Daily report for 7 February 1995

WORKING GROUP I

Working Group I concluded its deliberations on the review of nationalcommunications. Delegates did not want to consider the adequacy of commitmentsuntil Wednesday and, thus, the Group adjourned before 4:00 pm.

AGENDA ITEM 7(a) " REVIEW OF NATIONAL COMMUNICATIONS:Working Group I resumed consideration of the Secretariat"s synthesis report andrecommendations on national communications. Poland said the Secretariat"srecommended schedule of national communications " every two years " is tooexpensive for Parties and would not produce new information. He also said therecommended annual periodicity for emissions inventories was too short. Japan saidthe due date for the second national communications should be delayed, but hesupported annual emissions inventory updates. He said CO2 emissions data could becollected with a reasonable workload, but that inclusion of other gases should beoptional. The US said that the Secretariat"s report focused too much on CO2,suggesting that Parties needed to focus on all gases. He did not think Parties should benamed in the report. He supported the Secretariat"s recommended time frames, buturged development of guidelines for developing country Parties.

Russia said the synthesis report did not yet present a clear picture of emissions trends.He said the complexities in reporting make it impossible to agree to a new timetableand called for improved aggregations of emissions by sector to examine collectiveimplementation by Annex 1 Parties. Switzerland said naming specific Parties would beacceptable in the synthesis report. Supported by the Czech Republic, she suggested afour-year cycle for subsequent national communications and questioned the usefulnessof annual inventories. Norway said the synthesis report clearly indicates that furtheraction is needed to meet Convention objectives, and supported naming Parties in thesynthesis report, the Secretariat"s recommendation on periodicity, and improvedguidelines and evaluation of policy measures.

Hungary recommended averaging several years" emissions rather than using one yearfor an inventory baseline. He suggested biannual inventories and a four-yearperiodicity for full communications, and supported naming Parties in the synthesisreport. Mauritius said the Secretariat should consider non-Annex 1 Parties'communications in reviewing guidelines. New Zealand said while a decision onperiodicity of national communications could wait for more experience from theSBSTA, she supports annual inventories.

Australia supported annual emissions updates, but recommended that the COP definecomparable reporting years. Canada said Parties need to resolve deviations from theguidelines, requested flexibility on the exact date for submissions and supported annualinventories by Annex 1 Parties. China said the 15 submissions fail to meet theConvention"s requirements because many lack documentation and evaluations ofpolicies, and do not describe financial contributions to developing countries. France,on behalf of the EU, said that the synthesis report should be more flexible in namingParties, periodicity could await subsidiary bodies" advice, and annual inventoriesshould be extended to all GHGs. Argentina supported naming Parties and theSecretariat"s proposed timetable. The Climate Action Network presented an NGOevaluation of 20 OECD countries" plans, noting that although proceduralimplementation is moving forward, more needs to be done substantively. Without aprotocol, further progress would be undermined as Parties encounter politicaldifficulties.

AGENDA ITEM 7(b) " REVIEW OF ADEQUACY OFCOMMITMENTS: The Chair invited delegates to address the adequacy ofcommitments. The Secretariat reviewed information on the global situation, pastdecisions and the need to address other areas. He said the IPCC Special Report, itsguidelines document and various peer reviewed studies compiled in A/AC.237/Misc.43covered the global situation, and invited comments on these documents, as well asA/AC/L.23 and A/AC/L.23/Add. 1, the AOSIS protocol and the German proposals.The Philippines, on behalf of the G-77 and China, said they are more concerned withfull implementation of the Convention than with reviewing the adequacy ofcommitments. He said the objective for INC-11 and COP-1 is to ensure that theConvention can be implemented.

WORKING GROUP II

Working Group II completed consideration of the maintenance of interim financialarrangements and opened discussion of modalities and funding needs.

AGENDA ITEM 8(b) " MAINTENANCE OF INTERIM FINANCIALARRANGEMENTS: During the discussion of the Co-Chair"s draft decision,Brazil, Uganda, the Republic of Korea, Malaysia and Iran supported the G-77amendments, which clarified that the GEF shall continue to be the interim entityentrusted with the operation of the financial mechanism. Uganda and Malaysia felt thatthe relationship between the GEF Council and the COP requires further work andevaluation. The Netherlands and Norway said that the restructured GEF is now inconformity with the conditions in Article 21.3 and should permanently operate thefinancial mechanism. The US, supported by the Netherlands, warned that if thequestion of the financial mechanism is left open, it will sow doubt among peopleoutside this process.

The Co-Chair, Nobutoshi Akao, proposed a compromise for the first paragraph:"Decides that the interim arrangements with the restructured GEF, referred to inArticle 21.3, shall be maintained." Malaysia supported the proposal. The Netherlandsand Canada responded that the question of permanency should not be postponed andrejected the Co-Chair"s proposal.

The Philippines and Peru did not believe that the GEF has been adequatelyrestructured, especially with regard to universality of participation. While the Co-Chairimplored delegates not to argue about restructuring, the US, France, Japan andAustralia responded, since the issue of universality had been vigorously negotiated.Mauritius said restructuring was a precondition for the GEF to be the interim, not thepermanent, operating agency. The question before the Group is whether the interimarrangement is to be maintained. The question of a permanent financial mechanism israther premature. Benin noted that the fourth requirement in Article 11.3,determination of the amount of funding necessary and available for the implementationof the Convention, is not settled.

France, supported by the Philippines, Colombia, South Africa and others, called for theestablishment of a small working group to address this issue. The Co-Chair asked JohnAshe (Antigua and Barbuda) to chair this open-ended small group.

