Signed at Rio de Janeiro, Brazil in June 1992 by over 150 nations including the United States, the Rio Climate Treaty, or the United Nations Framework Convention on Climate Change (UNFCCC), entered into force in March of 1994 and has been ratified or acceded to by virtually every populous nation. The Framework Convention was the centerpiece of the Rio Earth Summit and was signed by over a hundred heads of state and government including then U.S. President George H.W. Bush. The UNFCCC sets an overall framework for climate protection and identifies as an objective in Article 2 "stabilization of greenhouse gas concentrations in the atmosphere at a level that would produce dangerous anthropogenic interference with the climate system.
Despite its very ambitious objectives, the UNFCCC does not set any binding emission limitations. In Article 4 concerning Commitments the Framework Convention calls for developed country parties to adopt national policies and take measures "with the aim of returning individually or jointly" their net greenhouse emissions to 1990 levels. Outside of the former Soviet Bloc countries whose emissions plummeted with the closing of noncompetitive industry, Germany, which experienced a windfall from that trend in what had been East Germany, and the UK, which substituted natural gas for coal, nearly all industrial countries failed to meet this non-binding commitment. By the mid-1990s it had become clear that the essentially voluntary measures of the Framework Convention were not arresting an upward emissions trend in most of the industrialized world prompting the parties to the UNFCCC to look toward an emissions protocol with binding limitations on developed country parties. After two-and-a-half years of negotiations such a protocol was agreed to in December of 1997 in Kyoto, Japan.
Even before the protocol was negotiated in final text in Kyoto, opponents in the U.S. Senate sealed its fate with a 95-0 resolution expressing the sentiment in the Senate that the United States should not sign an agreement which would either threaten the economic health of the United States or which would impose binding requirements on the United States without also imposing binding requirements on developing countries.
In the Berlin Mandate of April 1995 that set up the terms of the protocol negotiations, developing countries had been guaranteed that they would be exempt from binding limitations in any upcoming protocol. This was adopted due to equity considerations -- the fact that per capita emissions are generally much higher in the industrial countries, e.g. one American produces about the same greenhouse emissions each year as 60 Bangladeshi, 20 Indians or 8 Chinese. Yet opponents of the draft protocol seized on the non-inclusion of developing countries in the first Kyoto round to get the U.S. Senate to commit unanimously on record against the soon to be finalized protocol.
The Kyoto Protocol ultimately set requirements for developed countries which, if agreed to and successfully implemented, would produce an overall reduction of just over 5% below developed country 1990 emissions by the 2008-2012 time frame that was set as the first commitment period.
To come into force, the Kyoto Protocol required ratification or accession to it by 55 nations and ratification or accession to it by developed countries whose aggregate 1990 greenhouse emissions amounted to 55% of total developed country 1990 greenhouse emissions. It took nearly eight years after the signing of the Protocol, for the agreement to finally enter into force. The Guide to the Climate Change Negotiating Process shows the country variations with requirements of 1990 emissions allowable.
The first requirement of ratification or approval by 55 countries was readily achieved. The real hurdle for the protocol to come into force, given the opposition of the U.S. Senate and the Bush Administration, was the 55% of developed country 1990 emissions threshold. Under the Howard Government, Australia was adamantly opposed to Kyoto. This meant that the failure of either Japan or Russia to ratify or approve the Protocol would have prevented it from coming into force. Despite some concerns in Japan about the country's ability to meet Kyoto obligations, Japan ultimately ratified the Protocol in part because it was the most significant environmental agreement ever negotiated on Japanese soil. This ultimately left the fate of the Kyoto Protocol up to Russia. In mid-2004 the Putin Government was sending conflicting signals on its intentions. Ultimately European agreement to facilitate Russia's entry into the World Trade Organization tipped Russia to ratify Kyoto. As a result, the Kyoto Protocol entered into force on February 16, 2005. Read more on the implications of the Russian Ratification of the Kyoto Protocol.
