Update - Oct. 31, 2001

The Seventh Conference of the Parties opened in Marrakech Morocco on Monday October 29 with a plenary session in the morning followed by simultaneous SBI and SBSTA sessions in the afternoon. Jan Pronk opened the session with a brief statement congratulating the Parties on achieving a successful compromise in Bonn and called on all Parties to undertake the important task of translating the agreement into legal text and addressing all remaining issues so that the Protocol will be in a position to enter into force by the opening of the World Summit on Sustainable Development (WSSD) in Johannesburg in 2002.

Opening remarks by the majority of Parties and negotiation blocs were limited to statements of appreciation for outgoing Conference President Jan Pronk, UNFCCC Executive Secretary Michael Zamitt Cutajar and statements of welcome to new President Mohamed Elyazghi of Morocco who was officially elected in the opening plenary session. With the exception of the opening statement by the G-77 and China who called on all Parties to resist the temptation to reopen any issues that were settled in Bonn and went on to state that neither this Conference, nor the WSSD were the appropriate settings for discussing new commitments for Non-Annex I Parties, the opening statement lacked the substantive indication of intentions and positions that have been common at previous Conferences.

Key Developments in the Negotiations

The first day was largely dedicated to administrative and organizational matters. The second day of the conference saw negotiators get down to business with full SBI and SBSTA sessions covering a number of issues and negotiation sessions on LULUCF, the Mechanisms and Compliance. Wednessay featured an additional negotiation session on Articles 5,7 and 8.

SBI- The SBI sessions over the first three days of the conference covered topics ranging from the progress made on the construction of a new UN campus in Bonn Germany to a review of the budget of the UNFCCC secretariat. Delegates also discussed the location of the next CoP. No Parties have yet applied to host CoP 8 but many observers have speculated that the Bahamas will make its intentions to be the next host known before the week is out.

SBSTA- The SBSTA sessions have covered an equally diverse if more substantive array of topics thus far. The treatment of bunker fuels has been a topic that has generated considerable discussion in the hallways. The omission of bunker fuels from coverage under the Protocol has been criticized as a loophole by environmental groups, a position that has been bolstered by the results of an IPCC special report on the topic that found the environmental effects of emissions from international transport to be both significant and growing rapidly. The International Civil Aviation Organization (ICAO) indicated its intention to proceed with an analysis of policy option to reduce these emissions, including an analysis of emissions trading design options. This course of action was supported by Switzerland (Environmental Integrity Group) and the EU who stated their intention to levy charges on bunker fuels unilaterally if sufficient progress was not made by 2002. Other topics covered include technology transfer, GHG inventories and the IPCC's work plan to develop good practice guidance for LULUCF activities. Informal consultations are to be conducted on a number of issues and will be reported back by the close of the technical session.

Mechanisms- In the first full session of the negotiating group on the Mechanisms progress was limited to a single paragraph in each of the CDM and JI texts. The session was marked by a heated exchange between the representative of Nigeria and Co-Chair of the session Raul Estrada. The Nigerian delegate (supported by Saudi Arabia) stated his belief that the Parties preoccupation with getting issues addressed in short order was coming at the expense of getting things right. He then proceeded to work through a list of concerns including what he called contradictions in the agreement. The primary concern raised was the fact that the portion of the Bonn agreement referring to the fast track for the CDM made reference to Parties to the Protocol but no country is a Party to the Protocol until it is ratified so there could be no prompt start to the CDM.

Mr. Estrada described the intervention as an intentional disruption and refused to enter Nigeria's intervention into the record.

Compliance- Compliance is also proving to be a contentious issue. Inconsistencies within the Bonn agreement have bred divergent interpretations of the compliance regime. In the first session on the topic the Secretariat tabled a "non-paper" which indicated areas of disagreement. Japan, Australia, Canada and Russia submitted a joint proposal that would see a decision on legally binding consequences deferred to the first session of the CoP/MoP. The G-77 has objected strongly, stating their opinion that the Bonn agreement includes binding consequences.

Articles 5,7 and 8- The technical issues associated with these articles have proven even more complex than previously anticipated. Little progress has been made thus far. Members of the Umbrella Group have expressed concern that eligibility to use the Mechanisms could be threatened if inventory and registry requirements are made more rigorous or subjective if new qualitative criteria are added.

LULUCF- Prior to the open of the Conference the head of the Russian delegation made a formal request to the Secretariat that Russia's allocation of eligible domestic sinks be increased from 17 Mt to 33 Mt, an action that resulted in the fossil of the day award. The Russians who received the largest allocation of any Party in the Bonn agreement have received considerable criticism from members of the EU and the G-77 delegations.

Side Events

While this Conference has not been as well attended as previous CoPs, there has been a full slate of very well attended side events. Topics have ranged from alternative energy systems to public education and outreach initiatives. During the first three days there have been a total of three side events on the topic of adaptation, which is a topic that is receiving more and more attention. Particularly well attended sessions have included a presentation on the Dutch Erupt program and a presentation of the EU emissions trading program.

Looking Forward

The long awaited election of the CDM executive board is scheduled to take place before the close of the conference. Speculation about the make up of the CDM Executive Board has been coupled with ongoing speculation about who the next Executive Secretary of the UNFCCC Secretariat will be.

The majority of the talk in the halls has been centered around what has not been said thus far. There are two potentially controversial issues that are expected to be raised before the close of the Conference. The first is a proposal by Canada that would allow emission offsets from the export of natural gas to the United States to be recognized, despite the fact that the US is not involved in the Kyoto process. The EU is also expected to raise the issue of a prompt start for JI. Whether either of these issues will be raised or what the response will be remains to be seen.