The Republic of the Marshall Islands Climate Change Website: Statements

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President's Council on Sustainable Development White House Conference Center July 27, 1998

The Clean Development Mechanism (CDM) was established by the Kyoto Protocol in its Article 12. However, the detailed shape of the CDM has yet to be fully worked out. The CDM was a product of a suggestion made by Brazil, later refined and added to by the Alliance of Small Island States (AOSIS). AOSIS is the group with which the Republic of the Marshall Islands and all the other Small Island Developing States have the foremost cooperation at the international level, given the common interests and concerns of our countries.

As is well known, the Small Island Developing States and low-lying coastal areas are among the most vulnerable to climate change. As front-line states in this fight we have taken a very active interest in the subject matter. Any new idea that can help is therefore eagerly studied by our group. We have taken this approach to the CDM, because we have to take action and the business-as-usual scenario would be disastrous to our countries. In particular the low lying countries such as Marshall Islands, Kiribati, Tuvalu, Maldives, Bahamas, Seychelles, Belize and many others are at great risk. The Marshall Islands is in danger losing 80% of the Capital under this scenario. The larger islands as well as low-lying coastal areas would also be greatly impacted due to the concentration of their communities along the coast lines, including most economic activities.

The CDM is by its outline going to be of primary importance to all Small Island Developing States. First of all we will benefit from the provision of adaptation fee on activities under the CDM. A fee will be levied on the mitigation projects which will then be used for adaptation measures for the most vulnerable countries. It has yet to be decided how the fee will be levied - based on the cost of the project, or based on the value of the greenhouse gases prevented from emission.

Second, the CDM will also assist us in the long term, as it will encourage developing countries to develop in a cleaner and less polluting manner - in short it will promote sustainable development.

But the CDM remains, like the other flexibility mechanisms, largely untested. AOSIS has submitted some detailed views to the FCCC Secretariat on the uncertainties that surround these mechanism, and can be accessed through the FCCC web site (the document is FCCC/SB/1998/Misc.1, and is at this site: http://www.unfccc.de/fccc/docs/1998/sb/miscOl.htm).

In brief let me state that the issues of prime importance to AOSIS are those of compliance, verification, financial and environmental additionality, and reporting. Our concern is that the new mechanisms may open up for a whole lot of hot air, tropical or otherwise, and we think that there is a strict need for compliance and verification methods to be worked out before any of these mechanisms are fully operationalized.

Let me turn to some specific concerns relating to the CDM. There is some debate in the FCCC on what sorts of mitigation projects should be considered under the CDM. It is clear that these projects have to be credible, produce real and tangible reductions in greenhouse gases emissions, and that the projects must have a relevant longevity. It is also important that the projects do contribute to the long term sustainable development of developing countries, so that future emissions will not be as large as predicted. AOSIS has taken this approach to the CDM, of insisting that the mitigation projects must concentrate on sectors such as industrial emissions from developing countries. However, some countries, in particular some vocal Central American countries do not agree. Supported by the US, Australia, Canada and New Zealand, these countries argue in favor of carbon sequestration - the use of forests as carbon "sinks" - as the cheapest and quickest way to get carbon out of the atmosphere.

The use of the term sink is appropriate, because sinks can get clogged up and can overflow, and cracks often appear through excessive use. A forest grows old, stops absorbing carbon and it can burn down. A forest can experience the phenomenon of carbon saturation. Thus, a forest has a finite and limited contribution to make in terms of being a carbon sink. At some stage it ceases to be a sink.

This fact is often ignored when calls are made for the preservation of areas like the Amazon for the reason that it is a sink. Parts of the Amazon forest are most likely not a sink anymore, and there are indications that it may be saturated in its ability to absorb carbon. There is no guarantee that a forestry project will last forever - there are numerous examples of forest fires raging today. There is no guarantee that climate change will itself not destabilize the forestry projects - if El Nino is making current fires worse? And what if El Nifio is made worse by climate change? It must also be borne in mind that a sinks project must be measured against what is being emitted, especially in terms of the lifespan. when fossil fuels are burned, they remain burned, and all the carbon is released at once. When a tree grows, and takes up carbon, what is the long term stability of the tree, at what rate does it take up carbon and when does it stop taking up carbon? Does the tree eventually begin to release carbon?

Industry and cars on the other hand will continue to emit at constantly growing rates unless steps are taken. But politically it seems to be more expedient for industrialized countries to argue for forest preservation, rather than to take any concrete actions in regards to greenhouse gas emissions from sectors such as cars and industry. Moreover, if sinks projects re given equal value with emissions reductions from industry, and polluting industries are given the option of purchasing "emission credits" abroad, rather than reduce pollution at home, of course they will choose the cheapest route. In the view of industry, by engaging in sinks projects in developing countries, these industries will have "legitimately" made their required reductions. No concern will be made in the balance sheet on the longevity of the reduction made.

This is a critical point on the issue of the credibility of the reductions that are required under the Kyoto Protocol, and is an issue that AOSIS has reiterated.

AOSIS has asked the Conference of the Parties to adopt a two track approach to resolving and accounting for uncertainties in the area of sinks: 1) by accelerating efforts to improve and harmonize methodologies for calculating emissions and removals from these sectors, and 2) by capping or discounting the use of removals from those sectors where significant uncertainties remain.

