CAN, representing 281 citizens groups from all continents of this earth, wit h more than 10 million members, is concerned at the slow progress of the pre sent negotiations towards completion of the Kyoto Protocol, which together w ith the Climate Convention must be the first step towards protecting humanit y and our environment from dangerous climate change. Industrialised countrie s, which have already agreed to binding commitments (Annex B) should make do mestic emissions reductions their top priority. We strongly urge ministers t o take the following steps as a minimum at this COP, as well as pledging ear liest ratification of the Protocol, without which none of the flexibility me chanisms should be allowed:

Given the alarming trends in dangerous climate change, the overall limits on emissions, as required by science, must be structured so as to both protect the atmosphere and to allow sustainable and equitable development in all the nations. Despite the attention devoted to the challenge facing developed nat ions in reducing their greenhouse gas emissions, COP4 must accept the overar ching challenge of equitable development and burden sharing. Recognition of the inadequacy of the commitments accepted by the developed nations in the K yoto Protocol and their revision must be a priority.
・ With a fifth of the world's population, industrialised countries are resp onsible for around two thirds of the world'sgreenhousegasemissions and fo r virtually all historic emissions. Despite the fact that the UNFCCC and theKyoto Protocol require industrialised countries to take action first, the UShas made ?meaningful participation" a precondition of its ratification of the Kyoto Protocol. Many developing countries are already undertaking significant steps to combat climate change, some more than industrialised nations.
・ The current industrialised country targets specified by the Kyoto Protoco l are not sufficient to prevent dangerous climate change. Moreover, the use of the Kyoto Protocol's flexibility mechanisms enables industrialised countr ies to avoid taking the domestic actions necessary.
・ Lacking from this pro cess is any definition of the ecological limits, i.e. the global scale of em ission reduction that would actually prevent dangerous climate change. The R eview of Adequacy of Commitments provides an opportunity to rebuild a scient ific basis for the core tasks of the Convention and Protocol as well as revi ew the adequacy of the Annex I commitments adopted in the Kyoto Protocol. Moving forward on that scientific basis, to avert dangerous climate change r equires two key elements - (i) a scientifically derived global emissions pro file consistent with preventing dangerous climate change and (ii) an allocat ion system which fairly and equitably divides these global emissions among t he countries of the world.
・ A number of steps can be outlined, using the A dequacy of Commitment Review, to take this issue forward. COP 4 must: ・ Ack nowledge that the emission reduction targets in the Kyoto Protocol are inade quate.
・ Require SBSTA to identify the issues and factors relevant to a definition of dangerous climate change and report at COP VI. ・ Establish a binding tim etable to review and establish new targets in light of the IPCC Third Assess ment Report in 2001.
・ Mandate the Subsidiary Bodies to identify principles for determining the allocation of future emissions which need to be based on the Convention's principles of equity, responsibility and capability.
・ Man date the Subsidiary Bodies to assess the different ideas and models for the allocation of global emissions e.g. the Brazilian proposal, Contraction and Convergence, per-capita or other approaches and to submit a report to COP VI.

The Kyoto Protocol must ensure that the atmosphere is made "whole" in the ev
ent that any Party fails to comply with its commitments. This will depend on the ability of the Parties to institute a compliance system that would help them implement their commitments and impose penalties on those that fail to do so.

CAN believes that the Parties must take a holistic approach that integrates all the elements necessary to ensure compliance, and must include considerat ion of issues arising from many of the Protocol articles (including Arts 3, 4, 5, 6, 7, 8, 9, 12, 16, 17, 19). Parties must begin a process at this COP for dealing with the breadth of the issues that must be addressed and conclu de on the same time-scale as the flexible mechanisms work-plan. CAN thus cal ls for the creation of an Ad-hoc international legal and technical experts g roup on Compliance at this meeting.

