international shipping and the unfccc and kp: the ... · international shipping and the unfccc and...

International shipping and the UNFCCC and KP: the relationship between the proposed MBMs, the UNFCCC and KP principles

Third Intersessional Meeting of the Working Group on GHG E i i f ShiGHG Emissions from ShipsIMO, London, 28. March – 01. April 2011

UNFCCC secretariat, Adaptation, Technology and Science ProgrammeDr. Florin Vladu, Manager

Outline

1. Climate change

2. Negotiating process under the UNFCCC

3 Action to reduce GHG emissions from international3. Action to reduce GHG emissions from international shipping

4. Possible role for MBM for limiting GHG emissions from international shipiping

5. Offsetting: CDM in numbers

1. Climate change

• IPCC Fourth Assessment Report concluded in 2007 that:• Warming of the climate system is unequivocal (SYR page 2)Warming of the climate system is unequivocal (SYR, page 2)• With current mitigation policies and related sustainable

development practices, global GHG emissions will continue to grow over the next few decades (SYR, page 7)C ti d GHG i i t b t t ld• Continued GHG emissions at or above current rates would cause further warming with impacts larger than those observed during the 20th century (SYR, page 7)

• IPCC will completed its Fifth Assessment Report by the end of 2015, but these key conclusions are not expected to changep g

A comprehensive and global climate change strategy is necessary now more than ever to address climatenecessary now, more than ever, to address climate change across all sectors of the society and the global economic system


• What was the response form the intergovernmental process on climate chnage?

Convention

N ti ti L T C ti A tiNegotiations on Long-Term Cooperative Action

BAPCOP 15 (2009)

Copenhagen

COP 11 (2005)

Montreal

COP 13 (2007)

Bali

COP 16 (2010)

Cancun

Dialogue BAP BAP COP 17 (2011)Durban

+ CA

Kyoto ProtocolFurther commitments for Annex I PartiesFurther commitments for Annex I Parties


• The Convention:• Foundation of global efforts to combat climate change• Principles guiding Parties to the Convention (Article 3):• Principles guiding Parties to the Convention (Article 3):

• Common but differentiated responsibilities and respective capabilities• Precautionary principle

F ll id ti f d l i t d d i t• Full consideration for developing country needs and circumstances• Right to sustainable development• Supportive and open economic system

• The Kyoto Protocol:• The Parties included in Annex I shall pursue limitation or p

reduction of emissions of greenhouse gases not controlled by the Montreal Protocol from aviation and marine bunker fuels, working through the International Civil Aviation Organization andworking through the International Civil Aviation Organization and the International Maritime Organization, respectively (Article 2.2)


• The Cancun Agreements represent key steps forward in capturing plans to reduce GHG emissions and to help developing nations protect themselves from climatedeveloping nations protect themselves from climate impacts and build their own sustainable futures:• Form the basis for the largest collective effort the world has ever

t d i i i t ll t bl ithseen to reduce emissions, in a mutually accountable way, with national plans captured formally at international level

• Include the most comprehensive package ever agreed by Governments to help developing nations deal with climate change (finance, technology and capacity-building)g ( gy p y g)

• Include a timely schedule to review the progress they make towards their expressed objective of keeping the average globaltowards their expressed objective of keeping the average global temperature rise below 2 C (and agreement to review whether the objective needs to be strengthened in future)


• Cancun set in motion the design and construction of the ‘infrastructure for implementation’ needed for stepped-up action on climate change (e g the Adaptationup action on climate change (e.g., the Adaptation Committee, the Technology Mechanism, the Green Climate Fund, and the evolving mitigation framework)

• Yet, the mere existence of an international agreement does not in and of itself drive real action

• Policies are needed at the national and sectoral levels that work in tandem with international policy, including p y gfor international shipping

3. Action to reduce GHG emissions from international shipping

• International maritime transport contributes 2.7% of global GHG emissions and needs to contribute to achieving the LTGGachieving the LTGG• Growth in global trade will translate into GHG emissions from

shipping growing rapidly by a factor of 2.4 to 3.0 by 2050If l ft l t d i i f i t ti l iti• If left unregulated, emissions from international maritime transport might become a major source for globally emitted GHGs

A ti t li it d d GHG i i f• Action to limit and reduce GHG emissions from international maritime transport should:• Be environmentally effective y• Be customized according to the sector’s uniqueness• Allow the sector to contribute to global mitigation and adaptation

actions with a fair shareactions with a fair share• Contribute to minimizing impacts on vulnerable developing

countries• Avoid carbon leakage and competitive distortions• Avoid carbon leakage and competitive distortions

3. Action to reduce GHG emissions from international shipping

• An effective strategy to limit and reduce GHG emissions from international maritime transport should build on the IMO technical, regulatory and institutional expertise on international shipping andregulatory and institutional expertise on international shipping and the UNFCCC expertise on global climate change policies

B th i d d t P t d i d di ti t t t• Both processes are independent, Party driven, and distinct treaty regimes with their own Parties and sovereign decision-making bodies

• Parties under both processes might consider to work on a solution which respects both principles, and allows each treaty regime to p p p y gretain the integrity of its principles and practices

To address GHG emissions from international maritime transport, itTo address GHG emissions from international maritime transport, it is vital that Parties under the Convention meet the challenge of climate change together with the IMO

4. Possible role of MBM for limiting GHG emissions from international shipping

• Market-based measures may have a role to play in finding a common solution

• Customized market-based measures may bridge the gap between the two sets of leading principles and might help to reconcile both processesmight help to reconcile both processes

