1. National Climate Change Conference Climate Action Now South Africa, 17-21 October 2005 Climate Change Consultative Conference The CDM and strengthening a post-2010 climate regime Luiz Gylvan Meira Filho Visiting Professor Institute for Advanced Studies University of São Paulo BAS I C BASIC

2. The UNFCCC established a mandatory quantitative objective of stabilizing the atmospheric concentration of greenhouse gases at a level... BASI C

3. This implies that all countries are committed, collectively, to reach a situation where the net anthropogenic emissions (net means emissions minus removals), remain constant over time. BASI C

4. Given the dynamic equilibrium of carbon dioxide between the atmosphere and the terrestrial biosphere, in practice we have to stabilize the stock of carbon in the atmosphere-biosphere system. BASI C

5. From the point of view of the history of emissions, developing countries are those that, by 1990, had not yet reached their objectives of providing energy, transportation, etc, to all of their population. BASI C

6. Even if the industrialized countries ceased all of their emissions today, the developing countries would have to limit their emissions. The level at which they would limit their emissions could be at a higher than the present level, on a per capita basis. BASI C

7. Regardless of the level at which the atmospheric concentration of carbon dioxide is to be stabilized, it will be necessary to reduce its global emissions by about 60 percent, otherwise there is no stabilization. BASI C

8. The long-term challenge for developing countries is then to seek a future in which their emissions are limited. This is sustainability from the point of view of climate. BASI C

9. The near-term challenge for developing countries is to use the international climate change agreements to facilitate the transition to that future. BASI C

10. The Convention provides for a differentiation of commitments (common but differentiated responsibility). In particular, non-Annex I countries are supposed to receive financial resources to support their commitments. BASI C

11. At present, in addition to ODA and GEF as the financial mechanism of the Convention, the only practical mechanism for the provision of those financial resources is the Clean Development Mechanism of the Kyoto Protocol. BASI C

12. It follows that the post-2012 CDM is a significant part of the debate on the post-2012 regime. BASI C

13. Lack of clarity about the second and further commitment periods under the Kyoto Protocol is translated as risk for the investors. This fact is already influencing negatively investor decisions. BASI C

14. Any post-2012 regime containing a CDM style mechanism must contain assurances over a period of time longer than at present. BASI C

15. The interpretation of the Marraquesh Accords at present preclude, in practice, the implementation of large-scale CDM project activities on the grounds that they are not able to demonstrate financial or investment additionality, or that they are based on governmental policies. BASI C

16. Further guidance is needed from the Meeting of the Parties to the Kyoto Protocol, indicating that large projects (e.g. those involving the increase in the use of renewables, or the redesign of transportation) BASI C

17. Such guidance would make it easier for Parties included in Annex I of the Convention to accept deeper cuts in emissions in the post-2012. They would pave the way for Parties not included in Annex I of the Convention to see the benefits of adopting limits to emissions on a scale larger than that of simple projects. BASI C

18. There is a danger that, if COP-11 does not make progress in reforming the CDM, the compliance with Kyoto targets by Annex I Parties will be done with use of the emissions trading mechanism under the Protocol, without a real contribution to mitigating climate change – simply using the slack available in Russia and Ukraine. BASI C

19. At present, the existence of the CDM is a powerful factor in engaging the private sector in support of government policies to mitigate climate change. A signal from COP-11 in a direction different from enlarging the CDM may reverse this support. BASI C

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