Kyoto Protocol

Evaluating Durban

This post orginally appeared in the Opinio Juris blog.

Was the Durban climate conference a success or failure?  As always, the answer depends on one’s frame of reference.

As compared to the expectations going in, the outcome was more than I think most people thought possible. In a pre-Durban paper entitled “W[h]ither the Kyoto Protocol,” I identified three scenarios: (1) business-as-usual, with modest progress in developing the Copenhagen/Cancun framework and no political breakthroughs; (2) agreement to a “political” (not legally-binding) second commitment period under the Kyoto Protocol; and (3) agreement to a Kyoto Protocol amendment establishing a second commitment period, combined with a mandate for a new negotiating process to develop a legally-binding agreement addressing the emissions of the other major economies.  Many thought that (1) was the default option, (2) represented the best-case scenario, and (3) was politically unrealistic.  But the Durban outcome is in fact closest to (3):

  • It wrapped up much of the remaining work to elaborate the Copenhagen/Cancun process, by adopting the governing instrument of the new Green Climate Fund and transparency rules for both developed and developing countries' pledges.
  • It agreed to extend the Kyoto Protocol by another 5-8 years.  Although the emissions targets for Kyoto’s second commitment period still need to be worked out, and the formal amendment won’t be adopted until next year, the basic political decision to extend the Protocol was made in Durban.
  • It agreed to launch a new negotiating process to develop a “protocol, another legal instrument, or agreed outcome with legal force,” addressing the post-2020 period  and “applicable to all Parties.”

Durban – How Big a Deal?

Only time will tell whether the Durban climate talks produced an historic breakthrough.  It’s possible.   What’s clear for now is that the Durban deal keeps the global climate effort intact and moving – however incrementally – in the right direction.

The deal is delicately poised between two eras – the fading age of Kyoto, and a new phase beyond Kyoto, with developed and developing countries presumably on a more equal footing.

Politically, there were four essential ingredients to the deal: Developing countries – and South Africa in particular – were adamant that Kyoto not die on African soil.  Europe was adamant that it would only do another round of Kyoto if Durban launched new talks toward a comprehensive binding agreement.  The United States (along with Japan, Australia, Canada and Russia) was adamant that any such agreement include major developing countries too.  And, for the first time, China, India and other emerging economies appeared to agree.

The result: Europe (and a handful other developed countries) agreed to a “second commitment period” under Kyoto, with their new targets to be put in legal form next year.  And parties launched the Durban Platform, aimed at producing a new deal by 2015 to take effect in 2020.

The Question of Binding

The immediate fate of the Kyoto Protocol may be the headline issue at the U.N. climate talks now underway in Durban, South Africa.  But the real linchpin to any deal is not Kyoto – it’s whether or not parties can agree to any path beyond it.

What that may boil down to is whether governments are prepared to say that their goal, ultimately, is binding climate commitments.  We believe they should.

Country Emissions Targets

International Emissions Targets

 

Entity

Kyoto Target 2008-2012

Pledged targets under the UNFCCC [1]

Domestically mandated targets

Australia

8% above 1990 levels

5% below 2000 levels by 2020

15%-25% below 2000 levels by 2020 under different conditions of a global agreement that stabilizes GHG levels

Clean Energy Future Legislation: 80% below 2000 levels by 2050

Default emissions cap for cap-and-trade system starting in 2015 consistent with target of reducing emissions 5% below 2000 levels by 2020

Canada

6% below 1990 levels

17% below 2005 levels by 2020

 

European Community

EU-15: 8% below 1990 levels

EU-27: 20% below 1990 levels by 2020

30% below 1990 levels by 2020 if comparable and adequate actions by other countries

EU-27: 20% below 1990 levels by 2020, translated to 14% below 2005 levels by 2020

21% reduction from 2005 levels for ETS sectors

10% reduction from 2005 levels for non-ETS sectors

Bulgaria

8% below 1988 levels

Part of EU

 

