Technical paper

United Nations Climate Change Conference COP17/CMP7

Durban, South Africa 28 November - 11 December 2011
Prepared by: Daniela Stoycheva Bratislava, Slovakia, 11 January 20121

The views expressed in this paper are those of the author and do not necessarily represent the views of the UNDP 1

Contents
Introduction .................................................................................................................................................................................... 3 Summary of the Durban Outcome ................................................................................................................................................. 5 1. 1.1. Decisions under the Convention (COP17) .......................................................................................................................... 6 The Durban Platform for Extended Action ................................................................................................................. 6

1.2. Green Climate Fund ............................................................................................................................................................ 7 1.3. The Technology Mechanism ............................................................................................................................................... 9 1.4. Outcome of the work of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention ............... 9 1.4.1. 1.4.2. 1.4.3. Shared vision for long term cooperative actions.................................................................................................. 10 Nationally appropriate mitigation commitments or actions by developed countries .......................................... 10 Nationally appropriate mitigation actions by developing country Parties ........................................................... 10

1.4.4. Policy approaches and positive incentives on issues relating to reducing emissions from deforestation and forest degradation in developing countries; and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries (REDD+) ............................................................................... 11 1.4.5. Sectoral approaches and sector-specific actions .................................................................................................. 12

1.4.6. Various approaches, including opportunities for using markets to enhance the cost-effectiveness of, and to promote, mitigation actions (market and non-market approaches) ......................................................................................... 13 1.4.7. 1.4.8. 1.4.9. 1.4.10. 1.4.11. 1.4.12. Response measures .............................................................................................................................................. 13 Adaptation ............................................................................................................................................................ 13 Finance ................................................................................................................................................................. 14 Technology development and transfer ................................................................................................................. 15 Capacity building ................................................................................................................................................. 15 Review of the long-term global goal ................................................................................................................... 15

1.4.13. Other matterseconomies in transition and countries whose special circumstances have been recognized by the COP (Turkey) .................................................................................................................................................................... 15 1.5. Proposals for amendments under the Convention ............................................................................................................. 16 1.5.1. 1.5.2. 1.5.3. 1.5.4. Proposals under the Convention article 17 .......................................................................................................... 16 Proposals for amendments to the Convention under articles 15 and 16 .............................................................. 16 Proposal by the Russian Federation to amend Convention article 4.2 (commitments) ....................................... 16 Proposal from Cyprus and the EU to amend Annex I to the Convention ............................................................ 16

1.6. Revision of the UNFCCC reporting guidelines on annual inventories for Parties included in Annex I to the Convention ................................................................................................................................................................................... 16 2. 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. Some Decisions under the Kyoto Protocol (KP) ............................................................................................................... 16 Second Commitment Period of the Kyoto Protocol ..................................................................................................... 16 Proposals for amendments to the KP ............................................................................................................................ 17 Clean Development Mechanism (CDM) ...................................................................................................................... 17 Joint implementation (JI) .............................................................................................................................................. 19 Adaptation Fund board ................................................................................................................................................. 19 Capacity building ......................................................................................................................................................... 19

Introduction
The United Nations Climate Change Conference, Durban 2011, brought together representatives of the world's governments, international organizations and civil society. The goal was to advance, in a balanced fashion, the implementation of the Convention and the Kyoto Protocol, based on the Bali Action Plan, agreed at COP 13 in 2007, and the Cancun Agreements, reached at COP 16 in December 2010. Twelve heads of states and 130 ministers attended the high-level segment and there were around 20,000 participants all together. In Durban six bodies had their sessions, covering about 50 agenda items. Alongside there were numerous side events, where a lot of interesting ideas, experiences and lessons learned in dealing with climate change were shared. The official meetings covered: The 17th Conference of the Parties (COP 17) The 7th Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol (CMP 7) The 35th session of the Subsidiary Body for Implementation (SBI 35) The 35th session of the Subsidiary Body for Scientific and Technological Advice (SBSTA 35) The fourth part of the 16th session of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP 16-4) The fourth part of the 14th session of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA 14-4)

