HEADLINE NEWS
Finance discussion plods ahead. Developed country parties want equal importance given to private and public sector funding. India raises important issue of triple counting emission reductions. Battle lines seem drawn.
US indicate preference for all countries to give their mitigation commitments for the long term. Australia puts forward proposal for listing and accounting for mitigation commitments (everybody). G77/China, India raise concerns about slipping away from responsibility of historical emitters, taking on new mitigation targets
Text on Capacity Building might be done rather soon.
US say global deal that does not take their domestic policies into concern will exclude possibility of US money. ‘To access our money’ you have to design a policy in that way – Pershing.
REDD moves smoothly. Parties agree to consolidate initial parts of text. Start discussing what is important for Copenhagen.
KEY ISSUES OF THE DAY
Time is ticking, but it is becoming increasingly clear, that if things do not move in the Long-term Cooperative Action (LCA) track, then things will not move in the Kyoto Protocol track either. The log-jam however, doesn’t end there. It spreads into cross-cutting areas of discussion like a domino. Finance continues to be a fraught and unyielding area in the negotiations.
Discussions on Finance under the LCA are stuck for a number of reasons. One is that private sector financing is favoured by some Annex 1 countries as a key aspect of the funding mix. While they ‘accept that public funding is essential’, and are not shying away from it, they ask for their proposal of private investments to be considered seriously. The role and potential contribution of market mechanisms in facilitating mitigation actions in developing countries is proving controversial.
Many non-Annex 1 countries favour straightforward public finance from Annex 1 countries as funding which bears less risk for them than being exposed to the vagaries of the market. Small developing nations in particular favour a greater share of public finance as market mechanisms under the Kyoto Protocol (such as the Clean Development Mechanism) have overwhelmingly benefitted the larger emerging economies such as China, India and Brazil.
Looking at a range of options, many Parties raised the pertinent point that future outcomes (whatever they might be), must not be restricted by the Convention. Even the LCA chair alluded to this, saying that we must no be like a ‘nightingale in a cage’.
Sure enough, neither the G77/China, India, Pakistan, Barbados, Colombia, China nor most others of the developing country block said they would not agree to any proposals that were outside the provisions of the Convention, and the Bali Action Plan. The G77/China alluded to the market process becoming like a self-service mechanism.
Practically speaking, new text outside of the provisions of these documents (that themselves were many many years in the making), means more negotiations, more negotiations and more negotiations. And sure enough, proposals will only be countered by counter proposals – which is how we now have a 208 page document that not even the most experienced and wily negotiator can make sense of.
In the second half of the discussions on Finance, the G77/China finally made mention of the AOSIS and LDC countries, and that they would require some special consideration. This is some reason for cheer, because it has been observed that although the AOSIS and LDC blocks are part of the G77/China, they get little special mention, as they rightfully should.
The United States continues to hold to its line that larger developing countries with the means to do so must also make contributions to mitigation. The Delegate from the US noted the difficulty that domestic processes presented (read, in the US case) which implied they could never become a part of the Kyoto Protocol. The US conclusion on finance was: if you want to access our resources, you have to design a policy taking our laws into account.
FOCUS ON GOI
In the mitigation section of the LCA, India opposed the proposals of the Annex I countries to keep the paragraph that indicated that private funding would be the major source of money for mitigation and adaptation actions in developing countries. They stuck to the common G77/China stand on following the Convention and the Bali Action Plan, saying that any proposals that did not incorporate those principles, could not be part of the new text. They indicated that proposals to diminish the role of public sector funding ignored the concept of responsibility.
In the Finance discussion of the LCA, India raised two points.
One of triple (or is it quadruple?) counting – that mitigation options considered outside of a legal framework could technically be counted by developed countries as meeting their responsibility, by developing countries as their Nationally Appropriate Mitigation Actions (NAMAs), and by developed countries as meeting their financial requirements. Plus they could potentially get Certified Emission Reductions (CER) for it.
They also argued that if the private sector was to be the major source of funding for mitigation and adaptation action that this would come under bilateral partnerships, that would not count as supported mitigation actions (as is intended to be the case).
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