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June 7, 2010

Monday was devoted to discussion of some of the significant outstanding issues.  The big difference between here and Copenhagen is that the discussions have been serious and substantive and the past animosities have largely been put to rest.  The problem is that no decisions have been made.  It was hoped that this conference would lay the groundwork for the next major meeting of the parties in Cancun, Mexico in November, with building blocks of agreements on some of the issues being adopted.  So far that has not happened, though at these conferences agreements usually are not reached until the very end.
 
The outstanding issues are very significant, namely:
 
1.  Financing.  While the modalities of financing have been discussed at length, no cash has been forthcoming and it has not been decided what body should manage either the short term or long term commitments made at Copenhagen.  Decisions on financing will be critical to reaching agreement at Cancun. 
 
2.  Agreement Vehicle.  Whether the Kyoto Protocol will be retained and revised or a new agreement will be selected to replace it.
 
3.  Emission Reductions.  No new over-all figures have been adopted nor commitments from the parties. Also it has not been decided whether the Kyoto Protocol top down formula with mandatory commitments from the developed countries will be adopted, or the bottom up formula favored by the US and emerging economy countries. Certainly these latter parties won´t agree to the former so some kind of compromise will be necessary either by way of a new agreement to replace the Protocol or a second agreement confined to parties that have not ratified the Protocol. Furthermore, it has not been decided whether a cap and trade system will be adopted or some other vehicle -- without placing a price on carbon dioxide emissions, no market mechanism for emission reductions will work. But the US Senate is dead set against cap and trade and a carbon tax, so some replacement will have to be found.  Even the Clean Development Mechanism in place under the Protocol as a means of financing developing country mitigation measures won't work without a price on carbon.
 
4.  MRV.  The parameters of monitoring, reporting and verification have not been decided either for developed or developing countries. This is a matter of considerable contention since China, India and Brazil do not want to have an international body perform these functions, though most countries have conceded this function is essential to assure that financing is used efficiently and for the purposes intended.  China finally signed on the Copenhagen Accord formula of having national accounting for funds subject to unspecified international review if questions were raised,
 
5. Forests.  While there has been substantial agreement to the terms of financing for preservation of forests, there still remain unresolved questions of the baselines to be used. There was major debate on what rules should be applied to measuring forest protection provisions, with the EU showing a chart of the great difference that resulted from the use of different rule formulations.  To those countries like Bolivia who maintained that the rules didn't make any difference, a commitment level could and should be decided now, the EU quipped wonderfully that such an assumption was like a man who was placed with his feet in a freezer and his head in an oven, maintaining that the average temperature was acceptable.
 
Technology transfer is the one area where agreement actually has been reached at least by the AWK/KP negotiating group, though there is under discussion the treatment of tariff and other trade barriers. There also still are some capacity building provision to be resolved.
 
So it remains to be seen whether at least some of these unresolved issues can be resolved before the end of the conference on Friday.