Czech Republic

8% below 1990 levels

Part of EU

 

Estonia

8% below 1990 levels

Part of EU

 

Hungary

6% below average1985-1987 levels

Part of EU

 

Latvia

8% below 1990 levels

Part of EU

 

Lithuania

8% below 1990 levels

Part of EU

 

Poland

6% below 1988 levels

Part of EU

 

Romania

8% below 1989 levels

Part of EU

 

Slovakia

8% below 1990 levels

Part of EU

 

Slovenia

8% below 1986 levels

Part of EU

 

Japan

6% below 1990 levels

25% below 1990 levels by 2020 on condition of fair, effective international framework with ambitious targets by all major economies

 

New Zealand

Remain at 1990 levels

10-20% below 1990 levels by 2020 if comprehensive global agreement

 

Russia

Remain at 1990 levels

15-25% below 1990 levels by 2020; range depends on accounting of forestry sector and actions by all major emitters

 

United States

 

In the range of 17% below 2005 levels by 2020, in conformity with anticipated legislation

 

Croatia

5% below 1990 levels

5% below 1990 levels by 2020, to be replaced upon EU accession (1 July 2013)

 

Iceland

10% above 1990 levels

Same as EU target

 

Liechtenstein

8% below 1990 levels

Same as EU target

 

Monaco

8% below 1990 levels

Same as EU target

 

Norway

1% above 1990 levels

 

 

30% below 1990 levels by 2020

40% below 1990 levels by 2020 as part of a global and comprehensive international agreement

Strengthening Kyoto target to 9% below 1990 levels

30% below 1990 levels by 2020

Targets in the Report No. 34 (2006-2007) to the Storting (Parliament)

Political pledge to achieve carbon neutrality by 2050

Switzerland

8% below 1990 levels

Same as EU target

 

Ukraine

Remain at 1990 levels

20% below 1990 levels by 2020 under certain conditions

 

United Kingdom

12.5% below 1990 levels

Same as EU target

Domestically legislated emissions target of 34% below 1990 levels by 2020 and 80% below 1990 levels by 2050

Belarus

 

5-10% below 1990 levels by 2020, conditional on access to carbon markets, technology and capacity assistance, as well as clarity on accounting rules for forestry and land-use

 

Kazakhstan

 

15% below 1992 levels by 2020

 

Brazil

 

36.1-38.9% below business-as-usual projected emissions level in 2020

Presidential Decree of 9 December 2010: 36.1-38.9% below business-as-usual projected emissions level in 2020 (3236 MtCO2e)

Chile

 

20% below business-as-usual projected emissions in 2020, projected from 2007 levels, requiring international support

 

China

 

40-45% reduction in CO2 emissions per unit of gross domestic product (GDP) from 2005 level by 2020

12th Five Year Plan: 17% reduction in CO2 emissions per unit of GDP from 2010 levels by 2015

Costa Rica

 

Carbon neutral by 2021

Carbon neutrality goal in 2008 Climate Change Strategy

India

 

20-25% reduction in emissions per unit of GDP (excluding agriculture sector) from 2005 level by 2020

 

Indonesia

 

26% below business-as-usual projected emissions in 2020

Presidential Decree No. 61 2011, National Action Plan for Reduction Greenhouse Gas Emissions

Israel

 

20% below business-as-usual projected emissions in 2020

41% below business-as-usual projected emissions in 2020 with international support

 

Mexico

 

30% below business-as-usual projected emissions in 2020, subject to provision of adequate support

General Climate Change Law, April 2012: 30% below business-as-usual projected emissions by 2020 and 50% below 2000 levels by 2050

Korea (Republic of)

 

30% below business-as-usual projected emissions in 2020 (4% below 2005 level)

Cabinet decision of 17 November 2009: 30% below business-as-usual projected emissions in 2020

Singapore

 

7-11% below business-as-usual projected emissions in 2020

16% below business-as-usual projected emissions in 2020, contingent on legally binding global agreement

