Daily report for 15 July 1996

The sixth day of the Second Conference of the Parties (COP-2) to the FrameworkConvention on Climate Change (FCCC) commenced with meetings of the SubsidiaryBody for Scientific and Technological Advice (SBSTA) and an informal Round Tableorganized by the Ad Hoc Group on the Berlin Mandate (AGBM). Both SBSTAand a formal session of the AGBM met in the afternoon, while contact groups of theSubsidiary Body for Implementation (SBI) met all day.

AD HOC GROUP ON THE BERLIN MANDATE INFORMAL ROUND TABLE

IMPACTS ON DEVELOPING COUNTRY PARTIES: A Round Tablediscussion convened by the Ad Hoc Group on the Berlin Mandate consideredimpacts of Annex 1 measures on developing countries. Chair Kilaparti Ramakrishna (US)invited comments on costs and benefits by panelists from the Philippines, Saudi Arabia, theUS, Trinidad and Tobago, and Brazil. They called for mechanisms to share the burden ofimpacts of Annex I actions resulting in, inter alia, lower growth and inflationarypressures. It is not clear short term economic measures will result in a slow down.

Responses can stimulate technological innovation, increasing economic and welfare gains.They also discussed: the limitations of economic modeling; consideration of the costs ofinaction including non-economic implications; and how flexible and adaptive economies infossil fuel importing countries may experience positive impacts.

The participants then considered the differential benefit/cost ratio of action vs. inaction toimplement the Berlin Mandate. There was general agreement that imposing only“punitive” measures such as carbon taxes would have a disproportionate effect ondeveloping country economies, especially those dependent upon petroleum. One industryrepresentative stated that economic models predict a negative but minimal initial impact ofemissions limitations, reducing growth by about 0.5%.

Several speakers suggested that the process of reducing emissions could build a new basefor global economic growth inclusive of developing countries. Another participantspecifically referred to flexible market-based policies allowing maximum innovation,though many emphasized fairness and common but differentiated responsibility.

During subsequent discussion, it was stated that a study of the benefit/cost ratio over 20years of the US Clean Air Act had yielded a figure of greater than 16 to 1. Anotherspeaker pointed out that, despite this, there was substantial opposition from business tothe renewal of the law. Other participants discussed: using competitiveness to disseminatenew technologies; Annex 1 countries with links to Pacific territories should note theimpact of climate change on their regional interests.

SUBSIDIARY BODY FOR SCIENTIFIC AND TECHNOLOGICAL ADVICE

Several pending items were considered and the Chair reminded SBSTA of the need toachieve consensus on remaining items by Wednesday’s Plenary. The Secretariat read thedraft text and conclusions on Agenda Item 5(d) (activities implemented jointly). Both wereadopted without amendment. On Agenda Item 4(a) (Annex I communications), someamendments were proposed for the guidelines for the preparation of nationalcommunications. POLAND proposed that Parties with economies in transition presentemission level projections from “base years” rather than 1990.

The US proposed that Annex II Parties separately provide information “in accordancewith” or “on” each of their commitments under Articles 4.3-4.5, rather than “to fulfill”their commitments. They should also provide information on measures taken to promote,facilitate and finance access “as appropriate”. The Co-Chair of the contact grouprecommended that Annex II Parties “give effect to” rather than "fulfill" theircommitments. The Co-chair’s proposal was adopted. The US suggested that Parties carryout “as supplemental information” adjustments on inventory data. This proposal was laterwithdrawn at DENMARK’s urging. The text for the guidelines was then adopted.

Regarding the draft decision on Annex I communications, POLAND sought clarificationon the SBI’s role in dealing with Parties with economies in transition. The Chair notedthat this was an issue to be determined by SBI not SBSTA. VENEZUELA andBURKINA FASO expressed concern about a tandem review process where both SBSTAand SBI review the joint contact groups’ guidelines and decisions. The Chair stated thiscould not be avoided and that each subsidiary body was empowered only to adopt thoseprovisions it would take part in administering. On Agenda Item 9 (report to the COP), hesaid that he will present general comments on SBSTA’s work on any unresolved items.SBSTA was then adjourned until 5:00 p.m. to allow for meetings of contact groups on theroster of experts, the development and transfer of technology, use of scientificassessments, and non-Annex I communications.

The Chair and the Co-Chairs for the contact group on the use of scientific assessmentsintroduced the Chair’s summary of SBSTA’s discussion and draft decisions regarding useof the SAR. The Chair reaffirmed SBSTA’s mandate to advise the COP on this issue.SAUDI ARABIA noted that the views of all delegations, including his own, were notacknowledged in the Chair’s summary. He urged that the lack of scientific certainty bebetter reflected as well as Parties’ cost differentials in implementing the FCCC.

The RUSSIAN FEDERATION stated that the summary should be adopted at an officialsession with interpretation and that the text should reflect the exact language submitted bydelegations. KUWAIT disagreed with a reference to the SAR as a “clear indication” of thelikelihood of climate change, and noted that the optimum strategy for addressing theproblem will depend on the circumstances of each country. The EU said that individualmembers of the EU will make interventions on specific points.

