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ECO NEWSLETTER

CLIMATE TALKS GENEVA - AUGUST 1994
NGO NEWSLETTER

INC 10

August 24, 1994
ISSUE #2

TABLE OF CONTENTS

1. Germany Tests the Waters
2. Two Cheers for Germany
3. Don't Forget Article 6!
4. Leman
5. Thought for the day
6. Sustainable Industries Speak Out
7. NGO Update
8. Consistency Outside the Financial Mechanism
9. Plenary
10. Working Group I
11. Working Group II
12. Financial Mechanisms New Report
13. Contacts
14. Credits

ECO has been published by Non-Governmental Environmental Groups at major international conferences since the Stockholm Environment Conference in 1972. This issue is produced cooperatively by groups attending the Climate Talks in Geneva,August, 1994.

Germany Tests the Water

Tuesday afternoon saw Germany present their protocol type 'Statement' at INC10. In reality it was a comprehensive position paper rather than a real protocol. Section A notes:

1. "Annex 1 Parties shall commit themselves at COP1 to stabilising their CO2 emissions -- individually or jointly -- by the year 2000 at 1990 levels.
2. Moreover it is necessary to undertake ambitious CO2 reduction in the period after 2000. At COP1, therefore, the Annex 1 Parties should commit themselves to reducing their CO2 emissions by the year (x) individually or jointly by (y)%."

Section B includes regulations on other greenhouse gases including methane, nitrous oxide and HFCs and CFCs. Another significant new element is an automobile efficiency standard of 5 litres per 100km for all new cars.

Hot issues like the carbon/energy tax are mentioned in the last section: "Annex 1 Parties shall I promote the increased use of economic instruments, for example charges such as levies, including a CO2/Energy tax "

The million dollar question, however, is "what are (x) and (y)?" A CO2 target and timetable are left "for other countries to decide" according to one delegate. Stabilisation, after more than four years of negotiations, cannot be regarded as "adequate". The stance on taxes indicates a surrender to the forthcoming EU debates on the tax, discussions that have in reality been at a standstill since Rio. Taxes are a critical tool to achieve any reduction targets.

The exclusion of numbers for 'x' and 'y' is due to internal friction within German government departments and in part to the current German 'responsibility' to head the EU.

In contrast to the indecision on the conference floor, however, CAN Europe and NRDC (USA), launched their own Berlin Protocol on Tuesday. "We're seeing a wait-and-see game between industrialised countries," said Lise Backer of CAN Europe, "this at least gets a protocol with timetables and commitments on the table". The Protocol calls for Annex 1 countries to commit themselves to a 20% reduction of CO2 emissions on 1990 levels by 2005. She went on to note that at least eight OECD countries already have national reduction targets similar or even stronger than those called for in the CAN protocol.

"This document really acts as a yardstick by which we can all judge future proposals" said Uwe Fritsche, a co-author from the Oko-Institut.

Dan Lashof of NRDC went on to explain that the mechanisms in the NGO Protocol had three key pillars -- an energy/CO2 tax; least cost planning procedures and transport policies. "An energy/CO2 tax will, in the longer term, come back onto the US agenda" he predicted, "but a revenue neutral tax shift has yet to be debated." On least cost planning, he gave several examples from the US at the State level, saying that California's energy efficiency and renewable energy programmes had created a net financial benefit in excess of US$ 2 billion. On transport, the US "has no policy yet -- but we believe a first step is that all new cars should have a minimum efficiency of at least 45 miles per gallon."

Two Cheers for Germany

The debate on strengthening the climate treaty was joined in earnest yesterday, with the German protocol outline being tabled (if in a very low-key way). Now it's time to fill in the (x) and (y) blanks, flesh out the outline into protocol language, and make sure the formal language is circulated to Parties before September 28th.

Discussion during the remainder of INC 10 on this issue should focus on elaborating concrete steps that can be agreed at COP 1 in Berlin (such as the Danish proposal for post-2000 emissions stabilization by Annex 1 countries, or the Dutch proposal for limits on HFCs and PFCs), as well as on the more ambitious measures that may take one or two years to negotiate.

As the old proverb says, "if we don't change direction, we're likely to end up where we're headed." The Danish delegate made that abundantly clear yesterday, citing International Energy Agency projections of a 50 percent increase in annual global CO2 emissions by 2010.

Despite the doubts by at least one delegation as to "the existence of certain greenhouse gases," the climate problem is real -- and growing. Now is the time for negotiators to build on the German opening by agreeing on the next steps forward on the road to Berlin.

Don't forget Article 6!

by Kalle Hesstvedt, Greenpeace International

NGO representatives at the negotiations are often approached by government officials urging them to "raise the public concern over this issue -- the political mandate for change simply does not exist". Government delegates inclined to such requests should not forget Article 6 in the Convention which commits the signatories to the convention to "promote and facilitate" the "development and implementation of educational and public awareness programmes on climate change and its effects".

