The second part of the Sixth Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) was held at Bonn on 16-27 July 2001 as per the decision taken during the part of the Conference at The Hague. On 23rd July 2001, the Parties to the Conference, with the notable exception of United States, which has rejected the Protocol earlier on the grounds that it exempts developing countries like India and China and is economically precipitous, reached an agreement on "Core elements for the implementation of the Buenos Aires Plan of Action". The agreement was later adopted by the Conference of the Parties. The Buenos Aires Plan of action comprises four basic elements relating to detailed rules and modalities pertaining to mechanisms under the Kyoto Protocol: namely, Joint Implementation, Clean Development Mechanism and Emission Trading; Transfer of Technology; Adaptation and impacts of response measures.
The agreement opens up the theoretical possibility of ratification of the Kyoto Protocol to the United Nations Framework Convention on Climate Change. The basic elements of the agreement include funding under the Convention and Protocol; development and transfer of technology; mechanisms under the Kyoto Protocol; Land Use, Land Use Change and Forestry and Compliance.
Under the agreement on (Funding under the Convention) the developed countries Parties, in particular parties included in Annex II of the Convention, agreed to provide new and additional funding in pursuance of their commitments under the convention for undertaking activities related to climate change. For this purpose, it was agreed that there shall be increased replenishment of Global Environment Facility (GEF) to meet the specific needs and concerns of developing country Parties, arising from the adverse effect of climage change, and impact of implementation of response measures shall be supported by the GEF. Agreement was also reached on establishment of Special Climate Change Fund to fund activities relating to adaptation, transfer of technology and energy, transport, industry, agriculture, forestry and waste management. The developed country parties also agreed to increase funding of climate change related activities through bilateral and multilateral channels.
A certain flexibility has been provided to developed countries Parties not included in Annex-II and such parties are required to provide funding only if they are in a position to do so. The burden sharing arrangement amongst the developed countries is to be developed further.
An Adaptation Fund was established under the Kyoto Protocol to finance concrete adaptation project in developing country Parties, which are Parties to the Kyoto Protocol. The adaptation fund shall be funded from the share of proceeds from the clean development mechanism project activities and other sources of funding. The developed countries Parties may also contribute to the fund. On the issue of development and transfer of climate friendly technologies, Parties agreed to establish an Expert Group on Technology Transfer.
One of the key elements of the agreement on mechanisms was recognition of the principle of per capita emission. It has been provided that the Annex-I Parties shall implement domestic measures in a manner conducive to narrowing of per capita differences between the developed and developing country Parties. On the issue of supplementarity, no quantitative figure of suplementarity has been provided for. Suplementarity refers to the requirement that the domestic action to reduce emissions of green house gases should constitute the primary means of achieving compliance with quantified emission and limitation and reduction targets.
On the debate regarding inclusion of nuclear option, the agreement states that developed country Parties shall refrain from using nuclear facilities even though the argument that it is for the host Parties to decide their sustainable development priorities was recognised.
Prompt start of Clean Development Mechanism (CDM) with the election of members of the executive board at the Seventh Conference of the Parties has been envisaged under the agreement. The size of CDM would be effected significantly due to absense of United States from the agreement. The argument of the developing country Parties that the clean development mechanism projects should not lead to mere realignment of official development assistance has been agreed upon.
The agreement provides for simplified modalities and procedures for a small scale clean development mechanism project activities for renewable energy project activities up-to 15 MW, energy efficiency projects of 15 Giga-watts per year and some other project categories. Modalities for simplified procedures shall be developed further. Activities related to afforestation and reforestation under the land use and land use change and forestry activities have been included under clean development mechanism with a upper limit of five times of one percent of base year emission.
Considerable flexibility has been provided regarding activities related to Land Use, Land Use Change and Forestry, which have been extensively debated, particulary with reference to impact on the integrity of the Kyoto Protocol. In order to meet the concern regarding integrity, the Parties agreed upon a set of principles and upper limits (caps) on total credits from these activities.
The general understanding was that the caps were too liberal. The liberal provisions had become necessary if any agreement was to be arrived at, in particular with reference to what are referred as additional activities.
The procedures and mechanism related to compliance under the Kyoto Protocol turned out to be the most difficult part of the agreement. While a compromise was reached and text was adopted, the interpretation of the agreed text has been source of further debate.