• Market-based measures, if applied globally, may id d b t ti l f d hi h ldprovide new and substantial funds, which could:

• Benefit developing countries• Be used for mitigation, adaptation and technology purposesg p gy p p

• Market-based measures, if applied globally, may also avoid carbon leakage and competitive distortionsa o d ca bo ea age a d co pet t e d sto t o s


• MBMs appear also as suitable instruments to achieve an early peaking of global and national GHG emissions and the LTGGemissions and the LTGG

• Parties to the UNFCCC consider the establishment of one or more new MBMs to enhance and promoteone or more new MBMs to enhance and promote mitigation actions (submissions in February 2011):• MBMs should enhance the cost-effectiveness of global

mitigation actions• MBMs should maintain and build upon existing mechanisms,

including those established under the Kyoto Protocolg y• Parties submissions focused on sectoral trading and sectoral

crediting mechanisms

Some Parties mentioned mechanisms that may be developed working with and through other treaty bodies such as IMO/ICAO (e g AOSIS Tuvalu)bodies, such as IMO/ICAO (e.g. AOSIS, Tuvalu)


• MBM appear also as suitable instruments to support long-term financing for developing countries:• Parties decided to establish a Green Climate Fund (GCF)• Parties decided to establish a Green Climate Fund (GCF)

• The GCF will support projects, programmes, policies and other ti iti i d l i t P tiactivities in developing country Parties

• Industrialized countries commit to jointly mobilize USD 100 billion per year by 2020

• Finance will come from a mix of public and private finance p psources

• The report of the High-level Advisory Group on Climate ChangeThe report of the High level Advisory Group on Climate Change Financing (AGF) will be considered to identify options for the mobilization of financial resources (bunker included)


• Long-term financing for developing countries (cont.):• The GCF shall be governed by a board of 24 members

(developing and developed country Parties)(developing and developed country Parties)• The GCF will be administered by a trustee and supported by a

professional secretariat. Th W ld B k ill th i t i t t• The World Bank will serve as the interim trustee

• Parties decided to establish a Transitional Committee of 40 members to design the details of the GCF

• The Transitional Committee will encourage input from all Parties and relevant international organizations and observer. It is currently being constituted and will meet in Mexico on April 28-y g p29. Governments will discuss the functions of the permanent Board

• The design phase is to be concluded by the COP 17 in Durban at the end of 2011


• 2,933 projects registered (25 March 2011)• 1,663 large-scale projects• 1 270 small-scale projects1,270 small scale projects

• Distribution of registered project activities by scope

3 1%

2.0%

3.1%

4.0%

4.6%Energy

W t h dli d di l4.8%

Waste handling and disposal

Manufacturing industries

Fugitive emissions from fuels

15.1%

Fugitive emissions from fuels

Agriculture

Chemical industries

66.5%Others

Source: UNFCCC secretariat


• CDM projects registered in more than 71 countries



Registered projects by host country

Registered projects by investor countryhost country

Republic of Korea

Philippines, 1.7%Thailand, 1.5%

Others, 11.9%

investor country

France, 2.2%

Italy, 1.6%Austria, 1.6% Others, 7.7%

UK 29 6%Republic of Korea, 1.8%

Viet Nam, 1.9%

Indonesia, 2.1%

Malaysia, 3.1%

China, 43.8% Spain, 3.0%

Germany, 5.3%

UK, 29.6%

Mexico, 4.3%

Brazil, 6.4%

Sweden, 7.3%

Netherlands, 10.9%

India, 21.5%

,

Japan, 11.4%

Switzerland, 19.4%

Source: UNFCCC secretariat Source: UNFCCC secretariat


• 500 million CERs issued (January 2011)

Monthly CER issuanceo t y C ssua ce


• 21,6 million CERs issued in December 2010 (monthly maximum, issuance levels expected to remain in 2011)



14

15• CER spot price (1/1/2009 – 31/12/2010)

13

14

11

12

€

9

10

7

8

2 6 3 1 7 1 5 9 4 8 3 1 8 4 9 3 8 1 6 0 0

2009

-01-02

2009

-02-06

2009

-03-13

2009

-04-21

2009

-05-27

2009

-07-01

2009

-08-05

2009

-09-09

2009

-10-14

2009

-11-18

2009

-12-23

2010

-02-01

2010

-03-08

2010

-04-14

2010

-05-19

2010

-06-23

2010

-07-28

2010

-09-01

2010

-10-06

2010

-11-10

2010

-12-20

Source: BlueNext Carbon


• Carbon markets:

• Private transactions between facilities• Private transactions between facilities

• “Over the counter” transactionsB l O b (S G ) M ill L h C dit A i l• Barclays, Orbeo (Soc Gen), Merrill Lynch, Credit Agricole, Deutsche Bank, Credit Suisse, Morgan Stanley etc.

T ti i t k h• Transacations in stock exchage:• BlueNext Carbon Exchange• European Energy Exchange p gy g• European Climate Exchange• NordPool , etc.


• Carbon funds:• Private investors and

governments participategovernments participate in a common fund

• Public, private and bli i t f dpublic-private funds

• 96 carbon funds operating end of 2010 (10,800 MUS$)

• The World Bank manages 2,300 MUS$ in g13 of these funds

Source: CDC Climate Research

Thank you

Florin VladuManagerAnalysis and Methods SubprogrammeAdaptation, Technology, and Science ProgrammeUNFCCC [email protected]://unfccc.intp

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