Manik Roy, Pew Center, outlined progress in climate change policy by the US Senate and Congress. He highlighted, inter alia: the 2005 Bingaman resolution in Senate and the 2006 Dicks resolution in the House calling for mandatory, market-based programmes to address GHG emissions; the 2006 Domenici-Bingaman Energy Committee hearing on mandatory national climate policy; and the Lugar-Biden resolution related to international climate policy.

Vicki Arroyo, Pew Center, described the Center’s “Agenda for Climate Action”, a comprehensive, economy-wide examination of means to “put the US on a climate-friendly path.” She outlined the Agenda’s focus areas: research and development; market-based programmes; reduction of GHG emissions; energy production and use; adaptation; and international engagement.

Participants discussed: intensity-based versus absolute emission reduction targets; the Asia-Pacific Partnership on Clean Development and Climate; and the linkage between US domestic policy and international commitments to climate change.

Aaron Cosbey, IISD, discussed the CDM in the current commitment period to the Kyoto Protocol and post-2012. He suggested that the CDM, in its current form, is in effect a tax on governments and firms. He emphasized that investors need certainty regarding the CDM in the post-2012 regime in order to invest in projects and noted that continued use of quantitative targets is a pre-requisite to the CDM’s survival after 2012.

Diana Smallridge, Green Capital Advisors, noted that many CDM projects will fail for lack of financing due to the uncertainty of CER delivery and the small volume of CERs which may not justify costs and risks to buyers. She outlined possible solutions to overcome the challenges for financing the development dividend, including: building CDM capacity in host countries to make better use of carbon finance for projects; linking projects with high development dividend potential to national priorities; engaging ODA providers to catalyze CDM projects with high development dividend potential; and reducing CDM transaction costs through bundling of small projects.

Brian Dawson, UNDP, outlined UNDP’s experience with and interest in CDM and announced the upcoming release of a UNDP CDM Asessment Report. He suggested that the CDM could deliver sustainable development benefits over time if there is an increase in project number, technology mix and geographical spread. He identified financing and long-term post-2012 market certainty as essential determinants of the future project flow.

Daniel Murdiyarso, speaking on behalf of Rewarding Upland Poor for Environmental Services, highlighted the organization’s use of watershed functions as an entry point for carbon sequestration projects. He suggested that market-based mechanisms for the Land Use, Land-Use Change and Forestry sector are at stake and that new mechanisms must be explored. He concluded that payment for environmental services projects may not be able to reduce emissions effectively, unless land tenure issues are secured.

Murray Ward, Global Climate Change Consultancy, suggested reframing the mitigation challenge by thinking of climate change as a transformative and innovative business opportunity for the 21st century. He called for more flexible commitment measures along with a policy framework that could mix binding emissions targets and voluntary sector targets, proposed by countries according to their sustainable development priorities.

Participants discussed tender processes, sectoral baselines, internal rates of return and investment in CDM projects, and prospects for voluntary markets for emissions reductions.

Niklas Höhn, Ecofys, presented the first paper, “On analyzing countries’ contribution to climate change: scientific and methodological choices.” He said the analysis suggests that the impact of policy parameters such as time horizon of emissions, climate change indicators or greenhouse gas mix is greater than the impact of scientific uncertainties.

Joyce Penner, University of Michigan, provided an overview of the second paper on examining uncertainties in absolute attribution of climate change using a closure method. She explained that the paper examines uncertainties in emissions inventories, estimates forcing and forcing uncertainty from all other known climate factors, and considers the implications of this uncertainty for predicted global average temperature change and the change associated with 1990-2002 OECD Annex 1 emissions.

Höhn noted that the two papers are the first of a series and that future publications could combine the two earlier ones and include other test cases.

Participants discussed: robustness of data sets from the 19th century; choice of regional groupings; and possible policy recommendations.

Richard Baron, International Energy Agency, presented institutional and operational concerns with regards to sectoral crediting mechanisms (SCM) for mitigation. He highlighted three SCM options and noted issues relating to international governance measures and additionalities in SCM.

Dennis Tirpak, OECD, emphasized the wide range of adaptation terms and concepts available, noted some conflicts and contradictions between these terms and highlighted the need to reach a consensus.

Ellina Levina, OECD, presented a paper that examines the domestic policy frameworks for the water sector in four countries and assesses how adaptation could be incorporated in these frameworks.

Discussion: Participants focused on the nature of SCM buyers and issues relating to setting SCM baselines, the importance of consensus on adaptation definitions, and the merits and demerits of a sectoral approach to adaptation.