AWG-KP-16 Ad hoc working group Kyoto protocol

16th meeting

AWG-LCA-14 AWG long term cooperative action meeting 14th

Countries with commitments under the Kyoto Protocol to limit or reduce greenhouse gas emissions must meet their targets primarily through national measures. As an additional means of meeting these targets, the Kyoto Protocol introduced three market-based mechanisms, thereby creating what is now known as the carbon market. The Kyoto mechanisms are: Emissions Trading The Clean Development Mechanism (CDM) Joint Implementation (JI) The Kyoto mechanisms:

Stimulate sustainable development through technology transfer and investment Help countries with Kyoto commitments to meet their targets by reducing emissions or removing carbon from the atmosphere in other countries in a costeffective way Encourage the private sector and developing countries to contribute to emission reduction efforts

JI and CDM are the two project-based mechanisms which feed the carbon market. JI enables industrialized countries to carry out joint implementation projects with other developed countries, while the CDM involves investment in sustainable development projects that reduce emissions in developing countries. The carbon market is a key tool for reducing emissions worldwide. It was worth 30 billion USD in 2006 and is growing. Annex I Parties must provide information in their national communications under the Protocol to demonstrate that their use of the mechanisms is supplemental to domestic action to achieve their targets. This information is assessed by the facilitative branch of the Compliance Committee Eligibility requirements To participate in the mechanisms, Annex I Parties must meet, among others, the following eligibility requirements:

They must have ratified the Kyoto Protocol. They must have calculated their assigned amount in terms of tonnes of CO2equivalent emissions.

They must have in place a national system for estimating emissions and removals of greenhouse gases within their territory. They must have in place a national registry to record and track the creation and movement of ERUs, CERs, AAUs and RMUs and must annually report such information to the secretariat. They must annually report information on emissions and removals to the secretariat.

Greenhouse gas emissions a new commodity

Parties with commitments under the Kyoto Protocol (Annex B Parties) have accepted targets for limiting or reducing emissions. These targets are expressed as levels of allowed emissions, or assigned amounts, over the 2008-2012 commitment period. The allowed emissions are divided into assigned amount units (AAUs). Emissions trading, as set out in Article 17 of the Kyoto Protocol, allows countries that have emission units to spare - emissions permitted them but not "used" - to sell this excess capacity to countries that are over their targets. Thus, a new commodity was created in the form of emission reductions or removals. Since carbon dioxide is the principal greenhouse gas, people speak simply of trading in carbon. Carbon is now tracked and traded like any other commodity. This is known as the "carbon market."

A removal unit (RMU) on the basis of land use, land-use change and forestry (LULUCF) activities such as reforestation An emission reduction unit (ERU) generated by a joint implementation project A certified emission reduction (CER) generated from a clean development mechanism project activity

PRESS RELEASE
Design process of UNFCCC Green Climate Fund fully on track, says UNFCCC Executive Secretary (Bonn, 13 September 2011) The third meeting of the Transitional Committee tasked with designing the UNFCCCs new Green Climate Fund (1113 September) concluded Tuesday in

Geneva, with solid progress made on the design of the Fund. Next to advances on the nuts and bolts of how the Green Climate Fund will function, this includes a broad agreement on the importance of private sector engagement. Speaking from Bonn, Germany, UNFCCC Executive Secretary Christiana Figueres said: Clearly, there is ambition on the part of governments to create a fund that will reach a scale that is sufficient to put the economic development of their countries onto a low-carbon and climateresilient path. Governments also want the Fund to be country-driven and integrated into national development planning processes. And they are keen for Green Climate Fund resources to be long-term to allow for the economic transformation necessary to address climate change. The Transitional Committee of the Fund is now fully on track to conclude the design of the Fund for the approval by UNFCCCs Conference of the Parties in Durban, the UNs top climate change official added. In Cancn, Mexico, at the end of 2010, governments agreed to establish the Green Climate Fund as a central tool to finance climate change action, both adaptation and mitigation, in developing countries. The Green Climate Fund is to support projects, programmes and policies in developing countries. Governments meeting in Cancun entrusted the Transitional Committee with the design of the operational aspects of the Fund, to be presented to the UN Climate Change Conference in Durban (28 November to 9 December 2011). After it has been operationalized in Durban, the Fund is to be governed by a Board, comprising 24 members, as well as alternate members, with equal developing and developed country representation. The Geneva meeting was preceded by a workshop on the role of the Green Climate Fund in fostering transformational change, engaging civil society and leveraging the private sector, attended by representatives of banks, financial institutions and industry and civil society organizations from both developed and developing countries. The workshop and the interaction with private sector representatives has helped to raise

