THE BALI ROAD MAP: Key Issues Under Negotiation UNDP ENVIRONMENT & ENERGY GROUP THE BALI ROAD MAP: Key Issues Under Negotiation Disclaimer The views expressed in this publication are those of the author(s) and do not necessarily represent those of the United Nations, including UNDP, or their Member States. Acknowledgements UNDP acknowledges the generous support from the United Nations Foundation and the governments of Norway and Finland towards the project, “Capacity development for policy makers to address climate change”, which allowed the preparation of this document. This document was designed by Rebecca Buttrose. Production and review by Amy Schofield. THE BALI ROAD MAP: KEY ISSUES UNDER NEGOTIATION 1 TABLE OF CONTENTS Foreword 3 The Bali Action Plan: Key Issues in the Climate Negotiations – Summary for Policy Makers 5 Climate Change Mitigation Negotiations, with an Emphasis on Options for Developing Countries 23 National Policies and their Linkages to Negotiations over a Future International Climate Change Agreement 69 Adaptation to Climate Change: The New Challenge for Development in the Developing World 119 Negotiations on Additional Investment and Financial Flows to Address Climate Change in Developing Countries 161 The Technology Challenge: Considerations for National Government Policy Makers to Address Climate Change 209 Key Issues in Negotiations on Land Use, Land Use Change and Forestry, with an Emphasis on Developing Country Perspectives 249 2 THE BALI ROAD MAP: KEY ISSUES UNDER NEGOTIATION THE BALI ROAD MAP: KEY ISSUES UNDER NEGOTIATION 3 FOREWORD Nearly all sectors of society contribute to greenhouses gas emissions and are affected by climate change. The magnitude and the impact of the problem require a co-ordinated, effective response – both nationally and internationally – to both move societies towards less carbon-intensive pathways and make inroads towards achieving the Millennium Development Goals (MDGs) and reducing poverty. The scale and scope of the challenge means that every policy and investment decision will have to be assessed in light of its greenhouse gas reduction capacity and its contribution to long-term sustainability. Policy makers must also find solutions to directly improve the well-being of millions of poor and vulnerable people adversely impacted by the effects of climate change. At the international level, governments recently agreed under the United Nations Framework Convention on Climate Change (UNFCCC) process to step up their efforts to combat climate change. With the “Bali Road Map”, governments will seek to reach agreement on a number of forward-looking issues essential for reaching a secure climate future by the 15th Conference of the Parties in December 2009. This includes the “Bali Action Plan” – the UNFCCC negotiations on long-term cooperative action, which center around the four thematic “building blocks” of adaptation, mitigation, technology transfer and deployment, and financing. In order to effectively participate in, and develop positions for, such a challenging and complex negotiation process, developing countries – in particular those with medium- and small-size economies – will be required to involve and increasingly co-ordinate various government policy makers across key sectors at the national level, as well as other relevant stakeholders. This will require raising the awareness of not only environmental policy makers, but all policy makers about the key issues and elements of the Bali Road Map and the impact it could have on their sectoral areas. Strengthening their capacity to develop, implement, and evaluate cross-sectoral national policy options in response to climate change and the international negotiations can offer policy makers a key opportunity to move toward sustainability. Under the aegis of the UNDP Environment & Energy Group project, “Capacity development for policy makers to address climate change”, UNDP commissioned a series of documents that address the key issues under consideration for the Bali Action Plan building blocks, with a focus on the developing country context. We also included a document on land use, land-use change and forestry, which is a key sector for many developing countries. The documents have been prepared by leading international experts – many from developing countries – and translated into all UN languages in order to inform policy makers across the entire spectrum of economic sectors. UNDP is committed to capacity development and believes it can play a crucial role in the ability of countries to address climate change in a sustainable manner. We hope that this compilation of documents will be widely used by developing country negotiators and national climate teams to inform policy makers during this critical phase