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Special Report on Selected Side Events at UNFCCC COP-9
01 - 12 December 2003, Milan, Italy
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Events convened on Monday, 01 December 2003

Compilation and synthesis of third national communications from Annex I Parties

Presented by the UNFCCC

Sergey Kononov, UNFCCC, outlined Annex I Parties' greenhouse gas emission trends for 1990-2001, excluding land-use change and forestry. He drew attention to a decrease in emissions of carbon dioxide (CO2), methane and nitrous oxide, and an increase in emissions of hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. Kononov stressed that most emission reductions occurred during the early 1990s. He highlighted that from 1990-2001, there was a growth in overall greenhouse gas emissions in 19 Annex I Parties, and a decrease of emissions in 21 Annex I Parties. Noting that Annex I Parties' overall emissions had decreased by 6.6%, Kononov explained that emissions from countries with economies in transition (EITs) had decreased by 39.7% whereas Annex II emissions increased by 7.5%.

Stylianos Pesmajoglou, UNFCCC, presented Annex I Parties' greenhouse gas emissions projections for 2000-2010. Noting that EIT emissions decreased from 1990-2000 but are expected to increase from 2000-2010, he highlighted that Annex I Parties' overall emissions are consequently projected to increase by 10% by 2010. He explained that Annex I Parties' projections indicate that, with measures, 14 Annex I Parties will have decreased their emissions by 2010, whereas 20 will have increased emissions. Pesmajoglou noted that from 2000-2010, emissions are expected to increase in all sectors except waste management, and emphasized high-emissions growth projections for the transport sector and industrial processes. Stressing that the emission trends observed over the past decade would not continue, he underscored that reducing Annex I Parties' emissions may require new and strengthened policies.

Katia Simeonova, UNFCCC, provided an overview of policies and measures. She highlighted progress made by Denmark, Finland, France, Germany, Sweden, Switzerland, the UK and the EC in reducing emissions, which she said was due in part to proactive climate policies to promote energy efficiency, fuel switching and renewable energy, as well as to economic slow down and nuclear power. She noted evidence of success in some EITs in moving toward a decoupling of emissions from economic growth, highlighting Poland as an example. She also explained that approximately 25% of emission reductions in the Russian Federation are the result of fuel switching. Simeonova commended countries that have adopted an integrated approach to climate policy design and implementation.

Discussion: Simeonova raised three questions to guide the ensuing discussion: whether Annex I Parties have been successful in finding new policy approaches to control emissions; whether the policies have been sufficient to alter emission trends and achieve the aim of the Convention; and whether the policies provide a framework for achieving significant emission reductions in the future. Participants noted that the transport sector has the fastest growing emissions, is the second largest sector in terms of emissions, and is a sector in which emission reductions are difficult to achieve. Stating that Finland was the only Annex II country that achieved a reduction in transportation emissions, Simeonova said this was due in part to economic development, but also to policies and measures including the implementation of a comprehensive, integrated transport strategy.

Katia Simeonova, UNFCCC, says that most Parties noted the importance of the Kyoto Protocol in shaping their domestic policy responses.
Sergey Kononov, UNFCCC, highlights increasing emissions in the transport sector, and decreasing emissions in the energy, industrial processes, agriculture and waste management sectors during 1990-2001.
Sergey Kononov <skononov@unfccc.int>
Stylianos Pesmajoglou <spesmajoglou@unfccc.int>
Katia Simeonova <ksimeonova@unfccc.int>



The great warming

Presented by the Government of Canada

This short video, narrated by Alanis Morissette and Keanu Reeves, warned that the world's children face a changing climate. The film explained how industrialization, agriculture and animal domestication continue to generate greenhouse gas emissions, and indicated that the natural balance of gases in the atmosphere has been disturbed by these activities. Fossil fuel combustion was identified as the primary cause of increasing CO2 levels in the atmosphere.

