Purpose and issues
At the third COP of the Framework Convention on Climate Change, gathered in Kyoto in December 1997, an additional Protocol was adopted. The 39 countries listed in Annex I of the Convention (OECD countries and those “undergoing the process of transition to a market economy”) accepted legally-binding commitments to limit and reduce emissions for 2008 to 2012. This implies a reduction of at least 5% over 1990 levels for six greenhouse gases, including carbon dioxide and methane.
The Protocol specifies that Annex I economies must fulfil their commitments by regularly reviewing their energy, agriculture, and forestry policies. They must also provide new or bolstered financial aid to developing countries, facilitating and financing any necessary transfers of technology.
The innovative aspect of the Kyoto Protocol resides in its market-based mechanisms to fight global warming. In theory, these market strategies allow for emissions trading, involving both the Parties and the private sector. To attain its stated goals, three “flexible mechanisms” were created:
– Emissions Trading is an international market of greenhouse gas emission credits, which developed countries can buy or sell. These could be likened to “pollution allowances”. The underlying principle is that, from a global standpoint, the geographic origin of emissions is not important. Thus certain economies may produce more greenhouse gases than their “emission allowance” permits, as long as they offset this by purchasing emissions credits from other economies. In this system, greenhouse gas emissions are a marketable commodity.
– Joint Implementation (JI) is the second flexible mechanism. Annex I economies (developed countries and countries in transition) and the private sector invest in green projects (encouraging greenhouse gas emission reduction) in other Annex I countries, in exchange for emission credits. Through such endeavours, countries in transition benefit from financial aid and gain access to environmentally sound technologies.
– Finally, the Clean Development Mechanism (CDM) is similar to Joint Implementation, except that the emission reduction projects involved are between developed countries and developing countries (the “South”).
Eligibility requirements apply for green projects, as well as limitations to the use of “flexible mechanisms”. To prevent countries from avoiding greenhouse gas emission reduction in their own national territory, these three mechanisms can only be “in addition to” other domestic reduction measures (hence the term for this condition: “additionality”.)
It is worth noting that of the 850 CDM projects validated by the end of 2007, over 500 were in Asia (mainly India and China) and 300 in Central and South America. Africa, on the other hand, only benefited from around 20 projects. During the Accra Climate Change Talks (Ghana, 21 to 27 August 2008), the UNEP expressed its dissatisfaction over this imbalance and announced that for the first time in 18 months, projects had been undertaken in 6 African countries. Unless developed economies agree to more ambitious climate endeavours in 2009, Africa is likely to benefit from some 230 CDM projects by 2012.
Effects and application
The entry into force of the Protocol was conditional to its ratification by at least 55 countries, representing 55% of C02 emissions worldwide. After a period of hesitation, Russia (17.7% of greenhouse gas emissions) finally agreed to ratify the Protocol in November 2004, thus paving the way for its entry into force in 2005. The United States, responsible for 30 to 35% of total greenhouse gas emissions, did not ratify the Protocol.
The European Union ratified it by the Council Decision of 25 April 2002 and proceeded to divide responsibilities for its commitments among its member States. Any Party which does not meet its emissions reduction goals during the first period will have to make up the difference during the second period after 2012, and accept a penalty of 30% additional reduction.
The EU introduced the world’s first emissions trading system. Governments set emissions quotas for industry and the energy sector, thus limiting the quantities of carbon dioxide these sectors can emit. Businesses that do not use their full quotas may sell their surplus to businesses exceeding their own and that thus risk incurring the high fines in place for those that go over their emissions ceilings. However, since this mechanism is insufficient to meet the EU’s international commitments, the European Commission plans to extend the emissions trading system to the EU internal air transport industry in 2011, and to incoming and outgoing international flights in 2012.
The Conference of the Parties (COP) gathers all Parties to periodically examine the Protocol and take any necessary measures based on their conclusions.
During COP7 in Marrakech, 2001, a fairly elaborate regime was set up to guarantee effective implementation of the Protocol. It aims both to encourage compliance with the Protocol and to define sanctions for cases of non-compliance. A Compliance Committee was set up, consisting of two branches:
– The “facilitative branch” helps promote compliance among Parties. For example, the branch may provide “early warning” of potential non-compliance, give recommendations, and provide the Parties with technical and financial resources.
– The “enforcement branch” investigates compliance with quantitative goals and with other obligations relating to reporting, eligibility requirements, etc. It may especially initiate sanctions such as suspending participation in the flexible mechanisms, reducing an emissions budget, or requiring the elaboration of a plan of action detailing measures taken to attain new goals.