Response measures and adaptation

Legal assistance paper

All reasonable efforts have been made to ensure the accuracy of this information at the time the advice was produced. However, the materials have been prepared for informational purposes only and may have been superseded by more recent developments. They do not constitute formal legal advice or create a lawyer- client relationship. To the extent permitted any liability is excluded. Those consulting the database may wish to contact LRI for clarifications and an updated analysis.

Print Friendly, PDF & Email

Date produced: 03/12/2010

1. What is the accepted definition of adaptation under the UNFCCC, KP, and current AWG-LCA text (AWGLCA/2010/14) ?

2. What is the accepted definition of response measures under the UNFCCC, KP, and current AWG-LCA text?

3. Does the loss of oil revenue fall under the definition of response measures?

4. What is the legal relationship between adaptation and response measures under the UNFCCC, KP, and current AWG-LCA text?

5. Is there a legal basis for oil dependent countries’ claims that they should be compensated for the loss of income resulting from other countries reducing oil consumption in order to meet their greenhouse gas emission reduction targets under the KP or a future agreement?

6. Is there precedent for compensating countries for the loss of income from use of resources / paying them to conserve resources (on which their economy depends) in conventions?

7. Are there other parts of the current negotiating texts (including the mitigation and REDD sections) which could create a space to indirectly link adaptation and response measures OR compensation for loss/damage and response measures? Are there other parts of the text that could be vulnerable to interpretation in favour of compensation for loss of revenue from oil production and exportation?

8. What are the options for

• weakening the link between the text listed above and response measures OR compensation?

• reducing the likelihood that response measures will be classified as ‘adaptation’?

• reducing the risk that adaptation funding OR compensation will be channeled to response measures?

 1. There is no formal definition of ‘adaptation’ in the UNFCCC, KP or current AWG-LCA text (AWGLCA/2010/14), nor are there related definitions of terms such as ‘adaptive capacity’ or ‘vulnerability’. The definition that is accepted by parties is the definition from the IPCC, being: “adjustments in practices, processes, or structures [which] can moderate or offset the potential for damage or take advantage of opportunities created by a given change in climate” .

Adaptation is usually referred to in the context of adaptation to the adverse effects of climate change. Article 1 of the UNFCCC contains a definition of the “adverse effects of climate change” being: “changes in the physical environment or biota resulting from climate change which have significant deleterious effects on the composition, resilience or productivity of natural and managed ecosystems or on the operation of socioeconomic systems or on human health or welfare.” It is important to note that this definition intentionally excludes consideration of response measures.

2. There is also no formal definition of response measures in the UNFCCC, KP or AWG-LCA text. However, it generally understood to refer to the negative economic impacts resulting from the implementation of climate mitigation policies. In other words, the focus is on the economic impacts that arise from trying to prevent climate change.

The issue of impacts of response measures has historically been focused on estimating the costs and benefits of mitigation, and looking at spillover effects and welfare impacts resulting from action taken by one or more countries on other countries.

Whilst the focus on response measures has, in the past, been largely driven by the OPEC countries (see below) the issue is of interest to all countries due to the interlinked nature of global trade. In the past few years, spillover effects from policies such as food miles have been raised as an area of concern by countries such as New Zealand (lamb) Argentina (beef) and many developing countries in Africa that export produce to European markets.

3. Yes, if that loss of oil revenue is related to climate policies adopted to limit the use of fossil fuels and promote alternative sources of energy.

4. Articles 4.8 and 4.10 of the UNFCCC and Articles 2.3 and 3.14 of the KP are the key provisions that relate to the impact of response measures.

Article 4.8 effectively requires all parties to give full consideration to what actions are necessary under the Convention, including actions related to funding, insurance and the transfer of technology, to meet the specific needs and concerns of developing countries (including (Art 4.8(h)) those “countries whose economies are highly dependent on income generated from the production, processing and export, and/or on consumption of fossil fuels and associated energy intensive products”). Article 4.10 then requires parties to take into consideration when implementing the commitments under the Convention, the situation of parties, particularly developing countries, with economies that are particularly vulnerable to the adverse effects of the implementation of measures to respond to climate change (and states that this “applies notably” to those countries whose economies are dependent on income from fossil fuels).

