INSouth

On the issue of insurance, the United States sees value in exploring ways the UNFCCC might catalyze development of private insurance mechanisms, micro-insurance and or indexed insurance mechanisms, and, particularly, risk reduction/risk prevention activities. However it does not support calls for an additional fund or for intergovernmental insurance mechanisms.

New Zealand notes in its submission on mitigation that to reach an ambitious global long-term emission reduction target, and ensure that global emissions begin to decrease in the next 10-15 years, will require nationally appropriate mitigation commitments and actions from all major emitting countries and not just commitments from those Annex I Parties that have ratified the Kyoto Protocol. Its support of a 25-40 percent reduction for Annex 1 Parties in aggregate is contingent on comparable effort from all developed countries, and action from developing countries that reduces their aggregate emissions in the range of 15-30 percent below baseline. This reduction effort from developing countries should be done in a measurable, reportable and verifiable manner, and be additional to any reductions that result from projects used to meet Annex 1 Parties’ commitments (for example the Clean Development Mechanism).

On financing it notes that in developing solutions to address climate change through the Bail Action Plan, Parties must remain cognisant of what is achievable within the United Nations process. Further, the two documents on aid effectiveness and financing for development hold useful principles that can also be applied to climate change finance discussions. It expresses strong preference to avoid unnecessarily creating new funds and/or mechanisms. Problems with existing mechanisms should be addressed prior to consideration of additional avenues.

On technology issues, it draws a distinction between the transfer of existing, commercially-available technologies; and R&D and commercial deployment of new and innovative technologies.

Norway’s submission on shared vision acknowledges that the right to economic growth and poverty eradication is fundamental for developing countries. A shared vision must thus elaborate on the establishment of the necessary incentives for turning the global economy into a low carbon economy. Norway believes that necessary measures for the expansion of the carbon market, seeking to establish a global price on all greenhouse gas emissions, should be a part of a shared vision. It calls for considerable financial support, capacity-building, and technological support to be provided by the developed nations in a reliable and predictable manner, taking into account the circumstances and capabilities of the developing countries.

Its submission on sector-based approaches notes that this could be a means for the transfer of resources from developed countries to developing countries in the context of moving towards a low-carbon economy. New mechanisms must be created in order to facilitate a policy establishing incentives to appropriate mitigation actions.

On Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD), its notes that the international response to this situation should be twofold: the inclusion of a REDD mechanism in a post-2012 global climate change regime, and an international support program for building REDD readiness in interested developing countries, to contribute to their ability to participate in the REDD mechanisms of a potential future global climate change regime.

Switzerland, through its submission on financing adaptation notes that it would like to make use of existing institutions such as the Adaptation Fund of the Kyoto Protocol and the Global Environment Facility for the management of the funding of the Bali Action Plan in order to avoid a proliferation of the institutions in this field. Neither the adaptation fund under the CDM of the Kyoto Protocol nor other pledged funds can provide financing between 10 and 40 billion per year to adapt to climate change such orders of magnitude and therefore the issue of financing the necessary measures remains unresolved.

It discusses the creation of a global burden sharing system legally binding to all nations. Revenue for adaptation would be raised through a uniform global carbon tax of 2 USD per ton of CO2 emissions. Revenues raised would support adaptation and mitigation activities. This could be best managed by a Multilateral Adaptation Fund designed to finance low and middle income countries’ effort in implementing adaptation policies. Switzerland’s submission also supports the creation of an Insurance Pillar focused on providing financing for low probability, high consequence events. The Insurance Pillar would be particularly designed to ensure the rehabilitation of core infrastructure or compensate for lost assets due to climate change events, such as extreme weather events. The submission calls for a balanced private public partnership in developing such a mechanism, with conscientious consideration of the interests of affected groups in developing countries.

In Australia’s 11 separate submissions, several points are highlighted. In regards to the UNFCCC’s role, they state that the UNFCCC will be strongest as a facilitating body, not a focal point for implementation or technology cooperation. The UNFCCC should focus on three elements: Determining a mechanism for significantly increasing financing for adaptation, promoting coordination amongst donor countries, and catalyzing action at the local, domestic level. Regarding funding for mitigation activity, market-based approaches and private sector investment must be taken into account by national policy, given that 86% of current international finance and investment flows are in the private sector. To ensure efficiency and keep costs low, the market-based approach should be employed in regards to the Land Use, Land-Use Change, and Forestry (LULUCF) program and the Reducing Emission from Deforestation and Degradation (REDD) program, and policy should not mandate where to implement these programs. Australia states that the current financial crisis should not impede the creation of post-2012 financing or framework.

Australia’s submission states that the Clean Development Mechanism (CDM) must establish strong accountability, with a new mechanism designed to ensure and facilitate market integrity, environmental integrity, and economic effectiveness. Carbon Markets are also highlighted as a vitally important component of achieving meaningful carbon reduction. Flexibility mechanisms that support mitigation and ensure real reductions are an important of the development of the carbon market. One important flexibility mechanism highlighted is Carbon Dioxide Capture and Storage (CCS), promoted as a key technology to reduce GHG emissions. Australia advocates their recently launched a proposal for a Global Carbon Capture and Storage Initiative, including an Institute, to support and facilitate research and technology sharing. Sound governance is pointed out as a critical element to ensuring effective and transparent programs in regards to establishing effective flexibility mechanisms.

End Note

The Poznan Climate Change Conference comes at a critical point in time, with the financial crisis posing newer development challenges on developing countries, and the increasing effects of climate change becoming visible throughout the world. Developed Countries (Annex I Parties) are called upon to provide funding for adaptation and mitigation for many of the problems. Those countries most severely affected by climate change consequences are the least developed and most vulnerable countries who are responsible for a negligible amount of GHG emissions. Developed countries need to lead through actions – in particular by agreeing to greater GHG emissions reductions commitments and to fulfilling their existing treaty obligations to provide finance and technology transfer to developing countries.