Briefings from Bonn-3

Various Possibilities discussed as the Contact Groups Meet

Financial mechanism under SBI

In this session of the Subsidiary Body for Implementation, special references were made by the G77 and China on making submission to the GEF for increased funding whose inadequacy is established. Further there is lack of clarity on the GEF mechanisms on information on the number of projects approved for funding and those turned down for lack of funding. This process should be transparent as noted by the G77 and China group. Information on investment flows to particular destinations should be clear. The EU noted that they would look forward to what the G 77 proposes for the GEF.

The discussions were carried further on the process of the 4th review of the financial mechanism. The chair of the session stated that the 4th review was important and should not be concluded before COP 15. For the same there might be an overlap with the AWA- LCA. To this the G77 noted that the fourth review was important and the GEF was only a part of the review process. In any case the GEF will need to be replenished by the end of November. Norway raised a question on the completion of the fourth review and asked if it would be complete by Poland or by Copenhagen. The EU remarked that the replenishment should be based on the fourth review of the financial mechanism and some decision should be reached in Poznan. G77 countered this and noted that they did not intend to finish the review in Poznan. We need additional info from the GEF on what is needed for the review. To this the chair replied that Poznan will have inputs on both the GEF and inputs on the 4th review.

Mexico suggested that overlap should be avoided with the AWG-LCA. The G77 suggested that the focus should be on the kind of measures that are needed to implement the issues related to finance and the group (present there) should focus on that.

The EU asked for clear for clear guidelines for the fourth review of the financial mechanism.

The workshop concluded with the chair noting that the parties are comfortable with the G77 who will provide submissions with text and other parties can make submissions without text.

AWG – KP related to the Agenda Item 3( c ) and 3(d)

The sectoral emissions are a means for the parties to meet their commitments. The talks are needed to deliberate on what needs to be done in the second commitment period. On issue that emerged very strongly in the session was the emergence of new gases. The EU noted that the post 2012 period should consider inclusion of new gases. New types of gases are emerging which have been identified in addition to the six types identified in the 4th assessment report of the IPCC. New types of HFCs and PFCs have been identified which comes from various sources as the electronic industry etc. These need to considered as the GWGs. (Global Warming Gases). The EU shared that at least two new substances have been identified which are not included in the Montreal Protocol and which are currently being used for testing though not widely used. The EU also is uncertain if the existing estimation methodologies cover these gases and noted that it has a limited knowledge on this aspect and would like to this to be covered by a technical paper.

Norway remarked that it supports the EU and the gases as mentioned by the EU is needed for inclusion and classification of gases not mentioned in the Kyoto Protocol must be done. Switzerland noted that clarification was needed on production, geographical location and other issues. South Africa seconded the same and stated that these issues should also be discussed under SABSTA. Canada offered to assist with the technical paper. It was states by the EU and generally agreed that the commitment without inclusion of the newly identified gases will mean that the parties will have to turn back to the issue as emissions from those will create additional problems. Japan and Australia too were in support of the inclusion of the new gases. South Africa informed that these new substances are chemicals which are being explored and are not being commercially produced currently so there is no reduction commitment but these may be produced and consumed in the future. Sweden remarked that is support the G 77 on this issue and this cannot be postponed. India remarked that the IPCC should be involved in the same. China seconded India on this and noted that in addition to the inclusion of the new gases, energy transport sectors will require greatest reduction.

The second part of the discussion was on sectoral approaches. The chair noted that two characteristics of the sectoral approaches should be that first, they should be part of the national targets for emission reductions and second, they should not restrict trade. Slovenia remarked that they wished to see the expansion of the sectoral approach to maritime and transport issues. The key question in the meeting was the way of addressing sectoral approaches in the second commitment period. A ‘Bottom-Up’ means to sectoral approach was discussed. Switzerland asked for clarification regarding a common understanding on a sectoral approach and said it offered interesting avenues for putting caps.

Slovenia made clearer cases for the sectoral approach by dividing it along three parts. First, there should be a sectoral bottom up analysis which means that the ground situation for potential projects should be ascertained. This will provide the analytical tools for national efforts. Second, there should be what it termed as a cooperative sectoral approach outside the Carbon Market Mechanism. This will aim at mitigation and no crediting will be done for carbon reduction and it also noted that this should be part of AWG LCA. The third point is made was that there should be a sectoral trading and crediting as part of the global carbon market and this will also help developed countries in reaching their emission reduction targets.

Australia seconded Slovenia on this proposal. Canada remarked that the ‘bottom-up’ approach was just one approach. More discussions are needed on the issue and this must go to the AWG-LCA.

AWGLCA Agenda Item 3(d)

AWGLCA Contact Group met today to come out with suggestions related to technology transfer in furtherance to the workshop held on Agenda item 3(d) “ Enabling the full, effective and sustained implementation of the Convention through long-term cooperative action now, up to and beyond 2012, by addressing, inter alia Enhanced action on technology development and transfer to support action on mitigation and adaptation¹”.

The developed countries including EU and Japan observed in their respective interventions that market mechanisms and private sector role is important in technology transfer, diffusion and cooperation. In addition, the EU delegation advocated for creating an enabling environment, with focus on capital and risk management for private resource mobilization. The idea of sector specific technology transfer was mooted by Japan as a suggestion to national mitigation mechanisms.

As against the developed country proposals, the developing countries have advocated for proper monitoring and evaluation of the technology transfer under the existing framework of UNFCCC, and the role of public sector in technology development and diffusion. They are of the view that private partnerships should be simultaneous with the private initiatives. Further, specific proposals like auctions, south-south cooperation, bilaterals etc. should be explored as possible measures whereby technology can be transferred. The AOSIS representative emphasized on the need for developing adaptation policy related technologies, like, early warning systems. The proposed funds for technology transfer should be in the form of grants, and not as loans however soft the conditionality may be. It was submitted by Ghana that there is a need for developing a mechanism to measure, monitor, and verify the process of technology transfer across the geographical borders.

Centad Team                                                                 7 June 2008