One of the main results of COP 17 was the Durban Platform for Enhanced Action, which gives space for ambitious countries to take further steps to cut emission with all parties agreeing to negotiate a new regime for climate change mitigation by 2015 and make it operational by 2020. For this purpose an Ad Hoc Working Group on the Durban Platform for Enhanced Action (AWG-DP) shall start its work in the first half of 2012. Significantly, the United States, China and India, which together are the worlds largest emitters of carbon dioxide, have agreed to this roadmap (initially tabled by the EU). The Durban Platform should lead to the development of a protocol, another legal instrument or an agreed outcome with legal force under the United Nations Framework Convention on Climate Change applicable to all Parties. While developed countries are expected to take further mitigation measures, the language of Durban relates to all parties, trying to break down the distinction between developed and developing countries that has been a central element for the negotiations so far. The outcome of Durban also establishes a second commitment period under the Kyoto Protocol until 2017 or 2020 (pending further negotiation on an exact length next year). The European Union, and some other developed countries are signing up to a second commitment period, with many of the technicalities of that commitment period to be determined next year. However, Canada (which announced its withdrawal from the KP immediately after the COP), Japan and Russia will not participate in it. The outcome also operationalizes key elements of last year's Cancun Agreements, particularly the Green Climate Fund and the Technology Mechanism, although debates remain to take place in the future on the capitalisation of the fund. However, the Durban Platform has not succeeded in increasing the pledged Copenhagen levels of ambition for mitigation actions. The pledges to reduce greenhouse gas emissions still do not put the world on track to a 2 degree future (see Climate Tracker), which means a rise in average global temperature of 30C or more than pre-industrial levels, bringing considerable ecosystem damage and increased risk of climate-related extreme weather events. Stipulating that
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the Durban Platform leads to a legal agreement as outlined in the decision, a comprehensive legally binding agreement wont be in force for at least eight years (2020). The science (see IPCC reports) tells us that a peak and irreversible decline in global greenhouse gas emissions must occur by 2017 at the very latest in order to limit greenhouse gas concentrations in the atmosphere and keep climate change at more manageable levels (even so, a global peak and decline by 2015 would be safer). The failure of the politics to keep up with the science reinforces the importance of countrylevel action, with greater efforts in adaptation for the developing countries. While the Durban Platform, the second commitment period of the Kyoto Protocol, and operationalisation of the Green Climate Fund have received most of the attention, it is important to recognize that negotiators tackled more than fifty related issues as part of the Durban Package. Many of these sought to operationalize decisions taken in Cancun in December 2010 and covered amongst others monitoring, reporting, and verification (MRV), the periodic review, adaptation, technology, ambition, market mechanisms, and REDD. Key decisions that emerged from COP17 in Durban, other than the Durban Platform for Enhanced Action and the second commitment period of the Kyoto Protocol Green Climate Fund Countries have already started to pledge to contribute to start-up costs of the fund, meaning it can be made ready in 2012, and at the same time can help developing countries get ready to access the fund, boosting their efforts to establish their own lowemission development and adapt to the existing climate change. A Standing Committee is to be set up to keep an overview of climate finance in the context of the UNFCCC and to assist the Conference of the Parties. It will comprise 20 members, represented equally between the developed and developing countries. A focused work programme on long-term finance was agreed, which will contribute to the scaling up of climate change finance going forward and will analyse options for the mobilisation of resources from a variety of sources. The Adaptation Committee, composed of 16 members, will report to the COP on its efforts to improve the coordination of adaptation actions at a global scale. National Adaptation Plans will allow developing countries to assess and reduce their vulnerability to climate change, thus the adaptive capacities above all of the poorest and most vulnerable countries are to be strengthened. The most vulnerable are to receive better protection against loss and damage caused by extreme weather events related to climate change. The Technology Mechanism will become fully operational in 2012. The full terms of reference for the operational arm of the Mechanism - the Climate Technology Centre and Network - are agreed, along with a clear procedure to select the host. The UNFCCC secretariat will issue a call for proposals for hosts on 16 January 2012.
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Adaptation

Technology

Registry to support developing country mitigation actions

Governments agreed a registry to record developing country mitigation actions that seek financial support and to match these with support. A forum and work programme on unintended consequences of climate change actions and policies were established. Under the Kyoto Protocols Clean Development Mechanism, governments adopted procedures to allow carbon capture and storage projects. These guidelines will be reviewed every five years to ensure environmental integrity. Governments agreed to develop a new market-based mechanism to assist developed countries in meeting part of their targets or commitments under the Convention. Details of this will be taken forward in 2012. A system for monitoring, reporting, and verification (MRV) of emissions reduction commitments by both developed and developing countries. The first negotiation sessions for 2012 will be from 14 May25 May, probably in Bonn, Germany. The 2012 UNFCCC Conference, COP 18/CMP 8 (the 18th Conference of Parties to the UNFCCC, plus the 8th session of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol), will take place in Qatar from 26 November to 7 December 2012. The proposal to host COP 19/CMP 9 should come from the Eastern European Group. The Republic of Korea will host a ministerial meeting to prepare for COP 18/CMP 8. Such ministerial meetings are a tradition in the UNFCCC negotiations and are instrumental in clarifying, at high-level, central issues in the weeks before a COP.

Other key decisions

Meetings ahead

Summary of the Durban Outcome

The below summary does not represent a full report nor analysis of the COP17/CMP7, but rather highlights some main outcomes from Durban of interest for the EE&CIS region. It should be read in the context of the previous technical papers, of which this is a continuation.

General issues for the EE&CIS Region: From the perspective of the Russian Federation and Ukraine, it should be mentioned that the issue of the carryover of the surplus AAUs is still not resolved; The Russian Federation declared that it will not join the Second Commitment Period under the Kyoto Protocol. It is not clear in such a case if Russia will be able to participate in the Kyoto mechanisms. It is not clear at this stage how its emission reduction pledges will be accommodated, under the KP or the UNFCCC; For the EITs (mainly Belarus, Russia, Ukraine) a decision allowing them access to financial, technological and capacity building support in the post 2012 regime was adopted in Durban. For Turkey the negotiations will continue with discussion on modalities for the provision of support for mitigation, adaptation, technology development and transfer, capacity-building and finance to parties whose special circumstances are recognized by the COP are still ongoing, possibly with a positive solution in Doha; The proposal from Kazakhstan to be included in Annex B for the first commitment period was forwarded to the next session in order to continue its consideration;
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Following its request, as already an EU member, Cyprus was included in Annex I of the Convention; Croatia withdrew its appeal to the Compliance Committee2; The continuation and efficient performance of the CDM and JI is of great importance for all the countries in the region. Parties have to submit by 16 April 2012 to the Secretariat their views on the revision of the joint implementation guidelines, taking into account, as appropriate, their experience of implementing the mechanisms under the Kyoto Protocol, including national guidelines; The new reporting requirements adopted in Durban for both Annex I and non Annex I will require some institutional strengthening, possibly adoption of new procedures and training in the countries of the region; Information on NAMAs seeking international support and other NAMAs should be reported to the UNFCCC registry in the agreed format; Developing country Parties are invited to submit, subject to availability, more information relating to nationally appropriate mitigation actions, including underlying assumptions and methodologies, sectors and gases covered, global warming potential values used, support needs for implementation of nationally appropriate mitigation actions and estimated mitigation outcomes to the Secretariat, by 5 March 2012. The secretariat will organize in-session workshops on this issue, in conjunction with the 36th session of the Subsidiary Bodies. Countries with LEDS/NAMAs in the region may consider participation; Development of low-emission development strategies is encouraged (recognizing the need for financial and technical support). Interested developing countries may wish to share experience on the formulation of low-emission development strategies during the envisaged in-session workshops; Nominations for the Green Climate Fund Board members has to be sent to the Fund Secretariat no later than 31 March 2012; In general speedy operationalization of all the envisaged mechanisms in the Cancun agreements is a high priority for all the countries; however attention should be paid to the details. For that reason submissions from the countries are advantageous.

