Submission
This submission is made by Samoa on behalf of the Alliance of Small Island States (AOSIS). It provides comments on the Note by the President of COP6 of 23 November 2000, attached to decision 1/CP.6, and replaces earlier written comments by AOSIS on the President’s Note. However, it should be considered as building upon AOSIS submissions on related topics. AOSIS believes that the President’s Note provides a logical basis to commence negotiations on a political compromise at the resumed COP6. It wishes to urge Parties to reach a swift compromise on the political issues addressed in the President’s Note that remain unresolved, in a manner that promotes the Protocol’s environmental integrity. AOSIS also wishes to stress the need to finalize the technical discussions on the draft decisions before the end of the resumed COP6. This submission follows the structure of the President’s Note. AOSIS reserves the right to make further submissions, in particular, on technical issues. Box A. Capacity building, technology transfer, implementation of Articles 4.8/4.9; 3.14, finance Funding mechanisms and guidance to the GEF AOSIS supports the establishment of a specific fund for adaptation with special consideration to be given to the needs of LDCs and SIDS. AOSIS also supports separate funding arrangements for the funding of technology transfer and capacity building. Adaptation fund AOSIS believes this fund should be established under the COP/MOP. It should be managed by an existing institution that can demonstrate a high level of responsiveness to and knowledge of the needs of developing countries, in particular the LDCs and SIDS amongst them, capable of operating efficiently and effectively. The fund shall support all kinds of adaptation activities to climate change in developing countries that are particularly vulnerable to the adverse impacts of climate change in accordance with national priorities identified by these parties and programmes, priorities and eligibility criteria determined by the COP/MOP. Such activities may include stage III adaptation activities. AOSIS strongly believes that finance for the adaptation fund shall be generated by the share of the proceeds from the clean development mechanism (CDM), joint implementation (JI) and emissions trading (ET), including in the form of a transfer of [x] per cent of the initial assigned amount of each Annex II Party to the adaptation fund, as well as additional voluntary contributions from Annex II Parties and other sources. Such contributions shall in no manner diminish the legally binding obligations of Annex II Parties under the Convention to provide new and additional funding to the Convention’s financial mechanism for developing country Parties vulnerable to the adverse impacts of climate change, especially SIDS. AOSIS proposes that the share of the proceeds for CDM/JI is initially to be set at [not less than 10%] and shall be periodically reviewed and adjusted by the COP/MOP on the basis of the amount of funding provided and the impact of the share of the proceeds on the use of the mechanisms. The first review shall take place five years after the interim operation of the CDM (see Box B). Reviews shall not have retroactive effect. AOSIS strongly opposes any prioritisation of adaptation activities related to deforestation, land degradation and desertification over other types of adaptation activities. Funding arrangements for Technology Transfer and Capacity Building AOSIS supports the concept of specific, concrete funding arrangements to meet developing country Parties’ needs relating to capacity building and technology transfer. AOSIS believes the existing legally binding commitments of Annex II Parties to fund developing country Parties needs for technology transfer and capacity-building should be fully met without being made conditional upon the entry into force of the Kyoto Protocol and the operation of its mechanisms. AOSIS believes that any new funding arrangements to be established to meet developing country Parties’ technology transfer, technical support and capacity building needs should be established under the COP and operate in accordance with COP guidance. New funding arrangements shall be managed by an existing institution that can demonstrate a high level of responsiveness to and knowledge of the needs of developing countries in particular the LDCs and SIDS amongst them, and which is capable of operating efficiently and effectively. Capacity Building In view of their particular vulnerabilities, AOSIS believe the capacity-building needs of LDCs and SIDS should receive priority in the related draft decisions. Adverse effects of Climate Change AOSIS strongly believes that the legally binding obligations of Annex II Parties under the Convention to provide funding to the Convention’s financial mechanism for developing country Parties vulnerable to the adverse impacts of climate change are additional to the funding provided by those Parties to the adaptation fund. Box B. Mechanisms COP/MOP <-> Executive Board AOSIS strongly supports the President’s suggested formulation for the composition of the executive board as well as the other provisions in this section. In relation to institutions for a prompt start, AOSIS believes the CDM can only work effectively if the institutional infrastructure necessary for securing environmental integrity of CDM projects is in place. Thus, in addition to the executive board, AOSIS believes institutional arrangements must also be established to ensure the effective verification, monitoring and certification of CDM project activities, as well as the transfer of the share of proceeds to the Adaptation Fund (see also comments on Box A). Eligibility