Kyoto Protocol

effect on February 16, 2005. As of June 2007, 172 countries have ratified the protocol and the treaty expires in 2012. But some of the major countries such as the United States and Australia have not ratified the Kyoto Protocol. Big, developing countries such as India and China are part of the protocol, but are not required to cut back any emissions under this treaty (based on the rationale that developing countries should be given a chance for development). This has made the treaty controversial and, so far, the targets have not been fixed. This is based on the principle of common, but differentiated responsibilities, as most of the emissions to be reduced (or blamed for today's climate change) were produced historically (during the industrialization era when most the developing countries did not produce emissions) or originate in developed countries. Per capita emissions in developing nations are still relatively low compared to the developed nations, and the share of global emissions originating in developing countries will grow to meet their developmental and growth needs.

The United States argued that the developing countries should also be bound by limiting their emissions, but the Protocol did not impose any restrictions on them. Developing countries, on the other hand, felt that their development was hampered because the colonial powers prevented their development by exploiting their natural resources and selling their finished products to the developing countries hence preventing development of industry there. Now that they are free to carry on their development, no limits should be imposed on their emission levels, because of their heavy dependence on fossil fuel. Another point of difference between the developed and developing nation was whether to consider the absolute value of emissions or the per capita value—there is a great difference between the two sides, and hence, the controversy still persists.

HISTORICAL MILESTONE

The Kyoto Protocol is a historical milestone, as it is the first international agreement to set targets to reduce greenhouse gas emissions to tackle climate change. The Protocol sketches out the basic features of its mechanisms and compliance system, but did not flesh out the all-important rules of how they would operate. The 1997 Kyoto Protocol shares the UNFCCC's objectives, principles, and institutions, but significantly strengthens the UNFCCC by setting targets to limit green house gases. Under the protocol the signatory countries are divided into two categories: Annex I and Non-Annex parties. Annex I Parties are committed to individual, legally-binding targets to limit or reduce their greenhouse gas emissions. The targets cover emissions of the six main greenhouse gases, namely: Carbon dioxide (CO2); Methane (CH4); Nitrous oxide (N2O); Hydro-fluorocarbons (HFCs); Perfluorocarbons (PFCs); and Sulphur hexafluoride (SF6). It was agreed that developed countries would jointly reduce their net emissions (emissions from sources minus removals by sinks) of these six greenhouse gases by 5.2 percent in the period 2008-12 in relation to emission levels in 1990. The Protocol does not list separate targets for each individual gas but instead a combined target for all the gases, expressed in CO2 equivalence. On the other hand Non-Annex countries do not have obligations to reduce or limit the greenhouse gas emissions but can voluntarily do so.

The maximum amount of emissions (measured as the equivalent in CO2) that a Party may emit over the commitment period, in order to comply with its emissions target, is known as a Party's assigned amount. To achieve their targets, Annex I Parties must put in place domestic policies and measures. The Protocol provides an indicative list of policies and measures that might help mitigate climate change and promote sustainable development. Parties may offset their emissions by increasing the amount of greenhouse gases removed from the atmosphere by carbon sinks in the land use, land-use change and forestry (LULUCF) sector. However, only certain activities in this sector are eligible. These are afforestation, reforestation and deforestation (defined as eligible by the Kyoto Protocol) and forest management, cropland management, grazing-land management and revegetation. The main objective behind these reductions (as pointed out in UNFCC) is to stabilize the concentration of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate change.

THE THREE MECHANISMS

The Protocol also establishes three innovative mechanisms known as Joint Implementation, the Clean Development Mechanism and Emissions Trading.

The Kyoto Protocol marks the first time an international agreement has set targets to reduce greenhouse gas emissions.

These are designed to help Annex I Parties cut the cost of meeting their emissions targets by taking advantage of lower cost opportunities to reduce emissions, or increase greenhouse gas removals in other countries than at home. Under the Joint Implementation mechanism, developed countries can make investments in Eastern and Central European countries in return for emission reduction credits (when there are emission reductions in the host countries, the investing country receives credits). Thus, if a country is not able to cut down emissions in its own country it can invest in some Eastern and Central European country on project(s) that deal with greenhouse gas emissions and get credit for the same. Emission trading allows the emission targets to be tradable. This is more like a "cap and trade" system where a cap is set on the maximum emissions allowed and then the country that emits more can buy the credits from the country that emits less than the cap. In other words, if a coun try emits less than its assigned amount it can sell the remainder to another country that has exceeded its allowed or assigned amount of greenhouse gas emissions. The Clean Development Mechanism allows countries and companies from developed countries to invest in sustainable development (or cleaner technologies/development) projects in the developing world, in return for emissions credits. In addition to these three original mechanisms, another mechanism called Activities Implemented Jointly was launched in 1995, as a precursor to Joint Implementation and Clean Development Mechanism and allows countries to participate voluntarily in schemes during a pilot phase, in which no crediting is allowed.

