United Nations Framework Convention on Climate Change
OUTCOMES OF THE FOURTH CONFERENCE OF THE PARTIES TO
THE FRAMEWORK CONVENTION ON CLIMATE CHANGE
NOVEMBER 1998
General Overview
The Fourth Conference of the Parties (COP4) to the United Nations Convention on Climate Change (UNFCCC) was held in Buenos Aires from 2 to 13 November 1998. The Minister for the Environment and Heritage, Senator the Hon. Robert Hill, led the Australian delegation to this conference. COP4 was the first meeting of the Parties since COP3, held in Kyoto in December last year, which adopted the Kyoto Protocol. The Conference's two subsidiary bodies, the Subsidiary Body for Implementation (SBI) and the Subsidiary Body for Scientific and Technological Advice (SBSTA), had earlier met in Bonn in June 1998.
COP4 adopted a "Buenos Aires Plan of Action", the central feature of which is a program of work on rules for the Kyoto (flexibility) mechanisms. These rules will be negotiated over a two year timeframe, with a view to decision at COP6 in 2000. Other decisions included in the Plan of Action deal with the financial mechanism (GEF); development and transfer of technologies; implementation of Articles 4.8 and 4.9 (consideration of action to meet the needs of countries adversely affected by climate change and compensation for the implementation of climate change response measures); Activities Implemented Jointly; and preparations for the first session of the Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol (COPMOP 1), which includes a mandate for work on a compliance regime and the effectiveness of policies and measures.
As was the case at the June 1998 sessions of the Subsidiary Bodies in Bonn, much of the debate during COP4 was characterised by divergences between the G77-China and industrialised countries across the full range of issues on the agenda. Generally speaking, industrialised countries sought progress on implementation of the Kyoto Protocol, while the G77-China were reluctant to see progress on the Kyoto mechanisms and argued that the Conference should concentrate on issues relating to the Convention. The Buenos Aires Plan of Action calls for progress on issues of importance to all Parties and lays the groundwork for development of these issues over the next two years. It is a positive outcome which will sustain the momentum of, and confidence in, the Kyoto Protocol.
Other highlights at COP4 included U.S. signature of the Kyoto Protocol and announcements by Argentina and Kazakhstan that they would be voluntarily looking to take on emission commitments.
Australia worked closely with other members of the Umbrella Group of countries (United States, Canada, New Zealand, Japan, Russia, Norway, Iceland, the Ukraine) in the negotiations, including in developing the final outline of the action plan.
High Level Segment
During the two day high level segment, Ministers, heads of delegation and senior representatives from related convention bodies and intergovernmental organisations addressed the Plenary. Senator Hill made a statement (attached) in support of progress on the rules for the flexibility mechanisms and broader participation in emission commitments, and emphasised Australia's domestic efforts to address greenhouse gas emissions. Negotiations were conducted at ministerial level for the final three days of the COP, and led to the adoption of the Plan of Action.
Flexibility Mechanisms
COP4 adopted a decision with a work program listing topics for development of the three Kyoto Protocol flexibility mechanisms (emissions trading, Clean Development Mechanism and joint implementation). The list of topics is open-ended and non-negotiated. This decision sets in place a plan for the elaboration of operational frameworks for each of the mechanisms through this work program. The process will begin with submissions by parties on all three mechanisms by the end of February 1999, to be followed by two technical workshops organised by the secretariat before 15 April 1999, with a view to a final decision on all of the mechanisms being taken at COP6. In response to the G77-China wish, priority is accorded to development of the Clean Development Mechanism (CDM). The open-ended nature of the list and the differing positions between Parties indicate that considerable work will need to be done over the next two years.
The support for the CDM from many African and Latin American countries was an encouraging development which might lead the G77-China to take a more constructive approach to development of all three mechanisms. Nonetheless, they have indicated a range of issues which they wish to discuss under the work program, including the possibility of a "tax" on all flexibility mechanisms to provide funding for adaptation measures in the least developed and vulnerable countries, equity in the distribution of projects and linkages with compensation.
The EU, while generally supportive of the implementation of the flexibility mechanisms, has taken a firm position on supplementarity. The EU argues that use of the flexibility mechanisms should be supplemental to domestic action and subject to a concrete ceiling to be defined in quantitative and qualitative terms and based on equitable criteria. However, Umbrella Group countries consider that such restrictions would adversely affect the cost-effectiveness of the flexibility mechanisms and, by increasing the cost of compliance with the Kyoto Protocol, undermine the Protocol's environmental effectiveness. Consistent, transparent and verifiable monitoring, reporting and enforcement procedures are a more effective method for ensuring the environmental integrity of the Protocol. This issue was not a major focus of negotiations at COP4 but will be an important point for discussion over the next two years.
