Agenda item 3.2.5: Various approaches, including opportunities for using markets, to enhance the cost-effectiveness of, and to promote, mitigation actions, bearing in mind different circumstances of developed and developing countries
THE ONLY, REAL, VERIFIABLE, DURABLE, ATTRACTIVE, COMPREHENSIVE, BINDING MUST-DO
•The EU looks forward to the establishment at COP 17 in Durban of a new market-based mechanism for developing countries consisting of a common core set of rules and procedures at the international level.
The new market-based mechanism is essential to ensure that global action is sufficient to stay below a 2°C increase in temperatures and to enhance the cost-effectiveness of global mitigation action. The development of such a mechanism should complement existing flexible mechanisms under the Kyoto Protocol.
--EU, submission of September 23, 2011, AWG-LCA track, agenda item 3.2.5, italics added
•Comprehensive and well-functioning market mechanisms will assist countries to commit to, and achieve, ambitious mitigation objectives by facilitating least-cost and effective abatement.
Market mechanisms will also be an important means for mobilising long-term private sector finance to developing countries, and will play a critical role in transitioning developing countries to low emissions development. In addition, markets will provide incentives for the innovation and diffusion of low-carbon technologies.
All Parties to the Convention should have full access to expanded and improved market mechanisms to achieve their mitigation actions and commitments.
--Australia, submission of March 21, 2011, AWG-LCA track, agenda item 3.2.5, italics added
•Climate change is the epitome of greatest market failure so far. Using the market mechanism to redress its adverse impacts using the same market mechanism is thus a major cause of concern.
--Bangladesh, submission of March 21, 2011, AWG-LCA track, agenda item 3.2.5, italics added
•The issue of new market mechanisms is one of the critical elements why Bolivia rejected the draft Decision of Cancun. Bolivia did express its clear opposition to the establishment of new market mechanisms under the Convention at all times. In none of the contact groups there was a clear negopiation, much less even an acceptance, of these issues. Nevertheless the final draft decision makes it appeared as if this kind of agreement had been reached.
Mitigation must indeed be stimulated in all sectors of the economy. But if this results in “sectorial crediting” or in “NAMA crediting” it implies locking in the “business as usual” emissions, because all mitigation under the business as usual baseline in developing countries will result in offsets, that is to say, in permits to keep on emitting for developed countries.
Taking into account the damaging results of the existing 0.8 °C increase in global temperature, a 2°C increase is unacceptable. But even this target is far from being achieved with the existing Annex I pledges of 13-17% from 1990 levels, especially if it is taken into account that this reduction is in fact due to offsets, which represent the deviation of the business of usual of developing countries.
--Bolivia, submission of March 21, 2011, AWG-LCA track, agenda item 3.2.5, italics added
•AOSIS is of the view that any new mechanism to be elaborated should reflect key lessons learned from experience thus far with the Kyoto Protocol...The natural next step in the evolution of the Kyoto Protocol, and the climate change regime as a whole, is to create clear opportunities and financial incentives for developing country Parties to participate in international emissions trading if they so choose, on an economy-wide or sectoral basis.
The power generation sector is well-suited to a sectoral approach... The transport sector is another sector that may be amenable to inclusion...
The forestry sector, in contrast, would be far more problematic for inclusion, given the enormous data uncertainties in this sector, the large swings in annual emissions due to year-to-year variability in the climate, and the increasing likelihood of large-scale carbon stock losses due to the consequences of projected climate change itself
--AOSIS, submission of March 21, 2011, AWG-LCA track, agenda item 3.2.5
•New market-based mechanisms should allow wide spectrum of approaches, including project-based and sector-based approaches to fulfill its function as a whole... New market-based mechanisms should be flexible and efficient enough to be able to reflect specific circumstances of both developed and developing countries while ensuring environmental integrity.
--Japan, submission of March 21, 2011, AWG-LCA track, agenda item 3.2.5, italics added
•The entry into force of any new mechanism should follow the determination of the second commitment period of the Protocol, in order to preserve the legal nature of the carbon mechanisms under the Kyoto Protocol, provide confidence for the existing carbon markets and establish a strong demand for their continuity.
--Egypt, submission of March 21, 2011, AWG-LCA track, agenda item 3.2.5, italics added
•New Zealand believes progress on market mechanisms at COP 17 in Durban is vital to the global effort to reduce global greenhouse gas emissions... The future direction of the international framework is currently the key source of uncertainty in international carbon markets. In order to provide stability to the market, it is critical that Parties strongly indicate to the private sector at Durban that emissions reductions commitments will continue post 2012.
--New Zealand, submission of March 21, 2011, AWG-LCA track, agenda item 3.2.5, italics added
•It is important that the existing market-based mechanisms under the Kyoto Protocol, such as the CDM, continue to be maintained under the legal framework of the Kyoto Protocol in order to allow Annex I Parties to continue contributing to the sustainable development of developing country Parties
--Singapore, submission of March 21, 2011, AWG-LCA track, agenda item 3.2.5, italics added
•New and extended market mechanisms are a potentially important instrument to leverage private sector financing and generate scaled-up carbon market revenues for developing countries, while leaving flexibility and responsibility regarding implementation of mitigatikn policies and actions to national governments. Additionally, new market-based approaches can contribute to increasing technology transfer and reducing transaction costs, as compared to the CDM. New market-based mechanisms could complement existing mechanisms, in particular the CDM, for countries or segments of the economy with limited or dispersed potentials for applying these new mechanisms.
--USA, submission of March 21, 2011, AWG-LCA track, agenda item 3.2.5, italics added