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Inching towards Copenhagen

Copenhagen meeting draws nearer but previous conventions leave considerable doubt over what will be achieved

THE UN claims it remains on course to reach a new international agreement on climate change by December 2009, following last month's meeting in Poznan, Poland. In a separate meeting last month, European leaders confirmed the EU's goals of cutting greenhouse-gas emissions by 20% below 1990 levels by 2020 and deriving 20% of its energy from renewables by the same date.

However, both sets of meetings were criticised by environmental groups for failing to achieve enough. And, despite its optimism, considerable doubts hang over the UN's ability to complete climate negotiations by the end of the year.

The UN Climate Change Conference in Poznan aimed to lay the foundations for a new climate-change treaty to be signed by some 190 countries at December's summit in Copenhagen. Poznan – the 14th Conference of the Parties – ended with "a clear commitment" to reach an agreement in time for December's Copenhagen meeting, the UN says. A first draft of a "concrete negotiating text" will be available at a UN Framework Convention on Climate Change meeting in Bonn, Germany, in June. But detailed discussions of more controversial areas were deferred until 2009, when Barack Obama will have assumed the presidency of the US, the world's largest carbon emitter.

Progress was made in unblocking a so-called adaptation fund intended to provide finance to help developing countries take measures to combat the effects of climate change, by, for example, protecting themselves against droughts, floods or storms. The facility derives its funding from a 2% levy on certified emissions reductions issued for a clean development mechanism (CDM) project. The CDM enables developed-world countries and companies to earn tradable credits by investing in projects in the developing world that help reduce carbon emissions.

But as part of a so-called Article 9 review of the existing 1997 Kyoto protocol, some developing countries argued for a rise in the levy to 3% and that it should be broadened to include other mechanisms set up under Kyoto. Countries that would stand to lose out financially from a rise opposed the move, including the EU states, US, Japan and Australia.

In the end, the lower figure stayed in place, but the fund, which had been hamstrung by long-running negotiations, was at least freed up to dispense finance, with the result that some $60m should be available within the next few months. Analysts note that this amount is a drop in the ocean compared with the billions of dollars the UN says is needed to tackle climate change successfully, but in the context of a fraught climate-change process, it represents a step in the right direction.

EU leaders, meanwhile, agreed to boost funding for the development of carbon capture and storage (CCS) technology. Some €6bn-7bn ($7.5bn-8.9bn) of the money raised by EU governments from the auction of permits to industries participating in the bloc's emissions-trading scheme will now be set aside for CCS projects. EU leaders have said they want to see 10-12 CCS demonstration plants in operation in Europe by 2015.

A decision to issue free emissions permits to industries exposed to international competition, if they face a rise in costs of more than 5% through entering the EU emissions-trading scheme, was attacked by some environmental groups as a climb-down. More than 90% of EU industry could be eligible for free permits, according to some estimates, although the power sector, which is responsible for most emissions, will still have to pay for its permits through an auction.

Guy Turner, director of energy-research company New Carbon Finance, says the EU talks should not be regarded as a failure. "It was always going to be a hard sell to auction allowances to industries exposed to international competition in the present economic climate, so it was no surprise that negotiators backed down. However, the auction in the power sector is still going ahead and the 20% target is still there. I don't consider the outcome to have been watered down."

While both sets of climate-change talks showed the world inching towards greater collaboration on climate-change issues, the greatest progress, at least in the short-term, is likely to be made by individual countries and blocs on a unilateral basis.

Last month, for example, Australia announced plans for the most ambitious carbon-trading scheme beyond that of the EU, which is set to start trading in July 2010. Draft carbon-emissions laws are to be released in February 2009 and the bills are to be presented to parliament in May. The cap-and-trade scheme is expected to be based on a 2020 goal of cutting emissions by 5-15% from 2000 levels. Mexico, meanwhile, pledged to cut its carbon emissions by 50% by 2050, mainly through voluntary and non-binding commitments to improve energy efficiency in the cement, oil and other heavy industries. 

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