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Issue #1 from SB-12, 12-16 June, Bonn

Tuesday Edition, 13 June 2000

Welcome to IISD's new publication, ENB on the side, with coverage of the Special Events at the twelfth Session of the UNFCCC Subsidiary Bodies.

Title: Good practice guidance and uncertainty management in national greenhouse gas inventories
Intergovernmental Panel on Climate Change (IPCC)
Robert Acosta (racosta@unfccc.de)

This special event was convened by the IPCC  to report on the completion of work on a Good Practice Report to assist in the compilation of inventories that are transparent, documented, consistent over time, complete, comparable, assessed for uncertainties, subject to quality control and assurance, and efficient in the use of resources. The Report provides a reference that complements and is consistent with the IPCC Guidelines.The panelists were Taka Hiraishi, Co-Chair, IPCC National Greenhouse Inventories Programme (NGGIP),  James Penman, UK Department of the Environment, Transport and the Regions, and Sal Emmanuel, IPCC NGGIP Technical Support Unit.Hiraishi outlined the background to the preparation of the Report at SBSTA-8 in 1998, when Parties encouraged the IPCC-OECD-IEA Inventories Programme to complete its work on uncertainty, and prepare a report on good practices in inventory management.The Report states that inventories should not contain overestimates nor underestimates, as far as can be judged. 

James Penman, DETR, UK

It further recommends that uncertainties in estimates should be reduced as far as possible. The new Report addresses: choice of estimation method within the context of the IPCC Guidelines; quality assurance and quality control procedures to provide cross-checks during inventory compilation; data and information to be documented, archived and reported to facilitate review and assessment of emission estimates; and quantification of uncertainties at the source category level and for the inventory as a whole, so that the resources available for research can be directed toward reducing uncertainties over time, and to ensure that improvement can be tracked.

Title: Technology Cooperation Agreement Pilot Project (TCAPP) and Southern Africa Cooperative Technology Implementation Plan (CTIP)
: National Renewable Energy Laboratory on behalf of the United States Government and CTI
Ron Beinoff (ron_beinoff@nrel.government)
: www.nrel.gov/tcapp

Paul Stolpman, United States Environmental Protection Agency, provided an overview of TCAPP, a broad inter-agency program run by the US Government. He underlined the importance of host-country driven approaches with broad sustainable development benefits and the need to involve the private sector.Ubaldo Inclan Gallardo, Comision Nacional para el Ahorro de Energia, Mexico, and Lisa Jacobson, Business Council for Sustainable Energy, outlined their experiences with TCAPP. Gallardo said the program helped identify business partners, provided access to numerous institutions and information, and helped attract international investment. He suggested improvements to TCAPP, including the appointment of a national coordinator and the provision of financial resources. Jacobson explained that the Council assists with identification and development of clean energy market opportunities. She underlined the role of investment solicitation as a vehicle for private sector partnership.Several participating countries described their experiences with TCAPP projects in the transport and energy sectors. Many discussants agreed that TCAPP plays an important role in facilitating private sector involvement in clean energy technologies, though some called for a TCAPP role in financing activities. 

Title: Is natural gas an affordable option for emission of greenhouse gases reduction?
International Gas Union (IGU)
Peter Storm (pks@dong.uk)

Peter Storm, Secretary General of IGU, argued that natural gas would be a solution to global climate change until the world finds a sustainable source of energy. Wayne Soper, Chairman of the IGU Committee for environmental issues, remarked that the CDM is an opportunity to engage the gas sector in transferring technologies to developing countries. Marc Darras, Gaz de France, presented an IGU report on “Methane emissions caused by the gas industry world-wide.” Kristi Varangu, Principal Administrator, International Energy Agency (IEA), offered a presentation on “Natural Gas and the Kyoto Protocol: meeting the expectations.” She described natural gas as a climate change transitional fuel. Terence Thorn, Chairman of the IGU Committee for World Gas Products, presented on “Natural gas: its availability, its economics and the contribution it can make to the environment.” Josef Jansen, Economist, University of St. Gallen, Switzerland, presented on “Natural gas: the Kyoto Mechanism and the gas industry.” He noted the economic arguments in favor of natural gas.
participants expressed their concern about methane emissions and the level of investment required to bring new technologies into developing countries to reduce these emissions. Panelists responded that CDM rules must be sufficiently clear in order to ease the transfer of such technologies.
Realities and loopholes of the Post-Kyoto World: Study of Russian Forests
International Institute for Applied Systems Analysis (IIASA) and the World  Wide Fund for Nature (WWF)
Internet: www.iiasa.ac.at & www.wwf.ru

