Subject: SSI Info Update: A Detailed Look at the Kyoto Protocol


********************EXECUTIVE SUMMARY********************

The Kyoto Protocol was the successful culmination of the Third
Conference of the Parties to the UN Climate Convention.
Finalizing the Protocol required a resolution of the tension
between how much to reduce industrialized country greenhouse gas
emissions and how much flexibility would be allowed to meet the
target. Attending were delegates from over 160 nations and
observers from non-governmental organizations (NGOs) representing
the environment, business, and labor. UCS sent four staff members
to Japan, including the SSI Staff Scientist. The following report
details the proceedings and provides UCS's perspective on the
events that transpired during the intense negotiations.

The Kyoto Protocol is a small but important down payment to limit
global warming. The Clinton Administration exhibited considerable
resolve and flexibility to achieve this agreement. As you have
undoubtedly noticed in the subsequent media coverage, the
Protocol is now under intense attack at home, and the criticism
is only likely to intensify. If you are so inclined, please send
a brief message to President Clinton 
and/or Vice President Gore  in
support of the Kyoto Protocol and their hard work to reach an
agreement
*****************************************************************

          First Step in Kyoto: A Report on the Third Conference
          of the Parties to the UN Climate Convention
          1-10 December, 1997
          Kyoto, Japan

A briefing update by Darren Goetze, Staff Scientist
Union of Concerned Scientists

***Introduction
The Kyoto Protocol was the successful culmination of the Third
Conference of the Parties to the UN Climate Convention. Though
the conference got off to a low-key, amicable start, the
impending deadline began to produce considerable tensions and
some short tempers among the delegates. In the end, the final
document was produced by a marathon non-stop bargaining session
that ultimately extended the last day of the meeting until well
into the afternoon of December 11.

Finalizing the deal centered on resolving a tension between how
much to reduce industrialized country greenhouse gas emissions
and how much flexibility could be allowed to meet the target, in
the form of emissions trading, joint implementation with
developing countries, etc. The United States wanted maximum
flexibility and the Europeans wanted the deepest reductions
possible.  The end game negotiations between the US, the EU and
Japan were incredibly strained; the EU demanded a price (in the
form of a higher target) for every structural provision entreated
by the US.

The full text of the Kyoto Protocol is available from the UNFCCC
Secretariat's website at . (The
document is in pdf format, so Adobe Acrobat Reader is needed to
open it; if you need a Reader, it's available free at
).

***The Targets and Timetables
The final agreement requires the group of industrialized
countries known as Annex I nations to reduce greenhouse gas
emissions on average by 5.2 percent below 1990 levels during the
first "commitment period" between 2008 and 2012. This does not
represent a uniform target for all countries because Australia
was successful in forcing its proposal for differentiated targets
into the Protocol. Thus, Annex I nations will have individual
targets ranging from 92 and 110 percent of 1990 levels. Under the
formula, the US must reduce its emissions by 7 percent, Canada
and Japan by 6 percent, and the European Union by 8 percent.
Australia received a target of 108 percent of 1990 levels, which
was a straight political deal.

More problematically, Russia and Ukraine both received only a
stabilization target at 1990 levels. Due to the impacts of
transitioning to a market economy, these countries' emissions are
expected to be below 1990 levels at the start of the commitment
periods, and they will be able to trade the difference to other
Annex I nations. This is a potentially large problem and is
further discussed below in the "Loopholes?" section.

In keeping with the terms of the 1995 Berlin Mandate of the
negotiations, the treaty does not require any binding emissions
limitation commitments for developing countries. The original
proposal that developing countries should be assigned emissions
reductions commitments anyway came from the US fossil fuel lobby
as a way of heading off the possibility of a Protocol. It was not
a helpful suggestion to begin with, and it is appropriate that
the Protocol avoided its inclusion. Unfortunately, the more
useful US proposal for a Protocol provision that would have
allowed developing countries to voluntarily "opt in" to binding
commitments was blocked by China, India, and other developing
countries who "ran out the clock" with attacks on the US
emissions trading proposals. Though a number of developing
countries were prepared to voluntarily assume binding
commitments, they will now have to wait for subsequent rounds of
negotiations to produce the developing country commitments
necessary to address global emissions.

***Flexibility Measures
The US had always insisted that market-oriented flexibility
measures were a necessary component of any agreement on GHG
reductions. In Kyoto, despite EU resistance, the US got what it
wanted both on emissions trading and joint implementation.

To neutralize EU opposition to emissions trading, US announced on
December 8 that it was setting up a "trading umbrella" with
Japan, Canada, Australia, New Zealand, and Russia. This was a
strategy aimed at presenting the EU with two options: either
allow trading, the US was saying, or we'll set up our own
"bubble" with lots of cheap emissions credits available from
Russia. The strategy worked. Article 6 of the Protocol allows
industrialized countries to trade emissions reductions derived
from projects that offset human-sourced emissions or enhance
sinks. However, due to the time crunch, the rules and procedures
essential to implement actual trading were deferred to the 4th
Conference of the Parties (COP-4), which is to be held 2-13
November 1998 in Buenos Aires, Argentina.

As for joint implementation, the Protocol's 12th Article
establishes a new "clean development mechanism" (CDM) that allows
public or private entities in developed countries to receive
emissions credits for "project activities" that lead to
"certified emissions reductions" in developing countries -- in
essence, joint implementation by another name. In a nice fillip
to early action, CDM projects instituted from 2000 onwards will
be allowed to be counted in first budget period. As with trading,
however, critical decisions on many of the implementation details
were postponed to COP-4. In addition, there will likely be a
fight over where the CDM administrative apparatus is housed; both
the World Bank and the Global Environment Facility want it, but
developing countries (and some green NGOs) are leary about this,
given these institutions' environmental track records. It may end
up being passed to the Climate Convention Secretariat.

