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16 December 2011

From November 28 to December 11, 2011, environment ministers and negotiators from 194 countries met in Durban, South Africa, for the 17th Conference of the Parties (COP 17) to the United Nations Framework Conventionon Climate Change (UNFCCC). With the first round of greenhouse-gas (GHG) reduction commitments under the Kyoto Protocol expiring at the end of 2012, COP17 was largely perceived as the ‘last-chance saloon’ for policy-makers to establish a road-map to advance efforts to establish a new global climate agreement. This was especially true after the high-profile media hype surrounding earlier UN Climate Conferences in Copenhagen (2009) and Cancun (2010) which failed to replace or renew the Kyoto Protocol.

The main outcome, of the extended UN Climate Change conference at Durban, came at the end of a long night of negotiations, which almost resulted in their collapse, at around 7am on Sunday 11 December. The negotiations ultimately reached agreement, known as the Durban Platform for Enhanced Action, (commonly referred to as the ‘Durban Platform’) by all 195 UNFCCC Parties, including China, the United States and India, to establish ‘as early as possible’ or at least by 2015, a “protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties” that would come into force in 2020. The Parties agreed to establish a new Ad Hoc Working Group on a Durban Platform for Enhanced Action (AG-DP) for the purposes of assisting in the negotiations. Within this research note, we seek to summarise the main outcomes of the Durban Package, their key successes and weaknesses, and the next steps.

What were the main summary agreements within the Durban Package?

Durban Platform for Enhanced Action

• A commitment to develop, as a replacement to the Kyoto Protocol, and ‘as early as possible’ or at least at the latest by 2015, a ”protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties” so as to adopt the new Protocol, legal instrument or legal outcome at COP21, in December 2015, for implementation to start from 2020.

• To establish a new body, known as the Ad Hoc Working Group on the Durban Platform for Enhanced Action (AG-DP), in order to negotiate a new global agreement covering all countries.

• An agreement to ensure that global emissions will be brought in line with the scientific limits needed to ensure the chances of staying below 2°C are between 50-80%, and agreements to regularly review emissions targets with respect to the science.

Kyoto Protocol

• Agreement that a 2nd commitment period of the Kyoto Protocol – and consequently the CDM and JI - will run from 1 January 2013 to either 31 December 2017 or 31 December 2020, with a final expiration date to be decided in 2012.

• This arrangement, therefore, avoids a gap at the end of the first commitment period when the Kyoto Protocol finishes at the end of 2012. Parties’ quantified targets for reducing emissions, as well as rules governing the carryover of surplus emission rights from the first commitment period, will also be decided in mid-2012.

Green Climate Fund (GCF)

• Outline agreement on the $100 billion a year Global Climate Fund (GCF), agreed at Cancun in 2010, to help developing countries reduce greenhouse gas (GHG) emissions growth and also adapt to climate change. No details came out of COP17, as expected, on how this would be funded. The first board meeting will be held in April 2012.

Mechanisms, Transparency and Sectors

• Confirmation of the CDM’s extension into carbon, capture and storage (CCS) projects.

• A process is also to be launched to consider climate issues relating to agriculture, with a view to taking a decision by end of 2012.

• Each negotiating party is to give their views by end of February 2012 on how progress on cutting greenhouse gas (GHG) emissions can be more ambitious. Free online access to the original UNFCCC Durban Platform document can be accessed here. http://unfccc.int/resource/docs/2011/cop17/eng/l10.pdf. All of the decisions adopted by COP 17 and CMP 7 can be accessed here. http://unfccc.int/2860.php. When will the Ad Hoc Working Group on the Durban Platform for Enhanced Action (AG-DP) start, and what is their remit? The AG-DP will start its work ‘as a matter of urgency’ in the first half of 2012 with work plan completion expected ‘as early as possible’ or at least at the latest by 2015, with the outcome to be adopted at COP21 and to come into effect and be implemented from 2020. AG-DP’s work plan will focus on “enhancing mitigation ambition to identify and to explore options for a range of actions that can close the ambition gap with a view to ensuring the highest possible mitigation efforts by all Parties.”

What are seen as the key successes of COP17?

