Cancun Delivers After All, but Trade Issues Prove Too Difficult

14 December 2010

It's a done deal. Many observers had speculated that the UNFCCC's two-week Cancun Conference of the Parties (COP) would be a sleepy affair with little agreement on most issues. Perhaps a deal on forests was possible or perhaps an agreement on financing. But in the end, it seems the low expectations and the subdued atmosphere surrounding the COP was exactly what was needed for countries to make progress. Rumours were reverberating through the corridors of the Moon Palace as early as Thursday that ministers were making progress in key areas and that a comprehensive agreement might actually be possible.

But on the last scheduled day of negotiations, resistance to a handful of issues by many countries had observers speculating that COP 16 would run well into Saturday and may not produce anything meaningful after all. But despite many negotiators forging through their second night of talks without sleep, COP 16 President Patricia Espinosa - Mexico's Foreign Minister - insisted that the transparent process continue.

Spirits were lifted in the wee hours of Saturday when it became apparent that Cancun was actually going to deliver something tangible. Delegates openly praised Espinosa's skilful diplomacy and guidance at the COP and rewarded her with deafening applause as the meeting came to a close. Many observers were using the words "rock star" to describe Espinosa's treatment, noting that they had never seen such a reaction at an international climate change meeting.

Spirit of compromise

There are two texts that make up the Cancun Agreements: one on Long Term Cooperative Action (LCA) and one on the Kyoto Protocol. Much compromise can be seen in the texts with give and take by both developed and developing countries seen on key issues. For example, the Green Climate Fund - which was established last year in Copenhagen - was strengthened and the World Bank was given a three-year interim mandate to serve as trustee. Many experts have suggested that the Bank is one of the few international institutions with the capacity and experience to administer the fund. However, many developing countries had been staunchly resistant to the World Bank playing a role, arguing that the institution had a history of showing preference for developed countries.

This concession on the part of developing countries was balanced by agreement that the Fund would be designed by a transitional committee made up of a majority of developing countries. This 40 member committee will be made up of 15 developed countries and 25 developing countries (seven from Africa, seven from Asia, seven from the Group of Latin America and Caribbean Countries (GRULAC), two from SIDS, and two LDCs).

Another major compromise - particularly for China - can be seen in the establishment of an international system for providing measuring, reporting, and verification (MRV) for mitigation actions. This "transparency" issue looked to be too difficult a hurdle to overcome in the weeks leading up to Cancun with the US insisting that it be a part of any financing package and China resolutely against anything of the sort.

On mitigation in general, parties agreed that by the time next year's Durban COP arrives they would establish a timeframe for emissions to reach a global "peak." China has been resistant to committing to a peak in the past, arguing - quite recently in fact - that it expects its emissions to continue to rise for some time.

Kyoto not dead, but on life support

The Kyoto Protocol lives to see another day - although debilitated, it is not dead, as many thought might happen. Several developed countries - including Canada, Australia, and Japan - had been calling for an end to Kyoto, arguing that any climate deal that does not require major economies like China and India to meet mitigation targets is ineffective. Cancun secures the survival of Kyoto's Clean Development Mechanism (CDM) programme and opens up the possibility for its expansion. The deal, however, does not establish a second term for Kyoto and it still is unclear what will happen when phase one expires at the end of 2012.

Another key victory for developing countries is that, as laid out in the Kyoto Protocol, they will continue to not be penalised for failing to meet their emissions targets. In the end, China also managed to include language that allows it to set its reduction target based on "emissions intensity" - a less arduous target that pegs the amount of carbon emitted to each unit of economic output. Developed countries had been pushing for commitments to finite amounts of carbon emissions.

The agreement also establishes rules on the enhanced Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD+) programme, a key issue pushed by Mexico's President Felipe Calderon. The Mexican president played a prominent role in COP 16, making several speeches at formal UNFCCC events as well as side events taking place on the sidelines of the official discussions. Caldron appeared to adopt forest issues as a pet area of interest, perhaps in hope that parties would manage to find consensus in this one area if all else failed in Cancun.

Notably, the rules on REDD+ now acknowledge the need for respect for the rights of indigenous communities and others, in accordance with international law. Some developing countries, most notably Bolivia, had reservations over the possibility of an international forests agreement impinging on the traditional practices of forest dwellers.

Small Island Developing States (SIDS), the countries most vulnerable to rising sea levels resulting from climate change, received a small victory with language that "recognises the need to consider" strengthening the long-term goal of capping global average temperature rises by lowering this goal from 2°C to 1.5°C.

Thorny trade issues nixed

While the agreements in Cancun were more than what was expected at the outset, several key issues were dropped in order to reach consensus - many of which relate to trade. Agriculture, which was not considered to be one of the more difficult issues to negotiate became inextricably tied to the discussions on bunker fuels. When it became clear that parties would be unable to overcome their differences on how to manage bunker fuels - the global nature of the industry makes it difficult to make decisions on jurisdiction - both issues were snipped out of the text.

Additionally, any references to the use of unilateral trade measures were removed, leaving a crucial element of enforcement and regulation unresolved. Clearly, trade issues proved to be some of the most difficult questions to untangle and agree upon in Cancun. They are indeed some of the most complex issues and, as such, will require more time, consideration, and understanding. It remains to be seen whether they will re-emerge on the agenda when the UNFCCC resumes its regular meetings again in 2011. Depending on how the fallout of the Cancun agreement settles, these thorny issues could return as priority issues at next year's COP in Durban, South Africa.

Consensus or unanimity?

In addition to the two texts agreed to at COP 16, Cancun will be remembered for the final tense moments that brought the meeting to a close. Throughout the final plenaries, which stretched well into the early morning hours of Saturday, Bolivia expressed again and again its disagreement with the content of both texts. Their objections were many and ranged from a lack of inclusiveness in the process, to a lack of ambition in the mitigation measures contained in the documents.

A few countries - including Venezuela, Cuba, and Saudi Arabia - acknowledged Bolivia's objections and suggested heading back to negotiations, but eventually the Latin American country found itself isolated. When it looked as though the COP would come to a close despite its objections, Bolivia's UN Ambassador Pablo Solon repeated that they did not agree with the texts and therefore there was no consensus and, as such, they could not move forward. "Not even in Copenhagen, with all of the problems that there were, was this rule disrespected," Solon said.

When Espinosa gavelled the agreements, taking note of Bolivia's objections, Bolivia spoke out again to underline the violation of the rules of the international system that govern the UNFCCC. "This will set a dangerous precedent of exclusion," Solon insisted. "It may be Bolivia tonight, but it could be any country tomorrow." The president responded that the consensus rule does not mean unanimity. She further responded that she could not permit one country to exercise an effective veto over 193 other countries.

Analysts say this issue of consensus is certainly not closed and will have to be revisited in the future. But for now, many delegations and observers are stressing that the transparent and firm process in Cancun has restored their support for, and faith in, multilateralism and international cooperation on climate change.

More information

The AWG-LCA text can be accessed here.

The Kyoto Protocol text can be accessed here.

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