Now that the Kyoto Protocol has met the 55% threshold and come into force, it will in its initial stage have only a marginal impact on global emissions trends. It has been estimated that stabilization of greenhouse concentrations will ultimately require a reduction of global greenhouse emissions roughly 60% below 1990 levels. In the absence of any international controls it is estimated that global emissions would have risen about 40% by 2012. With Kyoto implemented by almost all developed countries, it is anticipated that global emissions might rise by 30% over the same period. With the U.S. and Australia on the sidelines and no real compliance mechanism even for those who have ratified, Kyoto may produce even more modest results.
The first meeting of the Parties to the Kyoto Protocol was held in 2005 in Montreal, Canada in conjunction with the eleventh session of the Conference of the Parties to the UNFCCC. Guidelines regarding the Clean Development Mechanism were clarified and the parties set up the governing body for Joint Implementation projects. During the meeting the parties adopted the Marrakesh accords, or the rules for implementation of the Kyoto Protocol. The first meeting of the parties to the Kyoto Protocol also produced a compliance regime for the Protocol that will help ensure that the Parties are held accountable in meeting their GHG emissions reduction commitments. The second meeting of the Parties to the Kyoto Protocol was held in 2006 in Nairobi, Kenya alongside the twelfth meeting of the Conference of the Parties to the UNFCCC. During the meeting, Sir Nicholas Stern presented a report, the Stern Review on the Economics of Climate Change, commissioned by the UK government, on the economic implications of climate change.
United Nations Climate Change Conference Agrees on Future Critical Steps to Tackle Climate Change, Press Release, December 10, 2005.
As part of the UNFCCC, parties to the convention hold annual meetings to discuss and further the rules to govern their commitments to address climate change. At the end of the sixth Conference of the Parties (COP-6) to the UNFCCC in 2000, delegates agreed to hold an additional COP-6 meeting the following year. The resumed COP-6 meeting, following the United States' decision not to pursue ratification of the Kyoto Protocol, produced the Bonn Agreements for the Implementation of the Buenos Aires Plan of Action, which attempted to resolve contentious issues among the parties, including funding mechanisms to assist developing countries, the establishment of expert working groups on technology transfers and least developing countries, resolving questions about carbon sinks, addressing compliance issues, as well as tackling the Protocol's market mechanisms of emissions trading, Joint Implementation (JI), and the Clean Development Mechanism (CDM). The Bonn Agreements additionally set forth criteria countries must meet to participate in Kyoto, including registry and monitoring systems.
At COP-7, the UNFCCC parties finalized the details of the agreements emerging from Bonn in the Marrakesh Accords. The Marrakesh accords address the specifics of rules and modalities for the CDM, JI, and emissions trading. The accords also finalized principles on Land Use, Land Use Change, and Forestry (LULUCF) and created emissions Removal Units for carbon sink projects. Finally, at Marrakesh, the parties adopted a compliance regime for the Kyoto Protocol.
David A. Wirth, The Sixth Session (Part Two) and Seventh Session of the Conference of the Parties to the Framework Convention on Climate Change, The American Journal of International Law, Vol. 96, No. 3, July 2002, 648-660.
Emily Boyd & Emma Lisa Schipper, The Marrakech Accord-At the Crossroad to Ratification: Seventh Conference of the Parties to the United Nations Framework Convention on Climate Change, Journal of Environment Development, Vol. 11, No. 2, June 2002, 184-190.
In July 2000 at their Okinawa Summit in Japan the G-8, a group of eight of the wealthiest and most powerful nations, at the urging of then British Prime Minister Tony Blair, agreed to create a Renewable Energy Task Force to address the challenge of two billion people lacking access to electricity. The Task Force drafted a Report that calls for G-8 member countries to support renewable energy actions in developing countries and to complement this with efforts in their domestic markets to scale up use of renewable energy.
At the G-8 meeting in Gleneagles, United Kingdom, the G-8 leaders signed a statement on Climate Change, Clean Energy and Sustainable Development.
The G-8 leaders at the St. Petersburg, Russia meeting in 2006 made pledges to global energy security, which included a commitment to the development of clean energy technologies to help mitigate adverse climate change.
