Shell International Limited With Complimems shell Centre 10mm 5n 7m m: <<2170934 ma fax. (ammo 8060 of Robin Arim Head av Exxema' Relanons "55' A Dimlincs m: (ammo 527a (av 7H9u 5525 Rammed No 307Snfl7hgmard oil-(e 7m mm FRAMEWORK CONVENTION 0N CLIMATE CHANGE (FCCQ COPZ 8-1911-1 JULY, GENEVA The second Conference of Parties (COPZ) for the took from 8-l9th July. Meeting of die Subsidiary Bodies for Scientific and Technological Advice (SBSTA) and for lmplemenminn and of the Ad HOC Groups on the Berlin Mandate (AGBM) and Article took place wncunenlly In addition informal workshops were held on Policies and Measures (PAMS), Qiantified Emissions Limits and Reduction Objectives (QELROS) and National Cormnmimxiom for Non Annex I Panies and by the (lntergovemmental Panel on Climax: Change) on Technology Assessment. A Ministerial mien M5 on 17th and 18m July. The main objectives of the meeting were to take stock of progress matte in the convention since and to intensify efforts to negotiate a protocol for consideration at a side meeting on Technology Coopmiticn and Capacity building on July. Pressht tar at least pan ofthe meeting were either on the or otlle[ delegations were Robin Ann-l (Shell a dclegation). Denny Bemstcin (Mobil . GCC delegaticn), Brian Flannery (Exxon . Charloth Grew (IPIECA), lois Johnston (Texaco ICC Klaus thlhase (BF - IPIECA delegation), Clem Malin (Texaw . delegation). Jean Marvillel (Total . lPlEcA delegation). Bill Mulligan (Chevron - GCC delegation), Titn Sal: . wac delegation), Peter Scupholrne (BF - delegation) and John Shinn (Chevron . IPIECA deleytion). This report draws on a report by Lenny Bernstein. SUMMARY Ovemll the positions Ufa number or countries became clatter, The us committed to legally binding targets and for induction in GHG emissions, but rejected mandalary polices. Saudi Arabia and Kuwait who have played a prominent role in arguing against new commitments were joined by 12 other principally OPEL Optic cuuntries including Rmsit Ausualia, New Zealand and Norway, whilst supporting a protocol, make the case that economic considmm'uns must be taken inm accotmt. The European Union reiterated its support for Tnandatmy policies and commitment to quantified reduction objectives (or the EU as a single party and for setting a mximum allowable atmospheric concentration for co, of 550 ppm. The ministcrial session resulted in a declamtion Miicll endorsed the Second Assessment Repofl (SAR) and rasfiinned commitment to negotiate new GHG emission reduction Commitments by Annex I cumin-is. Founwi including Saudi Ambia and Kuwait disassocialed themsele fi'om the declamtion. In addition Amalia. Zealand and die US mserved their position on specific provisions nt'tJic statement, The scene has been set for intensive negotiating sessions between now and com. Althoqu the Ministerial Declaration is not a binding document it is likely to be used t0 justify strongcr positions in the negotiations, The pliessux: on negotiators to pmduDe a protocol in time for com hm Shipped up sigrificantly, There are liker lo be three or evm four further negotiating sessions prior tn COP-3. The following dams have been scheduled: Decembcf 1996, Geneva 24 Febmary -7 March 1997, Bonn cop-3 l-thh Kyoto. Japan - The main outcomes of the meetings were as follows: MLNISIUUAL SESSION The Ministerial Declaration clearly endorsed the SAR of the IPCC and recognised it as a scienti?c basis for strengthening action to limit and reduce GHG emissions. By introducing the concept of a legally binding protocol and repeating it with respect to QELROS the Declaration has elTectively expanded the scope of the Berlin Mandate. In particular the Declaration noted that the balance of evidence suggests a discemable human in?uence on global climate; that projected changes will result in sigri?cant, o?en adverse impacts on ecological systems and socio?economic factors and that reductions in GHGS are technically possible and economically feasible. The Declaration interpreted the ?nding of the as indicating that continued rise in GHG concentrations in the atmosphere will lead to dangerous interference with the climate system, given the serious risk of an increase in temperature. Representatives were instructed to accelerate negotiations on the text of a protocol to be completed in time for adoption at COP-3. Although the declaration is not a legally binding document and has been noted rather than of?cially approved by COP it will likely add ?uther pressure on the negotiators to produce a substantive agreement for adoption at COP-3. Key items were: 0 The Bureau An important administrative item - the election of the bureau was ?nally achieved. Presumably this will allow the COP to operate more effectively and clears the way for more substantive matters. However it should be noted that Saudi Arabia remains unhappy. 0 Rules and procedures The outstanding issue on the Rules and Procedures conceming voting was not resolved. The COP therefore has no Rules and Procedures in place which could make the adoption of an agreement di?icult. Rati?cation - 1591Parties have now rati?ed the Convention. 