Kyoto Protocol

Background

The major feature of the Protocol is that it sets binding targets for 37 industrialized countries and the European Community (the Annex I Parties to the Protocol) to reducing six major greenhouse gas (GHG) emissions - carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs). The Parties to the Protocol have agreed to lower overall emissions by 5.2% calculated as an average over the five-year period of 2008-12.  The Protocol places a heavier burden on developed nations, who are principally responsible for the current high levels of emissions in the atmosphere, under the principle of “common but differentiated responsibilities.”  National targets for developed countries range from 8% reductions for the European Union  (for the 15 countries that were EU members in 1997) to 7% for the US, 6% for Japan, 0% for Russia, and permitted increases of 8% for Australia and 10% for Iceland compared to 1990 levels. ³  Developing countries, including India and China, do not have to commit to specific targets. They do, however, have to report their emissions levels and develop national climate change mitigation pro grams. ⁴

Under the Kyoto Protocol, developed countries must meet their targets primarily through national measures. The Parties to the Protocol are also allowed to use emissions trading to meet their obligations. The emission trading is a cap-and-trade system, which  allows Parties that can easily meet their targets to sell credits to those that cannot.  Mechanisms include Joint Implementation (JI) and the Clean Development Mechanism (CDM).⁵ 

The Conference of the Parties (COP) of the UNFCCC also serves as the meeting of the Parties (MOP) for the Protocol. This structure has been established to facilitate the management of the intergovernmental process. Parties to the UNFCCC that are not Parties to the Kyoto Protocol are able to participate in Protocol-related meetings as observers.⁶ The detailed rules for the implementation of the Protocol have been adopted at COP 7 in Marrakesh in 2001, and are called the “Marrakesh Accords." ⁷ The latest COP, COP-14, was held in Poznań, Poland on 1–12 December 2008. COP15 will be held in Copenhagen, Denmark, and will last two weeks, from December 7 to the 18, 2009. The overall goal for the COP15 will be to establish an ambitious global climate agreement for the period from 2012 when the first commitment period under the Kyoto Protocol expires.

Kyoto Mechanisms

There are three market-based mechanisms under the Kyoto Protocol in order to assist countries who ratified the Protocol to meet their targets of reducing greenhouse gas emissions.  Those mechanisms are Emissions Trading, the Clean Development Mechanism (CDM) and Joint Implementation (JI).

• Emissions Trading: In Article 17 of the Kyoto Protocol, an emission trading system was set to allow countries who are easy to meet their greenhouse reduction targets and have spare emission units to sell the excess capacity to countries that are over their target. The decision 18/CP.7 and decision 19/CP.7 provide specific guidance and rules for this article. ⁸ 
• Joint Implementation (JI):  JI is a project-based activity in which one country can receive emission reduction credits if it funds a project in another country where the emissions are actually reduced.  It offers a flexible and cost-efficient means to fulfill parties’ obligation to Kyoto agreement, while the host party can benefit from foreign investment and technology transfer.  ⁹ 
• Clean Development Mechanism(CDM): CDM is designed to allow a party with an emission-reduction or emission-limitation commitment under the Kyoto Protocol to implement an emission-reduction project in developing countries. “Such projects can earn saleable certified emission reduction (CER) credits, each equivalent to one ton of CO2, which can be counted towards meeting Kyoto targets.” ¹⁰

Agreement Reactions

The Kyoto Protocol has provoked a mix of reactions around the world. Generally, the governments of industrialized countries welcomed the agreement.  Climate scientists have argued that the targets set in the Kyoto Protocol are merely scratching the surface of the problem, and that the agreed reduction of emissions with 5.2% compared to 1990 levels does not go far enough.¹¹ Developing countries were concerned with the possible threat to economic growth and have also argued that developed countries should take more responsibility as they caused the problem.¹²

European Union

The European Union (EU) ratified the Kyoto Protocol on 31 May, 2002.  The EU member states ratified the Protocol simultaneously. After the withdrawal of the U.S. from the Kyoto Protocol in 2001, the EU has become the main champion of the agreement and a major power to push the negotiation process.  ²⁰ Under the Kyoto Protocol the EU has agreed to reduce GHG emission by 8% compared to 1990 levels. The EU's and Member States (the 15 states that were EU members in 1997)' greenhouse gas reduction targets have been agreed in June 1998 under the so-called "Burden Sharing Agreement": Austria -13%, Belgium -7½%, Denmark -21%, Finland 0%, France 0%, Germany -21%, Greece +25%, Ireland +13%, Italy -6½%, Luxembourg -28%, Netherlands -6%, Portugal +27%, Spain +15%, Sweden +4%, United Kingdom -12½%. ²¹