1. Decisions under the Convention (COP17) 1.1. The Durban Platform for Extended Action (Draft decision -/CP.17 : Establishment of an Ad Hoc Working Group on the Durban Platform for Enhanced Action) The work on the Durban Platform formally will be dealt with under a new Ad Hoc Working Group on the Durban Platform for Enhanced Action (AWG-DP), whose primary task is to launch a process to develop a protocol, another legal instrument or an agreed outcome with legal force under the United Nations Framework Convention on Climate Change applicable to all Parties. The new AWG will begin its work in 2012, with a view to concluding the agreed

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the Compliance Committee decided that the addition of 3.5 million tonnes (Mt) carbon dioxide equivalent (CO2 eq) by Croatia to its base year level following decision 7/CP.12 is not in accordance with Article 3, paragraphs 7 and 8, of the Kyoto Protocol and the modalities for the accounting of assigned amounts, and Croatia had objected to the Committees decision.

outcome with legal force by 2015 such that it can come into force by 2020. The main dispute over the significance of the text of the Durban Platform for Enhanced Action appears to be whether the agreement represents a framework for a new negotiating process, or whether implicit within the text is an agreement by all parties that they will assume legally binding emissions reduction commitments. It is very likely that the scale and ambition of emissions reduction commitments contained within any new agreement will continue to be the most challenging political issue facing the future negotiations. The Ad-Hoc Working Group on Long-Term Cooperative Action (AWG-LCA) will end at the conclusion of COP18 in Doha, Qatar, once it has completed its work on a number of further implementation issues related to the Cancun Agreements. These include the establishment of the Climate Technology Centre & Network and a process for parties to conduct the review of the long-term global goal and emissions reduction pledges in the period 2013-2015. Many of the difficult political issues under the LCAs shared vision text, including global peaking of greenhouse gas emissions and the long-term goal, will be considered most probably within the new AWG-DP. 1.2. Green Climate Fund (Draft decision -/CP.17: Green Climate Fund - report of the Transitional Committee) One of the major accomplishments of the COP17 in Durban was the launch of the Green Climate Fund (GCF). This was considered to be the most important of the implementation issues up for consideration at COP17, and it is considered by developing nations to be integral to developing countries assuming emission reduction commitments of their own, and important in building trust between developed and developing countries. Parties agreed to the governing rules of the GCF. It is still unclear when the Fund will be up and running, but Parties agreed that the Fund Board will "operationalize" it in an "expedited manner". Access to Fund resources will be through national, regional and international implementing entities accredited by the Board. Recipient countries may designate a national authority. This national designated authority will recommend to the Board funding proposals in the context of national climate strategies and plans, including through consultation processes. The national designated authorities will be consulted on other funding proposals for consideration prior to submission to the Fund to ensure consistency with national climate strategies and plans. This means that finance delivered by the Fund could, for example, be delivered to a sovereignadministered fund that lends to projects or programmes. Recipient countries will also be able to access the Fund through accredited international entities, including United Nations agencies, multilateral development banks, international financial institutions and regional institutions. The Parties have agreed to a private sector facility that enables the Fund directly and indirectly (through private financial intermediaries) to finance private sector mitigation and adaptation activities. The facility will "promote the participation of private sector actors in developing countries, in particular local actors, including small and medium-sized enterprises and local financial intermediaries". It remains unclear how private sector finance will be delivered as the Fund Board has been tasked with the development of "arrangements, including access modalities, to operationalize the facility". The creation of a dedicated private sector facility presents a strong opportunity to significantly scale up private investment. However it is not clear how private sector finance will be accessed and whether individuals with private sector experience will have a say in the facility's governance.
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The Fund will provide financing in the form of grants and concessional lending, and through other modalities, instruments or facilities as may be approved by the Board. Financing will be tailored to cover the identifiable additional costs of the investment necessary to make the project viable. The Fund will seek to catalyse additional public and private finance through its activities at the national and international levels. The Board has to initiate a process to collaborate with the Adaptation Committee and the Technology Executive Committee, as well as other relevant thematic bodies under the Convention, to define linkages between the Fund and these bodies. So far it is not clear what will be the relation between the AF and the GCF. The World Bank will provide interim trustee functions for the GCF as it does with many other climate funds, such as the GEF and Adaptation Fund until a permanent trustee is appointed. Below are the immediate next steps for the operationalisation of the Fund: Nominations to the GCF Board Parties are invited, through their regional groups and constituencies, to submit nominations for the position of member and alternate member of the Board of the Green Climate Fund. The agreed composition of the Board is 12 members from developing country Parties and 12 members from developed country Parties3. Nominations should be sent to the interim secretariat of the Green Climate Fund by no later than 31 March 2012. It should be mentioned with satisfaction that the non Annex I Parties within the Eastern European Group managed to assure a possibility to have a seat on the Board (see f in the footnote). Further information on the nomination process will be communicated to Parties in early January 2012. Parties are also informed that, in accordance with the decision of the COP, the first meeting of the Board of the Green Climate Fund will be convened by 30 April 2012. Hosting the GCF Parties are also requested to submit to the Board by 15 April 2012 expressions of interest for hosting the Green Climate Fund, based on the criteria contained in Annex II of the decision. Interim secretariat of the GCF Responding to the request from Parties, the UNFCCC secretariat and the GEF secretariat are promptly taking the necessary administrative steps to set up the interim secretariat of the GCF as an autonomous unit within the UNFCCC secretariat premises so that the interim secretariat can provide technical, administrative and logistical support to the Board until the independent secretariat of the Green Climate Fund is established. Capitalization of the GCF

