dialogue on future international actions to address global climate
TRANSCRIPT
DIALOGUE ON FUTURE INTERNATIONAL ACTIONS TO ADDRESS GLOBAL CLIMATE CHANGE
Mexico City, Mexico 16-19 November 2004
Note: All presentations are available on our website and links are provided in the summary below (click on blue highlighted text for the web link).
DEVELOPING COUNTRY DIALOGUE ON FUTURE INTERNATIONAL ACTIONS TO ADDRESS GLOBAL CLIMATE CHANGE
16 November 2004 Ned Helme, Center for Clean Air Policy (CCAP), and Dr. Adrián Fernández Bremauntz (Mexico), opened the Developing Country-only Dialogue by thanking participants for attending and provided an overview of the day’s discussion. Mr. Helme presented an introduction of the steps the FAD needs to cover and how they fit together. The first logical step in the process is to decide what the long-term goal will be and then look at what will be needed in terms of reductions by 2020 to keep open the possibility of achieving the long-term goal. Once the total allowable cumulative emissions out to 2020 are known, then it requires decisions on how that emissions “budget” will be divided between developed and developing countries, taking into account responsibility for past emissions and ability to respond to emission reduction goals. This step will begin with developed countries taking on as much of the burden as possible. With an overall target for reduction for developing countries, then, the next step will be to determine how to share the emission reduction burden among those countries. Recognizing that not all developing countries have made or will make the same contribution of emissions to the atmosphere nor do they all have the same ability to invest in emission reduction measures, the next step will be to determine how developing countries might be differentiated based on national circumstances and, accordingly, take on differentiated commitments or actions. The final logical step is to determine what kind of architecture can be put into place to achieve the long-term goals. In thinking about architecture, the key to the economic impact and equity for any given country is the stringency of the country’s target rather than the type of target architecture. Comments: One participant suggested that we incorporate the burden of climate change impacts and vulnerability to those impacts in any scheme to differentiate developing countries. Another participant suggested that we should strive to look for ways in which mitigation and adaptation
can be coupled and provided an example of fostering mangrove swamps as both an adaptation and mitigation measure. During the day, participants heard and commented on presentations on Differentiation of Developing Countries, Climate Change Approaches in Latin America, Overview of CCAP’s Developing Country Analysis, Sector Approach to Developing Country Actions: Case Study on Cement, Adaptation Vulnerabilities: Caribbean Case Study and Implications, and Transportation in the CDM. Below, we provide a brief description of the presentations held during this day. DIFFERENTIATION OF DEVELOPING COUNTRIES Harald Winkler, Energy Research Center (ERC) in South Africa, gave a presentation on Equity in the Greenhouse: adaptation, differentiating mitigation commitments and leadership, based upon the results of an international effort of researchers, known as the South-North Dialogue, to develop an equitable climate change approach. One of the outcomes of this process was to differentiate developing countries according to criteria of responsibility, capability, and potential. Responsibility was defined as cumulative emissions since 1990. The year 1990 was a compromise within the group, with some participants wanting a date as early as 1850 and other wanting a more recent date. For capability to make emission reductions, the team used GDP per capita in terms of purchasing power parity and the human development index “to acknowledge that income is not everything.” As a proxy to measure potential, the team used emissions intensity, GHG per capita, and growth of CO2 emissions in the last decade of the 20th century. The group differentiated developing countries using these criteria into four categories: Newly Industrialized Countries (NICs), Rapidly Industrializing Developing Countries (RIDCs), Other Developing Countries (ODCs), and Least Developed Countries (LDCs). Countries in the same category would face similar responsibilities and be expected to make similar commitments. As countries developed, they would move up into the next category and make new commitments appropriate for that level. In addition, his presentation highlighted the adaptation approaches suggested by this process. Comments: Overall, the participants thought that this was an important presentation and felt that the time is right for discussing differentiation of developing countries. Many participants were surprised by where some countries fell within the categories and had questions about specific assumptions about one criterion or another. One participant reminded the group that the important message is that there are differences among developing countries and that they can be considered in different categories. Several delegates suggested that vulnerability to climate change impacts be a criterion for differentiating developing countries. For example, middle income island state economies can be destroyed by one hurricane, so their ability to mitigate may be overstated without also taking into account the risk they face because of their vulnerability. One delegate suggested that G77 should remain intact because LDCs need to be assisted by the most advanced developing countries. Delegates also raised the question about continued commitments by Annex I countries and suggested that if Annex I countries demonstrate emission reductions through new technologies, NA1 countries can copy them.
Some delegates felt that the 1990 cutoff date for cumulative emissions is not equitable because it gives industrialized countries a free ride and puts a greater burden on RIDCs. A participant also thought the process was too complicated to make four categories and suggested that a methodology could be applied to apportion responsibility and that countries remain under a common bubble. Another participant cautioned the use of a bubble, citing how difficult the EU bubble negotiation was, even with the political mechanism of the EU. CLIMATE CHANGE APPROACHES IN LATIN AMERICA Jose Alberto Garibaldi, Instituto Energeia, presented results of a recent analysis, Challenges and Opportunities, Emissions, Impacts and Responses in LAC: An examination of sectoral approaches in the context of current policies within the region, which considered climate change in Latin America. The LAC region contributes to the climate change problem in a proportion which is less than its population or economic participation in the worlds’ total population and economic output (see figure). Almost 70% of GHG emissions in the LAC region are explained by 4 countries (Brazil, Mexico, Venezuela and Argentina). If Colombia and Peru are added, the percentage reaches 83%. The region is already suffering the consequences of climate change impacts in several areas, including hurricanes and tropical storms, El Niño, and rain patterns. For example, in 2004, nine tropical storms and five hurricanes hit the region and the 1997 and 1998 El Niño caused total losses in the region of $15,480 million USD. The region has undertaken several mitigation and adaptation policies, while receiving little external aid in the process. There is an enhanced need for costs-benefit assessments and increased potential for cooperation. He then briefly discussed a project with CCAP to examine the power sector in Mexico as an example.
