Climate Dilemma

According to Google Trends. I guess it might have something to do with COP 15.

There were three things that resulted from the talks in Copenhagen:

• A 13 paragraph ‘political accord‘ was agreed by most of the parties, but could only be ‘noted’ by the COP because there was not consensus.
• The negotiations on extending the Kyoto Protocol had unresolved issues, and the next meeting in Mexico will return to this. The key text that resulted from the Kyoto side of the negotiations is here.
• The negotiations on long-term cooperative action also had unresolved issues, which the Mexico meeting will have to resolve. The key text that resulted from the long-term cooperative action (LCA) side of the negotiations is here.

What did not result from Copenhagen was a framework for developing a fair, ambitious and legally binding agreement. What was positive about the accord was a commitment on finance from developing countries, which would add up to $100 billion per year by 2020, but whether actual commitments will add up to this number is still unresolved.

While the the Kyoto and LCA negotiations did not result in a successful conclusion, the draft texts are now considerably shorter, and the unresolved issues are more obvious. Whether there is a successful outcome to the negotiations at a later date depends crucially on how these issues get resolved.

Some undecided issues related to the Kyoto Protocol include how land use, land use change, and forestry is accounted for; carry-over of permits from the first commitment period (hot air); the scale of the Annex I (developed country) commitments; and how these commitments are represented in a table, and the issue of base years and reference years (a less important issue, but the one that takes up most of the negotiators time). The most important unresolved issues for the LCA track are the precise nature of developing and developed country mitigation commitments and actions, and whether anything from the text will facilitate a legally binding agreement.

The final meeting of the Ad-hoc Working Group on Long-Term Cooperative Action (AWG-LCA) was supposed to commence early in the evening on December 16. It instead commenced at 4.45 in the morning on December 15, after negotiations went through the night. The meeting was considering a new version of a text on long-term cooperative action that is to be considered by world leaders over the next few days. In this meeting, the United States delegate watered down the nature of any mitigation commitments that would be required from developed countries. The text that he is referring to (with the changes included) is here.

A fundamental problem with any international treaty is that for it to work it has to be ratified by its Parties, in this case including the United States Senate.

At an earlier meeting of the Conference of Parties, when discussing Tuvalu’s proposal for a fair, ambitious and legally binding deal, the Tuvalu negotiator made some eloquent remarks on the role of the US Senate in these negotiations, noting the irony that the fate of the world is in the hands of a few US Senators.

The talks at Copenhagen are not exactly what would be called a smooth operation…

This is an excerpt from a short meeting (slightly less than four minutes) of the CMP, this original video of this meeting is here.

Below is blogging from the KP track of the negotiations. New draft texts have been released to Parties, I haven’t been able to get hold them yet. A “stocktaking plenary” is about to commence. There was supposed to also be plenaries for the LCA track of negotiations this evening, not sure if that is happening or not.

Chair: we agreed we would establish a contact group for the sole purpose of fixing up the text. After this plenary we will work on the contact group. Time is of the essence, we hope to have something good to report to COP/MOP tomorrow.

Co-chair: contact group on numbers resumed. in this session we used various methodologies to try to get agreement, small informal consultations were particularly helpful. through consultations clarified c. periods – choice of 5 or 8 years. agreed to have single base year, not to have a common base year. discussed reference years. discussed surplus AAUs and LULUCF. This ensured numbers would be meaningful from environmental perspective. we have forwarded you an annex, which is bracketed, it is not a clean text. we did not discuss the ?? decision. two options option A consequential; option B go beyond, but fit under 3.9 of KP. need to return to reference periods. no agreement on how to express aggregeate figure and what it is, also on ‘top down vs bottom up’. much work remains to be done on other possible amendments.

