The Bali Road Map
Formal discussions surrounding the second commitment period began
in Bali in December 2007, at the thirteenth session of the Conference
of the Parties to the UNFCCC (COP),
serving also as the meeting of the Parties to the Kyoto Protocol.
The outcome of the meeting was a two-year plan paving the way to a
final scheme design by end-2009. This plan has become known as the
Bali Road Map.
The Bali Road Map continues the principle of the first commitment
period—'common but differentiated responsibilities' between
countries towards global protection against climate change. This principle
recognises that developed countries are responsible for most of the
increase in atmospheric greenhouse gas concentrations so far, even
though developing countries currently account for a large and growing
proportion of emissions. Furthermore, per capita emissions in developed
countries are still much higher than those of the developing world.
Poorer countries have a lower capacity than developed countries to
mitigate and adapt to climate change, although they are more vulnerable
to the impacts. Developed countries are therefore expected to take
the lead in committing to mitigate their own emissions and to invest
in and support technology transfer, mitigation activities and building
resilience in developing countries.
The Bali Road Map does not outline new targets for the post-2012
period but it recognises the need to severely slash global emissions.
For this it proposes sectoral approaches to greenhouse gas emission
reduction (such as setting sector specific technology agreements or
benchmarks for example), and supports incentives for reducing emissions
resulting from deforestation and forest degradation.
The Bali Road Map also recognises the need
to simplify the clean
development mechanisms (CDM), with the
aim of streamlining administrative processes,
expanding the reach across the developing
world, and including a larger range of activities,
such as carbon
capture and storage (CCS). In addition,
it outlines the 'Adaptation Fund' concept,
to be financed by a two per cent levy on
CDM projects, in order to assist developing
countries that are particularly vulnerable
to the effects of climate change.
The ultimate purpose of the Bali Road Map
is to set a timeline and provide some means
for the development of a post-2012 climate
change agreement by COP-15 in Copenhagen
(December 2009). For this, two working groups
have been established—the Ad Hoc Working
Group on Further Commitments for Annex I
Parties under the Kyoto Protocol (AWG-KP)
and the Ad Hoc Working Group on Long-term
Cooperative Action under the Convention
(AWG-LCA). The purpose of the AWG-KP is
to discuss future commitments for industrialised
countries under the Kyoto Protocol. The
AWG-LCA focuses on issues raised by the
Bali Road Map, and other proposals included
in submissions received from Parties.
BACK TO ISSUES AND ARGUMENTS
TOP OF PAGE
Poznan talks
In December 2008, the AWG-LCA presented
a progress report and its 'work programme
for 2009' at its fourth session and the
fourteenth United Nations climate change
conference (COP-14) in Poznan, Poland. The
report raised a number of issues, including
the need for a strategic programme on technology
transfer, the importance for adaptation
programmes in developing countries, and
means of securing additional funding. Real
progress was made with the opening of the
Adaptation Fund, which was first conceptualised
at discussions in Morocco back in 2001,
and then drew more attention from 2005 onwards.
Also, serious consideration of schemes for
reducing emissions from deforestation and
degradation in developing countries (REDD).
Unfortunately, before the Poznan meeting,
expectations of any solid results were marred
by the deteriorating global economic climate.
Australia's Minister for Climate Change
and Water, Senator Penny Wong, was among
the country leaders asserting that the financial
crisis must not be given as a reason to
delay progress because inaction will only
increase costs.
Uncertainty existed also because of the
impending change of government in the United
States. Participants were unsure how the
change of government might affect US environmental
policies. Many argued that until the new
US government had come to power (after inauguration
on 20 January) and was able to take
part in discussions, these would be futile,
even counterproductive. Negotiations did
however proceed.
At the meeting, Australia put forward a
strong case in favour of REDD. A joint
Australia–Indonesia submission
was presented to the UNFCCC, outlining both
Australia and Indonesia's commitment to
the scheme and its inclusion in a post-2012
outcome. Australia and Indonesia are already
cooperating on the Indonesia
– Australia Forest Carbon Partnership,
which is a prime example of international
collaboration on REDD.
