Climate Change: Issues Underlying Negotiations at the Bali Conference of Parties

Climate Change: Issues Underlying Negotiations at the Bali Conference of Parties

Order Code RL34260
Climate Change: Issues Underlying Negotiations
at the Bali Conference of Parties
November 26, 2007
Susan R. Fletcher
Specialist in International Environmental Policy
Resources, Science, and Industry Division
Larry Parker and Jane A. Leggett
Specialists in Energy and Environmental Policy
Resources, Science, and Industry Division

Climate Change: Issues Underlying Negotiations
at the Bali Conference of Parties
Summary
As climate change has gained widespread attention as a critical issue facing the
nations of the world, the negotiations to be held in Bali, Indonesia, December 3-14,
2007, are widely regarded as a critical next step in continuing to chart an
international course to mitigate global warming and deal with its impacts.
This report provides background on the negotiations in four sections:
(1) a summary of the status of the 1992 United Nations Framework
Convention on Climate Change (UNFCCC) and the 1997 Kyoto Protocol
that established mandatory limits on the six major greenhouse gases for the
major developed nations (listed in “Annex I” of the UNFCCC and
generally referred to as “Annex I countries”);
(2) a brief review of the science and economics underlying concerns about
climate change and related possible future goals to reduce greenhouse
gases;
(3) the progress to date of Annex I and non-Annex I nations under the
Kyoto Protocol; and
(4) an overview of the upcoming negotiations at the 13th conference of the
parties of the UNFCCC (COP-13) and third meeting of the parties to the
Kyoto Protocol (MOP-3) in Bali.
At a preliminary meeting leading up to the December COP/MOP, four key
elements were outlined as the focus for a “Bali road map”: 1) mitigation of climate
change (agreeing on emission reduction commitments); 2) adaptation to impacts of
climate change; 3) financial assistance issues; and 4) technology development and
transfer. It is very likely that, while future negotiations will grapple with the effort
to obtain some form of legally binding, mandatory commitments from all parties, the
recognition of differing national circumstances and differing abilities of nations to
take on various types of commitments will be major elements in the discussions.
It is widely expected that the outcome in Bali is likely to be decisions that focus
only on the framework, procedures, and time frame for negotiations to follow on a
post-2012 agreement. Substantive issues will be taken up in those future negotiations.
All parties appear to agree that an agreement needs be completed by the end of 2009
in order to be ratified by the necessary number of parties by 2012, when the Kyoto
Protocol commitment period ends.

Contents
The UNFCCC and Kyoto Protocol: Background . . . . . . . . . . . . . . . . . . . . . . 1
Climate Science, Economics and Future Goals to Reduce
Greenhouse Gas Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Progress to Date to Meet Obligations Under the Kyoto Protocol . . . . . . . . . 6
Issues and Expectations for COP-13/MOP-3 Negotiations in Bali . . . . . . . . 8

Climate Change:
Issues Underlying Negotiations
at the Bali Conference of Parties
Climate change negotiations to be held in Bali, Indonesia, December 3-14, 2007,
are widely regarded as a critical next step in continuing to chart an international
course to mitigate global warming and deal with its impacts. This report provides
background on the negotiations, including brief discussions of the Kyoto Protocol,
the science underlying climate concerns, progress of nations in meeting Kyoto
Protocol requirements, and an overview of key issues before the negotiations in Bali.
The UNFCCC and Kyoto Protocol: Background
The Kyoto Protocol is the only agreement establishing legally binding
reductions of greenhouse gas (GHG) emissions, which are major contributors to
global warming. It was negotiated under the auspices of the United Nations
Framework Convention on Climate Change (UNFCCC), and the United States played
a major role in shaping the provisions of the Protocol.1 The UNFCCC, opened for
signature at the 1992 Earth Summit in Rio de Janeiro, outlined a goal of voluntary
reductions in greenhouse gas emissions to 1990 levels by the year 2000.
At the annual conferences of the parties (COP), participants soon concluded that
the year 2000 goal of the UNFCCC would not be met, and that voluntary reductions
would not suffice; negotiations began on a protocol that would provide for
mandatory, legally binding emissions reductions for the developed countries listed
in Annex I of the UNFCCC.
Negotiations on the Protocol were completed in 1997, and the United States
signed it in 1998. However, it has never been sent to the U.S. Senate for advice and
consent, and thus the United States has not ratified it. President Bush characterized
the Protocol as “fatally flawed,” and rejected it in early 2001, citing economic
burdens, competitiveness concerns, and the lack of mandatory emissions
requirements for major developing countries such as China and India. The United
States’ withdrawal from participation in the Protocol and its rejection of mandatory
limitation of greenhouse gas emissions has remained a sensitive issue in U.S.
relations with many nations, particularly the European parties to the Protocol. They
continue to express the hope that the United States will rejoin the negotiations that
1 For additional detail on the Kyoto Protocol, see CRS Report RL33826, Climate Change:
The Kyoto Protocol, Bali Negotiations, and International Actions, by Susan R. Fletcher and
Larry Parker.