Whilst many details still remain unknown, such as the legal nature, the Durban Platform represented a major step forward from previous COP/CMP conferences, as it includes the difficult action of getting a legal agreement between developed and developing countries, such as China, India, Europe and America. The Durban Platform also indicated to the world, and especially to business leaders, that globally-coordinated action on climate change had not been abandoned. It at least provides business with some level of certainty that there is a long-term political will to address climate change and sustainability. Durban progressed, very slightly, on REDD+, by establishing some more of the technicalities needed for a system that would allow payments to countries that reduce carbon emissions through REDD+, which accounts for roughly 15% of global GHG emissions, although nothing really emerged on the subject of REDD+ finance. In answer to growing demands to consider agriculture asa separate sector within the UN Climate Framework, an agreement was reached to establish a technical body to investigate the issue and report back in December 2012 at COP18 in Doha. Further, agreements were also reached to extend the Clean Development Mechanism (CDM) to include projects that use carbon, capture and storage (CCS) technology of carbon from power plants. This enables Western countries to finance these plants more cheaply in India or China. The agreement also requires industrialised countries to accept long-term liability for the projects with 5% of the carbon credits being set aside to account for any leakage of stored GHG in the 20 years after they are buried.

What are seen as the key weaknesses of COP17?

Despite the celebrations in achieving the Durban Platform, some commentators suggest that the Durban Platform marks a success for the political process rather than for climate change itself. Discussions at Durban were on the principles on which future negotiations will be based, and so many of the details still remain unknown. There was no discussion on how far and how fast countries should be cutting the GHG emissions. The Platform does not require the Parties to commit to any binding greenhouse gas (GHG) emission reductions yet, doing little or nothing to reduce emissions right now and ultimately defers action for almost a decade, which has disappointed environmentalists and climate change scientists. As the agreements in Durban do not propose additional action before 2020, the risk of exceeding 2°C remains very high. As a study by the Climate Action Tracker in 2011 highlights, and as illustrated in Figure 1, that the world is on course to see 3.5°C of warming this century on current projections (the ‘Gigatonne Gap’), with the risk increasing by the time the new treaty comes into force in 2020, the world will have diverged further from the path needed to limit warming to 2°C by 2100. A warming over 3°C could bring the world close to several potential global-scale tipping points.

 

Figure 1: The Gigatonne gap

Source: Climate Action Tracker (2011)

 

How does the Durban Platform differ to previous agreements at Copenhagen, Cancun etc?

The Kyoto protocol, agreed in 1997, is the world’s only existing treaty stipulating cuts in greenhouse gas (GHG) emissions, but the cuts only apply to developed countries, excluding the United States, and the first commitment period expires at the end of 2012. Accords were also struck in 2009 and 2010 at Copenhagen and Cancun respectively, by which most countries and all of the biggest economies set out national targets on emissions curbs up to 2020. But these are voluntary, not legally binding, and give rise to the Gigatonne Gap discussed earlier. Some expectations were that at COP17, agreement would continue down the path towards voluntary climate commitments; however, the Durban Platform shifts the countries towards a legally binding agreement that would come into force in 2020. IDEAcarbon expect that this will be largely the same prediction of the ‘shell’ of the Kyoto Protocol, followed by a binding agreement in the longer term.

What about the Clean Development Mechanism?

As a result of the preservation of the Kyoto Protocol and a second commitment period, emissions offset markets based on the Clean Development Mechanism (CDM) and Joint Implementation (JI) will remain active. Agreements to include Carbon, Capture and Storage (CCS) projects were part of the agreed Durban Package.

What was the EU’s position before? How did this pan out?

The EU’s position was by far the most flexible and pragmatic of all industrialised economies as Durban kicked off. Unlike Japan, Canada and Russia, it had not ruled out the possibility of extending Kyoto. However, as the talks approached, the EU was accused of moving the goalposts by insisting that in exchange for signing up to a second commitment period for the Kyoto Protocol, all major emitters, including India and China, would have to agree to a roadmap that detailed timelines for a global agreement. This is the exact scenario that prevailed.

What are the implications of the Durban Package forcarbon traders?

The implications are three-fold. First, a second commitment period to the Kyoto Protocol means that CERs no longer become valueless assets in 2013. Projects will continue to be developed, albeit the majority in Least Developed Countries (LDCs), and CERs will continue to be traded. Second, with the EU using its already planned emissions reduction commitments in the Kyoto Protocol, the EU will be revising these commitments by attempting to push them even further, meaning we are likely to see renewed debate on a 25-30% reduction by 2020 on 1990 levels. Third, the fact that all countries around the world will have emissions targets means we are likely to see many more carbon markets springing up over the next decade, given the necessity of an emissions target to a cap-and-trade scheme.

What progress was made with the Green Climate Fund?

