Transcript Slide 1

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Sao Paulo Workshop
7-9 August 2006
Overview of Sao Paulo Proposal
for an Agreement on Future International
Climate Policy
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Core Elements of Sao Paulo Proposal
Article 2 Medium & Long Term Goals
Common but Differentiated Quantified
Commitments
– Annex I/B Parties Quantified Commitments
– Non Annex I/B Parties Sustainable Development
Commitments
Carbon Markets
Technology
Adaptation
Universality & Stability
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Article 2 Medium & Long Term Goals
Adoption would enable:
Better evaluation of progress by
the regime as a whole
Better alignment of climate policy
with science
No reason to interpret Article 2 to
focus solely on GHG
concentrations – link to SD
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Article 2 Possible Set of Indicators
a maximum temperature increase of 2oC by 2100
a maximum atmospheric concentration of CO2 such as 450
or 550 ppmv by 2050
greenhouse gas emissions by Annex I Parties to the
Convention at least 15 per cent below their combined 1990
emissions in 2020
global food supply sufficient to reduce hunger by A by
[date]
maximum loss of natural ecosystems of X by [date ]
Others? E.g. increased share of renewable energy of X by
[date]? Increased access to low carbon energy?
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Annex I/B Parties Quantified Commitments
2008-2012: Kyoto commitments & compliance
features retained
2013-2018: greater choice of targets more
adjustable to fit changing economic
circumstances, including hardship
An Annex I/B Party may choose a commitment
that is a combination of:
– an absolute emissions limit (tCO2e/year);
– emissions intensity limit (tCO2e/unit GDP);
and
– new and additional funding (USD per year) to
a maximum of 10% of its commitment (based
on international carbon price)
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Automatic Extension of Annex I/B commitments
Post 2018, commitments made more
stringent automatically on an annual basis
but always 5 years ahead of taking effect
e.g. 2019 commitments agreed in 2013 &
2020 in 2014
Commitments only become more
stringent if compliance through trading is
possible or becoming less expensive
Proposed formula means excess
allowances/hot air gradually eliminated
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Automatic Extension of Annex I/B commitments
Smaller more frequent adjustments
promote compliance culture
-Current 5 yearly pattern encourages hold
outs & use of future commitments
negotiations to renegotiate existing targets
Automatic extension generates regulatory
certainty, technology push & pull & global
lifestyle changes
More reassurance that dramatic, adverse
economic circumstances will not get ignored
for 5 years
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Economic Hardship
An Annex I/B Party whose real GDP has declined by
more than 1% during a year may request that its target
be equal to its emissions for that year
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Sustainable Development Commitments for Non-Annex I
Parties
For developing countries CC is part of many
other problems
Annex I/B type targets not effective or
appropriate: limited capacity, rapid economic,
social and demographic changes in global
context
Proposal: allow DCs to adopt such targets
but main focus of next round: rapid
integration of CC into SD policies &
measures (SD-PAMs)
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Non –Annex I Parties SD-PAMs
Create a new annex listing non-Annex I Parties that agree to
undertake voluntary actions to achieve SD and to report regularly on
specific actions through national communications
Actions earn political recognition but do not generate tradable credits
(programmatic CDM exists to achieve this purpose)
Easier funding for SD-PAMs
– Either through special procedures for Convention/Kyoto funding
mechanisms OR
– Direct non-Convention/Kyoto funding to SD-PAMs through IFIs,
or special new global fund)
Contribution of such SD-PAMs could be evaluated every 5 years as
part of progress towards Article 2 medium & long term goals
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Non –Annex I Parties SD-PAMs
Development of SD-PAM related methodologies by
Consultative Group of Experts by 2008 and agreement of these
at time of adoption of agreement in 2009
Secretariat produces dedicated compilation & synthesis report
or “register” on SD-PAMs with quantified reductions where
possible
– First report end of experimental phase 2012
– Second report by 2017 to contribute to overall review of
agreement and every 5 year thereafter
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Limits on transfers of CERs for Non –Annex I
Parties
An overall limit on transfers of
CERS and country specific limits on
transfers by non-Annex I Parties
since 2005
Once a limit is reached, a nonAnnex I Party is expected to
consider adopting a quantified
commitment
If it decides not to, it is deemed to
withdraw & loses access to benefits
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Limits on transfers of CERs for Non –Annex I Parties
Limits
– increase with population
– decrease with per capita emissions
– decrease with per capita GDP
Limits on transfers frontload domestic action by Annex I Parties, generate
a more steady demand for CDM & distribute its benefits more widely (e.g.
Africa/SIDs/GRULAC)
Provide incentives for improved regime effectiveness
– without being prescriptive
– without setting arbitrary graduation deadline unrelated to institutional
capacity to undertake climate mitigation
Further work on when limits reached needs to be done…
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Carbon Markets
Carbon markets boosted by
regulatory certainty & increased
demand from Annex I Parties
Clean Development Mechanism
continues with minor
improvements
– current CDM levy could
provide €325million up to 2012
2% levy on CDM extended to
Joint Implementation and to
International Emissions Trading
More modelling needed to
elaborate funding potential
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Compliance
Compliance assessed every five
year
Penalty remains the same: 30% of
excess emissions
Adaptation Proposals
Inclusion increases chances of
agreement
A pilot phase of “adaptation activities
implemented cooperatively” in 2008
A “pilot phase” shifts emphasis from
– inaction/workshops
– Funding stand alone projects
Towards learning-based policy approach
that promotes programmatic action
A new Adaptation Experts Committee
(ACE) to provides coherence/guidance
Adaptation Funding
Requirements to screen infrastructure
& investment for climate risks from
2008
Enhanced funding from better
resourced Adaptation Fund
In longer term:
– insurance mechanisms elaborated
by 2010 for extreme events
– Institutional & policy linkages
created with development &
disaster related international funds
as these key to long term
improvements in adaptive
capacity/resilience
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Technology Transfer
Long term framework promotes global
technology pull & push
Improved access to information to
proprietary technologies
Process to resolve complaints about
restrictions on technology transfer
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Technology Research and Development
Technology Fund resourced by
– JI/ET levy
– In-kind contributions private sector
– Private individuals/foundations?
Funding provided to non-Annex I Parties for:
– collaborative projects to develop new
technologies through international research
efforts
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Universality and Stability
Memoranda of Understanding (MOUs) could also be
agreed to extend scope of regime by including
agreements covering:
– aviation and marine
– global industries e.g. aluminium
Proposal allows non-Parties to agree a MOU which
could ensure they are making comparable efforts & do
not benefit from staying out (as the Montreal Protocol
does)
Competitive effects after 2012 become more significant if
entire countries/sectors stay out
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Universality and Stability
Competitive effects after 2012 become more significant if
entire countries/sectors stay out
Proposal allows non-Parties to agree a MOU which
could ensure they are making comparable efforts & do
not benefit from staying out (as the Montreal Protocol
does)
MOUs could also be agreed to extend scope of regime
by including agreements covering:
– aviation and marine
– global industries e.g. aluminium