Five negotiating days remain before the Berlin Mandate expires October 31, 1997. Whatever agreement has been achieved by the end of the Eighth session of the Ad Hoc Group on the Berlin Mandate (AGBM) will then move forward to the Third Conference of the Parties meeting scheduled for Kyoto, Japan December 1 to 10, 1997.

Two possible outcomes are emerging and neither appear as if they will lead to real climate protection.

Scenario one:

Various U.S. constituencies, including members of Congress, succeed in preventing any agreement at AGBM 8, the Berlin Mandate expires and negotiations begin again in Kyoto on a Kyoto Mandate. Those supporting this scenario believe they will succeed in bringing into the negotiations commitments for developing countries, long considered a key failure in the Berlin Mandate negotiated at the First Conference of the Parties in April 1995.

Such an outcome would be a severe blow to the Convention itself, and a tragedy for the atmosphere. The likely result of such a scenario is collapse of the climate talks which would take years to repair. If developed (Annex 1) Parties are serious about negotiating greenhouse gas emission reduction commitments for developing countries, these same Parties must show they are serious about meeting their current commitments. At this time, only three Annex 1 Parties (the U.K., Germany and Switzerland) are on track for meeting their year 2000 commitments. Only five Parties had submitted their national action plans by the April 15, 1997 deadline, and by AGBM 7, only 13 Parties (of 36 due) had submitted their communications. Initial analysis by the Convention Secretariat showed that most Parties had not followed the guidelines for reporting, particularly on policies and measures. In addition, since Parties signed on to the Convention in 1992, many have DECREASED spending on research and development, scientific assessment, monitoring and observation, etc., - key commitments in Article 4.1, the very article developed Parties are trying to strengthen as a means of increasing the commitments of developing countries.

Negotiations aimed at securing emission reduction commitments for developing countries will involve give and take on both sides. In addition to technology transfer and financial resources, developing countries will demand that any future commitments to emissions reductions on their part be tied to full compliance by developed Parties, both with respect to the general provisions of the Convention and to meeting current and future legally binding emission reduction targets.

Scenario two:

Even if negotiations continue to move forward, there is a risk that so many "elements of flexibility" will be included in the protocol that real emissions reductions will not be achieved, or it will be impossible to determine whether a target has actually been met.

Government negotiators broke into four "non groups" to negotiate on Article 4.1 (general commitments), Quantified Emission Limitation and Reduction Objectives (QELROS), Policies and Measures and Institutions during AGBM 7. The challenge was to reduce the more than 120 pages of Chairman's Negotiating Text, which included every possible proposal, into a single negotiating text. Final versions produced by the four non groups now include 75 pages of heavily bracketed text. Chairman Estrada has received support of the AGBM to proceed with intersessional negotiations and to produce a new Chairman's Text for AGBM 8. While the current text includes every conceivable option, Chairman Estrada revealed where his mind is headed during his press conference on the final day of AGBM 7.

Estrada is reported to have told the press that in his view the AGBM had agreed to:

1. commitments for 2005 and 2010;
2. differentiation, not using mathematical criteria, but political negotiations;
3. joint implementation among Annex 1 Parties;
4. legally binding Qelros;
5. budgets;
6. the use of the Framework Convention's existing objective and principles;
7. no borrowing.

Estrada told reporters that decisions had not yet been made on:

1. legally binding policies and measures;
2. use of the net approach;
3. coverage;
4. emissions trading.

The issue of joint implementation with developing countries (ie, countries with no targets) remains contentious, although strongly supported by Annex 1 countries like the U.S. and Canada. Developing countries "officially" do not support joint implementation, although countries like Costa Rica are participating in projects. The U.S. has said that it intends to commit to emissions reductions only if it also is allowed to engage in emissions trading with countries that have commitments, and in joint implementation with countries that do not have commitments. The Climate Action Network does not support joint implementation with Parties that do not have reduction commitments for technical and equity reasons.

Finally, Chairman Estrada has made it clear that while the Berlin Mandate does not allow for the negotiation of emission reduction commitments for developing countries, the Conference of the Parties does have the power to establish a process for negotiating future commitments for developing countries and that that decision could be made at the Third Conference of the Parties meeting in Kyoto this December.

Given these elements, what is the basis for concerns that the outcome in Kyoto will not lead to real emissions reductions?

