Gloomy faces

Empty corridors belied intense negotiations behind closed doors last night.

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At around 11:30pm, the US tabled a “bombshell” – in the words of agitated NGOs this morning – recommending removing all reference to binding emission reductions from a Bali roadmap.

The draft was distributed to journalists in the early hours by Greenpeace. It removes the distinction between developed and developing countries, recommending “enhanced action on mitigation” for all.

Four alternatives to differentiate between the action required by different countries are proposed:

-“level of economic development and significance”

-“level of economic development and greenhouse gas contributions”

-“level of economic development and energy utilisation”

-“the principle of common but differentiated responsibilities and responsive capabilities”

All potential action, from national emission caps to domestic plans and measures to binding market-based or sectoral programmes, is prefaced by “as appropriate”.

This morning, Greenpeace claimed the US did not have any support for this proposal. It also said at least 5 other proposals had been tabled, one by South Africa, which was “really good”. Discussions were ongoing, it added. A US press briefing scheduled for 9:30am was postponed.

At its daily 10am press briefing, the Climate action network (CAN) said the US last night remained opposed to the wording that developed countries should cut their emissions by 25-40 per cent by 2020, relative to 1990, and global emissions should be halved by 2050, relative to 2000.

It confirmed that negotiations ended around 4am with 4 or 5 proposals on the table. The Indonesian presidency of the UN talks is due to table a new compromise text this morning.

Japan supports the US, Australia’s position is “uncertain” and Canada has remained “silent” said the NGO. Russia has raised concerns, but CAN believes these can be met.

An EU press conference scheduled for noon was curtailed – EU commissioner Stavros Dimas gave a statement but took no questions. Spokeswoman Barbara Helfferich said negotiations were “very sensitive” right now.

Mr Dimas said there had been “good progress overnight” on the Bali roadmap. Agreement was reached on deforestation and capacity-building in developing countries. Adaptation and financing issues had also been resolved. This leaves on the table the issue of emission reduction guidelines, said the commissioner.

He welcomed a “text” proposed by the US as a sign of their engagement, but emphasised that the distinction between developed and developing countries is important.

An EU official confirmed the text distributed by Greenpeace was one version of two very similar texts tabled by the US last night.

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Political temperature still rising

Despite the good news on technology transfer, the political storm over whether industrialised countries should specify a range for future emission cuts now only intensified as night fell in Bali on Thursday.

Talks were expected to continue until the early hours. At lunchtime, UNFCCC chief Yvo de Boer told journalists he was “very concerned”  about the pace of things.

One thorny issue that has re-emerged is exactly what role the US envisages for its major emitters’ initiative. This brings together the world’s largest emitters of greenhouse gases to discuss action to combat climate change. The White House has repeatedly insisted it is intended to feed into, not compete with, the UN process, but rumours are resurfacing here that this is not the case.

NGO Climate action network, which gives away three “fossils” every day to countries is believes are being obstructive, awarded them all to the US on Thursday. 

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Some suggested the US had been blocking conclusions on technology transfer because it wanted to save the topic for its next major emitter’s meeting on 30-31 January in Hawaii. How else could the US justify its supposedly difficult behaviour on a text promoting technology, which it claims is central to the fight again climate change?

The fact that a draft text was agreed late on Thursday appears to disprove this theory. Yet tensions persist.

German environment minister Sigmar Gabriel stirred things up by insisting the EU would boycott the major emitters’ process unless there is agreement in Bali that industrialised countries should cut emissions by 25-40 per cent by 2020.

Mr Gabriel has been particularly vocal in defence of this goal. Back home, Germany has just launched a – perfectly timed – ambitious national climate strategy with a reduction goal of 40 per cent.

Both the Portuguese EU presidency and EU environment commissioner Stavros Dimas appeared to provide full support for Mr Gabriel’s position. Yet out of the limelight, EU delegates are more nuanced. One said they would participate in the major emitters’ meeting “only if there is a Bali roadmap”. “This is not the same as saying if we don’t get the wording we want we won’t take part,” he followed.

One of the issues the US is reportedly arguing is that it would never get the proposed numerical reference through its Senate. Opposition within the Senate blocked ratification of the Kyoto protocol.

As the talks enter their final 24 hours tonight, it’s all becoming very tactical and increasingly dangerous to speculate what’s going on. There may still be surprises. As Indonesia said earlier today, negotiators always keep their cards close to their chest until the very end…

Progress!

A draft text on technology transfer has been agreed. After desperately gloomy prospects on Tuesday night, when talks broke down over the words “facility” and “programme”, negotiators have managed to settle on a text without brackets. This means none of it is still under dispute.

The text must still be rubber-stamped by ministers, but no problems are foreseen since it has been agreed by officials representing all parties.

This is a milestone on the road to a post-2012 agreement.

