UNFCCC Negotiations Update At the “Half-way mark” on the Road to Copenhagen Are we there yet? Norine Kennedy United States Council for International Business (USCIB)

Context - UNFCCC negotiations United Nations system Ban Ki Moon UN General Assembly UN Environment Programme (UNEP) UN Commission on Sustainable Development (CSD) Etc… NAFTA APEC EU OECD MEM G8 APP

UN Climate Negotiations United Nations Framework Convention on Climate Change (UN FCCC) Kyoto Protocol (KP) 2008-2012 Annex 1 (dev’ed country) targets Bali Action Plan (BAP): Post 2012 Framework mandate Kyoto Protocol (KP) 2013-20xx New Annex 1 Targets (AWG-KP) UNFCCC Long-term Cooperative Action (AWG-LCA) To Agree in 2009 (Copenhagen, CoP 15)

Bali Action Plan (BAP): 2-Track Mandate Kyoto Protocol (AWG KP): post 2012 targets for Annex 1 (developed) countries, no reduction commitments for non-Annex 1 (developing) countries UN FCCC (AWG LCA): Long-term cooperative action Shared long-term vision (medium and long term targets?) Actions: Mitigation Adaptation Technology Finance New elements Sectoral approaches Shift from “Annex 1” and “non Annex 1” to “Developed and Developing” Developing Countries agree to consider commitments Aim to adopt agreement in 2009 (Copenhagen CoP 15)

BAP Negotiation: Key Positions & Issues National and bloc positions consistent Developing countries resist taking absolute emissions targets EU calls for +2ºC limits, requiring steep cuts by all nations Japan seeks a new framework with global participation Russian ambiguous about participation in Kyoto post 2012 US rejects participation in Kyoto debate, active in AWG LCA Australia promoting accession criteria for developing countries Issues Kyoto (AWG KP): Targets and duration of next period Future accession to emissions commitments by non-Annex 1 Parties Spillover impacts: emissions leakage, trade, jobs Long-term action (AWG LCA) “Comparable” effort by developing countries Funding by developed countries for adaptation, technology Process and terms to access funding Role and timing of US participation under next Administration

Other issues… Addition of new gases: HFCs Consideration of CFC emissions (Montreal Protocol) New GWPs or some other index CDM reform (sic) Inclusion of nuclear Exclusion of CCS Sectoral CDM (±) Technology Lists ... Land Use, Land Use Change and Forestry (LULUCF) In Annex 1 countries national obligations In CDM projects Reducing Emission from Deforestation in Developing Countries (REDD) How to fund adaptation & mitigation in developing countries A share of the proceeds from trading allowance auctions Global carbon tax (“solidarity”)

Technology and UNFCCC Experts Group on Technology Transfer (EGTT) under Subsidiary Body on Science and Technology (SBSTA) Developing indices of technology transfer Discussion/consideration of Establishing Technology Panels (as in Montreal Protocol) Soliciting National Technology Plans (to inform technology transfer) Creating a permanent Subsidiary Body for Technology BAP and AWG LCA Technology for mitigation and adaptation “Normal” technology transactions “don’t count” Protection of Intellectual Property is a growing topic Barrier or enabler of technology transfer? Parallel s drawn to HIV Aids drugs Claims of too high costs and barriers, but no examples (yet) Calls for Annex 1 Parties to establish IP buy-out funds Little recognition of role of IP in stimulating innovation Annex 1 Parties try not to add oxygen NGOs, non-Annex 1 Parties suggest review/relax IP protection, reference to compulsory licensing

Sectoral Approaches (SA) – Country views EU - Aviation and marine bunker fuels G77 & China: Sectoral approaches under the convention Sole focus on SA as a vehicle for technology transfer per §4.1.c No support for sectoral caps or standards of any type Japan No longer calling for sectoral caps as an alternative to Kyoto Continues to push for sectoral analyses and methodologies, To Identify emissions reduction opportunities As a tool to build bottom up national emissions targets on common basis US cites APP as an example, potential pilot for sectoral approaches Overall: no concerted push by Parties for sectoral cap, targets or standards: global or national (except EU on bunker fuels, aviation) Recognition of differences in national circumstances, priorities Desire to preserve national flexibility Developing countries resist backdoor emissions commitments

Sectoral Approaches: Diversity Roster of Sectoral approaches under UN FCCC/KP Regulatory National/Regional Transnational sectoral agreements (highly unlikely) Market Establishing caps w/opportunity for emissions trading Sectoral caps (EU aviation and bunker fuels) National no lose caps (CCAP) Offsets: Sectoral CDM Cooperative actions (includes voluntary) Sectoral methodologies for nations, e.g., mitigation potential (Japan) Identification of opportunities and barriers (APP) Technology transfer, esp. funds (G77+China)

Potential Outcomes AWG KP: New Annex 1 Commitments An amendment to the Kyoto Protocol with An Appendix listing new targets for Annex 1 Parties Changes or additions to some provisions, e.g. on next revision Changes or enabling decisions, e.g. on GWP, reports, reviews Entry-into-force would require Agreement of each affected Party to their new target Adoption at moP (requiring 3/4 of those present and voting) Ratification (requiring 3/4 of Kyoto Protocol Parties) AWG LCA: Shared vision, building blocks One or more protocols, or simply decisions of CoP ? New institutions, reports, methodologies, reviews ? New funding ? Linkages between the 2 tracks: when and how? Filling in blanks and details after COP15?

Next Steps 10 weeks (or more) of negotiation through CoP 15 2009 CoP 14, December 1-12, 2008 Poznan Design, approve UNFCCC negotiating workplan for 2009 Outline content for inclusion in outcomes (Chairman’s views) Opportunity for submission ongoing Polish govt effort to highlight technology & sectoral approaches via Sectoral Summit, Nov 27-28 (Happy Thanksgiving) ICC & WBCSD Day of business Conclude workshops, issue framing views by March 30-Apr 9, 2009 Develop initial negotiating text by June 1-12, 2009 (?) G8 2009, MEP and APP processes, UNEP GC 2009, among others CoP 15, December 2009, Copenhagen Danish govt seeks to funnel/orchestrate ngo input via Danish organized pre-meetings Science, Stakeholders and Business (May 2009)