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The Federated States of Micronesia, on behalf of the Alliance of Small Island States (AOSIS), has distributed among the contact group on ‘numbers’ a document titled ‘Potential effect of Surplus AAUs on Annex I allowed emissions in 2020: Technical Background and Assumptions’. It states:

Several economies in transition (EITs) have Kyoto first commitment period (KP.CP1) (2008-2012) targets that exceed their likely emissions for that period. Paragraph 13 of Article 3 of the Kyoto Protocol permits that surplus Assigned Amount Units (AAUs) from the first commitment period are carried forward to “subsequent commitment periods”. This leads to the situation where surplus AAUs are created and potentially available for transfer to other Parties where they may be used towards compliance with their obligations. As a result, surplus AAUs that are transferred to other Annex I Parties or carried forward will lead to more emissions to the atmosphere than would otherwise have happened.

The scale of surplus AAUs in the first commitment period is sufficient, if transferred to and used by other Annex I parties to meet their obligations, to permit Annex I as a group to emit as business as usual levels through 2020.

What the document is saying is that if Kyoto emission permits (AAUs) are carried over from the first (2008-2012) commitment period to the second commitment period, then the Kyoto Protocol will not have a significant impact on developed country emissions. In terms of emissions, this would be equivalent to not having a second commitment period, which is also a possibility (and has some support from Japan and Canada).

The document also has analysis of the impacts that each parties preference for accounting for land use, land use change, and forestry would have on emissions. It suggests that this would have a similar impact, but not quite as great as the impact of banking AAUs.

The EU has made similar statement on banking AAUs from the first commitment period, noting that banking could lead to an increase in emissions even if Annex I emissions added up to a 30% reduction (which they do not).

In an informal briefing to NGOs, an Australian negotiator did speak in favour of banking AAUs. I have not yet observed Australia saying anything on this in the negotiations.

This is the second meeting of the Contact Group on Further Annex I Emission Reductions today. At the first meeting, further meetings of the Kyoto Protocol contact groups were postponed for about 5-6 hours, in response to Africa and the G77 postponing negotiations on the LCA text.

A non-paper was distributed, containing the various options suggested by parties at the Dec 12 meeting. There were:

• A: 3 options for tables for Annex B;
• B: four options for article 3, paragraph 1 and paragraph 1 bis;
• C: article 3, paragraph 1 ter;
• D: article 3, paragraph 1 quater;
• E: article 3, paragraph 1 quinquies;
• F: article 3, paragraph 7 bis;
• G: article 3, paragraph 9 bis;
• H: article 4, paragraph 2 bis;
• I: article 4, paragraph 3.

The text of the non-paper was put up on the screen, like with many of these contact groups, there is likely to be quite a bit of editing of the text during the meeting. Lots of squealing noises coming from the microphones…

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Climate Dilemma came in halfway through this meeting. Issues being discussed include banking, shares of proceeds for an adaptation fund.

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Official negotiations have resumed, it is 4.50pm Copenhagen time.

The main issue of interest discussed below is new gases, which may require ministers to resolve.

Chair: will proceed slowly to start. We had an informal consultation on wednesday. negotiating chairs report. two drafting groups, common metrics, guidelines. after chairs report, had possibility to work on that. want to agree on a final text. chair has added some preambular paragraphs, there are 6 of them. should be reasonably factual and non-controversial. check if there are any problems. if that is not the case, we have agreed on preabular stuff and go to substance. go to common metrics. NZ invited to facilitate the work. Par 2-7 of KP Chairs text.

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Chair: New text with other Annex I countries and US. Options for Article 3 par 1 and par 1 bis. option 1 reflects eu, option 3 reflects micronesia, option 4 reflects bolivia.

Australia: disappointed about not continuing LCA discussions. So we should suspend KP discussions. [LCA was blocked by some african states?]

Sweden: LULUCF discussions interrupted?

Jap: support australia

Peru: concern that we already had a day of delay.

Sweden: One group would prefer to have numbers discussion at ministerial level. Don’t know what is happening? Is there some disengagement?

Chair: LULUCF are interrupted.

MIcronesia: AOSIS wants to continue discussion on numbers.

Gambia: Africa would want to continue contact group on numbers.