COP4 must set a mandate for the working group that incorporates the followin
g minimum elements for an over-arching compliance regime: coordination with ongoing work on national inventories and reporting; integration with the Art icle 8 review process; identification of how questions of implementation are raised; elaboration of procedures and mechanisms of a formal non-compliance regime under Article 18; application and appropriate modification of the mul tilateral consultative process under Article 16; preparation of an indicativ e list of consequences for cases of non-compliance; identification of mechan isms to cure excesses; evaluation of the role of domestic enforcement regime s and clarification of the relationship to other international agreements.

The compliance system must include measures designed to facilitate implement ation, encourage early domestic actions to reduce the chances of non-complia nce, and require Parties to prepare national implementation plans. The worki ng group should also propose any amendment necessary under Article 18 to ens ure availability of a full range of non-compliance responses. A comprehensiv e compliance regime should also include automatic accountability rules for t rading based on buyer/seller liability. NGOs should have the opportunity to participate in compliance reviews, including the right to raise potential no n-compliance issues and the right to provide and evaluate information.

Flexibility mechanisms are only a valid option if they benefit the environme nt, economic efficiency, if they are institutionally independent, transparen t and verifiable. They must not represent a loophole that allows high per ca pita emitters to evade aggressive domestic action. The three flexibility mec hanisms should be constructed concurrently and in accordance with common pri nciples. The flexibility mechanisms must conform to the foregoing principles of science and equity. It is inadvisable for the World Bank or other Interna tional Financial Institutions (IFI) to have any direct role in managing or i mplementing the flexibility mechanisms.

◆Trading and Joint Implementation (JI)

・ A set of prerequisites must be in place in each country before it is perm itted to transfer or acquire parts of assigned amounts. These include: compl iance with Articles 5 and 7 of the Protocol, national monitoring and verific ation systems, national registries and reporting systems, national enforceme nt systems and ratification of the Kyoto Protocol and the compliance system.
・ Rules defining the "supplemental" role of emissions trading and joint imp lementation must be quantified and verifiable. The vast majority of Climate Action Network members believe this is best achieved by placing a quantitati ve cap on the use of the flexibility mechanisms.
・ Rules governing trading and joint implementation among current and future Annex B parties must ensur e that global emissions are no higher than in the absence of trading.
・ Any Party joining Annex B must undergo scrutiny of its target to ensure i t requires real emission reductions.
・ Tradable permits, Emission Reduction Units (ERUs) and Certified Emissions Reductions (CERs) are not property righ ts.
・ Rules shall ensure that liability for non-compliance falls on both bu yers and sellers of emissions permits.
・ National reporting requirements mu st provide adequate and timely information to support buyer, as well as sell er, liability.
・ Rules on tracking and transferring ERUs, CERs and partial assigned amounts produced under Article 6 and 12 must provide for real-time public access to information and allow the application of joint buyer-seller liability.
・ JI projects must be subject to the same criteria for certification, addit ionality and verification as CDM projects, including investor liability and sustainable development.
・ There must be a fair and competitive playing field for all flexibility me chanisms, including allocation of a proportion of proceeds for adaptation an d mitigation.

◆The Clean Development Mechanism (CDM) - reductions and sustainability

To be an acceptable element of the Kyoto protocol, the CDM must be designed to help ensure that its two key objectives are realised. The CDM should cont ribute to achieving the Convention goals, to avert the threat of dangerous g lobal climate change while promoting sustainable development in the South, w ith priority given to the world's poor. The CDM on its own is a minor tool f or achieving sustainable development in the South, and is useless without su pporting action in other areas such as technology transfer, increased develo pment assistance and good IFI lending policies. The CDM should not be used a s a substitute for domestic actions by Annex I countries to make the necessa ry deep reductions in their emissions. The vast majority of CAN members beli eve this is best achieved by placing a separate quantitative cap on the use of the CDM. Ratification and compliance with the Protocol and its compliance regime must be a prerequisite for parties participating in CDM and generatin g CERs. As the CDM opens a loophole that will result in increased emissions, its rules and governance structure need to be developed carefully.

