Friday 29 October

Outlines of a decision on AIJ emerge :
The outline of a decision on the future of the pilot phase of Activities Implemented Jointly (AIJ) emerged at a meeting of a contact group chaired by Yvo de Boer, Deputy Director of Air and Energy at the Netherlands' Ministry of Housing, Spatial Planning and the Environment. In his draft decision, Mr.de Boer provides for a number of options, including:

• a continuation of the AIJ pilot phase
• a provision to address the progression beyond this at COP-6
• the possibility that criteria for determining the eligibility of activities implemented jointly under the pilot phase under Articles 6 and 12 of the Kyoto Protocol may be established by COP-6, through a decision on principles, modalities, rules and guidelines governing these mechanisms.

In our RealAudio presentation, De Boer outlines the rationale for his draft decision in an interview with Peter Doran.

The European Union has also tabled a draft decision. The Union's representative said de Boer's draft contained a number of useful elements. His preference was to stop the pilot phase now and start an 'AIJ phase' thus situating the instrument entirely within the Convention. He expressed concern that funds for projects will be lost without a decision indicating that the AIJ is to continue. The EU is also seeking to make a distinction between the AIJ pilot phase and the AIJ phase as such. For the pilot phase there would be no credits. In the AIJ phase there could be crediting, with a decision taken by those considering the Kyoto Protocol mechanisms in the negotiations.

Chair de Boer suggested that he could amend his draft decision, inserting text indicating a decision to stop the AIJ pilot phase, and deciding to start the AIJ under the provisions of the UNFCCC and with a view to capacity building. In another paragraph, he could introduce an amendment indicating that any decision on crediting should be left to the negotiators dealing with the Kyoto mechanisms.

Tuvalu expressed concern that the Parties were creating a whole new mechanism for crediting with less stringent rules than those to be applied to the Kyoto Protocol mechanisms.

Draft decision finalised by joint contact group on Annex-1 national communications :
The joint contact group working on national communications from Annex-1 Parties completed its work on a draft decision for consideration by SBI and SBSTA. The draft decision notes that the revised guidelines for the preparation of national communications by Annex-l Parties need to be updated to improve the transparency, consistency, comparability, completeness and accuracy of the information reported. It decides that Annex l Parties should use Part II of the UNFCCC reporting guidelines for the preparation of their third national communications due by 30 November 2001, in accordance with decision 11/CP.4. Annex l Parties are asked to provide a detailed report on their activities in relation to systematic observation and urges those Parties that have not submitted their first or second national communication to do so as soon as possible.

Subsidiary Bodies Progress Report
With one day of negotiations remaining this week, the Chairs of a number of contact groups submitted progress reports to a joint session of the Subsidiary Bodies Friday evening. Here is a summary of progress to date:

• On adverse effects, Parties have discussed the need for another workshop and a process for further information gathering, assessment and decision-making. The Co-Chairs of the joint contact group distributed a draft decision in the evening.
• On compliance, "considerable progress" has been reported with the establishment of some common ground.
• On AIJ, Parties discussed the possible continuation of AIJ and what form this might take. The question of a uniform reporting format had been set aside for the moment. A draft decision was circulated in the evening.
• On mechanisms, Parties have identified a number of areas of convergence and divergence. A draft Chairs' conclusion has been circulated to regional co-ordinators. The draft requests the SBSTA and SBI Chairs to revise their synthesis document to reflect new proposals and consolidate these with a view to preparing a draft negotiating text. The draft decision also requests the Chairs to convene intersessional meetings/workshops drawing on technical expertise.
• On capacity building, the G-77/China has submitted a constructive proposal and Parties have been conducting further discussion on the basis of a Co-Chairs' revision. The group is mindful of the need to work closely with other contact groups to address overlaps.

Calls for an extraordinary intersessional meeting on mechanisms:
The joint contact group assigned to examine the Kyoto mechanisms, under the chairmanship of Kow Kee Chow [right], has completed its first round of 'brain storming' based on a synthesis document integrating proposals from the Parties. The document brings together proposals on principles, modalities, rules and guidelines for the operation of the CDM, Joint Implementation and Emissions Trading.

