A meaningful TREATY?

The Kyoto Protocol to the Climate Change Convention is the first step towards defining the emissions reduction targets of industralised countries. However, as a first step it falls short of expectations.

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Published: Saturday 15 August 1998

A meaningful TREATY?

-- (Credit: Nikhat Jamal Qayum /CSE) " Under the protocol, between the years 2008 and 2012, industralised countries are expected to cut their overall carbon emissions by only 5.2 per cent below their 1990 levels. Moreover, large loophooles in the protocol mean it is "business as usual" for the world's polluters.

To understand the shortcomings of the protocol. Down To Earth sought the opinion of five environmentalists who have been closely monitoring the post-Kyoto developments. They were posed a set of five questions:
• Were the Kyoto negotiations successful? What are the major flaws in the protocol?

• Are the targets adopted by the protocol adequate?

• What do we mean by "meaningful participation" of developing countries?

• What are the issues involved in emissions trading?

• What is to be an equitable framework for determining rights to the atmosphere?

Most of the answers suggest that from the North-South point of view, the protocol was not a success as it does not define the criteria for allocation of environmental burdens. It is time developing nations got together and looked for a suitable way to enhance their presence at the negotiating table and fight back pressure from the fossil fuel-dependent North.

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North vs South

IN DECEMBER 1997, the Kyoto Protocol on the Climate Change Convention was adopted merely five years after the adoption of the Framework Convention on Climate Change (FCCC). The rapidity with which these treaties have been negotiated and adopted and the number of countries involved (more than 173 countries have ratified the FCCC) indicate that the regime is developing in a highly successful manner.

From an economic point of view, the protocol appears to be a success because the essentiality of cost-effectiveness is maintained. However, from an environmental standpoint, the protocol is a step back as the binding targets have been postponed by an additional 12 years - instead of making the year 2000 the target year, the new target year is 2012. This falls considerably short of what was recommended by the scientific community. From a North-South point of view, the protocol is no success as it does not define the criteria for the allocation of environmental burdens. It also fails to draw lessons from the pilot phase on activities jointly implemented and does not elaborate sufficiently on the issue of technology transfer. Ironically, the ratification of the protocol by the United States (US), vital for the success of the convention, has been made dependent on the "meaningful participation" of large developing countries. The US government, which often talks about showing leadership on various issues, wants to make sure that there will be followers.

Targets and loopholes
The original CO₂ stabilisation targets in the FCCC for industralised (Annex I) countries were ambiguously worded as targets to be aimed at rather than commitments to be implemented in a legally binding sense. Although countries of the European Union (KU) may be able to stabilise their CO₂ emissions by the year 2000 at their 1990 levels, emissions in the US may be as much as 11 per cent above their 1990 level in 2000. New Zealand, Australia, Finland, Norway, Japan and many other developed countries are also likely to have higher emission levels in 2000 than they had in 1990. The press secretary of the White House is reported to have stated, "It would be unrealistic to attempt to reach by the year 2000 the 1990 levels on emissions because it would most likely wreck the world economy if you attempted to do that." The Kyoto Protocol is a considerable step forward in that it makes targets for developed countries legally binding. However, not all that glistens is gold.

The targets on greenhouse gases reduction fall short of what is needed to achieve the ultimate objective of the FCCC - a stabilisation of greenhouse concentrations in the atmosphere that would prevent dangerous anthropogenic interference with the climate system. Groups of countries may adopt a common target which they may allocate among themselves in an apt manner so long as this allocation is subsequently communicated along with the instrument of ratification. The coherence and internal consistency of these projects and the Clean Development Mechanism (CDM) is unclear. Without going intp details, we could mention differences in the possibility of banking emissions credits; the requirement that a percentage of the proceeds of CDM is reserved for adaptation projects in vulnerable countries but similar requirements do not apply to the other mechanisms; and countries like Russia and Ukraine could gain financially from trading their unused allocations whereas developing countries have no such possibility. Finally, completely in opposition to the original rhetoric of developed country leadership and given the need of developing countries requiring time to enhance themselves economically, the US has stated that it is of vital importance that the key developing countries commit themselves to "meaningful action" for the Senate to ratify the protocol.

The issue of meaningful action will probably come up at the Conference of Parties in Argentina in November 1998. For the US, this has become important. The state department cannot convince the Senate of domestic action unless they can show that developing countries are likely to follow soon. At the same time, this is seen by developing countries as increasingly unfair as the US is nowhere near aehieving'the goal of stabilisation by 2000. It only wishes to make its responsibilities conditional on the role of developihg countries.

