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COP17 Briefing: Damian Ryan on key issues and possible outcomes

22 November 2011
COP17 Briefing: Damian Ryan on key issues and possible outcomes

COP17 takes place in Durban, South Africa, from November 28 to December 9, 2011. As part of our involvement in COP17, Damian Ryan our Senior Policy Manager, will be providing daily news and analysis, and live tweeting from Durban. This Pre-COP17 Briefing marks the start of his coverage.

The 17th Conference of the Parties (COP17) to the UN Framework Convention on Climate Change (UNFCCC) begins in Durban, South Africa on November 28, 2011.

Two years after the negotiating process suffered a heart attack in Copenhagen, and a year after it was resuscitated at Cancun, the job of Durban is to now stabilize the 'patient' and agree a recovery program. This must be sufficiently ambitious to ensure the goal agreed in Cancun of limiting global warming to 2 degrees or less is kept within reach.

Durban will not deliver any final deal, but it can put negotiations on a path to a legally binding agreement in the medium term (2015 to 2020). This will require the deadlock on the future of the Kyoto Protocol to be resolved and operationalization of the key elements of the Cancun Agreements, notably the Green Climate Fund, the Adaptation Framework, the Technology Mechanism, and Monitoring, Reporting & Verification (MRV) rules.

The process, however, remains in a fragile condition and there is a range of competing (and often conflicting) treatments proposed for it. This briefing note looks at the key issues for the annual two week summit and considers possible outcomes.

Key issues

Future of the Kyoto Protocol

The headline political issue for Durban will undoubtedly be the future of the Kyoto Protocol. The treaty's first commitment period ends in a little over 12 months and, despite more than five years of negotiation, countries remain as divided as ever on what should follow.

The Cancun conference deliberately avoided a clash over the Protocol in the interests of rebuilding trust and confidence in the broader UNFCCC process, but such diplomatic sidestepping is unlikely in Durban.

Developing countries remain adamant that the Protocol must be the cornerstone for any new global climate regime. At their most recent meeting in early November, the BASIC group (Brazil, South Africa, India and China) stated that agreeing a second commitment period “is the essential priority for success of the Durban Conference”. This view is echoed by the various other developing country groupings, such as the Least Developed Countries (LDCs) and the Small Island States (SIDS)

On the opposite side of the table, developed countries are split into two camps. The EU, along with Norway and perhaps Australia and New Zealand, is open to a second commitment period, but only if this is part of a broader transition to a new global regime covering all major emitters by 2020. Canada, Japan and Russia by contrast, remain opposed to any further commitments under Kyoto. These countries are instead seeking a single agreement under the parallel 'Convention track' talks, which aim to strengthen mitigation efforts by all countries, not least the US and China.

The extent to which this Kyoto deadlock is broken will depend (as it always has) on progress in the Convention negotiations, and especially on the issue of 'legal form'.

‘Legal form’ of Convention track outcome

What sort of agreement, precisely, are countries trying to negotiate under the Convention track talks? The answer to this simple question has been left hanging ever since this track was established at Bali in 2007. The text agreed at the time merely states that the objective is “an agreed outcome”. Such deliberate ambiguity was essential for getting the talks underway, but with the EU making its commitment to Kyoto conditional on comparable efforts under the Convention track, such ambiguity is no longer tenable.

The US is the lynchpin to this debate. It has championed a 'ledge and review' approach as the basis of any Convention track outcome. This would not (necessarily) require a legally binding agreement – hence its attraction for a US administration well aware of the Congressional obstacles to ratifying any kind of international climate deal. But such an approach, which is effectively voluntary in nature, hardly meets EU definitions of comparability, nor calls for a legally binding outcome by many developing and developed countries.

The US position, in effect lowers the overall level of ambition. For those developed countries intending to abandon Kyoto, it provides a softer regime without hard targets or possibly any clear rules. For the key emerging economies, particularly China and India, it removes any external pressure to make their existing mitigation pledges legally binding – a not insignificant loss. For the EU and its potential allies, it undermines any incentive for committing to a second Kyoto commitment period. The overall result helps to explain why UN climate chief, Christiana Figueres, has publicly remarked that the five main obstacles to progress in Durban are “the US, the US, the US, the US and the US”.

Finding a way through all this – so that progress is built rather than blocked – is not impossible. But getting the Kyoto-Convention choreography right will be essential, and the primary task for negotiators at Durban. Success or failure here will determine what, if any, progress is made on the summit's other key issues. These relate mainly to elements agreed as part of the 'Cancun Agreements', notably climate finance, the level of ambition, technology transfer, adaptation and the all important 'MRV' (monitoring, reporting and verification) discussions.