Public information material does, however, exist. Here are some quotes from a report published earlier this year:

"In principle this peril has always been present. All extreme weather catastrophes are basically the result of human systems failing to adjust to 'possible' local weather patterns. Now this peril is being dramatically intensified. Human intervention in the natural climatic system could accelerate global climate change to an extent that society might no longer be able to adapt quickly enough to this development. Improbable as it seems, the repercussions would be immense"

"The urgent need to act does not stem from what we know, but from what we don't know. We must ask what can be done to reduce the risk, instead of hanging around on tenterhooks until scientists are in a position to prove to us what we had better stop doing to prevent the situation from getting any worse"

"The Swedish chemist Arrhenius pointed out as long ago as 1896 that an increase in the carbon dioxide content of the atmosphere must inevitably lead to global warming. Not much notice was taken of this I because scientists relied on an (incidentally never proven) principle that minor changes on the cause side always produced correspondingly minor changes on the effects side.

"In other words a bit more carbon dioxide can only lead to a slightly higher temperature. This only applies, however, to enclosed and linear systems, or more specifically, a few special cases of nature, but not to dynamic systems in which the effect of individual causes is considerably intensified by feedback effects and can under certain circumstances lead to very sudden temperature changes. More recent climatic models suggest that in one decade mean temperatures can vary by up to 10 degrees C"

These quotes should have come from a government education program, but in fact come from a publication by the reinsurance giant, Swiss Re, "Global Warming: Element of risk".

It is encouraging that parts of the powerful insurance industry seem to understand the scope of the problem. However, the audience is limited, and governments now need to follow suit and educate the broader public on the implications of climate change. Politicians cannot expect support in combating a problem if the public is ignorant of its seriousness, its causes and its solutions.

Leman

Leman apologises for his absence from the last issue of Eco. He has been on a tour of the Arabian peninsula, attempting to discover whether Kuwait actually exists or not, and set off late for the INC owing to a misunderstanding with the Saudi police over a sheep and a watermelon. Then, he arrived at the Palais des Nations only to discover that there were no parking facilities for his new 5-litre bicycle, despite all the extra-wide car spaces. He was so overwhelmed by the UN's failure to set an example that he was unable to put pen to paper.

His recovery, however, was aided by some singular news: apparently the UK delegation is under the impression that they are being unfairly treated as 'blockers' in the EU process. Many more countries, they feel, would follow the same line if their command of English were a little better. Leman therefore is pleased to offer lessons to some of these foreigners in the correct use of the God's own tongue, thus enabling them to be just as obstructive as the Brits. Unfortunately he is obliged to ask Swiss prices for his services -- governments should pay in gold bullion.

Finally, Leman has had word that a pilot phase for JI is being considered between the US and Japan. He understands that they intend to build power stations and plant forests in each other's countries.

Thought for the day

Should countries (e.g. Canada) be attempting to obtain credit for JI projects without being debited for projects like their governments' massive (e.g. $75m+) spend on oil and gas projects abroad (e.g. Jordan)?

Sustainable Industries Speak Out

Though a number of industry delegates at the 1992 Earth Summit supported the goals of the Framework Climate Convention, support from industry for taking aggressive action to reduce greenhouse gases (GHGs) at subsequent INCs has been missing.

This situation has changed. The Business Council for a Sustainable Energy Future is participating for the first time at an INC. The US based Council is an NGO comprised of business leaders from the energy efficiency, natural gas, renewable energy and electrical power generating industries who share a commitment to developing cost-effective, low or non-polluting energy resources.

The Council delegation's head to INC10 is Terry Thorn, Vice President of Enron Corp., a natural gas marketing, pipeline and electric power generation company with global operations, including US, UK, Germany, Argentina, the Philippines and Central America. They plan to launch their position paper on global climate change this evening.

As Business Council chairman Willis Wood, President and Chief Executive of Pacific Enterprises, a holding company that includes Southern California Gas, (the largest natural gas distribution company in the US), puts it: "We believe that the technologies and services represented by our member companies have proven themselves by delivering competitively priced energy while reducing the environmental costs associated with the consumption of energy."

The Council supports the goals of the Framework Convention, particularly the stabilisation of GHG emissions, and will be urging the INC to adopt six guiding principles for action. They are also calling on all stakeholders to work together on the climate issue.

The projects described in the Council's annual report outlines established power generating operations and demand side energy efficiency measures that already reduce the economic and environmental costs associated with them.

Business Council open panel discussion --

Conf. Room XX1 at 6.30 to 7.30 pm., August 24 (today).