Privately, European delegates were jubilant, if surprised at the breakthrough. It was inconceivable that developing countries would come on board a Bali roadmap that did not address technology transfer. The deal also puts industrialised nations on firmer ground for the remaining negotiations.

On the very first day of the Bali conference, the G77 loudly accused the developed world of neglecting its technology transfer commitments. It demanded the subject be discussed not only in a subsidiary body dedicated to technology but also in one dedicated to financing and implementation. This duly happened and it was in the latter committee that discussions stalled on Tuesday night.

The final draft abandons both “facility” and “programme” in favour of “strategic programme”, which lies somewhere between the two I’m told. The term refers to a new entity to be set up under the Global Environment Facility (note the word!) (GEF), dedicated to technology transfer. GEF funds environmental programmes (note the word!) in developing countries.

It is not clear whether funding will come from elsewhere in GEF or from outside.

This “strategic programme” is the technology leveraging facility UN climate chief Yvo de Boer has been talking about. It is not however, the multilateral fund proposed by developing countries I wrote about earlier today. Yet the G77 are reportedly happy – sources say some were under pressure to obtain immediate results here in Bali and this qualifies.

More importantly for the long-term however, is that the draft text takes the developing world’s multilateral fund wish list and agrees to analyse current and potential funding sources with a view to filling gaps. An expert group will do this and must report back by 2010 “with a view to consider the role of new financing mechanisms and tools for scaling up development and transfer of technologies.”

These new tools could be anything from an enhanced carbon market to public-private partnerships.

The expert group is also requested to develop a set of performance indicators to monitor technology transfer implementation, another clear developing country demand.

EU sources said they were particularly happy with the text because it undertakes to review existing funds. Many of these could be better targeted, they say, and in any case the UNFCCC predicts it is private capital rather than public money that will hugely dominate future investment flows into clean energy. Thus it is more important to leverage the private sector than establish new public funds.

The bottom line

All the talk here appears to be focusing on targets, guidelines, or whatever you want to call them for long-term emission reduction commitments from developed countries. What will be the wording of our climate ambitions in the roadmap to a post-2012 agreement we expect in Saturday’s early hours?

Representatives from the US to the EU to the G77 and China are happily dedicating much of their press conferences to this topic. Journalists are lapping it up and feeding the fervour. But is this really the sole issue on which so much hinges? It feels like much of the talk on targets may be posturing rather than a reflection of the true terms of the debate.

UNFCCC spokesperson John Hay confirmed as much when he said, in his personal opinion, much of the target talk is indeed intended for domestic consumption back home. Politicians want to look good in front of their electorate.

Behind the scenes, technology transfer is the most substantive issue still under debate. “Developing countries want to go home with something in their pocket,” says Mr Hay. Daily conference newsletter Eco, produced by NGO Climate action network, has started highlighting technology transfer as a fundamental element in the negotiations.

The official line is not quite the same. The major issue that would deliver a “really meaningful result” at Bali is major new commitments from all industrialised countries to cut their emissions in line with the latest science, said Munir Akram, Pakistan’s ambassador to the UN and chairman of the G77 and China group yesterday.

But it makes more sense that the key priority for developing countries is financial and technological assistance to set them on a low-carbon development path and help them cope with the impacts of climate change. This is what they have been calling for all along.

An adaptation fund was finalised in the pre-ministerial talks at Bali. But, as I wrote yesterday, technology transfer talks broke down in the early hours of Wednesday morning. They have been picked up by ministers, but, at lunchtime on Thursday, no agreement had been reached yet, said the Indonesian delegation.

Technology transfer is as much a financing as a technology issue. The key sticking point is what financial commitments developed countries are prepared to make and how quickly this money would be available to developing countries.

There are several proposals on the table. Developing countries for example have suggested a new, multilateral fund to finance a whole wish list of items from technology needs assessments to purchasing licences. Industrialised countries have yet to articulate a response, says one observer.

Carbon finance is also part of this picture. Through the Kyoto protocol’s Clean development mechanism (CDM), developed countries are financing emission reduction projects in developing countries. This is helping drive the development of a clean energy infrastructure there.

But a carbon market requires mandatory emission caps, otherwise there can be no carbon price. And this brings us full circle, back to targets, and to exactly where the negotiations are right now.

“In a way, we’re in an all-or-nothing situation,” climate chief Yvo de Boer told journalists this morning. All four building blocks of the Bali roadmap – emission reductions, adaptation, technology transfer and financing – are inextricably linked.  A decision on one must be a decision on all.

Late nights

It’s not only me who’s been up late these last few days. Or who’s feeling frustrated at times. Talks on technology transfer – a big issue for developing countries and one which has proved contentious – broke down last night in a “very acrimonious way”. The cause was disagreement over a single word – should it be “facility” or should it be “programme”? It was after 2am. Negotiators decided to defer the whole topic to the next meeting of the responsible UN bodies. “I was a little incredulous myself when I received the report this morning,” said Munir Akram, ambassador of Pakistan to the UN and chairman of the group of 77 and China. The good news is ministers are almost certain to revive the topic and include it in their talks tomorrow and Friday.