1. Commitments for 2005 and 2010. While no formal decision has been made, rumour has it that legally binding commitments for Annex 1 Parties will only begin in 2010 and that commitments for 2005 will not be legally binding. Instead, any target for 2005 will be monitored using "milestones" or criteria for gauging success such as percentage improvement in energy efficiency, renewable energy supply, etc., (as proposed by Japan). Such an outcome is unacceptable from a climate protection point of view. Progressive industry has made it abundantly clear that without a legally binding commitment for significant emission reductions for 2005, investment in energy efficiency and renewable energy simply will not occur. Governments will have failed to send the clear market signal that is required to release pent up emissions reduction potential.

2. Differentiation: Parties like Australia, Norway and Japan (with Canada's tacit support) argue that different starting points, and economic structures requires that different targets be negotiated for the various Annex 1 Parties. Australia and Norway also argue that the European Union agreement to share the burden of reaching its 15 per cent reduction among its members so that some increase emissions (the Cohesion states: Portugal, Spain, Greece) while others decrease more than the 15 per cent (the UK, Germany, Austria, Denmark) proves that a better target can be achieved using differentation. The U.S., on the other hand, supports the same target for all Parties (flat rate), but with emissions trading to compensate for differences in the marginal cost of abatement. The environmental community believes that there is enough potential to reduce emissions in each country that near-term reduction commitments should be flat rate and that joint implementation be restricted to Annex 1 countries (joint implementation would allow for reduction investments to occur anywhere within Annex 1 with reductions deducted from the investing country's inventory or shared between the two Parties).

Chairman Estrada has said that he will pursue an agreement on differentation between now and AGBM 8 and that any final deal will be based on political negotiations, rather than mathematical formulas. There are two possible outcomes from such a process, and neither are acceptable from an environmental point of view.

One: The gap in perspective between high per capita emitters like Australia that believes it should reduce less, and low per capita emitters like Norway that believes countries like Australia should reduce more, cannot be bridged. Negotiations break down with no agreement on flat rate targets.

Two: Differentiated targets are agreed but in contrast with the Polluter Pays Principle, high per capita emitters like Canada (21 tonnes of carbon dioxide equivalent per capita) negotiate lower commitments, while low per capita emitters like the Europeans (half Canada's rate) are left to decide what to do with their political commitments to a 15 per cent reduction by 2010. The likely outcome: the European Union abandons its commitment to a 7.5 per cent reduction by 2005 and 15 per cent by 2010. The result: a lower overall commitment to reduce emissions and more climate change. Differentiation, if it could be negotiated (and that is not at all clear) should put additional pressure on high per capita emitters to reduce emissions both because there is more potential and because of equity considerations.

3. Budgets: Current proposals would allow for commitments to be made to two budget periods of up to ten years each. This would allow Parties to accumulate annual emissions into a ten-year budget allowing for flexibility year to year. Budgets could offer Parties flexibility but must not be so long that the Convention cannot be responsive to emerging science or climate surprises. Budgets should not exceed three years. The U.S. has also proposed that banking be allowed for any reductions in excess of targets and that borrowing be allowed for Parties that fail to meet current targets. That is, Parties could "borrow" emissions from a second budget period at a penalty. Chairman Estrada has indicated the concept of borrowing is unacceptable and it is.

4. Legally binding policies and measures: Environmentalists believe that most policies and measures are domestic in nature and do not require international co-ordination. Marine and airline bunker fuels are one area, however, where there appears to be a real need to co-ordinate internationally.

5. The net approach: The Framework Convention on Climate Change (FCCC) calls on Parties to "limit its anthropogenic emissions of greenhouse gases and protecting and enhancing its greenhouse gas sinks and reservoirs." The requirement of Parties to protect forests and control land use changes has been interpreted to mean that governments can DEDUCT any improvement in the capacity of forests and land to store carbon from fossil fuel EMISSIONS. Such an approach is completely unacceptable from an environmental point of view and dangerous for Canada from an emissions point of view. It is extremely difficult to calculate with any degree of certainty actual reductions achieved from carbon sequestration projects. In addition, these reductions, if achieved, are only temporary as any carbon stored will be released when forests die. Finally, scientific assessments of the impacts of climate change show that Canada's boreal forest is at risk of potential losses of up to two-thirds from forest fires and pest outbreaks. Should Canada continue to support the net approach it could face a situation where its managed forests become a significant and long-term source of carbon to the atmosphere with the result that Canada's inventory (and reductions requirements) increase rather than decrease.

6. Coverage: Canada has long been a proponent of including all sources and sinks of greenhouse gas emissions in the Convention. There are two concerns: (1) the sources included in any protocol, and (2) the treatment of all gases as one basket where global warming potentials can be used to trade gases off against each other.

