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CoP-8/UNFCCC   SPECIAL EDITION 2

October 25, 2002



Going bilateral
Straying into dangerous territory

The US will not take on mandatory commitments. "Not today, not tomorrow, never in the first commitment period," blusters US climate change negotiator Harlan Watson. Watson is gassing the negotiation process here. But he isn’t breaking any new wind. He has official mandate to say things like this, for it is now a part of US strategy to stop talking protocol and start talking bilateralism.

p-3.gifSo what are these bilateral deals the US has been boasting about? Many of these agreements stray (or deliberately strut?) into distinctly dangerous territory: debt for nature, where developing countries commit to protect their forests. In exchange, part of their debt to the US is written off. The problem with these deals is that they often deprive communities the right to decide how to use their forests, because the donor country has paid for their protection. "Pay off your debt. Sell us a forest!" is closer to the truth.

Under the guise of bilateral deals to mitigate their greenhouse gas emissions, the US has signed several debt for nature agreements with developing countries. This was facilitated by the revival of the 1998 Tropical Forest Conservation Act (TFCA), which allows eligible countries an opportunity to reduce their debt to the US, while preserving their tropical forests.

The US approached Sri Lanka with an offer to waive the island nation’s debt of US $400 million in exchange for four tropical forests last year. The Lankan government said no. But with its back to the wall due to a deepening economic crisis, it may be forced to rethink its stand in a decision expected in November. "Issues of ownership of genetic material, intellectual property rights, local community rights and future selling of forests will all be compromised if this agreement comes through," warns Hemantha Vithanage from Environmental Foundation Limited, a Sri Lankan non-government organisation.

Other developing countries have already given in. An agreement signed under this provision with Thailand in September 19, 2001 saves Thailand US $11.4 million in hard currency payments. In August 2001, the US and Belize concluded a debt for nature agreement to protect 23,000 acres of tropical forests, raising US $1.3 million in private funds. Another agreement was signed with El Salvador in July 2001, reducing the country’s official debt by US $3 million.

Gao Feng, head of the Chinese delegation speaks

p-3-b.gif What do you think of the US position in climate negotiations?
It is not satisfactory at all. Their approach to climate change is one thing, their ‘unilateralism’ is quite another. We are open to discuss their approach with regard to their economy. But we believe that multilaterlism is the best way to address climate change and its international character. The US refusal to ratify the Kyoto Protocol is a mark of unilateralism. But we have to remember that the US is still a signatory to the convention.

How do you view the carbon market?
I have doubts about the possibility of an international market to trade carbon emissions. If there is trading, in the real sense of a carbon market, then it is likely to be among Annex I countries, for example ‘hot air’ trading with Russia. If there is any trading of carbon emissions reductions credits between Annex I countries and developing countries, it would not be a real market, but a political market.

Energy deals have also been signed. The deal with India includes an agreement to increase the use of clean energy technology in cities. In March 2000, during former US president Bill Clinton’s India visit, India unwittingly committed to "embracing national goals for energy efficiency and renewable energy". USAID then magnanimously advanced a paltry US $45 million to help India on the road to this commendable goal.

China is the other major target of the US’ new bilateralism mantra. In April 2002 the two countries agreed to cooperate on technical research, including electric and fuel-cell vehicles, new materials, science and technology policy and clean coal technology.

Developing countries are not the only focus of US bilateralism — the attempt, after all, is to win over countries whose participation would be key in the Kyoto Protocol. Japan, Italy, Australia and Canada have also signed agreements. Japan and the US are collaborating on 30 research projects, on working out market mechanisms to take voluntary action for emission reductions. A similar agreement has been signed with Italy.

The US-Canada agreement will cover issues like climate change science and technology, carbon sequestration, emissions measurement and accounting, capacity building in developing countries, and measures to speed up the use of cleaner technology. The Australia-US Climate Action Partnership (CAP) aims at evolving a renewable energy model.

Once the US decided not to ratify the protocol, these coalitions provided the US with an easy way out of possible international isolation. Unfortunately, it looks like the governments of the targeted countries are blissfully unaware of the US agenda, or choose to be.

Don’t need the US
A crucial piece in the Kyoto puzzle may soon fall into place. Yesterday, the Canadian government tabled a plan admitting that Canada "can move ahead without the US", achieving its reductions targets at an acceptable cost. "If the Kyoto Protocol falters, it could take years to negotiate a new international agreement. The science suggests that we do not have time," says the overview.

In fact, it goes so far as to say that the Canadian economy will grow while the country reduces emissions. Canada’s reason: innovation and technology are critical, and timely investments will put Canada ahead of the curve. The overview does not insist upon getting emissions reductions credits for exports ‘cleaner’ gaseous fuels and hydroelectricity to the US.

The main opposition to this draft is likely to come from Alberta, Canada’s energy province which has a sizeable chunk of the fossil fuel reserves.

OE concession
The Executive Board (EB) of the Clean Development Mechanism (CDM) has halved the US $15,000 application fee for organisations from developing countries applying to become Operational Entities (OE). OEs are expected to assist project applicants to prepare CDM project design documents, evaluate projects to check if they meet requirements like contributing to sustainable development goals, and verify and certify reduction credits achieved by the project.

A common registration fee of US $20,000, paid when OEs submit a request to register projects with the board, was also modified. Now a different registration fee will be charged depending on the scale of the project. For instance, a small-scale project providing reduction credits below 15,000 tonnes of carbon dioxide equivalent will have to pay a registration fee of US $5000. The highest amount to be paid as registration fee was finalised at US $30,000.


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