Wayne Soper, IG

Professor Anatoly Shvidenko, IIASA, Austria, and Alexey Kokorin, WWF, Russian Federation, presented the results of their collaboration on the study of Russian forests. He outlined a methodology to establish the Russian Federation’s carbon budget and stressed the need for full carbon accounting. Kokorin noted that large carbon pools have very complicated internal links and warned against a simplified approach.

Title: CDM Baseline study in renewable energy and power supply
German Delegation in co-operation with Deutsche Gesellschaft fuer Technische Zusammenarbeit (GTZ)
Holger Liptow, GTZ (holger.liptow@gtz.de)

The event dealt with measures to implement the FCCC and introduced a study on “Wood Waste Power Plants in Zimbabwe as options for CDM” developed by GTZ in collaboration with the Oeko-Institut e.V. Holger Liptow, GTZ, introduced participants to the work of the GTZ on climate change, focused on the Clean Development Mechanism (CDM) and baselines. He presented the background to a renewable energy project in Zimbabwe, initiated by the Zimbabwe Power Company (ZPC) in partnership with the timber industry, aimed to assess its eligibility for the CDM. He concluded that the use of biomass within the project offers considerable ecological and economic benefits alongside the potential reductions in GHG emissions. Ms. Anke Herold, Oeko-Institut e.V., explained the different methodological approaches and how the project participants arrived at a baseline. The decision matrix includes a variety of choices and assumptions for the baseline.
The discussion focused on questions regarding the liability of the baseline approach in light of regional and national differences. Participants commented on the possible advantages of a flexible baseline.
Further information: Visit the GTZ exhibit at the Maritim.

Anke Herold, Oeko-Institut

Title: CDM Design: how an open architecture can meet the needs and visions of a broad range of interests
: World Resources Institute(WRI); Center for Sustainable Development in the Americas (CSDA); and World Business Council for Sustainable Development (WBCSD)
www.wri.org, www.csdanet.org, & www.wbcsd.org 

Kevin Baumert, WRI, presented various models for CDM implementation, namely bilateral, multilateral, unilateral and hybrid. He said the choice of the model could influence factors such as: geographic distribution of projects; project types and sizes; the need for host country capacity; competitiveness; and relative benefits shared between hosts and investors. He said that all projects would have to go through project development, design and financing; validation; monitoring; and verification/certification. He suggested an open architecture CDM in which there would be: a plurality of implementation approaches available and operating in parallel; wider participation and benefits; the possibility of learning by doing; and competitive advantages for the CDM.


Kevin Baumert, WRI

Coverage on Saturday, 10 June 2000

Title: Good practices on policies and measures: approaches to promote information sharing
Portuguese Delegation on behalf of the European Union
Julia Seixas  

Ogunlade Davidson, IPCC, provided an overview of the Policies and Measures (P&Ms) debate since the IPCC’s Second Assessment Report. He focused on, inter alia, criteria for evaluation, economic and social consequences; administrative burdens; institutional requirements and political considerations; and domestic and international technology transfers.  Jonathan Pershing, IEA, focused on the exchange of information. He said countries were very different in their approach to climate change policies and to the sectors they target. Marginal abatement costs vary between countries. Paul Stolpman, United States Environmental Protection Agency, noted that over 60% of GHG emissions in 2010 will come from equipment purchased between now and 2010. A variety of P&Ms have been used to influence these purchases, varying from mandatory, voluntary, and financial approaches to information programs. He cited the example of the Energy Star Products labeling programme for consumers. Julia Seixas, New University of Lisbon, stressed that the choice of P&Ms is largely dependent on domestic circumstances. She suggested that the IPCC provide guidance on information sharing practices.Francois Moisan, ADEME France, reported on a French study evaluating energy efficiency policy between 1973 and 1993. He said many regulatory measures were well designed but lacked control. A major barrier for small companies was the lack of access to capital.

