5.3 Institutional arrangements
5.3.1 Institutions at the international level: the FCCC negotiations
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4.2(a) & (b) of the convention” (UNFCCC, 1995a). Given the inability to arrive at any real consensus of opinions the “provisions of the FCCC did not resolve differences so much as paper them over…The Convention, therefore, represented not an end point, but rather a punctuation mark in an ongoing process of negotiation that continues to this day” (Bodansky, 2001: 34). The evolution of the regime from the Berlin Mandate onwards is depicted graphically in Figure 28 above.
At COP1, India (in conjunction with China and Brazil) played a significant role in supporting the call by the newly formed AOSIS that developed countries should take the lead in formulating policies and measures and setting quantified limitation and/or emission reduction goals (QELROs). This was premised on the “polluter pays principle” and on the fact that they had been responsible, for the most part, for creating the problem. The quid pro quo for this support was that AOSIS agreed to support the larger developing countries’ resistance to accepting new commitments in the next round of negotiations: the Berlin Mandate process (IISD, 1997b). The Ad Hoc Group on the Berlin Mandate (AGBM) convened for eight sessions between August 1995 and October 1997. Central to the Mandate, and echoing concerns reiterated by India (IISD, 1995), was that any adopted protocol would have quantified emission-reduction targets for developed countries only and that there would be no new commitments for developing countries (UNFCCC, 1995b). A telling contribution by India to the AGBM 3 (1996) discussions centred on the implications of policies and measures adopted by Annex I countries on international trade. The concern was that policies and measures put in place by Annex I countries in order to achieve emissions reductions might negatively affect trade with developing countries by, for example, requiring labelling or prior informed consent to transport goods. Given India’s increased and ongoing integration with the global trading system, any policies or measures that potentially placed restrictions on its trade certainly would be cause for concern (IISD, 1996b).
In terms of finance and technology, little progress was made beyond that achieved in the first phase. At the first COP in Berlin, the interim status of the GEF as operating entity of the financial mechanism was extended until the first review of the financial mechanism was to be conducted at COP4 (UNFCCC, 1999: decision 9/CP.1, para. 1). At COP4, after the first review, the GEF was confirmed as an operating entity and subject to review every four years (UNFCCC, 1999: decision 3/CP.4). India, much like other developing countries, repeatedly raised the concern regarding the slow pace of technology transfer from developed to developing countries during the AGBM process (IISD, 1996a,c).
The evolving climate change regime experienced its first major test from domestic action when the United States’ Senate unanimously passed the Byrd-Hagel Resolution (Senate Resolution 98 of
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1997) in July 1997. Byrd-Hagel resolved that the USA would not ratify the Kyoto Protocol – or any protocol to the UNFCCC – to limit GHG emissions that did not also include limits or reductions for developing country parties within the same term of compliance. Given this Resolution, the US executive did not forward the Kyoto Protocol to the Senate for ratification and the USA became, at the time, the only developed country outside of the Kyoto Protocol. This positioning of the US in turn caused a hardening of positions: the G77/China sought and used every opportunity to reject attempts to assign to developing countries anything that could be described as new commitments during subsequent AGBM meetings (IISD, 1997b).
The following paragraphs are a brief description of the evolution of the regime after the signing of the Kyoto Protocol. Specific attention is given to the operationalisation of the Protocol through the Marrakech Accords in order to highlight the preponderance of attention paid to mitigation matters that primarily concerned countries with quantified emission-reduction objectives (QELROs): the Annex I countries.
5.3.1.1 Kyoto to Marrakech
In 1997 the Kyoto Protocol was adopted at COP3 in Kyoto, Japan fulfilling the Berlin Mandate (Figure 28 above). It is a binding legal instrument that creates binding targets on Annex I (industrialised) countries and allows for carbon sinks and three “flexible mechanisms” for achieving these emission reductions. The cornerstone commitments of the KP are found in Article 3, which requires Annex I countries to reduce their GHG emissions by at least five percent below 1990 levels in the first commitment period between 2008 and 2012 (United Nations, 1998). Article 3, paragraph 3 stipulates that countries may use land-use changes (afforestation, reforestation and deforestation) since 1990 to meet their commitments. The three flexibility mechanisms – intended to make emission reductions as affordable as possible for Annex I countries (Vespa, 2002) – were emissions trading (ET) (Article 17), Joint Implementation (JI) (Article 6) and the Clean Development Mechanism (CDM) (Article 12) (United Nations, 1998).
The Marrakech Accords represented the culmination of difficult negotiations initiated by the Buenos Aires Plan of Action (BAPA) to flesh out the political agreement that was the Kyoto Protocol. The BAPA initially projected that work would be complete by COP6 in The Hague in 2000, but the intricate negotiations proved highly divisive and eventually became deadlocked instead.
