Q+A: The big issues at the Durban climate summit

BRUSSELS/LONDON Wed Nov 9, 2011 3:48am EST

BRUSSELS/LONDON (Reuters) - Representatives of nearly 200 nations will assemble at the end of November in Durban, South Africa, for their annual summit on climate change.

Following the failure of talks in Copenhagen in 2009 and Cancun in 2010 to agree a successor to the Kyoto Protocol -- the only global accord on tackling climate change -- diplomats and non-governmental organizations have been managing expectations for the Durban summit.

Rather than a breakthrough, they have emphasized incremental progress and the improvement of existing mechanisms for monitoring and managing climate change.

All observers agree time has run out to get a new version of Kyoto in place before the first commitment period expires at the end of next year.

The European Union has said the world might not be able to agree on a binding climate deal until 2015.

"After Copenhagen, there will probably never be another attempt to agree one global deal all at once," Tim Gore, international climate change policy advisor at Oxfam, told Reuters. "Durban will be another stepping stone."

"If we get an EU commitment to continue Kyoto, a signal from the rest of the world that they will undertake legal commitments in the future and delivery in the meantime ... then we'll be making progress toward a sophisticated global architecture for fighting climate change," he added.

The following looks into the issues for debate at the 17th conference of the parties (COP17) to the United Nations Framework Convention on Climate Change (UNFCCC).

WHAT IS THE KYOTO PROTOCOL?

The Kyoto Protocol is a UNFCCC pact aimed at fighting global warming. It was adopted in 1997 and entered into force in 2005. According to the UNFCCC website, 193 states have signed and ratified the protocol.

It subjects 37 richer countries, known as "Annex 1" countries, to legally binding targets for cutting greenhouse gas emissions. In total, the cuts seek a minimum 5 percent reduction from 1990 levels in Annex 1 countries before the end of the first commitment period in 2012.

The United States never ratified the treaty. Developing countries have since become major emitters, with China overtaking the United States to become the world's biggest producer of carbon.

Poorer nations want the Kyoto Protocol to be extended, but many rich nations say a broader pact is needed to include all the big polluters. Russia, Japan and Canada have said they will not sign up for a second commitment period unless the biggest emitters do too.

In the United States, the environment has become a political battleground between Republicans and President Barack Obama's Democrat party.

At least until the next presidential election is over next year, it is politically impossible for the United States to sign up to a new Kyoto.

Moreover, neither China nor the United States is willing to agree to a new deal unless the other does so first.

The EU, which has taken a lead in adopting targets to cut carbon and increase the share of renewable energy, has said it is open to signing up for a second commitment period, but on condition the major emitters give evidence of a firm intention to join in.

Otherwise, it will not work, says the bloc, which is responsible for a mere 11 percent of global carbon emissions.

"It is clear a number of partners are moving away from the protocol and we would probably end up being the only one in the Kyoto club," said Laurence Graff, head of international and inter-institutional relations unit at the EU's Commission climate action unit.

CAN WE KEEP CLIMATE ON THE AGENDA?

News coverage of the environment has shrunk as the world has obsessively turned its attention to solving an international financial crisis and companies' focus is the bottom line over the short term.

As evidence of a lack of government will to strike a global deal on cutting greenhouse gas (GHG) emissions, some analysts have cited a pitched battle between the European Union and the major airlines.

Airlines have taken their resistance to EU plans to make them pay for their carbon emissions under the EU's Emissions Trading Scheme (EU ETS) to the courts and a UN body, the International Civil Aviation Organization. [ID:nL5E7M22NS]

"Of all sectors, aviation is the most global and by far the easiest to set up a global GHG reduction program -- especially if market mechanisms are used," said Russel Mills, global director for energy and climate policy at Dow Chemical Co.

"So when we see the world striving to make progress rather than block progress on aviation, we will know that the enough of the world's political leaders are sufficiently serious about tackling climate change to be confident that a global agreement is in reach."

HOW CAN DEVELOPING NATIONS BE PERSUADED TO SIGN UP?

To help bridge the gap between rich and poor, progress in negotiations so far has concentrated on mechanisms that could persuade poorer nations to sign up to a new global protocol without feeling they are being penalized.

In Cancun, countries committed to raising $100 billion annually by 2020 to help developing nations adapt to the cost of limiting climate change. They also agreed to set up a Green Climate Fund which would be a major vehicle for raising and spending climate funds.

In Durban, delegates are expected to debate recommendations for the design of the fund. They need to establish progress on where the money will come from.

Non-governmental organizations Oxfam and the WWF have jointly proposed raising funds by applying a carbon price to international shipping, which they say is less problematic than seeking a carbon contribution from the airline industry.

CAN WE GET SUFFICIENT PLEDGES?

To achieve the target of 2 degrees of warming, emissions need to be cut by between 80 and 95 percent, scientists say.

Pledges on the table from Cancun totaled a roughly 60 percent reduction, which Artur Runge-Metzger, director of the international and climate strategy directorate at the EU Commission, said would translate into capping global warming at 3 to 4.5 degrees.

Oxfam's climate change policy adviser Tim Gore said the concern was that without a "top down" Kyoto Protocol, all that would be left would be the bottom-up pledging process, with no guarantee that would be enough.

WHAT ARE AAU/CER/EUA AND OTHER ACRONYMS?

The UNFCCC and Kyoto Protocol have spawned a host of acronyms and instruments for offsetting carbon emissions.

Last week, EU Commission officials in Brussels said Durban should focus on closing loopholes in such mechanisms that should not be carried over into a second commitment period.

The EU ETS is the biggest carbon market, on which EU Allowances, or EUAs, are traded. Under the scheme, the amount of carbon utilities and heavy industry can produce is fixed.

Companies that produce above the prescribed limit can buy extra carbon credits, while those who pump less carbon than their cap are allowed to trade their surplus.

At government level, nations are entitled to produce a certain level of emissions, known as assigned amounts.

Those who do not produce up to their limit have Assigned Amount Units (AAUs) to spare, which they can sell to countries that have produced more carbon than their entitlement as a way of still meeting their Kyoto commitments.

Following industrial collapse, some nations, such as Russia, have huge stockpiles of AAUs.

They have the potential to depress international carbon markets, which have already plunged to levels far below those needed to preserve what the EU has labeled "environmental integrity."

The EU is divided on this issue. At its environment council in October, it could only come up with vague wording.

On one side of the argument, Poland, which has a large surplus of AAUs that it could sell for a profit on international markets, would be happy to carry its entire allowance into a second commitment period, EU sources said.

Denmark, keen to promote the greenest of energy agendas, believes none should be carried beyond 2012. Host of the Durban talks, South Africa has proposed a 1 percent carry-over of AAUs.

Another carbon instrument that can be bought and sold and counted toward meeting Kyoto targets is the Certified Emission Reduction (CER) credit.

CERs can be earned via the Clean Development Mechanism (CDM), which allows a country to implement an emissions reduction project in developing countries.

China has been the biggest beneficiary of the CDMs.

The EU, the biggest buyer of CERs, has said it will not accept CERs generated by Chinese projects once the current phase of its ETS ends in 2012, although projects already registered will remain valid.