Brazil speaking for the G 77 and China firmly rejected any proposal directed towards differentiating between non-Annex I parties, such as amendments to the Convention or any of its Annexes with a view to establishing new categories of countries to undertake mitigation commitments.

The clash over the issue of 'differentiation' of developing countries in undertaking mitigation actions took place in the contact group on mitigation and its means of implementation, which met on 4 December and was chaired by Michael Zamit Cutajar of Malta, who is also the vice-chair of the Ad-hoc Working Group on Long-term Cooperative Action (AWG-LCA).

Japan and Turkey called for a redefinition of “developed” and “developing countries” under the Bali Action Plan (BAP), suggesting various criteria and parameters for such differentiation including that of GDP per capita and share of world emissions. Japan in particular advocated the graduation of some countries into Annex 1 from Non-Annex 1. (Annex 1 countries who are developed countries under the Kyoto Protocol have to undertake quantified emission reduction targets, while Non-annex 1 countries are developing countries who do not have mitigation commitments.)

The G77 and China said that it recognizes the importance of enhancing ambitious national and international mitigation action, in the context of long term cooperative action, directed towards achieving the ultimate objective of the Convention.

“National and international mitigation action must effectively respond to the serious challenge of climate change, respecting the right to development and the legitimate priorities of sustainable development and poverty eradication in developing countries. Mitigation action should be strengthened jointly with efforts to substantially improve support for adaptation to the negative effects of climate change. As in all other aspects of AWG-LCA work, our discussions on mitigation are guided by the Convention and the BAP. Both are explicit as to the distinct nature of the mitigation commitments of Annex I and the mitigation actions of non-Annex I parties. As we work, in a cooperative context, to face the climate change challenge, we will do so in a way that respects the principles of the Convention, specially common but differentiated responsibilities and respective capabilities,” said the Group.

It said further that the AWG-LCA must effectively address the issue of comparability of commitments among Annex I parties. “A global effort demands that all Annex I parties take on measurable, reportable and verifiable commitments, including quantified emission limitation and reduction objectives, that are compatible with their level of historical responsibility for climate change and economic and technological capacity”.

“While noting the midterm quantified emission reduction targets announced by some Annex I parties, we emphasize that much deeper reduction commitments are required and these must result from a multilateral agreement. These emission reduction commitments must reflect their historical responsibility as well as evolving scientific evidence.

It said further that all mitigation commitments or mitigation actions must take into consideration the need to minimize the adverse effects of these mitigation commitments or actions on developing country Parties.

“It is necessary to focus attention on the crucial issue of means of implementation, in order to generate a significant increase in the level of measurable, reportable and verifiable support offered to non-Annex I parties in technology, financing and capacity building. In line with article 4.7 of the UNFCCC, such an increase would allow non-Annex I parties to enhance their national mitigation effort in a measurable, reportable and verifiable way, adding to the actions they have already undertaken, without restricting their sustainable development,” it said.

The Group emphasized that the current global financial situation does not justify any rolling back on financing commitments under the Convention. “Short term financial difficulties, however serious, should not limit the support necessary to deal with the common long term interest of facing climate change,” it added.

Barbados, speaking for the Alliance of Small Island States said that the avoidance of climate change impacts must be a key benchmark for appropriate mitigation measures. “ The long term global goal must be sufficient to keep temperature increases below 2 degrees C to 1.5 degrees C. Global greenhouse gas (GHG) emissions should peak by 2015 and be reduced.

It said that for developed country Parties, economic instruments to address demand side management will be essential in achieving substantial emission reductions. These include taxes on carbon intensive activities, eco-labelling, appliance standards, fuel efficiency standards, the removal of subsidies for fossil fuels and the creation of incentives for the uptake of renewable energy and for the implementation of energy efficient measures.

It also said that developing countries should take concerted action to reduce their emissions trajectory, towards a clean development pathway, supported by technological and financial incentives by developed countries to significantly deviate from their current emissions baselines.

Switzerland, speaking for the Environmental Integrity Group said that while developed countries should take the lead in mitigation efforts, developing countries should take nationally appropriate actions. It supported the South Korean proposal to set up and open a register in the UNFCCC on such national actions by developing countries.

Japan said that the it was necessary to clarify the definition of “developed country Parties” and “developing country Parties” in the BAP and said that “developed country Parties” should be broadened beyond Annex 1 Parties. It said that among Non- Annex 1 Parties, there are growing differences. It said that there was a need for graduation among developing countries to move from Non-Annex 1 to Annex 1 to undertake emissions reductions. To respond to this situation, is to categorize non-Annex I Parties into groups based on stages of economic development, capacity to respond for its nationally appropriate mitigation actions (e.g. GDP per capita) and emissions share in the world and to encourage each Party to take suitable actions matched to its own group, in accordance with the principle of equity and the principle of “common but differentiated responsibilities and respective capabilities”, according to Japan.