All the parties who have ratified the Protocol have to develop national systems for calculating emissions and cost-effective programs to improve the quality of the national inventories, and to cooperate in technology, science, and the development of education and training programs (for cleaner technologies). Developed countries in Annex II (the countries that have committed financial contributions for meeting Kyoto Protocol commitments) are expected to provide additional funds to meet the agreed fixed incremental costs for developing countries to meet their specific obligations.

Under sustainable development, free utilization of Kyoto mechanisms is essential. Still, Kyoto Protocol Article 17 stipulates that international emissions trading must be "supplemental" to "domestic actions" to meet the quantified commitment of each country. Introducing the Kyoto mechanisms and not yet allowing their utilization unless supplementary, is itself a contradiction. This was the focus of post-COP3 negotiations where European Union (EU) was advocating "supplementary" and introduced the concept of "bubble." This essentially meant that EU's assigned amount is reallocated among its member countries, hence EU would have a lower reduction cost than would be the case if a definitive amount were assigned to each country individually. Depending on how many Eastern and Central European countries join the EU the cost drops quite significantly. According to some literature the cost margin can be quite large, for example even when EU is to implement emission reductions twice its total target of 8 percent reductions, EU has a marginal reduction cost of 20 €/CO2 ton (about $70 per C ton, this is in

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2004) as compared to Japan's $300-400 per C ton and the United States' 100-200 per Carbon ton. At the same time, EU also raised the question of liability in emissions permits, for the purpose of preventing noncompliance caused by overselling emissions permits to other countries. This would translate into the fact that a certain volume of assigned amount must not be sold to other countries, and the remaining part of the assigned amount must be reserved, hence restricting emission permit exports. This would present no harm to the EU but have an impact on countries such as Japan.

THREE coNcERNS on DIREcTioN

The Kyoto Protocol has also become a debate between North and South. According to some scholars (mainly from the South) there are a few concerns related to the direction global climate regime is taking, which can be categorized into three sections:

• Although the principle of equity was central to the discussions of global climate change and even till the adoption of UNFCC, it has not been part of most the discussions since, and particularly since the Kyoto agreement.

• The focus of the regime is heavily on minimizing the burden of implementation of Kyoto reductions on polluting countries (industries) rather than being on the vulnerabilities of the communities and countries at greater risk and disadvantage due to climate change.

• Somehow the limelight is now on the global carbon trade and how to manage it, rather than on reduction of greenhouse gases (the main objective of Kyoto Protocol).

It is interesting to note that although the United States was a leader in drafting the Montreal Protocol and to implement it, such is not the case with the Kyoto Protocol. The reason for this may be that for the key countries, including the United States, the payoff structure is fundamentally different for the two agreements. For most of the key countries, unilateral compliance with the Montreal Protocol requirements was justified and boosted industry, in the sense that better technology needed to be developed to deal with changing things such as refrigerators, and American industry took the lead. On the other hand, the Kyoto

Protocol might mean some cut-backs in emissions with an inverse impact on industries (but can boost industry if innovative greener technology is utilized). The Stern Review (a United Kingdom government-sponsored report on the economic impacts of climate change) concluded that one percent of global gross domestic product (GDP) is required to be invested to mitigate the effects of climate change, and that failure to do so could risk a recession worth up to 20 percent of the global GDP. Although some companies in the United States have begun working towards reducing greenhouse gas emissions, as a nation, the United States is still not part of the Kyoto Protocol. It is reasonable to predict that, when it comes to climate change, the United States will only move to ratify an international agreement reducing greenhouse gases if the perceived domestic costs of reduction decrease, or the benefits increase, or both. Without the United States participating, the success of any agreement will most likely be limited, because such a large amount of the world's greenhouse gas emissions are coming from the United States.

SEE ALSo: Berlin Mandate; Greenhouse Gases; Greenhouse Effect; Kyoto Mechanisms.

BIBLIoGRAPHY. Joe McGovern, The Kyoto Protocol (Dor-rance Publishing, 2006); Sebastian Oberthür, et al., The Kyoto Protocol: International Climate Policy for the 21st Century (Springer, 1999); United Nations Framework Convention on Climate Change, http://unfccc.int/resource (cited January 2008).

Velma I. Grover Natural Resource Consultant

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