Clayton Utz Insights

22 December 2011

COP 17 and beyond - the challenges posed by the Durban Platform

By Brendan Bateman and Alison Packham.

Key Points:

The Durban Platform has set the challenge for the international community and mapped out the future of global climate change action, at least as far as 2020.

COP17/CMP7 in Durban, the Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) and the signatories to the Kyoto Protocol, resulted in over 36 decisions, including the key outcome, the Durban Platform.

That the US, China, India and Brazil, the world’s largest emitters, agreed to the Durban Platform, which sets a roadmap for the negotiation, agreement and commencement of the successor to the Kyoto Protocol, is labelled a “significant” or “landmark decision” by some and “a face-saver” and “major disappointment" by others.

It's significant because there is now a foundation for negotiating a legally binding instrument by 2020 to tackle climate change that binds both developed and developing countries, disappointing because according to scientific evidence it may not be enough to avert dangerous and irreversible levels of global warming.

International climate negotiations are tense and the issues complex – the disparity between developed and developing nations in terms of capacity, capability and consequently levels of ambition, the responsibilities of large historical emitters versus current large emitters as well as the reality of the scientific evidence are just a few of the issues with which the UNFCCC attempts to grapple.

Effective global action requires consensus decisions that are widely supported by all stakeholders, with mitigation and adaptation commitments that are evidence based. That parties to the UNFCCC made an agreement to agree to a successor to the Kyoto Protocol is a milestone for UNFCCC negotiations, and one that sets a roadmap for the negotiations, and challenges, ahead.

The Durban Platform

Parties negotiated a day and a half over time to agree to “develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all parties.” Partly due to resistance from India and the US, the form and content of this future legally binding agreement have not been set; whether it will be another protocol, a treaty or take some other form, whether it will sets binding targets or requires voluntary pledges are the details to be explored over the next four years.

The roadmap outlined by the Durban Platform includes:

Ad Hoc Working Group on the Durban Platform for Enhanced Action – this working group will commence work in 2012 and complete its work “as soon as possible”, but no later than 2015 for its adoption at COP21 and to come into effect in 2020.

Kyoto Protocol second commitment period – In the meantime, the Kyoto Protocol, due to expire on 31 December 2012, now has life until 31 December 2017 or 2020, depending on the progress of the negotiation of its successor. Signatories did not commit to further targets under Kyoto, but rather, parties will make national voluntary pledges during the second commitment period. Annex 1 parties (developed nations) are to submit their quantified emission limitation reduction objectives (QELROs) by May 2012. This means that a new level of ambition in the form of legally binding targets may not eventuate until 2020.

Green Climate Fund

An agreement was reached as to the design of the GCF, which was designated the operating entity of the financial mechanism of the Convention. It is a $100bn/year by 2020 to fund to support the developing nations and the least developed nations achieve adaptation and mitigation measures. The major contention is that the source of the funding for the GCF is unclear. A proposal to generate capital from international shipping levies was opposed and the fund will instead distribute money by loans and grants.

Future challenges for UNFCCC negotiations

Durban sets the tone, and a goal, for the future UNFCCC negotiations. But these will not be without their challenges.

The science: According to current science, voluntary pledges under the Kyoto Protocol’s second commitment period are insufficient to stave off predicted dangerous and irreversible levels of global warming. The Intergovernmental Panel on Climate Change says that a temperature increase limited to 1.5 to 2 degrees Celsius with a peak of emissions by 2020 is necessary to keep global warming under control. Under current UNFCCC commitment levels, a change of 4 degrees Celsius is likely.

Commitment hiatus: The delay in the commencement of a successor agreement to the Kyoto Protocol and its second commitment period comprising national voluntary pledges means that it is probable that we will not see emission targets set until 2020, if at all. That Canada, Japan and Russia now stand with the US outside the umbrella of the Kyoto Protocol’s second commitment period, having withdrawn to avoid penalties for failing to meet their targets to reduce overall emissions, raises further concerns about international commitment levels.

Legal form: in order for consensus to be reached on the Durban Platform, the description of the new UNFCCC instrument was crafted in such a way as to be acceptable to all parties, particularly to India, who insisted on the agreed, watered-down terminology. This drafting may compromise the effectiveness of the successor agreement.

The fine print: It will be a monumental challenge to design an instrument that reflects and supports different kinds of effort and ambition in a common framework. Agreeing on targets will also be difficult and will involve governments factoring in responsibility for historical emissions, current heavy emitters, emission cuts to date, populations, capacity and capabilities (eg. those nations with forests, those hit more heavily by climate change, those with economic or geographic constraints on using more efficient power and those whose priorities lie with eradicating poverty). The EU indicated at Durban that it is ready to raise its level of ambition by 30%, but that it will not do this alone.

US commitment: That the US agreed to the Durban Platform is significant, especially considering its refusal to sign Kyoto. The US electoral cycle is expected to influence how the negotiations on the Durban Platform pan out, with a Republican government expected to favour voluntary pledges over binding targets.

Finance: Although Durban has established a new GCF, the source of this finance is unknown.

Effect on carbon markets and Australian climate change policy

Since agreement was reached on the Durban Platform, carbon prices have been slowly climbing from a record low. While the Durban Platform failed to deliver certainty on targets, it has demonstrated to the market that the global community is committed to reducing the amount of carbon in the global economy. It really is a question of the global community's resolve in delivering those reductions, and the time in which this is to occur.

Carbon markets have received a further boost from the announcement of China’s five year plan – which sets China’s first carbon intensity goal, aiming to bring emissions down by 17% as part of its overall pledge to cut emissions intensity by 40-45% by 2020 – and its intention to have an emissions trading scheme by 2015. California's emissions trading scheme will also commence shortly.

The boost to the international carbon market should support Australia’s Clean Energy Future Legislative Package. China’s five and 15 year plans, the targets proposed by the EU, plus the global agreement to reach a legally binding commitment to implement the objectives of the UNFCCC, indicate that Australia is participating in an international transition to renewable energy sources and participation in carbon markets.

 

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For more information, contact...
Email: Brendan Bateman, Partner
Tel: +61 2 9353 4224
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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.
Brendan Bateman
Brendan Bateman