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Scope of the Challenge

Transparency in emissions cuts has become a relatively new focus of the climate change regime. The Bali Action Plan adopted new monitoring parameters that required both developed and developing countries to commit to mitigation actions that could be measured, reported, and verified MRV. Strengthened somewhat at Copenhagen, this agenda was furthered in Cancun, where the final document called for "international assessment of emissions and removals related to quantified economy-wide emission reductions targets" for developed countries in a transparent manner.

However, this language on enforcement has yet to be matched by a plan of implementation, likely making it a contentious issue for future international climate agreements. The Durban Platform may have created additional confusion regarding the enforcement of climate accords. Particularly ambiguous was its call for a new agreement with "legal force" to replace the Kyoto Protocol rather than one that is expressly "legally binding. Under the current UNFCCC framework, developed countries report their emissions annually and developing countries are supposed to report theirs every six years.

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Emissions inventories in developed countries are generally agreed to be strong, and are accepted as the basis for international emissions trading in which errors in emissions accounting would result in large financial transfers. Reporting from developing countries is widely considered to be much weaker, and the six-year reporting requirement is often violated.

The exceptions are CDM projects, which are carefully monitored to determine whether promised emissions reductions are actually being achieved; here, monitoring is widely agreed to be strong.

This process tasks countries to publish emissions reductions goals in line with their national capabilities and then submit to international monitoring under the Copenhagen Accord. The barriers to improving emissions monitoring in developing countries are threefold. First, many such countries lack the domestic capacity to monitor their own emissions, which makes international monitoring even more difficult.

Existing emissions estimates are generally extrapolations based on energy use, and even large developing countries such as China and India, for example, do not know their total emissions output. This uncertainty is exacerbated in countries with significant emissions from deforestation because the technical means to precisely measure such emissions do not yet exist. Second, even if developing countries are able to monitor their emissions, many are wary that reporting emissions would open them to pressure to cap those emissions—something they have strongly resisted.

Third, countries such as China publically state that concessions for an internationally verifiable monitoring system are a direct infringement on their national sovereignty. Despite these barriers, an agreement that focuses on emissions monitoring might be easier to implement than an arrangement based on binding emissions reductions. Enforcement, meanwhile, is essentially nonexistent. Countries that fail to meet their Kyoto targets are legally required to subtract that shortfall plus a 30 percent penalty from their total allowed emissions in the next phase of the protocol.

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In practice, though, this is meaningless, given that future allowed emissions have not yet been negotiated. If the Kyoto Protocol penalty rules are observed—something still in question—countries could simply negotiate new caps that are inflated by an amount that offsets the penalty or just formally withdraw from the accord as Canada did in Channeling funds to curb emissions and adapt to global warming is one of the thorniest challenges in the fight against climate change. The Green Climate Fund, set forth in Cancun to be a centralized hub for climate financing, only recently agreed in October on a draft plan for dispersing funds.

Despite this recommitment, however, no framework was agreed upon for financing in the final outcome document. The group's final report was released in November and calls for taxes on emissions, trading, and international travel. The situation becomes particularly vexing when the transfer of money from industrialized countries to developing countries comes into play.

At the September G20 meeting in Pittsburgh, leaders proposed significant increases in funding to poor countries, but differences in how to achieve this goal led to a weak statement [PDF] that merely recognized the need for climate change financing for which there was no follow-through at the Toronto G20 summit in June More recent pledges made at the UN climate conference in Cancun are short of the aspirations of some world leaders and lack details regarding their source and disbursement. Several multilateral funds have been established under the UNFCCC , the World Bank , and the GEF to provide grants and loans targeting specific aspects of climate change, ranging from adaptation to development of clean technology.

However, by and large these funds are voluntary and have limited differences. Many experts have pointed to private investments as a way forward. Private investment has been critical in industrialized countries but much harder to come by in developing countries. The clean development mechanism CDM , initially set up by the Kyoto Protocol, has been applauded for injecting private-sector funding for clean energy projects into developing countries and helping industrialized countries meet their emissions-cutting targets.

However, the CDM has brought little benefit to areas most in need of clean energy, notably sub-Saharan Africa. Some economists and policymakers have proposed innovative solutions to the financing deficit such as a Tobin tax on financial transactions or a carbon tax on air transportation the EU instituted the latter in The Organization for Economic Cooperation and Development OECD has reported [PDF] that if all industrialized countries used carbon taxes or auctioned emissions-trading permits to reduce their emissions by 20 percent in relative to levels, fiscal revenues could reach 2.

