Reduced Emissions from Deforestation and Degradation (REDD)
Governments once again agreed to step up action to curb emissions from deforestation and forest degradation. More specifically the agreement calls on developing countries to begin laying the groundwork for the proposed Reduced Emissions from Deforestation and Degradation (REDD) mechanism by establishing forestry base lines and developing national forest protection action plans and monitoring methodologies. It also calls upon industrialised countries to reach bi-lateral and multi-lateral agreements to help fund this "capacity building".
Implications: REDD edges ever closer. Reports suggest most of the fine print for a full blown global forest protection mechanism based on a carbon offset model is pretty much agreed. It could still be scuppered by the failure to agree other parts of the deal, but the chances of a whole new adjunct to the carbon market being launched within the next few years look healthier than ever.
Agreement: Countries have agreed to establish a new Cancun Adaptation Framework to ensure improved planning and access for finance for adaptation projects in developing countries. They have also agreed to continue work with the insurance industry to better understand climate losses and damage and have stressed that "adaptation must be addressed with the same priority as mitigation and requires appropriate institutional arrangements to enhance adaptation action and support".
Implications: It has been under-reported, but this is one of the defining outcomes from Cancun. No one is turning away from the need to cut greenhouse gas emissions, but focus is increasing on the urgent need to invest in adaptation. More and more countries will begin to produce formal climate adaptation plans and will increase investment in climate resilience, opening up huge opportunities and risks for businesses.
Agreement: Negotiators have agreed to establish a new Technology Executive Committee and Climate Technology Centre and Network to help foster technology cooperation on adaptation and mitigation projects.
Implications: Again the timeline remains unclear, but this could have sizable implications for businesses, particularly those working on cutting edge clean tech projects. Expect more bi-lateral and multi-lateral technology sharing agreements over the next few years.
The future of Kyoto
Agreement: In the end countries agreed to kick the most contentious issue at the Cancun Summit into next year. The two page agreement on Kyoto simply states that countries will agree on the future of Kyoto "as early as possible and in time to ensure that there is no gap between the first and second commitment periods", which means before the end of next year.
Implications: Who knows? Japan, Russia and others insist they will not sign up to a second commitment period; China, India and virtually every other developing country insists they must sign on to extend the deal or the talks will collapse. It is shaping up to be the defining issue in the run up to next year's summit in South Africa.
The EU looks set to act as a go-between in an attempt to broker a deal, although both sides are currently adamant that they will not compromise. One mooted proposal is that Kyoto is extended for just two years; while a parallel binding treaty is finalized covering all nations. That way industrialised countries will remain covered by a legal instrument for cutting emissions, while developing countries will also be folded into an agreement with binding targets for all. It is a long shot, but it is currently the best idea in circulation.
For businesses the debate over Kyoto is the one area of uncertainty following an agreement that has otherwise served to increase certainty that they will come under increased pressure to cut greenhouse gas emissions and invest in clean technology.