CO2 Stock 1900-2002 per region(Total stock and total /CO2 *hab. for ‘99)
United States29.9% 282.8
Canada2.2%192.2
Europe29.8%123.3
África2.3%7.0
Latinamerica3.7%19.0
Ex-USSR8.5%120.2
MedioOriente
2.5%39.3
China, India anddeveloping Asia
15.5%10.2
Oceania1.3%147.8
Japón4.3%74.4
IndustrializedDeveloping
* Marked areas are proportionalTo the accumulated stock ofCarbon emmissions fromFossil fuel burn from 1900 to 2002.
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United States29.9% 282.8
Canada2.2%192.2
Europe29.8%123.3
África2.3%7.0
Latinamerica3.7%19.0
Ex-USSR8.5%120.2
MedioOriente
2.5%39.3
China, India anddeveloping Asia
15.5%10.2
Oceania1.3%147.8
Japón4.3%74.4
IndustrializedDeveloping
* Marked areas are proportionalTo the accumulated stock ofCarbon emmissions fromFossil fuel burn from 1900 to 2002.
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Comments: A participant liked the integrated nature of the study because it addresses development in general. One delegate suggested that unless we deal with vulnerability to climate now, it does not make sense to talk about the future. OVERVIEW OF CCAP’S DEVELOPING COUNTRY ANALYSIS Eric Williams, CCAP, provided a brief overview, Developing Country Economic Analysis of GHG Mitigation Options, of a new project with in-country partner organizations that will analyze emissions reduction options in China, Brazil, India, and Mexico and support the deliberations of the Dialogue. Partners will conduct bottom-up assessment of mitigation options by sector for each country. The project Team will identify important options and include them in a top-down macroeconomic assessment in each country. The project team will then combine bottom-up and top-down analyses into an integrated economic assessment. Partners will hold workshops and meetings with relevant government officials throughout project. FAD
participants will have the opportunity to give direction and the results will be presented to the FAD as they are available. Suggestions from group: The group suggested that CCAP focus on more practical operational policies and measures. A participant pointed out that there are related modeling efforts currently underway in Mexico and that we should be sure to coordinate with them so that our efforts do not overlap unnecessarily. SECTOR APPROACH TO DEVELOPING COUNTRY ACTIONS: CASE STUDY ON CEMENT Jake Schmidt, CCAP, presented the results of a recent working paper evaluating sector-based options for developing country actions. For this presentation, Jake presented a Sector-Based Program : Cement Case Study, which highlighted the emissions contribution by sector in developing countries and outlined some hypothetical scenarios for applying a sector-based program in the cement sector. (A more exhaustive presentation including a case study of electricity was presented in the Joint Dialogue). Cement production was responsible for 4 percent of global CO2 emissions in 2000. The majority of cement is produced in non-Annex I countries (~70%) and these markets are expected to continue to lead the global demand for cement through 2020. Multinational Corporations are playing a greater role in cement production outside of China—controlling 42% of production in 2002, up from 9% in 1988. The emissions intensity of cement production in a number of developing countries is equal to or better than that of industrialized countries (see figure). Given this situation, the presentation raised the question of whether a similar program should be applied to cement in developed countries. The presentation highlighted some possible implications of applying five specific options in the cement sector: growth cap, dynamic limit, benchmark, sector policy credit generation, and harmonized PAMs.
Cement Production and Emissions from Top Producers, 1994
Production Emissions
Cement
Production (Mt) Clinker to
Cement Ratio Total Emissions
(MtCO2) Process
Emissions Energy Use Emissions
Emissions Intensity(t CO2/t Cement)
China 423.0 83% 371.8 47% 53% 0.34
Japan 91.6 80% 57.2 63% 37% 0.23
US 77.9 88% 69.3 49% 51% 0.45
India 62.4 89% 57.9 48% 52% 0.48
Korea 51.6 96% 41.4 59% 41% 0.33
Russia 37.2 80% 29.0 52% 48% 0.37
Germany 36.1 79% 24.6 58% 42% 0.28
Italy 33.2 80% 24.9 53% 47% 0.35
Turkey 31.9 90% 29.3 49% 51% 0.47
Thailand 31.1 90% 26.4 53% 47% 0.40
Mexico 29.8 88% 22.4 59% 41% 0.31
Spain 26.7 81% 19.8 54% 46% 0.34
Brazil 25.2 77% 15.8 60% 40% 0.25 Source: Price et al., 1999; Hendricks et al., 2000
Comments: • Cement is a politically sensitive sector; it is unacceptable to have a downturn or outages. • A sectoral approach may be overly prescriptive for DCs; perhaps DCs should choose which
sectors to include. • Negotiating sector commitments may not be easier than negotiating an economy-wide
commitment. • A sectoral approach allows for a fresh look at the inventory and composition of emissions by
country and for a specific push toward new technology
• A sectoral approach can create a level playing field across countries and limit comptitive distortions
ADAPTATION VULNERABILITIES: CARIBBEAN CASE STUDY AND IMPLICATIONS Dr. Ulric Trotz, Caribbean Community Climate Change Center, presented an Overview of the Caribbean’s Efforts to Assess Climate Vulnerability and Develop Adaptation Approaches. In addition, his presentation highlighted the implications of their approach for others. The Caribbean undertook a five step process: (1) developed issue paper on what resources will be impacted by climate change; (2) submitted issue paper to national focal points to fill in country-specific information on the issues; (3) held consultations to identify and revise these issues, including what of these issues are critical and the experience to date with addressing these issues; (4) developed document that identified which impacts are priorities; and (5) developed adaptation strategies (all 12 participating countries developed National Climate Change Adaptation Policy and Implementation Plans). These efforts included extensive stakeholder consultation and expert judgment since limited quantitative descriptions were available for a variety of reasons. Comments: • Adaptation is not new; we now must respond to greater climate variability, so a
vulnerability assessment should assess climate variability, then add climate change impacts • One severe weather event can take 1% of the annual budget of a small island state, so
economic ability to adapt and to take part in mitigation will diminish as severe weather events become more frequent
• The poorest countries are becoming poorer, so over time, their ability to adapt will be decreased.
