First results

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It’s just after 9:30am. Negotiators in Bali have managed to secure provisional agreement on a “roadmap” to a post-2012 international climate agreement. At first glance, the document appears to be more a victory for the US and its supporters Japan, Canada and Australia than for the EU. But initial reactions are divided.

What no one can dispute is that the document clearly launches formal negotiations on a post-2012 climate treaty, to be completed by 2009.

Its proposed work plan to guide these negotiations is more ambiguous. Direct mention of the need for developed countries to cut their emissions by 25-40 per cent by 2020, relative to 1990 levels, and for global emissions to peak in the next 10-15 years and then be at least halved by 2050 have been deleted from the preamble.

A requirement for “much deeper cuts” by developed countries has been replaced by a requirement for “deep cuts” in global emissions.

The IPCC findings are still referenced but to see the actual numbers a footnote now directs you to the original IPCC report on mitigation. What does this mean? The formulation is clearly not as strong as the EU wanted – the numbers are not in the preamble but in a report footnoted in the preamble.

Nevertheless, Philip Clapp, president of the US National Environmental Trust insists the reference to the science is “very strong” because the numbers are directly linked to the text, even if at one step removed. The US had maintained it did not want any reference to specific emission reduction ranges.

On the other key issue of translating this long-term ambition into emission reduction goals for developed and developing countries, again the US appears to come out on top. Instead of asking developed countries simply for emission reduction commitments, the text offers them “nationally appropriate commitments or actions”, which could include reductions.

What does this mean? Some are saying inclusion of the words “nationally appropriate” effectively kills off the idea of internationally-agreed binding emission caps because decision-making power is shifted to the national arena. This is something that has been consistently advocated by the US.

Leaving the door open to “actions” instead of demanding commitments also seems to weaken the text. This is especially true when you see the same word used to describe potential developing country initiatives. The US had been arguing that the commitments of developed and major developing country emitters should come closer together.

Not everyone believes the text on emission reduction goals is weak. Mr Clapp says it’s a very open text but this is not necessarily a bad thing. While being acceptable to the current US administration, it also opens the door to a new administration taking on binding emission reduction targets.

Long-term ambitions and emission reduction commitments are not the only elements in the roadmap. The document also sets out work plans for adaptation, technology transfer and financing. Each of these is worked out in more detail in separate papers agreed by negotiators yesterday.

The overall roadmap and more detailed work plans must all still be approved by ministers. They are meeting as I write.

Brink of agreement

UN climate chief Yvo de Boer has said he thinks we are on the brink of agreement to a Bali roadmap. This does not imply an early finish. When pushed on the time issue by journalists desperate to squeeze in a bite to eat, Mr de Boer acknowledged talks were likely to carry on throughout the night.

His spokesman John Hay confirmed a nasty rumour that UN secretary general Ban Ki-Moon is due to return to Bali – he’s presently elsewhere – for a final address at 11am on Saturday morning. “He has to come back here anyway for a refuelling stop,” added Mr Hay but even he did not look like he believed this.

So we’re here for the night. It’s just after midnight and the press room is a lively place. During his last update, Mr de Boer provided a useful progress report. The primary outstanding issue remains how to word the long term climate ambitions and mitigation goals for developed and developing countries.

Conclusions on adaptation, financing and deforestation have all been agreed, save for some language linking them to mitigation. They join technology transfer, which was agreed last night. Details of a review of the Kyoto protocol have also been agreed.

This means it’s down to settling the ambition and mitigation text. Once that’s done, ministers will have to decide whether to launch formal negotiations and by when they want them to finish. They are expected to do so and set a 2009 end date. Assuming all this goes ahead as planned, what will the new agreement be called asked one journalist?

Mr de Boer added this to his to-do list. The document is currently entitled “consolidated text prepared by the co-facilitators”.

But all may not go as smoothly as this. At a press conference earlier in the day Munir Akram, chairman of the G77 and China group, told journalists developing countries were being threatened with trade sanctions to sign up to “commitments and obligations” on mitigation:

“The G77 has no obligation under the [UN] convention to accept binding targets,” he emphasised, “our measures will be voluntary, they’ll be national, and they’ll be in the context of sustainable development.”

