Cancun Climate Summit Exceeds Low Expectations, But Sidesteps Trade Issues

22 December 2010

The United Nations climate summit that finished in Cancun this month surpassed low expectations when governments struck a deal that keeps alive efforts for a multilateral response to tackle climate change.

The agreements reached in the Mexican beach resort do not establish caps on greenhouse gas emissions; on that crucial issue, they simply kick the can down the road to next year's summit in Durban, South Africa. But governments agreed on an international system for monitoring mitigation, fleshed out a facility for climate finance, and established rules for rewarding forest preservation. They also steered clear of a clash that could have killed what remains of the Kyoto Protocol. Trade issues, from emissions resulting from the international shipment of goods to the use of unilateral trade measures ostensibly to offset reduced industrial competitiveness resulting from higher carbon costs, proved too contentious, and were left out of the text.

Additionally, any references to the use of unilateral trade measures were removed, leaving a crucial element of enforcement and regulation unresolved. Clearly, trade issues proved to be some of the most difficult questions to untangle and agree upon in Cancun.

If  hopes for the 2009 summit in Copenhagen had been impossibly high, the bar for the Cancun Conference of the Parties (COP) to the UN Framework Convention on Climate Change could hardly have been set lower. Most observers expected at best some modest agreements on forests or climate finance.  Going into Cancun, where the talks ran from 29 November to 11 December, governments' positions were diametrically opposed on future obligations to reduce greenhouse gas emissions. China and India said they would not endorse any agreement that did not commit developed countries to take on further emission reduction obligations under the Kyoto Protocol. The US - which is not a party to the protocol - wanted to replace Kyoto with a new agreement that would include binding commitments for all countries. As the meeting got underway, possibility of a compromise receded further when Canada, Japan and Russia announced that they would not sign up for a second phase of Kyoto commitments.

But well into the second week of talks, there wer signs ministers were making progress on key areas. After some last-minute hiccoughs and all-night talks, governments finally reached an accord in the wee hours of 11 December - in no small measure, many delegates said, due to skilful chairing by COP President Patricia Espinosa, Mexico's foreign minister.

Spirit of compromise

There are two texts that make up the Cancun Agreements: one on Long Term Cooperative Action (LCA) and one on the Kyoto Protocol. Much compromise can be seen in the texts with give and take by both developed and developing countries. For example, the Green Climate Fund - which was established last year in Copenhagen - was strengthened and the World Bank was given a three-year interim mandate to serve as trustee.

Many experts have suggested that the Bank is one of the few international institutions with the capacity and experience to administer the fund. But accepting the central role for the institution represented a significant concession by developing countries, many of which had staunchly resisted giving an important role to the World Bank, arguing that it had historically favoured developing country priorities.

This concession was balanced by an agreement that the Fund would be designed by a transitional committee made up of a majority of developing countries. The 40 member committee will be made up of 15 developed countries and 25 developing countries (seven from Africa, seven from Asia, seven from the Group of Latin America and Caribbean Countries (GRULAC), two from small island developing states (SIDS), and two least-developed countries).

Another major compromise - particularly for China - can be seen in the establishment of an international system for providing measuring, reporting, and verification (MRV) for mitigation actions. This "transparency" issue had seemed too difficult to solve in the weeks leading up to Cancun, with the US insisting that it be a part of any financing package and China resolutely against anything of the sort.

On mitigation in general, parties agreed that by the time next year's Durban COP arrives, they would establish a timeframe for emissions to reach a global "peak." China has been resistant to committing to a peak in the past, arguing until quite recently that it expects its emissions to continue to rise for some time.

Kyoto not dead, but on life support

The Kyoto Protocol lives to see another day. Although debilitated, it is not dead, as many thought might happen. Several developed countries - including Canada, Australia, and Japan - had been calling for an end to Kyoto, arguing that any climate deal that does not require major economies like China and India to meet mitigation targets is ineffective.

Cancun secures the survival of Kyoto's Clean Development Mechanism (CDM) programme and opens up the possibility for its expansion. The deal, however, does not establish a second term of emissions reduction commitments for Kyoto and it still is unclear what will happen when the first phase expires at the end of 2012.

Another key victory for developing countries is that, as laid out in the Kyoto Protocol, they will continue to not be penalised for failing to meet their emissions targets. In the end, China also managed to include language that allows it to set its reduction target based on "emissions intensity" - a less arduous target based on carbon emissions per unit of economic output. Developed countries had been pushing for commitments capping total emissions.

The agreement also establishes rules on the enhanced Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD+) programme, a key issue pushed by Mexican President Felipe Calderon.

Notably, the rules on REDD+ now mention the need to respect the rights of indigenous communities and others, in accordance with international law. Some developing countries, most notably Bolivia, had expressed reservations that an international forests agreement might impinge on the traditional practices of forest dwellers.

Small Island Developing States (SIDS), the countries most vulnerable to rising sea levels resulting from climate change, received a small victory with language that "recognises the need to consider" strengthening the long-term goal of capping global average temperature rises by lowering this goal from 2°C to 1.5°C.

Thorny trade issues nixed

While the Cancun meeting surpassed what had been expected of it at the outset, several key issues were dropped in order to reach consensus - trade-related issues among them. Agriculture, which had been considered one of the easier negotiating issues, became linked in the negotiating process to contentious discussions about emissions resulting from international shipping. When it became clear that parties would be unable to overcome their differences on how to manage bunker fuels - the global nature of the industry makes it difficult to make decisions on jurisdiction - both issues were snipped out of the text.

Additionally, any references to the use of unilateral trade measures were removed, leaving the issue unresolved. It remains to be seen how governments will try to address these thorny issues when the UNFCCC process resumes in 2011.

Consensus or unanimity?

Beyond the agreements reached there, Cancun will be remembered for the tense final moments that brought the meeting to a close. Throughout the final plenaries, Bolivia expressed again and again its disagreement with the content of the two texts. Its many objections ranged from what it felt was the insufficiency of the mitigation measures provided for to a lack of inclusiveness in the process.

A few countries - including Venezuela, Cuba, and Saudi Arabia - acknowledged Bolivia's objections and suggested heading back to negotiations, but eventually the Latin American country found itself isolated.

When it looked as though the COP would come to a close despite its objections, Bolivia's UN Ambassador Pablo Solon repeated that his government did not agree with the texts and therefore there was no consensus and, as such, they could not move forward. "Not even in Copenhagen, with all of the problems that there were, was this rule disrespected," Solon said.

Espinosa gavelled the agreements anyway, taking note of Bolivia's objections. Bolivia spoke out again to complain that the rules of the international system were being violated. "This will set a dangerous precedent of exclusion," Solon insisted. "It may be Bolivia tonight, but it could be any country tomorrow."

Espinosa responded that the consensus rule does not mean unanimity. She further responded that she could not permit one country to exercise an effective veto over 193 other countries.

After the UNFCCC was concluded in 1992, parties to it were never able to agree on rules of procedure. In the absence of designed rules for decision-making, consensus had prevailed.

Analysts say the issue of consensus is certainly not closed and will have to be revisited in the future. But for now, many delegations and observers are stressing that the transparent and firm process in Cancun has restored their support for, and faith in, multilateralism and international cooperation on climate change.

ICTSD reporting.

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