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POLICIES AND MEASURES
On 5 March, the Chair opened the second meeting of AGBM-6 by stating that this meeting is not intended for negotiating but for refining and consolidating similar proposals contained in the Framework Compilation of Proposals (FCCC/AGBM/1997/2 and Add.1) to set out clear alternatives for negotiation at AGBM-7.
Annex I Expert Group Chair Ian Pickard (UK) reported on studies, carried out in cooperation with OECD and IEA, on carbon and energy taxation, P&Ms to encourage innovation in transport and technology and international greenhouse gas emissions trading. Document FCCC/AGBM/1997/Misc.2 contains an executive summary of these studies.
The Chair called on the AGBM to consider the submissions on general commitments and guiding objectives for P&Ms. SAMOA called for a coordination mechanism to assist Annex I Parties in implementing their commitments, as proposed in the protocol submitted by the Alliance of Small Island States (AOSIS). The mechanism would provide advice on a full range of measures including taxes and subsidies and would report regularly to the "Meeting of the Parties." The mechanism would be multi-disciplinary and open to participation by all Parties, government representatives, NGOs and scientists with relevant expertise. SAMOA also noted the need to avoid duplication of tasks, but expressed concern that existing subsidiary bodies may not be appropriately equipped to address technical issues.
SAUDI ARABIA and CHINA said the comments from Parties contained in document FCCC/AGBM/1997/2/Add.1 should be included in the Framework Compilation. CHINA also expressed confusion regarding references to Annexes X, A and B in the proposals and urged Parties to refrain from developing new categories. JAPAN suggested that Annex I Parties adopt P&Ms according to national circumstances, in the areas of efficient use of energy, low-carbon energy, technological development and cooperation, and enhancement of sinks. The "Meeting of the Parties" shall decide on indicators for P&Ms.
The EU, supported by SWITZERLAND, favored legally-binding P&Ms and highlighted its proposed Annex A (common P&Ms), Annex B (coordinated P&Ms that receive high priority) and Annex C (priority P&Ms for inclusion in national programmes). The EU proposal contains P&Ms on: renewable energies; energy efficiency standards; labelling and other product-related measures; transport sector; economic instruments; energy policies; industry sector emissions; agriculture sector; forestry; and fluorocarbons. Several delegations commented on the EU proposal and some noted alternative approaches and priorities. POLAND and the RUSSIAN FEDERATION supported a menu approach, which takes account of various economic structures and attempts to maintain a high and stable rate of economic growth. The G-77/CHINA, supported by SAUDI ARABIA, stressed that P&Ms should not have adverse impacts on developing country Parties. He also expressed concern about new annexes that would impose new commitments on non-Annex I Parties. The EU reiterated that its proposal provides flexibility through Annex B, which lists P&Ms to be applied according to national circumstances.
The US and SAUDI ARABIA did not support inclusion of specific P&Ms. The US also noted that sound information is not available for controlling greenhouse gases not listed in the proposed Annex C and suggested elaborating on P&Ms under the section on reporting. SAUDI ARABIA also warned that P&Ms undertaken by Annex I countries could negatively affect trade with developing countries. IRAN stressed the need for a section on general commitments and guiding measures in the protocol.
The EU clarified that energy efficiency, standards and labelling, as well as P&Ms related to fluorocarbons, should be the highest priority. He also noted that paragraphs proposed by a number of Parties, including Norway, Iceland, New Zealand and Switzerland, could be integrated into the EU proposal. He said some developed countries, particularly the US, have not included binding measures in their proposals and emphasized the EU’s conviction that P&Ms should be included to fully encompass the Berlin Mandate and the Geneva Declaration.
CHINA reiterated that the Berlin Mandate requires an elaboration of P&Ms whose objectives should be clear at this stage. He said the EU proposal is too complicated and supported a proposal by the Chair to use three "groups" rather than annexes on objectives, common but coordinated P&Ms and national P&Ms. The US also cautioned against including too many details and cited a number of examples illustrating the difficulties of proposed P&Ms related to specific products.
