Painting by Numbers in the Panama Climate Talks

If one thinks of the ongoing climate negotiations as a paint-by-numbers picture, the Cancun Agreements outlined what to paint and the basic colors to use. In last week’s Panama talks, Parties continued painting with various hues that, once complete, will hopefully create a detailed and beautiful picture. The painting does not yet have a frame, however, as the Parties still have to decide on what kind of “agreed outcome” the negotiations are leading to – i.e., a legally binding agreement or a non-binding one. At the same time the Kyoto Protocol’s first commitment period ends in 2012, which adds complexity but also opportunity to the picture. In Panama, detailed work on the core issues of Cancun picked up where the last negotiations left off, with countries getting down to the technical work of further developing decisions on a range of issues, including around transparency, finance, carbon markets, adaptation, technology, and legal form. Parties also began developing the modalities of the 2013-2015 periodic review and discussing what it should cover. In many ways this will be the work of Durban, a rulemaking Conference of the Parties where the technical implementation details matter greatly.

Transparency

Hours were spent on the details of what information should be included in biennial reports and how they should be reviewed internationally. These reports and reviews are the foundation for a transparent regime. Similarly central are the Cancun pledges, which are missing many details and need to be clarified. There was a strong call for developed countries to adopt common accounting standards, and a strong push for developing countries to provide more information on their pledges, particularly on the underlying assumptions (e.g., quantifying business-as-usual, baselines, and the metrics used to calculate emission reduction numbers).

Finance

Work on climate finance included defining the functions of the Standing Committee, which seeks to address how financial flows complement each other and are coordinated, as well as the identification of sources of long-term finance. Both are relevant to ongoing parallel discussions on the Green Climate Fund. Differing positions flared when it came to the issue of medium- and long-term finance. While the fast-start funding pledged in Copenhagen and Cancun is being delivered to some extent, it only goes to 2012. Developed countries have committed to mobilize long-term finance from 2012 to 2020, but it is unclear how the post-2012 gap will be filled and what kind of roadmap countries can put in place to meet the $100 billion goal.

Carbon Markets

Another key question in the post-2012 regime is the role of carbon markets – how the Clean Development Mechanism (CDM) moves forward, whether there are any new market mechanisms, and what role the UNFCCC will play in the future. A separate group focused on these questions, particularly those of new mechanisms with new proposals from the European Union and Japan. There is a wide range of views, with some Parties not wishing even to discussing new mechanisms and others already developing them.

Details for both the Adaptation Framework and the Technology Mechanism were also being discussed with seemingly less politics surrounding them.

Legal Form

At the same time, in the hallways and in the plenaries, Parties continued actively discussing the picture frame – i.e., the future of the Kyoto Protocol and the legal form of a new agreement. The Bali Action Plan includes a decision for an “agreed outcome”, not specifying whether that outcome is legally binding. Clarifications of that point were included in draft text both in Copenhagen and Cancun but were ultimately dropped. The EU is willing to consider placing its Cancun pledges into the Kyoto Protocol, but only if there is an agreement, mandate, or roadmap that specifies how and when other countries’ pledges will be placed into a legally binding agreement. This debate will likely continue into the final morning of Durban due to its political nature.

Regarding legal form, one can envision three scenarios:

1. Scenario One includes a decision to create a second commitment period of the Kyoto Protocol and adopt its rules, combined with finalizing the decisions from the Cancun Agreements and a mandate or decision to adopt a legally binding instrument with legally binding commitments (this could be an amendment to the Convention or a new instrument) by a certain date, e.g., 2015 when the periodic science review will assess implementation against the 2°C goal included in the Cancun Agreements.
2. Scenario Two stops short of a clear decision on the second commitment period and is more of a “fudge”, i.e., perhaps a political declaration. The set of Cancun decisions still move forward but the mandate for a legally binding instrument by 2015 with legally binding commitments is also a fudge, perhaps with no date or no specific use of the words “legal” or “binding”.
3. Scenario Three is also in the cards, whereby a fudge on Kyoto makes further agreement on the Cancun decisions impossible and a mandate impossible too. Some, such as the Africa Group and AOSIS, have placed great focus on a second commitment period of the Kyoto Protocol, and if that is not delivered could decide to block all progress and decisions.

Durban Calling

The situation is fluid right now. The road to COP 17 in Durban will be a delicate balancing act. There was good spirit at the start of Panama, with countries working hard to paint by the numbers and decide on the frame. But difficulties emerged when some countries felt that various colors weren’t filling in properly or that clarity on Kyoto’s future was missing. Ministers will meet once more later in October before gathering in Durban. Whether they can create a complete and beautiful picture with a solid frame by the end of COP 17 is still an open question.