Australia was also amongst many industrialised
countries calling for the inclusion of carbon
capture and storage (CCS) as a valid carbon
abatement project within the Kyoto Protocol's
schemes. Most developing countries however
were opposed to this idea, claiming that
CCS might destabilise global carbon markets,
and promote large projects to the detriment
of smaller-scale ones.
The UNFCCC set firm deadlines for submissions
on this and other issues, to allow the AWG-LCA
time to produce a draft agreement by its
fifth session in Bonn, Germany in March–April
2009. The draft is then to be sealed, signed
and delivered at COP-15 in Copenhagen.
BACK TO ISSUES AND ARGUMENTS
TOP OF PAGE
What to expect from a post-2012 agreement
International think-tanks and national research
centres have been speculating on the shape
of a new agreement. The biggest question
being asked by commentators is—will
a new treaty be a fine-tuning of the existing
architecture? Or will a complete overhaul
take place?
Many of these commentators support an overhaul
of the architecture and a multitude of brand
new proposals have been put forward. Interestingly,
these proposals are largely similar, and
can usually be classified into one, or a
combination, of four regimes—a bottom-up
scenario, an equity approach, harmonised
domestic actions and a global tax.
Alternatives to the Kyoto architecture
A bottom-up scenario
The bottom-up scenario considers the different
characteristics of countries and accepts
that least-cost emission-reduction strategies
will differ by region. Each country will
need to vary the strategies adopted. Some
of the relevant considerations include population
size, government type, local environment
and national industry. It works on the basis
that individual countries develop unique
approaches and climate policies and then
attempt to link these between the countries.
This bottom-up architecture calls for 'multi-track'
approaches whereby domestic schemes are
reviewed by other countries and enforced
only through ethical coercion. Some have
suggested that only the largest emitters
commit to domestic emission-reduction policies,
but that their progress be reviewed by an
international body.
The idea is that under any such system, a series of international
agreements will naturally develop and that such agreements would be
founded on solid platforms that are part of the national strategies
of each party.
A per-capita equity approach
The underlying basis of the equity approach is that responsibility
is shared equally by all individuals—developed and developing
countries, large and small territories, densely and sparsely populated
regions. Initially, this approach proposes that a global target of
carbon equivalent emissions in parts per million be established. The
burden would then be distributed between countries, which would be
required to meet specified per-capita targets by any preferred domestic
means.
Under this approach, highly populated developing countries would
be permitted to continue increasing their emissions until they reach
the per capita ceiling. Industrialised countries, on the other hand,
would need to make immediate and serious cuts to emissions.
A number of flaws with this approach have
already been identified. They include the
potential for CARBON
LEAKAGE, and rewarding deliberate
population increases. However, these problems
could be resolved using regular emission
target and policy reviews. The key to success
under the equity approach is for all nations
to participate and agree upon a per capita
emissions target.
Harmonised domestic actions
This approach can be similar to the bottom-up
scenario; however it depends largely on
global coordination of the price of carbon.
As in the bottom-up scenario, countries
would formulate their own domestic policies
but not in isolation. Instead, a multilateral
framework would ensure that all participating
countries' policies were complementary and
working in unison.
Under the harmonised domestic actions strategy,
international policy-makers have developed
two approaches. The first mimics the European
Union’s 'bubble' approach to climate
change mitigation, but applies it to a larger
selection of countries. The 'bubble' embraces
a selection of countries, usually in close
vicinity to each other, and treats this
as one unit in terms of emission reduction
responsibilities. The responsibility burden
is spread out amongst the country members
at the discretion of the 'bubble'. Policy
instruments might include an emissions trading
scheme, as well as renewable energy targets
and energy efficiency initiatives.
The other approach is for a global scheme of cap-and-trade systems,
whereby each participating country establishes a national cap-and-trade
system, on its own terms, with its own emissions targets. Although
there would be no trading between countries, the price of carbon would
be negotiated on an international level and an agreed ceiling or safety
valve would be determined. Warwick McKibbin of the Australian National
University developed this system.
A global tax
This simple approach proposes to impose
a tax on greenhouse gas emissions. The profits
are collected on a national level and used
at the government's discretion. A small
levy from developed countries' taxes would
help fund adaptation projects in the developing
world.