In accordance with paragraph 10 of the decision of the COP, and paragraphs 9 to 12 of the Governing Instrument for the Green Climate Fund: The twelve seats for developing country Parties are to be distributed as follows: (a) Three members and alternate members from Asia-Pacific; (b) Three members and alternate members from Africa; (c) Three members and alternate members from Latin America and the Caribbean; (d) One member and alternate member from Small Island Developing States; (e) One member and alternate member from Least Developed Country Parties; and (f) One member from developing country Parties not included in the regional groups and constituencies above; and one alternate member to rotate between developing country Parties included in the groups and constituencies listed above (a to f).

One of the first tasks for 2012 will be resourcing the Fund. The AWG-LCA will begin to undertake a programme of workshops in 2012 to start considering how to mobilize $100 billion in annual contributions to the Green Climate Fund. There is considerable dispute on whether the Fund should be resourced by direct contributions from developed country governments versus the leveraging of seed money from those governments through the private sector and other sources. International fees or taxes, such as a fee imposed upon the bunker fuels used for international maritime and aviation transportation, will also likely be considered. 1.3. The Technology Mechanism The Durban Conference agreed a set of modalities and procedures for the Technology Executive Committee (TEC), whose members were appointed late last year, to guide its work and provide it with its overall mission. It will develop its work programme in February 2012. The six key elements of the functions of the TEC are: analysis and synthesis; policy recommendations; facilitation and catalysing; linkage with other institutional arrangements; engagement of stakeholders and; information and knowledge sharing. The Technology Centre will receive and respond to requests from developing countries related to technology development and transfer. The Network, made up of "relevant institutions" including private sector organisations, will undertake the "substantive" work needed to address developing country requests. A set of Terms of Reference establish a set of guiding parameters for the operation of the Climate Technology Centre and Network (CTCN) and interested organizations are requested to submit proposals to establish and host the CTCN. A structure for responses and an evaluation process was also established. Interested entities have until the end of March to submit their proposals, with an aim to announce a host for the CTCN by COP18 in December 2012. 1.4. Outcome of the work of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention (Draft decision [-/CP.17]: Outcome of the work of the Ad Hoc Working Group on Longterm Cooperative Action under the Convention) The decision covers the following issues: Shared vision for long term cooperative actions Nationally appropriate mitigation commitments or actions by developed country Parties Nationally appropriate mitigation commitments or actions by developing country Parties (NAMAs) Policy approaches and positive incentives on issues relating to reducing emissions from deforestation and forest degradation in developing countries; and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries (REDD+) Sectoral approaches and sector-specific actions Various approaches, including opportunities for using markets to enhance the costeffectiveness of, and to promote, mitigation actions (market and non-market approaches) Response measures Adaptation Finance Technology development and transfer Capacity building
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Review of the long-term global goal Other matterseconomies in transition and countries whose special circumstances have been recognized by the COP (Turkey)

1.4.1. Shared vision for long term cooperative actions The work on the shared vision did not progress much. It will continue with regard to working towards identifying a global goal for substantially reducing global emissions by 2050 and a time frame for a global peaking of greenhouse gas emissions. A workshop will be organized under the AWG-LCA to consider the issue of equitable access to sustainable development at its next session. 1.4.2. Nationally appropriate mitigation commitments or actions by developed countries