Australia: unclear what is happening outside this room. Know there is plenary shortly. Very keen to discuss stuff. Disappointed that some work is interrupted. Given uncertainty need to stop at this point.

Chair: only have 20 minutes left, please make use of these minutes

South Africa: have already lest 1.5 days.

China: This is a core discussion. Unwillingness from Annex I to engage in discussions. Shoudl continue.

Sweden: agree with CHina that this is a central part of the work, but need LULUCF part.

India: support south africa and china. if we fail to come up with ambitious credible numbers, something I would not like to think about.

Saudi Arabia: support g77 and china.

Australia: repeat disappointment that some parties have stopped discussion in groups. “G77 and China has disagreed, and suspends participation in working groups”.

Russia: we have to stress that our main purpose is new regime. Support Australia.

Chair: close contact group. COme back at 7?

Bolivia: mentions 1.5 day delay.

??: finds this very unfair.

Chair: will convey messages to KP chair. no alternative but to close.

[Comment: there is a game of chicken going on, with different groups suspending discussions. G77 China, Africa (?) seem to have suspended LCA talks (until KP finishes).  Australia and the umbrella group have responded by suspending the talks of this contact group (and probably the other Kyoto talks)]

Korea: unfortunately secretariat unable to supply info about meetings.

Update: Earth Negotiations Bulletin reports that:

In the negotiations, substantive work on the long-term issues was suspended until late afternoon, pending consultations by the COP President on how to proceed. The need for such consultations arose due to “deadlock” between developing and developed countries: the African Group and LDCs, supported by the G-77/China, requested suspending all negotiations under the AWG-LCA. The move was repeated under the AWG-KP in all negotiating groups apart from the one focusing on Annex I parties’ further emission reductions. The EU, Australia and other developed countries participating in the AWG-KP, in turn, found this unacceptable.

Developing countries were ostensibly protesting against the arrangement whereby only AWG-LCA issues were to be discussed at the ministerial level and urged for more attention to be given to the AWG-KP. The issue was eventually resolved during closed consultations by the COP President in the main plenary, leading to an agreement to hold informal consultations on “crunch issues” under both negotiating tracks, headed by a minister from a developed and developing country. Many parties emerging from the meeting were heard wondering how work by the ministerial groups will be balanced against the more technical work by the various drafting groups, which is expected to continue in parallel with ministerial consultations. Nevertheless, work resumed under both negotiating tracks in the evening and the informal ministerial groups also began their work. Many drafting groups continued working late into the night.

The Contact Group on Annex I Parties Emission Reductions met at 6pm on Saturday December 12. Before this meeting was a meeting on mechanisms under the Kyoto Protocol, in which the chair was getting frustrated at countries inserting brackets into the Kyoto text and not really getting anywhere..

Co-chair: apologised for late start. other co-chair still in another meeting. After CMP, contact groups resumed their work. Part of understanding from informal was that we would work under chairs text. Start working on Annex to 3.9 Kyoto stuff. Please focus comments on chairs text and don’t insert everything.

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Earth Negotiations Bulletin has this to report on the Friday discussion of the Contact Group on Annex I Parties emission reductions:

ANNEX I EMISSION REDUCTIONS (AWG-KP): The group on Annex I emission reductions met in a late evening contact group. The UMBRELLA GROUP emphasized that work under the contact group could not continue until an informal consultation on the entire Chair’s draft text had been held with the AWG-KP Chair. Consultations with the AWG-KP Chair on his text were then scheduled for Saturday morning, and the meeting was suspended.

Several draft texts that could play a role in a possible treaty outcome have now been released. The first to appear was an early draft of a possible political agreement drafted by the Danish government in consultations with others. This was leaked to the Guardian earlier this week, and was opposed by the G77. It is probably not as bad as the Guardian article made out, and some of the claims in the article did not appear to be reflected in the actual text.

