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Trading Carbon : December - January 2011
S06 DURBAN ROUNDTABLE private sector to prepare for a low-carbon future. More and more companies are recognising that, even in the face of government inaction. But to mobilise investments and kick-start research and development at the scale this climate crisis requires, the private sector needs the long- term policy signals that a robust UN agreement, and concerted national level policies, can best deliver. JP: The private sector needs to have its voice heard so it can show what it has faced doing business. So that people understand the barriers, diffic ulties and risks. GP: Provide a definite demand for the commodities that we create. Be they offsets or the product of NAMAs, if there is a certain demand, the private sector can and will finance the projects and programmes. Alongside this certainty of demand, we need increased certainty that the CDM Dec 2011/Jan 2012 www.pointcarbon.com Exec utive Board, or whatever national or supra-national body controls the process, will deliver the commodities if we, the private sector, have fulfilled our side of the bargain. FL: The single most important thing that can be done to promote private sector involvement in anything is to provide clarity and stability. Carbon markets and climate finance are no different, (they need) long-term goals with gradually increasing coverage/commitments, post-2012 offsetting r ules, a clear roadmap for the fungibility of credits from existing and emerging mechanisms. These are ultimately more important than cash, especially since cash hasn't been forthcoming either. Q: What are the realistic outcomes for Durban? LA: Decision on a time-bound mandate to finalise a legally-binding instr ument, a (CDM) review process, clear MRV r ules, an indication on the fate of the Kyoto Protocol, a stocktake of progress made on finance, official acknowledgement of diversity of sources for REDD+ finance (which could later "infect" bigger finance discussions on capitalisation) and linking safeguards to REDD+ finance. JP: We should continue to see strong signals for the continuation of the CDM, more focus on technology transfer and technology centres, material pledges on fast- track finance and so see some functionality of the GCF, and start disc ussions on new market mechanisms and NAMAs. BL: A minima, an agreement on existing project mechanisms. There could also be an agreement on REDD and forestry, a sector where emission reductions will be needed in all cases in the long r un. JH: It's still a good outcome if Durban makes progress on the institutional arrangements for implementing the Canc un Agreements, such as setting up the GCF, in tandem with launching a work plan for 2012 that continues forward momentum toward an eventual new agreement. FL: That's a very hard question to answer, especially because the limits on Durban relate more to political will than practical barriers. Limited commitment to a second Kyoto protocol, a roadmap for future market development, specific progress on NAMAs and REDD and a usable framework to mobilise previously pledged funding are probably on the higher end of plausible expectations. The lower end looks a lot like what came out of the recent G20 summit, a pass-the-buck disc ussion and a lukewarm communique that rehashes "commitments" without anyone actually committing to do anything. GP: GCF approval; confirmation of the continuation of the CDM; perhaps a new roadmap to a 2015 decision point as c urrently proposed by the EU. Q: Is the UNFCCC process still the most important for um for discussing climate change issues? MW: It remains critical, but the need for decision making by consensus simply no longer works. At the same time, it must been seen as a process that sits alongside domestic legal developments, which, in terms of real regulatory action, has overtaken the UNFCCC process. In this regard, the UNFCCC process is likely to only be capable of delivering high-level policy goals and outcomes in the short The EU already has de facto accepted a second Kyoto period: the Climate and Energy package Pierre Ducret, CDC Climat