COP-6 was held in The Hague (Den Haag), Netherlands from 13-25 November of this year. The meeting was well attended, with over 7000 participants, including government representatives, intergovernmental and non-governmental organizations (NGOs), and media outlets. In addition, citizens from many countries were there to observe and influence the outcome of the negotiations, including over 200 college and graduate students from the United States.

UCS had a large delegation on site at The Hague, including Executive Director Bud Ris and several staff, renowned scientists Steve Schneider (Stanford) and John W. Winchester (Florida State), and Bill Nye, The Science Guy. UCS actively monitored and influenced key aspects of the negotiations, which will be the focus of this report.


POLITICAL SETTING

The Dutch government went to great lengths to set a positive stage for the two week conference. Jazz music played in the conference hall, human butterflies on stilts wandered the halls, bicycles were available free of charge to all conference participants, tasty organic juices and snacks were waiting at every turn, as was plenty of good Dutch beer.

The opening ceremony created a sense that history could be in the making at COP-6. The Queen of the Netherlands was seated front row and center. UN Secretary General Kofi Annan spoke to the participants via a videotaped message in which he said the task of reducing greenhouse gas emissions requires "radical change." He reiterated the hopes expressed by many world leaders at the recent UN Millenium Summit to bring the Protocol into force by 2002. Robert Watson, chair of the Intergovernmental Panel on Climate Change (IPCC), spoke convincingly about the mounting evidence of global warming, and urged governments to tackle the vexing problem head on.

This positive environment, however, did not translate into great progress during the first week of negotiations. Delegates managed to streamline most negotiating texts, but not to the degree they had hoped.

Ministers Arrive

The arrival of Ministers on Monday, November 20th renewed the initial sense of optimism. The US negotiating team began to hint it could compromise on some key issues, notably limiting domestic sequestration credits and excluding nuclear power from the Clean Development Mechanism (CDM). Senators Larry Craig (R-ID) and Chuck Hagel (R-NE), strong opponents of the Protocol and climate change skeptics, noted in a meeting with environmental representatives that the science is "coalescing." The media was finally beginning to focus its attention on the talks, helping create the political pressure necessary to move the talks forward. Demonstrators caused a brief disruption, but the negotiations continued.

Despite the promising atmosphere, however, by mid-week it became evident that negotiating progress was insufficient. On Thursday, Thanksgiving night, COP-6 President Jan Pronk issued a "note" -- a political document which, in his words, "caused pain for all." The note attempted to break the logjam in negotiations and to move the dialogue forward in order to come to a resolution by week's end. Pronk, in releasing the paper, also called on parties to stay until Saturday morning, rather than leave Friday night as previously scheduled. Pronk's controversial move focused attention on resolving key issues and forced all involved to grapple more seriously with the task at hand.

But by Friday evening, the parties were still at loggerheads. Ministers pulled an "all-nighter" -- meeting from 10pm until 6am and resuming talks at 8am Saturday. President Clinton, his environmental legacy at stake, intervened during the final hours, calling selected EU heads of State and attempting to forge consensus.

British Deputy Prime Minister Prescott, along with the French, German, and Swedish environment ministers, had met with the US and several other members of the Umbrella Group late Friday night, and it appeared an 11th hour deal could be achieved. The US had agreed to dramatically reduce its demands for allowable credits for domestic sequestration activities under Protocol Article 3.4, which had been the biggest point of contention in the negotiations. Other issues -- such as compliance and supplementarity -- were rumored to be part of the package.

When presented with the compromise package, however, the larger group of 15 EU Ministers rejected the deal, claiming that the US should not have what in their opinion amounts to a "free ride" in meeting its Kyoto emissions targets. Thinking an agreement had been reached, only to see it slip through his fingers, Prescott stormed out of the conference center, declaring that he was "gutted."


Reactions from the "Outside World"

The breakdown in the negotiations was lambasted by many, including the environmental community. Some, particularly the European NGOs, placed the blame squarely on the shoulders of the US for asking too much and refusing to compromise until it was too late. Others, including a few US NGOs, blamed the EU for failing to seize the compromise offered by the US in the final hours, particularly in light of a Bush Administration -- one much less inclined to support a strong treaty -- taking the reins next year.

UCS believes the negotiations could have succeeded had time not run out. The US was apparently willing to make further concessions on the key issue of credits for domestic carbon sinks. We, and others, have called on the US and EU to continue talks in the hope that a tentative agreement might be reached between the parties in advance of further negotiations next year. Despite several high level discussions between the Umbrella Group and the EU since The Hague, it is now clear that no deal is likely before the Clinton Administration leaves office in January.


