Worldwide: New Out Of Africa. The UN Climate Change Conference

Last Updated: 12 January 2007

Editor: Kerry Liebenberg

The climate change debate moved to Africa both in body and in mind, for two weeks at the beginning of November, as Kenya hosted the latest UN Climate Change Conference, the theme of which was to be "Pulling together for our Planet".

Members of the Linklaters Environmental Group attended the conference with approximately 6,000 other participants, including representatives from Government, UN bodies and agencies, and various non-governmental and inter-governmental organisations. This note sets out a few of the key themes and observations which emerged from COP/MOP2.

COP/MOP2 came in the wake of a flurry of action on climate change at both a national and international level most notably with the recent initiatives of the G8 that led to the Stern Report, and California’s announcement of its Cap and Trade system. Against that background perhaps it was inevitable that the outputs of this conference would be small steps rather than giant strides. But progress, albeit small, was maintained and some ground laid for further movement at the next conference.

A burning issue – the future post 2012

COP/MOP2 considered some of the major long term issues, including the degree of progress towards addressing climate change and the nature and size of future targets. However, the big disappointment of Nairobi was that no agreement was reached on a deadline or even a timetable for setting new global targets for the period post 2012. Given that such a review is necessary to ensure there is no gap between Kyoto and any so-called "Son of Kyoto", such a lack of progress is of concern to many parties - in particular the business community which has invested so heavily in the development of the global carbon market, with an estimated value in excess of $10billion a year.

The only agreement that was achievable was that the framework for emissions reductions after 2012 should begin to take shape in mid-2007.

This is too late for some and certainly increases the risk of any growth in the carbon market significantly slowing whilst the post 2012 issue is addressed. Key to the post 2012 period is the need for the developing world to accept a suitable mechanism including adoption of binding commitments by at least some, if not all, developing countries as well as the Annex 1 States. (At present the Kyoto Protocol contains no mechanism to permit this.) The failure to agree a framework is a missed opportunity to assert early pressure on sceptics to take action.

Issues related to the CDM

The aim of the Clean Development Mechanism (CDM) established under the Kyoto Protocol, is to enable developed countries to access emission reduction credits, whilst developing countries benefit from investment and clean development in those countries.

Given the emphasis on developing countries at the ‘African COP’, issues relating to the CDM were raised throughout the COP/MOP2 both in the opening sessions on 9 November and in smaller for a. Groups of negotiators focussed on specific issues such as carbon capture and storage (CCS), and particularly the current uneven regional distribution of CDM projects. African Parties and ‘civil society’ observers repeatedly emphasised that the majority of CDM projects approved to date are located in larger countries such as Brazil, India and China, with only a small minority being located on the African continent.

To address this imbalance the "Nairobi Framework" was announced by UN Secretary General Kofi Annan, as a joint initiative of the UN Climate Secretariat, the UN Development Programme, the UN Environment Programme, the World Bank Group and the African Development Bank to help countries, particularly in Africa, participate in the CDM. In addition, developed countries agreed to the inclusion of an explicit reference to "financial resources" to assist lesser developed countries, African countries and Small Island Developing States (SIDs), to gain access to CDM projects. But whether these measures will be sufficient to change the fundamental problems that are associated with investing in African CDM projects approval for CDM projects remains to be seen.

CDM Executive Board

The tension which we have experienced in practice between the CDM Executive Board (CDM EB) and industry was highlighted in a side event hosted by the CDM EB: "An Open Question and Answer Session with the CDM EB". The CDM EB’s apparent attitude to this issue was of concern. The President of the CDM EB was dismissive about questions raised by IETA

regarding the lack of transparency and consistency that has plagued the approval of CDM projects. In view of the considerable experience that project participants have of CDM in practice this reaction may be shortsighted. This is clearly an issue in relation to which industry will need to persist to achieve more engagement by the CDM EB.

JISC

The Joint Implementation and Supervisory Committee is some way behind the CDB EB in its evolution, and it is going through some of the financial teething problems that constrained the effectiveness of the CDM EB in the past. With activities only partially funded next year and paired down to fit the limited funds available, it seems likely that Joint Implementation (JI) will not develop as quickly as hoped in those Annex 1 countries which do not instigate their own approval process.

International Transactions Log

As the deadline for its roll out draws nearer, the important issue of the International Transaction Log ((ITL) - the computerised system which monitors credits under the Protocol and which will link with National Registry Systems) was addressed at the Conference. We sensed a genuine appreciation of the importance of making rapid progress on this front and for ensuring that Registry Systems are fully operational with the ITL by April 2007. Whether this will be achieved remains debatable and the talk around the room on this point was less confident than one might have hoped. No progress was made on the issue of funding shortages for the ITL.

Adaptation

Adaptation was another key theme of the "African COP". In its opening statements to COP/MOP2, we heard the EU and the G-77/China emphasise the need for progress on adaptation, and in improving the capacity of least developed countries (LDCs), to implement CDM projects, thus improving the geographical location of such projects.

