Bonn Climate Change Conference - June 2015

This session considered issues surrounding fossil fuel subsidy reform, the potential for emissions reductions and fiscal savings and linkages with INDCs. Hans Jakob Eriksen, Special Advisor, Ministry of Climate, Energy and Building, Denmark, opened the session. He noted the growing momentum for reforming fossil fuel subsidies, highlighting 30 countries that have carried out reform over the past year. He presented recent outreach activities of the Friends of Fossil Fuel Subsidy Reform, expressing hope for further progress before COP 21.

Radek Stefanski, University of St. Andrews, highlighted issues with current methodologies and presented research on a new model-based method for assessing fossil fuel subsidies, analyzing emission-intensity patterns as countries develop. He shared his findings that without subsidies 2010 global gross domestic product (GDP) would have been 1.7% higher and overall emissions between 1980-2010 would have been 36% lower. He underscored the potential of fossil fuel subsidy reform for climate change mitigation, noting that fossil fuel wedges amounted to 3.8% of global GDP in 2010, saying that this amounts to almost twice as much as IPCC estimates of the cost of climate change in 50 years.

Laura Merrill, IISD, underscored the "window of opportunity," under which fossil fuel subsidy reform can be used as an existing policy tool with great potential for reducing emissions and thereby raising pre-2020 ambition. She suggested that this could be included in countries' INDCs. She noted a three-pillar approach to reforms: getting prices right; building support for reforms; and managing and mitigating the impacts of reform. She presented IISD's Global Subsidies Initiative – Integrated Fiscal model, noting that initial results show an average of 10% reduction in CO2 emissions for consumer-level fossil fuel subsidy reforms. Highlighting the fiscal benefits that can result from fossil fuel subsidy reforms, she noted that if resulting savings are reinvested in renewable energy and energy efficiency, average emissions reductions are between 10-17%, depending on country-specific factors.

In the ensuing discussion, participants considered, inter alia: the importance of safety nets when undergoing reforms; the potential for better targeted policies for the most vulnerable such as direct transfers or investment in services; the need for patience when undertaking lengthy reform processes; the importance of dialogue between stakeholders; the need for socially- and environmentally-conscious redirection of savings; and the need for carefully deliberated policies to avoid social unrest.

Introducing the Agreement for Climate Transformation (ACT 2015) proposal on the Paris agreement as an exercise to identify what roles and functions the Paris agreement should play for low carbon, climate resilient development, Jennifer Morgan, World Resources Institute, opened the session. She highlighted the proposed agreement's two goals of building climate resilience and phasing out greenhouse gas emissions to net zero, both of which would be supported by three cycles of adaptation, mitigation and support (finance, technology transfer and capacity building).

Discussing the mitigation cycle, Morgan introduced its various elements, including: a five-year timeframe; national reports to review achievements; and collective assessment of mitigation commitments based on a long-term goal and an equity framework.

Highlighting the challenge to elaborate adaptation in the agreement on parity with mitigation, co-author Antonio La Viña, Ateneo School of Government (ASoG), presented the adaptation cycle featuring: a qualitative goal of achieving resilience, regular preparation and updates of adaptation effort statements, and further enhancement of measuring, reporting and verification procedures and role of the Adaptation Committee.

Noting that the adaptation and mitigation goals cannot be achieved without a complementary support cycle (finance, capacity building and technology transfer), La Viña described elements of the support cycle including: scaling up of finance; preparation of finance strategies; assessment and synthesis by the Standing Committee on Finance; and alignment of investment decisions and policies with the long-term goals.

Given the highly intertwined nature of the three cycles, Morgan noted that the cycles would come together for a "moment" every five years. Parties would make relevant submissions and after consideration by relevant bodies, the Meeting of the Parties to the agreement would endorse it together, preventing the need for individual ratifications.

Sebastian Oberthür, Free University of Belgium, discussed, among others, the legal form of the agreement. He noted the package consisted of a legally binding part, a set of COP decisions, and a political declaration on climate finance. He emphasized that the binding element of the agreement would be on conduct and procedures, as opposed to binding performance by parties. He also discussed tools for accountability and robustness including a transparency/accountability framework and an implementation mechanism to facilitate compliance.