Addressing climate change was one of the major discussion points covered during the G-8 summit in Heiligendamm, Germany in June of 2007 with G-8 leaders affirming their commitment to the upcoming UNFCCC conference to take place in Bali, Indonesia at the end of 2007. G-8 members showed willingness to consider polices to reduce global GHG emissions fifty percent by 2050. Their key strategies to address climate change include market-based mechanisms, such as emissions trading and tax incentives, development of energy efficient and low emission technologies, increased use of renewable energy and alternative fuels (such as biofuels), and support of efforts to combat deforestation. Acknowledging that fossil fuels will likely remain the most dominant energy source over the next twenty-five years, the G-8 committed to the development of carbon capture and storage, as well as more efficient power generation through such measures as combined heat and power. The G-8 leaders also called on emerging economies to reduce the carbon intensity of their economic development.
Chair's Summary, G8 Summit 2007, Heiligendamm, June 8, 2007
Growth and Responsibility in the World Economy, Summit Declaration, Heiligendamm, June 7, 2007
On September 9, 2007 in Sydney, Australia leaders from the Asia-Pacific Economic Cooperation (APEC), a forum of countries that meet to discuss economic growth, trade, and investment in the Asia-Pacific region, agreed to a commitment to address climate change. The agreement discussed resolves for a post-2012 climate change strategy, including that future climate change strategies should reflect different economic and social conditions. The APEC leaders acknowledged that fossil fuels will continue to be a large part of their respective countries energy needs, and thus emphasized the need for innovative technologies for lower emissions. To achieve this goal, the leader called for the dissemination of research and technologies for energy efficiency and renewable energy.
APEC leaders announced a commitment among its members for climate change mitigation that would entail a reduction in energy intensity by at least twenty-five percent by 2030, using 2005 as the base year. APEC members further pledged to increase forest cover in their regions by at least 20 million hectares by 2020, thus allowing the storage of 1.4 billion tonnes of carbon, or eleven percent of annual global emissions. The declaration finally pledged support for the protection of marine and coastal resources, which the leaders acknowledged as an integral part of the carbon cycle.
In addition to emissions trading schemes, greenhouse gas taxation is another type of economic incentive that is promoted as a way to combat climate change. Taxes on greenhouse gas emissions, viewed as an alternative to an absolute cap on emissions, are designed to prompt greenhouse gas emitters to reduce emissions. Backers of this scheme submit that countries that are able to change their emissions behavior at a price lower than the tax will reduce, and those that cannot will pay the tax. These taxes may be applied directly to emissions actually emitted by an energy source or indirectly along the supply line for products (either inputs or final products) that produce greenhouse gases. Revenue accrued from this tax based system could be used for additional climate change mitigation measures, especially in developing countries. Greenhouse gas tax revenue could also be used to offset and reduce other national taxes. The taxes could be applied at a uniformed rate or on a more equitable basis, with lower taxes for developing countries. Additionally, greenhouse gas taxes could be introduced in an incremental timetable in developing countries.
Carbon taxes, for example, place a fee on every ton of carbon emitted, as the market price of carbon-based fuels do not reflect the real price. Hidden costs include negative environmental and health externalities from carbon-based fuels. Thus, carbon taxes simply reflect the true costs of these fuel sources. Additionally, some carbon-based fuel producers enjoy preferential tax treatments in the countries they are located. Proponents of a carbon tax, and other greenhouse gas taxes, argue that the tax will force users of these carbon-based fuels to scale down their use, use cleaner technologies, as well as develop new technologies.
Richard N. Cooper, Alternatives to Kyoto: the Case for a Carbon Tax.
Christina Harper, Climate Change and Tax Policy, Boston College International & Comparative Law Review, Vol. 30, pg. 411 (2007).
James Randall Kahn and Dina Franceschi, Beyond Kyoto: A tax-based system for the global reduction of greenhouse gas emissions, Ecological Economics, Vol. 57, pgs. 778-787 (2006).
Roberta Mann, Symposium - The Business of Climate Change: Challenges and Opportunities for Multinational Business Enterprises: Another Day Older and Deeper in Debt: How Tax Incentives Encourage Burning Coal and the Consequences for Global Warming, Pacific McGeorge Global Business & Development Law Journal, Vol. 20, pg. 111 (2007).