2009 Sustainable Singapore Blueprint goals expected to lead to 7-11% reduction in business-as-usual projected emissions in 2020

 

South Africa

 

34% below business-as-usual projected emissions in 2020

42% below business-as-usual projected emissions in 2025, extent of implementation dependent on level of support

 

Marshall Islands

 

40% below 2009 levels by 2020 (CO2 only)

 

Maldives

 

Carbon neutrality by 2020

 

Antigua and Barbuda

 

25% below 1990 levels by 2020

 

 

European Community
 

Kyoto Target [2] 2008-2012

EU Climate and Energy Package Effort Sharing targets for 2013-2020 [3]

 

Austria

13% below 1990

 16% below 2005 level

 

Belgium

7.5% below 1990

 15% below 2005 level

 

Bulgaria

 

20% above 2005 level

 

Czech Republic

 

 9% above 2005 level

 

Cyprus

 

5% below 2005 level

 

Denmark

21% below 1990

 20% below 2005 level

 

Estonia

 

11% above 2005 level

 

Finland

1990 levels

 16% below 2005 level

 

France

1990 levels

 14% below 2005 level

 

Germany

21% below 1990

 14% below 2005 level

 

Greece

25% above 1990

 4% below 2005 level

 

Hungary

 

10% above 2005 level

 

Ireland

13% above 1990

 20% below 2005 level

 

Italy

6.5% below 1990

 13% below 2005 level

 

Latvia

 

17% above 2005 level

 

Lithuania

 

15% above 2005 level

 

Luxembourg

28% below 1990

20% below 2005 level

 

Malta

 

5% above 2005 level

 

Netherlands

6% below 1990

 16% below 2005 level

 

Poland

 

14% above 2005 level

 

Portugal

27% above 1990

 1% above 2005 level

 

Romania

 

19% above 2005 level

 

Slovenia

 

4% above 2005 level

 

Slovakia

 

13% above 2005 level

 

Spain

15% above 1990

 10% below 2005 level

 

Sweden

4% above 1990

 17% below 2005 level

 

United Kingdom

12.5% below 1990

 16% below 2005 level

 

 

References:

1. United Nations Framework Convention on Climate Change 2011, FCCC/AWGLCA/2011/INF.1 and FCCC/SB/2011/INF.1/Rev.1

2. The EU-15 nations have joined a "bubble" which allows the joint fulfillment of emissions commitments and preserves the collective emissions reduction goal of 8% below 1990 levels by 2008/2012. http://europa.eu.int/eur-lex/pri/en/oj/dat/2002/l_130/l_13020020515en00010020.pdf

3. http://ec.europa.eu/clima/policies/effort/index_en.htm. The EU’s collective 20% reduction target from 1990 levels translates to a 14% reduction from 2005 levels, split into sectors covered by the ETS (21% reduction) and those not covered by it (10% reduction). These targets apply to sectors not covered by the EU Emissions Trading System (ETS), such as buildings, transport, and other commercial activities. The EU ETS applies a sectoral cap and reduction target across the EU countries for emissions from power and heavy industry, and aviation from 2012. The ETS reduction target is 21% below 2005 levels by 2020. 

 

The Kyoto Mechanisms and Global Climate Change

The Kyoto Mechanisms and Global Climate Change: Coordination Issues and Domestic Policies

Prepared for the Pew Center on Global Climate Change
September 2000

By:
Erik Haites, Margaree Consultants Inc.
Malik Amin Aslam, ENVORK Research And Development Organisation

Press Release

Download Entire Report (pdf)

Executive Summary

The Kyoto Protocol sets greenhouse gas emissions limits for 2008-2012 for 38 developed coun-tries. Developing countries have no emissions limits. The Protocol also creates three "mechanisms" that enable countries to reduce the cost of meeting their emissions limits. The nations of the world are now negotiating the detailed rules for implementing the Protocol, including the three Kyoto Mechanisms.

