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Client Update: Doha and its implications for Australia

12 December 2012

In brief: At the recently concluded UN Climate Change Conference in Doha, Australia signed up to a second commitment period under the Kyoto Protocol and an agreement on a pathway for the adoption of a new global climate change treaty that is to come into effect in 2020. Partner Grant Anderson and Lawyer Albert Yu report.

Background

The Kyoto Protocol is an international agreement that was adopted in Kyoto, Japan, on 11 December 1997 and that entered into force on 16 February 2005. Australia ratified the Protocol on 12 December 2007.

The Kyoto Protocol sets binding targets for certain developed countries to constrain their greenhouse gas emissions. Countries bound by these targets can reduce their emissions by national measures as well as by way of access to the market-based mechanisms (such as the Clean Development Mechanism) provided under the Kyoto Protocol. As discussed in an earlier Focus article, emissions units created under the Kyoto Protocol (such as Certified Emissions Reductions from Clean Development Mechanism projects) will be able to be used from 1 July 2015 by liable entities under the Australian carbon pricing scheme to acquit up to 12.5 per cent of their annual Australian carbon liabilities. However, the initial commitment period of the Kyoto Protocol expires on 31 December 2012.

At the UN Climate Change Conference in Durban in late 2011, major developed and developing countries agreed on a roadmap to making a new treaty by 2015 which would create binding emissions reductions targets for developed countries and developing countries. The conference also provided for the second commitment period under the Kyoto Protocol to begin on 1 January 2013 and end either on 31 December 2017 or 31 December 2020, as decided at the Doha Climate Change Conference.

On 9 November 2012, the Federal Minister for Climate Change and Energy Efficiency announced that Australia was ready to join the second commitment period of the Kyoto Protocol subject to the following conditions:

  • continued progress in international negotiations towards the new 2015 agreement, which would require serious commitments from all countries, developed and developing alike;
  • the second commitment period ending in 2020 in line with the start of the new agreement;
  • access to the Kyoto Protocol market mechanisms, including the Clean Development Mechanism, from 1 January 2013;
  • the existing land sector rules continuing, thereby providing opportunities to reduce emissions through better land management, including under the Carbon Farming Initiative; and
  • the rules applying to carryover of units from the first commitment period of the Kyoto Protocol being appropriate for Australia.

The eighteenth session of the Conference of the Parties to the UN Framework Convention on Climate Change and the eighth session of the Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol was held from 26 November 2012 to 8 November 2012 in Doha, Qatar. The Australian delegation was lead by the Parliamentary Secretary for Climate Change and Energy Efficiency.

Second commitment period under the Kyoto Protocol

The most significant, and perhaps the only concrete, outcome of the Doha Climate Change Conference was that a number of countries (including Australia) signed up to a second commitment period under the Kyoto Protocol, which will commence on 1 January 2013 and end on 31 December 2020. Australia did so on the basis that the Federal Government was satisfied that the conditions set out above had been met. For the second commitment period, Australia has agreed to reduce its greenhouse gas emissions to 5 per cent below 2000 levels by 2020, this being a target that currently has bipartisan support in Australia. Australia has retained the option of increasing this target to 15 per cent or 25 per cent below 2000 levels if Australia's target conditions relating to the extent of global action are met (for more on this see our Focus: CPRS legislation introduced into Parliament and our Client Update: White Paper on Carbon Pollution Reduction Scheme released) and the Federal Government has stated that the 5 per cent target will not constrain the role of the Climate Change Authority in reviewing Australia's national emissions reduction targets.

However, the world's largest emitters are not bound by the second commitment period, which means that the Kyoto Protocol is of diminishing relevance. Of the major developed countries, Canada, Japan and the Russian Federation (which were signatories to the first commitment period) refused to recommit, and the United States of America (which decided against joining the first commitment period) has maintained that stance. Moreover, the Kyoto Protocol emissions reduction targets only bind developed countries and so major developing country emitters, such as the People's Republic of China, India, Indonesia and Brazil, are not subject to binding emissions reduction obligations in any event. If anything, this outcome seems to reinforce that future actions to reduce greenhouse gas emissions are more likely to be achieved through bilateral agreements, or voluntary domestic action, rather than a comprehensive multilateral treaty that requires the agreement of more than 200 countries.

The Doha Climate Change Conference also decided that only parties that signed up to the second commitment period would be eligible to transfer and acquire Kyoto Protocol units under the Clean Development Mechanism after 31 December 2012. Australia's participation in the second commitment period therefore means that entities which are liable under the Australian carbon pricing scheme will be able to acquire and surrender Certified Emissions Reductions to the Clean Energy Regulator to acquit up to 12.5 per cent of their annual Australian carbon liabilities from 1 July 2015.

Timetable for a 2015 global climate change agreement

At the Doha conference, countries agreed to 'speedily work toward a universal climate change agreement covering all countries from 2020, to be adopted by 2015'. This will entail the following steps:

  • in 2013, meetings and workshops are to be held to prepare the new agreement and to explore further ways to formulate more ambitious goals to tackle climate change;
  • by 1 March 2013, countries are to submit to the UN Climate Change Secretariat information, views and proposals on actions, initiatives and options to set more ambitious goals to tackle climate change;
  • no later than the end of 2014, elements of a negotiating text are to be made available so that a draft negotiating text can be prepared before May 2015; and
  • in 2014, the UN Secretary General will convene a meeting of world leaders to mobilise the political will to help ensure that the 2015 deadline for a new global climate change agreement is met.

However, there is still a very long way to go, and there are many significant obstacles that will need to be overcome, before a binding multilateral climate change treaty that covers at least a majority of the world's biggest greenhouse gas emitters will see the light of day.

Other outcomes of the Doha conference

The Doha conference also saw developed countries make various aspirational and non-binding pledges to provide assistance to developing countries. For instance, the conference called upon developed countries to provide developing countries with finance, technology and capacity-building in order to address the loss and damage associated with the impacts of climate change on developing countries that are particularly vulnerable to the adverse effects of climate change. In addition, the conference endorsed the selection of Songdo, South Korea as the location of the Green Climate Fund, which is intended to be a significant source of multilateral funding from developed countries to developing countries for climate change adaptation and mitigation. What is lacking, however, is tangible funding commitments from developed countries for this purpose.

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