On mitigation by developed countries, parties agreed to continue the process of clarifying developed countries mitigation targets by May 2012. They further elaborated the guidelines for biennial reporting, with the first reports requested by January 2014. International Assessment and Review (IAR) will occur two months after the submission of the first round of biennial reports. The due date for submission of a full national communication (biannual report submitted as an Annex or a separate document to it) is 1 January 2014. Next steps include: (a) Submission of relevant information by developed country Parties, using a common template, to the secretariat by 5 March 2012 to be compiled into a miscellaneous document; (b) In-session workshop in conjunction with the thirty-sixth sessions of the subsidiary bodies (Requests developed country Parties to share experiences with the development of lowemission development strategies); (c) An update of document FCCC/TP/2011/1. 1.4.3. Nationally appropriate mitigation actions by developing country Parties On mitigation by developing countries, parties are encouraged to develop low-emission development strategies and submit information on nationally-appropriate mitigation actions. Guidelines were agreed for biennial update reports and parties are to submit their first biennial update report by December 2014. Parties also agreed to develop modalities for the registry, housed by UNFCCC that will facilitate the matching of NAMAs to financial, technical and capacity building support. Guidelines for International Consultation and Analysis (ICA) of biennial reports were also adopted. Next steps: developing country Parties to submit, subject to availability, more information relating to nationally appropriate mitigation actions, including underlying assumptions and methodologies, sectors and gases covered, global warming potential values used, support needs for implementation of nationally appropriate mitigation actions and estimated mitigation outcomes to the Secretariat, by 5 March 2012; the secretariat to organize the in-session workshops in conjunction with the thirty-sixth session of the Subsidiary Bodies; SBSTA to develop general guidelines for domestic measurement, reporting, and verification of domestically supported nationally appropriate mitigation actions; Developing countries are encouraged to develop low-emission development strategies, recognizing the need for financial and technical support by developed country Parties for the formulation of these strategies, and invites interested developing country Parties to share experience on the formulation of low-emission development strategies during the insession workshops. Registry
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At COP 16 in Cancun, the Parties agreed to establish a NAMA Registry to record NAMAs seeking support and to facilitate the matching of support for these actions. At Durban, the Parties agreed that: "the registry should be developed as a dynamic, web-based platform managed by a dedicated team in the secretariat; participation in the registry shall be voluntary and only information submitted expressly for inclusion in the registry should be recorded; the registry should be structured in a flexible manner that clearly reflects the full range of the diversity of nationally appropriate mitigation actions, and a range of types of support". The registry will allow countries to list certain information about financial, technological and capacity-building support alongside developing country actions seeking support. The registry will facilitate the "matching" of support "by providing and directing information" to Parties that have submitted information on NAMAs seeking support and support available. Next steps: The UNFCCC Secretariat has been tasked with developing a prototype of the registry by the thirty-sixth session of the Subsidiary Body for Implementation for consideration by Parties. Developing countries are invited to submit, as appropriate, to the secretariat the following information on individual NAMAs seeking international support: (a) A description of the mitigation action and the national implementing entity, including contact information; (b) The expected timeframe for the implementation of the mitigation action; (c) The estimated full cost of the preparation; (d) The estimated full cost and/or incremental cost of the implementation of the mitigation action; (e) The amount and type of support (financial, technological and capacity building) required to prepare and/or implement the mitigation action; (f) The estimated emission reductions; (g) Other indicators of implementation; (h) Other relevant information, including the co-benefits for local sustainable development, if information thereon exists; Also developing country Parties are to submit to the secretariat information on other individual NAMAs, to be recorded in a separate section of the registry, for their recognition. 1.4.4. Policy approaches and positive incentives on issues relating to reducing emissions from deforestation and forest degradation in developing countries; and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries (REDD+)

Both in terms of environmental and social safeguards and reference emission levels (RELs), as well as financing mechanisms for REDD, the Parties made important progress. Within the REDD+ discussions, negotiators agreed on a number of important methodological issues, including safeguards and reference levels. They also discussed financing of results-based REDD+ actions, a key policy issue left out of the Cancun Agreements, and Parties are invited to submit to the secretariat, by March 2012, their views on modalities and procedures for financing results-based actions for consideration by the AWG-LCA at its session to be held in conjunction with the 36th session of the SBSTA.
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On safeguards and reference levels the decision includes the following: subnational forest reference emission levels and/or forest reference levels may be elaborated as an interim measure, while transitioning to a national forest reference emission level and/or forest reference level. And that interim forest reference emission levels and/or forest reference levels of a Party may cover less than its entire national territory of forest area.

The Annex to the decision on safeguards also notes that in constructing a country's REL, significant carbon pools and/or activities should not be excluded. This has particular relevant to countries with significant peat lands. The decision on REDD+ financing includes the following: agrees that results-based finance provided to developing country Parties that is new, additional and predictable may come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources considers that, in the light of the experience gained from current and future demonstration activities, appropriate market-based approaches could be developed by the Conference of the Parties to support results-based actions by developing country Parties referred to in paragraph 73 of 1/CP.16, ensuring that environmental integrity is preserved, and the provisions of appendix I and II to Decision 1/CP.16 are fully respected and should be consistent with relevant provisions of decision 1/CP.16, decision XX/CP.17 (SBSTA) and any future decision by the COP on these matters.

There are three other significant points about the above two sentences which send a positive signal to the investors in REDD+: the recognition and inclusion of private sources for results-based financing. the recognition of value to be gained from current and future demonstration activities. the express recognition that market-based approaches could be developed by the COP.

The COP encourages suggestions on the development of such modalities and procedures by 5 March 2012. These details will be discussed in the course of next year. 1.4.5. Sectoral approaches and sector-specific actions This issue contains three main areas: the general framework, agriculture, and international aviation and maritime transport. On agriculture, parties considered food security, trade, and economic development and poverty eradication. Some developed countries emphasized the relevance of a SBSTA programme of work on agriculture. On bunker fuels, divergent views were expressed on: the scope of measures, principles and directed guidance for the work of ICAO and IMO, ambition of action, and marketbased instruments. However, there was broad agreement on defining a role for ICAO and IMO to regulate greenhouse gas emissions from international aviation and maritime transport, respectively. The COP decision generally covers the following: agrees to continue considering a general framework for cooperative sectoral approaches and sector-specific actions with a view to adopting a decision on this matter at COP 18; requests that SBSTA 36 consider issues relating to agriculture;

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 agrees to continue consideration of issues related to addressing emissions from international aviation and maritime transport. 1.4.6. Various approaches, including opportunities for using markets to enhance the cost-effectiveness of, and to promote, mitigation actions (market and non-market approaches)