A number of countries have made specific proposals to restrict the use of the Mechanisms to achieve environmental or equity objectives. Other countries are arguing for an unrestrictive approach to improve economic efficiency. In addition, the lack of integration among the three Mechanisms may inadvertently restrict or bias their use. Finally, the extent to which countries may avail themselves of the Mechanisms depends both on the rules for the Mechanisms and on the domestic policies adopted by the developed countries to meet their commitments.

This report evaluates proposed rules for implementing the Kyoto Mechanisms in terms of their implications for equity, environmental integrity, and economic efficiency, and discusses coordination of domestic policies with the Kyoto Mechanisms. The authors conclude that:

The Kyoto Mechanisms have the potential to dramatically reduce the costs of meeting the Kyoto commitments. The Kyoto Protocol allows nations to fulfill part of their emissions reduction obligations by purchasing emissions reductions from other nations. Because greenhouse gases (GHG) lead to global effects, it does not matter, from an environmental perspective, where GHG reductions occur. However, because countries and businesses face widely differing control costs, it matters greatly from an economic perspective where GHG reductions occur. Hundreds of analyses using a wide array of economic models agree that the costs of controlling GHG emissions are significantly lower if emissions trading is permitted than if each nation has to meet its emission reduction responsibilities domestically. The broader the trade possibilities, the lower the costs of control.

The rules should allow substitution among the different Mechanisms. Some countries have proposed limiting substitution (fungibility) among the three Mechanisms. Others argue that the Protocol does not allow full fungibility. To limit such substitution, the rules governing use of the Mechanisms would have to be very restrictive. Even then countries could develop means to circumvent the restrictions. It would be better to simply allow substitution among the Mechanisms.

The rules for International Emissions Trading should allow "legal entities" (emitters, emissions brokers, etc.) to participate. Legal entities should be allowed to participate in emissions trading, just as they are allowed to participate in Joint Implementation, the Clean Development Mechanism, and international trading of other goods and services. If governments rather than legal entities trade, the potential efficiency gains of trading cannot be realized because governments do not know the compliance costs faced by the emitters. If the international rules don't allow legal entities to participate, individual governments could circumvent those rules, if they wish, by establishing internationally tradable "obligations to transfer." Rather than encourage the development of complex legal devices, countries should simply agree to allow legal entities to participate in emissions trading.

Lack of harmonization among the three Mechanisms may inadvertently restrict their use. There will be differences in design among the Mechanisms because their purposes vary. For example, only one of the three Mechanisms is designed to promote sustainable development in developing countries. However, an important objective of each of the Mechanisms is to allow legal entities and nations to use the most cost-effective means available to comply with their domestic and international obligations. Differences in rules among Mechanisms that are unrelated to differences in their purposes reduce economic efficiency and should be minimized to the extent possible.

Significant penalties for non-compliance and effective enforcement of those penalties are crucial to the environmental integrity of emissions trading. If the penalties for non-compliance with national emissions limitation commitments are relatively weak, emissions trading enables a country to benefit financially through non-compliance. Such behavior reduces the value of the allowances held by governments and legal entities. Liability proposals seek to limit the extent of such non-compliance by limiting sales to allowances expected to be surplus to the seller's compliance needs. Liability proposals differ in their environmental effectiveness, their economic efficiency, and their impact on the timing of transactions. Negotiators should adopt rules that are maximally effective in encouraging compliance with minimal increase in cost or environmental risk.

The Mechanisms are most amenable to use by countries that adopt domestic cap and trade systems. Countries will need to implement domestic policies to control emissions by different sources if they are to meet their emissions limitation obligations. The cost of compliance with domestic policies can be minimized by giving sources access to the Kyoto Mechanisms to the extent allowed by the international rules. Use of the Mechanisms is easiest to structure for participants in a domestic cap and trade system. However, the Mechanisms could be used, albeit with some difficulty, by countries that adopt emissions taxes or that specify the means of compliance through some types of regulations or negotiated agreements.

Erik Haites
Malik Amin Aslam
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