Discussant Christina Voigt, legal adviser, Norway, welcomed the balance in emphasis in the proposed agreement between effectiveness and fairness.

Discussant David Wei, Business for Social Responsibility, said the value addition of the ACT proposal was its demonstration of how policy certainty could be achieved and how transparency and accountability provisions can create a level playing field for businesses.

Respondent Sarah Moarif, Organisation for Economic Co-operation and Development (OECD), emphasized the importance of long-term decarbonization and cycles to ratchet up efforts, saying the agreement could promote greater domestic cohesion in policymaking.

During discussions participants considered the legal form of the agreement and how the agreement would be connected to the "real" economy and "real" people. Panelists noted the need to identify precisely what would be binding in the agreement.

Moderated by Lina Dabbagh, Climate Action Network International, this event discussed opportunities to achieve synergies across the major international negotiations taking place this year, especially the post-2015 summit and the ongoing negotiations on climate change.

Describing the state of play of the post-2015 development agenda and the climate change negotiations, Sven Harmeling, CARE International, emphasized the interlinkages between climate and sustainable development and highlighted growing awareness amongst negotiators of the need to address the issues concurrently. He stressed that a successful third Financing for Development Conference would pave the way for an ambitious post-2015 agreement in September and allow governments to raise the ambition bar for Paris.

Presenting findings from a report on how the UN Framework Convention on Climate Change (UNFCCC) and sustainable development goals (SDGs) could be linked, Sandeep Chamling Rai, WWF International, said the SDGs should have a strong and visible climate narrative and the sustainable development needs and contributions of climate actions should be recognized in Paris. Among others, he identified the need for universally agreed commitments including a long-term mitigation goal, SDG indicators linked to national and regional monitoring mechanisms, and clarity on follow-up and review processes, as examples of areas where cross-pollination between the processes can happen.

Noting that climate change is a driver for disaster risk, Harjeet Singh, ActionAid, identified areas for promoting coherence between climate and disaster risk reduction (DRR) including: developing indicators for DRR in conjunction with SDGs; reference to DRR in the Cancun Adaptation Framework and Warsaw International Mechanism for Loss and Damage; and linking DRR with National Adaptation Plans and identifying limits.

Responding to the panelists' presentations, Ronny Jumeau, Ambassador for Climate Change and Small Island Developing State Issues, stressed that climate and development could not be addressed in silos and called on the Intergovernmental Panel on Climate Change to make firm links between climate impacts and SDGs and related indicators.

Discussant Gottfried von Gemminger, German Federal Ministry for Economic Cooperation and Development (BMZ), identified building resilience as a common theme across the international processes and highlighted differentiation as an "open issue" that needs to be addressed.

Mariama Williams, South Centre, pointed to response measures as an overlooked area that connects climate change and sustainable development, noting that ratcheting up mitigation could have implications for developing countries such as the need to diversify economies.

During discussions, participants discussed: mechanisms to raise ambition of existing and new commitments; actions already being taken by countries; and the importance of implementation to bring together separate processes.

This event considered Chinese and US perspectives on the China-US Joint Announcement on Climate Change.

Su Wei, Director General of Climate Change, National Development and Reform Commission, China, noted that the Joint Announcement sent a strong political message that leaders of China and the US are committed to confront the "real and imminent threat" posed by climate change, and are working with other countries to find global solutions. He also highlighted the work of the US-China Climate Change Working Group in enhancing dialogue and cooperation on key issues leading up to COP 21.

Danny Cullenward, University of California, Berkeley, highlighted the "richly detailed" and unambiguous nature of the US contribution. He discussed the move away from relying on a legislative compliance strategy and towards a more legally complex, regulatory policy framework. Considering findings from a recent World Resources Institute (WRI) report, he noted US climate goals were achievable but underscored sequestration as a key source of uncertainty.