the level of understanding of the needs of all stakeholders. This is critical because with this new level of understanding, targeted systems can be put in place to engage the private sector, which in turn is very important to enable the Green Climate Fund to have truly transformational impacts, Ms. Figueres said. The establishment of the Green Climate Fund is to play a pivotal role in the successful operation of two other major new institutions agreed in Cancun to speed up international action on climate change - a Technology Mechanism for both adaptation and mitigation technologies and an Adaptation Framework. Both institutions are set to become fully operational in 2012. The speedy operationalization of the Green Climate Fund will be especially important, not least to vulnerable developing countries, given that a significant share of new multilateral funding for adaptation is to flow through the Fund, Ms. Figueres said. So for all the necessary cogwheels to interlink and produce real traction, the conference in Durban needs to detail how funding arrangements will link up with the new adaptation and technology institutions in time for their full operationalization in 2012, she added. A final meeting of the Transitional Committee for the design of the Green Climate Fund is scheduled for 1617 October in Cape Town. In Cancun, industrialized countries agreed in the longer-term to mobilize USD 100 billion per year by 2020 to address the needs of developing countries, from a mixture of sources, including public and private funds. Governments agreed that a significant share of the new multilateral funding should flow through the Green Climate Fund. Governments meeting in Cancun also took note of the collective commitment by developed countries to provide new and additional short-term financial resources, approaching USD 30 billion for the period 20102012, with a balanced allocation between adaptation and mitigation. Apart from the Green Climate Fund, the Cancun conference resulted in agreement on two

other major new institutions to speed up international action on climate change.

Technology Mechanism to boost the distribution and use of climate-sound technologies, notably in developing countries, and an Adaptation Framework to boost international cooperation to help developing countries protect themselves from the impacts of climate change.

CANCUN AGREEMENT
SPECIFICALLY, THE NEW INSTITUTIONS THAT WILL BE DEVELOPED INCLUDE:

a Green Climate Fund to house the international management, deployment and accountability of long-term funds for developing country support a Technology Mechanism to get clean technologies to the right place, at the right time and to best effect an Adaptation Framework to boost international cooperation to help developing countries protect themselves from the impacts of climate change a Registry where developing countries will detail their voluntary plans to limit greenhouse gas emissions and the support they need to achieve them

To this end, in Cancun, Governments agreed to continue work on identifying a goal for substantially reducing global emissions by 2050. They also agreed to work towards identifying a time frame for the peaking of global emissions. Both are important to keep the world on a viable timetable to address climate change. The first review of progress to identify whether the world is meeting the necessary timetable, or whether it will require stronger action, will start in 2013 and be completed by 2015. The review will be based on the latest scientific information and on progress made in combatting climate change. Parties meeting under the Kyoto Protocol agreed to continue negotiations in 2011. The Protocol is the existing international agreement that commits industrialized countries to reduce emissions under a framework of commitment, transparency and compliance. The Kyoto Protocols first commitment period, the time period in which industrialized

countries made specific commitments to reduce emissions, runs to the end of 2012. The overall aim of Governments is to complete their work and ensure no gap in effort between the end of the first commitment period and a second commitment period under the treaty, which is yet to be agreed. Governments will have the opportunity to capture further progress this year and make further decisions on all these aspects at the end of 2011, at the next Climate Change Conference in Durban, South Africa.