of project activities under the CDM AOSIS supports the speedy development of expedited procedures for environmentally sound projects covering small-scale renewable energy and energy efficiency. Priority action by the Executive Board should be taken to stimulate early development of such projects. A clear framework for developing consistent, comparable and credible baselines to determine the additionality of CDM projects must be adopted as part of the prompt start of the CDM. AOSIS welcomes the widespread recognition at The Hague that Annex I Parties will refrain from using nuclear facilities for generating certified emission reductions under the CDM. AOSIS also believes the inclusion of projects relating to land use, land use change and forestry can only be decided by the COP once outstanding scientific, methodological and policy issues have been resolved (see also comments on Box C). Supplementarity AOSIS supports the examination by the compliance system of information submitted by Annex I Parties indicating whether demonstrable progress has been made by each of them to implement domestic action by 2005, and that Annex I Parties shall meet their emission commitments primarily through domestic action. Trading modalities and liability Criteria relating to Party level participation are a major component in guaranteeing the environmental integrity of the system. Accordingly, all Annex I Parties must demonstrate to the compliance system that their participation would not undermine the environmental credibility of all three mechanisms prior to their participation in the mechanisms. At a minimum, the compliance system must provide affirmation that a Party has ratified the Protocol, is bound by the compliance system and meets all relevant reporting requirements before it can participate in the mechanisms. The portion of the assigned amount to be retained for each commitment period in a commitment period reserve shall not be less than 98%. The figure of 70% is too low and endangers the environmental integrity of the system. Promotion of geographic distribution of CDM projects Special attention should be given to the capacity-building for LDCs and for SIDS as these countries are often marginalized in the global economy, due to limited resource base, economies of scale and remoteness. AOSIS supports exempting CDM projects in LDCs and SIDS from the share of proceeds for adaptation. Procedures for Joint Implementation Criteria relating to Party level participation are a major component in guaranteeing the environmental integrity of the system, in particular for JI. Participation conditions for Parties, as mentioned under trading modalities above, must be demonstrably proven to the compliance system as having been met prior to participation in JI projects. AOSIS support exclusion of nuclear and, pending further work, LULUCF projects from JI. Box C. Land-use, Land-use change and forestry Definitions for afforestation, reforestation and deforestation under Article 3.3 AOSIS supports the biome approach to definitions of ARD under Article 3.3 and strongly believes that Parties should decide to establish a process to investigate the inclusion of biome-specific forest definitions. AOSIS has, furthermore, provided detailed technical proposals for definitions and will introduce these, as appropriate in technical discussions. Additional activities and accounting under Article 3.4 Accounting for the first commitment period AOSIS strongly supports the exclusion of additional activities under Article 3.4 for the first commitment period. Should negotiations move towards a discussion of additional activities under 3.4 for the first commitment period, AOSIS would call for a thorough assessment of the consequences of specific country-by-country caps to address issues related to scale, measurement uncertainties, factoring out pre1990 activities and indirect human-induced effects. Accounting for the second commitment period AOSIS believes a scientific process should be set up under the IPCC to assess practicable methodologies to factor out indirect human-induced effects, natural effects and effects resulting from pre-1990 activities and to address measurement uncertainties. AOSIS strongly supports the view that modalities, rules and guidelines for the inclusion and accounting of activities under Article 3.4 for the second and subsequent commitment period should be decided as part of the second commitment period negotiations. LULUCF under the Clean Development Mechanism AOSIS strongly believes that Parties should postpone the decision on the inclusion of LULUCF activities until outstanding scientific, methodological and policy issues have been resolved. In preparation for this decision, SBSTA, aided, if necessary, by the IPCC, should carry out further work to address accounting modalities and definitions, the issue of permanence, social and environmental effects, leakage, additionality, measurement uncertainty and scale. Box D. Policies and Measures, Compliance, Accounting, Reporting and Review Policies and measures AOSIS supports the proposal to invite parties to make submissions on the definition of demonstrable progress and the need for guidelines for reporting on this progress (Article 3.2 of the Kyoto Protocol) to be adopted by COP-7. Compliance AOSIS strongly supports continued negotiations on Procedures and Mechanisms for Compliance under the Kyoto Protocol on the basis of the text developed by the Joint Working Group on Compliance contained in document FCCC/2000/CRP.15/Rev 2, and addresses these responses to the President’s Note on the assumption that the choices and design principles that follow should provide the basis for completing negotiations on that text.