The four critical issues on which the negotiations foundered were Kyoto’s flexible mechanisms, carbon sinks21, compliance (with targets), and the mechanisms for financial and technology transfer
21 A sink is defined under Article 1(8) of the Convention as “Any process, activity or mechanism which removes a greenhouse gas, an aerosol or a precursor of a greenhouse gas from the atmosphere.”
to developing countries (Vrolijk, 2001). Procedurally speaking the COP was suspended until July the following year, when parties agreed to continue negotiating in an unprecedented resumed session – COP6bis (Vespa, 2002). Before the session could be reconvened, however, George W. Bush succeeded Bill Clinton as president of the USA and in March 2001 the Bush Administration rejected the Kyoto Protocol by unequivocally refusing to ratify it as had been signalled by the Byrd-Hagel resolution (Gupta, 2010). Despite (or perhaps because of) this unilateral rejection, the negotiations did not end as many commentators predicted; indeed the absence of the USA allowed many parties to be more flexible on some issues as the USA would no longer be a primary beneficiary of the decisions (Babiker et al., 2002). It was only at the resumed session, however, that sufficient political agreement was forged (the “Bonn Agreements” – see Figure 28 above) and that momentum was regained towards operationalising the Protocol. The political agreement that provided the breakthrough in Bonn was hailed at the time by the G77 and China spokesperson as “a triumph of multilateralism over unilateralism” (IISD, 2001a). COP7 in Marrakech later that year was able to convert political agreement into technical detail and culminated in the agreement of the Marrakech Accords in November 2001. These accords added much-needed substance (218 pages in four volumes) to the skeletal frame of the Kyoto Protocol (Ott, 2002). Importantly, it should be noted, that the advances made by the Marrakech Accords were on issues of importance primarily to Annex 1 Parties like flexible mechanisms, with little attention being paid to issues of adaptation crucial to NA1 Parties.
The Kyoto Protocol was finally operationalised by the Marrakech Accords in four main respects, namely: flexible mechanisms; carbon sinks; accounting, reporting and review; and a compliance regime. Firstly, the Accords put in place a range of operating rules for the various flexible mechanisms (decision 8/CP.7; decisions 15 – 19/CP.7) (UNFCCC, 2002). Negotiations settled the eligibility criteria for participation in the mechanisms as being ratification of the Protocol compliance regime with the rules on measurement, reporting and verification (MRV) (see below) and instituting national credit inventories (UNFCCC, 2002, decision 15/CP.7). Decision 15(6) provides for full fungibility of Units generated through the Kyoto mechanisms – JI, CDM, ET – and land use, land-use change and forestry (LULUCF) activities; each unit would be equal to one metric tonne of carbon dioxide equivalent (Yamin & Depledge, 2004). Crucially parties also decided the extent to which reductions from mechanisms could be supplemental to domestic mitigation actions taken by not imposing quantitative limits on their use (Vespa, 2002; Dessai & Schipper, 2003). In political moves to get the buy-in from the Umbrella Group, the flexible mechanisms were not linked to the compliance system (Dessai & Schipper, 2003).
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Secondly, the Accords attempted two resolve two “sinks” issues left unresolved in the Kyoto Protocol, namely, the extent to which net emission-reduction calculations could include domestic land-use change or forestry activities and the extent to which these activities could accrue CDM credits (Vespa, 2002). The final agreement in Marrakech allowed for Annex I parties to include reductions from human-induced activities like re-vegetation, forest, cropland, and grazing-land management, provided these had not already been counted pursuant to Article 3.3 in their sink calculations (UNFCCC, 2002). The second issue concerned the extent to which LULUCF activities in developing countries could be used to offset developed countries’ emissions through CDM projects (Vespa, 2002) – the agreement reached permitted afforestation and reforestation projects but only during the first commitment period (2008-2012) and with a cap of up to one percent of a party’s declared 1990 emissions (UNFCCC, 2002: decision 12/CP.7). Unresolved issues remained, relating to the reporting of sinks activities and the nature of sink credits, and many methodological issues were left for the Subsidiary Bodies to attend to in future sessions (Dessai & Schipper, 2003).
Crucial to the operationalisation were agreements on accounting, reporting and review of emissions reductions under the Protocol; specifically Articles 5 (methodological issues), 7 (communication of information) and 8 (review of information) (IISD, 2001b). In FCCC parlance, these issues are referred to as “MRV” or measurement, reporting and verification. Negotiations covered the fungibility of credits, i.e. whether credits under all three mechanisms were interchangeable, and the possibility of
“banking” credits from the first commitment period to be used in the second; they created a new unit called a Removal Unit (RMU) specifically for sinks activities (Dessai & Schipper, 2003). While banking was limited to credits from JI and CDM projects (but not RMUs) up to 2.5% of Assigned Amount Units (AAU), developed country parties could, however, transfer an unrestricted amount of credits among themselves to comply with the targets for the first commitment period (Ott, 2002).
