Carbon Market Watch

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NEWS: Perspectives from outside the room: UNFCCC Negotiations in Bonn and the lead up to Paris 2015

03 Nov 2015

unfccc_logoSTATE OF PLAY FROM BONN

The October talks in Bonn had a shaky start after the G77 opposed the Co-Chairs’ minimalist draft text. Other Parties expressed unhappiness at the lack of options and issues they saw as missing. Through Monday, Parties were allowed to bring in, with “surgical precision”, issues they felt essential to include. This process has bolstered Parties’ ownership of the text, but the talk is of coming up with ‘bridging proposals’ rather than reaching actual agreements on sections of the text.

During Tuesday’s “spin off” negotiation sessions, Japan (apparently silently supported by a number of other states) disallowed non-governmental observers from being in the negotiating rooms. While this is typical at the latter stages of COPs, it is unusual at this stage of negotiations, especially as NGOs can play an important role in working with different groups of Parties to develop bridging proposals.

Throughout the rest of the week progress was patchy. A lack of Party mandates left some fundamental issues, like differentiation, in stalemate – the opposite would have helped unlock the text. Irrespective of the progress made, this text will be the one taken forward in Paris.

LOOKING FORWARD TO PARIS

With just a month to go before Paris, there is still much work to do to reduce options in the text and converge on the thorny, politically-charged issues. One of the problems in the lead up to Copenhagen was that ‘nothing was agreed until everything was agreed’, and there is a sense that this dynamic prevented negotiators from making headway in Bonn necessary for Paris to focus on agreeing trade-offs between the major issues.

Paris is now the only formal space for negotiation. However, the French presidency of the COP will convene a November ministerial to stimulate discussion on areas of divergence to try to influence Parties’ negotiating mandates. The pre-COP will not include all countries’ ministers and results generated from these discussions will lack legal standing.

The first day of the COP will host heads of state and government, to unlock issues too controversial even for ministers. These discussions will plausibly cover: loss and damage; post-2020 finance; differentiation; and perhaps the legal form of mitigation commitments.

By the end of week one the ADP will conclude, ideally having agreed less controversial issues, and to narrow options subsequently presented to ministers. Bets are on as to when Paris will conclude. Durban finished in the early morning of the second Sunday. It seems likely that Paris will surpass this.

#Markets market markets

The Bonn negotiations have significantly changed how carbon markets are being discussed. There was initially no mention of them in the draft treaty text, however, 2-5 pages of language proposals for carbon markets have been added. Article 3 (mitigation) includes key principles, such as avoiding double counting, ensuring that “mitigation outcomes” are “real, permanent, additional and verified”, and ensuring that carbon markets are “supplemental to domestic action”. A paragraph on “cooperative approaches” is expected to allow countries to achieve their pledges jointly by linking their emissions trading systems. Paragraphs have been added for a “mechanism to support sustainable development” (Article 3ter) paving the way for the continuation of a revised version of the CDM or a New Market Mechanism. The establishment of a new “REDD-plus mechanism” (Article 3bis) is proposed separately. The accompanying draft decision text includes several paragraphs (para 30 and 34) on technical elements for enforcing the decision.

The text is open to discussion on all forms of carbon markets, including currently ineligible types such as REDD. While there are concerns about the effectiveness of carbon markets, there is also a risk that the absence of clear rules would allow countries to implement carbon markets without harmonised standards, necessary safeguards, and international oversight. Parties must ensure that markets do not undermine the Paris climate pledges.

#Upholding our rights

Starting with a weak text on human rights, Parties put forward proposals to include references in the preamble and operative and adaptation sections of the draft agreement. In the spin-offs groups, Parties debated these articles with the EU keeping rather quiet on support for their inclusion, especially in the operative part.

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