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Mr Akram said developing countries had faced an uphill battle in Bali and it had proved “extremely difficult” to secure a commitment from developed countries, especially the US, to enhanced mitigation efforts in future. He stressed several times that the priority for developing countries was to see full implementation of the existing UN climate convention and Kyoto protocol, not a sidelining of these by a new agreement.

Mr de Boer responded he was not aware of anyone having been threatened, but emphasised that the issues at stake went to the very heart of economic policy and tensions were running high.

The G77 and China chairman predicted negotiations would continue for “a few hours at least”. That’s proved optimistic. Ministers in the small working group dedicated to ambition and mitigation were due to report back to the main body of ministers at midnight. In the meantime it’s 1:20am and there’s still no sign of them.

I heard a few minutes ago the final plenary session is provisionally planned for 8am. Some are calling even that optimistic. As the trickle of information has dried up, journalists – including me – have started hanging around the coffee bar outside the locked meeting room, occasionally mobbing someone when they emerge.

A few are considering going home to sleep. That seems a shame after a week of build-up. But not as incredible as one Dutch journalist who apparently flew home today because he figured he could report on the final details from behind his own desk.

Breakthrough?

Things are moving. The Indonesian presidency of the UN talks in Bali has tabled a compromise text on how future emission reduction commitments could be worded in a Bali roadmap. German environment minister Sigmar Gabriel is suddenly calling the US “flexible”. Journalists are looking busy.

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The proposed text, which ENDS has seen, drops the notorious 25-40 per cent cuts for developed countries but says global greenhouse gas emissions must peak in the next 10-15 years and be reduced to “very low levels, well below half of 2000 levels by 2050”. These are “facts” that should guide future action to combat climate change, it says.

All that’s left of the original statement that developed countries need to make “much deeper cuts” in the range of 25-40 per cent by 2020 is: “developed countries should continue to take the lead in combating climate change and its impacts”.

All this has to do with the preamble of the proposed Bali roadmap. Indonesia’s compromise text also suggests changes to the operative part of the paper. This includes removing the word “national” from a section calling for consideration of quantified emission reduction commitments by developed countries.

In the same section a call to consider the work of the Kyoto protocol’s working group has also been deleted.

What does all this mean? Before I speculate, I should warn you that things are shifting very quickly here now. Nevertheless, the draft compromise text as it stands, which sources say was well-received, indicates the US may now be open to including specific long-term global emission reduction goals in the preamble to a Bali roadmap.

This would be a significant victory for the EU. At the same time, the sticking point appears to be what distinction there should be between developed and developing countries and exactly what the former should commit to at this stage.

Deleting the word “national” from the section on developed country emission reduction commitments suggests the US may be sticking to its guns on the point that while long-term shared emission reduction goals can be agreed internationally, each nation should then be free to decide its own national goal and strategy to achieve it.

Removing reference to the Kyoto protocol adds to the idea that the US and its supporter(s) would want to be as free as possible to set their national goals.

But all this is speculation. A UNFCCC press conference that was due to start in 15 minutes has just been pushed back by an hour-and-a-half, which doesn’t bode well. Rumours abound that some ministers have already changed their flight schedules.

Meanwhile, there is also confusion over the status of discussions on the other building blocks of the roadmap, like deforestation. Contrary to reports earlier this morning, several delegates have since said forestry talks have not yet been concluded, although a final agreement along the lines of what I reported is “very close”.

One source of confusion is that this conference must produce two outputs for these building blocks: first, draft conclusions that must be approved by ministers in their final plenary session, and second, a decision on how to reference the building block in the overall Bali roadmap.

Clearly the two are linked, but UNFCCC chief Yvo de Boer suggested earlier today that draft conclusions on deforestation, adaptation and financing are pretty much ready and it is how they must be referenced in the overall roadmap that remains to be decided.

As I write, two working groups are meeting, each comprised of a small selection of minsters together representing all other parties. One group is finalising work on deforestation, adaptation and financing – technology transfer was fully concluded last night – and the other is working on the Bali roadmap. I’m hoping Mr Gabriel was right when he said “it’s going a bit better.”

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.

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.

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.