Climate Agreement Reached without the United States

Amy Royden

Governments from almost 180 countries – with the notable exception of the United States – reached agreement in Bonn in late July 2001, paving the way to making the Kyoto Protocol operational. The meeting, which was a continuation of the COP-6 (Sixth Conference of the Parties) talks held at The Hague, produced high-level political agreement on several key issues, including emissions trading, sinks, the Clean Development Mechanism, funding and compliance. (See the UNFCCC Secretariat web site at http://www.unfccc.de and link to the document FCCC/CP/2001/L.7 for the text of the high-level decision).

However, delegates were unable to complete all their work on the texts incorporating the elements of the high-level decision, so all decisions were forwarded to COP-7, where delegates will attempt to conclude their negotiations. COP-7 will take place October 29- November 9, 2001, in Marrakesh.

The Protocol will enter into force and become legally binding after it has been ratified by at least 55 Parties to the UNFCCC, including industrialized countries representing at least 55% of the total 1990 carbon dioxide emissions from this group. As of July 20, 2001, 37 countries have ratified, including one industrialized country (Romania) (See http://www.unfccc.int/resource/kpstats.pdf).

Highlights of the Bonn agreement are described below.

Mechanisms (emissions trading and the Clean Development Mechanism (CDM))

• Supplementarity: Parties agreed that the use of mechanisms shall be supplemental to domestic action and that domestic action shall constitute a "significant element" of the effort made to meet emission reduction commitments.
• Eligibility: Eligibility of an Annex 1 Party to participate in the mechanisms shall be dependent on its compliance with methodological and reporting requirements.
• Nuclear in the CDM: Annex I Parties "are to refrain" from using Emission Reduction Units (ERUs)/CERs generated from nuclear facilities to meet emission reduction commitments.
• Sinks in the CDM: Only afforestation and reforestation projects are eligible for funding in the first commitment period, but the text is conflicting on whether the limitation will apply in subsequent commitment periods (see Sections VI.3.8 and VII.7). In addition, credits or debits for sinks projects for the first commitment period "shall not exceed 1% of base year emissions of that Party, times five."
• Simplified modalities and procedures for certain small projects in the CDM: The CDM’s Executive Board should develop and recommend by COP-8 "simplified modalities and procedures" for certain small-scale projects: renewable energy project activities with a maximum capacity of 15 megawatts, energy efficiency improvement project activities that reduce energy consumption by up to the equivalent of 15 gigawatt hours per year, or other project activities that "both reduce anthropogenic emissions by sources and directly emit less than 15 kilotonnes of carbon dioxide equivalent annually."

Sinks (Articles 3.3 (afforestation, reforestation, and deforestation) and 3.4 (additional activities, such as forest/land management))

• Limits on certain sinks credits/debits: For the first commitment period, caps are placed on how much credit or debit earned by Article 3.4 or joint implementation sinks activities can be applied against assigned amounts. The assigned amounts for each country are listed in an Appendix Z.
• Eligible Article 3.4 activities: The Parties agreed that "forest management," "cropland management," "grazing land management," and "revegetation" activities are eligible for credit under Article 3.4 of the Protocol. A Party may choose to apply any or all of these activities during the first commitment period, but must pick eligible activities prior to the start of the first commitment period. A Party must demonstrate that these activities occurred since 1990 and are human-induced.

Funding
Three funds will be established. A special climate change fund and a fund for least developed countries will be established under the UNFCCC to help developing countries adapt to climate change impacts, obtain clean technologies, and limit the growth in their emissions. In addition, a Kyoto Protocol adaptation fund will be established to finance concrete adaptation projects and programs. The EU, Canada, Iceland, Norway, New Zealand and Switzerland committed to providing funding for developing countries, amounting to an annual contribution of $410 million by 2005.

Compliance

• Commitment reserve: Each Annex 1 Party "shall maintain, in its national registry, a commitment period reserve which should not drop below 90 per cent of the Party’s assigned amount . . . or 100 per cent of five times its most recently reviewed inventory, whichever is lowest."
• Noncompliance penalties: Parties that fail to meet their emission reduction commitments in the first commitment period must make up the missed tons at a rate of 1.3 per missed ton in the second commitment period.
• Compliance committee: Parties agreed to set up a compliance committee comprised of both a facilitative branch and an enforcement branch. The facilitative branch is responsible for providing advice and facilitation for compliance with emission reduction commitments prior to a commitment period, and methodological and reporting requirements prior to the beginning of the first commitment period. The enforcement branch is responsible for determining whether an Annex 1 Party has met its emission reduction commitment, met its methodological and reporting requirements, and met eligibility requirements for participating in the mechanisms.

Amy Royden served as special assistant to the assistant secretary for Oceans, Environment and Science at the U.S. Department of State until January 2001 and is currently an environmental policy consultant. She is also a vice-chair of the Section’s Committee on Climate Change and Sustainable Development.