Briefings from Bonn -1

The AWG-LCA Commences with Innovative Proposals by the Parties

AWG-LCA Workshop Plenary:

At the ongoing SB28 at Bonn, the parties meet to discuss about the investment and financial arrangements for the Long Term Cooperative actions on Climate related issues. The proposals from the Annex-1 and the non-Annex-1 parties were tabled for discussion. On broader issues, like the governance of funds and investments, there were practically no differences between the developing countries. They demanded that the COP will be the authority to administer such distribution of funds. All the developing countries unanimously stated that there is a need to scale up the magnitude of fund atleast 2- 3 times. Further, sighting Article 11 of the Convention, the G77, represented by the Philippines sighted that the issues like transparency, equitability, and balanced representation should form the core of arrangements. The developing countries demanded “direct access to funding by the recipients”. EU has stressed upon the need to step up the objectives of “shared vision” in order to make substantial reduction of emissions by 2050. The representative from the EU has elaborated upon the effectiveness and importance of various market mechanisms for the provisioning of the future funds. It has been observed that the current arrangement amounts to about 0.3-0.5 percent of the EU GDP but the reduction measures carried out with this fund will not be enough for meeting the EU targets of emissions. The EU also proposed that the finance should be measurable and at the same time accountability issue should be attached to the recipients, apart from fulfilling other criteria like predictability and sustainability as given under the Bali Action Plan(BAP).

Bangladesh, representing the LDCs, has proposed for the scaling up of funds and also emphasized of the sustainability aspect of the funds, and has expressed strong difference about the effectiveness of market mechanisms for fulfilling the objectives of the development goals. As a part of the long term policies on adaptation, the proposal from Bangladesh included support of hydrological and meteorological services, and early information services. As part of the mitigation activities, the proposal from Bangladesh included scaling up of REDD¹ and compensatory mechanisms for reductions under REDD. The future proposal on resource generation has been proposed to be met from binding commitments based on historical responsibility of emission and equity criteria. The other source of funding is additional levy of 1 percent on the aviation and maritime fuel.

Indian submission to the workshop stressed on the issues of social development mechanism in accordance with the Article 4.7 of the Convention. Emphasis was also given on the inaction on part of developing countries in meeting their commitments. It was emphasized by the representatives that the new and additional resources should not divert the existing, current and future provisions under the convention. The delegation emphasized on the funds to be made available as grants and not loans, even if they are on soft conditionalities. The demand of right pricing of carbon credits were raised as a part of future mechanism of funds availability. The Indian submission also pointed towards the ineffectiveness of the Multilateral Funding Institutions (MFIs) by citing the fact that the IBRD under the World Bank has only disbursed -6.2 billion US dollars during 2007-08². The delegation also stated that the proposal of levy is not enough to meet the future requirement of incremental funds for long term cooperation mechanisms.

Presentation by Japan stressed on the point that adaptation fund should focus primarily on vulnerable regions of LDCs and small island states. Japan is currently having consultations with few African countries to have future collaboration on reducing mitigation by using their Cool Earth’s Partnership Fund amounting to 10 billion US$ for next 5 years. However, the conditionalities were not explicitly mentioned by Japanese delegation rather they chose to discuss the same bilaterally with interested parties.

The most interesting and concrete proposal for generating resources came from Switzerland, which proposed imposition of levy on carbon dioxide emissions by the countries³.

SBSTA 28 Developments:

At the Third Meeting of the SBSTA, the deliberations were centered on the proposal on Item 7(b) of the Provisional Agenda, concerning the fuel use for international aviation and maritime transport⁴. There was a clear difference among the developing countries on the issue. The countries like India, China, South Africa, Brazil, and Venezuela deliberated upon the continuation of discussion of the issue for removing the differences. However, the oil producing countries led by Saudi Arabia proposed for the closing of discussion of the issue and submitted that this should be taken up by the specific agencies like the IMO to decide on the magnitude of the proposed levy. This argument, if accepted will in effect shut the door for further discussions under the UNFCCC. It has been observed that the oil producing countries have vested interest in this proposal because the additional levy is not going to harm them as it will be passed on to the buyers in any case. Thus, they will hardly be affected by the additional levy.

Norway aggressively proposed for the closing of discussion of Item 7(b), and submitted in favour of taking up the issue only after COP 15 for long term arrangements. India suggested that due to the existing overlapping in the SBI and SBSTA, the discussions on the same should be done in a coherent manner in consultation with the SBI and also keep the options open for further discussions of this Provisional Agenda.

SBI 28

Developments taking place at the SBI Contact Group focused on the issue of financing and building up of a performance indicator for the technology transfer. Japan, US and Canada advocated private sector funding for technology transfer. The issue of funding became a contentious one as parties like Ghana have very strongly expressed grievance about the lack of transparency of GEF in preparation of the report on strategies for scaling up the technology transfer. The Ghanian delegation has expressed concern about the Terms of Reference (ToR) not being followed in true spirit. The developing country including India has asked GEF for interpreting the existing ToR in broader terms. US, Japan and Canada emphasized about the elements to be included as a part of the performance indicator under the technology transfer arrangements.

Issues Discussed at the Side Events:

SustainUS , a US based NGO made presentation at a side event titled “ Beyond Bali: Mitigation, Technology transfer and Adaptation” . The side event touched on the issues of 1) low carbon technologies for rural development and 2) technology transfer under CDM and other mechanisms and technology absorption.

The presentation and the discussions hinged on the ideas related to enhancement of technology transfer. The organisation noted that the means to enhance technology transfer should happen under the CDM framework. It also presented a difference between technology transfer and technology absorption. According to them, the difference lies between the latter being a widespread, long term process following technology transfer. They also noted that a stable and conducive policy framework, investment etc. are needed for technology adoption.

It has been observed by the Convention as well the Protocol that CDM cannot be the only mechanism for technology transfer, as has been pointed out by Sustain US representatives. It is essentially a complementary arrangement to the adaptation policies. Various mechanisms provided by the UNFCCC should ensure that business motives do not hijack the local and indigenous technologies available worldwide. The basic motivation of the presentation from the US based NGO is to promote business under the guise of technology transfer and also to construct new terminologies just to make things complicated. The UNFCCC should be very alert to ensure that the discussions take place under the existing practice and terminologies.

The session by the World Bank titled “ Implementation of adaptation to climate change activities in Latin America”, highlighted the projects that are being implemented by it and are funded by the GEF. The projects are being carried out in Caribbean and Latin American countries. In these projects in some of the countries, the GEF is the financier while the Bank is the implementer of the projects which span a variety of projects meant for adaptation. While one in Columbia aims to reorient the adaptive strategies to save livelihoods at the tourism based mountainous regions. Another in Castries, Saint Lucia aims to rework on the coastline to prevent pollution. All these projects notably argue about the contribution of the community and the participatory approach to the projects. The only fact that is not shared in these anecdotal stories is that the World Bank is also the institution that promotes lending in exchange for capturing policy space in many of these nations.

It was argued that while GEF is only a financing instrument, the World Bank is an implementing agency and hence the partnership makes sense. This raises the question as to why the governments in Latin American and Caribbean nations cannot themselves implement these adaptation projects given that local participation is so well articulated supposedly.

In the same session, some of the presentations also pointed out the shortcomings of the IPCC initiated scientific reports. This has led to the underestimation of the number of extreme climatic situations happening in the region.

Centad Team                                                                 5 June 2008