It also proposed the sectoral approach for major developing countries in relation to their mitigation efforts. (Japan in its written submissions proposed that major developing countries set economy-wide intensity targets in addition to their sectoral intensity targets for major sectors. It said that sectoral intensity targets should be set as responsible actions by major developing countries and be set on the basis of analysis of energy efficiency, carbon intensity and mitigation potential).

Japan also said that it was not fair to have one specific base year reference to determine the level of emission reductions. (The current reference is to 1990 levels).

Singapore said that the diverse and unique national circumstances of developing countries must be taken into account in addressing climate change. It said that many developing countries, particularly the smaller ones, are heavily dependent on fossil fuels with little or no ability to switch to alternatives. “The alternative-energy disadvantaged situation of a country is something which must be considered in assessing the relative capability and contribution of developing countries in climate change,” As predominantly small countries, “alternative-energy disadvantaged” countries have also been unfairly targeted through attempts at graduation and differentiation based on per capita GDP, it said. “The use of per capita GDP is inappropriate. Per capita GDP has no correlation to a country's emissions profile, its historical responsibility or its ability to take on mitigation actions. Moreover, small countries by dint of their small populations will also inevitably have inflated per capita-indicators which do not accurately reflect the fact that in absolute terms, the gross GDP and total emissions of these small countries are insignificant when compared to those of the developed countries”.

Turkey said that differentiation among Parties is crucial in the future mitigation commitments. In the current international regime, there are Non-annex I countries who have higher GDP than some of those in the Annex 1. It said that the AWG-LCA should establish a list of parameters and criteria to enable differentiation among Parties with a view of identifying future commitments. Some of these parameters could be, but not limited to, GDP per capita, primary energy consumption per capita, R&D expenditure, emissions per capita, population growth and human development index, it said.

China said that the work of the contact group is guided by principles of the Convention and the BAP. There is a very clear mandate in the BAP to focus on implementation of the Convention in the areas of mitigation, adaptation, technology and finance. It said that some Parties are trying to divert the attention from focusing on the mandate to implement the Convention to introducing extraneous issues. There should not be any renegotiation of the Convention and any attempt to revise the Convention or redefine 'developed' and 'developing countries' and its sub-divisions is not constructive, but destructive. Some delegations say that there have been changes since 1992 (when the Convention was conceived) but there are also several unchanged matters, it said. The historical responsibility of some Parties in producing GHG emissions has not changed. These emissions are the major cause of climate change. There has been no change as regards the implementation of the Convention. Since 1992, there has been little progress in technology transfer and provision of financial resources to developing countries. There has been no change as regards emissions from Annex 1 countries where emissions are still increasing from 1990 to 2005. There has been a lack of implementation of the Convention and therefore there is a need to focus on this and to elaborate on this rather than in redefining who is developed and developing, said China.

India said that differentiation does not have any space in the BAP and is contrary to the Convention. It said that developing countries have a wide spectrum of diversity. The BAP talks about nationally appropriate mitigation actions for developing countries, recognising this spectrum of diversity and national circumstances. It said that it was puzzled by Japan's proposal for the sectoral approach with a common matrix for all. There is no basis for this in the BAP, said India. Further, as regards what is deviation from business as usual in GHG emissions for developing countries as advocated by some Parties, India said that it not simply the case of -15% to 30% from baseline. This assumption is premised on Annex 1 countries undertaking a 25-40% reduction in emissions from 1990 levels by developed countries and this translates to the Non-annex 1 countries undertaking a 23% reduction in emissions from 1990 levels, which is a 60% per capita reduction in emissions for developing countries, it said. Hence, there is a need to move away from this, it added. In response to Japan's proposal for a moving base year, it said that this cannot be so. The 1990 reference is based on levels of GHG emissions which were unsustainable, said India. If the 1990 levels of GHG emissions were unsustainable, then that should be the base year, it added.

Bahamas, Qatar, Oman and Papua New Guinea and Cuba were all opposed to differentiation among developing countries. Bahamas, Qatar and Oman also said that the per capita GDP approach was inappropriate.

France speaking for the EU said that developed countries must take the lead in mitigation efforts and has proposed ambitious targets. It said that nationally appropriate mitigation actions by developing countries in the context of sustainable development is also important as this is a global effort. It said that there was a need to seek ways for developing countries to deviate from business as usual emissions. It said that there is no need to reinvent the wheel but to build on the Convention. It said that it was ready to explore the South Korean and South African proposals for having a registry in the UNFCCC to register national mitigation actions of developing countries.

New Zealand said there was a need to discuss what the principle of “common but differentiated responsibilities and respective capabilities” is. It noted that “respective capabilities” refers to national circumstances that reflect differing capabilities among developing countries.

Michael Cutajar, the Chair of the contact group said that there is clear divergence on the issue of “differentiation” and “graduation”. He asked parties to look at the language of the BAP in terms of the mitigation issue and see what has to be done.