The EU did not support the groupings proposed by the Chair and noted they were difficult to distinguish. He said objectives should not be separated from mechanisms and measures, and proposed listing all of them in Annex A. He also said that relevant details related to specific products must be considered because they are traded in the international market and an international agreement is needed to ensure results.
The EU also reported that the EU Council had reached a common position on QELROs. The EU proposed that Parties to the Berlin Mandate will reduce emission levels for carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) by 15% by 2010 with a reference year of 1990. The EU also proposed an interim target for 2005.
The Chair also requested delegates to consider a proposal regarding countries with economies in transition who are requesting a specific annex because of their particular circumstances. The EU did not support a separate annex and noted that the concerns of these countries could be addressed elsewhere, such as in an introductory section. The Chair, supported by IRAN, said these concerns are better addressed when considering QELROs.
On 6 March, the Chair presented his draft conclusions on P&Ms, which represent a streamlined version of Section II of the Framework Compilation on strengthening the commitments in Article 4.2 (a) and (b). The draft conclusions contain four elements: proposals regarding policies and measures; general proposals; proposals relevant to the nature and mix of policies and measures; and lists of policies and measures.
"Proposals regarding policies and measures," address: adoption of coordinated P&Ms; preparation of National Action Plans; national and regional programmes for climate change mitigation and protection; and enhancement of sinks and reservoirs. Some of the proposals refer to P&Ms with different priority levels, while others cite specific items such as removal of coal subsidies, technology development and transfer and promotion of renewable energy sources.
The "General proposals" support: identification of environmental and socio-economic impacts of P&Ms; compatibility between P&Ms and national development programmes; and cost-effective P&Ms. Some entries in "Proposals relevant to the nature and mix of policies and measures," call for individual, rather than coordinated, fulfillment of commitments and protection for developing countries, especially oil producing States. The section on "Lists of policies and measures" begins with a proposal from the Chair that contains three lists regarding: policy objectives for all Annex I Parties; possible mechanisms for implementation of P&Ms and a menu of P&Ms from which Parties could choose according to their national circumstances. The Chair’s proposal is followed by entries from several Parties including Canada, the EU, Switzerland and Japan. Each entry contains specific P&Ms.
The Chair said some Parties have submitted "negative" proposals, which note that they object to the inclusion of specific issues. He proposed including a general chapeau noting their objections and said that all ideas retained in the negotiating text do not have to be included in the Protocol. The proposal also contains several symbols and letters and the Chair said values would be attributed to them in future sessions. IRAN inquired about the possibility of elaborating on each proposal. The Chair noted that other proposals could be submitted later and asked delegates to refrain from making substantive statements.
POLAND requested that each reference to a new Annex specify which Parties will be included. NEW ZEALAND deleted its proposal calling for compulsory phasing out of fossil fuel subsidies. The G-77/CHINA noted its intention to submit a proposal on P&Ms. The EU requested that certain items from its proposed list of P&Ms also be noted in the Chair’s proposed list of P&Ms. The EU said it would submit "List C," containing P&Ms to be given priority by Parties listed in Annex X, as appropriate to national circumstances. The RUSSIAN FEDERATION requested retaining its proposals. One states that a protocol or other legal instrument should not change or replace statements of the Convention, including its principles. The other states that Parties to the protocol are guided by principles of the Convention.
Delegates also commented on the Framework Compilation (FCCC/AGBM/1997/2 and Add.1). The EU deleted several paragraphs submitted by its member States because these submissions were superseded by the common EU proposal. The Chair noted that a section on education, training and public awareness, included in the addendum, would also be included in the negotiating text.
Prior to consideration of QELROs, delegates heard statements from non-governmental organizations (NGOs). CLIMATE ACTION NETWORK, on behalf of environmental NGOs, asked delegates if they had the political will and moral character to act in the best interest of all the citizens of the world. She also called for a 20% reduction in carbon dioxide emissions by 2005. The US and EUROPEAN BUSINESS COUNCILS FOR SUSTAINABLE ENERGY proposed as priorities: setting clear near- term targets and time frames; using market-based tools to account for "external costs" of energy, which would allow each Party to select suitable options; and reducing and eliminating institutional barriers, such as subsidies and tax exemptions.
