Doha conference disappoints as first Kyoto period expires
As the international climate negotiations ended, carbon prices were softer, since progress in Doha was too limited to move the market. Analysts said this proved participants are increasingly disillusioned with the commitment of decision makers to making meaningful progress and highlighted the regulatory uncertainty that has depressed prices in the EU Emissions Trading System (ETS). The summit concluded on Friday in Qatar.
Key points agreed to at Doha include:
• the EU affirmed its commitment to participate in a second Kyoto period, running from 2013-2020 (phase II of the ETS), but noted that the parties that have signed up account only for 14% of global emissions;
• the parties committed to an extended year-long work programme on long-term finance, which will try to identify $100bn in climate aid already pledged by developed countries to developing ones. This will come from over the course of phase III. The EU also said it will continue to contribute to this figure after 2012;
• the Durban Platform will be the main channel to adopt a global agreement by 2015, and that will cover all countries by 2020;
• a 2013 work plan and actions to potentially increase the ambition of 2020 reduction targets will be adopted; and
• countries agreed to meet under UN auspices in Poland at the end of 2013 to discuss setting up international mechanisms to address the cost of climate change to developing countries.
Confirming its continued Kyoto commitment, the EU added that its carbon-reduction targets, which currently foresee reducing CO2 levels by 20% by 2020 against 1990 levels. It added that it will review this target by 2014, having "left the door open" to increase this target to 30%. The EU on Monday launched a consultation that looks into whether the bloc should increase its phase III carbon reduction target (see separate story). Japan and New Zealand, however, opted out of the second commitment period
According to Jeffries Bache analyst Matthew Gray, the progress on the Protocol's future came at a price. "The main trade-off appears to be [assigned amount unit (AAU)] carry over for excluding offset access to non-[Protocol] parties," he commented. Some had called for countries failing to sign up for a second commitment period to be banned from the market for these Kyoto credits.
The summit only made limited progress on the thorny question of surplus Kyoto credits, or AAUs. A limit on purchasing AAUs from the first Kyoto commitment period will apply, but the surplus will not be cancelled altogether. Furthermore, only a handful of negotiating parties (the EU, Australia, Japan, Liechtenstein, Monaco, New Zealand, Norway and Switzerland) have agreed to not buy AAUs from the first period.
"This does not matter much, because UN offset supply is vast and AAUs are allowed for the first compliance period. The AAU market is opaque, but based on disclosed purchases, these countries have so far purchased 216m tonnes of AAUs," Gray said in a briefing note on Monday.
Environmental non-governmental organisations repeatedly warned that failing to deal with the surplus effectively would undermine the environmental integrity of the Kyoto Protocol (see EDCM 4 December 2012).
"We are now on our way to the 2015 global deal. It was not an easy and comfortable ride. It was not a very fast ride either," EU Climate Commissioner Connie Hedegaard said in a statement on Saturday.
"Very intense negotiations lie ahead of us. What we need now is more ambition and more speed," she added.
Cyprus, which currently holds the EU presidency, said that the EU will work with other countries to increase ambition on global carbon reduction actions by 2015.
Others also called for more to be done and highlighted the urgency with which a future deal needs to be negotiated.
"We still need countries to do more and be more ambitious about reducing their emissions if we are going to avoid irreversible climate change and prevent devastating global warming," the UK's Energy and Climate Change Secretary Edward Davey commented on the COP18 outcome in a statement on Monday, issued by the country's Energy and Climate Change Energy Secretariat. MLDB
Other Related Stories