0 COP-3 COP-3 will be held from 1-12th December in Kyoto, Japan. No new proposals for a protocol or other legal instrument were put forward, however each of the previously presented proposals including those from the EU and AOSIS (Alliance of Small Island States) were reiterated. There was extensive debate on the nature of the protocol commitments. Key issues were: 0 Targets Australia, Japan, New Zealand, Norway and others argued for a differentiated target which would take into account the differences in the circumstances of developed countries eg current levels of energy ef?ciency and use of renewable energy. The US and EU and many developing countries supported a single target because the complexity of negotiating a differentiated target. The US, New Zealand and others made the case against annual targets because of the economic bene?ts of multi-year or cumulative targets. Mandatory Measures The EU position was that negative impacts on competiveness of many measures to control GHGs requires that they be implemented by all developed nations. The US strongly opposed common measures. Australia, New Zealand, the US and others argued that parties should have the freedom to choose the measures that made the most sense for their individual economies. Econom'c Ef?ciency The need for international cooperation to reduce the cost of controlling GHGs was universally accepted. Developing countries vigorously reemphasised their opposition to any mechanism \xhich would transfer any responsibility for reduction in GHG emissions to them. This position was accepted by the developed world at and was not challenged at COP-2. All parties supported Joint Implementation (joint projects to reduce GHG emissions between developed countries). Since Eastern European countries come into this category there is some scope for II. although this will be dependent on the nature of any targets that are a?grwd. The EU claimed that it should be treated as a single Party rather than as individual countries. This was opposed by the US. The Netherlands and the US both proposed emissions trading but gave no details about how this might operate. Impacts on Developing Natiom It is now widely accepted that mandatory GHG emissions reductions will have negative impacts on developing countries. Some claimed that they should be compensated for these impacts. This was not accepted by developed countries. SUBSIDIARY BODY ON SCIENCE AND WOIDGICAL ADVICI The major outcomes from SBSTA were as follows: 0 IPCC Second Assessment Report There was extensive debate surrounding the Second Assessment Report. There was a strong divergence of views on the SAR Many delegations including the EU. the US, Norway, Canada and New Zealand strongly supported the SAR as the most comprehensive assessment of scienti?c information on climate change and regarded it as a basis for urgent action. In contrast many others including Russia Saudi Arabia, Kuwait. Venezuela and Australia believed that given the uncertainty of much of the data, the SAR did not provide a basis for immediate action. Ultimately the report sent by SBSTA to the COP contained two bracketed paragraphs giving these opposing views. Both paragraphs were deleted in the ?nal plenary leaving the status of the SAR unresolved. This was overcome to some extent by the N?nisterial Statement which strongly supported the SAR (see above). Commrmicatiom from Annex I Parties Revised and more comprehensive guidelines were adopted for National Communications from Annex I countries However Guidelines will be the subject of further review at the next meeting of SBSTA Communicatiom from non-Annex I Parties Initial guidelines were adopted for non?Annex 1 Parties. They include national inventories of anthropogenic GHG emissions, GHG removed by sinks, proposed steps to implement the Convention. Mchanisns for Comultations with NGOs New Zealand and Canada acknowledged the important role of industry in implementing the Convention and endorsed the development of a business consultative mechanism. ICC, on behalf of business NGOs. supported a separate business consultative mechanism given industry's key role in implementation. A contact group lead by New Zealand recommended that current mechanisms should be explored ?rrther and procedures proposed ro improve emeieney See Business Consultathc Mechanism secuon belou Summum Bom 0N His main oulwmes of SBI were as follows: 0 GEF (Gain! mimnnrem Facility) GEF is Ihe inrenrn finanCIal meehanisin for rhe Man) deyeloping euunrries olyecled I0 enndibonalnies plneed by are cl;c Council on prnjocl proposals in addinon mere was a rnainr difierence or opinions dyer are Memomndum pr bemeen 0le and the cop Developing oounines were unhappy with Mm ehey sa\\ as an aneinpi rd Shlfi me burden of implemenmion Annex 1 lo nonrAnnex Panies This Issue was nor resolved Activiu'es Jointly Work on the pilor shape is to be oonrinned The rennr oruiis body IS ro Ihe ofa inullilarernl process" ineenns eonsidered orher Intematicnal envrronrnenral agreemenis compliance procedures However me meeling was orghnisniienal in llmure mm the ro pin in a posirion lo take up irs fol-nu] \mrk in December IPCC INFORMAL Womble? 0N Woman IPCC havc produced a drzfi paper on reehnology assessment and an informal workshop was held Io renew the firs drafl The ulpul In IPCC on Ihis issue was evldem in he (m and indeed Bab Waisen acknowledged the IPIECA contribution as a major source The key messages from me booklet on Technolog' Cooperauon and Capaclry were presented al a side meeung The meeting was chaired by Clem Malin. presenlzrians were givcn on the rempluie for Success by Charlene Grew. Case srudies from Senegal and I'apua New Gulm'z were presenred by Jean Maryillei and John Shinn respectively The rneering was well and despire die busy meeung schedule mended by delegares from a reasonably good cross clfPanies and The meeling was a good oppormnily Io demonstrate the pcsilive role mm the oil and gas rndusnry can play on The issue of technology wopemlion and capacity building However die of the moeling was wider and provided runher evidence of as a reepeered player in are climate ehnnee issue and a more geneml demonm on Offlle nduslnis pd ve response conoems rhe normal course of busine "(mm mec Little progess has been made on ihe ofa business eensulrarivc rneehanisrn mih ihe process, The business seeror repon orrhe NGO workshop on poienlial mechanisms was discussed briefly in SBSTA (see on SBSTA) Discussions indicaled rhar ifa more dcmiled proposal was made would be glvefl a hearing An indusuy nroering will held during the 3rd Quancr Io discuss possible llexl sreps 29 July mo gewpenpennzreprp