Climate finance

Operationalizing the new Green Climate Fund (GCF) is seen by many countries and observers as a key political must-have for Durban. The fund's establishment was one of the major achievements of the 'Cancun Agreements'. Once up and running, the fund is intended as the primary institution for channeling the $100 billion per annum in climate finance that developed countries have promised to 'mobilize' by 2020.

A Transitional Committee has spent much of the last 12 months negotiating the design of the fund. The committee was meant to send its agreed proposal to the COP for adoption. However, both the US and Saudi Arabia blocked consensus at the final meeting. The design has therefore been submitted as a draft, which means that it remains open to further negotiation. This outcome ensures the US maintains a strong position in one of the few issues in which it has negotiating leverage. It also fits with the US's general negotiating position that "nothing is agreed until everything is agreed". Unfortunately, it also opens the door for other countries to play spoiler roles.

If negotiators are able to reach consensus early on in the fund's design, this would likely have a lubricating effect on other issues. The likelihood, however, is that it will need to move in tandem with other issues, rather than ahead of them.

The other part of the finance debate likely to feature prominently, is with respect to funding sources, specifically how to fill the GCF once it's up and running. The substantive negotiation on this point will take place after Durban, but heated debates are likely on the role of private finance and the use of new 'innovative sources' such as financial transaction taxes and bunker fuel levies.

Level of ambition

Ratcheting up the level of ambition of existing pledges is probably the one issue that all the major emitters are perhaps most keen to skirt over. This is despite the fact that it is the fundamental objective of both the Kyoto and Convention talks. Any kind of review of existing pledges quickly reveals that few countries are on target to achieve the kind of emission reductions needed to stay within the 2 degrees limit of warming that parties formally (and finally!) agreed to in Cancun. Raising ambition is, however, an essential negotiating priority for vulnerable developing countries, the majority of observer organizations and a safe climate system.

The issue continues to gain urgency driven by a number of external developments. This includes the major climatic disasters of the past year, the worrying findings emerging from initial drafts of the IPCC's 5th Assessment Report, and most recently the International Energy Agency's warning that the world has only a five year window for taking action to stay under the 2 degrees ceiling.

Aside from the obvious emission reduction discussions, talks in Durban will center on developing the details for a formal 'Review' process – another key element of the 'Cancun Agreements'. Parties agreed to start the process in 2013, and conclude it by 2015. The Review is meant to assess the adequacy of and progress towards the 2 degrees goal, taking into account the latest scientific findings and observed climatic impacts.

Although the Review's final report is over four years away, its conclusion is arguably self-evident: namely that the world is not on track to meet the 2 degrees goal. It is unfortunate that the UNFCCC process will take so long to officially recognize this. The best that can perhaps be said is that it at least ensures the finding becomes part of the formal process.

Other issues to watch

Beyond the more attention grabbing issues, there are a number of other substantive matters that Durban will address and could help progress.

Much of the intersessional work this year has been aimed at operationalizing the elements of the 'Cancun Agreements'. In addition to those already discussed above, other critical issues include Monitoring, Reporting and Verification (MRV), the Technology Mechanism and the Adaptation Framework. The importance of this work might well be forgotten in the bigger dramas of COP. However, progress made in these areas is crucial for developing the institutional structures that create the trust and confidence that underpins country cooperation over the long term. As the global climate regime grapples with a shift away from a purely top-down structure to a bottom-up/top-down hybrid, the importance of these new institutional structures will likely grow.

Tied up explicitly in the Kyoto negotiations is the future of the Clean Development Mechanism (CDM). The CDM is one of the success stories of the Protocol and a significant private sector industry has been created around it. Developed countries are still interested in using this carbon off-setting mechanism to help achieve their emission reduction goals, whether as part of Kyoto or not. Many developing countries in contrast argue that the CDM cannot be separated from a second Kyoto commitment period. This uncertainty has seen the CDM market shrink by 40% in the last year. While it is too late to undo the damage done to private sector confidence in the short term, an unequivocal statement of support for an ongoing CDM at Durban is a prerequisite for securing the mechanism's future in the medium to long-term.

Aviation, or more precisely the EU's decision to include international airlines in its regional emissions trading scheme (EU-ETS) is expected to generate heated debate in Durban. The entry into force of this measure occurs on January 1, 2012, just a few weeks after the COP's conclusion. This unilateral action is seen by many countries, including the US, China and India, as a contravention of international law. Legal opinion looks to be on the EU's side, however. Preliminary judicial advice from a court case brought by US airlines against the inclusion supported the EU's arguments. From an environmental perspective, the EU also considers its action justified, in part because of over ten years of multilateral inaction through the International Civil Aviation Organization (ICAO).

A COP agenda item introduced by India on 'Unilateral Trade Measures' will provide the focal point for discussion on aviation. How the EU plays the debate will be important. This is because by taking unilateral action the EU has in fact gained extra leverage in other areas of the negotiations, notably with respect to Kyoto and climate finance.