◆COP4 should adopt the following design principles for their work plan:

1. The CDM must be designed to ensure that emission reductions in the host c ountry are truly additional, by verification and by comparison with objectiv ely and rigorously defined benchmarks or baselines, chosen to represent the high-performance end of current practice.
2. CDM activities must avoid negative environmental, social and cultural impacts.
3. CDM must promote development of domestic institutional capacities in the host country.
4. For energy-related projects, CDM must be reserved for demonstrated cuttin
g edge clean technologies, especially efficiency and renewables, and should encourage local appropriate technologies.
5. Large hydro, nuclear and coal are not acceptable CDM projects.
6. CDM projects must be consistent with the Biodiversity and Desertification Conventions as well as other relevant UN Co nventions covering the environment, development, human rights and Internatio nal Labour Organisation agreements.
7. Benefits of CDM projects must be equitably shared between sponsors and ho st countries, and among host countries.
8. The CDM must produce substantialfunds for adaptation, human and institutional capacity building in developing countries.
9. Governance and operation of CDM must be transparent, participatory and accessible to civil society.
10. CDM financial flows must be additional to existing development assistance.

・ All CDM activities must be in accordance with the national policies and priorities of the host countries to ensure a long-term sustainable development.
・ Any decision to include sinks should be deferred until the IPCC Special R eport, and its full consideration by relevant subsidiary bodies and the COP.
・ Crediting of CERs should be based upon results, with strict investor liab ility for outcomes.
・ The Executive Board of the CDM should have the necessary mandate and powe rs to govern the CDM, with a majority of board members from southern countri es and seats reserved for environmental NGOs and indigenous peoples.
・ All aspects of the verification, monitoring, auditing and reporting proce sses must be designed to ensure rigour, transparency, comparability and accessibility.

Nuclear power inflicts serious damage to human health and ecosystems because it produces permanent environmental problems, including dangerous waste that lasts thousands of years and the impacts of major accidents.

・ Nuclear energy is an inflexible and expensive option that precludes the m ore sustainable, clean, flexible and inexpensive energy efficiency and renew able energy solutions available today.
・ The Protocol should not lead to th e life extension of operating reactors or to the construction of new ones. N uclear projects under the CDM and/or JI must be prohibited by a Decision of COP4.

At present, emissions from international aviation bunker fuels are not requi red to be included in national inventories. The aviation sector represents o ne of the fastest growing emissions sources. These emissions are likely to t riple in the next couple of decades, and occur at altitudes where their glob al warming potential is multiplied. Consequently, they would represent more than the total Annex B reduction commitment.

The COP should express its deep concern that the last ICAO (International Ci vil Aviation Organisation) assembly in October 1998 did not fulfil the task given to it concerning the implementation of Article 2.2 of the Kyoto Protoc ol, to limit and reduce the greenhouse gas emissions from aviation bunker fuels.

COP4 should decide to include international aviation emissions in Annex I Pa rties' assigned amounts as a matter of priority and therefore: ・ SBSTA must give high priority to resolving the outstanding issue of allocating these bu nker fuel emissions to the Parties. SBSTA should complete a draft COP decisi on at its 10th session so that COP5 can decide on this issue.
・ COP5 must consider and adopt modalities for including international aviat ion emissions attributed to the Parties in the first commitment period.

By COP5, agree on a methodology to calculate the full climate change impacts triggered by all IFI development lending and guarantees.


◆TECHNOLOGY TRANSFER - the missing link

The work-plan decided at COP4 should elaborate mechanisms to promote, facili tate and finance the transfer of, or access to, environmentally sound techno logies to developing countries; as early as possible, with a view of adoptin g a decision at COP6. The decision should be informed by the IPCC Special Re port on Technology Transfer and remain independent of the CDM.

(Long versions of these points which do represent a broad consensus of CAN, but which do not necessarily reflect in full detail all groups' views, are a vailable from the CAN meeting room.)

Last update 12.4.1998