THE UNFCCC, KYOTO PROTOCOL AND AN INTRODUCTION TO CDM

1. THE UNFCCC, KYOTO PROTOCOL AND AN INTRODUCTION TO CDM JOYCELINE A. GOCO Head, IACCC Secretariat

2. Call for Global Action: In response to the scientific findings that the earth is getting warmer and may lead to irreversible adverse impacts, the United Nations Framework Convention on Climate Change (UNFCCC) was adopted on May 9, 1992 at the United Nations Headquarters in New York.

3. “Earth Summit” in Rio (June1992)United Nations Conference on Environment and Development (UNCED) • Signing of the UNFCCC • The Philippines was among the first 154 nations to sign • As of Dec. 2001, 186 nations (including the Philippines) have ratified the Convention

4. THE UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE The centerpiece of global efforts to combat global warming

5. CONVENTION’S OBJECTIVE Seeks to stabilize atmospheric concentration of greenhouse gases “ at a level that would prevent dangerous anthropogenic [human-induced] interference with the climate system”.

6. The Convention’s Guiding Principles • The lack of full scientific certainty should not be used as an excuse to postpone action. • The “common but differentiated responsibilities” of states assigns the lead to developed countries in combating climate change.

7. GENERAL COMMITMENT All Parties to develop “national communications” containing inventories of GHG emissions by source and GHG removals by sinks.

8. Commitments of Parties Annex 1 Country Parties • Developed countries and countries whose economies are in transition • Adopt policies and measures to limit their anthropogenic emissions of GHGs and protect/enhance their GHG sinks and reservoirs to demonstrate that they are taking the lead in modifying longer-term trends.

9. Submit their national communications on regular basis with the following information: • Projected anthropogenic GHG emissions by sources and sinks with the aim of returning them to 1990 levels, individually or jointly • Policies and measures to limit GHG emissions and protect/enhance sinks and reservoirs

10. Annex II Country Parties Under Article 4.2 of the UNFCCC, developed country parties included in Annex II (Annex 1 countries minus the economies in transition) have the following additional commitments: • Provide new and additional financial resources to meet the agreed full costs incurred by developing country Parties in complying with their obligations under Article 12.

11. Provide financial resources, including transfer of technology to meet the agreed full incremental costs of measures to be undertaken by developing country Parties under Article 4. • Promote, as appropriate, the transfer of, or, facilitate and finance access to, environmentally sound technologies and know-how to other Parties, particularly the developing ones to enable them to implement the provisions of the Convention.

12. Non-Annex 1 Country Parties Non-annex 1 country Parties or developing countries Have no commitments to reduce their GHG emissions, but only to “develop, periodically update, publish and make available to the Conference of Parties, their national inventories of GHG emissions by sources and removals by sinks”.

13. Institutional Bodies • Conference of Parties (CoP) - supreme decision-making body of the Convention - primary task is to promote and review the implementation of the Convention and any related legal instruments (such as the Kyoto Protocol, etc.) - has convened six meetings since the Convention’s entry into force on March 21, 1004 - 1st Session of the COP was held in Berlin in 1995 which agreed on the “Berlin Mandate” calling for the strengthening of Annex 1 commitments through the adoption of a protocol or another legally binding instrument.

14. Institutional Bodies • Subsidiary Bodies - Subsidiary Body for Scientific and Technological Advise (SBSTA) - provides the CoP with information and advice on scientific and technological concerns - Subsidiary Body for Implementation (SBI) - assists the CoP in the assessment and review of the implementation of the Convention.

15. Institutional Bodies • UNFCCC Secretariat: tasked with administrative functions, taking charge of arrangements for sessions, facilitate assistance to parties, etc. • Global Environmental Facility (GEF): interim financial mechanism (Art. 11-21 [3])

16. THE KYOTO PROTOCOL • The Kyoto Protocol is an international agreement of 159 countries, which attended the 3rd Session of the Conference of the Parties to the UNFCCC held in December 1997 in Kyoto, Japan. • This formalized the adoption of the results of the Berlin Mandate (CoP 1) to reduce worldwide emissions in GHGs.