Teng Fei, Tsinghua University, underlined the impressive nature of China's commitments, making particular reference to the goal of achieving 20% of total primary energy supply from non-fossil fuel sources by 2030. He noted that despite common misunderstandings that equate this goal to an increase of only 5% improvement between 2020-2030, the reality is far greater due to predicted growth of sectors, and will require 6-8% increases annually, equivalent to 1500GW extra installed capacity by 2030. He stressed the ambitious nature of China's goal to peak emissions by 2030, considering uncertainties in GDP growth, population growth and non-fossil fuel development, and noted a required annual improvement of 4.5% emissions intensity per unit of GDP to achieve this goal.

Zou Ji, Deputy Director General, National Center for Climate Change, China, underlined the importance of the Joint Announcement from the world's top two economies and emitters. He noted the significance of China's aim to peak before reaching the income level of USD 20-25,000 per capita.

Jennifer Morgan, WRI, highlighted the historic nature of the Joint Announcement, noting strong political progress made since COP15 and the implications for a new global agreement since there is "nobody to hide behind anymore." She informed participants of a WRI analysis that showed carbon pricing could achieve 40% emissions reductions by 2030, noting that this policy was unlikely to happen in the near future.

Gao Feng, Ministry of Foreign Affairs, China, noted that both China and the US had shown determination to ensure a successful Paris agreement, highlighting the role the Joint Announcement had already played in progressing talks in Lima.

Lin Jiang, Energy Foundation, underscored the importance of the Joint Announcement, and stressed the ambition and technological complexity of China's non-fossil fuel goal, noting that this was a complete remaking of China's power system.

At this event, moderated by Marion Vieweg-Mersmann, UNFCCC Secretariat, participants heard updates on the ICA on Biennial Update Reports (BURs) from non-Annex I parties to the UNFCCC.

Donald Cooper, Coordinator, Mitigation Data Analysis Programme, noted parties' strong interest in the ICA process, stating that the monitoring, reporting and verification process is delinked from the Paris agreement in that it will definitely continue after Paris. He highlighted that the Secretariat is currently addressing the first 11 BURs submitted between December 2014 and May 2015, and expressed hope they will complete the analysis by 2017.

Amena Yauvoli, Subsidiary Body for Implementation (SBI) Chair, noted that the ICA process has two phases: the technical analysis, and the facilitative sharing of views. Noting that implementation of the ICA is on track, he listed key focus areas for the process: the training of experts on the technical analysis; the technical analysis of BURs; and the facilitative sharing of views. He informed participants that he had already begun consultations with parties on the design of the process going forward.

Takeshi Enoki, Consultative Group of Experts on National Communications from non-Annex I Parties (CGE), presented on the training of technical experts for the technical analysis of the BURs, highlighting three information sharing clusters used in the training exercise: technical information, background material and REDD+. He noted that the experts nominated by parties need to attain at least 60% of the total score to pass proficiency exams during the training.

Stressing that the process is non-punitive, non-intrusive and respecting of national sovereignty, Vieweg-Mersmann then presented on the ICA, noting that the first stage is submission of BURs, followed by the technical analysis and the facilitative sharing of views. Listing the 11 parties whose BURs are currently going through the first technical analysis, she noted that the technical analysis helps in identifying the capacity building needs of non-Annex I parties. She informed participants that the next round of technical analysis is planned for 17-21 August 2015.

William Agyemang-Bonsu, UNFCCC Secretariat, spoke on the facilitative sharing of views, noting that 11 draft summary reports are being prepared out of the 13 BURs submitted. He noted that the process leading up to the facilitative sharing of views lasts up to nine months and the facilitative sharing of views begins three months later. He stated that due to this timeline, various scenarios for the meetings of the Subsidiary Bodies in 2016 are being considered.

In the discussion, participants queried why the training materials for the experts were not publicly available. They discussed changes to the proficiency assessments after the completion of the first round; the language challenge for the submission of BURs; the number of experts per technical analysis session; and the need for a website on the ICA detailing the technical analysis sessions. Others raised questions on the function of a group in the facilitative sharing of views, noting that the BURs are submitted by individual parties.