TRANSPORTATION IN THE CDM Steve Winkelman, CCAP, presented Transportation, the CDM and Beyond: Draft Recommendations to Circulate at the COP, which provided brief results of a recent project in Chile conducted between CCAP, International Institute for Sustainable Development, and Cambio Climático y Desarrollo Transportation. He outlined the barriers to including transportation projects in the CDM that the project discovered, including: 1) the current CER value has a minimal impact on the economics of many transportation projects; 2) projects that address fundamental structural changes (e.g., bus rapid transit) offer major reductions but face a more difficult fit for CDM; and 3) establishing additionality for such policy-based approaches is difficult. Steve offered some suggestions on how CDM may be changed to allow for greater participation in the transportation sector. First, he suggested that travel demand projects may be given special treatment under the CDM. He suggested that sector or regional targets and policy-based CDM may be a way to bring transportation actively into the CDM. Steve suggested flexibility in using ODA coupled with CDM by using ODA for infrastructure and CDM for promotion or maintenance. He also suggested flexibility in additionality in that we may be able to define projects narrowly enough so that CDM would cover an element that is critical for implementation. Based on project results, the project team recommends that Parties encourage the CDM Executive Board to conduct an analysis on methodologies for transportation and the
CDM and the UNFCCC to host formal workshops on issues related to transportation and climate change. Comments: One participant pointed out that transportation is a sector that unites so many opportunities and problems. It has huge opportunities for co-benefits, but there are lots of problems because it is difficult to show additionality. As long as cities in developing countries have lousy public transportation systems, people will want more and more cars. Transportation should be brought to the forefront of negotiations. Participants reiterated that CDM is not enough to pay for projects. But another, while acknowledging the importance of transportation, expressed concern about changing the rules for CDM and was particularly reluctant to play around with the concept of additionality. CDM means an increase in emissions in developed countries, so we must be very careful. A participant also felt that it is inappropriate to redirect ODA from sustainable development to climate change.
JOINT DIALOGUE ON FUTURE INTERNATIONAL ACTIONS TO ADDRESS GLOBAL CLIMATE CHANGE 17-19 November 2004
Ned Helme, Center for Clean Air Policy (CCAP), and Dr. Adrián Fernández Bremauntz (Mexico), opened the Joint Dialogue by thanking participants for attending and provided an overview of the discussions of the Dialogue over the coming days. Mr. Helme presented an introduction of the steps the FAD needs to cover and how they fit together. The first logical step in the process is to decide what the long-term goal will be and then look at what will be needed in terms of reductions by 2020 to keep open the possibility of achieving the long-term goal. Once the total allowable cumulative emissions out to 2020 are known, then it requires decisions on how that emissions “budget” will be divided between developed and developing countries, taking into account responsibility for past emissions and ability to respond to emission reduction goals. This step will begin with developed countries taking on as much of the burden as possible. With an overall target for reduction for developing countries, then, the next step will be to determine how to share the emission reduction burden among those countries. Recognizing that not all developing countries have made or will make the same contribution of emissions to the atmosphere nor do they all have the same ability to invest in emission reduction measures, the next step will be to determine how developing countries might be differentiated based on national circumstances and, accordingly, take on differentiated commitments or actions. The final logical step is to determine what kind of architecture can be put into place to achieve the long-term goals. In thinking about architecture, the key to the economic impact and equity for any given country is the stringency of the country’s target rather than the type of target architecture. Below, we provide a brief description of the presentations and the discussions held during the three days of the Joint Dialogue. DIFFERENTIATION OF COUNTRIES Harald Winkler, Energy Research Center (ERC) in South Africa, gave a presentation on Equity in the Greenhouse: Differentiation and Mitigation Commitments, based upon the results of an international effort of researchers, known as the South-North Dialogue, to develop an equitable climate change approach. One of the outcomes of this process was to differentiate developing countries according to criteria of responsibility (using cumulative CO2 per person from 1990-2000 as a proxy), capability (using GDP per person on a power-purchasing parity basis and Human Development Index as proxies), and potential (using CO2 / GDP, GHG per capita and growth of CO2 emissions from 1990-2000 as proxies). The application of these criteria resulting in the differentiation of developing countries into four categories: Newly Industrialized Countries (NICs), Rapidly Industrializing Developing Countries (RIDCs), Other Developing Countries (ODCs), and Least Developed Countries (LDCs). Countries in the same category would face similar responsibilities and be expected to make similar commitments. As countries developed, they would move up into the next category and make new commitments appropriate for that level. If countries were in decline, then they could move down to the previous category and face less stringent commitments. During the discussion of the presentation, the following points were made:
• Differentiating developing countries is a useful exercise because of the wide difference in levels of development and resources among developing countries, and it challenges the paradigm that we should just go after the biggest emitters and that all developing countries should be treated the same.