Parties have made an important step in moving from agreement to "consider" new market-based mechanisms at COP 16 to "define" a new market-based mechanism, "operating under the guidance and authority of the Conference of the Parties, to enhance the cost-effectiveness of, and to promote, mitigation actions". However, there is little detail on how the new mechanism will operate. Parties have decided that it will assist developed countries to meet their mitigation commitments meaning that it could be used as an offset mechanism. However it has been decided in the Cancun decision that it should cover broad segments of the economy. A work programme will be conducted to elaborate further elements with a view to recommending a decision at COP 18. Parties also "emphasised various approaches, including opportunities for using markets, to enhance the cost-effectiveness of, and to promote, mitigation actions". These approaches must "meet standards that deliver real, permanent, additional and verified mitigation outcomes, avoid double counting of effort, and achieve a net decrease and/or avoidance of greenhouse gas emissions". Parties have been invited to submit views on both elements by 5 March 2012, with a view to making recommendations at COP18. 1.4.7. Response measures The decision recognizes that social and economic development and poverty eradication are the first and overriding priorities of developing countries; urges parties in implementing policies to promote a just transition of the workforce; urges developed country parties to assist developing country parties to promote economic diversification in the context of sustainable development; urges parties to give full consideration to the positive and negative impacts of the implementation of response measures on society; and recognizes the decision that establishes the Forum to Implement the Work Programme on the Impact of the Implementation of Response Measures, and consolidates all progressive discussions related to response measures under the Convention. 1.4.8. Adaptation The decision recalls Decision 1/CP.16, which established the Cancun Adaptation Framework and the Adaptation Committee (AC). The COP decides that the Adaptation Committee should make use of the following modalities in exercising its functions: workshops and meetings; expert groups; compilation, review, synthesis, analysis reports of information, knowledge, experience and good practice; channels for sharing information, knowledge and expertise; and coordination and linkages with all relevant bodies, programmes, institutions and networks, within and outside the Convention. The COP also decides that the Adaptation Committee shall operate under the authority of, and be accountable to, the COP, and requests the Committee to: report annually to the COP; during its first year, develop a three-year plan for its work, and initiate some of the activities contained in Annex V to this decision; engage and develop linkages with all adaptation-related work programmes, bodies and institutions under the Convention, the work programme on loss and
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damage, and the operating entities of the financial mechanism of the Convention; and engage with relevant institutions, organizations, frameworks, networks and centres outside the Convention. Regarding composition, the decision decides that the Committee shall consist of 16 members, to be elected by the COP, as follows: two members for each of the five UN regional groups; one member from a small island developing state; one member from an LDC; two Annex I party members; and two non-Annex I party members. Annex V of the decision outlines an indicative list of activities for the Adaptation Committee: considering relevant information and providing recommendations to the COP on ways to rationalize and strengthen coherence among adaptation bodies, programmes and activities under Convention; preparing an overview of the capacities of regional centres and networks working on adaptation issues, and recommending to parties ways that their role can be enhanced; preparing periodic overview reports synthesizing information and knowledge relating to, inter alia, implementation of adaptation activities and good adaptation practices; and upon request, considering technical support and guidance to parties as they develop national adaptation plans, and work in support of the work programme on loss and damage. 1.4.9. Finance The text includes subsections on the Standing Committee and long-term finance. The COP decided that the Standing Committee shall: report and make recommendations to the COP, for its consideration, at each ordinary session of the COP on all aspects of its work; assist the COP in exercising its functions with respect to the financial mechanism of the Convention in terms of improving coherence and coordination in the delivery of climate change financing, rationalization of the financial mechanism, mobilization of financial resources, and MRV of support provided to developing countries; perform any other functions that may be assigned to it by the COP; and develop a work programme for presentation to COP 18. The decision includes Annex VI with the composition and working modalities of the Standing Committee. On long-term finance, the COP affirms the importance of continuing to provide ongoing support beyond 2012; decides to undertake a work programme on long-term finance in 2012, including workshops, to progress on long-term finance; decides that the aim of this work programme is to contribute to the on-going efforts to scale up the mobilization of climate change finance after 2012; and notes the information provided by developed countries on the fast-start finance they
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have provided and urges them to continue to enhance the transparency of their reporting on the fulfillment of their fast start finance commitments. 1.4.10. Technology development and transfer The decision requests the CTCN, once it is operational, to elaborate its modalities and procedures based on the terms of reference; and decides that the selection process for the host of the CTC shall be launched upon conclusion of COP 17, in order to make the Technology Mechanism fully operational in 2012. The COP further outlines the procedure for selecting the host of the CTC for approval at COP 18; decides that the costs associated with the CTC and the mobilization of services of the Network should be funded from various sources, including the financial mechanism, the private sector and philanthropic sources; requests the GEF to support the operationalization and activities of the CTCN without prejudging the selection of the host; and requests the TEC and the CTC to establish procedures for preparing a joint annual report. There are two annexes to this decision, Annex VII on the Terms of Reference of the CTCN and Annex VIII on criteria to be used to evaluate and select the host of the CTCN and information required to be included in the proposals. 1.4.11. Capacity building The decision recalls Decision 1/CP.16 on further enhancing the monitoring and review of the effectiveness of capacity building, and reaffirms that capacity building should be a continuous, progressive and iterative process that is participatory, country-driven and consistent with national priorities and circumstances; and the importance of taking into account gender aspects and acknowledging the role and needs of youth and persons with disabilities in capacity-building activities. The decision requests the SBI to organize an annual in-session Durban Forum for in-depth discussion on capacity building, with a view to sharing experiences, and exchanging ideas, best practices and lessons learned regarding the implementation of capacity-building activities. It was decided that the first meeting of the Durban Forum during SBI would explore potential ways to further enhance monitoring and review of the effectiveness of capacity building. 1.4.12. Review of the long-term global goal The decision recalls Decision 1/CP.16 on the Review and reaffirms that it should periodically assess the adequacy of the long-term global goal, in the light of the ultimate objective of the Convention. The first review should start in 2013 and conclude by 2015. It further decides that the Review will be concluded with the assistance of SBSTA and the SBI and further define expert consideration of inputs by COP 18. 1.4.13. Other matters - economies in transition and countries whose special circumstances have been recognized by the COP (Turkey) The COP invites Annex I parties, that are in a position to do so, through multilateral agencies, including through the Global Environment Facility within its mandate, bilateral agencies and the private sector or through any further arrangements, as appropriate, to make available the capacity- building, financial, technical and technology transfer assistance for Annex I Parties undergoing the process of transition to a market economy in order to assist these Parties in the development and implementation of their national low-carbon development strategies and action plans consistent with their national priorities and with their emission reduction targets. For Turkey it was agreed to continue with the discussion on modalities for the provision of support
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for mitigation, adaptation, technology development and transfer, capacity-building and finance to Parties whose special circumstances are recognized by the Parties in order to assist these Parties in the implementation of the Convention. 1.5. Proposals for amendments under the Convention 1.5.1. Proposals under the Convention article 17 The secretariat received five proposals by Parties (Japan FCCC/CP/2009/3, Tuvalu FCCC/CP/2009/4, Australia FCCC/CP/2009/5, Costa Rica FCCC/CP/2009/6, USA FCCC/CP/2009/7 ) for a protocol under the Convention. These proposals have been communicated to Parties in accordance with Article 17, paragraph 2, of the Convention. The COP agreed that the item will be included in the provisional agenda of COP 18. 1.5.2. Proposals for amendments to the Convention under articles 15 and 16 Mexico and Papua New Guinea made a proposal on voting. Mexico, supported by Colombia and others, introduced a proposal to allow a last resort vote in cases when every effort to reach consensus has failed on issues that carry broad support. Bolivia, Venezuela and Saudi Arabia said they could only support a consensus approach. Parties agreed to include the item on the provisional agenda for COP 18. 1.5.3. Proposal by the Russian Federation to amend Convention article 4.2 (commitments)