Promising Trends

Despite the lack of a formal agreement, several promising trends emerged from the rubble of COP-6. Four in particular stand out.

• First, the science is now accepted as sound by virtually all involved. Dr. Robert Watson's strong opening speech set the stage for the negotiations by referencing the IPCC's forthcoming Third Assessment Report. In contrast, contrarian Dr. Fred Singer arrived the second week of negotiations but was hardly even noticed. As mentioned above, Senators Hagel and Craig, in a meeting with environmental NGOs, publicly recognized that the science is "coalescing."
• Second, there continue to be noticeable shifts among the US and multinational business community on global warming. Few businesses were in active opposition in The Hague, and many now support the global warming treaty in principle.
• Third, there is increasing recognition that the United States can in fact meet its emissions targets without wrenching the economy. The recent report from the Department of Energy and five national laboratories that details cost-effective emissions reduction policies received widespread attention from both the media and other countries' negotiators at COP-6.
• Fourth, the EU and Japan continue to indicate that they want to ratify in time for the Protocol to enter into force by the 10th anniversary of the Rio Earth Summit in June 2002.

All of these trends are hopeful signs that "the corner has been turned" on this issue and that we will see more promising results -- both domestically and internationally -- in the near future.

NEGOTIATING RESULTS

More detailed discussions of specific negotiating points that UCS has been tracking follow. These negotiating points are organized around President Pronk's Note, since that is the most likely negotiating document to be used when negotiations resume at COP-6-B next year. Please remember, however, that no formally recognized agreement was reached on the issues discussed in the Note, so these conclusions are NOT official.


Flexibility Mechanisms

The flexibility mechanisms -- including emissions trading, joint implementation (JI), and the CDM -- were proposed by the US and others as ways to help countries meet their emission reduction targets in the most cost-effective manner possible.

Progress: Pronk's Note includes several compromise proposals to make the flexibility mechanisms viable.

For the Clean Development Mechanism, the Note suggests:

• a prompt start of the CDM;
• that accelerated consideration be given to energy efficiency and renewable energy projects;
• that developed countries "declare that they will refrain from using nuclear facilities for generating certified emission reductions under the CDM;"
• that a host Party, in determining project eligibility, would have discretion to decide whether the project contributes to sustainable development (a requirement of the CDM);
• that compliance with developing country obligations in hosting CDM projects would be assessed by the facilitative branch, rather than the enforcement branch, of the compliance mechanism. (See Compliance section for explanation of these two branches.)

For the emissions trading system, the Note suggests:

• that to prevent overselling of emissions allowances by parties -- which could endanger the environmental integrity of the Protocol -- Parties shall retain some of their assigned amounts (assigned amounts are the accepted emission levels for industrialized countries under the Protocol) for each commitment period (the first is from 2008-2012). A figure of 70 percent was suggested, with an alternative of "the portion determined on the basis of projected or recent emissions." (In its counterproposal to the Umbrella Group, the EU suggested this figure be set at 98 percent, which would effectively block countries like Russia and Ukraine from selling most of their anticipated surplus allocations -- the so-called "hot air" tons.)

Supplementarity:

On the issue of supplementarity -- that is, the limits sought by the EU on the use of market-based mechanisms in meeting emissions targets -- the Note states that parties "shall meet their emission commitments primarily through domestic action." The US rejects this language as imposing a binding quantitative limit on emissions trading and the other mechanisms.

Problems: Parties obviously failed to come to terms on the overall package, with supplementarity continuing to be the largest point of contention. The NGO community is dissatisfied with several of the Mechanisms provisions, including the lack of public participation safeguards (access to information, and the ability to communicate directly with the Protocol's governing and subsidiary bodies), and the absence of specific CDM energy project baseline requirements needed to guard against massive amounts of credits being awarded to business-as-usual projects.

Conclusions and Next Steps: The Bush administration will likely maintain strong US opposition to any real limits on use of the flexibility mechanisms to meet Kyoto obligations, and is unlikely to agree to the relatively strong language discouraging nuclear projects under the CDM. Prospects are not good for US-EU agreement on these issues by the resumed session next May.

Land Use, Land-Use Change and Forestry (LULUCF)

The Kyoto Protocol allows crediting for certain domestic and international LULUCF activities as another means of achieving emissions reduction targets.

Progress: Although LULUCF issues presented the most difficulty for negotiators at COP-6, the Note helped narrow the gap.

