Published by the International Institute for Sustainable Development
Vol. 12 No. 108
Thursday, 10 June 1999
HIGHLIGHTS FROM THE MEETINGS OF THE FCCC SUBSIDIARY BODIES
WEDNESDAY, 09 JUNE 1999
The Subsidiary Body for Scientific and Technological Advice (SBSTA) considered draft
conclusions on the review process relating to greenhouse gas inventories and other matters
related to methodological issues. Contact groups were convened on: the Protocol
mechanisms; non-Annex I communications; Annex I communications; budget; and land use,
land-use change and forestry (LULUCF).
Delegates adopted the draft conclusions on the review process relating to greenhouse
gas inventories (FCCC/SBSTA/1999/L.4). In the draft conclusions, SBSTA endorsed elements
of the FCCC technical review process including the annual initial checks, annual synthesis
and assessment and individual reviews. Chair Chow said the conclusions will be forwarded
for consideration by SBI, with a view to adopting a decision at COP-5. On other matters
relating to methodological issues (FCCC/SBSTA/1999/L.6), an amendment by FIJI to include
reference to regional consultations was accepted. The US called for consistency in
language used to state that the Secretariat would undertake work requested in light of the
budget. Chair Chow proposed deleting the paragraph and said this would be addressed in the
chapeau of the overall report on conclusions. Delegates adopted the conclusions as
CONTACT GROUPS AND INFORMAL CONSULTATIONS
Joint Contact Group on Mechanisms: Delegates continued consideration of the
synthesis of proposals on the clean development mechanism (CDM). On further work on CDM,
the G-77/CHINA stressed addressing principles and basic elements that are currently not
featured in the synthesis report. The US identified convergence on, inter alia, the need
for work on baselines and share of proceeds, and the EU highlighted monitoring,
verification, certification and validation.
The G-77/CHINA underscored the significance of capacity building. Supported by PERU, he
said capacity building should be incorporated into all CDM projects to enhance endogenous
expertise to identify technology needs and capacities for assimilation of technology. He
urged attention to the special needs of LDCs. The PHILIPPINES stressed that
capacity-building initiatives should be country-driven and within the intergovernmental
process. CHINA said capacity building should be "of, for and in" the developing
country. The AFRICA GROUP underscored the importance of an integrated approach to capacity
building and called for guidance from the subsidiary bodies to UN agencies working on such
activities. The EU suggested coordinating the various capacity-building initiatives so as
to optimize resource use.
PERU highlighted the usefulness of regional discussions on CDM. SENEGAL suggested
involving the financial sector, sensitizing the public and decision-makers and training
developing country officials. SWITZERLAND noted the bottom-up approach suggested by the
G-77/China and advocated tailor-made approaches for each country. VENEZUELA stressed the
need to establish clear rules for transparency regarding the projects contribution
to sustainability and the costs, risks and liabilities in the developing country.
Chair Chow invited delegates to identify areas of convergence and divergence in views
submitted on Protocol Article 6 (joint implementation) activities to assist in redrafting
the synthesis of proposals. On the structure, purpose and principles, the G-77/CHINA noted
its submission on elements that should be addressed to enable the COP/MOP to elaborate
guidelines. CHINA suggested focusing on cluster issues, including: principles, purpose,
nature and scope; methodological issues; and institutional issues. The EU suggested
including appendices on technical issues such as baselines and monitoring. SWITZERLAND
inquired about a date for early crediting noting the lack of clarity in the case of joint
implementation (JI). The EU said there is no provision for it in the Protocol. JAPAN noted
areas of convergence in the proposals submitted on environmental and cost effectiveness,
equity and transparency. The US emphasized that JI differs from CDM, as it does not share
the goal of promoting sustainable development.
On Parties participating in JI, the EU said they should have ratified the Protocol and
be bound by a compliance regime. On the involvement of legal entities, she noted the
impact they may have on a Partys responsibilities under Protocol Article 3 (QELROs).
JAPAN stated that the term "operational entities" was unique to CDM and could
not be used when discussing JI. The EU preferred referring to "independent
Regarding project eligibility, the EU identified convergence on a two-step approach in
JI; validation before implementation and certification of emissions reductions, and in
elements relating to assessment of additionality. She noted, however, diverging views on
the methodology for determining baselines. JAPAN preferred addressing initiation of JI
projects along with project eligibility and said many countries did not concur with the
two-step approach. The US underlined the need to ensure environmental additionality of JI
Concerning project monitoring, the EU said participants should provide information on
their provisions for systematic, accurate and periodic monitoring and submit the necessary
monitoring data to show that the project has resulted in quantifiable and long-term
On the definition of emission reduction units (ERUs), the US noted convergence on how
to denominate, serialize and track ERUs, and reiterated the need to recognize that
procedures used elsewhere may not be appropriate for constructing JI. The US also said the
registry was an important element for ensuring accurate reporting and tracking, as well as
to ensure compliance.
On the relationship to the AIJ pilot phase, the US, supported by the EU, said that AIJ
activities might be eligible for JI if they fulfill the rules and requirements set for
such projects. Regarding supplementarity, the EU proposed a concrete ceiling on the use of
all three mechanisms.
