Kyoto Protocol Adaptation Fund Board

Legal assistance paper

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Date produced: 06/11/2009

1. Can the Kyoto Protocol Adaptation Fund Board become the Board to manage a future fund under the Convention as well? Are there any legal barriers under international law to do this?

2. As the US has not ratified the Protocol would this be an obstacle?

3. Are there other options?

1. Use of the existing Board

There is no strict legal barrier to a new agreement or treaty making reference to a procedure or body created by an existing treaty, or seeking to provide powers to such a body. However such a treaty or agreement cannot, ordinarily, impose obligations on an existing body that the body does not already have by way of the treaty or agreement that created it, or accept pursuant to its own constitution or a specific agreement to which it is a party.

There are a number of possible obstacles, both legal and practical, to the Kyoto Protocol Adaptation Fund Board (the “KP Adaptation Fund Board”) becoming the Board to manage a future fund under the Convention. These arise because the KP Adaptation Fund Board is a creature of the Kyoto Protocol, not the Convention. Among the issues are the following:

• The KP Adaptation Fund Board operates “under the authority and guidance of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol” (the “CMP”) “and shall be fully accountable to the [CMP]” (Decision 1/CMP.3). It does not therefore take instructions from the Council of the Parties to the Convention (the “COP”) and even if the AWG-LCA were to decide that the KP Adaptation Fund Board was to manage a future fund under the Convention, this decision could only be put into effect with the KP Adaptation Fund Board’s agreement and, broadly, with the approval of the CMP. However as the members of the CMP are a subset of the members of the Convention this may however be a theoretical rather than a real issue.

• The KP Adaptation Fund is established to finance projects and programmes in developing country Parties that are Parties to the Kyoto Protocol (Decision 10/CP.7). Its administration (and, presumably therefore the costs of the KP Adaptation Fund Board) is to be met from “a share of the proceeds from certified project activities” (Decision 5/CMP.2). The issue therefore arises that if the KP Adaptation Fund Board were to administer a future fund under the Convention, how would the costs of its administration of that future fund be financed?

• The KP Adaptation Fund Board’s constitution and procedure do not allow for any input by non Protocol States, such as the US. There are a number of applications of this. For example, its functions are those assigned to it by the CMP (Decision1/CMP.3 para 5), the Board comprises 16 members representing “Parties to the Kyoto Protocol” (Decision 1/CMP.3 para 6), and provision is made for regular reviews of all matters concerning the Adaptation Fund, including its institutional arrangements (such as the Adaptation Fund Board) by the CMP (Decision 1/CMP3, paras 32 to 33). It therefore appears unlikely that the United States (or any of the other parties to the Convention that are not also parties to the Kyoto Protocol) would agree to any new fund, in which it was involved, being managed by such an entity in relation to which it had no input.

2. In answer to question 2 therefore, it is likely that the United State’s failure to ratify the Kyoto Protocol would be a serious obstacle to the existing Adaptation Fund Board, without structural change, becoming the Board to manage a future fund under the Convention.

3. Other options

(1) : use of a New Board established along the same lines?

If the AWG-LCA parties were to agree as a matter of principle to set up a new Board that operated along broadly the same lines, with the same modalities and structures as the existing KP Adaptation Fund Board, to manage a future fund, this should, through appropriate drafting, be achievable. Much of the existing language used to establish the KP Adaptation Fund Board could be used for the new Board, with references to CMP replaced with references to COP, references to Parties to the Kyoto Protocol replaced with references to Parties to the Convention, etc. This would however technically be a new entity, rather than the existing institution which, we understand from the question, is required by the AWG-LCA. There would also be no requirement for the new Board and the existing KP Adaptation Fund Board to be made up of the same members, giving rise to duplication.

Other options (2): is a hybrid Board possible?

If the agreement of both the CMP and the COP could be obtained, then it may (with careful drafting) be possible to achieve a hybrid solution with the constitution and role of the KP Adaptation Fund Board expanded so that it:

(i) continued to be constituted in broadly the same way and report to the CMP for the purposes of the Adaptation Fund under the Kyoto Protocol; and in addition

(ii) sat, with additional input / membership from the non-Kyoto Protocol members (possibly by way of one additional member being selected from the non-Kyoto Protocol countries) for the purposes of administering a new Fund under the Convention. There are a number of ways the constitution of the Board could be amended for these purposes to take account of the involvement of additional Convention parties.

This approach would require some amendment to the existing constitution of the KP Adaptation Board under e.g. Decision 1/CMP.3 to recognise that the KP Adaptation Fund Board would no longer report solely to the CMP, and issues such as sources of funding would need to be addressed. In the time available detailed analysis of how such a hybrid might work and all the drafting issues that arise has not been undertaken. However, please let us know if you would like us to look at this in more detail prior to Copenhagen.