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INTERVIEW: Warsaw UN talks to add impetus to CO2 market: official


Negotiators at the UN climate talks in Poland next month could provide a boost to existing and new carbon market mechanisms, including a system to link various programs, according to a senior UN official.

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John Kilani, director of the sustainable development mechanisms division of the UN Framework Convention on Climate Change, said he expects "a lot of progress in Warsaw" on the so-called framework for various approaches, which will link together national efforts to combat climate change.

"We have seen an evolution in Parties' thinking," Kilani told Platts in an interview.

There is a "need for a framework to act as a glue" for the efforts being made across the world, "with the primary objective of ensuring a ton is a ton," he said, noting the need for comparability of emissions mitigation efforts.

"This is something that is very popular and that Parties are very interested in," he said.

More than 190 countries are set to gather in the Polish capital November 11-22 for the 19th meeting of the Conference of Parties to the UNFCCC.

Kilani also expects progress to be made on the rules and procedures for a new market mechanism, which is a key component of an agreement due to be finalized in 2015 for a framework to replace the Kyoto Protocol.

Unlike the beleaguered 1997 treaty, all countries have agreed to sign up to the 2015 deal, including the US and China, with a new framework taking effect in 2020.

The new mechanism will not be finalized this year, as it is "intricately linked to other aspects of the 2015 agreement," Kilani said.

But negotiators in Warsaw can make progress on what sectors could be included; how to ensure its environmental integrity; how to measure sustainable development contributions; and a system to track emissions units associated with it.


Meanwhile, Kilani said he is "encouraged" by proposals coming from governments for the 2015 deal that mention the use of Certified Emission Reductions -- the credits generated from developing country projects through the Kyoto Protocol's Clean Development Mechanism.

This is significant, he said, as it is "a signal that Parties don't see the CDM as something tied to Kyoto. Parties are moving away from this rigid view."

"The CDM and [Joint Implementation] are facing a very challenging time at the moment, but I don't think they are dying -- especially the CDM," Kilani said, referring to the collapse in prices for CERs and JI credits as demand wanes amid a lack of binding national emissions targets for the big economies to date.

"Do I expect demand to pick up? Do I think it is possible to increase demand? My answer is yes," he said.

Negotiators at the talks in Warsaw have a "very unique opportunity" to demonstrate long-term commitments to the CDM, he said.

Kilani also said the idea of establishing a fund to buy CERs, in a bid to prop up prices, is still alive.

"It is viable -- I don't think it's off the table. But I don't think it's going to be easy," he said.

Governments are willing to use CERs in a new framework, and some have said that action needs to be taken now to maintain the CDM infrastructure for the post-2020 period, he said.

Kilani also pointed to aviation as "one of the sectors that could increase demand for CERs," adding that a decision by the International Civil Aviation Organization earlier this month to establish a global market-based mechanism for the sector by 2020 is encouraging.

ICAO left the door open for voluntary efforts in the interim, such as offsetting via reputable mechanisms, such as the CDM, he said.

--Katie Kouchakji,
--Edited by Jeremy Lovell,