Some advances were made to clarify key definitions. The Note proposed using the Food and Agriculture Organization's (FAO) definition of "forest," which allows national circumstances to be factored in. The IPCC definition for afforestation, reforestation, and deforestation will apply. For future commitment periods, the Note calls on Parties to investigate the feasibility of applying biome-specific forest definitions.

With regard to additional developed countries' domestic LULUCF activities under Article 3.4, the Pronk Note includes grazing, cropland management, forest management, and revegetation in the first commitment period. Countries could pick and choose which activities to include; presumably, they would choose to include only those activities producing net sequestration and omit those resulting in net emissions to the atmosphere.

With regard to LULUCF activities under the CDM, Pronk's note calls for including afforestation and reforestation activities, but excluding conservation projects aimed at preventing deforestation and land degradation. UCS believes this portion of the proposal is unacceptable. It does not include, for example, any language that would ensure adequate environmental and social standards. This could lead to conversion of native forests to industrial plantations, with devastating impacts on the environment and indigenous peoples. Moreover, the proposal excludes forest conservation activities which could reduce the tropical deforestation that now contributes between 20 - 25 percent of global anthropogenic emissions of carbon dioxide.

Problems: None of the issues discussed in the Pronk paper were resolved, including whether certain domestic LULUCF activities should be allowed during the first commitment period or how much of a country's overall emissions reduction requirements could be met through LULUCF activities. Indeed, many parties and observers believe that the controversy over domestic sequestration ultimately derailed the negotiations. Furthermore, the CDM proposal was contentious, as discussed above.

Conclusions and Next Steps: The elements of a deal between the US and the EU on the domestic LULUCF were on the table in The Hague, and could be resurrected if issues such as supplementarity were resolved. The split on LULUCF projects in the CDM, however, is much deeper. The US is willing to defer decisions on how to credit such activities to next October's COP-7 meeting in Morocco; the EU wants such projects excluded entirely, at least for the first commitment period.

Assistance to Developing Countries

Several provisions of the Protocol (and UNFCCC) require developed countries to assist developing countries with monitoring and adaptation to the adverse effects of climate change.

Progress: Pronk proposed several ideas in his Note to forge a compromise.

The Note makes reference to a framework to guide capacity building efforts under the Climate Change Convention and Protocol. Draft decisions in this regard were listed as the precursors to such a framework.

With regard to technology transfer, the Note calls for establishment of an intergovernmental consultative group of experts under the Subsidiary Body for Scientific and Technological Advice (SBSTA). The group would have several functions, including information exchange and staffing regional technology centers.

On the issue of industrialized country funding for developing country climate adaptation, the Note proposes three distinct sources. The first would be a "convention fund," sponsored by the Global Environment Facility (GEF), to assist in technology transfer and capacity building. It proposes an innovative new financing mechanism, involving transfer of a small portion of industrialized country emissions allocations to this new fund, which could be sold on the expected global allowance market to raise funds for developing country needs. The second mechanism is an adaptation fund to finance adaptation projects in the developing world. The final proposal is to levy a fee on joint implementation and emissions trading if additional developed country climate change assistance to developing countries does not equal $1 billion or more by 2005.

Problems: The G-77/China representatives strongly oppose attempts by industrialized countries to link technology transfer, adaptation assistance, and other obligations under the UNFCCC to the Protocol's flexibility mechanisms; they believe the funding produced by such a strategy will be "too little, too late." On a different matter, the US and EU strongly oppose Pronk's idea to put a levy on JI and emissions trading, even as a fall-back proposal. Finally, Saudi Arabia and other oil producing nations continue to argue for financial compensation for lost oil revenue due to any reduction in fossil fuel use resulting from mitigation measures -- a deal-breaker for developed countries.

Conclusions and Next Steps: Like the other negotiating groups, the parties involved in this area were unable to forge agreement by week's end. However, several draft documents were accepted in the final plenary, and the issue(s) will be taken up during COP-6-B. Several European countries called for substantial increases in funding for the GEF in next May's "replenishment" round, which could help address the G-77 and China's concerns about timing and magnitude of available funds. However, the US is in arrears on its current GEF obligations, and the prospects for Bush Administration and Congressional willingness to provide increased support are dubious, at best.

Compliance and National Reporting

An effective compliance regime is essential to maintain the confidence of all parties in the Treaty, and to ensure its environmental integrity.

Progress: Compliance was one of the most controversial issues in the Hague. Pronk's Note, however, reflects the progress made by parties towards bridging many (though not all) of their differences.

