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PRONK'S
"CORE ELEMENTS" TEXT – THE DETAILS
President
Pronk's new text contains core elements for the implementation of
the Buenos Aires Plan of Action (BAPA). It includes an introduction, a
short decision of the Conference of the Parties adopting the agreement
contained in an Annex detailing the key political decisions, and the
Annex itself, which is 12 pages long.
Introduction
In
the introduction, Pronk notes that this text builds on the
negotiations undertaken in the first days of the resumed COP-6, as
well as in discussions in the high-level Group convened by Pronk
himself, and in informal consultations. The text further notes that it
aims at the adoption of a "balanced package of decisions" and
takes the form of a draft decision that registers political agreements
on core elements of the BAPA. These agreements are to be incorporated
into complete decisions on the relevant subjects for adoption in the
coming week's negotiations. Some other issues have been left for
negotiation in the coming week, including those related to Articles 5
(methodological issues), 7 (communication of information), and 8
(review of information) of the Protocol.
The Decision
The
COP decides to adopt the agreements contained in the Annex to this
decision as core elements for the implementation of the BAPA. It also
decides to devote the coming week of negotiations to negotiating and
adopting a balanced package of further decisions to give full effect
to this agreement.
Annex
The
Annex contains the core political elements of agreement for
implementation of the BAPA, and is divided into eight sections
covering the key areas.
1) Funding to the Convention
The
first section of the Annex to the proposed decision addresses funding
under the UNFCCC. It proposes agreement by the COP that Parties included in Annex
II and other Annex I Parties that are in a position to do so provide
funding to meet the commitments under Article 4.1, 4.3, 4.4, 4.5, 4.8
and 4.9 through the GEF replenishment, the proposed Special Climate
Change fund, and bilateral and multilateral channels. It further
provides that appropriate modalities for burden sharing among the
Parties included in Annex II need to be developed. It specifies that
the Special Climate Change fund is to be established to finance
activities related to climate change that are complementary to those
funded by the resources allocated to the GEF and bilateral and
multilateral funding. These activities include adaptation; technology
transfer; energy, transport, industry, agriculture, forestry and waste
management, as well as activities to assist developing countries
diversify their economies. On LDCs, the text proposes that an LDC fund
be established, including funding for the purpose of funding NAPAs.
2) Funding under the Kyoto Protocol
The
second section of the Annex addresses funding under the Protocol. This
section agrees that appropriate modalities for burden sharing need to
be developed. It confirms the establishment of the Adaptation fund to
finance concrete adaptation projects in Parties to the Protocol. The
Adaptation fund is to be financed from the share of proceeds on the
CDM project activities and other sources of funding. Annex I Parties
are invited to provide this additional funding. The fund is to be
operated by the entity that operates the financial mechanism of the
UNFCCC.
3) Development and Transfer of Technologies
The
third section provides for the establishment of an Expert Group on
Technology Transfer comprised of 20 experts: three from each region of
non-Annex I Parties; one from a small island developing State (SIDS);
seven from Annex I Parties; and three from relevant international
organizations.
4) Implementation of Convention Article 4.8 and 4.9 and Protocol
Articles 2.3 and 3.14 (adverse effects)
This
section proposes agreement that the implementation of identified
activities in response to adverse effects of climate change be
supported through the GEF, the proposed Special Climate Change fund,
and other bilateral and multilateral sources. The COP also agrees to
consider at its eighth session the implementation of insurance-related
actions to meet the specific needs and concerns of developing country
Parties arising from the adverse effects of climate change, based on
the outcome of workshops on insurance. On the impact of response
measures, it agrees to support the implementation of identified
activities through the GEF, the Special Climate Change fund and other
bilateral and multilateral sources.
5) Matters relating to Protocol Article 3.14
Section
five of the Annex is on matters relating to Protocol Article 3.14. It
recognizes that minimizing the impact of the implementation of
Protocol Article 3.1 (assigned amounts) is a development concern
affecting both developed and developing countries. It recommends the
COP/MOP to request Annex I Parties to provide information, as part of
the necessary supplementary information to their annual inventory
report, on how they are striving to implement commitments under
Article 3.1 in such a way as to minimize adverse social, environmental
and economic impacts on developing country Parties. Priority should be
given to the implementation of, inter alia: the progressive reduction
or phasing out of market imperfections, fiscal incentives, tax and
duty exemptions and subsidies in all greenhouse gas emitting sectors,
taking into account the need for energy price reforms to reflect
market prices and externalities; cooperating in the technological
development of non-energy uses of fossil fuels, and supporting the
developing country Parties to this end; and assisting developing
country Parties highly dependent on the export and consumption of
fossil fuels in diversifying their economies.
