Edward Helme, CCAP, informed that his organization is concluding the third year of its Dialogue on Future International Actions to Address Global Climate Change, which brings together senior climate change negotiators from over 30 developed and developing countries to identify and discuss options for the post-2012 regime. He provided an overview of the implications of the ‘no lose’ voluntary targets for the transportation sector, noting that almost 80% of the global vehicle fleet is produced by 15 companies in nine countries. He stressed that efficiency improvements can be counteracted by increased vehicle weight and performance as well as additional amenities. He indicated that the CCAP technology-based sectoral proposal received positive feedback during the Dialogue.

Fernando Tudela, Ministry of Environment and Natural Resources, Mexico, called for transcending the project-based approach by adopting a sectoral approach to emission reductions. He explained that the “no lose” targets are linked to the nature of unstable economies in developing countries, where paying a penalty for non-compliance would be politically unacceptable. He underscored that a recent study in Mexico suggested that converting to higher diesel technology is cost effective in light of the health cost savings such a conversion would create. He added that carbon finance would help developing countries reduce their emissions further and faster.

Participants discussed the number of benchmarks needed to capture the major industrial processes, ways in which energy intensity benchmarks can address competitiveness issues and compared savings achieved by upgrading technology and improved driving conditions.

Howard emphasized that the ITL needs to be fully compatible with data exchange standards, and highlighted the Log’s characteristics, including its resilient architecture and size, which is designed to cope with the increase in the transactions rate of the carbon market. He indicated that the Secretariat is endeavoring to ensure that: the ITL is secure, reliable and available to support registries and the market; the EU ETS’ needs are fully integrated into Kyoto registries; and that the registry system administrators are becoming more established.

Istvan Bart, European Commission, described the CITL, noting that it uses the same code as the ITL but differs from it functionally. He provided an overview of the EU ETS, highlighting that 22 of the 25 Member States have active registries, with 9,400 installations. He explained that the CITL checks and logs transactions between member State registries and provides a website that enables access to information on account holders’ allocations and verified emissions. He said the ITL would become a fundamental part of the EU ETS and emphasized that in light of the dependence of trading on the computer system, the latter has to be transparent, watertight, and stable.

Participants discussed: exclusion of forestry credits under the EU ETS linking directive; whether EU ETS transactions will pass through the ITL; security differences between the CITL and ITL; and assigned amount units use in the second phase of the EU ETS.

Wanna Tanunchaiwatana, UNFCCC Secretariat, discussed lessons learned from workshops conducted by the Expert Group on Technology Transfer (EGTT) in Bonn and Montreal where financers and Parties discussed ways to link technology transfer projects with funding opportunities. Emphasizing that private sector funding exists to support technology transfer, she cited the lack of good project proposals as a barrier to tapping into this funding. She explained that EGTT’s future work will include coaching and training programmes for project developers in developing countries and the development of a practitioner’s guide on project proposal development.

Kishan Kumarsingh, Chair of SBSTA-24, discussed actions needed to enhance private financing prospects and highlighted key messages from the two EGTT workshops, including the need for: capacity building for project developers; mobilizing local resources, including natural, human, institutional, and financial; considering technical and political risks; mobilizing domestic capital; and creating an investor-friendly environment.

Bernard Mazijn, EGTT, discussed the need to create an enabling environment to involve the private sector and increase financing flows for technology transfer. He stated that the EGTT is currently working on a technical paper on innovative options for financing and a practitioner’s guide for project proposals, which aims at improving the likelihood of project financing, to be published at COP12. He highlighted the need for ODA to build capacity and increase the quality of Technology Needs Assessments to bridge the gap between project development and financing.

Peter Storey, HERA International Group, emphasized that project developers need to consider the suitability of their projects for private funding at an early stage. He explained that the private sector looks for: consistent regulatory, legal and commercial frameworks; commercially and technically experienced project sponsors; use of proven technologies; repayment ability and security; risk sharing and diversification; and adequate returns. He highlighted the CTI’s Private Financing Advisory Network as a tool for helping project developers to determine and seek out appropriate sources of funding.

Participants discussed various barriers to obtaining financing for projects, including: high relative transaction costs for small projects; development risks; and obtaining government guarantees.