As a means to reach the emission reduction commitments under the Kyoto Protocol, the EU has created the European Union Greenhouse Gas Emission Trading Scheme (EU ETS). It has commenced operation in January 2005 as the largest multi-country, multi-sector Greenhouse Gas emission trading scheme world-wide. ²² By putting a price on each ton of carbon emitted, the EU ETS is driving investment in low-carbon technologies, and has forced the cost of emissions onto the agenda of company boards. The EU ETS is based on the following principles:

• It is a cap-and-trade system
• Participation is mandatory for businesses in the sectors covered
• It contains a strong compliance framework
• The market is EU-wide but taps into emission reduction opportunities in the rest of the world by accepting credits from emission-saving projects carried out under the Kyoto Protocol’s Clean Development Mechanism (CDM) and Joint Implementation instrument (JI). The EU ETS is also open to establishing formal links with compatible mandatory cap-and-trade systems in third countries that have ratified the Kyoto Protocol.²³

The EU overall is broadly on track to meet its Kyoto target, although performance varies widely. The UK and Germany are on track, others are lagging and will need to be buyers in the Kyoto carbon credit markets to make up their shortfalls.²⁴

Most lately, the European Commission put forward a new climate and energy package on 23 January 2008, which set an ambitious goal of GHG emission reductions and adoption of renewable energy. The EU is committed to reducing the overall emissions by at least 20% of 1990 level by 2020 and this standard is ready to scale up to 30% if other developed countries commit to comparable cuts during international negotiations to come up with an follow up agreement for the Kyoto Protocol after 2012. It also decided to increase use of renewables (wind, solar, biomass, etc) to 20% of total energy production. In addition, the EU is also to cut energy consumption by 20% of projected 2020 levels by improving energy efficiency.²⁵ The EU uses the Emission Trading System (EU ETS) as the major tool to restrain emissions from sectors covered by the system to 21% below 2005 levels by 2020. For those who are not covered by the ETS, the target is to cut emissions by 10% from 2005 levels by 2020 and binding national targets will be adopted. The EU also seeks to promote the development and safe use of carbon capture and storage (CCS) technology according to this new package.²⁶

China

China accounts for 12 percent of global carbon dioxide emissions and ranks second among nations in GHG emissions according to a report from the Pew Center on Global Climate Change.²⁷  Some climate observation groups, for example, the Netherlands Environmental Assessment Agency, already reported China’s 2006 CO2 emissions surpassed those of the US by 8% using energy data and cement production data from British Petroleum (BP).²⁸

Having received criticism from the international community, the Chinese government has show a cooperative attitude and willingness to join global efforts in GHG mitigation in recent years. China ratified the Kyoto Protocol to the UNFCCC in September, 2002.

Some argue that China’s ratification to Kyoto Protocol enabled Beijing to position itself as a defender of the environment and provides Beijing with leverage to condemn the U.S. as irresponsible for global climate change and for withdrawing from the Kyoto treaty.²⁹ However, Beijing’s ratification to the agreement has not created urgency and pressure on its central and regional governments to reduce GHG emissions. As China is a developing nation, it does not have binding emission reduction targets under the Protocol.

The Chinese government sets the goal of GHG emissions as national priority. During the 11th Five Year Plan, the Ministry of Finance and central government budget respectively allocates 27 billion RMB and 41.8 billion RMB to support businesses in improving their efficiency and reduce GHG emissions. ³⁰ The State Council also issued “The Notification of Implication Plans on Monitoring and Evaluation of Energy Efficiency and Emissions Reductions” (Guowuyuan Pizhuan Jieneng Jianpai Tongji Jiance ji Kaohe Shishi Fangan he Banfa de Tongzhi), which will evaluate regional government jobs with respect to energy efficiency and emission reduction from both energy supply and consumption sides. The Notification specifies that political leaders in regional governments that cannot meet standards set by the State Council are unable to receive annual rewards and honors and also the central government will suspend approval for energy intensive projects in those regions.