Article 2.3 of the KP requires Annex I Parties to “strive to implement mitigation-related policies and measures so as to minimize their adverse effect, including adverse effects of climate change, effects on international trade and social, environmental and economic impacts on other Parties” especially those listed in Art. 4.8 of the UNFCCC. This obligation is stronger that the UNFCCC commitment – which is only to take account the situation of those Parties affected by impacts of response measures. Article 3.14 requires Annex I Parties to implement their commitments under the KP in such a way as to minimize the adverse social, environmental and economic impacts on developing countries, especially those listed in Art. 4.8 of the UNFCCC. This requires a consideration of how to minimize those impacts as well as to consider “the establishment of funding, insurance and technology transfer”.

The provisions listed above are procedural in nature and do not oblige parties to provide funding, insurance or technology to developing countries to deal with adverse impacts and/or response measures.

Note that these provisions link the consideration of adverse impacts with the consideration of impacts of response measures.

For a number of years, there have been both SBSTA and SBI agenda items that relate to the implementation of Articles 4.8 (and 4.9) of the UNFCCC and Articles 2.3 and 3.14 of the KP.

There has been some progress in relation to Articles 4.8 and 4.9 – through the implementation of Decision 1/CP.10 which addressed action to address the special needs and concerns of developing countries across four areas (i) adverse effects of climate change; (ii) implementation of Art.4.9 (LDCs); (iii) impacts of the implementation of response measures; and (iv) further multilateral work. By having a broader scope, SBI has been able to progress work on exploring the adverse effects of climate change, but this has had to be matched with similar workshop programmes, submissions of views etc. on the impacts of response measures.

The items related to Articles 2.3 and 3.14 of the KP have largely been initiated by OPEC countries, seeking to have issues related to the implementation of Article 3.2 and workshops that have considered response measures in the context of Article 3.14, considered by all Parties. Whilst there are exchanges of views at each meeting, it has been almost impossible to get any progress in these discussions in recent years. The agenda items are largely used politically for leverage in the negotiations, rather than as a vehicle for substantive discussions.

The AWG-LCA texts and information notes in Cancun include the following: (a) the negotiating text from Tianjin (FCCC/AWGLCA/2010/14); (b) the Secretariat’s note following Cancun which includes various options discussed at Tianjin (FCCC/AWGLCA/2010/INF.1); and the note by the Chair of possible elements of a decision in Cancun (FCCC/AWGLCA/2010/CRP.1). All three documents include references to the economic and social consequences of response measures, including a separate chapter on response measures. The Tianjin negotiating text and Secretariat’s note include a number of references to the impact of response measures being linked to the adverse effects of climate change. Those references are included in the Tianjin negotiating text related to a shared vision (paras 5 and 7) adaptation; Ch.II enhanced action on mitigation – provision of financial resources including a new fund with provisions for carbon capture and storage (para 60) Ch.II enhanced action on adaptation (paras 1, 4(e)(i)(k),8); Ch.III – financial resources – again funds for CCS (para 2) and references to funds to support programmes and activities to implement commitments including those under Art.4.8 of the Convention.

The references in the negotiating text and information note referred to above are all in square brackets and, in particular in relation to the adaptation text seek to include equal attention to the adverse effects of climate change and the impacts of response measures, and to include equivalent action on implementation of actions to address those impacts. This goes further than the requirement to ‘consider’ impacts under the Convention and KP.

