November 29, 2012

Doha Briefs: Hurdles


Day 3 of COP18 was punctuated with news of numerous hurdles hampering the progress of the search for solutions to combat climate change. Typical of most negotiations, there were parties who were keen on making it near impossible to agree on a number of issues. As you may all understand, one of the biggest issues at COP18 is putting in place a second commitment period for the Kyoto Protocol, which is to take effect from 1st January 2013. However, the biggest hurdle has been in sorting out the issue of the outstanding carbon emission permits (AAUs).
The Surplus Issue
If you are not familiar with carbon trading issues, you can take a slight detour and check out this primer on carbon emission permits and trade 
There are around 13 billion emission permits from the first commitment period of the Kyoto Protocol (2008 - 2012). In the quest for a second commitment period, the issue is what will happen to these permits.
Where it all came from: In the first commitment period, many country parties made weak pledges with regards to their targets for reducing carbon emissions. This meant that chances were these countries would have a surplus from carbon emission targets that they would then sell to countries that go past their emission targets. Poland and Russia are among the biggest holders of the surplus permits.
Spilling over:  If this surpluses spills over into the second commitment period of the Kyoto Protocol, then the danger lies in the fact that top carbon-emitting countries will focus on buying carbon emission permits without cutting down on their carbon emissions. This, coupled with the fact that the prices for the carbon emission permits have been dropping pretty fast, may render the Kyoto Protocol ineffective. Also, there lurks the grim possibility that the pledges for the second commitment period may be quite weak.
Therefore, this issue will be crucial in determining the outcome of the discussions on the second commitment period for the Kyoto Protocol.
Bits and Pieces
A round up of happenings with a bearing to COP18:
·      The US has just dropped a ‘carbon bomb’ by banning EU taxation of US airlines. The EU had come up with a policy to tax all airlines going through its airspace, but then it has suspended it for a year following the move by the US. The other side of the story from the US is that this will be an opportunity for the International Civil Aviation Organization (ICAO) – the UN agency in charge of aviation – to adopt a cross-sectoral approach of a carbon tax on airlines, which will also be a good source of finance for climate change mitigation and adaptation projects
·      Poland – renowned for obstructing negotiations at UNFCCC COP – will host COP19 in 2013. The world is now watching closely if Poland will lead by example in finding a solution to address climate change
·      There is progress in the establishment of the Climate Technology Centre and Network (CTCN) that will be hosted by UNEP. This is important because one of the key issues, with regards to climate change adaptation and mitigation, is the development and transfer of environmentally smart technologies (ESTs), with a special focus on developing countries

Conclusion
Despite these hurdles, negotiators at COP18 are working to resolve these issues, and we will sure keep you posted on any developments. See you in the next briefing!

Compiled by: Kennedy Liti Mbeva 

Note: The ECO newsletter was a useful research in compiling this update

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