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Trading Carbon : December - January 2011
likely to be reliant on progress elsewhere, such as on Kyoto, but, having said that, the following items are on the agenda: l Nationally Appropriate Mitigation Actions (NAMAs) or commitments by developed country parties; l developing country NAMAs; l policy approaches and positive incentives on issues relating to REDD+ in developing countries; l cooperative sectoral approaches and sector-specific actions; and l ways, including market opportunities, to enhance the cost-effectiveness of, and to promote, mitigation actions, in light of the different circumstances of developed and developing countries. Following the Panama meeting, the feeling is that Durban is most likely to produce a draft text on new market mechanisms or decide to postpone the text until the 2012 COP/MOP. What is clear is that South Africa will not result in any significant progress in this area at the UN level. Another major topic for discussion in South Africa will be funding commitments by developed countries to developing countries for mitigation and adaptation. Under UNFCCC agreements made both in Copenhagen in 2009 and Cancun last year, developed countries have pledged $30 billion during 2010--2012 and $100 billion a year by 2020. A Green Climate Fund (GCF) is in the process of being set up to administer some or all of these funds. Developments on the GCF are expected in relation to its institutional arrangements. However, there is also likely to be much debate on the when and from whom the finance is coming. Developing countries have argued that developed country governments should be providing the money. In the c urrent economic climate, this would seem an unlikely proposition. Many observers have noted that if $100 billion is realistically to be raised it will also have to include a large contribution from the private sector. If private money is to be leveraged at the levels required, companies and potential investors will want to see progress on the development of mechanisms to make it attractive to them. As noted above, they could have at least another 12-month wait for such action. At least seasoned observers of climate change negotiations are not heading to Durban with expectations too high -- as many did going into the Copenhagen talks two years ago. The aim for Durban will be to move the talks further along and make progress on some of the bigger issues that were sidestepped in Canc un in 2010. Failure to address and resolve the key areas will raise questions about what the UN process can ultimately achieve. Several domestic and regional activities to combat climate change from 2013 are in place already and, if the UNFCCC process drags on without any sign of a conclusion, it is these developments that could increasingly be the main focus in the future. l S09 INTERNATIONAL NEGOTIATIONS The countries of the EU are the only industrialised nations that ratified Kyoto still considering taking on a second round of greenhouse gas emissions reduction targets under the protocol. All the others, including Canada, Japan and Russia, have already r uled out such a move. It seems that progress on a second Kyoto period is the precursor for ensuring the CDM continues, at least for most developing countries. In relation to the CDM, the UNFCCC's Subsidiary Body for Scientific and Technological Advice (SBSTA) is scheduled in Durban to discuss issues relating to including carbon capture and storage in the CDM; the implications for new CDM projects that destroy the industrial gas HFC23, the implications for the inclusion of reforestation of lands with forest in exhaustion as afforestation and reforestation in the CDM; and a materiality standard -- the level at which errors in an audit of a project do not affect the overall conclusion of the auditor. Potentially related to markets, but not the CDM, SBSTA is also set to work on providing methodological guidance for activities relating to reducing emissions from deforestation and forest degradation and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries -- so-called REDD+. SBSTA will also address possible ways to deal with emissions from fuel used for international aviation and maritime transport. The main interest for carbon markets in the discussions under the Subsidiary Body for Implementation (SBI) will be the work on procedures, mechanisms and institutional arrangements for appeals against the decisions of the CDM Exec utive Board. The aim is for the SBI to make recommendations for the COP/MOP to consider in Durban. The Ad Hoc Working Group on Long-term Cooperative Action under the Convention is scheduled to consider several areas that could lead to enhanced GHG mitigation through market mechanisms. The depth of these talks is Dec 2011/Jan 2012 l Seventeenth session of the Conference of the Parties from November 28 to December 9; l Seventh session of the Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol, also from November 28 to December 9; l the 35th session of the Subsidiary Body for Scientifc and Technological Advice (SBSTA) between November 28 and December 3. l the 35th session of the Subsidiary Body for Implementation (SBI), also November 28 and December 3; l the fourth part of the 14th session of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention (AWG--LCA) during November 29 and December 9; and l the fourth part of the 16th session of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG--KP), also between November 29 and December 9. Main UNFCCC bodies meeting in Durban Developments on the GCF are expected in relation to its institutional arrangements