The
office for joint implementation and the national commission
for establishing the goals that were committed to
by Argentina’s President at COP5 have been created.
The organization I represent, the Argentine Business
Council for Sustainable Development (CEADS), is the
official advisor for both institutions.
A
joint analysis on what can be attempted from these
commitments and what we understand about the guidelines
of the COP4 work plan at Buenos Aires is currently
being made with the different public sector participants.
The intention of this is to better define progress
to be expected from COP5 concerning voluntary commitments
and goals. No position has yet been assumed on a national
level, and due to lack of time we are anticipating
difficulties in reaching a consensus in the private
sector.
Concerning
CEADS, work is being done on clarification and publicity
in both the private and public sectors. We have companies
with important gas reduction projects. However, it
should be mentioned that several of them have been
taking their time in revealing the details of their
projects until the rules of the game become clearer,
for fear of another loss of prestige for the initiative.
We have been making parallel efforts on two fronts
in this: a) with the Secretariat of Natural Resources
and Sustainable Development; and b) with the Ministry
of Foreign Relations. We also have initiatives with
the intention of certifying projects, pointing to
a regulatory framework that is possible but not yet
in existence.
Our
efforts are currently focused on working together
on the second national inventory, because the first
one along with its communications effort has already
been done. It should be mentioned that the private
sector has differences in the results and estimates
of these inventories. An attempt is being made to
resolve these differences with the idea of thus having
three different inventories in three years.
The
U.S. government is funding the public sector in this
area. The goal of the Argentine private sector is
to put more emphasis on the implementation of these
initiatives, cases and projects with reasonable design
criteria rather than on the political or protocol
part.
We
understand that the Kyoto Protocol process can be
delayed for a long time by pressure from the U.S.
and other countries, arguing that the cost of these
goals is very high and they need more time or another
protocol with a different focus. The intelligent solution
is to assure necessary funding for enabling a practical
program to be established that is results oriented
and provides incentives to the private sector for
reducing emissions through efficiency, and secondly
through alternative technologies or energy sources.
Argentina feels that its energy sources and agricultural
and livestock profile is providing it with opportunities
and benefits in reducing the six gases. Recent fiscal
policy for tax incentives to the forestry sector is
having positive effects on the expansion of forests.
Even though the issue of sinks has not been resolved
in the Clean Development Mechanism (CDM or MDL in
Spanish), Latin America’s contribution in it is essential,
and we are therefore insisting that forestry sinks
should be included in the CDM.
Concerning
the CDM, we have a proposal we are improving but it
contains the basic elements of our focus. It was published
in a first vision and presented at COP4. The issues
of baseline, verification, certification, sinks, different
alternatives for goals, marketing and ownership of
certifications for transfer are issues to be developed.
In synthesis, it is to create a way for private market
implementation that is quicker, real, credible and
efficient. The worst-case scenario for the protocol
is for it to be challenged because of its cost and
slowness, which would mean that the whole process
would have to be redefined and it would fall apart
politically. We believe there is a potential for creating
a new voluntary way for commitments which would fall
between Annex B and Annex 1, and would enable an implementation
alternative to be created for those who wish to make
and encourage investment projects and market their
emissions. The key to the private position for Latin
America has to do with being able to motivate the
commitment of the business sector to make exemplary
initiatives as soon as possible, going beyond ratification,
and to focus on real investments having high economic
and environmental impact.
The
establishment of voluntary commitments through goals
for greenhouse effect gas emissions by developing
countries not included under Annex 1 nor Annex B shows
the need to do a cost-benefit evaluation of certain
kinds of goals depending on the potential for development
of a market for credits for early and voluntary actions
domestically and between industrialized countries
and industrializing countries. This goal, as an objective,
should be plausible, precise (limited) and flexible
enough to not cause unnecessary costs.
There
are several proposals for this. We are presenting
a summary by the U.S. Center for Clean Air Policy
below. This proposal defines a baseline below “business
as usual” (BAU) emissions projections and over the
“no regrets” (NR) baseline. This is not an arbitrary
decision coming from negotiations, but defined from
linking the emissions budget (EB) with a carbon intensity
rate (CIR). The criterion is to allow economic growth
along a road to greater carbon efficiency while insuring
that gas emissions grow at a lesser rate than economic
growth. The emissions budget for each commitment period
will be calculated by EB = GIPxC/GIP and this indicator
would be used for defining a firm, fixed commitment
during the commitment period. The EB would be calculated
based upon a CIR goal and expected projected GIP.
It is suggested that this methodology be applied only
to the energy sector with credible information and
a potential for response.
The
advantage of this focus is that it would enable developing
economies to become involved in the negotiable permit
system and if active CIR improvement projects become
implemented while they are being benefited by “no
regret” (NR) options, or alternatively if the GIP
goes down more than what was projected. This focus
would mean a firm commitment and an incentive for
carrying out “no regrets” options as soon as possible
to free up the most permits possible for the first
commitment period. However, there would be a risk
of a more demanding commitment in the subsequent period
without the option of capitalizing on low cost options.
If there is unforeseen growth in the GIP, emissions
would be increased over what was budgeted without
incurring in violation, and also if there is a downturn
in economic activity, this would allow permits to
be freed up. The risk of “hot air” continues to affect
the environmental integrity of the process. This focus
is based on the availability and credibility of information
and the existence of enough emissions to be sold.
Other possibilities for flexible goals are currently
being studied with carbon intensity indicators. COP5
will be an opportunity for presenting different ways
for voluntary commitment, even though this issue has
not been formally accepted by the Convention.
Recent
research in the U.S. has shown probabilities of extreme
increases in temperature and sea levels greater than
those predicted by the United Nations in 1995. It
has also been found that cold temperature extremes
will be less frequent, and that frequency of high
precipitation will increase together with the frequency
of storms. Estimates are also being made of effects
on agriculture and livestock in countries like ours,
changes in cultivated area, etc.
Due
to its economic development, Argentina is in the category
of countries that should assume a responsible attitude
in its emissions of so-called greenhouse effect gases.
The commitment of Argentina’s President at COP4 to
establish goals for these gases has led to the creation
of an Office for Implementation and an Advisory Committee
for performing research and consultations with the
private sector for this purpose. The business sector
in our country, through organizations such as the
Business Council for Sustainable Development, has
been willing to respond to this initiative by cooperating
with the government in all ways necessary. >From
these studies it has been found that the modernization
and transformations that have taken place since the
nineties have increased efficiency in the production
and energy sectors. This efficiency is causing a reduction
in emissions compared to gross product. To capitalize
on this effort by society with greater added value,
the government will have to establish fair mechanisms
for turning this efficiency into credits and selling
them to countries with higher emissions levels, as
stipulated in the protocol for the Convention. In
that way, we will be showing the world a case of how
the economy, the environment and society can go hand
in hand toward a better future with sustainable development.