Noting the expected growth in emissions arising from increased fossil fuel consumption in China and that Canada is one of the largest greenhouse gas emitters in the world, the film questioned whether developed countries have the right to ask developing countries to reduce their emissions The film documented the devastating impact of El Niño on a small fishing village in Peru, and other climatic change impacts, including floods and droughts.

The film explained the complexity of predicting climate change due to the high number of variables. Outlining a Canadian climate change model that incorporates both natural and human variables, the film indicated that all climate change models point to the fact that a growth in greenhouse gas emissions will lead to increased temperatures. Possible negative consequences highlighted by the film include sea-level rise, droughts, floods, disturbance of the gulf stream, and accelerated shrinking of the Arctic ice caps. It also identified negative consequences for human health, including disease vector migration and respiratory and cardiovascular problems.

The film concluded by recommending the prudent reduction of greenhouse gases to avoid the consequent adverse effects of climate change.

The film The Great Warming warns that the world's quest for progress is casting a shadow over our children's future.



Collaborative Partnership on Forests: an interagency partnership for sustainable forest management

Presented by the Secretariat of the United Nations Forum on Forests (UNFF)

Mia Soderlund, UNFF, explained that the Collaborative Partnership on Forests (CPF) is: comprised of 14 international organizations and institutions; a focal agency system that fosters shared agency responsibilities; an informal but high-level partnership; and a forum for information exchange.

Heikki Granholm, UNFCCC Secretariat, discussed the CPF Task Force on Forest-related Reporting, saying that the aim of the Task Force was to reduce the reporting burden on countries. He explained that the Task Force proposes ways to reduce the forest-related reporting burden by, inter alia, streamlining reporting requests; synchronizing reporting cycles; and harmonizing data collection methods.

Granholm explained the CPF Portal on Forest Reporting, which aims to reduce the reporting burden by helping countries make the best use of existing information, contains national reports on forest-related issues; and provides information on the main reporting schemes.

Dieter Schoene, Food and Agriculture Organization (FAO), provided an overview of the CPF initiative on forest-related definitions. He noted the differences between harmonizing and standardizing definitions, the need to avoid ambiguity and conflicts between definitions, the importance of consistent reporting, and the disparity between current forest-related definitions.

Soderlund outlined the CPF Sourcebook on Funding Sustainable Forest Management (SFM). She explained that it is a searchable database on funding sources for SFM, and also provides information on fundraising for SFM.

Discussion: Participants requested clarification regarding the use of specific terms such as "trees" and "forests," asked when the harmonization process would be complete, and discussed the comprehensive coverage of forest reporting, drawing particular attention to the inclusion of peatlands.

Mia Soderlund, UNFF, outlined the CPF Sourcebook on Funding Sustainable Forest Management (SFM).
Dieter Schoene, FAO, says that organizations, such as those in the CPF, could examine proposed forest-related definitions to identify where they should be harmonized.
Mia Soderlund <soderlund@un.org>
Heikki Granholm <hgranholm@unfccc.int>
Dieter Schoene <dieter.Schoene@fao.org>



The interaction between the EU emissions trading scheme and Member State climate policy

Presented by the Energy Research Centre of the Netherlands

Steve Sorrell, Sussex University, discussed interactions between the EU Emissions Trading Scheme (ETS) and UK climate policies. Noting the importance of the ETS and the emissions cap to reducing emissions in the EU, he suggested that complementary instruments could be used to improve efficiency by overcoming market failures,
promoting technological innovation, delivering social objectives and compensating for
deficiencies in the ETS.

Regina Annette Betz, Fraunhofer Institute, outlined interactions between the ETS and the voluntary Climate Change Agreement (CCA), the Eco Tax and the Renewable Energy Act (REA) in Germany. She indicated that complementarities could be
developed between the CCA and the ETS by basing ETS allocations on CCA targets. Noting that the EcoTax seeks to reduce the consumption of electricity and that the REA seeks to double the use of renewable energy in Germany, she said that these
instruments are likely to co-exist with the ETS.

Jos Sijm, Energy Research Centre of the Netherlands, identified the impact of the ETS on electricity prices as a crucial variable in determining policy impacts. He noted that, in the long term, the free allocation of emission allowances should be replaced by auctioning, with the revenue being used to reduce the tax burden of industry.

