The UNFCCC Compliance Committee recently suspended Greece from trading carbon credits under the Kyoto Protocol. The Committee determined that Greece does not reliably observe and measure greenhouse gas (GHG) emissions, as required by Kyoto. This marks the first time that a country has been sanctioned under the UN system for inadequate GHG reporting.

Greece is now ineligible to participate in the Kyoto Protocol’s flexibility mechanisms, meaning it cannot buy credits to meet its own emissions targets or sell credits from domestic projects that generate excess emissions allowances.

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The European Climate Exchange (ECX) opened trading yesterday for emissions credits that extend beyond the Kyoto compliance period. The Kyoto Protocol, which went into force in 2005, will sunset in 2012. International negotiations are currently underway for a successor agreement that will run from 2013-2020.

ECX opened the futures markets for the December 2013 and 2014 settlement periods, with credits for 10,000 tons of carbon emissions being purchased by an undisclosed party for 27.7 Euros (approximately $42) per ton. These credits may be used in the European Union Emissions Trading System (EU-ETS) for compliance with future emission reduction obligations to which the European Union is expected to commit. The European Commission recently issued proposed Directives for governing the next phase (Phase III) of the EU-ETS, beginning in 2013, with the intent that the market will continue even if there were no post-Kyoto agreement in place.

London is, in many respects, the center of the carbon trading market. As recently as six weeks ago, publications such as the Financial Times and the Times of London published articles expressing doubts about the market. Two of the most critical problems facing the carbon market relate to the process for issuing credits under the United Nations process and uncertainties over the structure of the post-Kyoto regulatory system. While the inefficiencies of the Clean Development Mechanism certification process remain, this trade reflects confidence that, at least in the EU, there will likely be a functional carbon market beyond the expiration of the Kyoto Protocol.

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China has taken an aggressive posture on technology transfer in its comments on the Bali Action Plan - the “roadmap” for guiding the next round of discussions on a post-Kyoto global climate change regime.

The UNFCCC Secretariat posted comments from 26 countries earlier this week, in advance of the first session of the Ad hoc Working Group on Long-term Cooperative Action under the Convention that will convene in Bangkok from March 31 to April 4, 2008. While most countries’ positions reiterate statements made during the Bali Climate Change Conference, China’s submission is notable for its stance on intellectual property rights (IPR), clean technology financing, and transfer. China made it explicitly clear that it has uniquely high expectations for the United States, noting that special consideration in the negotiations should be given to ensuring “quantified emission reduction targets [25%-40% of 1990 levels by 2020] for the Annex I Parties to the Convention that are not Party to the Kyoto Protocol.”

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Subcommittee on Energy and Air Quality: The Subcommittee will hold a hearing on “Administration Perspectives on United Nations Climate Change Conference in Bali” on Thursday, January 17, 2008, at 10:00 a.m. in room 2123 Rayburn House Office Building. White House chief environmental adviser James Connaughton will serve as the witness for the hearing. The event will be available via webcast.

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The UN Climate Change Convention Bali, Indonesia, launched “a new negotiation process, designed to tackle climate change,” with the aim of reaching consensus on a successor climate change agreement by the end of 2009.

The timetables set forth in the Bali Action Plan and in related documents call for two major actions in the first quarter of 2008: (1) Parties may provide comments on the work program of the Bali Action Plan by February 22 and (2) “Parties and relevant organizations” may submit comments to support a comprehensive review of the Kyoto Protocol by March 7.

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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. Read the rest of this entry »

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This week, I will be posting updates on the United Nations Conference on Climate Change discussions being held in Bali, Indonesia. 

The Bali Conference is beginning to feel more like an industry association meeting than a COP. The presence of traders, offset project developers, and other carbon market types are making their strong presence felt.

Andrei Marcu, president of the International Emissions Trading Association (IETA), has provided several statements on behalf of “civil society” in support of continuation of the Clean Development Mechanism and for strengthening governance structure.

The Bali Conference is markedly different from the Nairobi meetings last year. At the 2006 Conference, few industry representatives attended, and those who did were clearly pushing company-specific issues. The dynamic has changed dramatically, with unprecedented involvement of industry.

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This week, I will be posting updates on the United Nations Conference on Climate Change discussions being held in Bali, Indonesia.

A major theme of discussions over the past two days was the Clean Development Mechanism (CDM) process, which is a financial mechanism under Kyoto allowing Annex 1 countries to invest in emission reductions projects in developing countries.

The Executive Board of the CDM shared recent statistics on projects, estimating that:

• The current project pipeline is expected to generate +2.5 billion Certified Emissions Reductions (CERs) by the end of the first Kyoto commitment period (2012);
• These CERs will result from more than 2,600 project activities;
• About 150 projects enter the pipeline each month, and no reduction is expected in this trend.

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This week, I will be posting updates on the United Nations Conference on Climate Change discussions being held in Bali, Indonesia.

The 13^th Conference on Climate Change kicked off with enthusiasm, but little fanfare. The highlight of the day was Australia’s new Prime Minister, Kevin Rudd, formally announcing his country’s ratification of the Kyoto Protocol.  The announcement leaves the U.S. as the only developed country to not agree to adopt the Protocol.

In his opening remarks, UNFCCC Executive Secretary Yvo de Boer outlined the main issues for delegates to act on during the meetings. Mr. de Boer emphasized the need for practical action on the issues of adaptation and reducing emissions from deforestation and called for support for developing countries, including through a framework for an Adaptation Fund that could be worth “$300 million annually from 2008 to 2012,” according to Reuters.

Mr. de Boer encouraged delegates to work towards the goal of adopting “a formal negotiating agenda.” Four important keys to the success of the talks, he said, are: leadership from industrialized countries; technology access and incentives for developing countries; recognition of our collective responsibility to use fossil fuels without destroying our environment; and a “focus on creating opportunities rather than being paralyzed by threats” by prioritizing adaptation.

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Akin Gump will host a side event at the 2007 UN Climate Change Conference in Bali, Indonesia, on “The Role of Compliance in Ensuring Environmental Integrity and Market Confidence in Climate Change Regimes.”

Compliance will play a critical role in the success of any post-2012 climate change regime and, in this side event, panelists will discuss the compliance issues faced by States in meeting commitments under a post-Kyoto treaty and in implementing the treaty through national measures.

Date: Tuesday, 4 December 2007
Time: 13:00-15:00
Location: BINGO Room, Grand Hyatt New Conference Center (Upper Level)

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