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Special Report on Selected Side Events at UNFCCC COP-6
published by the International Institute for Sustainable Development (IISD)
in co-operation with the UNFCCC Secretariat
<< visit the UNFCCC Secretariat website >>

Monday 13 | Tuesday 14 | Wednesday 15 | Thursday 16 | Friday 17 | Saturday 18 |
Monday 20 | Tuesday 21 | Wednesday 22 | Thursday 23 | Friday 24 |

Events convened on Monday 20 November 2000

The Kyoto Protocol and the WTO 
presented by the Royal Institute of International Affairs (RIIA), the International Institute for Sustainable Development (IISD), and the International Centre for Trade and Sustainable Development


Lucas Assunção, ICTSD.
This post-Seattle debate on potential synergies and conflicts between the Kyoto Protocol and the World Trade Organisation (WTO) attracted intense interest. Panelists from the ICTSD and the RIIA identified a number of reasons for potential conflicts, some of them integral to obscure elements of the trade regime and its openness to ongoing interpretation, while dimensions of conflict are also likely to emerge due to the nature of Multilateral Environmental Agreements (MEAs), such as the Protocol, where trade restrictions may be used to encourage compliance.

Duncan Brack, RIIA Energy and Environmental Programme, identified three areas of particular complexity: 
· where States attempt to implement domestic standards which exceed those agreed internationally, for example, in domestic attempts to follow the precautionary principle; 
· where there is an attempt to make a distinction between production processes, on environmental grounds; and 
· where enforcement of an environmental regime involves a discriminatory trade action. 

Lucas Assunção, ICTSD, identified attempts to implement policies and measures (P&Ms) as a huge challenge, given the radically novel character of the Protocol compared to other MEAs. He said the WTO's Committee on Trade and the Environment had not taken account of the specific domestic mitigation measures to be made available by the Protocol, nor had climate negotiators addressed the trade implications of P&Ms. He envisaged that problems might arise if P&Ms came into conflict with trade rules on subsidies. Specifically, this could happen in areas such as energy efficiency standards, government procurement policies, and carbon taxes. Assunção pointed out that the WTO has some flexibility in its approaches both to subsidies and standards.

Ali Dehlavi, ICTSD, looked at the compatibility of WTO rules and trade in ERUs, AAUs and CERs. He suggested that the functioning of the flexibility mechanisms may be undermined by trade rules, for example, in the likely scenario that some countries are excluded from participating in emissions trading. He anticipated violations of the "most favored nation" principle, the Subsidies and Countervailing Measures Agreement, and the General Agreement on Trade in Services.

Concluding the panel presentations, Brack examined the potential conflicts caused by the Protocol's compliance mechanism. Summing up, he expressed some pessimism about the development of more coherence between trade rules and the Protocol and suggested that "without a crisis there may be no opportunity."

Discussion: Discussants agreed that panelists were correct to identify standards and subsidy issues as the arenas for potential conflict between the Protocol and trade rules. However, the panelists were challenged to lower their levels of “paranoia” given the nature of the WTO, which is not a "self enforcing" regime but relies largely on the willingness of one or more members to initiate a complaint. It was suggested that complaints to the WTO arising from the Protocol may not be as frequent as some envisage.

More information:
IISD: http://iisd.ca
ICTSD: http://www.ictsd.org
RIIA: http://ww.riia.org

Christian Vrolijk <[email protected]>

Quantifying Kyoto:the impact of COP-6 decisions on the market
presented by the Royal Institute for International Affairs (RIIA)

Christiaan Vrolijk, RIIA.
Chad Carpenter, International Institute for Sustainable Development (IISD), chaired this event. Christiaan Vrolijk, RIIA, noted that countries aim for flexibility in achieving their targets because of concerns about the possible economic impacts of limitations on CO2 emissions. He explained that the Kyoto Protocol is marked by a high degree of flexibility, ranging from emissions trading to sinks and the basket of GHGs. Because the full extent of this flexibility is difficult to assess, this event aimed to highlight some of the impacts of decisions slated to be made at COP-6. First, the demand for GHG reductions was assessed for the business-as-usual (BAU) scenario, followed by the estimation of marginal abatement cost curves, which indicate the emissions reduction potential at a given price. The flexibility of the climate regime was examined in an assessment of the main factors that influence reduction costs.

Michael Grubb, Imperial College, London, outlined the uncertainties surrounding the different models that were examined. He said that these models show different levels of energy and carbon growth, and projections from the global economic models rarely match those reported in FCCC National Communications. He argued that the extent of flexibility needs to be balanced in setting the rules for implementing the Kyoto Protocol.

Discussion: Discussion focused on data sources, the carbon intensity of the Russian economy, supplementarity, and the economics of credits generated through the CDM.

More information:
Royal Institute for International Affairs: http://www.riia.org

Christiaan Vrolijk <[email protected]>

Climate Change and the World Bank 
presented by the World Bank

Charles Feinstein, ESMAP World Bank, Lars Vidaeus, World Bank, Ajay Mathur, World Bank Climate Change Environment Department, Ken Newcombe, PCF World Bank, Peter Kalas, NSS World Bank.