Article 17 of the Kyoto Protocol allows Annex I parties to engage in emissions trading in order to fulfill their emissions reduction commitments under the Protocol. Under this system, parties can trade extra units (either assigned amount units allocated under the Protocol, removal units from Land Use, Land Use Change, and Forestry (LULUCF) activities, emission reduction units from Joint Implementation projects, or certified emissions reductions from Clean Development Mechanism projects) when they have more units than needed to meet their Kyoto emissions targets. Traded units are tracked through national registry systems. The Marrakesh Accords further provided the rules and modalities for the Kyoto emissions trading system. Though originally one of the more contentious proposals introduced during initial Kyoto negotiations, emissions trading has since gained international acceptance. Indeed, emissions trading may be one of the best methods to involve non-Kyoto parties, such as the United States and Australia, as well as developing countries and private actors in a post-2012 climate change mitigation solution.
Michele M. Betsill, The Multilevel Governance of Global Climate Change, MEA BULLETIN (Int'l Inst. for Sustainable Dev., New York, N.Y.), Nov. 30, 2006.
The European Union countries decided to collectively pool their Kyoto emissions targets as part of an EU "bubble." To achieve GHG emissions reduction of eight percent below 1990 levels by 2012, the EU created the European Union Emissions Trading System (EU ETS) that began operating at the start of 2005. The EU ETS includes two commitment periods running from 2005 to 2007 (only covering carbon dioxide emissions) and from 2008 to 2012 (covering all greenhouse gas emissions under Kyoto) to align with the end of first Kyoto commitment phase. Emission allowances are allocated to EU countries based on National Allocation Plans and the allowances are then distributed over individual national industries that emit greenhouse gas emissions. Under the EU ETS, EU countries may also choose to offset their emissions through the Clean Development Mechanism and Joint Implementation projects. An interesting facet of the EU ETS is that individuals and other organizations are allowed to buy and sell credits within the EU ETS market. One problem with the first phase of the EU ETS was an excess of allowances in the marketplace, which caused the market price for allowances to plummet. The EU is seeking to address this problem during the second phase of trading scheme by issuing fewer allowances.
European Commission, EU Action Against Climate Change: EU Emissions Trading - An Open Scheme Promoting Global Innovation, 2005.
Joseph A. Kruger & William A. Pizer, Greenhouse Gas Trading in Europe: The New Grand Policy Experiment, Environment, Vol. 46, No. 8, October 2004, 8-23.
Pew Center on Global Climate Change, The European Union Emissions Trading Scheme (EU-ETS) Insights and Opportunities.
Economic incentives and market mechanisms are considered important methods to advert climate change. Such incentives include emissions trading system and green taxes. These financial inducements work to help change the behavior of either producers or consumers in limiting their greenhouse gas emissions. Supporters of economic incentives believe they will be the most effective in mitigating climate change, because they work to alter producer and consumer behavior. Advocates of market mechanisms further feel that the marketplace is the best solution for tackling climate change and more viable as a policy option, compared to command-and-control methodologies.
Christina Harper, Climate Change and Tax Policy, Boston College International & Comparative Law Review, Vol. 30, pg. 411 (2007).
Proponents of a cap and trade program that includes the transportation sector believe it serves as a potential alternative to other programs aiming to reduce greenhouse gas emissions from vehicles, such as increasing fuel costs, requiring refineries to hold permits, or raising the CAFE standards. This type of trading scheme would allocate greenhouse gas emission permits at no cost to vehicle manufacturers. The emission permits, covering all vehicles in use that manufacturers have produced, would be valid for a predetermined time period, potentially multi-decadal, but the amount of allowances associated with the permits would depreciate each year in order to decrease the overall amount of emissions over time. Manufactures with excess allowances could trade them with other manufacturers that are above their emissions allotments, thus keeping emissions within the overall allowable emissions cap. By covering both new vehicles and old vehicles, in addition to decreasing the worth of the emissions allowances over time, this type of cap and trade program would compel vehicle manufacturers to improve the performance of new vehicles, purchase and then scrap or retrofit older vehicles, and promote policies that reduce emissions. Manufacturers would also have the incentive to encourage their customers to use biofuels and other alternative fuels. If such a program were to include the aviation industry, it would also prompt aircraft manufacturers to improve airplane performance and potentially even encourage train use for shorter distances.
Technology subsidies could range from grants for research and development of cleaner technologies to funds for dissemination of these technologies to tax credits for cleaner and more efficient energy sources.