US remains unconvinced

There was a marked change in the air as I entered the conference centre this morning. A lot more suits, a lot more ties – even the journalists have dressed up – and a palpable buzz. It seemed busy before, but this is different – more serious, more determined, more “right we’re getting down to business”.

 “As we convene here in Bali, the eyes of the world are upon us,” UN secretary general Ban Ki-Moon told ministers in their first plenary session at 10am, “the time for evocation is over, the time to act is now.”

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 Mr Ban reminded those present of the strong call for action they issued at a high-level UN meeting in New York in September. He reminded them of the science they backed when they signed off the last Intergovernmental panel on climate change (IPCC) report in November.

But, it seems, despite having been party to both these actions, one country still does not believe in them. The US is refusing to accept that emission reduction guidelines drawn up by the IPCC should guide negotiations on a new climate treaty over the next two years. This is inexplicable unless you conclude they do not believe the science.

“We want to launch a process that is open and does not preclude options,” head of the US delegation Paula Dobriansky told journalists this morning. “Once numbers appear in text it predetermines outcomes… it will drive negotiations in one direction,” clarified colleague Harlan Watson.

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But isn’t this the point? The goal of negotiations must be to prevent dangerous climate change. The IPCC defines this as global warming over two degrees Celsius. The IPCC also says that to ensure a temperature rise below this requires developed countries to commit to 25-40 per cent emission cuts by 2020.

Yet the US is insisting this range should not guide negotiations over the next two years. And even stranger, it seems to be getting its way. Of course we are at the start of three days of ministerial-level talks, but UN secretary general Ban Ki-Moon today appeared to confirm suggestions by UNFCCC chief Yvo de Boer yesterday that the US position could be accommodated.

“It may be too ambitious if delegations expect to be able to agree on targets for greenhouse gas emission reductions, but as I told you sometime down in the road we will have to agree on that,” he said. Mr de Boer clarified once again the discussion is about a guiding range, not targets, but this seems to make the US position even stranger.

Mr Ban named “domestic business” and “national policy” as two reasons behind US reservations. Dr Dobriansky welcomed the IPCC report as “an affirmation of climate change that needs to be addressed” but suggested that since it covers 177 scenarios, the 25-40 per cent cuts one need not be the sole guiding principle for future talks.

It is essential to have the US on board a new climate agreement. Indonesia’s president Susilo Bambang Yudhoyono was interrupted by applause when he said as much in the plenary this morning. But how effective can a roadmap be that does not set out a clear goal?

“I’m sure we will not be able to convince developing countries to commit themselves without having a clear decision about the reduction targets of the developed countries, including the US,” says German environment minister Sigmar Gabriel. “We can negotiate about instruments over the next years, but what we cannot do in Bali is forget what the international science told us in the last two months.”

Where things stand

Wednesday morning at 10am the high level segment of the Bali talks kicks off. Over the next three days, ministers from about 155 countries will take over from the more junior officials who have been negotiating so far. This is crunch time.

Between now and Friday night we will find out whether governments will agree to launch negotiations on a post-2012 climate treaty, to finish these by 2009, and to agree a detailed work plan for the next two years.

What can we expect? Whoever you ask will tell you the most significant questions won’t be resolved until the early hours of Saturday morning.

Nonetheless, certain things can be said now. Before I say them, a warning: because this post attempts to provide a full update on where things are at, it’s unusually long. Hopefully the sub-headings will help.

Everyone agrees that negotiations must be launched on a post-2012 climate treaty. For the US, this is an about-turn from its stance only a year ago, when George Bush was still questioning the science behind climate change.

Virtually everyone agrees that negotiations must end by 2009 – China has been the sole exception, advocating a 2010 deadline, but I wonder whether it will stick to its guns in the face of broad consensus. There are more important things for it to spend its bargaining chips on.

The really tricky issue is the work plan. This is the most controversial element of the talks. How much detail should it include and what should it say? Yesterday US chief negotiator Harlan Watson said he favoured something “short, to-the-point, and balanced”.

“We want the essential building blocks [of a post-2012 climate agreement] identified… mitigation, adaptation, technology and financing,” he said, “there has to be a little specification below that level but without prejudging what might come out at the end.”

Reduction ambitions

Any concrete numbers suggesting what emission reductions developed countries should commit to, or what we should try to limit a temperature rise to, could prejudice the final outcome of an agreement, according to Dr Watson. The US has received support from Japan, Australia and Canada.