This was largely a win for developing countries as the US was accused early on in the negotiations of attempting to ensure a body like the World Bank, over which the US wields disproportionate power, will be the body under which the Green Climate Fund (GCF) operates. This later failed. The draft governing instrument has largely been approved as it was laid out by the Transitional Committee before COP17. It was also agreed that the GCF shall operate as a financial entity under the authority of the COP, in much the same way as the Global Environment Facility operates, offering concessional lending and grants to developing countries. The implication, however, is that since industrialised countries wish to use private finance to source a significant sum of the £100 billion, this private finance is now unlikely to pass through the GCF. That said, the GCF will have a private sector facility, although it’s not clear how this facility will operate. The GCF us expected to be one of the major distribution channels for the U$100 billion in assistance which developed countries have pledged to mobilise for developing countries annually by 2020. Germany has pledged E40million and Denmark E15million for the operation of the GCF.

What progress was made on NAMAs?

Although detail on NAMAs is still somewhat absent, a very positive outcome here is the COP recognising the ‘ambition gap’ – the gap between proposed mitigation actions (aka emissions targets, or QELROs in the UNFCCC slang) and the level needed to stave off climate change above 2°C – is too large and only widening. The COP agreed to review targets to ensure that, globally, they close this ambition gap and review it on an ongoing basis.

What about deforestation? What progress was made on REDD+?

There’s agreement that forest countries should be able to choose whether to use Reference Emission Levels (RELs) or Reference Levels (RLs). On the verification of emissions reductions, the text does not specify a body that is responsible for the verification. This could be forest countries, donor countries or third parties. Given the political element to verification – namely the protection of national sovereignty – it seems likely REDD+ could proceed down the same lines as the CDM, meaning forest country bodies approved by the UNFCCC will verify emissions reductions, although we will probably have to wait another year before there is clarity on this issue. The text puts forward requirements for the reporting of safeguards. Controversially, and attracting criticism from many observers, it does not do enough to measure how safeguards will be respected, and in the event that they are not respected, detail the punitive measure faced by those inviolation of those safeguards. And on finance, the text simply pushes back a decision on finance by asking the secretariat to provide options on financing modalities and procedures before the thirty-eight meeting of the SBSTA.

Who were the heroes and villains at Durban?

This depends entirely on your perspective. From both an environmental, logistical and negotiating point of view, the EU came up trumps, winning the support of every country in the world for a globally-binding agreement that aims to have targets agreed by 2015, and to come in to force by 2020. But from an equity perspective, India may be perceived a winner, as with China they both accused the EU of violating the “respective capabilities” principle by forcing the assignment of targets on developing and developed countries alike, although this argument is weakened somewhat when it is considered that the LDCs and G77 were onboard with the roadmap before India. China may be more generally perceived as a hero, but the truth is, China’s position has always been reasonably flexible and pro-solutions, whilst also implementing far more policies to tackle climate change than, for example, the United States. Interestingly, the United States stayed in the background at Durban, not presenting significant hurdles to progress, although this is because the agenda pushed by the EU – legally-binding targets for all countries – was essentially what the United States has wanted for a long time.

What are the next stages, and what challenges does the Durban Platform face in going through smoothly?

At Durban, parties agreed to establish an Ad-hoc working group on a Durban platform for enhanced action (the AGDP. The AG-DP has the mandate to develop a “protocol, another legal instrument or an agreed outcome with the legal force under the Convention applicable to all parties.” The AD-DP will start its work as a ‘matter of urgency’ in the first half of 2015. Next December will see 2012’s COP18 hosted by Qatar, from 26 November to 7 December, and will test the water with regard to the Durban Platform’s success of reaching a global climate change agreement by 2015 at the latest. They are expected to be tough and lengthy as different Parties, and vested interests, bring different views to the table for a fair and effective global Treaty. Further, the next 3 years are unknown in terms of political or economic changes that could affect the outcome, such as the possibility of a new United States Republican President refusing to negotiate, even though the Durban Platform includes all countries. The biggest problem now is ensuring that targets for all countries are set by 2015, and that those targets do in fact close the ‘ambition gap’ for a climatically stable world. At any point a Party could still walk away from the negotiations, meaning that great care will now have to be taken in ensuring the platform is translated in to targets that are satisfactory to all.

Acknowledgement

IDEAcarbon would like to acknowledge and thank our Advisory Board members during COP17 who gave their insights and various contacts during COP17 to inform IDEAcarbon intelligence gathering and editorial.