In 1988, the United Nations Environment Programme and the World Meteorological Organisation jointly established the Intergovernmental Panel on Climate Change (IPCC) with a mandate to assess the best scientific efforts on climate change, its potential impacts, and possible response strategies. Since then, the IPCC has produced four comprehensive assessments - the latest of which was relased in November 2007 - and a number of special and technical reports.

As a political response to increased concerns about climate change, the United Nations Framework Convention on Climate Change (UNFCCC) was negotiated on the basis of initial IPCC findings. The UNFCCC was established and signed by almost all countries in 1992 at the Rio Summit.

The Global Environment Facility (GEF) was created as a financial mechanism for the UNFCCC, supporting developing countries to meet their obligations under the Convention. It finances incremental cost to make environmental friendly options of projects economic, and has become a major source also for renewable energy financing in developing countries. The fourth replenishment of the GEF Trust Fund, which was agreed in August 2006 for 2006 to 2010 amounts to US$ 3.1 billion, of which about US$365 million are earmarked for renewable energy. It concentrates on renewable energy for grid electricity and for rural energy services. Expected outcomes are favourable conditions for market development.

One of the major political tools of the Convention is the Kyoto Protocol, which was negotiated and signed in 1997. The Protocol establishes specific and binding greenhouse gas (GHG) reduction targets for all ratifying industrialised countries. The Protocol also sets a timetable for the achievement of these targets, i.e. 2008-2012, as well as a process to negotiate later commitments. Due to the strict rules for ratification by major GHG emitters, the Protocol only entered into force on 16 February, 2005. Although major GHG emitters from among the industrialised countries, such as the US and Australia, did not ratify the Protocol, it has been ratified by 163 states and regional economic integration organisations (as of April 2006). The Kyoto Protocol is the one of the rare examples of successfully introducing a binding multilateral regime.

The Kyoto Protocol creates three mechanisms: the Clean Development Mechanism (CDM), Joint Implementation (JI) and Emissions Trading (ET). These mechanisms have an elaborate set of rules and regulations, but in simple terms CDM and JI are project-based mechanisms by which projects in developing countries and countries with economies in transition (both country groups are exempted from binding GHG reduction commitments) can be undertaken to generate carbon credits (CERs). Industrialised countries can purchase these credits in order to meet their own targets. Emissions trading, on the other hand, facilitates trade in carbon emissions among countries that have reduction commitments. Renewable energy sources, including landfill gas, were responsible for the largest share of CERs to be generated annually from the current global portfolio of CDM projects.

This is not surprising, as energy activities are by far the largest source of GHG, contributing 78% of total GHG emissions from industrialised countries. This can be concluded from the data by the UNFCCC Secretariat which is based on national emission inventories from Annex 1 countries. For developing countries (called 'non-Annex I countries' under the Convention) estimates of GHG emissions, which are less than for developed countries but quickly increasing, indicate a similar dominance by the energy sector.

Within IPCC, emission scenarios are elaborated in the framework of the comprehensive assessments, which deliver a range of alternative global energy development paths and resulting emissions up to the year 2100. New scenarios were published in May 2007 by IPCC's Working Group III as part of the 4th Assessment Report (4AR): Climate Change 2007: Mitigation of Climate Change. These stabilisation scenarios also give an idea of the expected contribution of renewable energy under different assumptions (see Renewable Energy Prospects page).

Carbon funds set up by governments and the World Bank have served as pilot operations for trying various innovations in the mechanisms. In parallel with the formal Protocol mechanisms, a number of countries have initiated domestic carbon emissions trading schemes. In early 2005, for example, a regional emissions trading scheme (ETS) was started by the EU. This combination of mechanisms including the Carbon Funds has led to the gradual emergence of a global carbon market, which has the potential to leverage additional financial resources for clean energy, and particularly renewable energy projects.

Another important area of the UNFCCC with relevance to renewable energies is technology transfer. Renewable energy constitutes one set of the pivotal technologies, within the group of alternative energy sources. An expert group on Technology Transfer (EGTT) reporting to the Subsidiary Body for Scientific and Technological Advice (SBSTA) is preparing its recommendations to facilitate and advance technology transfer activities relevant for mitigation of climate change, to be presented to the Conference of Parties (COP).

At the occasion of the UNFCCC Conference of Parties (COP11), in Montreal 2005 REN21 presented a first version of the report on the Role of Renewable Energy in a Carbon-Constrained World, which was launched at UNEP's Dubai Environment Ministers Conference in 2006.

Ahead of the COP 13 Climate Conference in Bali in December 2007, the REN21 Secretariat analysed the relevance of the UNFCCC and the Kyoto Protocol for renewable energy.

At the Bali COP itself, a roadmap for the post-2012 negotiations was agreed that includes the following features: a) Finalisation of negotiations at COP 15 in December 2009, with two additional negotiation rounds each year, and b) Two linked negotiation tracks for UNFCCC parties and Kyoto Protocol parties, both run as "Ad Hoc Working Groups".

The Kyoto track is based on a target corridor of 25-40% emission reduction from 1990 to 2020. The UNFCCC track contains no numerical target values, but a reference to the part of the IPCC report discussing necessary reduction levels. It contains the four “building blocks” adaptation, mitigation, technology transfer, and financing. The critical text now acknowledges mitigation commitments by developing countries: "nationally appropriate mitigation actions by developing country parties in the context of sustainable development, supported by technology and enabled by finance and capacity building in a measurable, reportable and verifiable manner.

This is mirrored by "measurable, reportable and verifiable nationally appropriate mitigation commitments or actions, including quantified emission limitation and reduction objectives by all developed countries, taking into account differences in their national circumstances".


Recommended Reading:

Renewable Energy and the Climate Change Regime, REN21 Secretariat, 2007