Discussion: Participants focused on ETS' effects on the price of electricity in the EU, and the possible solutions for compensating consumers faced with rising prices,
including tax reform and revenue raising through emissions auctioning and changes in taxation. Sorrel stressed that the further development of EU policies will set the
framework for future Member States' climate policies.

Steve Sorrell, Sussex University, emphasizes the importance of interactions between EU and Member States' climate policy mechanisms.
Regina Annette Betz, Fraunhofer Institute, said that long-term targets for reducing emissions in Germany could be more ambitious.
Steve Sorrell <s.r.sorrell@sussex.ac.uk>
Regina Annette Betz <r.betz@isi.fraunhofer.de>
Jos Sijm <sijm@ecn.nl>



Commitments for beyond 2012
to achieve climate change mitigation and
human development goals

Presented by the Research Centre for Sustainable Development, China's Academy of Social Science (CASS)

Jiahua Pan, CASS, called for a future commitment to a framework for developing countries that would allow reduction of greenhouse gas emissions, promote human development and satisfy basic human needs.

Ying Chen, CASS, highlighted China's plan to invest in infrastructure development and achieve its goal to provide for basic human needs.

Noting China's population shift from rural to urban areas, Xingshu Zhao, CASS, identified the link between increasing urbanization and energy consumption. She also underscored that promoting human development in rural areas will increase energy consumption and greenhouse gas emissions.

Youba Sekona, Environmental Development Action, Senegal, noted the need to reinforce the Kyoto Protocol with effective measures to address climate change issues.

Underscoring the importance of achieving environmental objectives relating to climate change, Jackie Jones, Climate Change Policy Advisor, UK, called for more methodological work on the CASS approach.

Liyan Li, China, underscored the importance of including technological innovation as one of the elements that could contribute to defining future commitments.

Highlighting the need to define human development, Gurmit Singh, Centre for Environment, Technology and Development, Malaysia, said it is difficult to distinguish "human greed from human need".

Ying Chen, says she elieves that further development can be achived by reducing greenhouse gas emissions.
Jiahua Pan, CASS, suggests obligatory and voluntary commitments, which would take a country's population, technological innovation, and economic growth into account.
More information:

http://unfccc.int
Sergey Kononov <skononov@unfccc.int>
Stylianos Pesmajoglou <spesmajoglou@unfccc.int>
Katia Simeonova <ksimeonova@unfccc.int>



Development and transfer of technologies

Presented by the UNFCCC

Iulian Vladu, UNFCCC, outlined the methodology and the questionnaire for the survey on the effectiveness of the use of the UNFCCC technology information clearing house (TT:CLEAR). He noted the need to enhance developing countries' access to information on environmentally sound technologies.

William Agyemang Bonsu, Expert Group on Technology Transfer (EGTT), and Nick Campbell, International Chamber of Commerce, provided an overview of the upcoming senior-level panel discussion on enabling environments for technology transfer, which will be held on 8 December 2003. They emphasized the need for advanced technology, improvements in enabling frameworks for technology transfer
and technology commercialization.

Richard Bradley, EGTT, described the EGTT's programme of work for 2004, outlining proposed actions for areas including technology needs assessment, technology information, enabling environments, capacity building, mechanisms, cross-cutting activities and innovative financing. He explained that proposed actions include considering the outcome of the TT: CLEAR survey and identifying linkages and possible collaboration with other conventions.

Daniele Violetti, UNFCCC, presented a technical paper on capacity building for technology development and transfer. He highlighted human, institutional and informational capacity building, spoke on case studies, evaluations, and lessons learned,
and suggested next steps for promoting technology transfer and development.

Discussion:
Participants cautioned against ignoring country specific issues and discussed the importance of institutional capacity building for regulatory, legal, financial and managerial capacities in adopting environmentally sound technologies.