On Wednesday, there was a discussion in the COP plenary for an agenda item based on submissions 6 months ago from Tuvalu, Australia, the United States, Costa Rica and Japan. The main focus of the discussion was on Tuvalu’s proposal, which had strong legally binding emission reductions. This was supported by many small islands states, as well as countries from the Sahel. Tuvalu sought to establish a contact group to discuss this text, this was blocked by China, India, Saudi Arabia, Venezuela, Oman, Algeria, Botswana, Libya, Kuwait. A consensus is required to establish a contact group. The COP was then suspended. The next day the COP/MOP was suspended because a contact group to examine amendments to the Kyoto was also blocked.

Yesterday the chair of the ad-hoc working group on long term cooperative action (AWG-LCA) released a draft text. This is now being discussed by the COP.

The chair of the ad-hoc working group on further commitments under the Kyoto Protocol (AWG-KP) also released a draft text.

Draft AWG-LCA text is here: lca chairs text – 11 dec[1]

Draft AWG-KP text is here: awgkpchairstext111209

Draft AOSIS text is here: 23989010-AOSIS-Proposal-for-KP-Survival-and-New-en-Protocol-Final

Draft Danish text is here: 23831690-091127copenhagen

A big issue in the Kyoto track of the negotiations is what happens with the excess allowances from the first commitment period (2008-2012). Estimates of the number of allowances are between 7-10 Gt CO2-e. In a presentation to the contact group on emission reductions for Annex I parties, the EU stated that they expect there to be 10 Gt CO2-e of excess allowances, and that even if the Annex I emission reductions were increased to a 30% reduction, carrying over the allowances would lead to an increase in emissions.

My understanding is that Australia supports carrying over permits. In particular, it is that countries take rules into account when making commitments, and we should exercise caution about revising those rules. The Marrakesh rules provide for carrying over allowances into future commitment periods and Australia does not support changing this rule.

In my opinion we should also exercise caution about an outcome that could lead to an increase in Annex I aggregate emissions. This would have direct risks for the climate, and risk causing problems in the rest of the negotiation process.

The contact group on numbers met yesterday evening. I did not make it, but the Earth Negotiations Bulletin did cover it. This is what they had to report:

ANNEX I EMISSION REDUCTIONS (AWG-KP): In the evening, the contact group on AWG-KP Annex I emission reductions convened. Co-Chair Leon Charles reported on the informal consultations, noting that on length and number of commitment periods, parties had identified domestic policy processes as a constraint as well as the importance of taking science into account.The FEDERATED STATES OF MICRONESIA gave a presentation highlighting the need to cap the use of LULUCF and address the issue of surplus Assigned Amount Units (AAUs). She noted that there are many ways to address AAUs, including requesting parties not to use them in the second commitment period, capping carryovers, and discounting. NEW ZEALAND suggested using actual emissions as a starting point for calculating quantified emission limitation and reduction objectives (QELROs) as a means of eliminating surplus AAUs.

The EU and AUSTRALIA expressed concern that this rewards countries that overshoot first commitment period targets. BRAZIL said this would create more “hot air.” BANGLADESH, the FEDERATED STATES OF MICRONESIA and EGYPT stressed a single starting point. NEW ZEALAND emphasized that the starting point with the greatest environmental benefit is from actual emissions.

The Secretariat will prepare a paper to capture the various options and clarify terms such as “base year” and “starting point.”

I sat down in the room where the contact group on numbers was supposed to meet, after a bit of a delay. After more of a delay, the co-chair announced that they were waiting for the CMP meeting (a meeting of Parties to the Kyoto Protocol) to finish, which was discussing similar issues. Somewhat later, the co-chair announced that the contact group meeting would not be happening at this time, because the CMP had been suspended.

I will probably have more to say on this later. Yesterday, the Conference of Parties (COP) to the UNFCCC was suspended. A number of countries: Australia, Tuvalu, Japan, Costa Rica, and the US, had made proposals on the legal form for a new agreement under the convention. Tuvalu’s was the most interesting, calling for no more than 1.5 degrees of temperature rise and stabilisation at 350ppm or less. This was strongly supported by the small island states, and many countries in the Sahel. The proposal to form a contact group to discuss this was blocked by Saudi Arabia, China, India, and a bunch of other oil exporting countries. This led yesterday to Tuvalu suspending the COP. It is possible that the suspension of the CMP is related to this matter.

