PARTIES (COP2) OF THE FRAMEWORK CONVENTION ON CLIMATE CHANGE, NOW

10:19 AM Jul 16, 1996

PARTIES (COP2) OF THE FRAMEWORK CONVENTION ON CLIMATE CHANGE, NOW
negotiating a protocol for reduction of greenhouse gas (GHG) emissions by the industrial countries, and may have to put this off until after the US elections in November, according to some participants.

The COP2 is due to end Friday, with a high-level ministerial segment due to be held Wednesday and Thursday.

One Conference source said that while there has been a lot of seminars, workshops and presentations, there has been no serious effort at starting a process of negotiating a protocol towards emissions.

However, there have been a number of controversies and issues going on.

The FCCC envisages at this stage only the industrial countries (the Annex I parties) submitting their country reports of inventories of sources of emissions and sinks, the measures they are taking to move towards stabilising and reducing the emissions to achieve the 1990 levels by year 2000, and other cognate matters.

The commitments of the developing countries at this stage under the FCCC is only that of providing inventories, in accordance with a format still to be settled. Any action by them towards mitigating climate change is made contingent on the industrialized countries providing them with the necessary finances and technology transfer.

With the differentiated commitments clearly laid out in the FCCC, and the industrial countries in no position now to force the developing countries to undertake commitments in GHG and particularly Carbon-di-oxide (CO2) emissions, there have been subtle efforts to do so through the World Bank run Global Environment Facility (GEF) and its funding.

The FCCC has recognized GEF as an interim financial mechanism.

In terms of the FCCC, while the GEF will be the source of funding, the guidelines for financing is to be laid out by the FCCC and the COP.

The GEF though has put forward a Memorandum of Understanding (MOU) on its functioning as an interim financial mechanism, and this has an Annex in effect laying out the guidelines for the GEF to finance climate-change related activities in the developing world.

This MOU and its annex has been drawn up and approved by the GEF's governing body, and efforts are being made to get this approved by the COP -- a move that has been resisted by the Group of 77 and China.

The idea behind this move is that the major industrial countries which control the World Bank and the GEF as contributors to its funds could use the GEF funding as conditionality lending to force developing countries to adopt environment and climate change policies that the North wants, and behind to implement changes that they are not now obliged to do under the FCCC.

Some hard negotiations have been going on, within the COP's Subsidiary Body on Implementation (SBI), chaired by Mauritania, over this question of the MOU and its annex, the GEF as an interim mechanism and as a permanent financing mechanism, and the COP role.

The Group of 77 and China had formulated a position that the guidelines for use of the funds and its disbursal by the GEF have to be set by the COP, and not the other way around. As a result they rejected an initial attempt of the SBI chair to formulate a decision approving the MOU, and setting in motion a process of review of the GEF's functioning to lead to its being named as the permanent financing mechanism.

The US and France have been playing a leading role in this move, backed generally by the OECD countries.

The threat that if the GEF is not approved as a permanent mechanism, and its MOU and Annex (of guidelines) is not rubber stamped, there will be no funds has left the developing world cool.

As one leading G77 member pointed out, the commitments under the FCCC by the developing countries is conditional on funds being made available and the necessary technology is transferred. If there are no funds (on the ground of GEF not being approved permanently or of approval of the MOU and annexed guidelines) and if there is no technology transfer, the developing countries have no obligations either.

A compromise is being evolved, within a contact group chaired by Antigua and Barbuda (one of the island countries that may cease to exist as a result of climate change and rise in sea levels if no action is taken).

But before this is approved, some hard negotiations are ahead, and continuous attempts are being by the major industrial nations and the SBI chair to get endorsement of the GEF, a move being rejected by G77 countries.

At the moment, the GEF funding is envisaged under FCCC only to help developing countries to prepare their communications to the COP on their national inventories. However, the GEF guidelines (which it has been attempting to get rubber-stamped by the COP), also involves reporting on the actions being taken or contemplated by the developing countries on measures to mitigate climate change, and its implementation.

This is seen as a 'conditionality' not envisaged under the FCCC, and essentially part of the attempt of the major industrial nations to continue their merry ways of consumption and life styles contributing to the GHG and CO2 emissions, shifting the burden of adjustment on to the developing world.

Even in terms of review of the GEF functioning so far, there has been some sharp criticisms. Brazil and Malaysia noted that though the report made available to the COP would make it appear that GEF has funded projects in their countries, they had so far not seen a single cent of it disbursed.

The compromise that is now expected to be endorsed by the COP, some G77 sources say, would provide the guidelines for the GEF funding of developing country projects for carrying out their FCCC commitments -- which at this stage is no more than preparing national inventories in accordance with the format to be set by COP2 (on which G77 and China have tabled their proposals). There will be no guideline requiring countries to report on actions for mitigation or their implementation. But countries could do so on a voluntary basis.

The SBI at a scheduled meeting in December will take up the process of review of the working of the GEF as an interim mechanism and with a view to making an assessment of its suitability as a permanent mechanism.

While several developing countries were opposed to this, the compromise will allow the start of a process that is however to be completed only in 1999 (the target date set for deciding on converting the GEF as an interim financing mechanism to a permanent one).

While developing countries have been active in formulating their joint position and negotiating on this, they have been less active on the review of the national reports from the industrialized countries, or on the basic issues of lifestyles and consumption patterns in the industrial world (the FCCC envisages a reduction in terms of commitments to reduce the GHG and CO2 emissions) as also issues of technology transfer.