17. Objective of the Kyoto Protocol The protocol was developed to meet the ultimate objective of the UNFCCC which is to “stabilize GHG concentrations in the atmosphere at a level that would prevent anthropogenic interference with the climate system”, through quantified emission targets within a specified time frame.

18. Significant Provisions of the Kyoto Protocol • Annex 1 Country Parties, individually or jointly, ensure that their aggregate anthropogenic CO2 equivalent emissions of GHG do not exceed their assigned amounts. • Reduction of their overall emissions by at least 5% below 1990 levels in the commitment period 2008 to 2012.

19. The Protocol commits Annex B countries that ratify the Protocol to reduce GHG emissions below 1990 levels by the first commitment period (2008-2012) • The Protocol will be legally binding when it enters into force. It must be signed and ratified by at least 55 countries, whose total emissions represent 55% of the emissions of the Annex I countries in 1990.

20. Incorporation by Annex 1 Parties in its annual inventory of anthropogenic emissions the sources and removals by sinks of GHG gases. • Expert review process, providing a thorough and comprehensive technical assessment of the implementation of this protocol. • No introduction of new commitments for Parties not included in Annex 1.

21. The Kyoto Protocol reinforces the principle of “common but differentiated responsibilities”.

22. THE KYOTO PROTOCOL FLEXIBILITY MECHANISMS • EMISSIONS TRADING • JOINT IMPLEMENTATION • CLEAN DEVELOPMENT MECHANISM

23. Emissions Trading (ET)Article 17 - Permits countries to transfer parts of their “allowed emissions” (assigned amount units)

24. Joint Implementation (JI)Article 6 - Allows countries to claim credit for emission reductions that arise from investment in other industrialized countries, which result in a transfer of equivalent “emission reduction units” between the countries.

25. Clean Development Mechanism (CDM)Article 12 KP Allows emission reduction projects that assist in creating sustainable development in developing countries to generate “certified emission reductions” (CERs) for use by the investor.

26. Greenhouse Gases covered by the Kyoto Protocol Carbon dioxide (CO2) Methane (CH4) Nitrous Oxide (N2O) Hydrofluorocarbons (HFCs) Perflourocarbons (PFCs) Sulphur hexafluoride (SF6)

27. ANNEX B ANNEX 1 Party Quantified Emission Limitation or Reduction Commitment (fr. Base year or period) Australia 108 European Community 92 Japan 94 Netherlands 92 Russian Federation 92 USA 93

28. Achievements on the International Level Conference of Parties (COP): Convention’s ultimate authority

29. COP 1: Adopted the Berlin Mandate December 1: Parties should protect the climate system for the benefit of present and future generations of humankind, on the basis of equity and in accordance with their common but differentiated responsibilities and respective capabilities 1995: IPCC published its Second Assessment Report (SAR) and concluded that “the balance of evidence suggests that there is discernible human influence on global climate” and that the overall impact of this influence will be negative

30. COP 3: Adopted the Kyoto Protocol The Kyoto Protocol, when it goes into force, will legally bind participating industrialized countries to reduce their aggregated greenhouse gas emissions by 5.2% compared to the 1990 baseline, by the end of the First Commitment Period (2008-2012)

31. COP 4: Adopted the Buenos Aires Plan of Action (BAPA) The BAPA was worked out with the goal of finalizing the Kyoto Protocol by the year 2000. The BAPA also established a prompt beginning for the Clean Development Mechanism (CDM), eventually leading to a start in the year 2000.

32. COP 6 July 2001: IPCC published its Third Assessment Report (TAR). The TAR concluded that the new scientific findings provided evidence that global warming is, indeed, brought about by human-induced activities.

33. COP 7: Adopted the Marrakech Accords Delegates from over 170 countries agreed on the package of decisions, which elaborate a finely drawn structure for the implementation of the Kyoto Protocol. The “Marrakech Accords” completed the 1998 Buenos Aires Plan of Action and paved the way for the ratification of the Protocol.