One technology subsidy method for reducing greenhouse gas emissions is providing tax credits for producers or consumers that use renewable energy sources or energy sources that emit significantly less greenhouse gases. These renewables could range from solar to geothermal to wind to ocean energy. Credits could also be given to companies or consumers that use more energy efficient products. This method would help to induce technological innovations and encourage energy consumers to conserve. Tax credits could be used not only to introduce cleaner technologies and reduce greenhouse gas emissions, but also to encourage carbon sequestration projects.
Many researchers and advocates have proposed alternative approaches to the current international climate change regime set forth in the United Nations Framework Convention on Climate Change and the Kyoto Protocol. These inventive greenhouse gas mitigation options could be integrated into the current climate change regime or molded into a different approach altogether. Proponents of these methodologies believe that they will achieve the most in greenhouse gas reductions. Some of these methods are already being utilized on a national and regional scale, but could be expanded to a more global level. The following is an introductory survey of some of the major alternative ideas to the current international framework on tackling adverse climate change.
The Contraction & Convergence model, a method advocated by the Global Commons Institute, is based on the principles of equity and precaution, and proposes decreasing the amount of greenhouse gas emissions each year. This model is meant to compliment an international accord on climate change that determines the overall allowable amount of greenhouse gas concentrations in the atmospheres. Determining the amount of greenhouse emissions that need to be cut back is the contraction part of the model. The convergence element of model is that developed countries should bring down their emissions levels so that emission allocations can then be distributed equally to all nations on an equitable per capita basis. This approach is an alternative to the approach where all countries, regardless of their amount of past emissions, have to reduce by the same amount. Under the Contraction & Convergence method, countries that are unable to keep within their allocated emissions amounts would be able to purchase extra allowances from countries that emitted less and had extra allowances. Architects of this plan argue that Contraction & Convergence is the most viable and equitable solution to addressing climate change.
Aubrey Meyer, Contraction & Convergence: The Global Solution to Climate Change, Schumacher Briefing No. 5, 2000.
There are some policy makers who propose devising a completely new Climate Protocol (Kyoto 2) after the end of the first Kyoto commitment period in 2012. The current Kyoto Protocol (Kyoto 1) could either be scrapped altogether or allowed to run alongside this new approach. Kyoto 2 would abandon the country-based system for greenhouse gas regulation under Kyoto 1 in favor of a more unified global system. As a part of this unified system, a global cap would be set on the amount of allowable greenhouse gas emissions and emission Rights based on the overall cap would be auctioned off yearly (or even more frequently). Producers of items that emit greenhouse gases would need to hold emissions Rights, i.e. the Kyoto 2 system would target upstream producers. Thus, for example, companies that produce fossil fuels, airlines and militaries, cement producers, and producers of Potent Industrial Greenhouse Gases would all need Rights. Additionally, governments would need Rights, on a per capita basis, to cover methane emissions from agriculture and carbon dioxide emissions from forest burnings. The effect of Rights allocated on a per capita basis would be that poorer countries would not need to buy as many Rights at auction. Unused Rights could be sold to producers or governments who needed additional Rights; the Rights would additionally carry over each year. Producers or governments that destroyed or safely stored greenhouse gases would be credited Rights on a pro rata basis. Producers and governments who produced more emissions than their Rights allowed and did not offset these emissions by purchasing additional Rights in the trading market would be penalized with a "buyout price."
Funds procured from the auction of Rights, and also potentially a small "Tobin" tax on trading transactions, would be used to further efforts on confronting adverse climate change, such as a fund to help countries adapt to climate change and to develop low carbon technologies, efforts to reduce reliance on fossil fuels, payments to countries with carbon sinks, assistance to developing countries in reducing their greenhouse gas emissions, creating a Low Carbon Development Bank to fund low carbon projects, and payment to countries to abstain from using their fossil fuel deposits.
Proponents of this global cap and auction system argue that a global cap is the best means to truly reduce the amount of greenhouse gas emissions by setting a limit on what will be the overall emission amount. Additionally, they believe that using an auction system to allocate Rights is the most optimal way to distribute allowances. The auction system could utilize an ascending-clock method where the price for emissions Rights is gradually raised. Kyoto 2 presents a new route in addressing climate change by limiting the global greenhouse gas amount and providing incentives to producers and governments to limit their emissions.