of the international climate negotiations. Veerle Vandeweerd Director, Environment & Energy Group Bureau of Development Policy UNDP 4 THE BALI ROAD MAP: KEY ISSUES UNDER NEGOTIATION THE BALI ActION PLAN: KEY ISSUES IN THE CLIMATE NEGOTIATIONS – SUMMAry FOR POLIcy MAKERS 5 THE BALI ActION PLAN: KEY ISSUES IN THE CLIMATE NEGOTIATIONS SUMMARY FOR POLICY MAKERS CHAD CARPENTER 6 THE BALI ACTION PLAN: KEY ISSUES IN THE CLIMATE NEGOTIATIONS – SUMMARY FOR POLICY MAKERS THE BALI ACTION PLAN: KEY ISSUES IN THE CLIMATE NEGOTIATIONS – SUMMARY FOR POLICY MAKERS 7 OBJEctIVES OF THE PROJEct THE BALI ROAD MAP The UNDP project, “Capacity development for policy into national development and economic planning. At At the United Nations Climate Change Conference in financing and capacity-building, in a measurable, makers to address climate change” seeks to strengthen the the international level, an assessment of investment and Bali in December 2007, governments from around the reportable and verifiable manner. national capacity of developing countries to assess climate financial flows will help maximize national participation in world – both developed and developing countries – agreed change policy options across different sectors and econom- the international climate negotiations by providing more to step up their efforts to combat climate change and Other subjects for the future discussion include the use ic activities. The project will run in parallel with the “Bali accurate estimates of funds needed for mitigation and adopted the “Bali Road Map”, which consists of a number of sectoral approaches; approaches to enhance the Road Map” process agreed at the UN Climate Change adaptation. By providing useful inputs to the international of forward-looking decisions that represent the various cost-effectiveness of mitigation actions, including market Conference in December 2007, which includes the “Bali debate, a financial flows assessment can help provide that tracks that are essential to reaching a secure climate future. mechanisms; and the issue of reducing emission from Action Plan” – the United Nations Framework Conven- an appropriate financial architecture plays a key role in any The Bali Road Map includes the Bali Action Plan, which deforestation and forest degradation in developing tion on Climate Change (UNFCCC) negotiations on long-term cooperative action. charts the course for a new negotiating process under the countries (REDD). long-term co-operative action on climate change set to To assist policy makers in understanding the complex UNFCCC, with the aim of completing this by 2009. It conclude by the end of 2009. issues under discussion in the negotiating process, UNDP also includes the current negotiations under the Kyoto Two-Track Approach: The UNFCCC and the To effectively participate in, and develop positions for, commissioned a series of background briefing papers Protocol, and their 2009 deadline, which focus on further Kyoto Protocol this challenging and complex negotiation process, develop- on the key issues under the four main “building blocks” quantified emission reduction commitments for industrial- ing countries – in particular those with medium- and of the current international negotiations – mitigation, ized countries, as well as negotiations on the ongoing work Future international action is being addressed by a small-size economies – will be required to involve and adaptation, technology and finance – as well as land use, pertaining to key issues including technology, adaptation, “two-track” approach. In parallel with the Bali Action increasingly co-ordinate various government decision- land-use change and forestry (LULUCF). and reducing emissions from deforestation. Plan negotiations under the UNFCCC (also referred to as makers across key sectors at the national level, as well as This document contains summaries for policy makers the Convention), negotiations are also underway under other relevant stakeholders. This will require raising the of these briefing papers. All the briefing papers are avail- The Bali Action Plan the Kyoto Protocol. Provisions of the Kyoto Protocol also awareness about the key issues and elements under able in the UN languages on the UNDP web site at: address the key issues being discussed under the Bali discussion and strengthening capacity to develop, imple- http://www.undp.org/climatechange/documents.html. The Bali Action Plan, adopted by the Conference of the Action Plan and there are many linkages between the two ment and evaluate policy options in the context of the Parties (COP)1 as decision 1/CP.13, launched a compre- processes. For example, on mitigation, Parties to the Kyoto international negotiations. hensive process to enable the full, effective and sustained Protocol