Lastly, in decision 24/CP.7, the Marrakech Accords put in place a compliance regime that was considered “the most innovative and elaborate non-compliance procedure for any existing multi- lateral environmental agreement” (IISD, 2001b). It was also considered unique in the realm of international environmental law (Dessai & Schipper, 2003) at the time. Despite the interpretation of compliance to the Bonn Agreements being a sticking point, the compliance regime was one of the first domains to be agreed to at Marrakech (Dessai & Schipper, 2003), even though the final resolution of some key points were deferred to the first meeting of the MOP – Meeting of the Parties to the KP (Babiker et al., 2002). One such key sticking point was the actual legal status of the compliance regime due to the language formulation in Article 18 (Werksman & Herbertson, 2010)
and in particular the legal nature of any decisions made by the enforcement branch (IISD, 2001b;
Dessai & Schipper, 2003).
In addition to operationalising the Kyoto Protocol, the Marrakech Accords also established three new funds as channels for developed-developing country assistance: the Special Climate Change Fund (SCCF), the Least Developed Countries Fund (LDCF) and the Adaptation Fund under the Kyoto Protocol (UNFCCC, 2004). The SCCF was designed to support adaptation, technology transfer, economic diversification and activities in the energy, transport, industry, agriculture, forestry and waste management sectors (UNFCCC, 2002: decision 7/CP.7, para. 2). The LDCF was intended to support a work programme for LDCs, including, but not limited to, support for preparation and implementation of National Adaptation Programmes of Action (NAPAs) (UNFCCC, 2002: decision 7/CP.7, para. 6). Under the Kyoto Protocol, an Adaptation Fund (AF) was created to assist in financing adaptation projects and programmes in developing country parties that were parties to the Protocol (UNFCCC, 2002: decision 10/CP.7, para. 1); this fund would be financed by a 2% levy of CDM transactions. All three funds would be initially operated by the GEF in its capacity as an operating entity of the UNFCCC’s financial mechanism under the guidance of the Conference of the Parties to the Convention (UNFCCC, 2004). Once the Kyoto Protocol came into force in 2005 the Adaptation Fund would be guided by the Conference of the Parties, serving as the meeting of the Parties to the Kyoto Protocol (UNFCCC, 2002).
Article 4, paragraph 5 of the Convention stipulates that developed country parties should take practical steps to “promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-how to other Parties, particularly developing country Parties, to enable them to implement the provisions of the Convention”. As an essential precursor to the transfer of technologies thus mandated, the Marrakesh Accords agreed to put in place a “technology framework” (UNFCCC, 2002: decision 4/CP.7, para. 1) and established an Expert Group on Technology Transfer (EGTT) tasked with “analysing and identifying ways to facilitate and advance technology transfer activities” (UNFCCC, 2002: decision 4/CP.7, para. 2). The technology framework was to be driven at both the national and sectoral level by multiple stakeholders in developing countries, and would include “activities on technology needs assessments (TNAs), technology information, enabling environments, capacity building and mechanisms for technology transfer” (UNFCCC, 2002: decision 4/CP.7, Annex para. 2). The TNAs in particular became the focus of early technology-transfer work.
Developing countries – including India – consistently and successfully resisted US calls to put in place a process that would culminate in QELROs or any new commitments for Non-Annex I
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countries (Bodansky & Rajamani, n.d.; Dessai & Schipper, 2003). The level of detail in the Accords provided countries with sufficient detail to begin domestic Kyoto Protocol ratification procedures (Vespa, 2002). Despite the USA’s withdrawal, at least some negotiators hoped that having a legal framework in place would enable the USA to re-join the process at a later date (IISD, 2001b).
5.3.1.2 Post-Marrakech and pre-ratification
In 2002 India ratified the Kyoto Protocol and hosted the 8th COP in New Delhi. At the COP the Prime Minister, Atal Bihari Vajpayee, outlined the strides India had taken in its renewable-energy sector while still calling for sufficient atmospheric space in which developing countries could develop (IISD, 2002). Vajpayee took the opportunity to highlight the importance of addressing adaptation and vulnerability and providing for capacity building for developing countries. He also stated firmly that
“consideration of developing country commitments would be premature due to, among other things, inequitable per capita emissions rights, and differences in per capita income between developing and developed countries (IISD, 2002). On the final day of COP8 the “Delhi Declaration on Climate Change and Sustainable Development” was adopted; it reaffirmed developing countries’
prioritisation of poverty eradication and development. In addition the Declaration reemphasised CBDR and the role of national priorities in relation to the implementation of FCCC commitments and adopted rules and procedures for the Executive Board (EB) of the CDM.
COP9 brought with it similar messages from the Indian government: calls for Annex I parties to take the lead and begin to address the impacts of climate change and to make good on the provision of financial and technological assistance to developing countries. India’s Joint Secretary for Environment and Forests, C. Viswanath, also rejected any commitments for developing countries (IISD, 2003).
After the change of government in India in 2004, the new Minister of Environment and Forests, A.
Raja, expressed the view at COP10 that GHG emissions by developing countries would rise in order for them to address poverty and achieve sustainable development. Much like Vajpayee two years before, and Viswanath the year prior, Raja also emphasised that contemplation of future commitments for developing countries was premature, as was any proposal to create new categories of parties under the FCCC (IISD, 2004).