The specific sections of the text on response measures (Ch.I part C (6) and Ch.VII) also include various options related to the establishment of or provision of a forum to either consider or support the development and implementation of action to address the impacts (either negative or both positive and negative) of response measures. The language reflects differing levels of strength and capacity vested in the forum and whether a work program is undertaken with expected outcomes of actions or merely consideration. The list of matters to be addressed by the forum includes , inter alia, insurance and financial mechanisms, economic modeling and technology transfer. It is important to note that the impacts of response measures are very difficult to model and quantify. Whilst holding a forum is widely acceptable, the weight given to the outcomes of the forum and the requirements for developed countries to report on the actions they are taking to minimize negative impacts remain contentious.

A number of alternatives are also presented in the text related to the ability of developed countries to impose trade related measures (either generally or specifically related to climate change mitigation) that would discriminate against developing countries.

Note that the Chair’s proposal for Cancun is structured differently, with no links between adverse impacts of climate change and impacts of response measures in the adaptation or financing sections and only a stand-alone chapter addressing response measures.

5. As part of the discussions under Article 2.3 of the KP, Saudi Arabia has demanded compensation for a potential loss or revenue from the sale of fossil fuels due to the implementation of climate mitigation measures.

As noted above, the provisions of the UNFCCC and KP that relate to the impact of response measures are largely procedural, requiring consideration etc. but there is no legal obligation to take any particular action, or to provide funding, insurance or technology to respond to the concerns raised.

6. As far as we are aware, there are no similar examples in any of the multi-lateral environmental treaties. There are examples of bilateral agreements which involve, for example, payments for ecosystem services, which take into consideration lost revenue from commercial activities (e.g. logging rainforests).

7. See discussion above about the places where response measures are linked in the current negotiating text. This includes linkages in the mitigation chapter (Ch.I C. 6) and also in the adaptation and finance chapters. Despite OPEC countries becoming more engaged in REDD+ (largely as a means of leveraging other items) there is very little room to include references to response measures in the REDD+ text.

For example does reference to the ‘economic impacts of climate change’ create a space for compensation for loss of revenue from oil exportation? Potentially yes.

For example, what (if any) are the legal differences between the principles underlying REDD and compensation for loss of revenue from production and exportation of oil? (NB some delegates believe that the REDD system – of paying countries to keep resources in the ground – is similar to the principle of paying oil exporting countries not to export their mineral reserves.) This could be another avenue to obtain compensation for loss of revenue from the economic ‘impacts’ of climate change. Is there a legal basis for differentiating between the two so that the REDD text does not get hijacked by oil interests? Whilst some people may see parallels between the concept of payment for ecosystem services and compensation for loss and damage (whether from adverse effects of climate change or of impacts of response measures), in our view these are each fundamentally different concepts. On the one hand, PES is rewarding positive action to mitigate climate change. On the other compensation for loss and damage is a mechanism to put persons/countries affected by climate change (or response measures) in the position they would have been but for the prevailing situation. We would expect strong resistance to drawing parallels (in a legal or practical sense) between the concepts from both developed and developing countries.

Are there other parts of the text that could be vulnerable to interpretation in favour of compensation for loss of revenue from oil production and exportation? The primary areas are those described above due to the history of linking adaptation and response measures. There has also been a history of linking progress on discussions related to bunker fuels with progress on issues related to article 2.3 of the KP.

8. In order to delink adaptation and response measures in the LCA text the key is to avoid references to response measures in the adaptation sections of the text (and those related to finance) and instead keep the discussion contained to the chapter and or annex on response measures.

In the text related specifically to response measures, the key is to avoid references to concrete obligations, especially for the implementation of actions and for compensation. In other words, press to adopt a similar approach to the UNFCCC and KP and keep the language procedural rather than operative – that is to consider the issue in the forum or through workshops and discussions in SBSTA but to avoid references to implementation of particular steps that may lock in a course of action that could lead to resources (technical and financial) being diverted from other issues.

Does the definition of ‘vulnerability’ deprioritize oil exporting/producing countries? This list of vulnerable countries in article 4.8 of the Convention includes oil dependent countries therefore when referencing vulnerability it is prudent to qualify it with reference to SIDS, LDCs and countries in Africa so that the link is deprioritised.