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continue on the Protocol and particularly on measures to reduce GHGs after the
Protocol commitment period ends in 2012.
A key element of both the UNFCCC and the Kyoto Protocol is “common but
differentiated responsibilities,” which has meant that while all nations, developed or
developing, have responsibilities for monitoring and reporting their emissions, only
the developed [Annex I] nations have had an obligation to reduce GHG emissions.
This has meant, in practice, that in negotiations relating to the Kyoto Protocol, no
new commitments for developing countries have been under consideration. This
concept arises from two basic principles accepted by all parties to the UNFCCC and
the Kyoto Protocol: that the industrialized/developed nations are responsible for most
of the greenhouse gases in the atmosphere (several of these gases remain in the
atmosphere for decades or a century or more); and that nations have widely different
capacities and resources to undertake the costs of mitigation,2 with developed nations
generally having the resources and technological infrastructure to undertake
emissions reductions. As ways to involve all nations in post-Kyoto action are sought,
it is likely that this principle will be the subject of much debate.3
The over-all reduction for the 38 industrialized nations specified in Annex B of
the Kyoto Protocol is stated as 5.2% below 1990 levels, averaged over the five-year
“commitment period” between 2008 - 2012. A target for each Annex B country was
negotiated; the United States’ target in the Protocol would have been to reduce the
six major greenhouse gases by 7% below 1990 levels. Because of the fact that
“sinks,” which remove and store carbon from the atmosphere, are counted, and
because emissions credit trading4 would be allowed, the actual reduction of emissions
within the United States that would have been required to meet the target was
estimated to be lower than 7% — closer to 4%. But based on projections of potential
growth of emissions, the actual required reduction in greenhouse gas emissions for
the United States would have been an estimated 15 to 30 % below where their levels
would otherwise be by the 2008-2012 period.
2 For more detailed discussion, see CRS Report RL32721, Greenhouse Gas Emissions:
Perspectives on the Top 20 Emitters and Developed Versus Developing Nations, by Larry
Parker and John Blodgett.
3 In accord with the differentiated responsibilities principle, the Kyoto Protocol’s legally
binding restrictions of greenhouse gases to 5.2% below 1990 levels in the period 2008 to
2012 apply only to the 38 industrialized nations listed in Annex I of the UNFCCC and
Annex B of the Protocol (those that have ratified the Protocol) — and not to developing
(“non-Annex I”) countries.
4 Emissions trading allows nations to meet their emissions reductions targets by purchasing
emissions credits from nations or entities that have met their obligations and have “credits”
to spare. For more detail on emissions trading, in particular the system instituted by the
European parties to the Kyoto Protocol, see CRS Report RL33581, Climate Change: The
European Union’s Emissions Trading System (EU-ETS), and CRS Report RL34150, Climate
Change: The EU Emissions Trading Scheme (ETS) Gets Ready for Kyoto, both by Larry
Parker.

