The EU could propose a lifeline for the beleaguered Kyoto Protocol and secure the future of the Clean Development Mechanism (CDM) beyond 2012, government negotiators and observers have said.

EU officials will discuss whether to back an extension to the climate treaty in the next few weeks, on the condition that it expires in 2018 and is replaced with a deal that caps all major nations' emissions.

If all 27 countries agree, the EU could announce the plan at UN climate talks in South Africa in November, as part of an attempt to overcome the four-year impasse over Kyoto's future.

Such an agreement could bolster confidence in the CDM, for which new investment shrank to a fifth of its peak last year as UN negotiators tied the future of the offsetting system to new targets under the Kyoto pact that underpins it.

"It's not a formal EU position yet, although it is something that has gained ground in recent months," said one senior EU negotiator who requested anonymity. "We see there are a lot of parties that want to maintain the Kyoto Protocol and its rules-based system. Maybe it's possible to preserve the rules, but not ratify [a second period]," he added.

EU leaders will discuss the proposal ahead of an October meeting of environment ministers, at which the bloc is expected to agree a collective negotiating position for November's Durban talks.

Earlier this year, the EU rebuffed an offer by developing nations to unilaterally sign a second Kyoto period in return for extending the CDM, which provides the offsets used by EU nations to meet their emissions targets.

Since then, the EU – which opposes extending Kyoto without commitments from other major nations such as China, India and the US – has grappled with various alternatives.

Kyoto or bust
"To ratify [a second Kyoto period] will take countries years," said Mark Lynas, climate advisor to the president of the Maldives, which is vulnerable to rising sea levels, a by-product of global warming. 

"This is for some kind of transitional legal arrangement to keep the Kyoto mechanisms in operation, or in some kind of suspended animation until a new Kyoto period is agreed," he said.

It might also keep the pact's strict auditing system and carbon markets working without immediately taking on new internationally-binding pledges.

Green groups and developing countries want a second Kyoto phase to preserve the pact's system of independently-verified emission reductions rather than a voluntary pledge-and-review system that major emitters are lobbying for, but have yet to agree the rules.

Canada, Russia and Japan have all ruled out ratifying a second phase of targets, despite the Japanese government spending hundreds of millions of dollars buying Kyoto-backed carbon credits to meet caps.

"These EU parties [backing the plan] do not want to kill the Kyoto Protocol," said Hans Verolme, a Germany-based consultant who works for environmental groups including WWF.

"The sense I'm getting is that some sort of decision will be taken in Durban where countries move into negotiating a legally-binding outcome in the LCA track," he added, referring to the wider negotiating forum that includes the US, a non-Kyoto party.

(EurActiv, with Reuters, 23/08/2011)