What is it? Various approaches, including opportunities for using markets, to enhance the cost-effectiveness of, and to promote, mitigation actions, bearing in mind different circumstances of developed and developing countries → TOO LONG!!!
Simply put… New approach or mechanism◎ Objective enhancing the cost effectiveness of promoting mitigation actions◎ Type Market-based and Non-market based
In Bali Action Plan(b) Enhanced national/international action on mitigation of climate change, including, inter alia, consideration of: (i) Measurable, reportable and verifiable nationally ・ ・ ・ (v) Various approaches, including opportunities for using markets, to enhance the cost-effectiveness of, and to promote, mitigation actions, bearing in mind different circumstances of developed and developing countries;
2. Present situation a. COP16 b. AWG-LCA 14 1st session (Bangkok) c. AWG-LCA 14 2nd session (Bonn) d. AWG-LCA 14 3rd session (Panama)
COP16The Conference of the Parties(a) Decided to consider the establishment, at its 17th session, of one or more market-based and one or more non-market-based mechanisms(b) Requested AWG-LCA to elaborate these mechanisms, with a view to recommending draft decisions to the COP for consideration at its 17th session(c) Invited Parties and admitted observer organizations to submit to the their views and information by 21 February 2011
COP16Market-based mechanism takes into account(a) Ensuring voluntary participation of Parties, supported by the promotion of fair and equitable access for all Parties;(b) Complementing other means of support for nationally appropriate mitigation actions by developing country Parties;(c) Stimulating mitigation across broad segments of the economy;(d) Safeguarding environmental integrity;(e) Ensuring a net decrease and/or avoidance of global greenhouse gas emissions;(f) Assisting developed country Parties to meet part of their mitigation targets, while ensuring that the use of such a mechanism or mechanisms is supplemental to domestic mitigation efforts;(g) Ensuring good governance and robust market functioning and regulation;
AWG-LCA14 Bangkok◎ COP16 Invitation of information on various approach from Parties and admitted observer organizations◎ AWG-LCA 14 1st session (Bangkok) Synthesis Report It synthesizes the information submitted by Parties and admitted observer organizations. 1. Evaluation of existing mechanism 2. Possible evolution of market-based mechanisms 3. Possible evolution of non-market-based mechanisms
AWG-LCA14 Bangkok◎ Summary of the report1. Evaluation of existing mechanism Market-based Non-market-based Enhancing of the ○ × cost effectiveness Promoting × ○Market-basedCDM, JI, ETS…etcNon-market-basedFeed-in-tariff, Regulation, Education…etc
AWG-LCA14 Bangkok2. Possible evolution of market-based mechanisms ・Inadequacy of existing mechanisms ⇒ New mechanisms should be Build upon them ・ The base will be Trading or Crediting. ・Main focus is placed on national or bilateral mechanisms. (The role of COP is help them)
AWG-LCA14 Bangkok3. Possible evolution of non-market-based mechanisms ・Improved version of the existing mechanism ・Reducing or removing of emission-intensive activities and enhancing of non-emission-intensive activities with policy or finance ・Others specific approach (creating national center, removing barrier of intellectual property)
AWG-LCA14 Bonn AWG-LCA 14 1st session (Bangkok) Synthesis of the information submitted by Parties and admitted observer organizations AWG-LCA 14 2nd session (Bonn) Note by Facilitator Reflection of the facilitator’ s assessment of issues to be addressed by Parties for the fulfilment of Cancun agreements
AWG-LCA14 BonnContents1. Possible structure of one or more decisions on market-based mechanisms2. Possible structure of one or more decisions on non-market-based mechanisms3. Possible work prior to COP 17
AWG-LCA14 BonnPossible structure of decisions(a) Reference to consistency with Convention principles, guidance from decision 1/CP.16, paragraph 80, and complementarity with Kyoto Protocol mechanisms; (1,2)(b) Consideration of eligibility criteria and a cap on using offsets;(1)(c) Elaboration of specific mechanism(s), with further guidance on scope, characteristics and governance;(1,2)(d) Elaboration of a framework under the Convention to guide the bottom-up development of mechanisms by Parties;(1)(e) Launch of work (process and timing) to develop modalities and procedures for each new mechanism;(1,2)(f) Consideration of the use of mechanisms being contingent on legally binding targets reflecting increased levels of ambition (e.g. under a second commitment period of the Kyoto Protocol or equivalent).(1)
AWG-LCA14 BonnPossible work prior to COP17The Need for Technical workshop Technical Papers
AWG-LCA14 Panama AWG-LCA 14 2nd session (Bonn) Reflection of the facilitator’ s assessment of issues to be addressed by Parties for the fulfilment of Cancun agreements AWG-LCA 14 3rd session (Panama) Parties Compilation Summary of the submission from Parties and organizations and the base of discussion in COP17
AWG-LCA 14 Panama Parties CompilationOption 1 (146 paragraphs)Option 2 147. Decides to consider, at the eighteenth session of the Conference of the Parties, the establishment of various approaches, including opportunities for using markets, to enhance the cost-effectiveness of, and to promote, mitigation actions, bearing in mind different circumstances of developed and developing countries;Option 3 148. No decision on this matter.
