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Outcome of the Durban (COP 17 and CMP 7) Agreements: Implications for the Private Sector PDF Print E-mail
Climate Compliance
Saturday, 14 January 2012 08:32

The 2011 United Nations Climate Change Conference in Durban, South Africa,[1] resulted in a set of interrelated agreements for furthering international action on climate change. These included the establishment of a new process for working toward a binding, comprehensive agreement on mitigation (the Durban Platform), a second commitment period for the Kyoto Protocol, and a variety of instruments for implementing components of the 2010 Cancun Agreements.[2] Although directly applicable only to national governments that are Parties to the Convention, collectively these agreements define an implicit realm of areas in which reporting requirements and emission reduction obligations are likely to be apportioned to the private sector at some point in the future.

1. The Durban Platform

UNFCCC Parties agreed to establish a new “process to develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention and applicable to all Parties.” In addition, the Parties agreed to create a new negotiating body, the Ad Hoc Working Group on the Durban Platform for Enhanced Action (AWG-DP), to carry out the task of defining the structure and details of a comprehensive climate action mechanism.[3] In essence, the agreement calls for countries to participate in a three-year process, beginning in the first half of 2012 “as a matter of urgency” that is designed to result in an outcome that is rule-based or has legal effect. The words “binding” or “commitment,” however, are not found in the agreement and the Platform does not address the legal form of commitments that could emerge from an outcome with legal force.

Details of the mechanism must be completed by 2015, with implementation of the new mechanism to begin in 2020. Once in effect, the new protocol, instrument, or outcome will replace existing UNFCCC mechanisms, including the Kyoto Protocol. The Durban Platform also requires the AWG-DP to take up a discussion of the long-term implementation of matters which are currently subject to negotiation by other UNFCCC bodies,[4] including mitigation, adaptation, finance, transparency, technology transfer, and capacity-building.

Implications for the private sector

The Durban Platform launches a long-term process, with mid to long-term implications. Political willingness on the part of countries to commit to a meaningful, comprehensive agreement will hinge, in part, on participants furnishing data that is accurate, transparent, complete, and comparable. National governments cannot accomplish this alone. Requirements for private sector emitters in all sectors to provide increasingly accurate and standardized data on their emissions is an inherent part of process.

2. Extension of the Kyoto Protocol

A separate Durban agreement provided for a second commitment period under the Kyoto Protocol (KP).[5] The period will begin on January 1, 2013 and end either in 2017 or 2020, depending on whether there is a decision to coordinate the end of the period with the entry into force of the future Durban Platform legal mechanism. While Japan, Russia, and Canada have declined to renew their participation under the Kyoto process, the renewal of the Protocol for other signatories has the practical effect of keeping alive the efficiency mechanisms it contains, including the Clean Development Mechanism (CDM), as well as the framework of procedures that support them.

Implications for the private sector:

The second commitment period for the Kyoto Protocol will most directly impact private sector entities that are subject to the laws of KP signatory countries. By committing to voluntary emission targets, these countries must continue to employ policies and programs for limiting emissions in selected economic sectors and industries. The continuity of a second commitment period also means that public and private investors have continued opportunities (and are subject to enhanced rules) for investment in the Kyoto Protocol’s efficiency mechanisms – emissions trading and offset projects under the CDM and the Joint Implementation (JI).

3. Progress toward fulfilling the mandates of the Cancun Agreements

The Cancun Agreements called for UNFCCC Parties to develop the details of procedures for taking action a wide variety of issues, including national reporting of greenhouse gas inventories, emission reductions, and disbursements of financial support. One of the documents adopted in Durban[6] operationalized many of these components, which together define a comprehensive framework for ensuring transparency and integrity of climate mitigation performance data through measurement, reporting, and verification. Specifically, this document provides additional clarity on biennial reports, national greenhouse gas inventories, emission reduction targets, international assessment and review (IAR) of developed country emissions and support data, and international consultation and analysis (ICA) of developing country emissions data.

Implications for the private sector:

The implementation of the Cancun mandates imposes reporting requirements on national governments that are likely to impact private sector entities in the near to mid-term horizon. Under the provisions adopted in Durban, the first biennial reports by developed countries must be submitted by January 1, 2014.[7] Guidelines for complying with new biennial reporting requirements are intended to “ensure the provision of consistent, transparent, comparable, accurate and complete information by developed country Parties.”[8] Providing aggregate data that is consistent with these attributes can only be accomplished if national governments obtain information from significant emitters in all economic sectors that is sufficiently detailed and trustworthy. The Durban documents do not address how nations will prescribe these information requirements.

1 The conference consisted of meetings that included the seventeenth session of the Conference of the Parties (COP 17) to the UN Framework Convention on Climate Change (UNFCCC) and the seventh meeting of the Conference of the Parties serving as the Meeting of Parties to the Kyoto Protocol (CMP 7).

2 The 14th session of the Ad hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA) undertook to finalize issues that included the Green Climate Fund (GFC), long-term climate finance, measurement, reporting, and verification, national communications and inventories, REDD, adaptation, technology transfer, new market-based instruments, and a variety of other issues.

3 FCCC/CP/2011/L.10, http://unfccc.int/resource/docs/2011/cop17/eng/l10.pdf

4 The Durban Platform provides for one additional year for the Ad Hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA) to complete its mandate under the Bali Action Plan, after which the AWAWG-LCA will be terminated. The AWG-LCA has been primarily responsible for discussions on these topics.

5 http://unfccc.int/files/meetings/durban_nov_2011/decisions/application/pdf/awgkp_outcome.pdf

6 FCCC/AWGLCA/2011/L.4, available at http://unfccc.int/resource/docs/2011/awglca14/eng/l04.pdf

7 FCCC/AWGLCA/2011/L.4, Par. 13.

8 FCCC/AWGLCA/2011/L.4, Annex I, UNFCCC biennial reporting guidelines for developed country Parties.