Approximately one-fifth of global emissions come from land use, including deforestation.

Asia and the Wider World

Mitigating the effects of climate change will require looking at a broad set of alternatives, including leveraging tools inherent to our natural ecosystem. Forests provide natural carbon sinks that help mitigate the effects of carbon dioxide emissions. There are currently few initiatives that compensate countries that promote this natural process. Although this is a positive step, critically missing are incentives for forest conservation activities that would help reduce emissions from existing carbon stocks. In an effort to bridge this gap, numerous [PDF] bilateral and multilateral arrangements outside the UNFCCC framework have been created to provide assistance to developing countries in harnessing their carbon sinks.

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At the national level, some governments have established funds, such as Brazil's Amazon Fund , and Burkina Faso's cash bonus tree-planting program, which leverage private donations and government resources to provide incentives for the preservation of forests. Additionally, there has been some attention on promoting oceans as a natural carbon sink. However, scientific skepticism on the ocean's ability to absorb carbon dioxide emissions remains.

Promoting low-carbon development: Needs coherence, financial support, and developing-country buy-in. Low-carbon development must be at the heart of any successful climate change mitigation effort. Yet it faces two distinct challenges. The world is not particularly good at development assistance beyond climate change, and it has no large-scale experience with low-carbon development. Although the CDM has undoubtedly resulted in some low-carbon investment that would not have otherwise occurred, it has not prompted fundamental shifts in development patterns.

Alongside it, traditional development organizations have begun to invest in low-carbon development.

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The World Bank , for example, has ramped up climate-related spending, and the UNEP has set climate change as a priority in its capacity-building efforts. These efforts are constrained, however, by funding that is not commensurate with the scale of the challenge, as well as by deeper challenges in the development aid model. These international institutions are also not well coordinated, with occasionally weak mechanisms that can fail to complement each other. Another important path to low-carbon development is new technology, such as carbon capture and storage CCS , which focuses on securing and storing carbon dioxide emissions before they are released into the atmosphere.

Although this technology is still in its early stages, successful pilot projects offer hope of developing and implementing it for large-scale projects. Some countries are committed to implementing variations of it, and both bilateral and multilateral cooperation is under way.

The Global Climate Change Regime

This cooperation is particularly important because implementing CCS on a large scale can be expensive and offers few obvious economic benefits. One of the major multilateral efforts in this area is the Carbon Sequestration Leadership Forum CSLF , which supports joint efforts to develop cost-effective carbon sequestration technology.

Additionally, an international initiative, Futuregen , led by the U. Department of Energy, harnesses public and private-sector funds and expertise to help build near-zero emissions plants around the world. Renewable and nuclear energy will be critical in diminishing reliance on fossil fuels and developing low-carbon communities. Expectations for nuclear power as an alternative source of energy are especially high among big emitters such as India, China, and the United States, as well as in a number of developing countries that lack the necessary infrastructure to meet their growing energy needs.

Since the nuclear incident in the wake of Japan's March earthquake and tsunami, some of the support for nuclear power has declined. When nuclear energy is optimal, the agency assists with energy planning and developing relevant infrastructure, such as drafting nuclear legislation and establishing independent and effective safety regulators.

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However, given its limited resources, the IAEA will find it increasingly difficult to meet the growing demands for its services as more developing countries seek help in establishing nuclear facilities. There has also been significant international action on renewable energy. Despite these promising international efforts, only about 25 percent [PDF] of the world's energy is produced through renewable and alternative sources including hydroelectric, biomass, and nuclear.

Another dimension of the solution is often ignored but is likely, in the long term, to be the most prominent: domestic policy reform in developing countries that encourages low-carbon investment. This might include steps like energy market reform or reduction of tariff barriers to low-carbon technology transfer. International institutions have begun to promote domestic policy shifts through measures like technical assistance provided by organizations like the UNEP and UNDP , discussions [PDF] on tariff reductions for environmentally friendly technologies through the WTO, and processes aimed at phasing out fossil fuel subsidies spurred through the G Some existing institutions, though, may incidentally work against positive developments in this area.

The Kyoto Protocol's CDM, for example, may discourage countries from making climate-friendly policy changes by rewarding countries only for activities that go beyond existing national policy. Complicating matters, efforts to promote policy shifts and efforts aimed at providing assistance with clean development are rarely coordinated with each other.

Rise of Asia in a Changing Global Economy

Adapting to climate change is currently being addressed incidentally through traditional development aid.