Is a CDM+ underway?

cdmAs previously debated in this blog, the future of CDM remains greatly uncertain. To try to tackle this uncertainty, Brazil has submitted a proposal for an Enhanced Clean Development Mechanism, or CDM+. The proposal, submitted to the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP), is a response to the new market-based mechanism requested in decision 2/COP 17.
Brazil has great interest that CDM continues under the new international framework.  Besides being one of the countries that most benefited from CDM projects during the first commitment period of the Kyoto Protocol, Brazil already has in place the necessary institutions and knowledge to enable even more CDM projects. Thus, proposing that the new market-based mechanism be similar to the well-known CDM does not come as a surprise. But one particular aspect is different under the new proposal: the possibility of voluntary cancelled CERs still be accounted towards countries’ nationally determined contributions (NDC) financial targets and pledges.

The proposal is a good attempt to save CDM, which in the past years has lost debate space to other mechanisms (e.g. loss and damage, and REDD+), and has barely reached ADP discussions. But the proposal is already being deeply criticized by other countries, in particular the European Union. The expression “double-counting” of CERs in different markets was continuously used during this week negotiations, in a clear reference to the Brazilian proposal for after 2020.  While the double-counting language was not included in the final CMP decision regarding CDM due to lack of agreement, the issue will continue to underline future discussions as Parties move on to a new international agreement.


“Hit the ground running.”

downloadWith this statement the Executive Director of the Green Climate Fund (GCF), Ms. Hela Cheikhrouhou, reported on the current status of the fund. The interactive session held on Thursday at COP 20 provided a brief overview of the latest GCF decisions, and laid out the expected deliverables for next year.  Offering an optimistic perspective, Ms. Hela affirmed that grants are scheduled to start being distributed next year in the hope that approved mitigation and adaptation projects can be presented at COP 21.  But for the GCF to be able to do so, the interested countries will have to do their homework and develop functioning institutions to tackle climate finance flow. From GCF’s part, Ms. Hela explained that procedure rules will be kept simple to allow “less process, more access.” 

This seems to be the ideal approach; climate funds bureaucracy has been one of the main obstacles for these funds to effectively reach vulnerable countries  – least developed, small island, and African countries.  But is this a fair procedure?  Many in the session raised concerns related to the hurry in approving projects for Paris 2015, and how this simplified, speed process will once again negatively impact countries that are more vulnerable to climate change impacts.  

climatefinancingsign_0The imbalance between least developed countries and larger developing countries has been seen through the years, and is present in several of the mechanisms adopted under the UNFCCC and the Kyoto Protocol.  The most critical example is the clean development mechanisms (CDM). During the first commitment period of the Kyoto Protocol, countries like China, Brazil, and India were responsible for hosting the majority of CDM approved projects. In the financing context, this gap is based on vulnerable countries’ lack of institutional capacity to properly enable climate finance flow.   

The bottom line is that less process is ideal, and it will lead to more access.  But without the right rules in place, it will not provide access to those countries that might be the highest in need. The readiness process offered by the GCF, while promising, will make difficult for these countries to take advantage of the fund resources if greater support for capacity building is not provided on time.  A lot of work will have to be done, but 2015 “hit the ground running” approach will, once again, leave the most vulnerable countries behind – the opposite direction of GCF’s goal.


The Inevitable Linkage Discussion

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Let’s face: it is almost the end of 2014 and we are still negotiating an international agreement to mitigate climate change for after 2020. The good news is that several countries have taken the initiative, and adopted climate change policies. These policies vary from emissions trading, carbon taxes, performance standards, among others. But what role will these regional, national, or sub-national policies play under the new international agreement? Yesterday, the International Emissions Trading Association (EITA) held a side event to address this question. The discussion, “Linkage Among Climate Policies in the 2015 Paris Agreement”, had as panelists leader researches on the topic: Robin Stavins, from Harvard University; Daniel Bodansky, from Arizona State University; and Dirk Forrister, from  EITA, among others. The discussion was based on the latest report from the Harvard Project on Climate Agreements, “Facilitating Linkage of Heterogeneous Regional, National, and Sub-National Climate Policies Through a Future International Agreement” (November, 2014).

The concept of linkage is fairly simple; it refers to the idea that distinct carbon pricing instruments can be linked together to meet the general goal of reducing greenhouse gas emissions. The linkage can occur is two ways: direct and indirect. The direct linkage occurs when two different schemes mutually accept the emission reduction units from one another to meet their goals. The indirect linkage occurs when two programs, for example cap-and-trade schemes, do not allow the trade of allowances between their programs, but both are direct linked to a third, common trading scheme.