Here is a summary of what happened at the December 9 meeting of the contact group on Annex I Parties’ emission reductions (aggregate/individual). Of particular interest was the discussion of the nature of Russia’s possible increased commitment, complaints from developing countries about conditional commitments having conditions related to the rest of the negotiation process, and a presentation from the EU on how a 30% aggregate reduction from Annex I countries could work, but how this would be undermined by permits being carried over from the first Kyoto commitment period, or a perverse LULUCF outcome.

There is coverage of the Contact Group on ‘numbers’ in the Earth Negotiation Bulletin. The particular bulletin covering this meeting is here.

At the same time as this meeting was happening, the COP Plenary was having a lively discussion on a proposal from Tuvalu for a strong legally binding treaty. The establishment of a contact group to discuss this proposal was blocked by Saudi Arabia, India, China, and some other oil exporting countries.

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In the previous blog post, the question of how much a country can make a commitment was discussed. An issue of interest is how much a Party can commit to increase their emission reduction if certain conditions are met. This is of interest because many mechanisms for providing public goods are based on players matching each others commitments in some sense.

One of the most interesting papers on matching commitments is

Boadway, R., Song, Z., Tremblay, J.-F., 2009, The Efficiency of Voluntary Pollution Abatement when Countries can Commit, Queen’s Economics Department Working Paper No. 1205.

They investigate a process where countries can choose a ‘matching rate’ at which they will increase their abatement based on other countries’ abatement. This process is a game whose solution (a subgame perfect equilibrium) is also a socially optimal outcome. This requires whether countries can commit to their matching rates.

This is why it is interesting whether a pledge announced at a climate meeting (and possibly included in a UNFCCC text) is a strong commitment or not. In the Kyoto process, the pledge and review process is repeated, which means that if a player goes back on a commitment, they could face consequences later.

Climate Dilemma was an observer today to a meeting of the AWG-KP contact group on further emission reductions under the Kyoto Protocol. These meetings are important because they discuss that size of the emissions reductions for developed countries (except the US), which are a big factor in climate change. These meetings also discuss things like the length of the next commitment period, and the base year to refer to in emissions accounts.

From a game theory perspective, it was interesting to observe the meeting to understand the role of the sequential nature of strategic behaviour, which is something that can be modelled with an extensive form game. Also of interest is the role of conditional commitments. This process is sometimes known as ‘pledge and review’. A country can make a commitment to reduce its emissions by an extra amount, based on what other countries do. But is this really a commitment? And what if other countries do what is required, but the country that makes a commitment to increase its ambition then reneges on its commitment? Because this process is repeated, there could be an opportunity to punish such a country – commitments are more likely to be meaningful than if this process was not repeated.

Below is a summary of the meeting. It is quite possible that there are mistakes, it was a little difficult to hear everything going on, and sometimes hard to identify who was speaking.

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The UNFCCC negotiations have started. Today there were plenaries for the Conference of Parties to the UNFCCC (the COP) and the Ad-Hoc Working Group for Long-Term Cooperative Action (AWG-LCA).

There are rumours and media reports about two draft texts for a possible political agreement to come out of this meeting. There is a “Danish text” – which is now not supposed to actually be a “Danish” text; and there is a “BASIC” text from China India, Brazil, South Africa and Sudan. There are reports that if the demands of the BASIC text are not met, then these countries will stage a mass walkout. The developed and developing countries are lining up to play chicken with the respective texts.

The UNSW Centre for Energy and Environmental markets has set up a prediction market (unfortunately not using real money) where you can bid on the likelihood of different stabilisation goals coming from Copenhagen, different countries abatement targets, the likelihood of a sectoral crediting mechanism, quantities of public finance, and other things.