A draft COP/MOP decision with regards to the Adaptation Fund was adopted, and this has been hailed by the President of the COP/MOP as one of the achievements of the Conference. Both the EU and the G-77/China (during the preliminary sessions) urged the early functioning of the fund which is expected to become fully operational at the COP/MOP3 through the auspices of a new organisation specifically set up to administer the fund and the Global Environment Facility (GEF).

Carbon Capture and Storage

In the wake of the recent decision under the London Protocol to allow carbon sequestration in sea bed geological formations, the issue of CCS in the CDM was hotly debated. However in essence a decision on this was delayed until 2008, in order for further research to be conducted. We heard some delegates (including South Africa, Japan, China the EU and the Gulf States) express a clear interest in incorporating CCS technology under the CDM. However, others (notably the Latin American delegates) were opposed to this option. They argued against CCS on the basis of the potential impacts of such technology on the current CDM portfolio, raising concerns that, given the scale of CO2 storage under a CCS regime, benefits from other CDM projects could be overshadowed. Nevertheless a favourable decision on CCS in the CDM is essential for the roll out of this technology which is likely to prove key in addressing climate change issues. Russian and Belarus Proposals for Voluntary Targets

Arguably, some of the most contentious issues addressed at the Conference related to voluntary measures under the Kyoto Protocol. These included Russia’s proposal for developing countries to commit to voluntary emissions reduction targets, and Belarus’s proposal to commit itself to such a target. Whilst the Kyoto Protocol sets out procedures for new emission targets for Annex 1 parties, currently there is no mechanism for non-Annex 1 parties to similarly adopt such targets.

No outcome was achieved at the Nairobi Conference on Russia’s proposal, but a workshop is to be organised to take place in May 2007 with the aim of reporting to COP/MOP3 on the "scope and implications" of the proposal.

COP/MOP2 approved Belarus’ proposal to take on an emissions reduction target below 1990 levels, although imposed a reduction target of 8%, which was 3% more than Belarus had argued for. It should come as a relief to the business community that Belarus’s approval is also subject to various limitations, in order to avoid flooding the carbon market with excess credits. The significance of the Belarus target is that it is both the first new target adopted, and the first amendment to the Protocol.

HFC-23

Complaints about the treatment of HFC-23 (a by-product of the refrigeration gas HCFC-22) within CDM did not get the results some environmental campaigners were seeking. Whilst the COP/MOP2 recognised that issuing

CERs for the destruction of HCFC-23 at new HCFC-22 facilities could lead to higher global production of HCFC-22 and/or HCFC-23 and that the CDM should not lead to such increases; no conclusion was reached on this issue. This was notwithstanding numerous Parties’ submissions containing practical solutions to address the situation.

Implications for the business community

Business and economic issues played a prominent role during the Conference, and it was the representatives of business and industry who were pushing most strongly for delegates to achieve robust outcomes capable of supporting long-term investments. The business community repeatedly expressed concern that in the absence of strong signals from Governments for the post 2012 period, the booming carbon market risks being the next "dot com". It was clear to us that there is a genuine recognition of the importance of the role of the private sector, a theme which will be developed further when the World Economic Forum hosts talks with the World Business Council for Sustainable Development in 2007.

However, in spite of all this recognition, the political impasse over reciprocal obligations and the resulting stagnation in the climate change process (as evidenced by Nairobi’s failure to even agree a deadline for negotiations) was a real disappointment. The obvious lack of political will to commit to emission reduction targets will most certainly have a knock on effect, and the potential levels of private investment necessary may not be achieved in the short term because of this demonstrable lack of will.

This said, both the opportunities for CDM projects, and the additional finance that will be made available pursuant to the decisions taken at Nairobi, at least provide an interim buffer.

The Upshot

Whilst the UN has been quick to point out that the decisions taken at COP/MOP2 are essential enabling steps which must necessarily precede decisions on the big ticket items, the feeling we were left with was that at this conference both the realities of climate change and the measures necessary to deal with them were side-stepped. There remains much to do at the next conference and a real need for business and industry to lobby government delegations in all the key jurisdictions to confront the crunch issues and to start to negotiate a path forward.

* * * * * * * * * * * * * * * * * * * * * * * * * *

Linklaters Credentials

Our clients include many of the pioneers in this new market and, as a result, we are a market leader in advising on the global emissions trading market, whether that be under the EU ETS or the Kyoto Protocol and the related jurisprudence of the United Nations Framework Convention on Climate Change. We have also advised on carbon capture and storage, a technology that is likely to be brought within this regime shortly.

Click here to see what work we have done in this area.

This publication is intended merely to highlight issues and not to be comprehensive, nor to provide legal advice. Should you have any questions on issues reported here or on other areas of law, please contact one of your regular contacts at Linklaters, or contact the editors.

© Linklaters. All Rights reserved 2007

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.