NGO Update

In addition to those listed in the last Eco, the following are also attending INC10:

Karan Capoor -- EDF (USA); Bheki Maboyi -- ZERO (Zimbabwe); Ilya Popov -- Socio Ecological Union (Russia); Alden Meyer -- Union of Concerned Scientists; Atiq Rahman -- Bangladesh Centre for Advanced Studies; Jochen Rudholf -- Germanwatch; Carol Werner -- Env. and Energy Study Institute (USA); Richard Gendron -- CERCLE (Canada); Tomasz Terlecki -- Polish Ecological Club; Rusty Russell -- Conservation Law Foundation (USA); Kristina Sleenbock -- Greenpeace International; Tessa Robertson -- Greenpeace UK; Scott Hajost -- EDF; Hermann-J Tenhagen -- Climate Forum 95 (Germany); Liv Astrid Sverdrup -- Fridtjof Nansens Inst. (Norway); Martin Hession -- Imperial College London; Kilaparti Ramakrishna, Woods Hole Research Centre.

Consistency Outside the Financial Mechanism

by Bheki Maboyi, ZERO; Gurmit Singh; EPSM; Karan Capoor, EDF.

The INC Secretariat Document A/AC/237/71 on consistency between Convention policies and relevant activities outside the financial mechanism makes interesting reading.

It is futile to think that the anticipated $1billion over 3 years for global warming projects from the GEF will go far in solving the global warming problem. As the Secretariat document notes, all major actors: the CSD, the multilateral development banks, the bilateral development agencies, the private sector and NGOs, need to further the Convention's objective.

Nearly two billion people in the developing world have no access to electricity. Governments, as they seek to meet the basic needs of their people are looking for cost-effective ways to meet these needs, while meeting their commitment to protecting the atmosphere.

Over $100 billion a year will need to flow into the electric power sector in developing and emerging economies. About $10 billion will be available from all the multilateral development banks combined. Funding from bilateral development sources, and from private sources, will be hard pressed to come up with $ 90 billion a year. Clearly, there are insufficient funds to meet the entire need of developing countries, unless some changes occur.

Energy efficiency offers the major option to find a way out of this crisis. According to study after study, up to half of future energy generation can be replaced, or deferred, through aggressive energy efficiency measures. Renewable energy is also coming of age -- wind energy is now competitive with conventional sources in many parts of the world.

Yet, institutions such as the World Bank have been grossly negligent in their obligation to provide energy resources to developing country members at the truly least economic and environmental costs. According to a recent Greenpeace report released at this INC, only 1.4% of current loans are allocated for renewables and less than 1% for end-use energy efficiency.

Proven technologies to decrease energy intensity exist; proven methods of increasing energy efficiency exist. It is an appropriate role of this Convention to assist in assuming that the best possible technologies are available at affordable rates to developing countries so that they do not make the costly, energy-intensive, and over-consumptive mistakes of the North. If developing countries are to have a true choice in choosing a climate-friendly development path, then the North must make these technologies available and affordable for developing countries.

It is imperative that the Convention have a modality to ensure that the international financial institutions support the objectives of the treaty.

Specifically, the CoP should direct the other relevant international financial institutions to provide the following:

1. Detailed project life cycle analysis of emissions from projects.
2. Current loans for renewables and end-use energy efficiency are grossly inadequate. The CoP should ask that international institutions like the MDBs, export credit agencies, bilateral development agencies, project financiers, and multinational corporations investing in developing countries to set numerical targets for increasing the percentage of funds for energy efficiency investments and renewable resource projects in their investment portfolio (e.g. 50% of funds in energy sector for renewables and end-use efficiency by 2000, 80% by 2005 etc.). The CoP should also work with this wide array of institutions, public and private, in setting numerical targets for reducing emissions targets for their activities. (e.g. 50% reduction in life cycle emissions funded by 2000, 80% by 2005, and so on") Setting numerical targets with timetables for key institutions has the advantage that it will be possible to monitor progress toward incorporating climate considerations into mainstream activities.
3. Direct the operating entity of the financial mechanism to leverage all sources, private and public, in order to facilitate movement toward the numerical target.

In order to meet the incremental cost of such investment there needs to be more grant and concessional funding available through the financial mechanism of the Convention. This will be vital to meeting the goals of the Climate Convention.

Plenary

INC10's first plenary featured UNEP's Elizabeth Dowdeswell and the essential presentation by Professor Bolin. According to Bolin, "the analysis shows that the long-term changes are primarily dependent on the magnitude of cumulative emissions. It is interesting to note that within a decade from now the IPCC central scenarios 1992 a and b are in excess of any one of the stabilization profiles assuming a ceiling for atmospheric carbon dioxide concentration equal to or less than doubling."

Working Group I

Review of communications

The work of the Secretariat and the OECD group on the review of communications was positively received by delegations on Monday. The US and UK offered to be reviewed soon after the September 21 deadline and invited groups to visit and assess their plans. AOSIS, in its intervention, noted that the OECD paper was a source of "deep satisfaction" and bodes well for future work. They were pleased to see that Annex I countries are making a sincere effort to abide by their commitments.