• Some participants were concerned about putting countries into groups and that any sort of categorization should not be rigid.
• Others questioned the political feasibility of differentiating DCs and wondered how it could ever be negotiated. It was pointed out that the key may not necessarily be to negotiate the criteria, but to have the criteria inform the negotiation. In this case, having good information on the implications of various criteria would help base the negotiation more on facts. In this light, it is useful to think about what criteria are the most useful to inform the negotiations.
• Some participants were surprised by the inclusion of certain countries, such as small island states, in the top categories and raised questions about the factors used and about not including adaptation/vulnerability factors in the differentiation.
• The criteria for differentiating countries was discussed and suggestions for modification were made, including:
o Many participants said that a measure of vulnerability to climate change should be included, since some countries score relatively high in this criteria because of per capita income, but that income can be significantly hurt with one major weather event.
o Some participants argued that historic emissions should be calculated from as early as 1850 or 1900 rather than 1990, as was chosen in the study. These participants felt that starting with 1990 is not equitable to developing countries.
o Take into account national circumstances (e.g., resource availability). o Inclusion of absolute emissions in some manner. o Emissions projections may also be useful to consider. o Using PPP instead of GDP may cause some discrepancies; however, defining a metric
that can be compared across countries may require using PPP. o Apply the Gini Index to reflect income disparities within countries. o May be useful to weigh individual indicators differently, as opposed to the equal
weighting in the current proposal. • The specific response measures outlined in the proposal for each of the country categories
was discussed in detail. Some were unsure of the usefulness of using the criteria to define the categories and also to define response measures. Others were concerned with the specific response measures outlined in the proposal.
CLIMATE ANALYSIS INDICATORS TOOL VERSION 2 Kevin Baumert from WRI presented the latest version of the Climate Analysis Indicators Tool (CAIT) version 2.0 and demonstrated how the tool can be used to help with the kind of analysis needed to differentiate developing countries. CAIT 2.0 is currently in peer review, and it will be released at COP10. It is available at: http://cait.wri.org/. In addition, Kevin summarized some of the lessons learned as they considered the data included in CAIT. Among the findings of this are: (1) a relatively small number of countries produce a majority of emissions; (2) most large emitters are also those with large populations; (3) there is a significant overlap among the top 25 in population, GDP, and emissions; (4) CO2 from fossil fuels are the largest source of emissions,
but LUCF and non-CO2 together account for 40 percent of global emissions; (5) inclusion of different gases alters the North-South balance; and (6) the time period and gases chosen significantly influence how much each country has contributed to historical emissions. TRIPTYCH APPROACH Dian Phylipsen, ECOFYS, presented the Triptych Approach to allocating emission targets, which is based on a detailed analysis of sector emissions. Sectors included in the Triptych 6.0 methodology are industry, electricity, domestic, fossil fuel production, agriculture, waste, and land use change. Triptych assumes similar ultimate endpoints or improvement rates for the various sectors in each country (e.g., renewables and emissions free generation account for a fixed share in all countries of 60% by 2050, converging per-capita emissions in the domestic and waste sectors, and efficiency improvements in industry). These individual sector results are then added up to form national emissions budgets. The presentation showed, as examples, the sector results of Triptych for the USA, China, and South Korea (results for other countries are available, but were not presented). The analysis shows substantial reduction requirements for industrialized countries, whereas most developing countries are allowed significant emission increases (see figure). Triptych 6.0. is rather complex and requires large amounts of data and assumptions to model; however, it can accommodate national circumstances through sector detail and allow for economic growth and improved efficiency. Participants made the following comments:
Decline to zero (here excluded)Land use change and forestry
Converging per-capita emissionsWaste
Reduction below BAUAgricultural
Decline to low levelFossil fuel production
Converging per-capita emissionsDomestic
Adjusted BAU production growth with limit on sources
Electricity
Adjusted BAU production growth with efficiency improvement
Industry
Decline to zero (here excluded)Land use change and forestry
Converging per-capita emissionsWaste
Reduction below BAUAgricultural
Decline to low levelFossil fuel production
Converging per-capita emissionsDomestic
Adjusted BAU production growth with limit on sources
Electricity
Adjusted BAU production growth with efficiency improvement
Industry
Nat
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lem
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• Several participants said that the triptych approach works well when countries are largely
comparable in economic conditions like countries within the EU 15, but the approach may break down if applied across significantly different countries. It may, however, be appropriate within a particular group identified through a differentiation scheme where countries are potentially more similar.
Change in emissions from 1990 to 2020
Triptych 2020
-60%
-40%
-20%
0%
20%
40%
60% 400450550Reference
Triptych 2020
-50%
0%
50%
100%
150%
200%
250%
300%400450550Reference
• Others raised the issue that this approach may not necessarily reflect equalized cost per ton in the various countries. It was pointed out that the Triptych analysis when applied in the EU relatively closely matched equalized cost per ton; however, this may not necessarily be true
for global analysis where there is bound to be much more disparity amongst countries than within the EU.