The State Council Information Office of People’s Republic of China published China's White Paper on Energy: China’s Energy Conditions and Policies on December 26, 2007. It consists of eight chapters addressing the current status of China’s energy development, China’s strategy and goals of energy development, promotion of energy conservation programs, improvement of energy supply capacity, acceleration of energy technology development, coordination of energy and environment development, energy system reform and international cooperation..

Besides of involving in the negotiation of Kyoto Protocol, China has also joined the Asian Pacific Partnership on Clean Development and Climate.

Footnotes

¹: UNFCCC Article 2, Kyoto Protocol" UNFCCC website.

²: UNFCCC Article 2, Kyoto Protocol" UNFCCC website.

³: Kyoto Protocol, UNFCCC website.

⁴BBC News, Q&A: The Kyoto Protocol, BBC website.

¹¹: BBC News, Q&A: The Kyoto Protocol, BBC website.

⁵: The Mechanisms under the Kyoto Protocol: Emissions Trading, the Clean Development Mechanism and Joint Implementation, UNFCCC website.

⁶: Baker & McKenzie, CDM rulebook: Clean Development Rules, Practices and Procedures.

⁷: UNFCCC, The Marrakesh Accord and The Marrakesh Declaration.

⁸The Mechanisms under the Kyoto Protocol: Emissions Trading, the Clean Development Mechanism and Joint Implementation, UNFCCC website.

⁹The Mechanisms under the Kyoto Protocol: Emissions Trading, the Clean Development Mechanism and Joint Implementation, UNFCCC website.

¹⁰: The Mechanisms under the Kyoto Protocol: Emissions Trading, the Clean Development Mechanism and Joint Implementation, UNFCCC website.

¹²: World Mixed Reaction to Kyoto Agreement, BBC News.

¹³: Kyoto Protocol and the United States,The Encyclopedia of Earth.

¹⁴: Kyoto Protocol and the United States, The Encyclopedia of Earth.  

¹⁵: US Refuses to Sign Pact to Stem Global Warming, About.com: US Liberal Politics.

¹⁶: US Refuses to Sign Pact to Stem Global Warming, About.com: US Liberal Politics.

¹⁷: Fact sheet, United States Policies on the Kyoto Protocol.

¹⁸: Obama brings US in from the cold, The Independent, Climate Change.

¹⁹Obama on the Issues， A look at Barack Obama's environmental platform and record .

²⁰: Schreurs, Miranda. and Tiberghien, Yves, "The European Union and the Kyoto Protocol: A Leader Struggling to Make Good on its Commitments" Paper presented at the annual meeting of the International Studies Association, Town & Country Resort and Convention Center, San Diego, California, USA, Mar 22, 2006. Retrieved 2008-12-12.

²¹: EU RAPID Press Releases, The Kyoto Protocol and climate change - background Information , ec.europa.eu.

²²:EU, Emission Trading Scheme (EU ETS), ec.europa.eu.

²³: EU, EU Action Against Climate Change, The EU Emissions Trading System, 2008 edition.

²⁴: Progress report: Kyoto and beyond, www.carbonpositive.net.

²⁵: EU, The Climate action and renewable energy package, Europe's climate change opportunity, ec.europa.eu.

²⁶: EU, The Climate action and renewable energy package, Europe's climate change opportunity, ec.europa.eu.

²⁷: China now no. 1 in CO2 emissions; USA in second position, Netherlands Environmental Assessment Agency.

²⁸: Climate Change Mitigation in Developing Countries - Brazil, China, India, Mexico, South Africa, and Turkey, Pew Center on Global Climate Change, October, 2002.

²⁹:Antoaneta Bezlova, ENVIRONMENT: China Sends Smoke Signals on Kyoto Protocol,ENVIRONMENT: China Sends Smoke Signals on Kyoto Protocol, Inter Press Service New Agency(IPS).

³⁰: Jia Haibin, “Zhiyue Yangqi Jieneng Jianpai Jizhi Wenti Rengwei Jiejue”, (Institutional Problems Hinder State Owned Companies to Adopt Energy Efficiency Programs), China Securities News, Jun. 2008.

Resources

• KyotoUSA: "KyotoUSA is an all volunteer, grassroots organization that encourages U.S. cities and their residents to reduce the global warming greenhouse gas emissions for which they are responsible."