6) Mechanisms
The Annex relating to mechanisms addresses: principle, nature and
scope; joint implementation (JI); CDM; and emissions trading.
On
principles, nature and scope, the COP agrees that:
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Parties shall be guided by the objective and principles contained in
Protocol Articles 2 and 3, and UNFCCC Article 4.7;
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Annex I Parties shall implement domestic action in accordance with
national circumstances and with a view to reducing emissions in a
manner conducive to narrowing per capita differences in emissions
between developed and developing country Parties;
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the use of mechanisms shall be supplemental to domestic action and
domestic action shall constitute a "significant element" of the
effort made by each Annex I Party to meet Protocol Article 3.1
commitments;
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Annex I Parties shall be requested to provide relevant information in
relation to their supplemental activities, in accordance with Protocol
Article 7, for review under Protocol Article 8;
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the provision of such information shall take into account reporting on
"demonstrable progress";
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the Compliance Committee's facilitative branch shall address
questions of implementation;
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a recommendation be made to the COP/MOP that CERs, ERUs and AAUs may
be used to meet Article 3.1 commitments and can be added as provided
for in Article 3.10, 3.11, and 3.12, and ERUs and AAUs can be
subtracted as provided for in Article 3.10 and 3.11 in conformity with
provisions on registries, without altering Annex B commitments;
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the share of proceeds to assist particularly vulnerable developing
countries to meet adaptation costs shall be two percent of the CERs
for a CDM project activity; and,
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a recommendation be made to the COP/MOP that eligibility to
participate in the mechanisms shall be dependent on compliance with
methodological and reporting requirements with oversight being
provided by the Compliance Committee's enforcement branch, and on
acceptance of the compliance agreement.
On
JI and the CDM, the COP agrees that it is the host Party's
prerogative to confirm whether JI/CDM project activities assist in
achieving sustainable development, and that Annex I Parties
"refrain" from using ERUs/CERs generated from nuclear facilities
to meet Article 3.1 commitments. On JI, the COP agrees to recommend to
the COP/MOP to establish a supervisory committee to supervise, inter
alia, the verification of ERUs.
On
the CDM, the COP agrees:
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to emphasize that public funding for CDM projects from Annex I Parties
is not to result in the diversion of ODA, and is to be separate from
and not counted towards the financial obligations of Annex I Parties;
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to facilitate a prompt start for a CDM and to invite nominations for
membership of the executive board prior to COP-7 with a view to
electing members at that session;
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that the board shall comprise ten members with one from each UN
regional group, two others from Annex I Parties, two others from
non-Annex I Parties, and one representative of SIDS;
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that the board shall develop and recommend to COP-8 simplified
modalities and procedures for small-scale CDM project activities on
renewable energy project activities with a maximum output capacity
equivalent of up to 15 megawatts, energy efficiency improvement
project activities which reduce energy consumption on the supply
and/or demand side by up to the equivalent of 18 gigawatthours per
year, or other project activities that both reduce anthropogenic
emissions by sources and directly emit less that 15 kilotonnes of CO2
equivalent;
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to invite the executive board to review these modalities and
procedures and the definition of small-scale projects and if necessary
to make recommendations to the COP/MOP;
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that afforestation and reforestation shall be the only eligible LULUCF
projects under the CDM during the first commitment period, with
implementation of these projects guided by the LULUCF principles
defined elsewhere in the Annex and by definitions and modalities
developed by SBSTA for decision at COP-8 including on non-permanence,
additionality, leakage, scale uncertainties, and socio-economic and
environmental impacts; and
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that LULUCF projects under the CDM in future commitment periods shall
be decided in negotiations on the second commitment period.
On
emissions trading, the COP agrees to recommend to the COP/MOP that
each Annex I Party shall maintain in its national registry a
commitment period reserve that should not drop below 90 % of the
Party's assigned amount, calculated in terms of Protocol Article 3.7
and 3.8 or 100 % of five times its most recently reviewed inventory,
whichever is lowest.