34. THE CLEAN DEVELOPMENT MECHANISM(CDM)Art. 12 KP

35. Objectives of the CDM • Assists non-Annex 1 countries in achieving their sustainable development objectives • Enables Annex 1 parties in achieving compliance with their quantified emissions limitation and reduction commitments (QELRC) • Investors benefit by obtaining GHG emission reduction credits

36. Objectives of the CDM • Host countries benefit in the form of investment, access to better technology, and local sustainable development • Contribute to the ultimate objective of the Framework Convention on Climate Change • Developing countries will benefit from the project activities resulting in certified emission reductions (CERS) and developed countries will benefit by using the CERs to meet their commitments.

37. Principal Requirements for CDM Projects • Only Parties to the Protocol could participate; • Participation is voluntary and approved by each Party; • National CDM authority to be set up; • Non-Annex I Parties (host country) must benefit from project activities resulting in certified emission reductions (CERs);

38. Principal Requirements for CDM Projects • Projects must assist host countries in achieving sustainable development and contributing to the ultimate objective of the Convention; • Projects must result in real, measurable and long-term benefits related to the mitigation of climate change; • Projects must result in reductions in emissions that are additional to any that would occur in the absence of the certified project activity.

39. Principal Requirements for CDM Projects • The COP/MOP shall elaborate modalities and procedures that ensure transparency. Efficiency and accountability through independent auditing by operating entities and verification of project activities; • A share of proceeds from the CERs will be collected from the CERs issued to meet the administrative costs of the secretariat maintaing CDM activities as well as adaptation fund set up to assist developing countries that are seriously affected by climate change.

40. Principal Requirements for CDM Projects • Projects formally initiated under the Activities Implemented Jointly are eligible to be converted into CDM effectively from January 2000 if they meet the criteria.

41. Additionalities • Environmental additionality - long-term real and measurable reduction • Technology additionality - Transfer of environmentally safe and sound technology • Investment additionality - no diversion of ODAs • Some countries require foreign investment in CDM activities • Some other countries allow locally funded CDM projects (unilateral CDM projects)

42. Decision 15/CP.7 Principles, Nature and Scope of the Mechanism (Article 16, 12 & 17 of the Kyoto Protocol) • KP has not created or bestowed any right, title and entitlements of any kind on Annex I Parties. • Annex I Parties implement domestic action to reduce emissions in a manner conducive to narrowing per capita differences between developed and developing countries.

43. Use of mechanism shall be supplemental to domestic action. • Environmental integrity to be achieved.

44. Decision 17/CP.7 Modalities and Procedure for a Clean Development Mechanism • Host Party’s prerogative to confirm whether a CDM project activity assists in achieving sustainable development • Refrain from using CERs generated from nuclear facilities • Need to promote equitable geographic distribution of CDM project activities

45. Public funding for CDM should not result in the diversion of ODA • CDM should lead to the transfer of environmentally safe and sound technology and know-how

46. The CDM Executive Board(EB) • Supervises the CDM • Operates under the authority of the COP/MOP

47. Composed of 10 members: - 1 representative from each of the 5 official UN Regions: • Africa • Asia • Latin America and the Caribbean • Central and Eastern Europe • OECD - 1 from the small island developing state - 2 each from Annex I and non-Annex I Parties

48. Executive Board Tasks • Recommend to the COP/MOP on further modalities and procedures for the CDM • Approve new methodologies related to baselines, monitoring plans and project boundaries • Review provisions on simplified modalities, procedures and the definitions of small scale project activities

49. Accredit operational entities • Develop and maintain CDM registry • Report regional and subregional distribution of CDM project activities

50. Updates • Procedural guidelines for accrediting operational entities • Simplified modalities and procedures for small-scale CDM project activities • Guidelines for methodologies for baselines and monitoring plans - Meth Panel was organized - Drafted and posted the CDM-PDD (project design document)