The strategy is attractive in its ease of administration, its ongoing
flexibility and the fact that it disregards all past actions of countries.
On the other hand, it relies on governments reaching a consensus on
relative tax levels and subsequent adjustments—not a small feat.
BACK TO ISSUES AND ARGUMENTS
TOP OF PAGE
Fine-tuning Kyoto
Although many of these proposals are feasible
and have important strengths, it is likely
that a post-2012 agreement will be a modified
version of the original, not least because
so much work went into the first agreement.
Over the past decade, significant investments
(human and capital) have been directed towards
establishing emissions monitoring methodologies,
inventory databases and reporting standards,
all of which support the current global
Kyoto architecture.
If a post-Kyoto agreement does end up resembling the original treaties
in many ways, there still remains a whole host of unanswered questions.
Country targets
Many commentators are currently speculating
on what the new global stabilisation concentration
target in parts per million (ppm) CO2-equivalent
will be (CO2 equivalency
accounts for the relative ability of different
greenhouse gases to trap heat in the Earth-atmosphere
system compared to CO2). And what will be
each new country target? Will there be an
evolution of the Annex I and non-Annex I
(developed versus developing countries)
divide?
The
Garnaut Review analyses stabilisation
scenarios of 550 ppm and 450 ppm,
and concludes that:
Some climate experts believe that even
a stabilisation level of 450 ppm would
be insufficient, and that the goal should
be 350 ppm. While a figure has not
yet been decided for the second commitment
period, targets for developed countries
have already been discussed by the Kyoto
member parties.
At the Bali conference in 2007, developing
countries put forward the view that developed
countries should have to commit to cuts
of 25 to 40 per cent below
1990 levels by 2020. At the time, Senator
Penny Wong declined to comment as she was
waiting for the outcomes of the Garnaut
Review. She simply pointed out that Australia
could not agree to any targets that might
undermine conclusions drawn from the Review.
After publication of the Garnaut Review,
the Australian Government further delayed
announcement of its 2020 targets until completion
of the Carbon
Pollution Reduction Scheme White Paper,
which was published shortly after the Poznan
conference in 2008. The Government's 2020
emissions reduction target was eventually
laid out on 15 December 2008. It promises
an unconditional 5 per cent below 2000 levels,
and up to 15 per cent if an international
agreement is reached with commensurate commitments
from other developed countries and commitments
from developing countries to substantially
restrain their emissions.
The issue of whether binding targets will be imposed upon developing
countries through a new international agreement is another point of
debate. Even the most conservative economic models suggest that by
2020 emission from the developing world will overtake those of the
developed world. From this it would seem that developing country participation
in a global mitigation effort is essential, at least for the biggest
polluters, especially China.
There is also widespread speculation about whether the US will ratify
an agreement. If so, what effect will it have on global negotiations
and subsequent rulings?
As an economic leader responsible for a
disproportionate level of greenhouse gas
emissions, the US has enormous leverage
in this debate. It is able to place large
demands on the shape of a final agreement
and it is possible that other parties will
make significant compromises just to bring
the US to the table. Or so have been the
concerns of some commentators. The general
apprehension is at the capacity for the
US to slow down progress towards an agreement
at COP-15.
Without the participation of major emitters the agreement is flawed,
however many feel that the inclusion of the US should not dilute policies
to such a point that the treaty becomes ineffective. Some promise
lies in climate change mitigation and clean energy negotiations that
have been ongoing between the US and China. It is hoped that some
kind of bilateral cooperation might eventuate to help take international
discussions to the next stage.
The Clean Development Mechanism
The CDM scheme has
attracted the majority commentary from international
stakeholders, mainly regarding possible
improvements. Since its establishment, the
CDM has proven increasingly popular to the
governments of both industrialised and developing
countries. What has been described by some
commentators as an 'explosion of projects'
has occurred, putting severe pressure on
administrative processes.
For a project to be valid within the CDM
scheme it must be formally approved and
registered by the CDM executive board. Many
project designers have complained of unfair
delays for approval and registration, sometimes
stretching to and beyond 200 days.
These time lags seriously reduce the cost-effectiveness
and sometimes the overall value of the project.