The Russian Federation explained the need for periodic review of the list of countries in Annexes I and II. Belarus, Ukraine and Kazakhstan supported this proposal, while Saudi Arabia opposed it. Parties agreed to include the item on the provisional agenda for COP 18. 1.5.4. Proposal from Cyprus and the EU to amend Annex I to the Convention The COP adopted a decision to include Cyprus in Annex I of the Convention. 1.6. Revision of the UNFCCC reporting guidelines on annual inventories for Parties included in Annex I to the Convention The decision adopts the Guidelines for the preparation of national communications by Parties included in Annex I to the Convention, Part I: UNFCCC reporting guidelines on annual greenhouse gas inventories (hereinafter referred to as the UNFCCC Annex I inventory reporting guidelines). The guidelines are contained in annex I of the decision and the new common reporting format tables contained in annex II. From 2015 the global warming potentials used by Parties to calculate the carbon dioxide equivalence of anthropogenic emissions by sources and removals by sinks of greenhouse gases shall be those listed in the column entitled Global warming potential for given time horizon in table 2.14. 2. Some Decisions under the Kyoto Protocol 2.1. Second Commitment Period of the Kyoto Protocol (Draft decision -/CMP.7 : Outcome of the work of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol at its sixteenth session) The second major outcome of COP-17 is the decision on a second commitment period to the Kyoto Protocol. The Protocol will now be extended until 2017 or 2020 (pending further negotiation of the date), with the European Union, Croatia, Belarus, Iceland, Liechtenstein, Monaco, Norway, Switzerland, Ukraine, Kazakhstan and potentially New Zealand, Australia signing up to a second commitment period.
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Many of the technicalities of the second commitment period, such as converting emissions reduction targets into quantified emission limitation or reduction objectives (QELROS) will be determined next year. These have to be submitted to the UNFCCC Secretariat by 1st May 2012 for further discussion in the May 2012 meetings. They will influence the proposed emissions reduction commitments that parties agree to for the second commitment period. The issue of carry-over of assigned amount units (AAUs) was not resolved (of great interest for Russia and Ukraine). The AWG-LCA will assess the implications of the carry-over of AAUs to the second commitment period in regard to its effect on the scale of emission reductions to be achieved by Annex I Parties with an aim to resolve the issue at CMP8. Kazakhstan, in accordance with its request was added in the table of proposed amendments of Annex B, with a base year of 1992 and a pledge of emission reductions of -15% by 2020. Cyprus was added to the list of Annex B, as it will become an Annex I Party on 1 January 2013, so far without an emission reduction target. The names of Canada, Japan and Russia are at the end of the table, in line with their declaration that they will not join a second commitment period and Canada announced withdrawal from the KP shortly after the conclusion of the COP. Under what rules the pledges of these countries will be treated, as well as their participation in the KP market based mechanisms, is still not clear. Especially the last issue may bring complications for participation in JI for the Russian federation. 2.2. Proposals for amendments to the KP Belarus, the EU and Ukraine favored simplifying amendment procedures. The CMP decided that consideration of this item will continue at CMP 8. This issue is also addressed under the AWGKP Outcome Document, annexes II and III, which include proposed amendments to the Kyoto Protocol. 2.3. Clean Development Mechanism (CDM) During informal consultations, some developing countries sought to specifically link participation in the CDM after 2012 to accepting a target under the Kyoto Protocol, which proved to be a major point of discussion. Following lengthy consultations, parties were unable to agree on: supplementarity of the mechanism; transition to a second commitment period; review of CDM modalities and procedures; stakeholder consultations; and share of proceeds. 2.3.1. CDM Guidance decision on further guidance relating to the CDM Whilst not containing any breakthrough decisions, the main CDM document to come out of CMP7 placed a clear emphasis on improving the efficiency of the Executive Board (EB) decision making process and facilitating greater participation of under-represented regions in the CDM. The decision makes a number of calls for progress in regards to improving CDM procedures especially around Programme of Activities (PoAs) and simplifying and streamlining additionality requirements. The decision calls for the development of simplified top-down baseline and monitoring methodologies for project activity types under-represented in the CDM. In addition, the decision requests that the EB accelerates the implementation of guidelines on suppressed demand that are specifically relevant to countries under-represented in the CDM, notably African states amongst others. Requests are made also for improvements in the transparency in decision making. Specifically, the EB was encouraged to make the technical reports it uses in its decision making publically
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available. In addition, the Secretariat was asked to improve the efficiency of the project cycle by digitising the validation and verification process. The rest of the COP guidance to the CDM contains some good and useful advances, methodological improvements (including digitization) and reiterated pressure for progress. 2.3.2. Advancement on definitions Perhaps the most important of the advances in relation to the CDM was an acceptable quantified definition of materiality. The decision, provides a standardised definition of materiality to be applied across the CDM. The definition was also quantified in relation to emissions measurements across the various project types. 2.3.3. Appeals mechanism against EB decisions A decision on an appeals process was once again delayed with further consideration postponed to the Subsidiary Bodies' meetings in June 2012. The failure to reach an agreement was purportedly due to disagreement between China and the EU on the scope of appeals to be allowed. The EU lobbied for an extension of the process to appeals of positive decisions such as project approvals while China argued for a narrower scope. 