***Loopholes?
The results of negotiating sessions prior to Kyoto left many with
serious concerns that the any final deal would be riddled with
gaping loopholes that would allow industrialized countries to
actually increase greenhouse gas emissions. Largest among the
loopholes was the possible trading of "hot air" emissions by
Russia and other nations in transition to a market economy, what
categories of sinks (i.e. carbon-absorbing forests) could be
included in the calculation of emissions budgets, and whether the
treaty would include the so-called F-gases (HFCs, PFCs and SF6)
or just the three primary gases (carbon dioxide, nitrous oxide,
and methane).

*On "hot air" trading: Currently, Russian and Ukrainian emissions
of greenhouse gases are, according to figures released by the
Energy Information Agency (EIA, a DOE agency), about 30 percent
below 1990 levels. These reductions are the result of economic
restructuring, not any climate-relevant policies. Though their
emissions are forecasted by EIA to grow in the future to about
85-90% of 1990 levels by 2010, the Protocol will allow them to
trade the surplus difference to other Annex I countries starting
in 2008. Essentially, they will be getting credits without having
taken any actions to begin de-carbonizing their economies.

Quantitative estimates suggest that the total tradable "hot air"
emissions from the three primary gases should be in the range of
85-120 million metric carbon equivalent (MtC) tons, based on data
deposited with the Climate Convention Secretariat and EIA
projections. The bulk of tradable hot air will certainly come
from Russia. The big unknown is in this estimate is Ukraine; but
based on the relative size of its economy and its relative state
of collapse, an educated guess is that they might bring another
15-20 million MtC to market. Given that the US alone already
needs reductions of over 200 million MtC to reach its 2008-2012
target of 1483 mMtC, the hot air tons may get pricey but they
won't be sufficiently abundant for Annex I countries to avoid
domestic actions.

*On Sinks: On the topic of global warming, "sinks" refer to
storehouses of carbon dioxide on earth, most notably forests. The
forests absorb the carbon dioxide from the air as they grow and
help slow the build-up of this gas in the atmosphere. While
forestry science is helpful in measuring how much different types
of sinks help protect us from the build-up of greenhouse gases,
there is as of yet no consensus on the best method for assessing
sinks. As scientific integrity is crucial to the political
acceptance of sinks measurements, UCS advocates that the
Intergovernmental Panel on Climate Change be tasked with producing
a common methodology for use by all countries wanting to take
credit for planting trees and other sinks.

The Kyoto Protocol does allow counting of some sinks towards a
country's emission reduction target but confines their use to
"direct human-induced land-use change and forestry activities,
limited to afforestation, reforestation, and deforestation since
1990" and measured as verifiable changes in stocks. The rules and
methodologies for counting sinks credits, however, will not be
settled until the first meeting of the ratified signatories to
the Protocol -- which is unlikely to occur for several years.

*On F-gases: All six greenhouse gases are included in the treaty
-- the primary gases based on a 1990 baseline, and the F-gases on
a 1995 baseline. The US negotiators deserve credit for their
determined insistence that the treaty cover all 6 gases, instead
of just carbon dioxide, methane, and nitrous oxides as had been
proposed by several other countries.

***Review of Adequacy
The Protocol does include a provision requiring periodic review
of the protocol, with the first review to take place at the
second meeting of the Parties to the Protocol (i.e. the second
meeting after entry into force; see below).  The environmental
community tried, but failed, to include language setting reviews
at least every five years after that. Nonetheless, the role of
science continues to be assured as the review must consider "the
best scientific information and assessments on climate change and
its impacts."

The Protocol also has a non-compliance clause which calls on the
first meeting of the Parties to "approve appropriate and
effective procedures and mechanisms to determine and to address
cases of non-compliance with the provisions of this protocol."
Any procedures "entailing binding consequences" will require
amending the protocol -- and thus separate ratification by the
Senate. This is far less than the defined, strong non-compliance
punishment clause that was hoped for.

***Signature, Ratification, and Entry into Force
The Protocol will be open for signature between March 1998 and
March 1999.  It is unlikely the United States would sign the
treaty until after the COP-4 meeting, when it's clear that
trading is allowed to go forward and there is at least the
beginning of a discussion over "meaningful participation" by
developing countries. There is no deadline for ratification, and
it is clear that the Administration is in no hurry for the
ratification battle. Despite the urging of Republicans for an
early submission, the Administration has already gone on record
saying the Senate is unlikely to see the document before 1999.

The treaty will enter into force for those countries who have
ratified it when the conditions of a "double trigger" are met: 55
countries must sign and ratify the treaty and the countries that
ratify must represent 55 percent of Annex 1 emissions.  This
makes it very difficult, though not entirely impossible, for the
treaty to enter into force without ratification by the US (whose
emissions account for roughly 40 percent of Annex I).

***Conclusion
Though the document is by no means perfect, the Kyoto Protocol is
an important beginning to the decades-long international effort to
prevent serious global warming. Even developing countries, despite
their insistence that industrial countries make the first
reductions, have agreed that all countries will ultimately need to
accept emission limits in order to protect the atmosphere's energy
balance.

As with any international treaty, the Protocol requires
ratification by the US Senate. The opponents of a global warming
treaty have been very effective in building resistence in the
Senate. Powerful political forces led by lobbyists for the coal
and oil industries will push the Senate to withhold its approval.
The Clinton Administration does not have to submit the treaty to
the Senate any time soon and plans to delay seeking ratification
until negotiators make more progress on how developing countries
will participate in the protocol. Public support for the Kyoto
Protocol is essential to lay the groundwork for eventual Senate
consideration and defines some future work in the area of climate
protection.