Title: CC: Forum on Mechanisms
Sponsor: UNFCCC
  Kai-Uwe Schmidt  

Robert Kleiburg, Shell International, opened this event with a presentation on small-scale CDM projects. He presented a case study on the installation of 50,000 solar home systems (SHS) in South Africa, concluding that small-scale projects incur high transaction costs. He said a fast track approval process and up-front crediting will reduce transaction costs and stimulate private sector interest, and proposed that COP-6 formulate interim guidelines on baselines to offer security to investors. Comments focused on the ancillary benefits of rural electrification and the need for criteria to guide the prioritization of preferential treatment for small-scale projects. On “The Practical Application of Multiple-project Baselines for the Evaluation of CDM Projects in Industrial Sectors”, Michael Ruth, Lawrence Berkeley National Laboratory, advocated a process-step benchmarking approach to CDM projects in industrial sectors. Comments focused, inter alia, on the criteria for the benchmark or baseline, and the degree of spatial aggregation. On the “ERU-PT programme”, Maurits Henkemans, of the Dutch Ministry of Economic Affairs, outlined guidelines based on the Dutch experience with AIJ projects. Co-presenter Remko Ybema, from the Netherlands Energy Research Foundation (ECN), said that while basic guidelines need to be in place, the modalities could be worked out by independent third parties. Henkemans expressed concern about the lack of institutional capacity in host countries, and proposed that the EU fund capacity building programs. On “Setting Baselines: lessons from experience with environmental and non-environmental programs,” David Harrison, National Economic Research Associates  (NERA), proposed a two tier approach, each with a different trade-off. 
More information:

From left: Robert Kleiburg, Shell International, Liam Slater, WWF, Kai-Uwe Schmidt, Axel Michaelowa, Peter O. Odhengo, Kenya Industrial Research and Development Institute


Title: Wetlands, water and climate change.
The World Conservation Union (IUCN)
Brett Orlando, IUCN USA Multilateral Office (borlando@iucnus.org)

This event explored the relationship between the climate change and Ramsar Conventions. Brett Orlando, IUCN, introduced participants to the organization’s work on climate change over the past 3 years. He noted the IUCN’s intention to focus on clarification of liability, adaptation options and carbon sink issues. Nick Davidson, Ramsar Secretariat, stated that Ramsar will address approaches to wetland management that help to mitigate climate change. Janos Pasztor, FCCC Secretariat, acknowledged that the FCCC has a role to play in linking the two conventions.

Nick Davidson, Ramsar Secretariat  and Brett Orlando, IUCN USA Multilateral Office

Mirna Verin, Honduras, talked about “Vulnerability of Honduras to Climate Change: The Mitch experience,” noting that wetlands were among the areas worst affected after Hurricane Mitch. Rudd Jansen, Country Representative, IUCN Botswana Office, noted the relationship between water, wetlands and climate change and the impact of river floods in marginal areas and human settlements.
Participants commented on the benefits of implementing related environmental conventions, the recognition of synergies, including those operating at the local level, and the importance of agriculture in the context of carbon sinks. Janos Pasztor underlined the importance of public awareness, communications, and outreach.

Title: Designing effective liability rules for emissions trading
The Electric Power Research Institute (EPRI)
Richard Bratcher 

Richard Rosenzweig and Kyle Danish, EPRI, presented a comparative study on qualitative, legal and commercial analysis of proposed emissions trading rules. They focused on how the risk of overselling can be effectively addressed in the proposed Protocol compliance mechanism, noting that the compliance framework under consideration by the Parties would not prevent overselling.
He argued that sanctions would succeed in deterring overselling, although their adoption would face legal and political obstacles. On overselling, Donald Goldberg, Center for International Environmental Law (CIEL), proposed a hybrid liability system for emissions trading. His system is based on: a pre-commitment eligibility test; and, a “trajectory” based on inventories. On a “Model evaluation of the cost and environmental impact of liability proposals”, Fanny Missfeldt, UNEP, presented work undertaken with Erik Haites. 