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The Kyoto Protocol obtained the necessary number of ratifications from Annex
B countries in late 2004 and entered into force in February, 2005.5 Some 169 nations
have ratified or accepted the Kyoto Protocol, according to the UNFCCC Secretariat,
representing 66% of the emissions of developed countries with obligations outlined
in the Protocol.6 As noted above, the Protocol’s provisions apply only to those
countries that have ratified it, which two of the Annex I countries — the United
States and Australia — have not done.
Annual meetings of the parties to the UNFCCC and the Kyoto Protocol
continue, and attention of the negotiations has turned in large part to “next steps”
following the end of the commitment period in 2012 — in particular the extent to
which developing countries (non-Annex I) would assume binding commitments,
which most of the major greenhouse gas emitters among them remain reluctant to do.
The United States has attended these annual meetings, participating in an observer
status.
Climate Science, Economics and Future Goals
to Reduce Greenhouse Gas Emissions

Since the UNFCCC Conference of the Parties last met one year ago, major
international technical assessments of climate change has been released by the
Intergovernmental Panel on Climate Change (IPCC) — the panel of over 2000
scientists from around the world charged with providing the scientific basis for
understanding changes in the Earth’s climate and their impacts. The “Fourth
Assessment Report” issued in November 2007 (AR4) critically reviewed and
synthesized the research on science, impacts and mitigation strategies and
underscored large areas of agreement on climate issues (as well as some important
uncertainties and disagreements). The IPCC concluded unequivocally in its first
report in 20077 that the Earth’s climate has changed over the past century,8 and that
while natural factors, including changes in solar irradiance and volcanoes, have
played roles in the observed changes, “most of the observed increase in globally
averaged temperatures since the mid-20th century is very likely due to the observed
increase in anthropogenic9 greenhouse gas concentrations.”10
5 See [http://unfccc.int/kyoto_protocol/items/2830.php].
6 In order to enter into force, the Protocol had to be ratified by Annex B nations
representing 55% of their 1990 emissions.
7 Intergovernmental Panel on Climate Change (IPCC) Working Group I, Climate Change
2007: The Physical Basis (Cambridge, UK: Cambridge University Press, 2007), Summary
for Policymakers, p. 8.
8 The Earth’s climate has warmed by 0.6 to 0.9o Celsius (1.1 to 1.6o Fahrenheit) since the
Industrial Revolution. Precipitation has increased over the past century, although some
regions have been wetter and some have become drier, consistent with scientists’
understanding of how heightened greenhouse gas concentrations affect climate. Observed
increased ocean temperatures, altered wind patterns, extreme weather events, melting
glaciers and sea ice, and timing of seasons have been partially attributed by the IPCC to
greenhouse gas forcing.
9 Human-driven, i.e., caused by human activities.
10 Intergovernmental Panel on Climate Change, Summary for Policymakers of the Synthesis
(continued...)

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The IPCC has dealt with both mitigation — measures that would reduce climate
changes, largely involving reducing greenhouse gas emissions — and adaptation,
which involves identifying impacts of climate change and taking measures to deal
with the impacts. In its fourth report, the IPCC concluded, “There is high confidence
that neither adaptation nor mitigation alone can avoid all climate change impacts;
however they can complement each other and together can significantly reduce the
risks of climate change.... Many impacts can be reduced, delayed or avoided by
mitigation. Mitigation efforts and investments over the next two or three decades
will have a large impact on opportunities to achieve lower stabilisation levels and
increase the risk of more severe climate change impacts.”11
Elevated greenhouse gas (GHG) concentrations in the atmosphere (carbon
dioxide is now about one-third higher than in 1880) result from fossil fuel use, land
clearing, industrial, and agricultural emissions. Current levels of carbon dioxide are
at approximately 381 parts per million (ppm) in the atmosphere, up from some 270
ppm in pre-industrial times. GHGs in the atmosphere remain there for many decades
to centuries. The United States contributes almost one-fifth of net global greenhouse
gas emissions. China emits about as much as the United States.12 But, with its robust
economic growth dependent on industrialization fueled largely by coal, China will
likely become and remain the largest global emitter for the foreseeable future. Future
greenhouse gas emissions will grow most rapidly from developing economies, as
they strive to eliminate poverty and raise income levels towards those of the
wealthier “Annex I” countries. Future GHG trajectories are widely uncertain,
depending largely on the rate and composition of economic growth and technology
choices; the plausible future range may be significantly influenced by policy
decisions to limit emissions.
Scientists have found it very likely that rising greenhouse gas concentrations,
if they continue unabated, will increase global average temperature above natural
variability by at least 1.5o Celsius (2.7o Fahrenheit) during the 21st century (above
1990 temperatures), with a small likelihood that the temperature rise may exceed 5oC
(9oF). The projections thought most likely by many climate modelers are for
greenhouse gas-induced temperature rise of approximately 2.5 to 3.5oC (4.5 to 6.3oF)
by 2100. Future climate change may advance smoothly or sporadically, with some
regions experiencing more fluctuations in temperature, precipitation, and frequency
or intensity of extreme events than others.
Many scientists expect that wet regions will get more precipitation, and dry
regions are likely to become drier. Floods, droughts, storms and other extreme
weather events are projected to increase, with impacts for ecological and human
systems. Some impacts of climate change are expected to be beneficial in some
10 (...continued)
Report of the IPCC Fourth Assessment Report. See [http://www.ipcc.ch/index.htm].
11 Ibid., p. 20.
12 While the U.S. emits less per unit of economic production than China (with “GHG
intensities” of about 562 versus 703 metric tonnes of CO2-equivalent per million dollars of
GDP), the United States emits about 24 tons of CO2-equivalent per person while China
emits only about 4 tons per person.