Sources: not all sources of greenhouse gas emissions can be measured with high levels of certainty: a critical point when dealing with a legally binding target. Methane for example, can be more accurately measured from oil and gas operations than it can from rice paddies. Carbon dioxide emission, particularly from energy source, can be accurately measured which is why Japan supports a protocol that includes only carbon dioxide emissions. Sierra Club (and the Climate Action Network globally) believes that only those sources that can be accurately measured be included in any legally binding emissions reduction protocol. As methodologies for measuring emissions from various sources improves, then those sources would be added to the protocol.

Basket versus gas-by-gas approach: The Climate Action Network has long supported a gas-by-gas approach for the Convention. Targets should be set for individual gases (carbon dioxide, methane, nitrous oxide, perflurocarbons, hydroflurocarbons) and be based on sources that can be accurately monitored and verified. The scientific community has developed the concept of Global Warming Potentials to identify the relative contribution to radiative forcing from the various greenhouse gases. There are large uncertainties associated with these global warming potentials. Current values for GWPs will continue to be adjusted by the scientific community. Current proposals, however, could see today's values locked into commitments for 15 years or more. Changes to GWPs could mean that emissions reductions for gases other than carbon dioxide result in lower reductions than originally anticipated. Such an outcome supports the argument for short-term reduction commitments with budget periods of no more than 3 years, with targets set on a gas-by-gas basis.

In addition, governments like Canada are using global warming potentials to "add" the impact of emissions reductions by various gases and are reporting emissions on a CO2-equivalent basis (carbon dioxide equals one; methane 24.5, nitrous oxide 320).

The Intergovernmental Panel on Climate Change (IPCC) has argued that this approach should not be followed. In its Technical Report on Stabilization of Atmospheric Greenhouse Gases: Physical, Biological and Socio-Economic Implications, the IPCC argues:

"Although the equivalent CO₂ concept is pedagogically useful and provides a means to compare the effects of C0₂ with other gases, it does have disadvantages. An important disadvantage arises from the non-linear relationship between radiative forcing and CO2 concentration. This non-linear relationship means that, at higher C0₂ levels, it requires a larger C0₂ change to increase radiative forcing by the same amount. Because of this, radiative forcing changes can be added, but C0₂ equivalents can not be. "

"A further disadvantage of the equivalent C0₂ concept is that, in the context of impact assessments, it addresses only the climate change aspect. Other impacts of increasing CO2 (e.g., fertilization), sulphate aerosol (acidification), and ozone may also be important. Also with the equivalent C0₂ concept, as with radiative forcing, a global aggregate measure subsumes information about regional impacts of climate change that are critical in assessing impacts. It would be possible, for example, to impose a forcing pattern on the climate system that had zero global mean forcing, but which would lead to large changes in regional climate."

7. Emissions trading: The United States is proposing that emissions trading be included in the protocol to allow Parties to reduce emissions more cost effectively. The current proposal is filled with so many options for flexibility (borrowing, budget of 5 - 10 years, banking, all gases, sources and sinks, etc.,) that many in the environmental community find it difficult to believe that the U.S. is in fact serious about emissions reductions. The U.S. has not yet proposed an emissions reduction target making it even more difficult to assess the trading proposal. Rumour, however, has it that the U.S. will propose nothing more than stabilization of greenhouse gas emissions from 1990 levels by 2010. We are told the maximum we can expect is a reduction of 5 per cent from 1990 levels by 2010. Japan has also not made a formal proposal for a specific target, but three possibilities are emerging:

1. a cap of 3 tonnes CO₂/per capita from 1990 levels by 2010. Such a target would allow many countries, including many in Europe, as well as Japan to increase emissions by 2010. Japan's Environment Agency is arguing that per capita emissions in 2010 must not exceed their 1990 levels.

2. Parties could opt for the per capita approach or choose to stabilize at 1990 levels by 2010.

3. A reduction target of 3.5 per cent is rumoured, with the possibility that the U.S. would take on a lower target, say 1.5 per cent reduction from 1990 levels by 2010. Only carbon dioxide would be included.

Stabilization by 2010 on either a per capita or absolute basis is not in line with the potential Annex 1 countries have for reducing emissions cost effectively - with or without trading, nor is it in keeping with the reductions required to prevent potentially dangerous climate change. It certainly isn't clear whether such modest targets will induce emissions trading as the U.S. argues.

Conclusion

Proposals so far do little to protect the climate and, in fact, may do more to increase emissions than to reduce them. Sierra Club is increasingly concerned that Parties, including Canada, are not yet negotiating in good faith and are not taking their current or future commitments to protect Canadians from climate change seriously.

Prepared August 13, 1997  
  

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