The Chair noted that the exact wording of the proposals for each delegation was notreflected but the message of each was included. The US noted that the balance in theparagraph noting the divergent views did not represent SBSTA’s discussion. The G-77/CHINA recommended referring to the “human face” of climate change and todeveloping countries suffering the effects of climate change.

Following a brief consultation with the G-77/CHINA, Saudi Arabia and the EU, the Chairamended a reference to the SAR as “an assessment,” rather than a “clear indication” of thelikelihood of climate change. He added a sentence noting large cost differentials ofreducing GHGs among countries, and inserted a reference to areas such as agriculture,water resources and human health in regard to the socio-economic impacts on developingcountries. The US, the MARSHALL ISLANDS, the EU, CANADA, NORWAY, JAPANand AOSIS voiced concern that the text was not balanced and asked that their objectionbe noted on the record. The Chair stated it was “useless” to continue deliberations on thisissue.

The issue of whether the SAR is to be used “as a basis for urgent action to implement theconvention” or “taken into account during consideration of the implementation of theFCCC...bearing in mind the lack of scientific certainty in some of the information” will beleft to the COP to decide. SBSTA will resume debate with the hope of reaching consensuson the remaining points of decision and solidifying its recommendations for the COP.

AD HOC GROUP ON THE BERLIN MANDATE

The Chair commenced by summarizing previous discussion on Agenda Item 5 (possiblefeatures of a protocol or other instrument), stating that: the form of the legal instrumentshould flow from its substance; the new instrument should be served by existinginstitutions; and many Parties supported a simple protocol which was open to all FCCCParties and was flexible. Chairs of the Round Table discussions on Policies and Measures,and on QELROs, then gave their summaries.

Following this, Ian Pickard (UK), chair of the Annex I Expert Group, presented asummary (FCCC/AGBM/1996/Misc.1/ Add.2) of a study entitled “Policies and Measuresfor Possible Common Action”. The report differentiates between Annex I developedcountries and those with economies in transition.

The Chair then invited general comments on policies and measures and QELROs.ROMANIA agreed with the concept of differentiated commitments but cautioned againstusing 1990 data for his country because GHG emissions decreased 20-40% due to majorpolitical changes. BANGLADESH emphasized developed countries’ obligations to reduceGHG emissions.

The EU described previous work on policies and measures for a protocol, includingimpacts on international competitiveness. He called the SAR of the IPCC the “principalreference report” for global emissions reduction objectives. The EU prefers to see GHGemissions levels below 550 ppmv, and it is essential for Parties to bring specific proposalsfor a legally binding instrument to the table at AGBM-5.

AUSTRALIA cautioned that the potential to limit GHG emissions without seriouslyundermining economic growth is limited. She stated that flat emissions reductions are notenvironmentally- or cost-effective or equitable. Calling differentiation “central”, shesuggested three illustrative approaches to differentiation, with emissions reductions basedon: projected emissions trends; factors such as population growth; and considerationsembodied in trade.

NORWAY favored binding commitments that are differentiated, cost-effective, equitableand verifiable. The US said proposals will have to be concluded early in 1997 for adoptionat COP-3. The REPUBLIC OF KOREA and KUWAIT called for equity and fair burdensharing. NEW ZEALAND said flexibility will be a key factor in AGBM process andoutcomes. JAPAN said it is essential to allow each Party to choose policies and measures.

SWITZERLAND, supported by MALI, called for a dynamic approach and proposed threecategories of commitment. CANADA said policies and measures should reinforce apositive relationship between the economy and the environment. The RUSSIANFEDERATION said policies and measures must acknowledge a right to sustainabledevelopment. AOSIS, supported by the PHILIPPINES and the MALDIVES, said theSAR is sufficient to allow agreement on QELROs.

URUGUAY said measures must be incumbent on Parties beyond their contaminationthreshold. The NETHERLANDS underscored support for policies based on a view that atemperature increase exceeding 2 degrees is not tolerable. The PHILIPPINES stated thatQELROs should be legally binding.

IN THE CORRIDORS I

Contact groups of the SBI met today. Among the issues discussed was communicationsfrom non-Annex I Parties. According to some delegates, developing countries objected tothe suggestion that non-Annex I national reports include information on mitigationmeasures. This opposition, it was reported, is linked to objections to funding GHGmitigation projects by the Global Environment Facility. Mitigation, it was claimed, shouldbe first pursued by developed countries.

IN THE CORRIDORS II

Reliable sources confirmed that the venue for COP-3 will be Kyoto, Japan.

THINGS TO LOOK FOR TODAY

SUBSIDIARY BODY ON SCIENTIFIC AND TECHNOLOGICAL ADVICE:SBSTA will meet at 10:00 a.m. Please check the board for room assignment.

AD HOC GROUP ON THE BERLIN MANDATE: AGBM will meet at10:00 a.m. in room XIX and reconvene in the afternoon.

SUBSIDIARY BODY ON IMPLEMENTATION: SBI will meet at 3:00 p.m. inroom XX.