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 Clintonand/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.