Lars Vidaeus, World Bank, introduced speakers on the Bank's involvement in climate change issues. He affirmed that climate change is core to its mission to improve quality of life and poverty alleviation through sustainable development and equitable growth. Ajay Mathur, World Bank, outlined the Bank's climate change activities, including: the World Bank-Norway AIJ Programme; the Prototype Carbon Fund (PCF); National Strategic Studies (NSS); environmental strategy for the energy sector; the WB/GEF strategic renewables partnership; and the CDM Assist, a collaborative programme to build capacity in Africa. Peter Kalas, World Bank, described the National AIJ/JI Strategy Studies (NSS) as a mechanism to enhance technical knowledge among host countries. He described NSS as providing options on international markets and other financing opportunities for GHG emissions offsets. Charles Feinstein, Energy Sector Management Assistance Programme (ESMAP), World Bank, described a joint UNDP/WB global technical assistance programme that provides innovative solutions to governments and the private sector focusing on pre-investment activities. He announced the allocation of $750M a year over the next five years to support rural renewable energy and energy efficiency projects as part of the World Bank Group - GEF Renewables Strategic Partnership.

Discussion: Representatives of the Youth Climate Summit criticized the Bank's fossil fuel based lending portfolio. Other participants raised the role of the Bank promoting low cost renewable energy, the liberalization of the energy market, the Bank's natural disasters initiative, and the involvement of NGOs in the Bank's lending process.

More information:
NSS carbon market simulation model: http://www-esd.worldbank.org/cc (January 2001)
ESMAP: http://www.esmap.org

Lars Vidaeus < [email protected]>
Ajay Mathur <[email protected]>
Peter Kalas <[email protected]>

Turning the promise of technology into reality
presented by The Business Roundtable (TBR)

A number of initiatives on breakthrough technologies to address climate change mitigation were presented at this workshop. Lynn Schloesser, Eastman Chemical, explained that the Business Roundtable (BRT) is an association of chief executive officers of leading corporations who are concerned about climate change and committed to effective action. 

Linda Trocki, Bechtel, presented the findings of "The National Summit on Technology and Climate Change," convened to identify specific strategies to accelerate technology development, implementation and global diffusion. Tom Mark, General Motors, delivered a presentation on technology innovations in automobile combustion engines, including developments in hydrogen, fuel cells, and electricity. Tom Jorling, International Paper, presented a project on pine afforestation to sequester CO2. Georgia Callahan, Texaco, announced the creation of new business units on reforestation, fuel cells and solar energy.

More information:

Partnership for Climate Action
presented by Environmental Defense (ED)

Dan Dudek, Environmental Defense: "The goal is to share learning and explore how to achieve GHG reductions at the lowest possible cost." He invited companies to join the PCA.
Environmental Defense and representatives of several multinational corporations, including Shell, BP and DuPont, presented the Partnership for Climate Action (PCA). Dan Dudek, ED, explained that under the PCA, companies have made a serious commitment to cut GHG emissions. He said that the companies are showing leadership and good corporate citizenship by anticipating how to conduct business in a carbon constrained world while improving their environmental record. 

Fred Krupp, ED, noted that the PCA members' combined emissions are equivalent to those of the country ranked 12th in the world for its GHG pollution. Total emissions in 1990 were 330M tonnes of CO2 equivalent, and total cuts pledged under the PCA would amount to 22% of this figure. Thomas Jacob, DuPont, noted that most of his company's reductions would be non-CO2 related. Thierry Berthoud, Pechiney, emphasized that much can be learned from shared experience. One such opportunity lies in setting up emissions trading systems between the companies, and thus demonstrating the viability of market approaches to the mitigatation of GHG emissions.

Discussion: An extensive discussion followed. On lessons for an international trading regime, BP advocated setting up an exchange where allowances can be traded rather than using bilateral arrangements. In addition, BP believes that liability for the integrity of a trade should lie with the seller because this will improve confidence in the market. On the practical implications of the PCA on current negotiations, panelists stressed that this private effort has just taken off and much needs to be learned and further defined. On the issue of leakage, Anita Burke, Shell, remarked that this underlined the need for transparent accounting rules. She noted that Shellis already incorporating the carbon implications of new investments and is adjusting its business portfolio to reflect a carbon constrained future. Panelists stressed that the PCA does not lobby the United States Congress, and that most of its focus is related to learning by doing. In concluding the event, Fred Krupp, ED, argued that a carbon constrained world is highly probable and that companies need to be prepared to operate under such conditions.

More information:

Dan Dudek <[email protected]>

Engaging the private sector in the CDM:
What are the WBCSD and UN agencies doing and why?

presented by the UNFCCC with UNDP, UNIDO, UNCTAD and WBCSD

David Moorcroft, WBCSD, presented work carried out in cooperation with several United Nations agencies to construct a platform for commercially viable CDM projects. He discussed the need to assess the business context of potential projects and to develop an effective system of knowledge management to avoid "parachuting" experts into the field to carry out projects.

Jane Owen Jones, Lloyd Masters Consulting, described a knowledge management system. Citing the critical need to retain knowledge after individual projects are completed, she described an internet-based information system that focuses on connecting people involved in CDM projects while also integrating detailed documents and background information.