Delegates discussed the synthesis of proposals on Protocol Article 17 (emissions
trading) activities. The G-77/CHINA reiterated the need address principles and basic
elements before dealing with methodological and operational issues. He said environmental
integrity must be inherent in the system, which should not freeze or perpetuate existing
inequities between Annex B and developing countries. He stressed that the Protocol had not
created any right, title or entitlement and said emissions trading should be restricted to
excess limitations and reductions additional to a countrys commitment. The
PHILIPPINES distinguished emissions trading from other mechanisms and stressed that it did
not imply a right to pollute but an obligation to reduce greenhouse gases. The EU
identified divergence on interchangeability between CERs and ERUs, and, with JAPAN, noted
convergence on cost effectiveness, environmental benefits, equity and transparency. With
the G-77/CHINA and the US, the EU said the Protocol did not create property rights, and
stated that emissions trading was a way of fulfilling obligations under the Protocol.
AOSIS, with the African Group, highlighted the need for adaptation surcharges to be
assessed against all the Protocol mechanisms. The RUSSIAN FEDERATION reminded delegates
that the Convention aimed at stabilizing rather than eliminating greenhouse gases in the
On the definition of units, CANADA noted divergence on the concept of fungibility among
the Protocol mechanisms. Regarding the sections on competitiveness, market size and
structure, relationship to domestic policies, and liability for sales of non-surplus
units, the G-77/CHINA said such headings are not neutral and recommended changing them.
CANADA said reference to "competitiveness" should be changed to "access to
emissions trading." On market size and structure, the RUSSIAN FEDERATION suggested
either defining or deleting the term "hot air" in the text. Regarding levies,
the EU noted some divergence regarding liability for sales of non-surplus units. On
capacity building, the US said paragraphs relating to project specific activities are not
applicable to emissions trading and should be removed.
Chair Chow said he would redraft the documents based on Parties comments, and
asked for new submissions to be provided by 1 July 1999. The G-77/China urged a later
deadline for submissions. The EU asked for additional time to complete its technical work
in producing draft appendices. Chair Chow said he would extend the deadline for the
technical submission to 1 August, and would consult with Parties on the suggested 1 July
Non-Annex I communications contact group: The contact group met to discuss
proposed draft decisions submitted by the EU and the G-77/CHINA and to decide on ways to
proceed in preparation for COP-5. Chair Reifsnyder (US) proposed identifying common
elements between the two proposals. Many delegations highlighted the differences,
including: whether the initial guidelines should be revised for second national
communications; whether there should be a technical assessment to "consider"
communications; or if a non-Annex I group of experts should provide assistance. Other
delegations noted common elements between the proposals on information gaps, GEF enabling
activities, and the need to identify problems faced by non-Annex I countries in preparing
communications. The group opted for a text "comparing" the two proposals, rather
than attempting to combine them. Further consultations are expected.
Annex I communications: The Annex I communications contact group met to discuss the
non-inventory part of the draft guidelines. The group considered a number of paragraphs,
and accepted proposals to, inter alia: title the document "The National Report;"
delete the paragraph containing definitions of "shall," "encouraged"
and "may;" reorder and rationalize paragraphs relating to the structure of
communications; and consider developing further the section on mitigation plans as it
relates to reporting of policies and measures by sectors. Deliberations are scheduled to
LULUCF: The LULUCF contact group met in the afternoon to consider draft
conclusions negotiated in previous sessions and an informal meeting held the previous day.
The group cleared the final remaining bracketed text after accepting an EU proposal,
amended by the US and the G-77/China, to note that an invitation to Parties to provide the
Secretariat with guidance on the scope of a proposed workshop "may include data,
information and a decision-making framework." The group concluded its work, adopting
the draft conclusions as amended.
Budget: The contact group met in the afternoon to consider proposed SBI
conclusions and a proposed draft decision to COP-5 on the programme budget for the
biennium 2000-2001. The group also considered a chart comparing the previous, current and
forthcoming budgets proposing an 18.4% increase in the 2000-2001 budget, as compared to
the 1998-1999 biennium. Allowing for a specific amount of expenditure from carry-overs to
cover part of the budget increase would result in a 10.7% rise in indicative
contributions. The group discussed bracketed text in the draft recommendations and in the
draft decision on the "contingency budget" related to the consideration of
non-Annex I communications and on authorizing the Executive Secretary, pending approval by
the COP, to draw on carry-overs to cover part of the budget increase. The group is to hold
IN THE CORRIDORS
One senior delegate observed that although voluntary commitments may not be on the
agenda at the subsidiary bodies, they remain a "hot issue" just as in Buenos
Aires. They have been compared to the uninvited guest who refuses to leave the party,
notably at the negotiations on the biennium budget and during the discussions on non
Annex-I communications. Some developing country participants have linked proposals for
assessments of non-Annex I communications to attempts to prepare the ground data for new
developing country commitments.
THINGS TO LOOK FOR
Joint Working Group on compliance: The group is expected to meet at 3:00 pm in
the Beethoven Room.
For all other meetings, consult the meeting board.