Another approach advocated for climate change mitigation is domestic tradable quotas. This model, which focuses downstream of production, would require end-users of energy products to submit emissions rights, or carbon units, for the amount of emissions the product they are purchasing emits. On a national level, countries would set their carbon budget, which is the maximum allowable amount of emissions a country could emit per year, in line with international commitments, whether they are Kyoto or some new agreement. Fossil fuels and other energy sources, such as electricity, would be assigned a carbon rating and when individuals or organizations purchased these energy sources they would be required to submit carbon units equivalent to the amount they purchase. This could be accomplished by automatically debiting individuals when they pay utility bills, and subtracting units from a carbon card when individuals purchase fuel at gasoline stations. Carbon units would be allocated for free on a per capita basis to individuals, based on several factors including income levels. Individuals, and also organizations, could purchase additional carbon units in a carbon market, which would include primary sellers, final buyers, and intermediaries.
This model defines primary sellers as governments and below-average individual emitters. Final buyers would include organizations, above-allocation individual emitters, and overseas visitors, all of which would be required to buy units in the carbon market. Intermediaries are defined within this model as market makers and energy retailers.
Another measure that some policy makers argue will address adverse climate change is reducing emissions intensity, which is the ratio of greenhouse gas emissions to economic output, such as GDP. Under this approach, an overall emissions intensity level is set that must be achieved by a certain end date. Champions of this method hope to spur technology improvements and believe it will push efforts for cleaner fuel use and increased energy efficiency. Proponents further argue that this method will reduce emissions levels while concurrently increasing economic growth.
Environmental Protection Agency, U.S. Climate Policy and Actions.
Abraham Spencer, The Bush Administration's Approach to Climate Change, Science, July, 30 2004.
Stabilization Wedges - S. Pacala & R. Socolow, Stabilization Wedges: Solving the Climate Problem for the Next 50 Years with Current Technologies, Science, Vol, 204, August 13, 2005.
Academics Stephen Pacala and Robert Socolow purport that a combination of currently existing technologies can meet energy needs over the next fifty years while concurrently limiting a rise in anthropocentric greenhouse gas emissions. They hypothesize that revolutionary mitigation technologies will not be necessary until the later half of this century. Their contention is that, by using technology "wedges" from a "stabilization triangle," the amount of carbon dioxide emissions can be stabilized to 500 ppm over the next half century, in contrast to present projections that the emission rate will double. Pacala and Socolow propose technology wedges that range from energy efficiency options, including vehicle efficiency, reduced reliance on vehicles, more efficient buildings and power plants, substitution of natural gas for coal, power plant carbon emissions storage, nuclear technologies, wind and solar power, and biofuels, to carbon capture and storage, including forest management and conservation tillage. They submit that if several of these technology wedges are utilized as part of a climate change mitigation strategy, the amount of carbon dioxide emissions can be stabilized over the next fifty years.
There are numerous ways companies and individuals can be part of the climate change solution. Find out what you can do. [link to "How You Can Help" section of the website].
There are many voluntary programs where companies and individuals can purchase offsets to their greenhouse gas emissions. These offset programs invest in carbon trading markets, such as the Chicago Climate Exchange, renewable energies, or in carbon sequestration programs. For example, travelers can pay to purchase carbon offsets for the amount of emissions from their travels through programs like Travelocity's "Be a Hero, Go Zero" and TerraPass.
On another voluntary front, the International Organization of Standardization (ISO) created guidelines for environmental management under ISO 14000. The ISO 14000 environmental management standards help businesses implement environmental management strategies. Specifically, groupings under ISO 14064 lay out specifications for reporting greenhouse gas emissions and sinks, as well as for monitoring and verifying a company's greenhouse gas inventory.
The third meeting of the Parties to the Kyoto Protocol will be held along with to the thirteenth meeting of the Conference of the Parties to the UNFCCC in December 2007 in Bali, Indonesia. The fourth meeting of the Parties to the Kyoto Protocol will be held along with to the fifteenth meeting of the Conference of the Parties to the UNFCCC in 2008 in Poznan, Poland. Participants at these meetings will try to negotiate a post-2012 framework to address climate change.
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