Representatives from Brazilian industry and government joined in a dialogue about public/private partnerships in their country. Panelists stressed the need for profitability in CDM projects, stating that the private sector foots the bill.

Discussion: Discussions addressed the difficulties in initiating CDM projects without a pre-existing structure; the need to move beyond capacity building workshops to project implementation; and the convergence of sustainable development goals with government and industry objectives.

More information:

David Moorcroft <[email protected]>
Jane Owen Jones <[email protected]>
Arun Kashyap <[email protected]>

Energy Indicators in IEA countries and beyond
presented by the International Energy Agency (IEA)

Lee Schipper, IEA, (left) demonstrated how key indicators for energy efficiency, such as in home heating, can be translated into indicators of carbon emissions.

In describing links between energy use and human activity, Fridtjof Unander, IEA, explained and defined energy indicators. He illustrated the IEA's development of indicators service sector energy use and CO2 emissions. Stressing the usefulness of indicators for understanding energy use, he noted the importance of developing reliable and consistent data. Lee Schipper, IEA, citing a recent report on the historical evolution of energy use in selected IEA countries, emphasized that indicators should be used to understand underlying policy impacts on GHG emissions. He demonstrated how indicators for the fuel economy of cars and household light trucks are derived in order to map out progress in improving energy efficiency. Michel Francoeur, Natural Resources Canada, provided an overview of Canada's experience of using indicators to determine energy efficiency trends. On Germany's indicator work, Wolfgang Eichhammer, Fraunhofer, presented the Odyssee/SAVE (EU) project which produced, among other things, a database on energy efficiency and CO2 indicators.

Discussion: Participants discussed reliability of data, communicating outputs to a wider audience, structural trends in the energy sector, potential for autonomous energy efficiency pricing, and underlying policies affecting carbon reduction strategies.

More information:

Lee Schipper <[email protected]>
Fridtjof Unander <[email protected]>
Michel Francoeur <[email protected]>
Wolfgang Eichhammer <[email protected]>
Hans Koch <[email protected]>

Flexibility mechanisms: an opportunity for sustainable development
presented by the World Council of Nuclear Workers (WONUC)

Andr� Ma�ssieu, WONUC, invited participants to ask questions about nuclear energy. Responding to a question on nuclear waste, he criticized the anti-nuclear lobby and presented an example of waste storage. He announced WONUC plans to organise a conference on this topic in 2001.

Ma�ssieu assured participants that nuclear workers do their best in nuclear power stations. Asked about the economic viability of the nuclear industry, Ma�ssieu said he was convinced that nuclear energy is and will remain the answer to climate change. He noted that WONUC studies indicate the possibility of halting increases in GHG emissions through the construction of nuclear reactors.

Due to a dispute over the organisation of this event, four of the five scheduled panelists did not participate.

More information: 
http:// www.wonuc.org

Andr� Ma�ssieu <[email protected]>

Operationalizing the Clean Development Mechanism: accreditation, conformity assessment and standardization issues
presented by the International Organization for Standardization (ISO)

Hendro Sangkoyo, Consortium for Community Forest Systems.

Opening the event Viktor Kaisiepo, West Papua Peoples Front, invited panelists to discuss the issue of defining a forest. Hendro Sangkoyo, Consortium for Community Forest Systems, stated that the forest definition proposed by COP-6 will result in the commodification of forests and threatens serious social and ecological implications. Johnson Cerda, Coalition of Indigenous Organizations of the Amazon Basin (COICA) and Amazon Alliance, expressed concern about recent government interest in defending the Amazon for its carbon value, noting that Indigenous Peoples have been protecting forests for centuries. He noted that Indigenous Peoples seek greater formal participation in international negotiations. Kalimba Zephyrin, Communaut� des Autochtones Rwandais, said that forests represent "life� for indigenous groups in Africa. Chris Webster, Representative of the Maori Congress, expressed concern that treating forests as a commodity threatens Maori spiritual links and territorial rights to forests.

Discussion: Lengthy discussions ensued on a number of key issues. On defining afforestation, reforestation and deforestation, Sangkoyo said that formulating definitions is deeply embedded in Western positivist thinking. On the acceptability of including �averted deforestation� under the CDM, Cerda argued that forests represent the past and future of Indigenous Peoples. Furthermore, he underscored that the Kyoto Protocol reduces forests to a calculation of their carbon sequestration capacity when they should be valued as part of an ecosystem. Zephyrin said land rights were a key reason for excluding sinks from the CDM.

Joyotee Smith, the Centre for International Forestry Research (CIFOR), posed the possibility of adopting the ecosystems approach used in the Convention on Biological Diversity (CBD), which contains principles supportive of Indigenous Peoples. Sangkoyo responded that many contradictions between the CBD and the FCCC require attention.

More information:
Joyotee Smith <[email protected]>

Viktor Kaisiepo <[email protected]>
Kalimba Zephyrin <[email protected]/rwandal.com>
Johnson Cerda <[email protected]>
Chris Webster <[email protected]>
Hendro Sangkoyo <[email protected]>


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