Industrialised nations have introduced a Clean Development Mechanism to meet their reduction targets. In the second part of her climate change report, NIKHAT JAMAL QAIYUM examines how these countries perverted the original Brazilian proposal to suit their needs
THE assignment of responsibilities to Annex I (industralised) countries according to their contribution to climate change has been a critical issue haunting climate negotiations. Brazil first proposed a "budget" concept on historical emissions at the Ad Hoc Group on the Berlin Mandate (AGBM) meet held in July-August 1997. It found surprise approval from the United States at the Third Conference of Parties (COP-3) held in Kyoto in December, 1997.
The Brazilian proposal was probably the most ambitious proposal made for the Kyoto meet. The proposal puts the heaviest burden of "differentiated responsibilities" on historically large emitters. It defines quantitative emission limitation and reduction objectives (QELROS) for adoption by the protocol in Kyoto. The proposal is to limit the actual Annex I greenhouse gases (GHG) emissions to a constant of 1990 levels in the period 1900 to 2000. This is the "effective emissions reference".
The emissions are to decrease regularly from 2000 to 2020, reaching a 30 per cent lower level than 1990 in 2020. This constitutes the "effective emissions ceiling".
Reduction targets for Annex 1 countries, for each of the periods - 2001 -2005, 2006-2010, 2011-2015 and 2016-2020, are calculated to equal the difference between the effective emissions reference and the ceiling. The calculation criterion is "differentiated responsibilities" as opposed to a "flat rate", fixed to a 1990 baseline. It was argued that the latter would penalise countries that have maintained relatively low emissions up to the baseline year.
The proposal recognises "net anthropogenic emissions" as the difference between human-induced emissions and human-induced removals by sinks of a given GHG in a year. And "effective emissions" in a given period is defined as the increase in global means surface temperature resulting from an increase in the net anthropogenic emissions of a particular set of gases in a year. The increase is to be over the initial concentration of gases as at the beginning of the calculating period.
In this way the relative responsibility of each Annex I country would to be calculated to equal its effective emissions.
The proposal grants some flexibility to Annex I countries by allowing them to achieve targets individually or jointly. The difference between the emission ceiling and the actual emissions can be used as a measure for trading among themselves. These provisions sought to limit mitigation efforts to domestic action by an Annex I country or Joint Implementation (JI) among each other.
A penalty- US $3.33 for each effective emission unit higher than the ceiling limit - would be slapped for non-compliance. The money thus collected would go into the Clean Development Fund (CDF) and will be used for climate change mitigation and adaptation projects in Non-Annex I countries. The financial resources allotted to the latter would be in proportion to their allocated effective emissions which, will be calculated as it is done for Annex I countries.
It is often implied that Non-Annex I emissions in the future will tend to grow more rapidly than Annex I emissions. The year when the Non-Annex I emissions equals those of Annex I Parties is being taken as the year when the respective responsibilities become equal. However, according to the proposal, this approach does not take into consideration the different historical emission path resulting from the industralisation process and consumption patterns in both groups of countries.
The Inter-governmental Panel on Climate Change (IPCC), taking the 1992 levels, estimated that whereas annual emissions from the South will equal the North by 2037, the resulting human-induced change in temperature are estimated to be the same only in 2147.
However, Non-Annex I parties stand most vulnerable to the adverse effects of climate change. Hence it is important that the developing countries realise that they have a stake in the discussion on "differentiated responsibilities" and methods likely to be adopted by Annex I countries to achieve their targets.
Clean Development Mechanism
In Kyoto, the Brazilian proposal seemed to find support from many quarters, that were to rewrite it altogether. A group of negotiators from the US, Japan, HU, Brazil, China and other developing countries was set up to draft the outline of the programme. The Clean Development Mechanism (CDM), as it finally emerged, was just a bank for carbon credits.
Under the CDM, the climate change secretariat will establish a special body with functions similar to a stock exchange. But instead of stocks, "carbon credits" will be sold and bought. Annex I countries or private companies from the North will undertake sustainable projects aimed at reducing GHG levels, mostly in developing nations. When such projects succeed in reducing emissions, the amount of the reduction will be counted as carbon credits. Developing countries can bank their credits at the "carbon credit exchange" which can then be purchased by the North to meet their reduction targets. The purchased carbon credits will be included as emission reductions by the developed countries.
The CDM, therefore, is nothing but JI in a new packaging. Under the protocol, JI would grant credits for investments in projects, but only in developed countries. CDM is to become the option of credits by financing emission reduction projects in developing countries from the year 2000. Moreover, under the CDM, even private companies are allowed to invest in projects. Developed countries will thus continue to evade mitigation at home.
"The Clean Development Fund as has been defined in Kyoto would actually allow the North to gain credit for investing in developing countries," said Saifuddin Soz, India's former environment minister.
In simple terms, the purpose of the CDM is only to make the South assist the North in meeting their emission reduction targets. Like JI, CDM projects would mean reducing developed countries' emissions where it is economically the cheapest, while giving no credits to the developing countries. Moreover, once the South come to accept reduction targets, the North will have no incentive to invest there either.
In Kyoto, many developing nations voiced apprehension over the CDM proposal. South Africa pointed out that there was no limit on how much emission reduction activities could be undertaken in other countries, and how much had to be done at home. India, too, opposed the mechanism. But with the US pressing for the proposal, and Latin American and small island nations showing support, it was decided to let it pass.
An important lesson that emerged from the Kyoto talks is that the South's lack of preparedness may mean that it will have no negotiating counters at a critical moment. Much of the South went to Kyoto with the belief that it would have to stand firm against any involvement of developing countries as agreed in the Berlin Mandate of 1995. But it soon found itself facing a proposal for a CDM.
What happened in Bonn?
At the eighth meeting of the subsidiary bodies to the United Nations Framework Convention on Climate Change (UN FCCC) held in Bonn in June this year, Brazil reiterated its earlier proposal for CDF. It argued that the proposal establishes a methodology for linking the responsibility for increasing global temperature with the responsibility for lowering it. It called for a contact group be set up to consider the issue. China too endorsed the Brazilian proposal and said it highlights the "real" relative responsibility of Annex I and Non-Annex I countries.
However, several countries called for the proposal to be discussed further. The EU, the US, Switzerland and Australia expressed concern about the method for reconstructing historical emissions, indicators that ignore the rate of change, and data availability. Even Greenpeace, an environmental organisation, said the methodology needed improvement.
A contact group was convened to work on suggestions for the proposal. On the last day of the Bonn meet, the group presented draft conclusions recognising that there were outstanding issues that needed to be resolved.
Brazil announced that it will convene a workshop to develop its proposal further, and report back to the ninth meeting of the Subsidiary Body for Scientific and Technical Advice (SBSTA), which is to take place in November this year to coincide with the Fourth Conference of the Parties (COP-4) in Buenos Aires.
It is important that the proposal be addressed with more seriousness than was done in Bonn. This is especially since it recognises the principle of the common but differentiated responsibilities between Annex I and Non-Annex I parties.
Of late, this principle has been drowned in the clamour for "flexible mechanisms" and "meaningful participation". To counter this, equity and entitlement need to be pushed back into the agenda for round four of the COP negotiations.