7) Land use, land-use change and forestry (LULUCF)
In introducing the decision text on LULUCF, President Pronk noted
significant progress on LULUCF. He said guiding principles as well as
a pragmatic solution had been agreed for the first commitment period,
without setting the precedent for the second and later commitment
periods. He stressed that the total amount of credit for forest
management, allocated between Annex I countries, amounts to less than
the total under the proposed formula in the Pronk text, and said the
decision meets the criteria of environmental credibility, provides
predictability and takes into account national circumstances.
The
section on LULUCF includes a paragraph affirming eight governing
principles for the treatment of LULUCF activities: treatment on the
basis of sound science; use of consistent methodologies over time for
estimation and reporting of activities; consistency with the aim of
Protocol Article 3.1; non-inclusion in accounting of "mere
presence" of carbon stocks; contribution to biodiversity
conservation and sustainable use of natural resources; accounting that
does not imply transfer of commitments to a future commitment period;
accounting at the appropriate time for the reversal of a removal of
carbon from the atmosphere; and exclusion of windfall effects from
accounting.
The
decision on LULUCF proposes that the Protocol Article 3.3 definitions
of "forest," "afforestation," "reforestation" and
"deforestation" are based on changes in land use. Debits during
the first commitment period from harvesting following afforestation
and reforestation since 1990 are not to be greater than credits on the
same land. Each Party may choose to apply all or a selection of
additional activities – forest management, cropland management,
grazing land management and revegetation – under Protocol Article
3.4 during the first commitment period. These activities must be
proven to be human-induced and to have occurred since 1990. The
decision lays out the following accounting rules for the first
commitment period: net-net accounting for agricultural activities;
accounting for forest management up to the level of a possible debit
under Article 3.3; and a negotiated cap included in an Annex for
Article 3.4 activities and LULUCF resulting from joint implementation.
The decision further allows LULUCF under the CDM in the form of
afforestation and reforestation only, limits such credits during the
first commitment period and requests the SBSTA to develop definitions
and modalities in this respect.
8)
Compliance
The final section of the text addresses the issue of the procedures
and mechanisms relating to compliance under the Protocol. The proposal
covers eight aspects of the compliance system. On the mandate of the
facilitative branch, the COP agrees that advice and facilitation shall
be provided for compliance with: quantitative emission commitments
prior to, and during, the commitment period; and with methodological
and reporting requirements prior to the first commitment period. On
the consequences of non-compliance to be applied by the enforcement
branch, the COP agrees that these aim at restoring non-compliance and
repairing the damage to the environment. Accordingly, enforcement
consequences include: deduction at a rate of 1.3 for the first
commitment period; development of a compliance action plan, to be
assessed by the enforcement branch, that provides for action to comply
with the emission commitment of the subsequent period and that gives
priority to domestic policies and measures; suspension of eligibility
to make transfers under Article 17 (emissions trading); and payments
to repair the damage to the environment.
On
the mandate of the enforcement branch, the COP agrees that this branch
shall assess Annex I Parties' compliance with the quantitative
emission commitments, the methodological and reporting requirements,
and the eligibility requirements under Articles 6 (JI), 12 (CDM) and
17 (emissions trading). On appeal, the COP agrees that there will be a
possibility of appeal to the COP/MOP in case of denial of due process.
In such cases, the decision of the enforcement branch will only be
overridden by a COP/MOP three-fourth majority decision. On Principles,
the COP agrees that the principle of common but differentiated
responsibilities and respective capabilities shall be reflected in the
design of the compliance system as well as in the mandate of the
facilitative branch. On the composition of the facilitative and
enforcement branches, the COP agrees that both bodies shall be
composed of: one member from each of the five UN regional groups and
one member of the SIDS, taking into account the practice of the Bureau
of the UNFCCC; two members from Annex I Parties; and two members from
non-Annex I Parties.
On
decision-making the COP agrees that, failing consensus, decisions
shall be taken by a three-fourth majority, except in the case of the
enforcement branch where a double majority of Annex I and non-Annex I
Parties will also be required. Finally, on the adoption of the
compliance system, the COP agrees to adopt at its sixth session a
legal instrument on procedures and mechanisms relating to compliance
as an integral part of the Protocol.
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