The INTERNATIONAL PETROLEUM INDUSTRY ENVIRONMENTAL CONSERVATION ASSOCIATION, on behalf of European industries, noted that the years 2005 and 2010 are impracticably close deadlines. He said developing countries are expected to generate two-thirds of global greenhouse gas emissions by 2025 and urged delegates to secure worldwide agreement. The AMERICAN FEDERATION OF LABOR-CONGRESS OF INDUSTRIAL ORGANIZATIONS, on behalf of labor groups, expressed concern that "harsh, arbitrary" flat-rate reductions in greenhouse gas emissions are being proposed without regard to their impact on working people. He urged delegates to remember that they hold the power to destroy jobs and incomes of millions.
Following these statements, delegates discussed aspects of the proposals on QELROs contained in the Framework Compilation (FCCC/AGBM/1997/2 and Add.1).
On "guiding objectives," the EU stated that eventual reduction of CO2 emissions to 50% of their current levels is required to keep global average temperature from increasing more than two degrees above its pre-industrial level. He recalled the recent decision of the EU Council of Environment Ministers, which established a common position on a reduction target for the year 2010. The EU’s proposal states that, in the longer term, more sophisticated methods to allocate reduction targets shall be implemented and will eventually lead to a convergence of emission levels based on appropriate indicators. The EU could not accept Iran’s proposed condition that QELROs for Annex I Parties must not affect international trade or national incomes of developing countries, particularly those exporting fossil fuels.
The EU also suggested that the US proposal regarding establishment of long-term goals could be incorporated into the new EU submission. The US responded that this change should await a written submission from the EU.
On "legal character" of QELROs, the EU reiterated its support for QELROs for significant overall reductions and noted that P&Ms should also be legally-binding. SWITZERLAND stressed that each Annex I Party should adopt legally-binding QELROs. NIGERIA requested the deletion of a reference to the Geneva Ministerial Declaration, which calls for legally- binding QELROs for Annex I Parties within specified time frames with respect to sources and removal of sinks of greenhouse gases not controlled by the Montreal Protocol. He emphasized that the Declaration was not adopted and noted that the G- 77/CHINA proposal to set "realistic and achievable QELROs in a comprehensive manner" reflects its substance. PERU referred to the Geneva Declaration and called for reduction target for the year 2005.
On "coverage," the EU proposed covering carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O), and to add hydrofluorocarbon (HFC), perfluorocarbon (PFC) and sulphurhexafluoride (SF6) to the "basket" of gases by 2000. P&Ms to reduce emissions of these gases should be included in the protocol. The US proposed merging paragraphs on Annex I commitments based on the CO2 equivalents of their emission contributions to the atmospheric stock of greenhouse gases and on the exception of sources and sinks for which there is insufficient knowledge of the global warming potential (GWP) or inability to accurately measure emissions or removals. HUNGARY supported the US’s long-term goal for reduction of atmospheric greenhouse gas concentrations.
NORWAY and ICELAND withdrew their proposals, as they were contained in other proposals. SAUDI ARABIA insisted on references to sinks and greenhouse gases other than CO2. CHINA said that the text should only include issues on which agreement has been reached. JAPAN did not agree and called for retention of its proposal that QELROs would be set for CO2 only. The MARSHALL ISLANDS, on behalf of AOSIS, stressed the need for hard targets for CO2 reductions.
On "level and timing/emissions budgets," the EU urged early stabilization of greenhouse gases. He noted that sections of the EU proposal in the Framework Compilation should be replaced with the new EU common position. The position states that Annex X Parties, individually or jointly, in accordance with the Berlin Mandate, shall reduce emission levels for CO2, CH4 and N2O together (weighted total, using GWP, with a 100-year time horizon) by 15% by 2010 with a reference year of 1990. An interim target for 2005 will also be set. The EU opposed the concept of borrowing and the consideration of emissions budgets without QELROs and timetables. He favored flexibility regarding the base year for countries with economies in transition.