• Some of the participants raised concern with specific assumptions for individual countries, but agreed that further work on such a framework with more robust assumptions may provide some useful information.
• Some of the participants felt that the complexity of the approach makes it something of a “black box” and that it may not be possible to negotiate. However, a more detailed Triptych-like analysis could provide important information to inform the negotiation and could serve as a starting point for such discussion, similar to its use in the EU.
SECTOR APPROACH TO DEVELOPING COUNTRIES Jake Schmidt, CCAP, presented Sector-based Program, based upon a draft working paper for the Dialogue. His presentation discussed the potential advantages and disadvantages of a sector-based program, followed by an overview of sector GHG emissions in non-Annex I countries (see figure) and in the electricity and cement sectors. Advantages of a sector-based program are: (1) countries can start reducing GHG incrementally and reduce concerns about undertaking an economy-wide approach; (2) it is easier to develop and collect robust data from a limited number of sectors; (3) sector-based programs may be fairer and more equitable since some internationally competitive sectors in developing countries are equally or more carbon-efficient than those in Annex I countries (e.g, in the cement industry); and (4) it is easier to negotiate internationally as more data is available for certain sectors. Possible programs in the electricity and cement sectors included: (1) growth cap; (2) dynamic target; (3) benchmark-based; (4) sector policy credit generation; and (5) harmonized PAMs. The presentation was followed by a respondent, which showed the results of a recent proposal, Sector Approach Discussion, which considered the technical potential of emissions reductions through the diffusion of existing technologies in some select sectors. Participants made the following comments in relation to the sector-based programs presented:
Source: Author’s calculation; based upon: IEA, 2003; Marlandet al., 2003; Schaefer et al., 2004; Scheehle & Kruger, 2004;
WRI, 2003
Public Electricity and Heat Production; 13.1%
Unallocated Autoproducers ; 0.7%
Other Energy Industries; 5.0%
Iron & Steel; 2.0%
Chemical & Petrochemical; 1.8%
Other Manufacturing Industries and
Construction; 4.1%
Transport; 5.9%
Agriculture; 12.5%
Residential ; 2.7%
Other sectors ; 9.2%
Unallocated Non-CO2 gas; 5.0%
Non-CO2 Industrial Processes ; 0.8%
Non-Metallic Minerals ; 3.8%
LULUCF; 33.4%
Source: Author’s calculation; based upon: IEA, 2003; Marlandet al., 2003; Schaefer et al., 2004; Scheehle & Kruger, 2004;
WRI, 2003
Public Electricity and Heat Production; 13.1%
Unallocated Autoproducers ; 0.7%
Other Energy Industries; 5.0%
Iron & Steel; 2.0%
Chemical & Petrochemical; 1.8%
Other Manufacturing Industries and
Construction; 4.1%
Transport; 5.9%
Agriculture; 12.5%
Residential ; 2.7%
Other sectors ; 9.2%
Unallocated Non-CO2 gas; 5.0%
Non-CO2 Industrial Processes ; 0.8%
Non-Metallic Minerals ; 3.8%
LULUCF; 33.4%
• Most participants agreed that a sector approach is promising and should be considered
further. Some participants had concerns with a sector approach, citing concerns that a sector approach had a considerable potential for leakage if every country is not included, technology transfer may not be sufficient, and some important sectors will be missed.
• Others pointed out the linkage between the sector approaches presented here and the Triptych approach discussed earlier. In particular, emissions reductions from individual or groups of sectors could be combined into an overall reduction contribution from those
countries/sectors. “Triptych-like” analysis could be used to provide information on the level of reduction towards 2020/2030 emissions budget from these sectors.
• It was pointed out that it should not necessarily be considered either/or between sector and economy-wide approaches.
• A number of delegates stated that the a sector approach should apply to developed countries as well since the operations of some sectors in a number of developing countries were more efficient than in developed countries.
• Some delegates suggested that a sector approach should be based on “carrots” rather than “sticks,” suggesting that the best approach would be to make advanced technology transfer and financing a reality. This raised the issue that the inclusion of a specific sector in a country does not necessarily mean that country has to pay for the reductions.
• The discussion highlighted some specific modifications to the sector proposal, including: o It may be useful to think about two variants: one where it is country-based (as
presented in this presentation) and the other where the sector as a whole is included (e.g., through sector-wide agreements).
o How to decide on indicators, how to define BAT in each sector, how to choose which sectors are included, and how to link it with Kyoto Protocol emissions trading were raised as potential issues of concern that could be further elaborated.
o May be useful to directly link the emissions level of the benchmark with the emissions level in the growth cap, dynamic target, and the baseline in the sector policy credit generation. In this regard, it was pointed out that achieving a benchmark may be difficult for developing countries, but may be more useful in the credit generation option.
o A number of participants did not think that harmonized PAMs could be achieved given the stalemate over this discussion in the past. In addition, it is not likely that countries would trade the “credits” (e.g., renewable generation credits) created under such an approach.
• In discussing which sectors the program should apply to, the participants highlighted the following points.
o Some participants expressed concern that an approach where that explicitly defines which sectors would participate is too prescriptive. Countries should be allowed to choose in which sectors they want to take action. Others pointed out that this could raise equity and competitiveness concerns if the same sector is considered in different manners in separate countries.
o Many participants suggested that only internationally competitive sectors be included as a way to address competition concerns; sectors that produce primarily non-tradable goods could have a disproportionate impact across countries.
o Applying the South-North Dialogue-like criteria to sectors may imply that certain sectors in LDCs would be included since they may score high on these criteria.