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locations with a few degrees of warming (e.g., increased agricultural productivity in
some regions, less need for space heating, opening of the Northwest Passage for
shipping and resource exploitation). Most impacts are expected to be adverse (e.g.,
lower agricultural productivity in many regions, drought, rising sea levels, spread of
disease vectors, greater needs for cooling). Risks of abrupt, surprising climate
changes, with accompanying dislocations, are expected to increase as global average
temperature rises, disturbing both natural and socio-economic systems, with national
and international security implications. Disparities across locations will increase
pressure on international aid and migration, with possible implications for political
stability and security. Impacts may be alleviated through investments in adaptation,
although this strategy is thought to be more challenging as climate changes become
more widespread, uncertain and severe.
The potential costs of adapting to climate change and the residual damages —
including possible catastrophic events — lead many people to believe that actions
are justified to reduce greenhouse gas emissions in order to limit climate change.
Economic analyses of costs for mitigation interact with peoples’ values and ethical
considerations of disparities across populations already living and future generations,
and across countries and income groups; ethical approaches also vary concerning
how to weigh potential risks to ecological systems, such as expected increases in
extinctions of species.
In order to mitigate climate change a variety of specific policy targets have been
proposed. For example, the European Union (EU) has articulated a goal of avoiding
more than 2oC (3.6oF) increase of global mean temperature above pre-industrial
levels.13 This is estimated to require stabilizing GHG in the atmosphere at between
450 and 550 parts per million (ppm), carbon dioxide equivalent. The AR4 of the
IPCC concluded that:

Lowest stabilization targets require an earlier peak of CO2 and CO2-equivalent
emissions. In the majority of the scenarios in the most stringent stabilization
category (a stabilization level below 490 ppmv CO2-equivalent), emissions are
required to decline before 2015 and are further reduced to less than 50% of
today’s emissions by 2050. For somewhat higher stabilization levels (e.g. below
590 ppmv CO2-equivalent) global emissions in the scenarios generally peak
around 2010 — 2030, followed by a return to 2000 levels, on average around
2040. For high stabilization levels (e.g. below 710 ppmv CO2-equivalent) the
median emissions peak around 2040.....14

The debate over which countries and sources should begin to reduce their GHG
emissions, at what rate, and when — in the post-2012 period — will underlie the
discussions in Bali. Countries will position themselves in the debate on whether to
set long-term temperature or concentration targets, and whether to set binding
13 Council of the European Union. Press Release 6272/07, February 20, 2007, Brussels,
Belgium. P. 6.
14 Brian Fischer and Nebojsa Nakicenovic, et al. “Chapter 3: Issues Related to Mitigation
in the Long-Term Context,” in Climate Change 2007: Mitigation. Contribution of Working
Group III to the Fourth Assessment (New York: Cambridge University Press, 2007), p. 172.