Cost-effectiveness and equity
In many ways, the debate on how emission reduction should be undertaken has been taken over by the economists. Cost-effectiveness, the goal *to achieve a given target with minimum costs, is ran important economic principle. Economists argue that joint implementation and emission trading are the most cost-effective ways of reducing emissions by industrialised countries because these mechanisms allow for emission reduction to take place in the countries and sectors where the marginal costs of reduction are the lowest. While economists can calculate how to achieve given targets in a cost-effective way, they have little input on how the initial allocation of targets should take place. Unfortunately, international law also does not provide any guidelines about how Equity (thus the issue of allocation of targets) should be interpreted. In an article on equity in international environmental law, environmental law expert Farhana Yamin concludes that there is "no universally agreed meaning of equity".

There is no doubt that some form of equity needs to be taken into account in determining the allocation of responsibilities among countries. However, countries seem to argue that just about any variation in national conditions should be taken into account in determining responsibility. The FCCC itself recognises that national priorities, objectives and circumstances - for instance, dependence on fossil fuel (exports), type of country (least developed, small island states, developing county, countries in transition, most developed) - justify differential treatment. In literature, equity can imply equal effort (that is, maintaining the status quo between nations), differentiated effort on the basis of contribution to the problem and equal goals, equal quotas, (on per capita or per state basis). Each approach tends to favour different groups of countries.

Gross emission levels have been cited by some researchers in order to focus on major polluters. However, such an approach tends to be lopsided and large and populated countries suffer. A per capita approach may tend to put the blame on countries like the US, Canada, Australia, Japan, the former Soviet Union and the EU since their per capita emissions are very high. If one were to use a formula such as carbon emissions per unit of Gross National Product (GOT), China and India would be the main culprits since their economies would not appear very efficient. A per hectare target would benefit large countries with a small population. However, if the formula was changed to carbon emissions per unit of GNP using purchasing power parity exchange rates, China, the US, South Africa, the EU and India would be held responsible for the problem. Is it fair to formulate flat reduction targets that also apply to countries that are already very efficient? If it fair that countries with sloppy population policies should get higher quotas? These are only some of the issues that need to be; taken into account. Should all these issues be taken into account in determining what is fair?

Although international law cannot provide clear guidance on understanding equity, the Intergovernmental Panel on Climate Change (IPCC) argued in its 1996 report that in the case of climate change, distribution of the cost of adaptation, cost of abatement, future emissions rights and ensuring institutional and procedural fairness are the four equity issues that could be used to determine the responsibilities of countries. The report states that equity can imply parity (equal distribution of burdens or benefits), proportionality (burdens and benefits are distributed in accordance with contributions of claimants), priority (those who need the most should be given priority), classical utilitarianism (the greatest good of the greatest number) and distributive justice (equal distribution unless unequal distribution leads to greater social justice). However, it is clear that the issues to be decided will set a very important precedent for future negotiations on sharing environmental responsibilities.

Meaningful participation
The term "meaningful participation" has been coined by the US. It is, therefore, up to their Senate to define it. But if developing countries sit back and enable the Senate to do so, they will end up being purely reactive. Furthermore, it would be unwise for developing countries to take on a we-will-do-nothing-for-the-time-being approach since many of them are already taking climate-related measures, although for other reasons. It is, therefore, vital that the developing countries take stock of the situation and see in what way and when their contribution can be meaningful. They should lobby for support from the KU and thereby ensure collective pressure on the US. In defining meaningful participation, developing countries can learn from other countries. The Dutch climate change policy was initially based entirely on existing policies, particularly in the field of energy efficiency. British climate change policies benefited from the closing down of coal mines. The German policy benefited from the closure of old factories in the former German Democratic Republic. Any existing policy that focuses on adaptation strategies, improving the efficiency of energy production and use, on renewable energy and on public transport can be presented as meaningful participation. If developing countries decide to participate in the CDM, it should be presented as meaningful participation. The G-77 nations and China should define meaningful participation in a way that suits their conditions. It should be well packaged and put on the table as their negotiation position.

Onno Kuik and Joyeeta Gupta are senior researchers at the Institute of Environmental Studies, Amsterdam, The Netherlands

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A humble beginning

CLIMATE negotiations and international climate policy are very recent compared to other policy issues. Thus, one cannot expect all problems to be solved at once. While the question of efficient mitigation is dealt with prominently in the Kyoto Protocol, the inequitable distribution of current emissions is widely taken for granted. This may change in the future as climate negotiations will go on for decades to come and finally resemble international trade negotiations where small steps are taken at a time but cumulate in the long run. A combination of an equitable allocation of entitlements and a globally accessible free market in emission permits would reduce greenhouse gas (GHG)emissions at minimum cost while guaranteeing trade facilities to the developing countries as well as safeguarding their right to development.