ECONOMY-WIDE GROWTH CAPS FOR DEVELOPING COUNTRIES Eric Williams from CCAP presented an Assessment of Economy-Wide Growth and Dynamic Caps for Developing Countries, based upon a draft working paper for the Dialogue. In the presentation, Eric discussed an innovative approach for linking dynamic caps with emissions
Range of Differences Between Target and Actual Emissions as Expressed as a % of Expected Emissions
-200%
-150%
-100%
-50%
0%
50%
100%
Absolute Cap
Carbon Intensity
Growth indexed
Growth Sched., Flex
Growth Sched., Fixed
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trading systems. He also presented the idea of a growth schedule target, which consists of a schedule of fixed caps and corresponding GDP growth rates. A particular cap would come into effect depending upon the GDP at the beginning of the period. Economic growth and growth in emissions during the period can be taken into account by allowing the number of tons an allowance can be redeemed for to vary according to economic growth. For example, if GDP grew 5% one year, then an allowance with a vintage of the next year could be redeemed for 1.05 tons (or less if carbon intensity is factored in). This approach allows a fixed number of allowances to be allocated before the trading period, yet allows flexibility by setting the value of those allowances at one ton or more to reflect economic growth. Eric also presented results of a risk assessment of a number of types of growth and dynamic targets (see figure). SECRETARY ALBERTO CÁRDENAS JIMÉNEZ Secretary Jimenez welcomed the group to Mexico City and provided his perspectives on the role that CDM is playing in sparking interest in Mexico, the importance of the forestry sector, and the significance of the discussions of the group on the next set of efforts to address climate change. He pointed out that as this group was meeting, another set of policymakers were deliberating on the elements of Mexico’s next national communication. CLIMATE IMPACTS CASE STUDIES: PERU AND CALIFORNIA Maria Paz Cigaran from the Peruvian National Environmental Council presented Adaptation in Peru: Results and Implications. She discussed vulnerability and adaptation (V&A) assessment of increasing climate hazards and poor socioeconomic conditions that pose challenges for Peru to appropriately respond to climate change and development. The focus is on reducing current and future climate change impacts through project implementation, capacity building, and integration of adaptation to development in a dynamic and long-term process. Building knowledge through sproposals, and development plants at all levels were emphasized.
cenarios, vulnerability assessment, adaptation
Peter Frumhoff from Union of Concerned Scientists also presented Climate Change Impacts in California under Alternative Emissions Scenarios: Implications for Adaptation and Mitigation. A panel of scientists produced a report, “Emissions pathways, climate change and impacts on California,” that shows substantial impacts on temperature, precipitation, and vegetation change in California under both lower and higher emissions pathways. Adaptation measures, which can be designed based on these impacts, will cost more with higher emissions, although such options are greatly limited for some impacts. Suggested options for mitigation and adaptation include reducing GHG emissions, minimizing pressures on the environment (floodways, air quality, etc.), and preparing for unavoidable climate changes (heat warning system and water conservation). Participants made the following comments to the presented case studies: • One delegate suggested that we need to marry disaster management to adaptation and climate
change because for vulnerable countries they must be addressed together. • A participant raised the question of how to prioritize adaptation options in a very vulnerable
country. • A delegate pointed out that countries tried to include pilot adaptation projects in NAPAs, but
this was rejected by the GEF. This delegate expressed concern that Annex I countries are delaying the process of funding adaptation by requiring more and more studies.
• Another delegate pointed out that the more we can demonstrate the impacts of climate change and get this message to as many people as possible, the easier it will be to get strong commitments on mitigation.
OPTIONS FOR ADDRESSING EMISSIONS FROM TROPICAL DEFORESTATION
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Forest Fire (Non El Niño year)
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Peat Fire (El Niño year)
Kyoto Target
Paulo Moutinho from Amazon Institute of Environmental Research (IPAM) and Stephan Schwartzman from Environmental Defense presented Compensated Reduction of Deforestation. Mr. Moutinho provided information on the global context of deforestation emissions global, which sthat emissions from deforestation are a significant source of emissions (see figure). This was followed by a case study on the situation in Brazil with regard to deforestation, include some projections of deforestation rates and efforts to be able to
howed
track in “real-time” the increases in deforestation. He then discussed some recent efforts in Brazil to control deforestation, including the Environmental Control System on Rural Properties in Mato Grosso State. This program is a US$ 3M/yr license program that requires owners to register their property with the government and provide details on their property. It has been successful so far, reducing deforestation rates by 25% compared with recent trends in other states. He then presented a new proposal, Compensated Reduction of Deforestation, which is a sector-wide program to reduce tropical deforestation emissions. The proposal would begin with setting a baseline derived from the average annual deforestation for 1980s (using satellite imagery) for tropical countries. Tropical countries that elect to reduce their national emissions from deforestation below that baseline during a commitment period, and demonstrate success, would be authorized to issue “temporary carbon certificates” post facto for the reductions below the baseline (see figure). The IPCC could establish common criteria for baselines and equivalence between deforestation and carbon stocks. These countries would then agree not to increase or further reduce deforestation in subsequent commitment periods. The baseline would be revised after 20yrs. Oa portion of the certificates might be valid for offsets in the first period, and others could be validfor second and subsequent commitment periods.
nly
Comments included: • Participants pointed out that the issue of deforestation emissions must be addressed at some
point in the future to meet global GHG stabilization levels. • Participants generally agreed that the Compensated Reduction approach is superior to a
project-based approach for addressing deforestation emissions by addressing in-country leakage and avoiding tying up specific land areas as occurs in project-based CDM. However, some delegates wondered if the Kyoto Protocol is the right place to deal with this issue.