During discussions on progressing the negotiations and plans for a technical meeting of experts on the mechanisms next year, some G-77 countries resisted the suggestion that technical issues could be separated from political negotiations and supported a more substantive intersessional meeting.

Chairman Chow reminded Parties that such an extraordinary meeting would require a decision by the COP and consideration of the budgetary implications. He preferred an intersessional meeting that would help with preparations for the scheduled intersessional meetings of the UNFCCC subsidiary bodies.

In his attempt to question the distinction between technical and political meetings, the delegate from China reminded colleagues about the fate of the "premature negotiating" text on voluntary commitments presented by COP-3 Chair, Raul Estrada. He recalled a Chinese proverb: experience, if not forgotten, can be a guide to the future.

Parties consider two sessions for subsidiary bodies before COP-6:
With a heavy and complex workload during the next intersessional period, some Parties are examining the possibility of convening two sessions of the subsidiary bodies before the next COP. There is support within some Annex l countries for sessions of the subsidiary bodies held back to back with technical workshops in the Spring and Summer. A number of important ministerial meetings will also be used to drive the process, including a meeting at the UN Commission on Sustainable Development and at the G-8 meeting of environment ministers.

Chair Chow consults with SBSTA Chair Harald Dovland [center] and SBI Chair John Ashe [right].	SBI Chair John Ashe and SBSTA Chair Harald Dovland meet with environmental groups, business and industry organizations and representatives of local government and municipal authorities.
Local government and municipal authority representatives.	Business and industry organization representatives.
European Union Press Briefing
Satu Nurmi, Finland, speaking for the EU at the press conference. The Finnish Presidency of the European Union has identified the pilot phase of Activities Implemented Jointly as one of the most crucial facing COP-5. A decision on the future of AIJ is required before the end of the year if projects are to continue.	Jos Delbeke, European Community
United States Press Briefing
During a US press briefing, Mark Hambley, Deputy Assistant Secretary, US State Department, said the US was pleased with progress made thus far at COP-5, highlighting in particular work done on the synthesis report on mechanisms. He also noted progress on compliance, capacity-building and sinks.
Joint Working Group
Considerable progress was reported by the Co-Chair of the of the Joint Contact Group on compliance, Harald Dovland, when he reported to a joint meeting of the subsidiary bodies Friday evening. He said common ground had been established. Co-Chairs of the Joint Working Group on Compliance Harald Dovland and Espen Rønneberg	Daisuke Matsunaga, Japan, said the costs of not complying with the Protocol should be lower than those resulting from withdrawl from the Protocol
Protocol On the relationship between the compliance system and Article 19, Patrick Szell, UK (on the right), highlighted the need to determine whether the compliance system or the dispute settlement process would take precedence where the two were in action simultaneously.	José Romero, Switzerland, supported the imposition of financial penalties as a last resort
Thomas Kuokkanen, Finland on behalf of the EU, said that the consequences of non-compliance should take into account the cause, type, degree and frequency of non-compliance	Juliette Voinov, ENB, speaks with the Australian delegate regarding Australia's preliminary thoughts on a compliance procedure. Australia said the Party concerned should have the option to choose from a menu of consequences.
Joint Contact Group on AIJ
Yvo de Boer, Netherlands, AIJ contact group chair	Mohammad Reza Salamat, Iran, Co-Chair of the contact group on Articles 4.8 and 4.9, and Kok Kee Chow, Malaysia, Chair of the mechanisms contact group
Joint Contact Group on Capacity Building	Evening Plenary
Janos Pasztor (right), UNFCCC Secretariat, introduces a draft proposal for a joint project on capacity-building for developing countries for the CDM. The draft project proposal is contained in document FCCC/SBSTA/1999/INF.8/Add.1.	Harald Dovland and Michel Zammit Cutajar after the evening Plenary session

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