Bloomberg News

UN Climate-Talks Collapse Piles Pressure on November Summit (2)

June 13, 2013

United Nations talks on reforms to emissions-market rules stalled this week after members rejected a proposal to reconsider the body’s decision-making rules, putting additional pressure on a climate summit in November.

The loss of two weeks’ negotiating time means that items that were due to be discussed in Bonn from June 3 through June 14 may now be revisited at the UN’s annual climate conference in Warsaw at the end of the year, adding to an already-packed agenda that may not be fully addressed, according to a project developers’ group.

“Countries have between now and the beginning of the UN Climate Change Conference in Warsaw to unblock the situation so that relevant decisions can be taken at the meeting,” Tomasz Chruszczow, chairman of the Subsidiary Body on Implementation, or SBI, said June 11 in a UN statement. “It is essential that the time is used for discussions at the highest political level on how to resolve the issue so that this body can take forward its important work.”

The SBI, one of three tracks of negotiations taking place in Bonn, had been due to discuss a variety of issues including a review of the rules governing UN carbon offset projects and proposals to address loss and damages resulting from the effects of climate change.

‘Procedural Violations’

The request to discuss rules of procedure came after last year’s climate summit in Doha was brought to a close over the objections of Russia and Ukraine. The countries opposed a decision restricting their ability to sell surplus Kyoto permits in the eight years to 2020. Oleg Shamonov, Russia’s chief climate negotiator, said he was “highly disappointed in both the procedural violations and the conduct of business,” in an interview at the end of the December climate talks.

Despite appeals from the U.S., the European Union, China and India, the three countries refused to accept a compromise solution, and Chruszczow closed the session June 11. Talks will resume under Polish guidance in Warsaw Nov. 22.

“I see my role as a guardian of the process, and not a Roman emperor who gives a thumbs-up or thumbs-down to decide who to slay,” Chruszczow said yesterday in an interview in Bonn. “This is the attitude the Polish presidency will have; nobody in the Polish presidency will replace the rule of law with the rule of force.”

Time Loss

The loss of two weeks’ negotiating time may mean that a review of UN offset market rules may not be completed by the end of the year, said Gareth Phillips, chairman of the Project Developers’ Forum, a group representing investors and developers of clean energy projects that generate carbon credits.

“We’ve lost a massive amount of time,” Phillips said today in an interview in Bonn. “Parties were already in two minds over whether they could complete the review of the CDM in Warsaw, so now it looks very unlikely we can conclude the work by then.”

The delay may give emerging market mechanisms being discussed valuable time to advance and gain exposure, threatening the future flow of funds to the Clean Development Mechanism, Phillips said.

“It’s bad news for the CDM, as it gives other new mechanisms time to get established and increases the likelihood that buying parties will look at these mechanisms before the CDM,” he said.

Record Low

Prices for UN offsets plunged as much as 99 percent from their peak in July 2008 to an April 17 record low of 20 euro cents on the ICE Futures Europe exchange in London. Credits for December were unchanged at 46 cents at 3:01 p.m. today.

The suspension of one of the three negotiating strands in Bonn is unlikely to affect wider talks aimed at crafting a global agreement on climate action by 2015, according to Ruth Davis, political director of Greenpeace U.K.

“You really can’t expect there to be a negotiation at the seriousness of this one, which is about transforming the whole global energy economy, without there being hurdles and obstacles,” she said today in an interview in Bonn.

The collapse of the talks led one of the key participants in the negotiations over the Kyoto Protocol in 1997 to call for Chruszczow to resign.

In an open letter dated June 11, Raul Estrada-Oyuela, a retired Argentinian diplomat who led the final negotiations over the Protocol in Japan more than 15 years ago, said the “frustration of an important political meeting” would have a “political cost.”

Serious Issue

Speaking by phone from Buenos Aires yesterday, Estrada-Oyuela said the halt of the talks was a serious issue. Chruszczow declined to comment on the letter when contacted today through his spokeswoman Lidia Wojtal.

The UNFCCC drafted a set of rules in 1995 governing its processes, including decision-making, that haven’t been formally adopted at any meeting since then. The draft rules call for decisions to be taken by consensus which, Estrada-Oyuela said, is binding on the UNFCCC, not on member states.

“Consensus is not defined in writing,” he said. “It’s a legal opinion drawn up for the legal services of the UN.”

The abrupt end to the discussions in Bonn this week reflected “business as usual,” Chruszczow said yesterday.

“We have the rules of procedure, they’re not perfect, they’re not fully agreed, but they’re being applied,” he said. “If consensus is to be the rule then we have to respect our own decisions, otherwise we are just taking everything back to the Middle Ages.”

To contact the reporter on this story: Alessandro Vitelli in London at avitelli1@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net


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