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medium-term emission caps, based on perceptions of the potential damages of
climate change and mitigation costs.
All countries are concerned about the costs of policies to abate greenhouse gas
emissions, and considerable research underlies understanding of the economics and
uncertainties. The IPCC concluded that, “In 2050 global average macro-economic
costs for multi-gas mitigation towards stabilization [of GHG concentrations] between
710 and 445 CO2-eq, are between a 1% gain to a 5.5% decrease of global GDP.”15
Delaying initiation of GHG limitations may decrease cumulative costs of
meeting a given GHG target if the reductions are timed to minimize early retirements
of productive capital and if lower-GHG technologies advance rapidly, or if better
information on climate impacts allows relaxation of the GHG limit. However, aiming
for a given GHG or temperature target, but delaying GHG emission limitations, may
increase costs if hoped-for technological advances do not materialize, if the more
rapid emission reductions required in later years accelerate early retirement of
productive capital, or if climate change impacts appear to be worse than expected and
there is a desire to ratchet down the GHG cap.
How allowable emissions are distributed among sources worldwide is not a
strong determinant of future climate, but would strongly affect who pays. How the
burdens of GHG reductions may be distributed is a critical political, economic and
values issue. However, given the scientific and economic uncertainties,
policymakers are not bound to make an immediate, single decision on long-term
goals that must remain fixed for decades into the future. Once post-2012 goals are
set, policy-makers may adapt them as scientific, technological and socio-economic
information improves.
Progress to Date to Meet Obligations
Under the Kyoto Protocol
Compliance with the Kyoto Protocol is focused on Europe (particularly the
European Union (EU) and Russia), New Zealand, Canada and Japan. These
countries constitute most of the Annex B parties of the Kyoto Protocol. Preparations
in these countries have been underway for the past several years for the “commitment
period” of the Kyoto Protocol — 2008 to 2012 — during which their average annual
emissions must meet their obligations under the Protocol
The most comprehensive effort at compliance has been in Europe. In October
2007, the European Commission (EC) completed its review of the 27 members’
proposed plans to achieve their Kyoto obligations and at least conditionally approved
all of them.16 The focus of the EU’s compliance efforts is the Emissions Trading
Scheme (ETS) that is completing a three-year trial “learning by doing” period in
15 Climate Change 2007: Mitigation. Contribution of Working Group III to the Fourth
Assessment (New York: Cambridge University Press, 2007), in Summary for Policymakers,
p. 27.
16 For more information on EU activities, see CRS Report RL34150, Climate Change: The
EU Emissions Trading Scheme (ETS) Gets Ready for Kyoto.

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preparation for Kyoto compliance17. If a country determines that it will exceed its
emissions limit during the compliance period, emissions trading permits it to
purchase emissions reduction credits, generally called “allowances,”18 from another
country that has determined it will achieve more emissions reductions than necessary
to comply. With emissions trading, countries that can make relatively inexpensive
emissions reductions have an incentive to reduce emissions below the level required
by the Kyoto Protocol, and sell the extra allowances to other countries whose
emissions control costs are more expensive. Thus, both the seller and the buyer will
have lower costs by virtue of the seller’s profit and the buyer’s savings. This type of
implementation scheme is commonly called a “cap-and-trade” program.19
After a rocky start, primarily resulting from data shortcomings, several positives
have emerged from the “learning by doing” exercise that may assist the ETS in
making the Kyoto compliance phase run more smoothly, including (1) greatly
improving emissions data, (2) encouraging development of the Kyoto Protocol’s
project-based mechanisms — Clean Development Mechanism (CDM) and Joint
Implementation (JI) — and (3) influencing corporate behavior to begin pricing in the
value of allowances in decision-making, particularly in the electric utility sector.
However, several issues that arose during the trial phase remain contentious as the
ETS moves into its Kyoto commitment period, including allocation schemes,
shutdown credits and new entrant reserves, and others. In addition, the expansion of
the EU and the implementation of the directives linking the ETS to the Kyoto
Protocol project-based mechanisms created new issues to which the EC has had to
respond.
In 2006, the European Environmental Agency (EEA) projected the 15 EU
Members that had jointly agreed to reduce GHGs by 8% below 1990 levels during
the Kyoto compliance period would meet their obligation as a whole. However, the
EEA estimated that 7 of those countries would not meet their individual Kyoto
obligations.20 In contrast, the EEA estimated that all 10 of the new Member countries
with obligations under the treaty would meet them.21 The EEA also estimated that
non-EU countries Iceland and Switzerland would meet their obligations, while
Liechtenstein and Norway would not. In October 2007, the EC announced agreement
on linking the ETS with emission trading systems in Norway, Iceland, and
Liechtenstein.22 The other major European signatory, The Russian Federation, is
anticipated to meet its obligations under the treaty, although it will do so due in large
17 The ETS also provides that countries can obtain credits through the Kyoto Protocol’s
other two flexibility mechanisms — Joint Implementation (JI) and the Clean Development
Mechanism (CDM). Note that the EU nations address climate change both individually and
collectively.
18 An allowance equals one metric ton of carbon dioxide equivalent emissions.
19 For a detailed discussion, see CRS Report RL33799, Climate Change: Design Approaches
for a Greenhouse Gas Reduction Program, by Larry Parker.
20 Austria, Belgium, Denmark, Ireland, Italy, Portugal, and Spain.
21 Two countries, Cyprus and Malta, do not have mandatory reductions requirements under
Kyoto.
22 European Commission, Emissions Trading: Commission announces linkage EU ETS with
Norway, Iceland, and Liechtenstein (Brussels, October 26, 2007).

