Authors: Sabrina Chesterman & Nyla Sarwar.

As the climate talks gain pace in Bonn, progress is being made on a new text, designed to resurrect chances of a global agreement in Cancun in December. Many, including outgoing UNFCCC Executive Secretary, Yvo de Boer, are still hesitant about Cancun being able to achieve a deal, which was originally supposed to have been reached at Copenhagen last December. One of the Mexican negotiators, Luis Alfonso de Albo, has used the coverage at Bonn to try and instill confidence in what may be achieved there, stating a climate deal is still ‘positive’.

The Bonn meetings have brought together key negotiating groups, including;

(I)              AWG-KP – to focus on further commitments by Annex I parties, based on text prepared by the Chair

(II)            AWG-LCA – to focus on preparation of an outcome to be presented to at COP 16, based on a new text by the Chair

(III)           Subsidiary Body for Implementation (SBI) – which will consider issues including national communications and reporting, the financial mechanism and capacity building.

(IV)          Subsidiary Body for Scientific and Technological Advice (SBSTA) – which will consider methodological issues, technology transfer and the Nairobi Work Programme on impacts, vulnerability and adaptation to climate change.

The Bonn discussions have entered their second week with many fundamental questions still remaining regarding the legality of the proposed agreement, emission levels and temperature goals.  The big white elephant in Hotel Maritim where the discussions are being held, lingering from Copenhagen, centres on the scale of commitments by developed and developing countries. The new text aims to ameliorate the huge bridge that exist between these groups and integrate the Copenhagen Accord with the 2009 versions of the AWG-LCA and AWG-KP texts.

In regards to finance, the new text states that that all finance will be new, additional, adequate and predictable. Whilst developed countries have committed to a goal of mobilising USD$100bn/pa by 2020, there is still uncertainty about which countries will contribute towards this and how much. Discussions regarding the generation of private funds have seen suggestions of a potential international cap-and-trade system with auctioned permits. There have also been references to the creation of a Finance Board within the UNFCCC to manage the operators of the agency’s financial mechanisms (i.e the GEF and the Climate Fund), including the Copenhagen Green Climate Fund (CGCF). Disillusionment regarding funding is also created due to the texts reference to the Copenhagen Adaptation Framework (CAF), implemented through international collaboration. The CAF aims to undertake 11 activities (e.g. planning, vulnerability assessments, strengthening institutional capacities, building resilience, disaster risk reduction etc.) all of which require extensive funding.  Worryingly the text remains sparse on new market mechanisms, likely to be critical to galvanise funding, especially from private and public sector partnerships.  In addition, as the EU Commissioner for Climate Change, Connie Hedegaard, made clear last week discussing the monetary agreements in lieu of the destabilised Euro does not come at an easy time, especially with money having to be drawn from the public purse.  Therefore funding remains a sensitive yet pivotal topic, especially if alliances are to be bridged between different negotiating groups.

Some aspects of the text being prepared at Bonn remain unchanged from the text prepared at Copenhagen. An example includes the issues surrounding REDD and REDD+, which was hailed as one of Copenhagen’s successes. In addition, the text regarding technology transfer remains unchanged from last year, and this section is considered to deliver a major outcome. The text suggests that establishment of a Climate Technology Centre and Network – the mechanism to support and organise the transfer of technology, encourage collaborative innovation, and skills development for developing countries. It is expected to be funded by the overarching funding mechanism and could begin as early as January 2011. Leading on from technology transfer, discussions so far at Bonn regarding capacity building have been largely inconclusive with additional brackets added to the text, and wide disagreement concerning its funding, delivery mechanism and reporting. With key uncertainties remaining, negotiators at Bonn have a lot of talking to do this week if success is to be achieved in any of these areas and a clear path to Cancun is to be laid.

Discussions that had been continuing on the incorporation of Carbon Capture and Storage (CCS) into the Clean Development Mechanism (CDM) have now halted.

In an open meeting of the negotiations–itself following several rounds of negotiations–no consensus between the negotiating parties could be found.  Three main camps emerged on potential use of CCS

• Full incorporation with CCS functioning like existing off-setting projects
• No CCS at all
• Use of some pilot projects, but only with assigned companies

The rationale is that CCS could be a major form of reducing emissions globally, but that the cost of doing so would be extremely high.  As an off-setting mechanism, though, CCS does not fit neatly in the CDM’s sustainable development goals; it is not clear, for example, exactly how CCS is development or what economic service it provides for developing countries.

Further, there is the complication of how the long-term aspects of CCS projects could be incorporated in to the CDM process.  At present, CDM projects are registered, implemented and completed: the technology or installed facility performs as installed, and that’s it.  For CCS, this could not be the case.  The capture technology is highly technical and would require ongoing operations from the operating company.  Further, CCS is not a permanent project; each project would have a finite life span, with different technical processes occurring at different stages.  Essentially, these issues ask the question: how can the long term nature of CCS fit into CDM?

Even if these issues could be overcome, there remains a raft of questions about actual operationalisation.  Not least: would CDM companies be prepared to take on such high investment and high risk projects?  The initial investment would be hundreds of millions of dollars.

When looked at through this lens–which is precisely the lens that the negotiating parties were discussing–CCS and CDM are not easily compatible projects.  Not for now at least.  The issue has been tabled until the SBSTA and SBI meetings in Bonn in June next year.