In the run-up to Kyoto, expectations were subdued. An e-mail survey administered by the Global Environmental Change Report found that two-thirds of the respondents expected no more than stabilisation of emissions by industralised (Annex I) countries. So theoutcome was a major surprise. There might have been no protocol at all if one considers the extreme divergence of opinions. Obviously, a lot of space still exists in the various provisions of the protocol but reaching a consensus on these provisions will be an arduous task in the months and years to come. Therefore, an overall evaluation of the protocol at present is difficult.

Some provisions which can be unequivocally labelled as successful are;

• the legally binding nature of Annex B (Quantitative Emissions Limitations and Reductions Objectives) commitments;

• an overall reduction figure much higher than anticipated;

• the acceptance of flexibility mechanisms;

• inclusion of the long-lived GHG; and

• the set-up of an adaptation fund in the framework of the Clean Development Mechanisms (CDM).

Some major problems which needed to be addressed but did not arise are:

• use of "hot air" from countries in transition;

• unclear definition of sinks;

• uncertainties in the measurement of some GHGs;

• build up of exceptions benefiting specific countries (exemption of single projects, net emissions, choice of base years); and

• lack of a clear definition of emissions trading and artificial differences between Joint Implementation (JI) and CDM.

Careful negotiations can eliminate many of these problems. Open questions on sinks and net emissions issue could be clarified by commissioning a special report of the Intergovernmental Panel on Climate Change (IPCC), an independent and technical body under the sponsorship of United Nations Environment Program and World Meteoro-logical Organisation. Differing degrees of uncertainties could be prevented through insurance or discounting rules. A single project exemption should not be granted in a system where emission permits can be bought easily. A unified base period could be used for the next commitment period, JI CDM and trading could be brought in line by extending the adaptation tax to JI and trading. It must also clarify that after verification and certification no difference is made between from JI, CDM and trading permits. Major flaws of the protocol are:

• lack of an objective to set differentiated commitments for future commitment periods (such as contraction and convergence or the Brazilian proposal). This is absolutely critical for the future;

• lack of a sanctions regime in case of non-compliance;

• the 55 per cent Annex I emissions hurdle before entry into force giving the US a de facto veto power. As the domestic US debate is very defensive, that might sink the protocol;

• an overly long interim period not conducive to early action. Problems also arise out of early crediting as this might lead to distortions; and

• the last-minute deletion of Article )0 allowing developing countries to take up commitments.

Like the Montreal Protocol on ozone-depleting substances, the Kyoto Protocol is the first of a long row of steps to be made to reach the climate convention's ultimate target of stabilising GHG concentrations to a non-dangerous level. While the power of the industrial countries makes it unlikely that an equitable initial allocation of entitlements will be granted, the allocation could be gradually changed from a grandfathering approach to a per capita approach. Developing countries should therefore step up their pressure for a contraction and convergence approach that gradually leads to an equal per capita allocation of emission budgets, for instance, by 2050. A gliding 20 per cent reduction compared to the 1990 level in industrial countries by 2020; 40 per cent reduction by 2030 and 60 per cent by 2050 could be a suitable path. Taking into account the accumulated emissions of industrial countries, at least since 1980 when global warming became a relevant subject of scientific and political debate, an additional reduction could be distributed over a century.

The threat of a deadlock between the US and developing countries where the former threatens with non-ratification in case the latter does not take up commitments is enormous. While this linkage is the old-fashioned "big stick" policy, it is feared that the US will not ratify the protocol unless at least one of the big developing countries (China, India, or Brazil) accepts commitments that lie below the business-as-usual emissions rise. It would be wise for the developing countries to link acceptance of commitments and full-fledged trading with Annex I acceptance of a contraction and convergence approach.

Emissions trading in all of its forms is a crucial element of a truly global climate policy. However, it has to be armed with appropriate sanctions to prevent fictitious reductions. In the short run, the CDM should be drafted in a way developing countries can benefit from trading. Thus, countries should be free to create certified emission reductions even without foreign investors and sell them in the market provided there are strict international rules for project baseline determination and independent verification. Full participation in the other forms of emission trading should only be possible if a country accepts a commitment.

Alex Michaelowa is project leader for climate policy at the Institute of Economic Growth, Hamburg, Germany

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Pressure on the South

A FEW months prior to Kyoto Protocol in 1997, the US Senate passed a resolution to ratify a protocol in the Climate Change Convention "all nations should be required to act within the same time frame". The Senate resolution was substantiated by the US delegation in Kyoto with frequent references to a need for "meaningful participation from developing countries".