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As wisely explained by Daniel Bodansky, to address this issue the new international agreement can follow three distinct approaches.  The first is to expressly forbid any linkage between different carbon pricing schemes. The second approach is to be silent about the issue, and the third, preferable approach is to allow linkage between different carbon pricing schemes. Allowing linkage would provide a number of benefits to participating countries, including: cost savings; improvement of individual market, through the decrease of market power and price volatility; and equity distribution. Another main interesting point is that, as Robert Stavins (left) pointed out, allowing the linkage between different schemes can potentially increase overall national emission reduction ambitions, as more market options are made available. 

To allow linkage between different climate policies, all panelist agreed that the new agreement shall include a paragraph as simple as possible. As proposed by the panelists, the paragraph shall be limited to expressly allow linkage, define key terms, and provide basic guidance regarding tracking emissions to ensure the environmental integrity. In their opinion, further detailed rules shall be decided by future meetings of the Conference of the Parties. 

While challenging, linkage is already happening in different levels. In fact, the issue is very similar to the decision, in 1997, to allow the co-existence of emissions trading, joint implementation, and clean development mechanisms under the Kyoto Protocol. Countries are also already dealing with this issue in the national, or sub-national level. California and Quebec Emission Trading Schemes, for instance, are linked since 2013. The same is true for the European Union and Norway Emission Trading Schemes, that signed their linkage agreement back in 2007. Other linkage agreements are expected to happen as the number of cap-and-trade programs increase; up to date there are 20 regional, national, or sub-national trading schemes in operation or scheduled to enter into operation. The linkage issue will not go away, and several examples and options have already been deeply discussed. The remaining question is if the Paris agreement will take the necessary step and deal with this issue, or if the new agreement will be silent. 


Australia wins the Fossil of the Day… again!

FossilSince COP 20 started 9 days ago, Australia has already won 3 of the 7 daily Climate Action Network (CAN) Fossil of the Day awards.  Last Thursday, Australia won the award for declaring that loss and damage should be an element of adaptation in the 2015 agreement. On Friday, the award was once again given to Australia due to its announcement that the country would not contribute to the Green Climate Fund (GCF). Yesterday, Australia was awarded for its silly statements, like the lack of understanding of what “global solidarity” means. But the interesting fact is that the award was given less than twenty minutes after the Australian Foreign Minister, Julie Bishop, affirmed at the Ministerial Dialogue on Climate Finance that Australia will, in fact, provide 200 million Australian dollars to the GCF in the course of four years. But shouldn’t the 200 million change of mind be enough to save Australia from its third  Fossil of the Day? CAN still does not think so


What does the future hold for Kyoto’s Clean Development Mechanism?

UntitledOn my first day at COP 20 / CMP 10, I had the opportunity to watch CDM’s draft decision discussions – thanks to the European Union, which defended observers’ opportunity to watch the session. It was five hours of long discussions and little progress. Despite the particularities of many of the debated paragraphs, there was only one ghost in the room: the uncertain future of CDM in the post-2020 agreement.

CDM was a mechanism created in a time when international environmental agreements were drafted for two, distinct worlds: developed and developing countries. But since 1997, much has changed.  With China’s GHG emissions surpassing the United States’ emissions by far, the post-2020 agreement will no longer be able to give amnesty to developing countries that are also large emitters.

But how will CDM adapt to a world divided into developed, developing, and least developed countries?

During this second week of COP20/CMP10, Parties continue to discuss improvements to CDM’s accounting system, modalities and procedures.  But it is noticeable how little effort is truly invested in moving the discussions forward.  The lack of certainty regarding CDM’s future, especially for developing countries that host a great number of CDM projects, casts a long shadow on these negotiations, producing a lack of commitment to really improving CDM’s rules.


“The choice is in our hands”

After spoilers ipcccand seven years of waiting since the last Intergovernmental Panel on Climate Change (IPCC) report, the full Fifth Assessment Report (AR5) was accepted and its final piece (the Synthesis Report) was approved on November 1, 2014. The Synthesis Report integrates the findings of the three 2013-2014 IPCC working group reports: physical basis for climate change; climate change impacts, adaptation and vulnerability; and climate change mitigation. The Synthesis Report, however, is considered the most influential part of the report for climate change negotiations. Its shorter version – 40 pages long – is written in a non-technical style to be used by policymakers and addresses policy questions, even though it does not prescribe specific policies to be adopted by governments.

The latest report is already being recognized as the most comprehensive IPCC report to date. But the news is not all good. Mother Jones listed what it considers the “most terrifying facts from the IPCC report”: human influence on climate change is clear, climate change is happening today and is going to get worse, oceans are keeping most of the heat and are turning more acidic, developing nations will be hit the hardest, and biodiversity is particularly vulnerable. However, IPCC’s conclusion does not come as a total surprise to those familiar with climate change studies.  In fact, several people have come forward to critique the report as underestimating the actual severity of the situation.