Although the delays have significantly improved
since the inception of the scheme, there
are still calls for increased transparency
within the CDM executive board and more
streamlined administrative procedures. Of
course, this would need to occur without
adversely affecting the quality of the review
and decision-making processes.
Despite having these concerns over heavy bureaucracy, most Annex
I countries support the continuation of the CDM scheme. In fact, many
are asking for extra inclusions within the existing framework. Australia,
for example, is very keen to see CCS, or other forms of geosequestration,
included as possible projects to promote pilot and demonstration projects
in countries such as China. The use of biochar for the retention of
carbon in soils, for example, is also not currently included within
the CDM but has attracted a lot of attention as a possible CDM option
for Australia.
Australia's biggest interest in discussions
about additional inclusions in the CDM has
been with regard to the Reduction of Emissions
from Deforestation and Degradation (REDD)
scheme. Australia is among countries arguing
that reducing emissions from deforestation
is the biggest and most important contribution
that the developing world can make to the
mitigation of climate change. It has even
been suggested that some Annex I countries
might be happier to take on more stringent
emission reduction targets if REDD was included
in CDM in the second commitment period.
In fact, this may even be quite necessary
to balance the subsequently high number
of extra credits that will become available
on the market.
Inclusion of REDD in the CDM, as with the
other new propositions, raises questions
about monitoring and measuring methodologies
and the demonstration of emission reduction
'additionality' (reducing emission beyond
what might have occurred in the absence
of the project). These will need to be resolved.
A final point on the CDM is the concern
over Africa's low level of activities. Only
Egypt and South Africa feature in the list
of top 20 host countries, and even
their contributions amount to only a handful
of projects. More than 75 per cent
of the projects are being hosted by China,
India and Brazil. A second commitment period
might find some means to address this global
project distribution inequality.
Adaptation
Even with strengthened country targets that include developing countries,
more technologies in the CDM, and drastic cuts in emissions, there
will still be a need to adapt to the impacts of climate change. Climate
change will affect the poorest countries the most, and within countries,
it will have a disproportionate impact on the lowest socio-economic
classes. This raises questions about how millions of people will deal
with these impacts without the necessary finances, know-how and technologies.
There is a general consensus that the onus
is on developed countries to carry this
load. The Adaptation Fund recently established
in conjunction with the CDM is an example.
The details of the fund were finalised at
the Poznan meeting in December 2008, where
it was agreed that two per cent of certified
emission reduction credits generated from
the CDM project activities would finance
'concrete adaptation projects and programmes
in developing countries' (UNFCCC).
Although this is a beginning, it does not go far enough. Financial
assistance is required to develop appropriate technologies, not just
implement existing ones. Instead, serious research and development
into adaptation technologies as a global public good is needed. At
present, the price of carbon drives the development of carbon abatement
technologies, but there is no or little incentive for innovation in
the field of adaptation. Because of this, Kyoto may be the only possible
driver for such investments.
BACK TO ISSUES AND ARGUMENTS
TOP OF PAGE
Looking to Copenhagen
This next stage of the UNFCCC treaties has
been several years in the making. From 7 to 18 December
2009, an expected 15,000 government leaders,
scientists, economists and policy-makers
will gather in Copenhagen with the aim of
developing a post-2012 agreement. Based
on the long list of unresolved issues (only
touched upon here) it is possible that this
meeting will fail to meet expectations and
that yet another meeting and more time will
be needed for an agreement to be reached.
Whether or not any future agreement will
serve the global need for immediate serious
action remains to be seen.
BACK TO ISSUES AND ARGUMENTS
TOP OF PAGE
Further reading and sources:
J. Aldy and R. Stavins, 'Post-Kyoto
world', Environment, vol. 50, no. 3,
May–June 2008.
G. Anderson, 'What happened in Bali?',
Lawyers Weekly, 18 January
2008.
A. Kean, 'Post-Kyoto—Bali and
the ICSE', EcoGeneration, no. 45,
March–April 2008.
Senator P. Wong (Minister for Climate Change
and Water), Statements to Poznan climate
change negotiations, Poznan, Poland,
2008.
International Insititute for Sustainable
Development, International Climate Change
Policy Scenarios, February 2008.