Richard Rosenzweig and Kyle Danish, EPRI

The model estimates how different liability proposals deal with total emissions by Annex I Parties, and their total costs and quantities. They concluded that: proposals differ widely in terms of environmental effectiveness and compliance costs; in many proposals operational specification is country sensitive; some proposals restrict the trading period, leading to higher costs; and, some permanent reserve proposals can lead to compliance at no additional cost.
A panel of experts focused their discussion on the imposition of tough sanctions to favor compliance. Murray Ward, New Zealand, addressed: the legitimacy of international institutions imposing sanctions; the relationship between international and domestic markets; the need to address legal loopholes; and the need for incentives.

Title: Why sinks should be included under the CDM?
Chilean Delegation, Comision Nacional de Medio Ambiente.
Juan Pedro Searle (jpsearle@conama.cl) 

Thomas Black Arbelaiz, Chief Economist at the Ministry of the Environment, Colombia, called for rapid progress on mitigation activities and noted the important role of the CDM. He also argued that the inclusion of multifunctional small-scale projects in the CDM could contribute to poverty alleviation among rural populations.Dr. Jose Villa-Lopera, Ecolombia, stressed the importance of having forest projects as a component of Colombia’s CDM strategy, with a view to supporting the development of multifunctional projects on natural forest conservation and management. Aquiles Neuenschwander, Ministry of Agriculture, Chile, outlined a project on the contribution of afforestation and the recovery of degraded soils to carbon sequestration. 
Greenpeace discouraged the promotion of forest projects through the CDM. The World Wildlife Fund (WWF) cited the economic benefits to be derived from including large-scale energy and transport projects in the CDM.
More information on LULUCF in Chile:


Title: Reducing costs and trade impacts of mitigation: The Clean Development Mechanism (CDM)
Global Climate Coalition (GCC)

Russel Jones, American Petroleum Institute (API) (jonesr@api.org), W. David Montgomery, Charles River Associates, Washington D.C.

David Montgomery outlined a model on the economic and trade implications of the Kyoto Protocol, designed to provide a realistic approach to the CDM. Results of the analysis include findings on the costs of meeting the Kyoto Protocol obligations and the role of flexibility mechanisms in reducing costs. As future emissions reductions are projected to become more costly than those achieved up to now, European countries will be confronted with problems concerning their burden sharing targets for 2010. According to the analysis, flexibility mechanisms become particularly important for countries falling farthest short of their burden-sharing goals. Emissions trading will become a “safety valve” for Europe as trading reduces the need for very costly domestic mitigation policies. In addition, he focused on trade and spillover effects on non-Annex B countries under different implementation scenarios for the flexibility mechanisms, including changes in terms of trade and shifts in investment in energy intensive sectors. He concluded that flexibility will reduce spillover effects, trade distortions and carbon permit prices, thus leveling the playing field for energy prices across countries participating in the emissions trading system. Regarding the CDM, the model stresses the benefits for Annex I countries to be derived from unrestricted trading, adding that the CDM would be less valuable with restrictions on geographic distribution.

Title: Do dams emit more GHGs than other options?
The World Conservation Union in collaboration with the World Commission on Dams (WCD)
Jamie Skinner, WCD (jskinner@dams.org) 

The IUCN’s Brett Orlando outlined the organization’s collaboration with the World Commission on Dams and the World Bank. The participants discussed the question of whether dams should be considered sinks or sources under the terms of the Kyoto Protocol. Jamie Skinner described how the World Commission on Dams was conceived at a 1997 workshop convened by the World Bank and IUCN in Switzerland. The Commission was established to enhance dialogue and is due to report its conclusions at COP-6 in November 2000. The WCD includes representation from a number of NGOs, scientists, economists, the private sector and politicians. Outlining the pros and cons of the argument about dams, Skinner explained that opponents claim that dam reservoirs emit GHGs, that the science is uncertain, and that dams have other significant social and environmental impacts, and subsequently, should be excluded from the CDM. Hydropower developers, on the other hand, claim that dams are not only a renewable energy source but also, on balance, produce cleaner power than other sources. The debate centers around the question of how much carbon dioxide and methane is emitted from reservoirs created by dams, the global warming impacts, and whether these emissions can be compared with those from other sources. Skinner reported preliminary findings confirming that: all reservoirs studied so far emit GHGs, as do all natural lakes that have formed part of the study; flooded biomass alone does not account for observed GHG emissions as carbon is also flowing into the reservoir from the entire basin upstream; and long-term studies will be essential to draw rigorous conclusions. 
Skinner outlined problems with standardized measurements during discussion, and addressed comments on the importance of focusing on net emissions. He pointed out that the WCD does not have a clear view on the CDM. The focus of its work has been to present all positions gathered from the participating sectors, with a view to finding common ground and providing guidance to Parties who have to make the final decisions.