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part to economic contraction after the previous Union of Soviet Socialist Republics
(USSR) collapsed. As its economy expands, these conditions are likely to change.
Outside Europe, the major Annex B parties are New Zealand, Canada, and
Japan. In September 2007, the New Zealand government decided to phase-in an
emission trading scheme beginning in 2008 (last stage beginning in 2013) to assist
New Zealand in complying with its Kyoto obligations.23 However, the Government’s
most recent analysis estimates New Zealand will not comply with its Kyoto
obligations, although that projection only reflects policies adopted as of April 2007.24
In contrast, Canada has simply stated it can not meet its Kyoto obligations and the
government has adopted alternative goals.25 Finally, Japan is anticipated to have
difficulties meeting its Kyoto obligations and has been developing strategies to
acquire substantial credits from the Kyoto flexibility mechanisms (JI and CDM) in
an attempt to bridge the expected gap between Japanese emissions and Japan’s Kyoto
target.
Issues and Expectations for COP-13/MOP-3 Negotiations
in Bali
The Kyoto Protocol was always intended to be a first step in moving toward
reducing global accumulations of greenhouse gases in the atmosphere. Negotiators
recognized that the goals of the Protocol, even if met by all the parties, would not
produce the stabilization of atmospheric greenhouse gases posited as the goal of the
UNFCCC. The Protocol set forth a timetable for reviewing progress of actions
undertaken to meet the Protocol’s goals and to consider “next steps.” As momentum
and concern have built over the past year, strong expectations have been expressed
by all parties that a positive outcome is critically important at the negotiations to be
held this year in Bali, Indonesia, December 3 - 14, 2007. It is widely accepted by all
parties that a post-Kyoto agreement needs to be completed by the end of 2009, and
that the outcome in Bali is likely to consist primarily of a “road map” for future
negotiations that will provide an agenda for identifying and resolving the substantive
issues involving the nature of obligations to be undertaken by all parties and the
methods to be used to achieve them.
Contributing heavily to a sense of increased urgency were both the scientific
findings and reports of the IPCC over the year (as noted above), growing public
concern, and the high priority given to climate concerns in numerous high level
international meetings; in these meetings, high expectations were expressed by
participating nations that the COP-13/MOP-3 in Bali would launch a process of
negotiations that would culminate by 2009 in a post-2012 agreement on greenhouse
gas emissions reductions. Key meetings included:
23 New Zealand Ministry for the Environment, Emissions Trading Scheme (Wellington,
September 2007).
24 New Zealand Ministry for the Environment, Projected Balance of Emissions Units During
the First Commitment Period of the Kyoto Protocol (Wellington, September 2007).
25 Governor General (Canada), Strong Leadership. A Better Canada — Speech from the
Throne (Ottawa, October 16, 2007).

