On the basis of the costs indicated in this report, economists might well suggest that any immediate and generalized efforts at exercising bioenergy options should be fairly muted. However, for a number of reasons, that may not be the case. Strategic concerns figure prominently, possibly too prominently, in the thinking of a significant number of nations. There are also questions of public opinion, public expectations, the need to be seen to be ‘doing something’ even it that something is not particularly effective - as well as the (possible) role of Kyoto Protocol mechanisms. Both public opinion and Protocol mechanisms are likely to be significant in shaping energy sector developments.
The failure of the COP 6 meeting of the FCCC in The Hague in November 2000 to negotiate the decisions required to implement the Protocol, attracted condemnation of position of some governments during the meeting. For example:
"These talks have been brought to this impasse by the intransigence of the USA, Japan, Canada and Australia. If the USA and Japan showed environmental and political leadership, rather than leading the race to cheat their way out of action, the protocol would be saved,"
Bill Hare Climate Policy Director Greenpeace. (23 Nov 2000).
and following the end of the conference calls for ‘people power’.
If governments continue to act irresponsibly, as they have done this week, then people from rich countries should prepare to build ever higher and wider dikes, from which they can watch the rest of the world suffer and drown from climate change. Either that or demand that politicians give them access to the solutions to climate change in the form of clean energy and energy efficiency". (www.greenpeace.org)
The possibility that differences between governments will prevent the Kyoto Protocol from ever coming into force must be admitted. However, there does seem to be general willingness on all sides to try and find a solution to the problems. Negotiations on the issues that the COP6 negotiations were supposed to resolve, were to be resumed in mid-June to late July of 200112. That means that it is possible that some Kyoto Protocol mechanisms, most notably the Clean Development Mechanism (CDM) could be operating by 2002.
The CDM is only one of three Kyoto Protocol mechanisms intended to assist Annex 1 Parties (the Parties that have agreed greenhouse gas emission commitments) to meet their emission targets. It is the Kyoto mechanism with the potential to have the most widespread bioenergy systems impacts. However at this stage without resolution of the CDM implementation issues the possible impacts of it are more easily understood by looking at one of the other mechanisms - “Joint implementation”. “Joint implementation” (JI) (Article 6) is the other mechanism likely to have bioenergy system impacts.
JI allows Annex 1 Parties to implement projects– either emission reduction or sink enhancement –in the territories of other Annex 1 Parties and have the outcome credited against their own emission targets. Emission trading (Article 17) allows Annex 1 Parties to trade targets among themselves, or officially to, for one Annex 1 Party to transfer reduction targets - “assigned amount” - to another Annex 1 Party. The CDM (Article 12) is similar in many senses to JI but it applies to non-Annex 1 parties. CDM mechanisms will allow Annex 1 Parties to implement, and claim benefit from, projects that reduce greenhouse gas emissions in non-Annex 1 Parties. The CDM also has an additional goal of assisting non-Annex 1 Parties achieve sustainable development by providing an incentive for Annex 1 Parties to transfer technology which is climate friendly to non-Annex 1 Parties.
To date, because in a sense the rules are somewhat clearer, there has been more JI activity than CDM. Following COP1 (1995) the Netherlands for example commenced a pilot program for JI and CDM type investments and in 2000 it launched a fully-fledged initiative for Joint Implementation, called Emission Reduction Unit Procurement Tender (Eru-PT) (Anon 2001). Although the aim of the program is the procuring of cost-effective emission reductions from JI projects the pilot program has a number of objectives including:
• obtaining practical experience of project development;
• promoting JI and CDM among Dutch companies;
• gaining familiarity with the development of baselines;
• gaining an understanding of the concepts of validation, verification and registration; and
• the initiation of a network with governments in partner countries in Central and Eastern Europe, Africa, Asia and Latin America.
To date, the Dutch government has supported some forty JI projects in Central and Eastern Europe and the technologies used include renovation of district heating, biomass, anaerobic wastewater treatment, co-generation and energy efficiency in industry (Anon, 2001) with, so far, partnerships of local and Dutch companies been involved in carrying out all of the projects.
There is undoubtedly much interest in the CDM and suitable resolution of many of the outstanding issues concerning it should see an equally wide similar range of programs being undertaken by a number of Annex 1 and non-Annex 1 Parties in non-Annex 1 areas. Outstanding issues include:
- the extent to which forests should be included in the CDM.
- whether downstream forest activities (processing) should be included.
- what, if any, should be the limits on emission trading and what liability should exist if trading goes wrong.
- should nuclear power and coal be excluded from the CDM.
- how much finance should be available for technological transfer and who should manage these funds.
- whether funding of climate adaptation projects in developing countries should be assisted not just by the CDM but by levy on emissions trading as well.
Depending on the way some of the above are resolved the potential of the CDM to impact on investment in bio or other renewable energy systems in non-Annex 1 Parties could be significantly enhanced or alternatively restricted to levels comparable to those applying for Annex 1 Parties.
12 From a media release 12 February 2001 available on the website www.unfccc.de/media/pressrelcop6/cop6release.pdf