Adequacy of Commitments

Germany, AOSIS and the Netherlands led the way in Tuesday's discussion in urging adoption of a protocol at COP 1 (see lead story). Denmark said it was prepared to commit to a 20% reduction in greenhouse gases by 2005 and called upon other Annex 1 countries to do the same.

Many other countries echoed their INC9 statements calling existing commitments inadequate to meet the objective of the FCCC. The common theme of these countries was the need for negotiations on a protocol(s) to begin at COP 1 and be completed by COP 3. Such protocol(s), it was agreed, should include targets and timetables as well as policies and measures. The Czech Republic, Poland and Russia also called for further action to be taken. Kenya and Uruguay, on the other hand, stated that existing commitments are inadequate and Kenya agreed with AOSIS that "targets and timetables" are essential for the convention to have any teeth.

Several other countries, however, staked out their "go slow" positions one more time. Statements by China, Saudi Arabia, Kuwait, Korea, Iran, Venezuela and Brazil all argued against further negotiations saying they felt existing commitments by developed countries must be met first before addressing the question of adequacy. Some of these countries may have been digging in their heels in response to suggestions by some delegates that certain non-Annex I countries should also adopt commitments under a strengthened treaty.

New Zealand's intervention received considerable support from other governments because it called specifically for a mechanism to be established by the INC which would elicit consultation from industry, particularly the transnationals. They cited the need especially for the auto, aircraft, fuel production, fertilizer and renewable energy industries to be involved since they all can have a major impact on greenhouse gas emissions. In the auto industry, for example, 14 companies produce more than 80% of the world's autos, according to NZ.

Working Group II

Working Group II got off to an auspicious start Monday afternoon, with a long dialog between M. El-Ashry, Chairman/CEO of the GEF and the delegations. El-Ashry was upbeat and positive in response to several questions on relations with convention secretariats, stating that they were generally good, despite some misunderstandings. He claimed that the GEF should be viewed as an implementing arm of the convention, based on a relationship of cooperation, not subsidiarity. He audaciously offered the GEF as a permanent entity for the financial mechanism as well as a coordinator or facilitator for any other operational entities that may be designated in the future. He also reported that a draft of the interim climate strategy has again been delayed, until January, which will allow scant opportunity for review before INC11. In response to an NGO intervention, he answered that the question of NGO observer status in the GEF Council had not been settled, indicating the next Council meeting may decide on the self-selection of 8 NGOs to participate.

On Tuesday morning, WGII approached eligibility criteria, policies and programme priorities for mitigation. India and Argentina proposed that priority be given to research and training activities for capacity building, which received general support. Canada produced a seven point draft of programme priorities to aim at, which was comprehensive enough to no longer be a priority list. Momentum was soon lost however by Saudi and Kuwaiti interventions to the effect that particular sectors should not be identified as priorities. Nevertheless, slow movement commenced in the afternoon session with Antigua and Barbuda proposing to amend a U.S. proposal which suggested one priority and three policies. Australia noted that the Canadian laundry list was in need of simplification and clarification, and Germany stepped up with a proposal to do just that. Tanzania proposed that priority be given to funding of mitigation activities for countries currently experiencing adverse effects of climate change, particularly least developed countries. India also proposed policy guidance to include a reference to Article 3.3 of the convention, which concerns the precautionary principle, though the U.S. objected to the inclusion of the phrase "precautionary principle". On all of these proposals, the chair requested interested delegations to consult informally and work out acceptable language to be submitted to the chair by Wednesday.

In what may have been one of the briefest consideration of an agenda item, WGII dealt with the tricky matter of adaptation in the final hour of the afternoon sessions. The INC did adopt closely negotiated language on this issue at INC9, which left the matter far from settled. Germany, on behalf of the EC, proposed a 3 stage approach to the matter. In the initial stage of adaptation, the foundation for further stages would be laid down through activities aimed at impact studies, identification of vulnerable areas, policy options for adaptation and appropriate capacity building. Stages 2 and 3 would build on these with further capacity building and adaptation measures. The Chairman welcomed this as laying the foundation for a possible breakthrough on the issue, and after a series of clarifications, asked the co-chair to lead informal consultations for a draft conclusion based on the German submissions.

Financial Mechanism -- New Report

The Woods Hole Research Center has released a report entitled "The Financial Mechanism of the Framework Convention on Climate Change: Operational Issues.", by Abram Chayes and Kilaparti Ramakrishna, addressing the key points of discussion at a recent conference on the financial mechanism held under the auspices of the WHRC. It also reprints several papers commissioned for the conference, and relevant INC/FCCC and GEF documents.

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ECO NEWSLETTER - GENEVA AUGUST 1994 (INC 10)

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