• It was recognized that leakage is resolved to some extent with this proposal, but that it doesn’t necessarily solve the problem of international leakage unless all the major countries were involved in the program. Some expressed concern that the global market for timber needs to be addressed in order to avoid leakage if actions are taken only in some countries.
• Some participants had concerns that this approach does not solve the problems of defining the baseline and additionality, the definition of a forest (and thus deforestation), and permanence. Participants suggested that the baseline should be conservative and inquired why the proposal used the average of the 1980s instead of the projections that were shown in the presentation.
ADDITIONAL POST-2012 LULUCF OPTIONS Bas Clabbers from the Netherlands presented Possible Role of LULUCF in Future Regimes based upon a recent meeting in Europe. Future LULUCF regimes can vary, yet it remains important to consider the following policy dimensions: scope and coverage; broader participation; commitments and modalities; base year; and relationship with other socio-economic and environmental processes. Mr. Clabbers presented some additional possible regimes for addressing LULUCF emissions. These could include separate targets for LULUCF which can be iwith non-LULUCF emissions sources or separated from those emissions (see figure). In addition, he presented on three options for addressing deforestation emissions: (1) voluntary sector targets (e.g., compensated reduction as presented earlier); (2) “soft-capping” proposal; and (3) flat-rate proposal were discussed as ways to avoid deforestation. This presentation was followed by a
ntegrated
LULUCF Response which outlined some of the issues that had arisen in the past on LULUCF negotiations and lessons for the future discussions.
DC
BA
No
YesCountry to country
NoYes
Sector to sectorFungibility
DC
BA
No
YesCountry to country
NoYes
Sector to sectorFungibility
Comments included: • Some participants were concerned about separating out the discussions of LULUCF from
other emissions sources. They pointed out that it is important that these emissions sources be considered as a part of the “package” of emissions reductions efforts in order to avoid some of the problems that occurred during the previous negotiations on the subject.
• In addition, it was pointed out that a separate program without any fungibility between the LULUCF sector and other emissions sources would likely have no buyers since the developed world (the likely buyers) have net sinks. In essence you might only have a system where developing countries buy from other developing countries, which didn’t seem likely to many of the participants.
TRANSPORTATION SECTOR: CHILE ANALYSIS, THE CDM, AND OPTIONS BEYOND KYOTO Steve Winkelman from CCAP presented Transportation, the CDM and Beyond: Lessons from Chile and Ideas for Facing the Long Term. This project analyzed the transportation CDM potential in Santiago, Chile of bus technology, bicycle policies, and location efficiency. Steve outlined the barriers to including transportation projects in the CDM discovered during the project, including: 1) the current CER value has a minimal impact on the economics of many transportation projects; 2) projects that address fundamental structural changes (e.g., bus rapid transit) offer major reductions but are a more difficult fit for CDM; and 3) establishing additionality for such policy-based approaches is difficult. Steve offered some potential options for how CDM may be modified to allow for greater participation in the transportation sector. First, he suggested that travel demand projects may be given special treatment under the CDM. He suggested that sector or regional targets and policy-based CDM may be a way to bring transportation actively into the CDM. Steve suggested flexibility in using ODA coupled with CDM by using ODA for infrastructure and CDM for promotion or maintenance. He also suggested flexibility in additionality in that we may be able to define projects narrowly enough so that CDM would cover an element that is critical for implementation. His recommendations
include: (1) the CDM Executive Board should conduct an analysis of methodologies for transportation CDM; (2) progress on vehicles, fuels, travel demand, as well as improved transit and land use, are important for the post-2012 period; and (3) UNFCCC should host formal workshops on transportation and climate change. He suggested new vehicle standards, biofuels, transit expansion and regional “smart growth” land use policies for mid-term options. Participants made the following comments in response to the presentation: • There was general agreement that transportation projects are unlikely to materialize in a large
manner under the current CDM. However, participants recognized that transportation emissions reductions have to be a part of the program to get to global stabilization levels. In addition, it was pointed out that transportation projects can have some significant co-benefits, especially in relation to air quality.
• A number of participants felt that a sector approach to transport is preferable to project-based CDM.
• Delegates pointed out that transportation is inherently local, not global, and must be approached as such. Therefore, sector may not necessarily be a good fit for a sector-wide approach (i.e., one where the global sector is covered). It may be more useful to think of the options where a sector approach is considered at the country level.
PROGRESS REPORT ON THE CDM EXECUTIVE BOARD Eduardo Sanhueza from Chile and Lu Xuedu from China presented CDM Executive Board: Status of Work. They reported that all elements for operating the CDM – accreditation, methodologies, and validation & registration – are up and running. Present challenges include managing a large caseload on methodologies and accreditation; advancing on the consolidation of additional methodologies; setting up the CDM registry; and further streamlining processes to contain transaction costs. Participants made the following comments: • Some delegates expressed frustration that CDM projects so far have been mainly methane
and other gases that offer nothing or little for developing countries in terms of sustainable development.
• Others pointed out that the CDM is not the only way to push emissions reductions in developing countries; technology transfer and finance are also keys to sustainable development.
• There was significant discussion on the recent Executive Board decision on how existing regulations would be considered.