Compliance: consequences of non-compliance with Article 3.1 AOSIS believes that legally binding consequences that are likely both to deter and to provide a means of remediating the environmental effects of non-compliance will be an essential tool in responding to noncompliance with Article 3.1 of the Protocol. Such consequences must be designed in conjunction with mechanisms for preventing particular kinds of non-compliance, such as commitment period reserves, and rigorous rules and procedures for designing and verifying project performance under JI and the CDM. While a penalty in the form of a deduction of tonnes from a subsequent commitment period assigned amount can provide a deterrent and a means of continuing to hold an Annex I Party accountable for its ongoing obligations, such a deduction cannot alone guarantee environmental integrity. Failure to comply with commitments in a first commitment period justifies greater international scrutiny of an Annex I Party’s performance in a subsequent commitment period, through a Compliance Action Plan. For the deduction of tonnes to be an acceptable penalty, it must be: - Accompanied by an agreement by the COP to negotiate, adopt and bring into force emissions reductions commitments for subsequent commitment periods prior to the conclusion of the first commitment period; - Subject to a penalty rate at a high level that will partly serve as an interest rate for the delays in the achievement of emission commitments, and as an incentive to comply as quickly as possible. Therefore, AOSIS would join in a consensus to support giving the authority to the enforcement branch to impose, in response to a the non-compliance of an Annex I Party with its commitments under Article 3.1, the following consequences in combination: - Deduction of tonnes from the assigned amount of the non-complying Party in a subsequent commitment period at a penalty rate of [2][1.5] times the amount of tonnes emitted by that Party in excess of its assigned amount in the first commitment period. - Parties concerned shall, after determination of non-compliance, develop and submit to the enforcement branch for its approval a compliance action plan setting out inter alia how they propose to meet their commitments, on an annual basis in the subsequent commitment period. - Imposition of an additional penalty of 0.50 [0.25] times the remaining excess tonnes calculated annually for as long as that Party is in non-compliance as well as in relation to the amount with which the Party concerned has exceeded its target. Compliance: differentiation between Parties (in particular Annex I and non-Annex I) AOSIS agrees that the mandate of the enforcement branch shall be limited to agreed obligations of Annex I Parties only. There will be no eligibility requirements for non-Annex I Parties in respect of their participation in the CDM other than ratification of the Protocol and acceptance of the compliance system. There will be no differentiation between Annex I Parties and non-Annex I Parties in respect of the application of consequences by the facilitative branch. The facilitative branch, shall, in providing advice and assistance to Parties, respect the differing rights and obligations of Parties under the Protocol and the principle of common but differentiate responsibilities. It must recognize that not all the consequences that have been proposed can apply to Non-Annex I Parties in the same manner as it applies to Annex I Parties. Some of the consequences are not appropriate. For example it is proposed as a consequence that the facilitative branch can refer a case to the enforcement branch. This is totally inappropriate where non-Annex I Parties are concerned. Furthermore, financial resources under the Protocol’s financial mechanism are available, as a matter of right, to developing country Parties only. This cannot be altered in law or in practice through the mandate of the compliance system. Compliance: relationship between the COP/MOP and the Compliance Committee AOSIS believes that Parties decide that the role of the COP/MOP should be limited to giving general policy guidance to the Compliance Committee and that it should not intervene in individual cases. AOSIS agrees that there is no need for an appeals procedure. Mandates enforcement branch and facilitative branch AOSIS believes that the mandate of the enforcement branch covers quantitative emission commitments, reporting requirements and eligibility requirements under Articles 5.1, 6, 7.1, 12 (only Annex I Parties) and 17. The facilitative branch shall be responsible for providing advice and facilitation to parties in implementing the Kyoto Protocol and promoting compliance of Parties with their commitments under the Protocol, taking into account the principle of common but differentiated responsibilities and capabilities of Parties included in Annex I and Parties not included in Annex I. Compliance: composition of the Compliance Committee AOSIS supports the President’s proposal on composition, that the Compliance Committee membership shall reflect current UNFCCC practices (equitable geographical representation of the five UN regional groups, taking into account interest groups as reflected by the current practice in the UNFCCC Bureau). AOSIS does not, however, support the use of a double majority voting rule within either branch, as this would in effect provide Annex-based groupings of members from Parties with a veto, and would promote partisan politics contrary to the spirit of the individual and expert capacities in which the members are asked to serve. Compliance: Legal basis, the form of adoption of the final result on compliance AOSIS supports the adoption and ratification of a legally binding agreement that would bring into force procedures and mechanisms authorized to impose binding consequences that would supplement the Kyoto Protocol prior to its entry into force.