2.3.4. Establishment of the CDM Policy Dialogue Panel The UN climate chief Christiana Figueres has announced a new independent panel tasked with reviewing the CDM to consist of twelve members with a broad mandate to compile feedback and produce reports on the effectiveness of the CDM and its ability to meet the needs of future carbon markets, ten years on from its establishment. The panel is part of an attempt to engage stakeholders outside of the CDM market in order to promote the offset mechanism to new markets, including 15 national and regional schemes funded by the World Bank. 7.2.5 Carbon capture and storage in the CDM The Durban talks ended six years of debate over whether and how the technology of carbon capture and storage (CCS) could qualify for carbon offsets under the CDM. Agreement was reached regarding rules for carbon-capture plants, allowing such projects to receive emissions credits for the first time. This decision sets the precedent for how CCS can be included in other future funding mechanisms. Modalities and Procedures for CCS under the CDM were adopted by the decision and attached as an annex to the decision. The adoption of the modalities and procedures opens the way for CDM project developers to begin investigating and designing CCS projects for inclusion in the CDM. The new rules force project developers to put five percent of the carbon credits earned in a reserve, to be awarded to them only after site monitors have proved that no carbon dioxide has leaked from the underground store 20 years after the end of the crediting period. Individual governments must decide who will ultimately be responsible for any such leakages. The procedures require countries hosting the projects to have regulations for CO2 storage siting and liability, which will take time. In the long run, however, CDM could help CCS project developers in developing countries attract financing for two main reasons: CDM permits are a predictable albeit minor stream of revenue, and Annex I project partners (developed countries) are allowed to assume the risk and responsibility for CO2 seepage. However, a decision as to the eligibility of CCS projects that involve the cross-border transport of CO2 or the location of storage sites in international waters was left to the CMP 8.
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2.4. Joint implementation (JI) The report of JISC was noted, which recommended: replacing the current two-track approach with a single, unified verification process; establishing a new governing body to oversee this verification process; and providing clarity on how joint implementation should continue after 2012. The decision on guidance on the implementation of Article 6 of the Kyoto Protocol, encourages the JISC to continue to streamline the process of accrediting independent entities, including efforts to align the joint implementation accreditation process with the CDM accreditation process, and to continue enhancing the implementation of the verification procedure under the Committee; agrees to consider at CMP 8 the issuance of emission reduction units (ERUs) for projects considered by the JISC; and requests the JISC to draft a revised set of key attributes and transitional measures dealing with the possible changes to the joint implementation guidelines with a view to develop revised joint implementation guidelines for adoption at CMP 9. The decision also contains some provisions on governance and resources for the work on joint implementation. Parties have to submit by 16 April 2012 to the Secretariat their views on the revision of the joint implementation guidelines, taking into account, as appropriate, their experience of implementing the mechanisms under the Kyoto Protocol, including national guidelines. 2.5. Adaptation Fund board The decision on the report of the Adaptation Fund Board looks forward to the organization of the two regional workshops to assist in the accreditation of national implementation entities. The decision on the review of the Adaptation Fund requests the Adaptation Fund Board to submit to the Secretariat, as soon as possible, after its first meeting in March 2012, its views on the report on the Review of the Interim Arrangements of the Adaptation Fund for inclusion in an information document; requests SBI 36 to consider the initial review of the Adaptation Fund; and decides to complete at CMP 8 the initial review of the Adaptation Fund. 2.6. Capacity building This decision refers to the importance of taking into account gender aspects and acknowledging the role and needs of youth and persons with disabilities in capacity-building activities. The CMP invites continued provision of financial and technical resources to support capacitybuilding activities for the implementation of the Kyoto Protocol, addressing the following challenges: geographical distribution of CDM project activities; lack of technical expertise to estimate changes in carbon stock in soils; and the need to train and retain experts to plan and implement project activities. Decides that further implementation of the capacity-building framework should be improved at the systematic, institutional and individual levels by: ensuring consultations with stakeholders; enhancing integration of climate change issues and capacity building needs into national development strategies, plans and budgets; increasing country-driven coordination of capacity-building activities; and strengthening networking and information sharing among developing countries, through South-South and triangular cooperation.
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The CMP further: encourages cooperative efforts between developed and developing country parties to implement capacity-building activities relating to participation in the CDM; encourages relevant intergovernmental and non-governmental organizations to continue enhancing and coordinating their capacity-building activities under the Nairobi Framework; and decides to conclude the second comprehensive review and to initiate the third comprehensive review of the implementation of the capacity-building framework, with a view to completing the review at CMP 12.

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