The EU and UN climate chief Yvo de Boer have consistently maintained these specifics must be included. A draft text that emerged on Saturday said developed countries must commit to cut emissions by 25-40 per cent by 2020, relative to 1990 levels, global emissions must peak in the next 10-15 years, and global emissions must be cut by at least half by 2050.

It’s the 25-40 per cent that has attracted most media attention. The latest rumours are that it’s been cut from the draft text, but this could change again. Whatever version officials settle on tonight, it will be passed on to ministers for debate tomorrow. And I can guarantee this is one of those questions they will debate until 4am on Saturday.

Yet I think we can say that even on this seemingly impossible question, consensus may yet be reached. The EU and UNFCCC appear to be making an unprecedented effort to reach out to the US.

EU environment commissioner Stavros Dimas today again set forth his clear support for the commitments detailed above. But other EU sources described the 25-40 per cent as “preferable” rather than “essential”.

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When asked whether he would consider a Bali roadmap without the 25-40 per cent wording a failure, Yvo de Boer said, “No, specific targets you should discuss at the end”. This comes remarkably close to Dr Watson’s position. Mr de Boer emphasised too that the 25-40 figures were intended in any case as “guidance” not “targets”.

There are a million ways in which ministers can phrase the level of ambition in the Bali roadmap they sign off – which they choose will also depend on how other building blocks are written into the plan. For example, perhaps the EU would be prepared to change the wording on ambition in return for more explicit support for the carbon market.

Targets and mitigation are issues that concern primarily the developed world. What about the developing world? We reported earlier this week that emission caps for developing countries seemed about to fall off the table and indeed there has been no further mention of them. Sectoral commitments by industry sector look like the most likely commitment we can expect from developing countries. Details of these too will have to be worked out by ministers.

Adaptation

Adaptation, deforestation, technology, and financing are the main priorities for developing nations. And they scored victories today on the first two. The final structure and operation of an adaptation fund was finally agreed by officials. This is therefore one item ministers will not have to debate but can simply rubber-stamp.

I had wondered how important the set up of the fund was when recent reports have suggested the fundamental problem with adaptation is that rich nations aren’t paying up. Only about 15 per cent of US$1.2bn  (€0.81bn) promised to the developing world by the EU and other states in 2001 has materialised, said UK newspaper the Guardian just before Bali.

All the money in this particular fund however, will come from a two per cent levy on transactions under Kyoto’s Clean development mechanism (CDM), rather than donations. If operational tomorrow, it would contain about US$36m, hardly the US$50bn the World Bank forecasts is needed, but Mr de Boer notes there is a huge CDM pipeline.

Deforestation

On deforestation, World Bank president Robert Zoellick today in Bali launched a new fund to help developing countries reduce emissions from deforestation and land degradation. The fund, which is expected to be worth US$300m, will among other things offer countries carbon credits in return for reducing deforestation.

Not everyone applauded the fund. NGO Friends of the Earth said it would not help combat change because it simply offered industrialised countries another way to avoid reducing their own emissions. The US has not decided whether to support it, reports Bloomberg, but it notes President Bush opposes putting a price on carbon.

Negotiators came close to finalising a draft text on deforestation, which begins to set out accounting standards for forestry carbon reduction projects and doubles the size limit for forestry projects that qualify as “small-scale” under the CDM. Such projects face simplified requirements. Mr de Boer said the move would not only expand the geographical scope of the carbon market, but also help countries without strong energy sectors profit more from the CDM.

The only outstanding controversial element in the deforestation text, which will therefore have to be taken up by ministers tomorrow, is how forest conservation fits into the picture.

Technology transfer

On the other two issues of concern to developing countries, technology and financing, the latter is a horizontal issue that cuts across everything from the carbon market to the adaptation fund. Subject to a dedicated international finance ministers’ meeting here in Bali today, I’ll report on that separately.

Technology transfer continues to generate heated discussion and will undoubtedly go to ministers for debate.

One proposal on the table is to monitor technology transfer – as for adaptation, the developing world does not feel it has benefited as it should from this mechanism. Also under consideration is a technology leveraging facility that would help turn a country’s assessment of its technology needs into project proposals that meet the criteria of international financial institutions. The idea is to combine soft loans with much larger commercial investments to bring technologies to new markets.

Other issues

On other issues, UN officials agreed for the first time to consider carbon capture and storage projects for inclusion in the CDM. But they could not agree on how to tackle a potentially perverse incentive to up production of the greenhouse gas HFC-22 to earn carbon credits from reducing its by-product HFC-23. Support for including aviation and maritime emissions in a post-2012 agreement continues to look very iffy.

The aim at these UN meetings has always been to get as much as possible sorted before the ministers arrive so they can devote themselves to the tricky stuff. Despite progress in some areas, there is quite a plateful awaiting them after breakfast tomorrow. The language on and mix of ambition, emission reduction commitments, technology transfer and deforestation will somehow have to please them all.