We recognize that some parties attach great importance to the early completion of the decision making process on the issues of the flexibility mechanisms. These parties must also recognize that parties such as AOSIS members are extremely concerned with the need to avoid unnecessary loopholes and the creation of perverse incentives. If we take sinks projects as an example, this could result in the cutting down old growth forest, rich in biodiversity, and replanting with fast-growth mono-culture. Clearly this is not in anyone's interest, even to those who have not ratified the Convention on Biological Diversity.

To be satisfied that a forestry project will indeed be as meaningful as industrial emissions are gravely serious will take a great deal of scientific analysis. Until that analysis is carried out, most likely by the United Nations Intergovernmental Panel on Climate Change, AOSIS is not in favor of the inclusion of sinks projects in the CDM.

There is tremendous pressure against this position. In particular those industrialized countries in favor of sinks in the CDM are involved in gaining support for sinks in AOSIS countries using other channels than the climate change negotiations. Several Ministries of Agriculture and Forestry have been approached in this regard. Those of us involved in the climate change negotiations find this to be a very underhanded method of working.

The CDM offers a rare opportunity for the international community to take proactive steps to combat climate change. The CDM can be a valuable tool for working on measures that would prevent developing countries emissions in the near and long term. But it can not be misconstrued to become a paper crediting of emissions. The credibility of the CDM will be seriously undermined if it does not begin to tackle the industrial emissions, but rather builds up a store of readily flammable tree preserves.

I would also like to take this opportunity to say a few words about the involvement of developing countries. we believe that the CDM could be a valuable additional mechanism for this purpose. It should be stressed that many developing countries are already taking big steps to reduce their emissions, contrary to what the propagandists are saying.

AOSIS is of course very interested in a progressive climate regime, that would take into account the changing global emissions profile. We have gone as far as to propose an evolutionary process. But our approach to this issue is the result of very careful consideration.

First of all there must be a full discussion of the level of efforts undertaken by the Annex 1 Parties in their implementation of all of their commitments under the FCCC. It is recognized and acknowledged by all Parties that it is Annex 1 that must take the lead in the FCCC process. It is therefore not sufficient to merely restate this concept, but to actually show what actions, if any, are indeed being taken. This has been amplified in the Kyoto Protocol in article 3.2 and is a fundamental requirement before any further evolution can be discussed.

As has been stated before by AOSIS, the question of "commitments" on the part of developing country Parties to the Protocol was a divisive one during the negotiations leading up to and including Kyoto. There is every reason to believe that this "debate" will resurface at COP 4 with potentially tragic consequences that almost torpedoed the negotiating atmosphere in Kyoto. Against this backdrop, Parties may wish to consider the establishment of an Ad Hoc process to handle discussions on issues related to the original Article 10, which it may be recalled was included in the AOSIS Protocol.

Efforts to begin this process of discussion can not be side-tracked by dogmatic and glib phrases such as "meaningful commitments', "until key developing countries sign on to commitments" or "voluntary commitments". The discussion must follow the provisions of the Convention and Of the Protocol, both in legal terms as well as in terms of the fundamental principles involved.

Questions that will have to be addressed by this ad hoc process should include what actions or efforts it is reasonable to expect from developing countries. This must be discussed in the context of the priorities of poverty eradication and sustainable development, while cognizant of the threats posed by climate change to the developing countries. At the same time it is imperative that efforts by the Annex 1 Parties to assist such efforts by developing countries must be given high prominence in the discussions.

The process must be predicated on the fundamental principle that the developed' countries must take the lead, both for their own historical emissions as well as to indicate to the developing countries some of the methods of greatest utility in bringing about emissions reductions.

For AOSIS and other developing countries it is in our interest to use the avenues created by the Framework Convention on Climate Change to promote sustainable development in our countries, through such efforts as renewable energy. It is not in our interest to create new loopholes for certain industrialized countries to export out their domestic obligation to reduce greenhouse gas emissions. It is unfortunate that some AOSIS countries are being targeted as potential sinks projects recipients. The unscrupulous industrialized countries who are seeking to promote such projects need to be reminded of their obligations under the Convention itself as well as under the Kyoto Protocol - to reduce their own emissions of greenhouse gases - the primary focus of which should be domestic action.

In conclusion I would like to list some of the priorities which AOSIS will seek to bring in the debate on the CDM:

1. We will insist that the CDM must first of all tackle industrial sectors and other large sectors of greenhouse gases emissions from developing countries, if this mechanism is to be at all useful in limiting the future rise in these emissions.

2. We will also insist that the focus must be long term survival of all countries vulnerable to climate change, especially the Small Island Developing States, not short term gains for a few. That focus is clearly to counter and reduce industrial and transport sector emissions.

3. We are of the view that the proper IPCC procedures be followed in regards to sinks in general, and that there should be no consideration of sinks projects under the CDM until the issue has been fully clarified under other articles of the Kyoto Protocol. 4. We would pre-condition the operation of the Protocols flexibility mechanisms to the satisfactory completion of a workable compliance and verification regime, which would include rigorous reporting requirements. This regime would have to be observed by developing countries who are participating in the CDM.

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