[A2k] TWN Bali Update: HIGHLIGHTS FROM THE SBSTA SESSION

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Title : TWN Bali News Update No.4
 Date : 07 December 2007

 Contents:
TWN BALI NEWS UPDATE  NO. 4

7 December 2007
Published by Third World Network
www.twnside.org.sg


HIGHLIGHTS FROM THE SBSTA SESSION



Nusa Dua, Bali, 6 Dec (Neth Dano) -- Diverse views of delegations emerged o=
n
various issues at the SBSTA (subsidiary body for scientific and
technological advice). Delegations were polarized on most items in the
agenda during the session on 4 December. The Chair established 4 Contact
Groups to attempt to arrive at some decisions.  The Contact Groups have bee=
n
meeting on 5 and 6 December and will report back to the SBSTA by next
Tuesday (11 December) for adoption of decisions.

Some highlights of the SBSTA discussions are summarized below.

Reducing Emissions from Deforestation in Developing Countries (REDD)

Many delegates who spoke at the meeting are looking forward to a
=B3comprehensive agreement on REDD=B2, but differed on how to move forward.
Portugal, on behalf of the EU, referred to the draft text for a decision on
REDD that came out from SBSTA-26 as a =B3good basis=B2 to move forward.
Switzerland also supported the use of the SBSTA-26 draft decision text,
which is heavily bracketed. Curiously, Canada described the document as
representing a =B3high degree of consensus=B2.

The EU and the US welcomed the launch of the World Bank=B9s Forest Carbon
Partnership Facility (FCPF) in Bali next week, as a mechanism to support
REDD.  The US said that the WB=B9s FCPF should support technical capacity
building and pilot activities in REDD. Papua New Guinea also mentioned the
FCPF, as well as the WB and GEF as potential sources of financing for REDD.

Developing country delegates, such as India, Paraguay, Brazil, Indonesia an=
d
Papua New Guinea, called for simple but reliable and dynamic mechanisms
supported by predictable and sufficient funding.  Brazil warned that REDD
should not be linked to the post-2012 Kyoto Protocol negotiations, and that
the main task of cutting GHG emissions by Annex 1 countries should not be
supplanted by REDD.  Australia, on the other hand, wanted to link the REDD
discussion with the post-2012 outcome.

Costa Rica called for a compensation regime that recognizes and provides
incentives for the early efforts of those developing countries that started
conserving their forests early.  Sri Lanka posited that the CDM could be an
incentive mechanism for countries sustainably managing their forests.
Malaysia said that the nature of the CDM gives favorable terms for polluter=
s
to gain credits, at the disadvantage of parties using clean technologies.
It said that this scheme should be avoided in the REDD. Gabon, speaking on
behalf of the Congo Basin countries, noted that REDD currently does not
protect countries and regions with low deforestation rates from
deforestation.  It suggested the establishment of financial mechanism to
support efforts in forests conservation by countries.

Several countries stressed the need for capacity building in REDD,
especially in monitoring and remote sensing. Korea noted the need to
exchange relevant information, experiences and policy measures on positive
market-based incentives to provide sustainable financial resources.
Switzerland also talked about effective incentives for sustainable forest
protection and enforcement of policies, in order to mobilize effective
financing.

A number of delegates called for the importance of conducting pilot
activities in REDD until 2012.  South Korea mentioned its MOA with Indonesi=
a
on a CDM project in forestry, while Switzerland talked about its experience
in Africa on national capacity building in REDD and reforestation and
strengthening national forest policies.

Liberia stressed that REDD should depend on national circumstances and must
respect national sovereignty.  It proposed the adoption of a Code of Conduc=
t
or Ethics in dealing with communities in REDD. Sri Lanka flagged the need t=
o
tap traditional knowledge in sustainable forest management.  IUCN mentioned
the importance of local participation in REDD, while CAN-International
called for the protection of local land rights. CAN-I said that REDD should
be part of the post-2012 negotiations and the Bali Mandate should include
incentives for REDD.

The Contact Group for REDD will be co-chaired by Norway and Argentina.

Establishment of Experts Group on Adaptation under the Nairobi Program of
Work

All delegates who spoke supported the Nairobi Program of Work (NPW), but
contentious views rose on the proposal to establish an Experts Group on
Adaptation.

EU, Japan and the US were united in voicing their reservations on the
establishment of an Experts Group on Adaptation.  EU said that it does not
see any additional value at this point, but this may be considered in the
second period of the NPW. Japan stated that it might overlap with other
groups of expert that already exists, and that it might be considered in
2010.  US thinks that its mandate and tasks are too broad and will not
contribute in improving the NPW.

On the other hand, the developing countries were one in stressing the
importance of establishing an Experts Group on Adaptation. Jamaica said tha=
t
a formal and structured body will provide focus on adaptation in the NPW.
Tuvalu noted that the body will provide the scientific and technological
guidance on adaptation in the NPW. Malaysia noted that more time should be
devoted for the implementation of the NPW, operationalizing the Adaptation
Fund and immediate action.

A Contact Group led by Jamaica and New Zealand, was established on this
agenda item.

Report of the IPCC Assessment Report-4 (AR-4)

Delegates who spoke welcomed the scientific findings and recommendations of
the AR-4. Most interventions stated that the findings should serve as the
basis for the post-2012 negotiations, while others said that they should be
considered in decisions at the UNFCCC and Kyoto. EU, supported by Russia,
suggested that the IPCC provides updates to COP-15 by mid-2009.

