1. 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)

2. 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

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

4. 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)

5. 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

6. 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”)

7. 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

8. 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

9. 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)

10. 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?

11. 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 (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)