ESTE TEXTO NÃO REFLETE UMA POSIÇÃO DA SECRETARIA DE ASSUNTOS ESTRATÉGICOS

Mechanism of Early & further action , " currency climate " and " Bretton Woods low carbon " Mr Alfredo Sirkis *

The submission by the Brazilian government to the UNFCCC on “early action” concerning GHG emissions reduction achievements ahead of 2020 targets is a promising initiative. Our idea here is to expand its scope as to become a catalyst for a new international low carbon financial mechanism. We also intend to develop the concept of “additional action”. It is our proposal to recognize, certify and price both “early” and “additional” action. The former relates to action in the 2010-2020 period reducing GHG emissions beyond goals of the second period of the Kyoto Protocol, for developed countries and National Appropriate Mitigation Actions (NAMA) for developing countries. The latter refers to GHG reductions beyond targets set in 2015 for the post 2020 period. Instead of the original submission’s use for certified “early action” to help achieve post-2020 targets, we suggest a more ambitious mechanism related to the establishment of a “climate currency” (CLC). Early and additional action will be rewarded in CLC initially for acquiring services, products and technology promoting further GHG reductions thus establishing a virtuous cycle. The rewards in CLC will include a small initial bonus for governments who achieve their Annex I or NAMAs goals. Certified early and/or additional action will be subsequently priced on a steady upward curve. The purchasing power and convertibility of the CLC to new sets of services, products and technology as well as established currencies will expand following its pace of recognition and adoption by the international financial system. It will likely develop in time as its induction of subsequent emission reductions is verified and new financial products related to it are developed by the international financial system. The issuing and regulating entity of the CLC will be the Early and Additional Action Mechanism (EAAM) and the Early and Additional Action Fund (EAAF), legitimized under the UNFCCC process. The EAAF will be established by governments acting as guarantors of last resort thereafter attracting resources from the multilateral institutions and the private international financial system. This initial "guarantee deposit" by governments will entitle the Fund to an AAA rating capable of attracting substantial capital flows from the international financial system. It will be negotiated under the UNFCCC taking into account national cumulative, per capita and future emissions. The proposed mechanism will also generate highly beneficial economic and social side effects. It will be complementary to the Clean Development Mechanism (CDM) and will eventually become a more effective and fair instrument for mitigation. In the CDM reduction is certified and purchased to compensate for other parties’ failures to comply with GHG reduction targets. In the EAAM reduction will be rewarded so as to generate subsequent reduction and beneficial socio-economic effects on employment, income, promotion of clean energy and other low carbon technologies.

ESTE TEXTO NÃO REFLETE UMA POSIÇÃO DA SECRETARIA DE ASSUNTOS ESTRATÉGICOS

The EAAM capability of attracting resources from the international financial system will depend on GHG emission reduction being recognized as a unit of value. This recognition will likely involve a sort of “Low Carbon Bretton Woods", mobilizing governmental –most likely in the G 20 framework-- as well as multilateral and private sector parties in a framework quite distinct from the original 1944 conference here referred to metaphorically. It will be part of a new international low carbon financial order. An offshoot of the original scope of the EAAM will be the ability to relate to future regional/local government and private certified GHG reduction targets. This will require a much greater improvement of regulation in this regard in the global climate governance. The full potential of this mechanism will be achieved with the access to CLC by sub national governments and private sector as well. Thus it is our proposal that Brazil should take the initiative of expanding the scope of it’s original early action submission at the preparatory meetings for the COP 20 and COP 21 conferences in Lima and Paris, in the context of workstream 2 and as well as in other instances such as the G20 , the WTO, the IMF and the World Bank. * Chairman of the Joint Committee on Climate Change ( CMMC ) of Congress and vice chairman of the Foreign Affairs and National Defense ( CREDN ) the House of Representatives .