But the IPCC’s latest report comes at a time when the international community could use a little help from our (scientist) friends.  With the upcoming Conference of the Parties (COP) in Lima, and the roadmap to reach a post-2020 agreement in Paris next year, the strong language used in particular in the Synthesis Report could push forward the negotiations.  In the words of IPCC Chairman, Mr.  Rajendra. K. Pachauri, if we are aiming to keep within the 2oC increase limit, we must act now. In fact, the report affirms that if we do not change business-as-usual within the next 17 years, we are going to exceed the global carbon budget – calculated to keep us under the ‘safe level’ of 2oC increase. To avoid surpassing this number, we need to drastically reduce GHG emissions, or, as presented in the report, keep up to 86% of all proven fossil fuel reserves in the ground.

The clocking is ticking, and the message is clear. As 350.org founder Bill McKibben explains, it does not get clearer than the language used in Synthesis Report: “For scientists, conservative by nature, to use ‘serious, pervasive, and irreversible’ to describe the effects of climate falls just short of announcing that climate change will produce a zombie apocalypse plus random beheadings plus Ebola.”

The good news is that governments seem to finally understand the message.  On the same day the Synthesis Report was released, the Director of White House Office of Science & Technology, Dr. John P Holdren, affirmed that the IPCC report underscores the need for “continued engagement with other countries on ambitious emissions-reductions targets and the policies and technologies necessary to achieve them.” United Kingdom Energy and Climate Change Secretary, Mr. Ed Davey, also recognized the importance of the report, stating that “we must act on climate change now.” Now we need to wait and see if the message will continue strong in the next 27 seven days for COP21. But either way, according to WMO General Secretary Mr. Michel Jarraud, “ignorance can no longer be an excuse for no action.”


Global leaders respond to 400,000 climate wake up calls

After 400,000 people marched on Sunday, NYC was again the stage of another climate change event: the United Nations Climate Summit 2014. Aimed to move forward the climate change negotiations and achieve an agreement at COP 21 in Paris, the UN Climate Summit gathered over 100 Heads of State and 800 leaders from business, finance and civil society. UN Secretary-General Ban Ki-moon affirmed in his opening statement that “we are not here to talk, we are here to make history.” He challenged global leaders to propose climate actions on five fronts: emission reductions, mobilizing money and markets, pricing carbon, strengthening resilience, and mobilizing new coalitions.

While many of the leaders reiterated previous commitments – e.g. the need to limit global warming to 2o Celsius from pre-industrial level –  some of them announced new commitments that showed a real effort to advance climate change negotiations. Several countries –  developed, developing, and least developed countries – pledged to increase their GHG emission reduction goals beyond 2020 and increase the use of clean energy: the European Union committed to reduce 40% of its emission from 1990 levels by 2030; Ethiopia and Sweden stated their goals to become zero net emissions by 2025 and 2050, respectively; Republic of Korea announced that it will launch  the first Asian Emission Trade Scheme in 2015; Nicaragua committed to generate 90% of its electricity through renewables by 2020; and Tuvalu announced its goals to use 100% clean energy by 2020, just to name a few.

China, the biggest GHG emitter (28% of global CO2 emissions in 2013), announced goals to reduce its GHG emissions for the first time: 40 to 45% from 2005 levels by 2020. China also offered to provide $6 million for the United Nations’ efforts to boost South-South cooperation to address global warming. These announcements come as an initial break through to the developed versus developing country debate, which has been the biggest challenge in climate change negotiations. The shift in the tone of the Chinese government, which recognized its international obligation to tackle climate change as responsible major country, could force key emitter countries, such as United States and India, to participate in post-Kyoto commitments.

Another announced effort was the New York Declaration on Forests. The Declaration, the first of its kind, sets a non-legally binding timeline to cut natural forest loss in half by 2020 and to end it completely by 2030, while restoring 350 million hectares of degraded landscapes and forestlands. These efforts combined would result in a cut between 4.5 and 8.8 billion tons of carbon pollution every year. 32 governments, including Indonesia and Colombia (but surprisingly not my own country of Brazil), signed the Declaration, as did 20 subnational governments, 30 of the world’s biggest companies (e.g. Asia Pulp and Paper, Nestle, and Unilever), and more than 50 civil and indigenous organizations.

And last, but not least, poet Kathy Jetnil-Kijiner, a Marshallese citizen, provided a moving speech that brought some world leaders to tears. She gave the face, the voice, and the perspective of those experiencing climate change impacts today – the ones that world leaders hope to address by the end of 2015 in the new mitigation and adaptation agreement.

  Kathy Jetnil-Kijiner, Civil Society Representative from the Marshall Islands, is greeted on stage by her husband and her baby after speaking during the Climate Summit at United Nations Headquarters in New York