Many countries again stressed the need for increased capacity-building.
Malaysia noted the need for more sharing of research and experiences in
climate modeling. China talked about the need for actions on technology
transfer and the need for more scientific research to reduce uncertainties.
Saudi Arabia questioned the treatment of AR-4 as a separate agenda item and
noted that there are already 4 separate items in the agenda relating to
AR-4.

An informal consultation to be led by Sudan and Belgium was established for
this agenda item.

Methodological Issues Under the Kyoto Protocol

1. Implications of the establishment of new HCFC-22 facilities seeking to
obtain CER for the destruction of HCFC-23

The EU opposed the crediting of CER for the destruction of HCFC-23 because
of its potential impacts to the carbon market, and instead proposed the
consideration of alternative financing for this purpose.  Japan indirectly
supported this stance by citing that HCFC-22 production is going on even
without CER for the destruction of HCFC-23.

China noted that there has been no agreement on this matter for years due t=
o
the =B3lack of sincerity=B2 from some delegations, and cited China=B9s effo=
rts to
phase out HCFC-23 by 2030, 10 years ahead of the deadline. Senegal supporte=
d
China=B9s position.

Argentina proposed to study the current demand and supply of HCFC-22 and
-23, in view of the observation that market and competition do not improve
the demand for HCFC-23 which would require external support and incentives.

An informal consultation led by Chile and Austria was established to addres=
s
this item.

2.  Implications of possible changes to the limit for small-scale
afforestation and reforestation CDM (AR-CDM) project activities

Most developing countries wanted to adjust the limit for small-scale AR-CDM=
,
from the current 8,000 tons of carbon per year to rates ranging from 32,000
to 40,000 tons of carbon per year.  Delegates noted the potential benefits
of such adjustment to local communities and the direct positive impacts on
rural development. Increasing the limits of AR-CDM would provide incentives
for such projects and would benefit more communities.

On the other hand, countries like Tuvalu did not see the need for such
adjustment and called for studies on actual benefits to poor communities
under the CDM.  Paraguay suggested to open windows and simpler modalities
that would be more accessible for poor communities. Japan call for
adjustments in limits of AR-CDM based on studies and actual experiences.
Indonesia asked for more elaboration of the socio-economic impacts of
AR-CDM. India called for the retention of the current limits.

Informal consultations on this item are to be led by Chile and Austria.

3. Carbon Capture and Storage (CCS) in geological formations as CDM project
activities

Delegates were deeply divided on this issue.  Oil producing countries were
fully supportive of CCS as CDM, hailing it as a =B3decisive tool=B2 for
developing countries and a =B3tool for a sustainable energy future=B2, acco=
rding
to Kuwait. Saudi Arabia and the EU cited the special report of the IPCC on
CCS  which established its =B3great potential=B2 to reduce GHG emission.
Pakistan referred to CCS as a =B3most promising and effective technology=B2=
 for
developing countries especially if resources and technologies will be made
available.  It suggested the establishment of a =B3CCS Fund=B2.  The pro-CC=
S
countries assured that there are =B3adequate means available to address
environmental and safety questions=B2.

The EU is also supportive of CCS as CDM, but more cautious in saying that
appropriate safety and technical measures need to be put in place to avoid
seepage. Nigeria, a major oil producer, shared the EU=B9s cautious stance o=
n
CCS, adding the need to resolve legal, methodological and technical issues.
Norway attested to the technical soundness and safety of CCS and its
potential to facilitate energy efficiency.  It supported CCS in CDM =B3unde=
r
environmentally sound conditions=B2.  Korea acknowledged the potentials of
CCS, but said that there is not enough data on its risks, and suggested the
need to establish its additionality and an independent system of regulation=
.

On the other hand, the SIDS and other developing countries were united in
opposing CCS. Micronesia cited the =B3need to maintain the environmental
integrity of CDM=B2, while Brazil declared that CDM is not the appropriate
mechanism for CCS. Tuvalu said that CCS is a largely =B3unproven=B2 technol=
ogy.
SIDS reiterated the need to address in more details technical and legal
concerns.  India opposed CCS as CDM, and called for more studies to address
questions on seepage and transboundary impacts. Micronesia and Brazil raise=
d
the issue of liability in cases of problems from CCS.

A Contact Group on CCS, to be led by Austria and Chile, was established.

Article 2, para. 3 of the Kyoto Protocol
(relating to the obligation of Annex 1 countries to implement policies and
mechanisms to minimize the adverse effects, including adverse effects on
climate change, effects on international trade, and social, environmental
and economic impacts on other Parties especially developing countries)

Saudi Arabia strongly criticised the =B3market distortions=B2 in many Annex=
 1
countries that contradict the spirit of Art.2, para 3 of Kyoto.   Kuwait
supported this line. The EU called for the need to discuss the progress of
implementation of decisions in previous COP.  Japan said that this matter i=
s
already covered by other agenda items, especially in the SBI.

Due to lack of agreement on how to proceed, the SBSTA Chair decided to hold
a Consultation with interested Parties on the issue.

Methodological Issues Under the Convention:  Emissions from fuel used for
international aviation and maritime transport

Kuwait moved for the removal of this item in the agenda, citing that it is
only for review by SBSTA.  It clarified that only Annex 1 countries should
be covered by this agenda.

China noted that the principle of common but differentiated responsibility
has not been followed, stressing the historical responsibility of developed
countries to reduce emissions. It stated that the developed countries
control the aviation capacity and technology.

The SBSTA Chair will initiate a Consultation with Parties on this issue.

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