A separate COP decision on Activities Implemented Jointly (AIJ) allows for the continuation of the AIJ pilot phase and provides for the commencement of a review process, with a view to the COP taking a conclusive decision on the pilot phase by the end of the present decade. The question of whether it would be possible to claim credit under the CDM for emission reductions achieved in AIJ projects was not resolved at COP4, nor was there clarification on the issue of credit (starting from 2000) for qualifying projects begun before CDM rules become effective. These matters have been incorporated into the work program on flexibility mechanisms.
Future Developing Country Commitments
At present, only developed countries and economies in transition are listed in Annex I to the UNFCCC and Annex B of the Kyoto Protocol. Annex I Parties sought to advance discussion of future developing country commitments at COP4, arguing that scientific assessments, particularly the work of the IPCC, demonstrated that action by Annex I Parties alone would not be sufficient to meet the ultimate objective of the Convention. Discussions took place on this issue through a number of pathways, including, first and foremost, the proposed inclusion of "voluntary commitments" as an item on the COP4 agenda, but also the second review of adequacy of Article 4.2(a) and (b) and the Brazilian Proposal. Continuing informal consultations will ensure that this issue remains on the horizon for COP5.
After a lively debate on the first day of the COP, developing country opposition to the item on voluntary commitments proposed by Argentina for inclusion on the COP4 agenda led to its deletion from the formal agenda. Argentine Minister Alsogaray, President of the COP, nonetheless undertook informal consultations during the conference on possible future voluntary commitments by developing countries under the Convention, and will continue consultations during the intersessional period. Further impetus to the issue was provided by President Menem's announcement at the High Level Segment that Argentina would work towards taking on an emissions abatement commitment at COP5 and Kazakhstan's statement that it was looking to join Annex I and Annex B. There are also indications that Niue and Nauru might be interested in a greater level of engagement with the climate change regime.
There was no decision on the second review of adequacy of Articles 4.2 (a) and (b) of the Convention. Australia will be seeking to ensure that this issue will be revisited in the lead-up to COP5.
Brazil put forward a proposal at COP3 which relates to a methodology for determining the relative responsibilities of Parties for global warming based on their historical greenhouse gas emissions. This proposal remains on the table as a means of advancing the issue of broader participation in mitigation efforts, but with a strong focus on the scientific and methodological aspects of the proposal. The discussion on the Brazilian Proposal provided an opportunity to raise awareness of the range of scientific work being done by other parties, including Australia, on the same general issue of emissions, concentrations and responsibility. Brazil signalled its intention to hold a workshop in early 1999.
Compensation (Articles 4.8 and 4.9)
Articles 4.8 and 4.9 of the Convention require consideration to be given to actions to meet the needs and concerns of countries adversely affected by climate change and the effect on countries of the implementation of climate change response measures. Developing countries continued to insist at COP4 that the impacts of climate change and the economic effects of response measures be considered simultaneously. The COP4 decision on Articles 4.8 and 4.9 sets up a program for further work on these issues, including through the gathering of more specific information on effects via party submissions and an expert workshop. Initial actions to address Articles 4.8 and 4.9 (as well as similar provisions in Articles 2.3 and 3.14 of the Protocol) are to be identified by COP5 with additional actions to be identified by COP6.
Financial mechanism
Progress was made on both the review of the financial mechanism and guidance to the Global Environment Facility (GEF). COP4 adopted new guidance to the GEF on funding for developing country parties in a range of areas including stage II adaptation (for example, including feasibility studies, capacity building and in-depth analysis of vulnerability, as compared to stage I preliminary studies and stage III implementation), second national communications, capacity building and the identification of technology needs. Parties decided that the GEF will be "an entity" entrusted with the operation of the financial mechanism. This formulation, which reflects the Convention's implicit provision that more than one entity may operate the financial mechanism, removes the interim status that has applied for the past four years. The decision also provides for the COP to review the financial mechanism every four years.
Technology transfer
The COP4 decision on technology transfer establishes a consultative process to achieve agreement on a framework for meaningful and effective actions to enhance implementation of Article 4.5 of the Convention (which deals with the promotion, facilitation and financing of environmentally sound technologies in developing countries). The Climate Change Secretariat is looking to facilitate a SBSTA workshop and regional meetings and workshops on relevant issues. A preliminary list of issues and questions to be addressed has been drawn up, and parties have been invited to provide their views on these by 15 March 1999. Other aspects of the COP decision included enhancement of capacity building for non-Annex I countries in technology development, assessment, application, diffusion and transfer; and an invitation to non-Annex I parties to submit their prioritised technology needs.