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! The United Nations held two major meetings to express a high level
of concern about climate change: In April, the Security Council held
its first-ever debate on the relationship among climate change,
energy, peace and security, and in early September the United
Nations General Assembly held a high-level ministerial meeting on
climate change.
! The G-8 meeting in June put climate change high on its agenda, and
issued a declaration that was regarded as a compromise between the
European proposal for a 50% reduction in GHG emissions by 2050
in order to limit global warming to an increase of some 3.6 degrees
Fahrenheit, and the continuing insistence of the United States on
voluntary actions to reduce greenhouse gas intensity. The final
declaration suggested the European proposal would be “seriously
considered” and recognized the continuing principle of common but
differentiated responsibilities of nations, but also recognized “that
the efforts of developed economies will not be sufficient and that
new approaches by other countries are needed.”
! Just prior to the G-8 meeting, President Bush announced May 31,
2007, that the United States would convene a meeting in
Washington in late September of “major economies” — those that
are “major emitters” of GHG — on “Energy Security and Climate
Change.”26 This meeting occurred September 27-28, 2007; the U.S.
summary of the Major Economies Meeting on Energy Security and
Climate Change stated, “Discussion reflected a common
understanding that any long term goal is aspirational, and that it
should not be used as a basis for burden sharing.”27 This continuing
rejection of mandatory limits in favor of “aspirational goals” was a
disappointment to those (in particular, the European participants)
who hoped for a breakthrough in the U.S. approach. At the meeting,
future meetings of these participants were discussed, to be held after
the Bali meeting.
The challenge before the upcoming COP/MOP meeting in Bali remains how to
find agreement on the nature of commitments, if any, that would be acceptable to all
the major players — including Kyoto Protocol parties with existing obligations,
developing countries that are major GHG emitters, and the United States, whose role
is regarded as critical by all potential participants in the post-2012 period.
One key element in the negotiations that go forward at Bali and afterward, will
be the extent to which low-carbon-emitting technological alternatives to the current
energy and development patterns will be or can be adopted by both developing and
developed countries. One major key to this question will be how developing
26 Nations and entities invited were the European Union plus France, Germany, Italy, and
the United Kingdom; and Japan, China, Canada, India, Brazil, South Korea, Mexico, Russia,
Australia, Indonesia, South Africa, and the United Nations.
27 See Final Chairman’s Summary at [http://www.state.gov/g/oes/climate/mem/93021.htm].

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countries can continue to make economic progress and enhance their prosperity while
finding the additional resources to address the issue of technological change. It is the
latter concern that prompts a major focus by these countries on the need for financial
support from developed nations.
The major GHG-emitting Non-Annex I countries continue to reject mandatory
requirements for themselves, while pushing developed Annex I nations to continue
mandatory GHG reduction goals in the negotiations. There are concerns, expressed
by advocates of mandatory obligations, that the U.S. “major economies” meetings,
focusing as they do on voluntary measures, may serve to reinforce the resistance of
developing countries to taking on mandatory obligations. There are further concerns
that without U.S. agreement to mandatory GHG reductions, developing countries —
and developed nations as well — may be less willing to take on new or continuing
mandatory obligations. The latter concern is reflected in the expressed views of some
observers that, although all parties agree on the goal of completing an agreement by
the end of 2009, it may also be difficult to achieve until a new administration after
U.S. elections takes office and takes a different approach to the issue of mandatory
emission reduction requirements.28
At a preliminary meeting leading up to the December COP/MOP, four key
elements were outlined as the focus for a “Bali road map”: 1) Mitigation of climate
change (agreeing on emission reduction commitments); 2) Adaptation to impacts of
climate change; 3) Financial assistance issues; and 4) Technology development and
transfer. It is very likely that, while future negotiations will grapple with the effort
to obtain some form of legally binding, mandatory commitments from all parties, the
recognition of differing national circumstances and differing abilities of nations to
take on various types of commitments, will be major elements in the discussions.
In summary, it is widely expected that the outcome in Bali is likely to be
decisions that focus only on the framework, procedures, and time frame for the
substantive negotiations to follow on a post-2012 agreement. Substantive issues will
be taken up in those negotiations. All parties appear to agree that an agreement needs
be completed by the end of 2009, in order to be ratified by the necessary number of
parties by 2012 when the Kyoto commitment period ends. In addition, as nations,
businesses and societies consider their actions and investments in the future, it is
regarded as important to provide some certainty about what the future national and
international obligations are likely to be.
28 For example, the statement made by former Senator Timothy Wirth at a hearing by the
Senate Foreign Relations Committee on November 13, 2007.