AGENDA ITEM 8(a)(i) " MODALITIES: The Co-Chair initiated adiscussion on possible arrangements between the COP and the operating entity for thefinancial mechanism, using the suggested elements in paragraph 11 of documentA/AC.237/87. France, on behalf of the EU, supported using a Memorandum ofUnderstanding (MOU) as a form of institutional arrangement and agreed with theprocedure for creating the agreement. She added that paragraphs 25 and 28 containedambiguities, which must be clarified in the MOU, and that paragraph 19 must clarifyhow the COP can inform the GEF or other organization on reconsideration of fundingdecisions. The Co-Chair warned against micro- management of the operating entity,but reiterated that any decision must be consistent with COP policies. Japan suggesteddeleting the list of specific articles from paragraph 31, on the mobilization of funds.Co-Chair James Stovall opened the afternoon session by noting a general sense ofagreement that the Secretariats of the Convention and the GEF should draft anagreement.

AGENDA ITEM 8(a)(ii) " GUIDANCE: The Co-Chair then invitedcomments on Agenda Item 8(a)(ii), Guidance, based on documents A/AC.237/Misc.40-41 and A/AC.237/86-88. Saudi Arabia asked for specific inclusion of the position ofthe G-77 and China for consideration with A/AC.237/Misc.41. The Co-Chair repliedthat the document represented a composite text and any text in dispute was underlined.

Sub-paragraph 1(a)(v): France, supported by the US, preferred the secondbracketed option, which listed specific elements of national programmes subject tomitigation and adaption measures, but suggested moving it to paragraph 2 onprogramme priorities. The Philippines said that the G-77 had not readressed its INC-10position on this issue and she could not speak on their behalf. Saudi Arabia stressedthe need for generality, and agreed with deleting the sub-paragraph. The Co-Chair thensuggested the possibility of deleting the debated portion of sub-paragraph (v), butleaving in paragraph 2(e), on implementation.

Sub-paragraph 1(a)(vii): France suggested that this sub-paragraph, onmobilization of funds, be deleted because the sub-paragraph requires the fundingmechanism to ensure predictability of resources, and shifts the commitment to ensurefunds onto the operating entity. The US was concerned about linking several parts ofthe Convention without actually adding anything. Japan also had difficulty acceptingthis sub-paragraph. However, Egypt, India and the Philippines voiced strongobjections. They noted the sub-paragraph only required the entity to take full accountof the predictability of funds in decision making, but did not require ensuringpredictable funds. China reminded delegates that this sub-paragraph added no newrequirements and took two days of negotiation during INC-10. France and thePhilippines disagreed as to the sub-paragraph"s application to Article 4.3, developedStates" obligations. The US reiterated that the COP has responsibility for mobilizingfunds.

Paragraph 1(b) addresses activities undertaken outside the framework of thefinancial mechanism. There was still some question about the location of sub-paragraph (iii), which prohibits new forms of conditionality. Egypt and other G-77countries prefer that this sub-paragraph either follow or be appended to the first sub-paragraph on consistency between activities outside and within the financialmechanism. Australia disagreed.

India proposed deleting sub-paragraph (ii) on information from multilateral andregional financial institutions. The US wanted to retain it. Japan and Australiasuggested deleting the underlined portions. On sub-paragraph (iv), China suggestedretaining the first sentence on measures for promoting consistency, and deleting therest. The US and Japan wanted to retain the entire paragraph. New Zealand proposed:"The Secretariat and the operating entity or entities of the financial mechanism shouldpromote consistency. Initial measures for promoting such consistency would includeinformation collection and analysis, and appropriate contact with relevant institutionsand organizations." India suggested deleting the entire paragraph since it "micro-manages the GEF."

EU PAPER ON DETERMINATION OF THE AMOUNT OF FUNDINGNECESSARY AND AVAILABLE: France, on behalf of the EU, introduced apaper on necessary and available funding. She noted that in addition to the GEF, othertraditional sources of funding are important, including multilateral banks, financialassistance, private sector and national resources. Needs must be clearly defined in theplans designed by developing countries. Available funds must first cover incrementalcosts, which should be determined jointly by the entity entrusted with financialmechanism and the country concerned. Since the extent of funding necessary will bebased on national communications of developing country Parties, the timing of reviewsshould be linked to the rate of which such communications become available.

China thought that the paper "put the cart before the horse" because developingcountries need financial and technical assistance to implement the Convention andsubmit reports. Benin and Peru echoed these concerns. India asked the EU to examinethe paper produced by the G-77 at INC-10 on communication of information by non-Annex I Parties. France responded that the EU believes that the preparatory work onnational communications will be financed by the financial mechanism. Discussion willcontinue after delegates have a chance to study the paper.

IN THE CORRIDORS

The Climate Action Network has been actively lobbying G-77 countries to endorse theAOSIS draft protocol, which calls for a reduction of emissions of greenhouse gases byat least 20% by the year 2005. Meanwhile, others are trying to convince delegates thatsuch a protocol is unnecessary. The fate of the protocol is still uncertain both withinthe G-77 and in the Committee as a whole. With so much concern over the adequacy" or inadequacy " of commitments, as evidenced by the crowds in Working GroupI, many are looking forward to the discussion on this matter.

THINGS TO LOOK FOR TODAY

PLENARY: The first item on the Plenary"s agenda this morning is theintroduction of documents A/AC.237/L.23, the AOSIS draft protocol, andA/AC.237/L.23/Add.1, German proposals for further elements of a protocol to theConvention. The Plenary will also address Agenda Item 4, Review of Annexes to theConvention, and Agenda Item 10, Review of extrabudgetary funds.

WORKING GROUP I: After Plenary, Working Group I will addressAgenda Item 7(b), Review of adequacy of commitments.

WORKING GROUP II: Working Group II will meet this afternoon tocontinue to discuss document A/AC.237/Misc.41 on guidance to the financialmechanism.