Ned Helme, CCAP, discussed sectoral options for a post-2012 climate policy framework. Comparing a sectoral approach to the current country-based approach under the Kyoto Protocol, he said targeting individual sectors would be easier, allow countries to gain experience incrementally, and avoid transfers of industrial activities from developed to developing countries. Regarding disadvantages, he noted that a sectoral approach would be less cost effective, and warned against the possibility of “emissions leakage” outside covered sectors.

Jake Schmidt, CCAP, discussed five possible designs for a sectoral system based on: emissions growth cap; target of emissions per unit of industrial output; sector benchmarks; sector policy credit generation; and cross-national policy harmonization. He said key questions include: which sectors should be included; whether rules should be binding; how reduction targets should be set; and how a sectoral approach should 

Maria Teresa Szaur, Andean Corporation of Promotion (CAF), indicated that the Latin American region has seen a growth and strengthening of both the CDM market and the capacity to engage in CDM projects, with the creation of a robust regional institutional framework.

Christiana Figueres, CAF, noted that Latin America has demonstrated political leadership in the climate regime, with nearly all Latin American countries having ratified the UNFCCC and the Kyoto Protocol. She said Latin America is a leader in CDM projects, and outlined a number of reasons. First, she highlighted the robust CDM project portfolio in Latin America, in terms of quantity, quality and diversity. She also emphasized the expertise in developing and implementing CDM projects, and highlighted involvement of the private sector. Indicating that strong institutional backing for CDM mitigates risk, she stressed that the comprehensive coverage of Designated National Authorities (DNAs), local

verification and certification services, and the activities of the regional development bank all reduce transaction costs for CDM projects in Latin America. Figueres highlighted the contribution of the CDM to sustainable development in Latin America, identifying social and economic benefits, and stressed that Latin America has the capacity to participate in a climate regime beyond 2012.

Discussion: Participants considered how to resolve potential conflicts of interest between the public and private sectors, and stressed the importance of engaging all sectors and including CDM in national development strategies. A participant highlighted the major contribution of transport to GHG emissions, and questioned why the transport sector has been overlooked when developing CDM projects. Another participant enquired as to whether hydrofluorocarbon projects could be anticipated in Latin America, and representatives from Latin American DNAs indicated that none were expected. Figueres said funding for DNAs came from public sources, revenues from fees for project evaluation and international cooperation. A participant suggested that the experience vested in Latin American DNAs could be communicated to funding institutions in order to build their capacity to engage in CDM project development. The need to ensure the quality of project proposals in order to attract investors was stressed.

Toshi Sakamoto, Climate Technology Initiative (CTI), introduced the CTI, indicating that it is a multilateral initiative aimed at facilitating the transfer of climate technologies.

Elmer Holt, CTI, stressed the importance of partnerships, private sector engagement, enabling environments and targeted capacity building in promoting technology transfer.

Margaret Martin, Chair of the Expert Group on Technology Transfer (EGTT), reported on the EGGT workshop on innovative financing options for technology transfer held in Montreal, Canada, from 27-29 September 2004. She stressed the facilitating role of partnerships and the need for enabling environments.

Terry Carrington, CTI, reported on a workshop on technology diffusion held in Jakarta, Indonesia, on 4-5 February 2004, indicating that the

workshop had examined the current energy situation, renewable energy, possibilities for regional cooperation, governance, financial barriers and the CDM.

Morihiro Kurushima, CTI, stressed that CTI works with government and financial institutions to provide a “tool box for energy and the environment.”

Kishan Kumarsingh, EGTT, highlighted the need to develop enabling environments in developed countries to facilitate technology transfer, such as providing financial incentives.

Larisa Dobriansky, US Department of Energy, noted that mobilizing private sector investment for technology transfer requires clear, transparent and predictable regulations.

Andrej Kranjc, Slovenia’s Ministry of Environment and Spatial Planning, identified three pillars for technology transfer, namely financing, an enabling environment and the coordinating role of governments.

Nick Campbell, International Chamber of Commerce, stressed that technology transfer is ”alive and well” in the private sector, emphasizing that private companies are always seeking new markets.

Patricia Garffer, US Agency for International Development, introduced the US Climate Technology Cooperation Gateway website, which provides climate technology information in an accessible format for business and other stakeholders.

Discussion: Participants considered whether the EGTT should provide information on the adaptation of technologies for small island developing States. They role of business in diffusing climate technology to support the goals of the UNFCCC, stressing the importance of certainty.

Heiner von Luepke, Food and Agricultural Organization of the United Nations, presented a study on national regulations concerning CDM projects in the forestry sector. He said there is pressure to find national legal frameworks before the first Kyoto commitment period starts, and outlined regulatory options including market mechanisms, subsidies, command and control legislation and information systems.

Maria Socorro Manguiat, IUCN, identified additionality, the right to Certified Emission Reductions (CERs) and environmental and socioeconomic standards as the most pressing legal challenges to national regulation regarding CDM sink projects. She said legal reform may not be the best solution to address these issues in the short term.
Juan Rodrigo Walsh, Fundacion Vida Silvester Argentina/WWF, outlined the legal and institutional framework for CDM in Argentina. He said environmental laws make public consultations a mandatory part of the CDM approval process, and noted that the fiduciary mechanism, a specific property right in Argentina’s Civil Code, could be useful for CDM

sink projects. He emphasized that economic and political stability are more important for CDM projects than legal reform, and said improved coordination between federal and provincial authorities is needed. He said the additionality of CDM sink projects is difficult to demonstrate in Chile because the forestry sector is well established.

Discussion: Participants discussed ways of sharing benefits from CDM sink projects with local communities. They said while there is no single rule, options include straight payments, CERs, trust funds, specific investment into the community, and splitting the proceeds between investors and landowners. Manguiat noted that projects with clear synergies with the Convention on Biological Diversity and the UN Convention to Combat Desertification might not be eligible under the CDM because of additionality criteria. Participants noted that the additionality requirement may also discourage countries from setting new environmental standards, but recognized that “the additionality tool” by the CDM Executive Board has addressed some of these problems. Participants suggested that the current definition of forests may be problematic for the additionality of CDM sink projects in countries with tropical forests. Walsh said while countries can decide to nationalize the right to carbon, it is unclear whether this policy yields benefits.

and cooperates with large Indian companies developing CDM projects.

Elisabeth Mausolf, GTZ, explained GTZ’s adaptation policy, which is based on a holistic approach that tries to mainstream adaptation to climate change into the activities of the German Development Cooperation. She said priority sectors include water resources, agriculture, terrestrial ecosystems, coastal zones, human settlements and health. Mausolf outlined GTZ’s country initiative in Mali, emphasizing, inter alia, the importance of a multi-stakeholder approach, communication among stakeholders, improvement of the agro-meteorological service, and measures against soil erosion.

Robert Dilger, GTZ, spoke on climate change in Nicaragua and the GTZ Sustainable Resource Management Program, which will build on existing projects and comprises policy assessment, land use planning and development of entrepreneurial skills.

Liana Bratasida, Indonesia’s Ministry of Environment, said her country ratified the Kyoto Protocol in October 2004, and the DNA is about to be formalized.