UNEP FI Side Event: United Nations Framework Convention on Climate Change (UNFCCC) Ninth Conference of the Parties (COP 9)

10 December 2003 | Milan, Italy With the uncertainty of Russian ratification looming over the UN Framework Convention on Climate Change (UNFCCC) Ninth Conference of the Parties (COP 9) in Milan, the UNEP FI Climate Change Working Group (CCWG) considered it appropriate to communicate its strong support for the Kyoto Protocol and its flexible mechanisms. An informative side event to the negotiations was held on 10 December 2003 during the high-level segment of the conference. The event provided an ideal platform for the group to convey its message of climate change and the inherent threats and opportunities it presents to the financial services industry, with a focus on the market mechanism of emissions trading. The chair of the CCWG, Thomas Loster, Munich Re, commenced the proceedings by highlighting the group’s achievements for 2003, which included: The Bavarian Minister of the Environment, Werner Schnappauf, gave the public sector perspective, which shared many views with financial institutions on the upcoming EU emissions trading scheme. He also affirmed that Bavaria welcomed proactive solutions to climate change, such as emissions trading. Sascha Lafeld, Dresdner Bank, a specialist on emissions trading, commented that the international market for greenhouse gas emission certificates was highly fragmented and that risks from emissions trading schemes resulted from cash flow, market perception and capital cost. Mark Way and Nigel Baker, Swiss Re, explained that new financial products and applications where needed to deal with measures to reduce greenhouse gas emissions and outlined a number of current developments. Andrew Dlugolecki, Andlug Consulting, stressed the need to promote adaptation through concrete actions. He also called on the financial sector to be bolder in its approach to climate policy and mitigation. Following the presentations, side event participants had an opportunity to partake in a panel discussion addressing issues such as harmonisation of emissions trading regulations and the degree to which companies prioritise climate change in their day-to-day business practices. The side event coincided with the launch of the latest publication from the CCWG, CEO Briefing on Emissions Trading (PDF: 200 KB). The paper explores the issue of emissions trading from a financial sector perspective – addressing recent political developments, implications for companies, risks and opportunities trading presents and the role of financial services providers in reducing risk and maximising opportunity. Once again, the Group was able to generate significant global media coverage surrounding their COP participation.