The G-77/CHINA called for: flexibility for Annex I countries due to their differences in starting points; no adverse effects of P&Ms on developing countries; and no further commitments for developing countries. CHINA called for all other Annex I countries to propose QELROs with time frames as the EU has done. He opposed emissions borrowing and, with HUNGARY, opposed a new category for countries that are rapidly developing. The RUSSIAN FEDERATION highlighted his proposal that new commitments of Parties do not cancel, reconsider or prolong commitments adopted by Annex I Parties for the period before the year 2000. He supported 2010 as a target and said that 2005 as an intermediate target seems unrealistic. The MARSHALL ISLANDS called for separate and short-term targets for reducing the level for CO2 emissions. The US stressed that the Berlin Mandate does not preclude emissions budgets. He noted that the EU proposal does not specify whether countries should abide by QELROs individually or jointly. He also suggested that the EU proposal include Table 1 of the decision by the EU Council of Environment Ministers. This table specifies emission reduction targets for each EU country. The EU responded that the Council decision is not part of the EU proposal for the protocol.
On 4 March, Chair Chow Kok Kee (MALAYSIA) reported on the roundtable on differentiation. He noted a growing consensus that indicators will be useful in negotiating QELROs. He also acknowledged divergent views on whether or not the EU Council of Environment Ministers’ decision illustrates a differentiation practice applicable outside the EU.
The EU requested more time to determine whether proposals from individual EU countries could be deleted and incorporated into the EU’s new proposals. NORWAY noted that ambitious targets via legally-binding commitments can only be achieved through efforts such as differentiation, equitable burden sharing, comprehensive treatment of sources and sinks, and coordination of economic instruments. He also noted that the EU decision illustrates how differentiation facilitates more ambitious targets. He stated that a 10 to 15% reduction for Annex I countries by the year 2010 would be both ambitious and realistic. The US restated that a differentiated approach would not be appropriate. AUSTRALIA insisted that its complete text on differentiation be reproduced in the document.
On the issue of "flexibility," MALAYSIA, supported by CHINA, requested deletion of the entire section. He said that the issue was already covered under differentiation and QELROs. The EU noted the high improbability of reaching agreement on a trading system in time for COP-3. He cited disagreement on the use of procedures for monitoring and verification and the use trading as a substitute or delaying mechanism for domestic action.
On "Joint Implementation" (JI), the G-77/CHINA called for the deletion of the entire section. UZBEKISTAN called for the retention of text noting that JI can serve as an instrument to allow technology transfer on a more beneficial basis. The EU said that Germany’s proposal that "a certain portion yet to be determined may be met through JI, whereby a significant part of the commitments must be met through measures within each Party’s own territory" should be retained for now. SWITZERLAND supported retaining its proposal that: JI may contribute up to 50% to meeting a country’s fulfillment of commitments; JI may begin in 2000; and JI can also take place with non-Parties to the Protocol. PERU requested retaining JI in the text, until the review at year’s end.
Delegates also discussed impacts that new Annex I commitments may have on developing countries. SAUDI ARABIA and NIGERIA requested retaining paragraphs relating to loss of income. The EU did not support a compensation mechanism for financial losses of oil producing countries.
Proposals in the Framework Compilation related to measurement, reporting and communication of information and voluntary application of commitments by non-Annex I Parties were accepted without amendment.
On 7 March, the Chair introduced "Draft text by the chairman, strengthening the commitments in Article 4.2(a) and (b): quantified emission limitation and reduction objectives within specified time frames (QELROs)." This document includes six sections: introductory elements by the Chair; atmospheric concentration; level and timing; flexibility; possible impacts on developing countries of new commitments in the new instrument/socio-economic injuries sustained by developing countries; and measurement, reporting and communication of information. The section on level and timing includes: proposals for specific flat-rate targets and timetables for CO2 and other greenhouse gases; support for such targets and timetables without reference to specific numbers; differentiation via various indicators; provisions for regional economic integration organizations; emissions budgets; emissions based on a cumulative emissions basis; and joint implementation.
NEW ZEALAND requested that its proposal on sinks contained in Addendum 1 to the Framework Compilation be included in the additional proposal section on "level and timing." The draft text was accepted for inclusion in the negotiating text.