Coverage on Wednesday, 7 June 2000

Title: IPCC Special Report on LULUCF
Intergovernmental Panel on Climate Change (IPCC)
Contact: Robert Watson, Chair, IPCC
Internet: www.ipcc.ch

Robert Watson presented the major findings of the IPCC Special Report on Land Use, Land-Use Change and Forestry (LULUCF). The Report was prepared upon a request from SBSTA-8, to examine the scientific and technical state of understanding for carbon sequestration strategies related to land use, land-use change, and forestry activities and relevant articles of the Kyoto Protocol. The Report discusses the global carbon cycle and how different land use and forestry activities currently affect standing carbon stocks and emissions of GHGs. It also looks forward and examines future carbon uptake and emissions that may result from employing varying definitional scenarios and carbon accounting strategies within the forestry and land-use sectors.Lead authors were invited to elaborate on their main findings. On the global carbon cycle, Bert Bolin, Sweden, said that ecosystem models indicate that additional terrestrial uptake of atmospheric CO2 arising from indirect anthropogenic effects is likely to be maintained for several decades in forest ecosystems, but may gradually diminish. 

Robert Watson underscored the critical task of defining afforestation, reforestation and deforestation, because this will determine the amount of land to be considered under Protocol Article 3.3 (afforestation, restoration and deforestation - ARD) and the treatment of the harvesting-regeneration cycle. On carbon accounting, he presented land-based and activity-based approaches, noting that in the former case it is difficult to factor out human-induced activities, while the latter poses a risk of double counting. Bernhard Schlamadinger, Austria, outlined three alternative accounting approaches. On Article 3.4 (additional human induced activities), Robert Scholes, South Africa, noted that the magnitude of additional activities could be substantial compared to the scope of existing provisions in Protocol Article 3.1, and distinguished between changes in management and in land cover.He highlighted verifiability and associated non-climate impacts and benefits as key issues for COP-6.Jayant Sathaye, US, noted that experience in LULUCF projects is being gained through AIJ activities. He outlined his key concerns, notably permanence, baselines, additionality, carbon leakage, monitoring and verification and implementation of sustainability conditions. N.H Ravindranath, India, highlighted provisions for LULUCF in the current IPCC Guidelines, and how they might be revised to accommodate Protocol requirements, including additional activities under Article 3.4 and project-based activities. Peter Frumhoff noted that a system of criteria and indicators would be useful to compare sustainable development impacts across LULUCF alternatives.
Discussion: A number of delegates noted uncertainties in the IPCC research, while several sought clarification. Participants raised issues related to: sustainable development; avoiding deforestation in tropical regions; consistent ground and atmospheric definitions; the effect of climate on photosynthetic potential in tropical regions; the potential for sink activities to contribute significantly to the fulfillment of Annex I Parties� commitments; and issues relating to a full carbon accounting system.


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. The Editor of ENB on the side is Peter Doran Ph.D <peter@iisd.org>. This issue has been written by Hernan Lopez <hlopez@law.pace.edu> and Gerhard Mulder <gerhardmulder@hotmail.com >. The Digital Editor is David Fernau <david@iisd.org>. Photos by Kenneth Tong <ken@iisd.org> and Andrei Henry <andrei@iisd.org>. Funding for publication of ENB on the side at SB-12 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 other 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 Managing Editor at <kimo@iisd.org>. Electronic versions of these issues of ENB on the side from SB-12 can be found on the Linkages WWW server at http://www.iisd.ca/climate/sb12/.
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