Carbon Market Watch

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COP19 Analysis Editorial

20 Dec 2013

In the early hours of Sunday, 24 November 2013, the 19th Conference of the Parties (COP19) to the United Nations Framework Convention on Climate Change (UNFCCC) concluded in Poland, Warsaw. After a 40 hour negotiating marathon, the conference concluded with a package of decisions and an even bigger bunch of undecided issues that will be discussed at the next session in June 2014.

The decision by the Polish COP Presidency to co-host the World Coal Association’s International Coal & Climate Summit during COP19 was simply outrageous and placed the conference under a dark shadow of corporate and short-sighted government interests. It was not just the Poles who made this COP one of the most demoralizing. During the COP, Japan announced that it lowered its target – from fairly ambitious to meaningless and Australia’s new government is trying hard to dismantle its climate policies. The Climate Action Tracker in the meantime let us know that with the current reduction commitments we are heading towards 4o Celsius of warming by the end of this century.

Against these prospects, the final outcome was not a disaster.  Although the timeline was pushed back to the first quarter of 2015, it does give countries a deadline for when they have to present how they intend to contribute to the global goal to combat climate change. However, the negotiations for the new climate deal for after 2020 inched forward by watering down requirements for the mitigation targets counties will have to take on. “Commitments” were changed to “contributions” (see here for a marvellous spoof on this) and any reference to equity was removed.

In addition, decisions were taken on a Framework for REDD+. A relatively positive outcome includes the decision to enforce REDD+’s mandatory environmental and human rights safeguards by both setting up a system to monitor, report and verify carbon emissions.

Some marginal progress was also made on finance. Countries pledged US$ 280 million to finance the new REDD+ Framework and reached their goal to fill the Adaptation Fund with US$100 million. However, no pledges were made on how to reach the goal of mobilising US$ 100 billion annually from 2020. At the eve of Typhon Haiyan that hit the Philippines ahead of the conference and caused major disaster, the conference also finally agreed to establish a mechanism to address loss and damage as the result of climate change. However, much remains unclear, including how the mechanism will be financed.

While the COP was expected to be a “Finance COP” and ultimately rather turned into a “REDD COP”, it was definitely not a “Carbon Market COP”. Warsaw saw no decisions on establishing future carbon markets. All discussions on major decisions on the framework for various approaches (FVA) and the new market mechanism (NMM) were postponed to the next session in June 2014.

The reason for this was enormous disagreement and general distrust about the intention of countries that are aggressively advocating a trading platform for credits from various market mechanisms. For example Japan, which is developing a Joint Crediting Mechanism (JCM) which has raised doubts about its environmental integrity, has pointed out at various occasions the importance of such a framework while at the same time announcing to decrease its climate reduction target. A UNFCCC high-level round table on market approaches during the COP, which should have provided a platform for key players in the fight against climate change, instead included panellists from countries that have hampered the international climate process, such as New Zealand, and corporate lobbyists that are not known for supporting climate friendly policies, such as the Italian energy giant ENEL and the International Emissions Trading Association (IETA).

Also the reforms of the rules of the Clean Development Mechanism (CDM) and Joint Implementation (JI) were postponed. The only decisions that were taken relate to guidance on the CDM and JI for implementation in the course of 2014. It is noteworthy that in particular the CDM decision includes useful language to improve the local stakeholder consultation rules and a monitoring mechanism for the contribution of sustainable development of CDM projects. Host countries can now approach the CDM Executive Board for technical assistance and guidance on these issues.

Following the heated negotiations on hot air in Doha, several countries were hoping in vain to get a much needed decision on how to implement the Doha decision that limits carry-over of hot air and avoids the new build-up of surplus in the second commitment period. Negotiations were postponed to the next June session. The delay makes it difficult for Parties with commitments in the second commitment period, such as the EU, to move forward in ratifying the Kyoto Protocol.

See full analysis here