Australia: Doha COP 18: Where are we now, and where might we end up?

Key Points:

Further incremental developments towards a universal legally binding agreement can be expected at Doha COP 18.

Doha COP 18 comes at a time when the Kyoto Protocol commitment period is about to end, and there's a perception that the progress in climate change policy has stalled. Is this perception fair? What can we reasonably expect from Doha COP 18 when it ends on 7 December 2012?

To answer these questions, we need to briefly recap recent domestic and international developments in climate change policy, before looking forward to Doha and beyond.

Framework Convention on Climate Change (FCCC)

The FCCC came into force in 1994, and has spawned two regular meetings, the Conference of Parties (COP) and Meeting of the Kyoto Protocol Parties (CMP).

The most recent, Durban (COP17/CMP7), was considered by some to have been a failure. Others however pointed to the fact that the US, China, India and Brazil, the world's largest emitters, agreed to the Durban Platform, which sets a roadmap for the negotiation, agreement and commencement of the successor to the Kyoto Protocol, labelling this as a "landmark decision".

The Durban Platform as a basis for a future climate change agreement

The 195 parties at Durban agreed to "develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all parties." The form and content of this future legally binding agreement are yet to be set, but the Durban Platform agreed by the parties requires that the new agreement is to be in place by 2015.

The roadmap outlined by the Durban Platform has three main elements:

  • Ad Hoc Working Group on the Durban Platform for Enhanced Action: The Working Group is tasked to complete its work "as soon as possible", but no later than 2015 so the new agreement can be adopted at COP21 and come into effect in 2020.
  • Kyoto Protocol second commitment period: The Kyoto Protocol, due to expire on 31 December 2012, will continue into a second commitment period until 31 December 2017 or 2020, depending on the progress of the negotiation of its successor. Signatories did not commit to further targets under Kyoto at Durban, but this year some have submitted their national voluntary pledges for the second commitment period.
  • Green Climate Fund: The $100bn/year by 2020 fund is meant to support developing nations and least developed nations implement adaptation and mitigation measures by promoting a shift towards low-emission and climate resilient development pathways.

Country commitments and mitigation targets

While few countries have committed to a further targets under the Kyoto Protocol, many made pledges under the Copenhagen Accord (COP 15) and these were taken note of in the Cancun Agreements (COP 16). These pledges:

  • cover 80% of global emissions;
  • are self-regulated voluntary targets which unlike the Kyoto targets have not been subject to international negotiation;
  • are not backed by a legally binding compliance system, and so have limited legal significance, although they have significant political significance, having emerged from a head of state negotiation;
  • are self-selected and based on different criteria (such as amount, intensity, or just by sector), which makes comparing pledges difficult; and
  • are often conditional, depending upon, for example, foreign aid or the achievement of a global legally binding agreement by all major emitters.

A common concern about both the Kyoto targets and the Cancun pledges is that they are unlikely to meet the demands of science and challenges of climate change.

What can we expect from Doha?

To expect that a silver bullet will come out of this round of negotiations would be misguided. Recent negotiations have seen incremental developments which continue to evolve between the COPs, as we have seen this year in meetings in Bonn and Bangkok. Further incremental developments are what we can reasonably expect from Doha.

The challenge in Doha will be progressing the Durban agreement to negotiate a universal legally binding agreement. An important preliminary step will be determining the form that the agreement may take. In order for the agreement to be formulated, there will need to be a breaking down of the Annex I, non-Annex I and Annex II categories of countries (which are historical categories relevant to the obligations on countries to, in the case of Annex II countries, provide support to developing countries through financial mechanisms in the Convention) and all countries will need to accept obligations and make a contribution.

One potentially fatal roadblock to the Durban Platform was avoided earlier this month with the re-election of Barack Obama as US President. Although President Obama has already indicated that there is more the US can do in relation to the issue of climate change, the outcome of the Congressional election suggests that at the present time there will be continuing difficulty for the US to do it as part of a legally binding international treaty. This however is unlikely to prevent what progress can be achieved at Doha in negotiating the terms of such an agreement.

We also should not also discount the potential for a surprise – the recent COPs at each of Copenhagen, Cancun and Durban have concluded with last minute "deals" to save the UNFCCC negotiations. Indeed, Durban appears to have resuscitated the process with a relatively "positive" plan for future negotiations. Based on past experience however, the fact that the Durban Platform requires an agreement to be finalised by 2015, suggests that negotiators will leave it closer to COP21 to decide whether there will be a new agreement.

Australia's position going into Doha

Australia has made a non-binding pledge to reduce emissions by 5% on 2000 levels by 2020, irrespective of international action, and says it will reduce emission levels by 15-25% of 2000 levels by 2020 if other countries make significant commitments.

Greg Combet, the Minister for Climate Change and Energy Efficiency, told delegates at CarbonExpo in Melbourne on 9 November 2012 that Australia would sign on to a second commitment period under the Kyoto Protocol, providing that:

  • the access of Australian companies to low cost certified emissions reductions through the Clean Development Mechanism is not interrupted;
  • the rules allowing the inclusion of land use change (reduced levels of land clearing) in accounting for carbon emissions remain in place;
  • there are continued negotiations towards a legally binding agreement with commitments from all countries;
  • the second commitment period of the KP ends in 2020 in line with the commencement of the next commitment period; and
  • the rules around the carrying over assigned amount units into the next commitment period are appropriate for Australia.

Implications for the carbon market

While the UNFCCC process spurred the development of the carbon market through the Kyoto Protocol and Marrakesh Accord, the UNFCCC and its processes has in many respects now become an obstacle.

The Kyoto Protocol has succeeded in delivering US$130bn in private investment in developing countries in the form of abatement and low emissions projects. However, the continued uncertainty around international negotiations, and the near death experience in Copenhagen in 2009 continue to frustrate the emergence of a broad international market.

The Durban Platform which emerged from COP17 in Durban, has been described as a "remarkable and unexpectedly positive outcome" – probably more in response to the very low expectations of any type on international agreement out of the UNFCCC processes. While it still represents an "agreement to agree", the inclusion in the text of the development of a new market mechanism, potentially building on the infrastructure and methodologies of the CDM, has raised hope for an additional avenue for private capital to invest in low emissions technologies and projects.

The reality however remains that at best an agreement under the Durban Platform will not come into existence until 2015, and not commence before 2020. Until then, and possibly beyond, the carbon market will still operate as a collection of national and sub-national schemes, dependent on bilateral and regional agreements.

Now, we have to wait and see what happens.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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