The American position, backed by the multimillion dollar domestic industries and media campaigning, is a serious attempt to modify the key principle of "common but differentiated responsibility" of the member states. It is an arrogant attempt to once again divert attention from the action that is needed to be taken in the fossil fuel-dependent North. At a point in time where the US has with great hesitation expanded its vocabulary to including the word "mitigation", it seems rather premature to turn the attention towards the emissions of developing countries.

The Kyoto Protocol, with its new "co-operation" mechanism between industrialised and developing countries could, however, easily be paving the way for gradual enlistment of developing countries in combating problems created by the industrialised countries. Under the protocol, Clean Development Mechanisms (CDMs) will enable industrialised countries to finance emissions reduction projects in developing countries and receive credit for doing so. Joint Implementation (JI) will also grant credit for investments in projects, but only in other developed countries. An international emissions trading regime will allow industrialised countries that reduce emissions beyond their agreed target to sell the excess emission credits to others. The operational details for these co-operation schemes are still to be elaborated.

The CDM, in particular, may open the door to increasing involvement of developing countries in combating emissions. The CDM, as proposed by Brazil, was meant as a mechanism to impose financial penalties upon countries which did not balance their emissions budget according to their mitigation commitment under the protocol.

The CDM appears more like a new terminology for ]i but this time allowing industrialised countries to gain credits from their support to projects in developing countries. Letting the North invest in emission mitigation in the South might mean reducing emissions where it is economically the cheapest. However, it might also result in reduced pressure on industrialised countries to take action with respect to their own emissions as it makes it cheaper to invest in emission reduction in developing countries. In addition, CDM projects could result in developing countries using up foreign funds and cheap options for reducing emissions. If future agreements have developing countries accepting mitigation targets there will be little economic incentive or interest left to invest in projects in developing countries. Developing countries, moreover, will be left with no credit for the cleaning up of their emissions in former CDM projects.

Inter-governmental negotiations on greenhouse mitigation look more like a plan to create markets, private sector involvement, and carbon colonies than an effort to reduce fossil fuel reliance in the North. Is this really the way forward for combating climate change, for developing socially, politically and ethically sustainable relations between North and South?

To answer such questions, the South needs to get much more actively involved in the international politics on climate change. Developing countries in general have a tendency to respond and react rather than propose or direct the international negotiations on climate change. As a group, they have seldom been able to act as a consistent coalition in the negotiations. In future years, a country like Brazil is particularly likely to separate from the G-77. The Brazilian energy sector relies heavily on hydro-power. Consequently, Brazilian officials are more open to American pressure that "we must have meaningful participation by key developing countries" than their Indian, Chinese or Mexican counterparts.

The US, by bringing on board the Brazilians and with the help of the Japanese, Australians and maybe the Canadians, will eventually bring the focus of negotiations into that of debating actual mitigation commitments by major developing countries.

In general, governments in developing countries are not in a position to counter-react to such pressure. In many developing countries, climate change competes with a number , of pressing problems such as poverty, economic crisis and political disorder. Political attention is, therefore, mostly absent when it comes to climate change. National position on climate-related topics are often foreign policy rhetoric rather than actual political insight into the topics at stake. Poorly prepared governments leave much responsibility to domestic scientists and environmental groups.

Internationally, research on climate change has largely been dominated by North American and West European scientists. In most developing countries, research remains consistently under-prioritised and under-funded. Those researchers who do have funding are those adhering primarily to an agenda set by foreign (North) rather than domestic priorities. Much research is as such clustered around n and tradable permits. This is rather astonishing, when the opposition to these forms of implementation by the South are considered.

Fragile domestic research coupled with a general lack of political attention and sparse debate among major domestic stakeholders leave the contours of many developing governments' national position, by and large, determined by external forces. This places developing countries at a major disadvantage in international negotiations. A comprehensive and careful preparation of a national position demands not only political attention but also substantial domestic science, money and thorough dedication and debate. A lack of most of these leaves them with severe handicaps in international negotiations. So far, the concerns of the North have dominated the negotiations and the South has only reacted to these proposals.

The return of increasing US pressure that "we must have meaningful participation by key developing countries" is a serious signal that pressure on major developing countries is not going to go away.

With major developing countries remaining severely handicapped and ineffective, negotiating partners unwilling and unable to forward their position as nothing but a foreign policy rhetoric, sustainable inter-governmental solutions for addressing the problem of global climate change are unlikely to occur.

Susanne Jakobsen is a scholar of global environmental politics, University of Copenhagen, Denmark

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