Richard Bradley, Expert Group on Technology Transfer, discusses each proposed action for the EGTT programme of work such as implementing different capacity-building activities.
Nick Campbell, International Chamber of Commerce, emphasizes that an enabling environment involves a stable economic system, transparency, intellectual property rights, long-term commitments and a fair distribution of benefits.
Florin Vladu <ivladu@unfccc.int>
William Agyemang Bonsu <wbonsu@epaghana.org>
Nick Campbell <nick.campbell@atofina.com>
Richard Bradley <richard.bradley@hq.doe.gov>
Daniele Violetti <dvioletti@unfccc.int>



The role of ESCOs in reducing greenhouse gas emissions

Presented by the Republic of Korea

Susan Wickwire, US Environmental Protection Agency, provided an overview of the Climate Technology Program (CTP), which establishes partnerships to propel full-scale implementation of technologies in developing countries. Wickwire said that a key technology area identified by the Republic of Korea and Mexico for implementation under CTP is energy management, with a focus on the development of energy service companies.

Jeannie Renné, National Renewable Energy Laboratory (NREL), provided an overview of the CTP in Mexico. She said it aims to advance four to eight ESCO projects in the industrial and hotel sectors by the end of 2003.

Mónica Pérez-Ortiz, NREL, discussed options for financing renewable energy and energy efficiency projects in Mexico. She mentioned a strategy to strengthen ESCOs by promoting education and establishing a loan guarantee fund.

Gyung-Ae Ha
, Korean Energy Management Corporation, discussed how the Government of the Republic of Korea funds ESCOs through a special account supported by tax revenues. She noted that to overcome financing obstacles, the projects should be compiled in funding proposals and a financial institution specializing in ESCO projects should be established. Hyung-Chul Shin, KDB Capital, discussed an example of how the Republic of Korea has established a low-interest revolving fund to overcome funding barriers for ESCOs.

Dave Howard, NREL, said that project financing is the primary barrier faced by ESCOs. He outlined possible financing alternatives for future Korean ESCOs, including further CTP joint partnerships between US and Korean ESCOs. Ubaldo Inclán, Mexican Ministry of Energy, described renewable energy and energy efficiency activities to mitigate climate change. He said the most important characteristics of these projects are the low transaction costs, and easy monitoring and verification activities.

Mónica Pérez-Ortiz, NREL, says one of the main advantages of ESCOs is that they keep the client focused on their core business.
Gyung-Ae Ha, KEMCO, notes that the current barriers to financing include: the average duration of ESCO projects; the uncertain benefits of ESCOs; and the size of the projects.
Susan Wickwire: <wickwire.susan@epa.gov>
Jeannie Renné <jeannie_renne@nrel.gov>
Mónica Pérez-Ortiz <tcapp@conae.gob.mx>
Gyung-Ae Ha <hga@kemco.or.kr>

The Earth Negotiations Bulletin (ENB) on the side is a special publication of the International Institute for Sustainable Development (IISD) in cooperation with the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat. This issue has been written by Fiona Koza <fiona@iisd.org>, Karen Alvarenga de Oliveira <karen@iisd.org>, Kaori Kawarabayashi <kaori@iisd.org>, Catherine Ganzleben <catherine@iisd.org> and Lauren Flejzor <lauren@iisd.org>. The Digital Editor is David Fernau <david@iisd.org> the photographers are David Fernau and Leila Mead <leila@iisd.org> and the online assistant is Diego Noguera <diego@iisd.org>. The Director of IISD Reporting Services is Langston James "Kimo" Goree VI <kimo@iisd.org>. Funding for publication of ENB on the side at UNFCCC COP-9 is provided by the UNFCCC Secretariat. The opinions expressed in ENB on the side are those of the authors and do not necessarily reflect the views of IISD and funders. Excerpts from ENB on the side may be used in non-commercial publications only and only with appropriate academic citation. For permission to use this material in commercial publications, contact the Director of IISD Reporting Services at <kimo@iisd.org>. Electronic versions of issues of ENB on the side from COP-9 can be found on the Linkages website at: http://www.iisd.ca/climate/cop9/enbots/

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