AWG-LCA 14 PanamaNot Summarized yet… 16. Stimulating mitigation across broad segments of the economy; 17. Stimulating mitigation across broad segments of the economy, which constitute a significant proportion of a country’s emissions or a significant proportion of a country’s GDP, and can contain sectors or subsectors; ⇒ It will be summarized before COP17 and used as the base of discussion.
Market-based MechanismSupporters◎ Common View ・Considering different circumstances of countries ・Need for financing and technology transfer ・Importance of environmental integrity ・complement of existing market-based mechanism…etc◎ Different View ・Wide range or Strict rules? ・ScheduleOpponents
Wide range or Strict rule?◎ Supporters of a wide range of mechanismsAustralia ・All Parties to the Convention should have full access to expanded and improved market mechanisms to achieve their mitigation actions and commitments. ・The post-2012 framework should accommodate a broad range of potential market mechanisms to harness all possible mitigation opportunities.Japan ・ New market-based mechanisms should allow wide spectrum of approaches, ・ Market-based mechanisms provide opportunities to reduce GHG emissions in the area where the abatement costs are relatively low.
Wide range or Strict rule?◎ Supporters of a wide range of mechanismsRepublic of Korea ・ However, such rigorous MRV may be prohibitively costly and time-consuming or simply infeasible with regard to large- scale mitigation actions, for the interactions among mitigation actions will make it much more complicated to identify the pure reduction/avoidance of those actions.
Wide range or Strict rule?◎ Supporters of strict rulesAOSIS(Alliance of Small Island States) ・ ambitious, legally-binding emission reduction targets, taken at the international level, are essential to drive a global carbon market ・ stringent baselines for new participants are essential, ・ inventories must be transparent, consistent, comparable, complete and accurate for the sectorsPoland (on behalf of the EU and its member States) ・ the units resulting from the new market-based mechanisms need to represent real, measurable, verifiable and additional emission reductions.
Wide range or Strict rule?◎ Supporters of strict rulesChina ・ Emission reduction commitments of the developed country Parties shall be achieved mainly through domestic efforts and the market-based mechanism could only play a complementary role.Saudi Arabia ・ There must be an agreed maximum percentage of total mitigation by Annex I countries (measured by total GHG reduction) that can be undertaken outside national borders. ・ Lower cost mitigation opportunities (low hanging fruits) should be left for the developing countries, as part of their voluntary endeavor to contribute to the global mitigation effort.
SchedulePoland (on behalf of the EU and its member States) ・The EU looks forward to the establishment at COP 17 in Durban of a new market-based mechanism for developing countries consisting of a common core set of rules and procedures at the international level.Japan ・Parties should aim to adopting at the COP17 decisions which will provide directions on the new mechanismsPeru ・Peru also proposes to explore, develop and implement the contents of these approaches, including its modalities and procedures established no further than COP18.
Opposing viewBolivia ・The issue of new market mechanisms is one of the critical elements why Bolivia rejected the draft Decision of Cancun. ・In none of the contact groups there was a clear negotiation, much less even an acceptance, of these issues. ・Any kind of carbon markets are unacceptable, because they are against the integrity of climate policy, and only worsen the actual climate crisis.Venezuela ・They are simply a means for shifting the burden of mitigation from developed to developing countries.
Reference・FCCC/AWGLCA/2011/4・Note by the Facilitator (Bonn)・FCCC/AWGLCA/2011/MISC.2・FCCC/AWGLCA/2011/MISC.2/Add.4・FCCC/AWGLCA/2011/MISC.3・Parties. Compilation (Panama)