1. european capacity building initiativeecbi Legal issues and options for COP 17 Dr. Achala Chandani Abeysinghe International Institute for Environment and Development (IIED) european capacity building initiative initiative européenne de renforcement des capacités ecbi for sustained capacity building in support of international climate change negotiations pour un renforcement durable des capacités en appui aux négociations internationales sur les changements climatiques

2. european capacity building initiativeecbi Introduction In order to achieve a ‘balanced package’, work during 2011 should have; Finalised numbers and legal issues related to KP 2 nd CP, and arrangements for entry into force; Led to elaborate a legally binding agreement based on BAP and building on COP 16 decisions; Both leading toward simultaneous adoption of instruments at COP17. New and puzzling terms-legal nature of outcomes (US- ‘legal symmetry’, G77 – ‘firewall’, the conundrum of the legal character of COP decisions etc). Legal questions: Legal form of the instruments? legal form of commitments? what is specific and prescriptive nature of commitments? how to manage performance review and consequences?

3. european capacity building initiativeecbi Current issues under AWG-KP Avoid the GAPIf there is a gap Agree on Annex B amendments in time to avoid the gap? Entry in to force/ early entry into force by provisional application? Political declaration by parties? Continuation of negotiations? Use existing commitments in Annex B?What will be the commitments of Annex I Parties in light of a gap? An extension of the first commitment period to maintain the existing KP rules without accepting the low pledged emission reductions proposed by Annex I Parties Facing the implications (Reduction of emissions, affects two flexible mechanisms (JI and International Emissions trading) Uncertainty of carbon markets affects CDM projects, limit demands and ultimate investments in CDM projects, decline in the issuance of CERs affect the long term financing of the Adaptation Fund.

4. european capacity building initiativeecbi Issues under the AWG-LCA What would be the “agreed outcome”? A new mandate for negotiations towards a new Protocol under the AWG-LCA? Arguments that substance precedes form and that it is premature to decide legal form now Different views on possible outcomes: One protocol, two protocols and set of decisions

5. european capacity building initiativeecbi LDC position Ultimate goal: Two legally binding agreements, with linked entry into force –Annex B amendment adopted with provisional application pending entry into force –Mandate for negotiation of future legal agreement to complement the Kyoto Protocol with provisional application pending entry into force –In addition, set of CMP decisions with any modifications to KP rules for accounting, mechanisms, reporting and review and a set of COP decisions to implement the UNFCCC and operationalise the Cancun Agreement ‘Dream scenario’? supported by some Parties/ groups Issues: Which countries on which track?, What modifications of KP/ Marrakesh rules for KP 2 nd CP targets? start and completions dates,? scope of negotiations for LCA,? trading across tracks? rules for accounting reporting, review and compliance? Legally binding agreement is only effective if it commits parties to ambitious outcomes. Therefore a second commitment period under the Kyoto Protocol or a new legally binding agreement under LCA that locks in low-level ambition GHG reduction targets risks being meaningless.

6. european capacity building initiativeecbi Other possible scenarios for Durban KPLCA No agreement on 2 nd CP Continuation of KP negotiations KP institutions and procedures continue under existing legal rules COP decision to elaborate Cancun Agreement Decisions without prejudice to any future legal agreement Questions include: Which aspects would automatically continue, in absence of agreement to 2 nd CP? commitments regarding national system and reporting review process? CDM? Adaptation Fund? Which aspects of Cancun Agreements would be further elaborated?

7. european capacity building initiativeecbi Other possible scenarios for Durban KPLCA CMP decision to agree on political /transitional arrangement Specification in Durban or later of QELRO and rules COP decision containing a mandate to negotiate a new agreement Pledged targets/ actions reflected in COP decisions / transitional arrangement COP decisions elaborating Cancun agreements Issue: to what degree can details of political 2 nd commitment/ transitional period be finalised in Durban? What rules would apply during political 2 nd CP? KP/Marrakesh system to use? Can countries still use CERs from CDM to meet their targets? Will KP reporting and review and compliance system be used? What is the length of the transitional period? Under LCA, how to reflect pledges/ actions in COP decision? Which countries in which track, linkages across tracks during transitional period (trading across tracks?), what is the long term goal, is this leading towards two agreements or single comprehensive agreement?

8. european capacity building initiativeecbi Summary of options for COP 17 in Durban Kyoto Protocol track Agree on a legally binding 2 nd CP, amendments to Annex B including all current Annex B parties Unrealistic Political 2 nd CP through a CMP decisionAmbitious but possible? Apply the KP rules/mechanisms/targets for a defined period Possible? Continue negotiations with no outcome in DurbanDefault? UNFCCC track Agree on a new legally binding instrument in DurbanUnrealistic A COP decision containing a mandate to negotiate a legally binding instrument with a clearly defined scope and outcome Ambitious (but possible?) A COP decision containing a mandate to negotiate a legally binding instrument with a more open textured scope and outcome Possible? Continue discussing legal formDefault?

9. european capacity building initiativeecbi Legal form of outcomes: proposals on the table Proposal 1 (option 1) Keep the Kyoto Protocol in its current form, and complement it with a separate LCA-Protocol, covering the relevant key elements of the current negotiations under the AWG-LCA (Latest mention in Norway and Australia proposal) Proposal 2 (Option 2) Start afresh with negotiating a comprehensive new instrument incorporating the key elements of the KP with the AWG-LCA outcome ((Latest mention in Norway and Australia proposal) Proposal 3 (Option 3 / Plan C) keep the KP in an enhanced and improved form. The idea is to simply amend the KP sufficiently for willing Annex B Parties to agree to both a second and third commitment period, and to introduce an Annex C