As the 2007 United Nations Climate Change Conference draws to a close, I would like to share comments on some of the major topics arising from the talks. Mitigating climate change and adapting to its impacts formed the basis for the majority of the talks at Bali, with technology transfer and new financing mechanisms proposed as the leading methods for facilitating global cooperation.

As delegates sought to promote strategies to mitigate climate change, there was a new push towards the approach of limiting emissions from carbon-intensive sectors, such as cement and steel, and the Financial Times reported on plans “due to be agreed” for “industry-wide pacts on cutting …emissions.”

The business community indicated its concern of a strict limit on carbon emissions by actively engaging in the Bali discussions. The “Bali Global Business Day” event recognized the need for a “clear policy framework, which can then guide the investment decisions by businesses, and within which businesses can then do the right thing.” Furthermore, a group 150 global companies issued a new request for an “international and comprehensive legally-binding United Nations agreement” which would “provide business with the certainty it needs to scale up global investment in low-carbon technologies.”

Mitigation discussions also explored mechanisms to expand and strengthen the Clean Development Mechanism (CDM) process, including through the potential inclusion of carbon capture and storage as part of the CDM project options, and through streamlining the rules and governance procedures of the CDM Board.

Reducing emissions from deforestation and forest degradation (REDD) was another major topic of the discussions, since deforestation contributes as much of 20% of the total carbon emissions and since “saved” forests are not considered under the Kyoto Protocol. The World Bank announced the launch of a new partnership, the Forest Carbon Partnership Facility, that is intended to “prevent deforestation by compensating developing countries for carbon dioxide reductions realized by maintaining their forests.”

Adaptation to climate change increased in profile in this year’s talks, following the release of the final IPCC synthesis report, which recognized that “viable adaptation options that can be implemented in some sectors at low cost, and/or with high benefit-cost ratios.” Delegates reached agreement on an Adaptation Fund that would support development projects that seek to minimize impacts from climate change. The Fund would be financed from a percentage of the CDM projects, and estimates suggest there will be $170 million and $1 billion available by 2012.

Participants discussed financing and access to investment as critical to the success of a future climate agreement that will help the developing world purchase the technology necessary to mitigate and adapt to climate change. It appears that future negotiations may consider the development of a new fund, managed by the Global Environment Facility, that will enable developing countries to purchasing licenses for clean energy technologies. However, significantly more work needs to be done on intellectual property rights and reducing tariffs and trade-related barriers.

For further information about this topic, please contact Akin Gump.