Possible Durban outcomes

It need hardly be said that Durban will not deliver any final climate deal. The hopes for 'big-bang' type outcomes ended with Copenhagen, while Cancun introduced a more incremental, stepping stone approach.

Durban is the next step in what many now accept is an ongoing, iterative negotiating process. Success in Durban will therefore be measured by how the Kyoto issue is dealt with and the extent to which the conference builds on the key outcomes from Cancun.

The good result

A good result would see a middle way found between the Kyoto traditionalists (i.e. those countries seeking a continuation of both the Protocol and the existing global climate regime generally) and the Kyoto rejecters (i.e. Canada, Japan, Russia and the US). As the political space does not exist for agreeing specifics in Durban, the best outcome would be a deal on a pathway for reaching a new agreement. This would include a firm date for conclusion (ideally 2015 at the latest) and an understanding of the shape of the agreement. The EU holds the key here as the only major emitter to have stated its 'openness' to further Protocol commitments, while also seeking a single new treaty. As a result it straddles both camps.

To be supported, any 'pathway' deal would need to have as its basis the continuation of the Protocol, in order to secure general developing country buy-in. This of course requires the EU to sign up in principle to a second commitment period. This support in turn hinges on whether certain conditions identified by the Union are met. These largely relate to more ambitious and comparable action by the other major emitters (both developed and developing) under the Convention track.

For the BASIC countries this could mean accepting (in principle for the moment) greater responsibility for emission reductions above and beyond those of other developing countries. This would be a major concession, creating for the first time a differentiation amongst developing countries and removing much of the 'firewall' with developed countries. For the Kyoto rejecters, it would mean agreement to make their Convention track commitments comparable with the EU‟s Kyoto commitments in terms of ambition and their legal nature. For the US, and those countries seeking a 'softer' regime to Kyoto, this would also amount to an important concession.

To complete a successful Durban package, parties would also need to agree to fully operationalize the key elements of the Cancun Agreements. This would include the Green Climate Fund, the Climate Technology Center & Network (a core part of the new Technology Mechanism) and the full Adaptation Framework. As noted earlier, agreement on these important institutional mechanisms will likely be far easier if the main Kyoto deadlock is successfully addressed.

The not so good result

The not so good result is one where the deadlock over Kyoto's future remains unresolved creating a cascade of negativity that undermines progress across the wider negotiating process. Such an outcome is possible if any of the major players is unable or refuses to offer key concessions. For example, if the EU were to withdraw its conditional support for Kyoto, or if China or the US were unwilling to compromise on their respective views on Kyoto and legally binding commitments.

An outright collapse in talks remains unlikely. This is partly due to the political capital regained in Cancun that countries will be loath to squander, and partly because South Africa, like any good COP host, will be doing its utmost to secure a successful summit. Stalemate is a possibility, however. If this were to occur then a 'COP17 Part II' (or 'COP17 bis' in the UN jargon) could be held in mid 2012. COP6 suspended in the Hague in 2001 provides a precedent for this.

A final poor outcome might be a political 'fudge' which papers over enough cracks to pass COP decisions, but leaves the process comatosed and unable to make any meaningful future progress. An outcome of this sort would make the process increasingly irrelevant and lead countries to use other, less representative forums, to advance national interests.

A final point

It is important to keep in mind the overall environmental context when thinking about the 'good result' described above. The reality is that even if Durban delivers such an outcome, it will still leave the world with an ambition gap between where it is and where it needs to be in terms of a safe emission reduction trajectory.

Bridging this gap has arguably been made more difficult by the de facto acceptance – at least for now – that bottom-up action will be the main driver for emission reduction in the short to medium term. Substantial bottom-up efforts are certainly underway at the corporate, city, sub-national and national levels. However, it seems unlikely that these will be sufficient to deliver the 10-fold increase in carbon productivity that is needed over the next four decades without a strong, complementary top-down framework.

This underlines the importance of harnessing the climate leadership shown by those already implementing bottom-up actions to rebuilt trust and confidence at national and international levels. By demonstrating that a 'clean industrial revolution' is already underway, climate leaders in business and government can help bridge the ambition gap and make the essential connection between top-down and the bottom-up actions.

Further reading

For those interested in more analysis on the prospects for COP17, the following sources and are recommended.

Damian Ryan, Senior Policy Manager, The Climate Group, will also be writing news and analysis throughout COP17, and providing a more in-depth post-COP Briefing after the events. Keep up to date on our website and by following him on Twitter during COP17.

Our international policy teams are also commenting on key regional positions in the lead-up to Durban; read about AustraliaChina, EuropeIndia and the US.

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