Sinks flexibility mechanisms and compliance

Although there has been little contention between the NGOs regarding the compliance regime, narrowly defined, they have not been unified on closely related issues, in particular sinks and the flexibility mechanisms. This is due not least to differences in philosophies regarding the role of the market as a means to reduce GHG emissions in the implementation of the flexibility mechanisms in the Kyoto Protocol. In general, the more markets and the more sinks there are, the easier it will be for most parties to comply with their commitments. The traditional NGO view has been opposed to such a market-based approach, as it would reduce the need for tough domestic actions to reduce emissions. This, however, does not apply to all green NGOs.

ED relies on a market-based approach. According to Newell (2000, p128), ED 'boasts the largest assemblage of scientists, economists and lawyers of any national NGO working on climate change'. In contrast to most expert organizations, ED has quite a large member base. It was also among the main architects behind the US system of tradable sulphur dioxide (SO2) permits, designed and put into operation more than a decade ago (interview with Petsonk, 2002). ED has worked relentlessly to get the negotiators to adopt a similar approach for the international climate regime. Considering its expertise, close interaction with the US administration and political clout, there is reason to believe that it has had an effect on the design of the Kyoto mechanisms, which are mainly a US brainchild (Grubb et al, 1999). In general, ED has sided with the US against the EU in its interpretation of the Kyoto mechanisms.18

ED is also among the few environmental NGOs supporting the previous US administration on the interpretation of sinks - the possibility to claim emission credits for carbon stored in forests and soils.19 At The Hague (COP-6) and in Bonn (COP-6 part 2), most green NGOs argued that sinks should not be included as Clean Development Mechanism (CDM) projects, and that 'additional activity sinks' (Article 3.4 of the Kyoto Protocol) - which can include land management, agricultural practices and forest management - would put the integrity of the Kyoto Protocol at stake.20 This placed a considerable strain on CAN (as well as negotiators), and ED excluded itself from CAN at COP-6, but is now once more attending the CAN meetings.21 The agreement in Bonn and the final agreement in Marrakesh (COP-7) include sinks in the CDM, and the liberal interpretation of the 'additional activity sinks' prevailed during the negotiations, against the mainstream NGO position. We can thereby safely conclude that mainstream NGOs have had little influence on this turn of events. However, we cannot conclude that the outcome is a result of ED's influence because the same outcome was promoted by other, very powerful, actors, notably the US.

This position of ED and some other US-based think-tanks, in opposition to that of Greenpeace and other more traditional green NGOs, mirrored the differences in philosophy between the US and the EU in their regulatory approaches during most of the negotiation process. The fact that ED sided with the US on key points has made it somewhat 'suspect' in many green quarters, and Greenpeace and ED have been at loggerheads. Most of the other major NGOs have been closer to the Greenpeace position on issues like sinks and the flexibility mechanisms. ED also argued for no cap on the flexibility mechanisms to ensure cost efficiency, whereas the major NGOs strongly favoured such a cap. The major NGOs were not successful in persuading the delegates to adopt their positions here either.

ED advocated that compliance be built into the rules for emission trading, claiming that this would make a separate compliance system redundant (interview with Petsonk, 2002). Although ED did not succeed on this, compliance was actually built into the rules for emission trading because a party that is not in compliance is not eligible to sell allowances. The Enforcement Branch will have the authority to suspend and reinstate that eligibility.

Two NGOs, CIEL and CAN, had long fronted the idea of a compliance fund, provided that it was designed in such a way that real emissions reductions would be achieved (see Wiser, 2001). The idea, however, was captured and given a new meaning after the US, Canada and France at COP-6 in The Hague tried to use it as a way to introduce a price cap on costs into the Protocol - 'a mechanism that could allow countries to comply with their Kyoto targets by paying a discounted fee instead of accomplishing actual emissions reductions' (Wiser, 2001). This turned out to be a critical issue at the session in The Hague. During the negotiations running up to The Hague, CAN had been able to convince several states to endorse the compliance fund idea; now it suddenly found that it had to oppose the idea due to the new meaning given to the issue. The problem was that most EU ministers 'were at best vaguely familiar with it [the compliance fund], recognizing it only as something the green groups wanted' (Wiser, 2001). At a press briefing, CAN declared war on the new compliance fund, and CIEL and other key expert NGOs mobilized their people on compliance to convince EU ministers to reject the idea. In the end, CAN's war on the price cap and voluntary fund and the expert NGOs' efforts to fight the idea bore results. The EU and those Umbrella Group countries that had never been enthusiastic about the fund - including New Zealand, Australia and Japan - decided against the proposal and the idea never went anywhere.

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