Annex I National Communications
The decision adopted by COP4 on Annex I National Communications requests Annex I Parties to submit their third national communications by 30 November 2001 and provides that subsequent communications will be due at three-to-five year intervals. The decision also considers new processes for reviewing Annex I national communications and provides a basis for further revisions to reporting guidelines and review processes under the UNFCCC and, in the future, the Kyoto Protocol.
Non Annex I National Communications
The COP decided that the GEF will provide funding for second non-Annex I national communications without further conditions. The issue of review processes and revised national communication guidelines for non-Annex I countries was referred to COP5.
Preparations for COPMOP 1
(i) Compliance
The item dealing with preparations for the first session of the conference of parties serving as the meeting of the parties to the Kyoto Protocol (COPMOP 1) provided the setting for negotiations over the mandate for the work on a compliance regime and on policies and measures. The outcome on compliance was a decision establishing a working group under the subsidiary bodies with a mandate for future work which is focused on ensuring that any specific work on compliance would track work done in other groups rather than duplicating it, including, for example, on substantive rules and consequences for non-compliance. The group should also identify gaps, develop procedures to address non-compliance and ensure coherent approaches to developing a comprehensive compliance system. It was also agreed that COP5 would consider further steps, including, if necessary, the creation of an ad hoc working group to take forward this work. A timeline for early work was also agreed, with submissions due in March and consultations in June.
(ii) Policies and measures
The decision on preparations for COPMOP 1 provides that the Secretariat will prepare a report in 1999 on best practices in policies and measures (domestic action on climate change), drawn from national communications, submissions by the parties and other information, for discussion at SBSTA 11, and organise a workshop on best practices to report to COP6.
Land Use Change and Forestry
As anticipated, Land Use Change and Forestry was not a major focus of COP4. Nevertheless Australia's objective to promote continued work in this area was achieved through the endorsement of the SBSTA9 outcomes in the COP decision on Land Use Change and Forestry.
The COP decision provides an agreed interpretation of Article 3.3 of the Kyoto Protocol, setting out how afforestation, reforestation and land clearing activities are to be counted when determining compliance with Kyoto targets. In addition, a workplan which allows SBSTA to undertake policy analysis and debate on additional sinks activities and supplementary reporting guidelines under Articles 3.3 and 3.4 of the Kyoto Protocol was agreed. This work will take place in parallel to the production of the IPCC Special Report on Land Use Change, which is scheduled for completion in May 2000.
Impact of Single Projects- Icelandic Proposal
Iceland proposed development of a methodology to accommodate the emissions impact of single, energy-intensive projects which impact significantly on national commitments in a small economy (defined to apply to three economies: Monaco, Liechtenstein and Iceland). This issue was deferred to allow further analysis of Iceland's proposal and possible decision at COP5.
Interface between Kyoto Protocol and Montreal Protocol on Ozone Protection
COP4 adopted a decision to commence a process of addressing the interaction between these two agreements in relation to the use of HFCs and PFCs as substitutes for ozone depleting substances. Australia supported this approach, pointing to the need to address uncertainty for industry and to ensure a coherent approach to achieving the twin ozone and greenhouse objectives.
Research and Systematic Observation
The recommendations of the report on the review of the adequacy of global climate observing systems received widespread support from both Annex I and non-Annex I parties. COP4 adopted a decision on research and systematic observation which sets in place action to review and improve the global observing systems. The decision invites climate agenda agencies to initiate an intergovernmental process to address the priorities for action and identify immediate, medium-term and long-term options for financial support, and to report back to the next session of SBSTA. A major benefit of the decision is that it provides the mandate for essential improvements in the infrastructure needed to characterise climate and detect climate change. To effect these improvements, action is required at both a national and international level.
Administrative and Financial Matters
The COP Plenary adopted a decision on administrative and financial matters which urged the Secretariat to address the large carry over fund from 97/98 and implement the recommendations of a recent audit report which highlighted areas where improvement in Convention procedures is needed. The Executive Secretary was tasked with exploring further a proposal that the Secretariat establish a New York base and will report back to COP5.
COP5 Arrangements
COP5 will be held from 24 October to 5 November 1999, with the host and venue as yet undecided. Jordan has an offer on the table to host COP5 and is in consultation with the Secretariat on the arrangements, with a decision due by 11 December 1998. The next (tenth) sessions of the Subsidiary Bodies will be held in Bonn from 31 May to 11 June 1999.