On the critical issue of consequences for non-compliance, President Pronk's paper stipulated that parties would have to make up any shortfall in meeting their reduction obligations by subtracting excess emissions during the 2008-2012 compliance period from their assigned amount in the following commitment period, plus an initial penalty of 50 percent of their shortfall. To prevent gaming, Pronk calls for emissions reduction obligations for the second commitment period to be adopted before the first commitment period starts. In addition, non-complying parties would be required to submit a compliance action plan laying out efforts to come into compliance.

The governing body, otherwise known as the Conference of the Parties/Meeting of the Parties (COP/MOP), would be limited to providing general policy guidance and would not be allowed to hear compliance case appeals.

The two branches running the compliance system -- enforcement (which acts as the court or judiciary body with the power to enforce party obligations) and facilitative (a non-binding court, more akin to an information office) -- would have differing authority. The enforcement branch would oversee parties' quantitative commitments and eligibility to participate in the mechanisms; the facilitative branch would address all other cases.

The Note proposes that the enforcement branch be comprise of 11 members -- two from each of the five UN regions, plus one from the group of small island states, giving the majority to developing countries. That means that the majority of those "judging" whether industrialized countries have complied with their emissions reduction obligations would be from developing countries having no such obligations -- a "non-starter" for both the Umbrella Group and the EU.

Problems: In addition to the dispute over composition of the enforcement branch, there is still a vocal minority of countries opposed to any binding consequences for non-compliance, including Australia, Russia, and Saudi Arabia.

Conclusions and Next Steps: While no agreement was reached on the compliance issues discussed in the Note, in the final plenary the parties accepted draft documents negotiated earlier in the session as the basis for resumed negotiations next year. Substantial progress was made on defining consequences for non-compliance and defining the responsibilities of the facilitative and enforcement branches. If the knotty issue of compliance body composition can be resolved, the compliance area should not be a roadblock to an overall deal at COP-6-B.

OVERALL CONCLUSIONS AND NEXT STEPS

As noted earlier, the parties may indeed have reached agreement on many of the issues had there been more time. Unfortunately, some tactical negotiating errors were made -- particularly on the part of the EU and US -- in not laying out their final negotiating positions in time for compromise to be reached. Even had the US and EU reached agreement, of course, it is not clear such a compromise would have proven acceptable to the G-77 and China. And the Umbrella Group-EU discussions did not encompass the full range of issues under negotiation in The Hague.

The largest uncertainty as we look forward to the resumed COP-6 session next May is a new Bush Administration -- which has no clear positions on the numerous issues in these negotiations, and has a negotiating team that may not be confirmed by the Senate and up to speed on these issues by May -- much less by the informal Ministerial consultations expected to be convened by Pronk over the next few months.

The most troubling scenario would be President-Elect Bush calling for a complete renegotiation of the Kyoto Protocol -- which, during his campaign, he declared to be "unfair to the US" because of its lack of binding developing country emissions commitments. Any renegotiation could result in years of stalemate on the international front. Fortunately, there are two factors that could preclude such an outcome. First, as noted above, the business community is increasingly supportive of action on global warming and is quite worried about losing the flexibility mechanisms included in the Kyoto Protocol. Second, an intransigent Bush Administration could cause other industrialized countries -- such as the EU, Russia, and Japan -- to move forward without the US to ratify the Protocol, thus ensuring its entry into force in 2002. Under this scenario, these countries could "call the shots" on the Protocol's rules and implementation details at the first Meeting of the Parties to the Protocol, with the US and other non-ratifying countries relegated to observer status.

And of course, pressure from the environmental community and the public at large will continue to build on governments to complete an agreement that ensures the Kyoto Protocol's environmental integrity.

UCS remains steadfast in its efforts to forge a compromise worthy of the public's and environmental community's support. We are working with both domestic and international NGO allies to develop effective strategies for continuing to shape the negotiations. In the meantime, we are updating our website to reflect current developments, and will keep you informed as the climate talks move forward -- and as the incoming Administration develops its policy on global warming. Most particularly, we will identify those opportunities where scientists can help influence the process in a timely fashion.

December, 2000

This report may not be reprinted or posted to electronic networks without permission and acknowledgement.

• UNFCC Secretariat's (http://www.unfccc.int).
• IPCC (http://www.ipcc.ch)
• Earth Negotiations Bulletin (http://www.iisd.ca/Linkages/)
• Weathervane (http://www.weathervane.rff.org)
• The US submission on land use and forestry (pdf) (http://www.state.gov/www/global/global_issues/climate/
  000801_unfccc1_subm.pdf)