NEXT STEPS FOR THE DIALOGUE The participants suggested a significant number of next steps for the Dialogue. These steps include the following (Note: planned CCAP actions are noted following the ⇒; other actions stemming from these proposed next steps will be outlined shortly). • Conduct work on the sector approach, including through:
o Better defining the approach o Conducting a “Triptych-like” sector bottom-up analysis on key sectors o Explore a sectoral approach for transportation and LULUCF
⇒ CCAP will refine the working paper presented at the meeting to reflect the discussions of the group.
⇒ ECOFYS and RIVM will provide assistance to the group by conducting a more detailed Triptych-like analysis based upon bottom-up detailed information in some key sectors and analyze the cost implications of this analysis.
⇒ CCAP will form a working group (the Sector Working Group) of a smaller number of FAD participants to progress the sector approach in between meetings of the FAD. This group will discuss elements through email exchanges and conference calls. The group will help provide input on the approach and assist in developing the scenarios for the detailed analysis, mentioned above.
• Explore new commitments from developed countries
o What future actions will A1 countries take o What kinds of policies/means would be implemented
⇒ CCAP will work to have a presentation on this topic for the next FAD meeting. • Consider adaptation in greater detail, including:
o Develop a “straw” adaptation proposal o Examine the relationship between insurance and adaptation o Explore how to mainstream adaptation into development o Evaluate the economic effects of food security and biodiversity loss as a result of
climate change ⇒ CCAP will organize a working group (the Adaptation Working Group) to consist
initially of participants only from developing countries to outline some elements of a “straw” proposal for adaptation.
• Consider options for addressing technology transfer and financing, including:
o R&D commitments to funding o Future of CDM o Energy efficiency and renewable energy
• Further explore differentiation of developing countries and include adaptation and
vulnerability to climate change • Look at some negotiation process issues
o Pledge and review, etc. o If we amend the KP do we need a new agreement
• Consider how we define flexible mechanisms going forward (e.g, look at the work of the
Annex I expert group on the future of CDM) • Further examine options for addressing bunker fuels • Look at non-CO2 gases
LIST OF PARTICIPANTS DIALOGUE ON FUTURE INTERNATIONAL ACTIONS TO ADDRESS GLOBAL CLIMATE CHANGE
MEXICO CITY, MEXICO NOVEMBER 2004
DELEGATES
Name Country Organization Email Address AMIN, Amal-Lee UK Department for Environment, Food and Rural
Affairs [email protected]
CARRASCO, Jean-Bernard Australia Greenhouse Office (International Climate Team)
CHUNG, Rae Kwon Rep. of Korea Ministry of Foreign Affairs and Trade [email protected] CIGARAN, Maria Paz Peru National Council on the Environment [email protected] CLABBERS, Bas Netherlands Ministry of Agriculture, Nature and Food
Quality [email protected]
ELLEGAARD, Elizabeth Belgium Direction générale de l’environnment [email protected] FANGEL, Thorbjorn Denmark Ministry of the Environment [email protected] FERNANDEZ, Adrian Mexico SEMARNAT [email protected] FORSYTHE, Douglas Canada Department of Foreign Affairs and International
Trade [email protected]
FRY, Ian Tuvalu Government of Tuvalu [email protected] JAUREGUI, Sergio Bolivia Sustainable Development Advisors [email protected] KRANJC, Andrej Slovenia Ministry of the Environment, Spatial Planning
and Energy [email protected]
LEFEVERE, Jurgen EU European Commission [email protected] LU, Xuedu China Chinese Ministry of Science & Technology [email protected] MIYAZONO, Hiroki Japan Ministry Agriculture, Forestry, and Fisheries [email protected] MORISSETTE, Guy Canada Natural Resources Canada [email protected] RANKINE, Dale Jamaica Meteorological Service [email protected] SAKAMOTO, Toshiyuki Japan Global Environmental Affairs Office, Ministry
of Economy, Trade and Industry [email protected]
SANHUEZA, Jose Chile Climate Action Network – Latin-America [email protected] SASANOUCHI, Mayasuki Japan Toyota [email protected] TALLEY, Trigg USA U.S. Department of State [email protected] TREMBLAY, Normand Canada Environment Canada [email protected] TROTZ, Ulric Belize Caribbean Community Climate Change Center [email protected] TUDELA, Fernando Mexico SEMARNAT [email protected] WARD, Murray New Zealand Global Climate Change Consultancy [email protected]
STAFF AND SPEAKERS HELME, Ned USA Center for Clean Air Policy [email protected] SCHMIDT, Jake USA Center for Clean Air Policy [email protected] WILLIAMS, Eric USA Center for Clean Air Policy [email protected] WINKELMAN, Steve USA Center for Clean Air Policy [email protected] HAUPTMANN, Jerzy USA Center for Clean Air Policy [email protected] BAUMERT, Kevin USA World Resources [email protected] Den ELZEN, Michel Netherlands RIVM [email protected] FRUMHOFF, Peter USA Union of Concerned Scientists [email protected] GARIBALDI, Jose Mexico Instituto Energia [email protected] MACE, M.J. UK FIELD [email protected] MOUTINHO. Paulo Brazil Instituto de Pesquisa Ambiental da
Amazonia/Sucursal Brasilia [email protected]
PHYLIPSEN, Dian Netherlands ECOFYS [email protected] SCHWARTZMAN, Stephan USA Environmental Defense [email protected] TAMURA, Kentaro Japan IGES [email protected] WINKLER, Harald South Africa University of Cape Town Energy Research
Center [email protected]
Updated on 1/5 at 1005