After the highly anticipated two week conference of the parties (COP) held in Copenhagen, the United Nations Climate Change Committee (UNCCC) agreed to "take note of" the Copenhagen Accord (the Accord) on 18 December 2009.

Whilst the Accord was described as an "essential beginning" by UN Secretary General Ban Ki-moon, many commentators have criticised its lack of legal force and detail.

In this e-bulletin, we set out a high-level summary of the Accord and analyse how it will affect the future of the existing project mechanisms established under the Kyoto Protocol.

A political declaration

The Accord is a political declaration, with two appendices to be completed by 31 January 2010. Once completed, the first appendix will be a list of economy-wide emission reduction targets to be achieved by developed countries (excluding the United States) by 2020. The second appendix will be a list of "nationally appropriate" mitigation actions for developing countries.

The Accord encourages developed countries to jointly commit USD$100 billion a year by 2020 to address the needs of developing countries in respect of climate change, particularly those in small island states and Africa, which the Accord references twice, thereby indicating that climate change issues in those regions are on the UN's agenda. A significant portion of this is intended to flow through the newly established Copenhagen Green Climate Fund. Where developing countries are seeking international financing for their efforts, measuring, reporting and verification (MRV) are to be performed every two years in accordance with international rules.

Further UN decision making is required

The Accord was not formally adopted under the UN rules but merely "noted" by UNFCCC parties at the Copenhagen COP. "Noting" a document can be legally distinguished from "approving" it; the latter requires a consensus to be reached at COP meetings. No such consensus was achieved at the summit in Copenhagen and the COP rules do not provide for a voting procedure in these circumstances.

By "taking note" of the Accord, UNFCCC parties formally acknowledge its existence without making a statement of their support or otherwise of its content. Importantly, the act of "taking note" of the Accord does not lend it the status of a COP decision and the Accord does not commit countries to agreeing a binding successor to the Kyoto Protocol. However by "taking note of" the Accord, the UNFCCC parties formally acknowledge its existence and arguably this gives the Accord a higher status in the hierarchy of UN documents than other documents submitted to COP proceedings that are merely "miscellaneous" or "informative".

The Accord is described in its opening sentences as being a "draft decision" that would become "immediately operational" upon agreement. However the Accord does not contain any legally binding commitments that could, at UN level, become operational without the need for further COP decisions.

Detail is lacking

The goal of keeping global temperature increases below 2°C is stated in the Accord; however, the language does not phrase this as a formal target. Developed countries have been given the flexibility to determine their own targets for reducing emissions. Developing countries have committed to undertake "mitigation actions" but the scope of this commitment is unclear.

The base year for targets has not been specified and therefore the Accord does not identify when carbon emissions should peak. In addition, although a deadline of 31 January 2010 has been set for countries to populate the appendices with their targets, there are no penalties for countries which do not meet this deadline and there is no legal mechanism to enforce the targets.

Furthermore, countries which have pledged targets have given varying levels of commitment (for instance, the United States has said its target is "under consideration", while the EU target has been "adopted by legislation"). A legally binding target for developed countries was removed from the Accord in order to allow them to determine their own targets. Developed countries have offered to reduce emissions by 14-18% below 1990 levels by 2020, but developing countries want developed countries to agree to a reduction of at least 40% below 1990 levels in the same period.

No agreement was reached on whether certain industries should be excluded from the emissions reduction targets. The Kyoto Protocol excluded greenhouse gases from aviation, shipping, deforestation and farming but no references to these industries has been made in the Accord. These industries are responsible for at least 35% of all global emissions.

Importantly, the Accord fails to set a 2010 deadline for concluding a treaty and does not even mention the need for a legally binding agreement in the future.

A provision in the Accord, although lacking in descriptive and implementing detail, establishes a Technology Mechanism to expedite the transfer of technology on mitigation and adaptation. It also recognises the need to focus efforts on reducing emissions from deforestation and forest degradation, and agrees to provide "positive incentives" such as financial resources from developed countries. Although this provision lacks substance, it provides the foundation for resources and know-how to move from developed countries to developing countries with a view to achieving a common objective.

An uncertain future for Kyoto project mechanisms

Whilst the conference of the parties in Copenhagen achieved, at working group level, various technical objectives to streamline the procedure currently applicable to CDM Projects under the Kyoto Protocol, the Accord does not address the issue of whether new projects will be allowed to qualify for the CDM or JI mechanisms, nor whether these mechanisms will continue after the expiry of the first commitment period of the Kyoto Protocol.

This uncertainty, when coupled with the failure of the Copenhagen summit to deliver a binding treaty to replace the Kyoto Protocol post 2012, has led some commentators to predict that investor interest in CDM-approved emission reduction projects is likely to slump without greater certainty over what will happen to the scheme.

All eyes on COP 16 in Mexico

The Accord, having no legal force and containing very little detail on its implementation, has been a disappointment for those who were seeking a legally binding and substantive move towards a global effort against climate change. However, many see this as a strong first step to mobilise the countries who have historically dragged their feet in their response to climate change. The next stage will be to see which countries will meet the 31 January 2010 deadline for committing to emissions reduction targets.

Although there are glaring omissions from the Accord, this is the first time that the United States has announced plans to commit to emissions reductions at all. Similarly, this is the first time that developing countries have agreed that their efforts can be assessed on the international stage; for instance they have allowed the monitoring, reporting and verification of their future emissions reductions to be judged according to international rules. Based on their negotiating positions in Copenhagen, it is expected that the so-called "BASIC" countries (Brazil, South Africa, India and China) will, in addition to the US and the EU, play a key role in agreeing a binding climate treaty.

Hopes for achieving an international, legally binding treaty are now focused on the conference of the parties which is due to be held in Mexico from 29 November to 10 December 2010.