The Kyoto Protocol: time for action, not hot air

Kyoto is the only foundation for global action on climate change, but governments must now start using the tools it provides, says Michael Grubb.

In February 2005, more than seven years after it was adopted, the Kyoto Protocol on climate change finally entered into force as an internationally binding legal treaty. The spectre of chaos on international climate policy is now replaced by a condition of stalemate. But the world is looking in the wrong direction for the way out.

The Kyoto Protocol has been ratified by more than 140 nation-states. Among the rich countries, only the United States and Australia are opposed, though Australia intends to meet its Kyoto target and to participate in future negotiations. Nor should Russia’s decision finally to bring it into force have been a surprise. Russia had reasons to prevaricate but never to reject it.

Kyoto has survived, fundamentally, because George W Bush has been unable to honour his early promise to come up with a plausible alternative. Kyoto’s fundamental premise is that countries should tackle climate change by negotiating a core of national targets for emission reductions. It sounds sensible, and it is: after four years, and numerous discussions, credible alternatives remain elusive.

With Kyoto now in force, as the culmination of fifteen years of climate diplomacy, the path forward is to implement what has been agreed as the basis for moving on to a subsequent round of negotiations.

The opponents of the protocol wildly exaggerate the cost of implementing it. A realistic figure may be in the region of $10 billion. Much of this price tag will take the form of investment, rather than net cost, because implementing emission reductions largely means taking measures to improve energy efficiency, and the energy savings often outweigh the initial costs required after very few years.

That being said, it’s important to understand the obstacles to progress and how they can be overcome.

Kyoto’s message

The debate on Kyoto has suffered from an almost obsessive focus on first-round targets that set emission limits for industrialised countries over 2008-2012, and on the US position. This has obscured its real importance, namely its fundamental structure and the obligations on governments it embodies: to negotiate specific, binding limits on their emissions; to implement these (including efficient market mechanisms); and to update these in sequential rounds of negotiations, as knowledge accumulates, until the problem is solved. Nearly all the world has now signed up to that structure.

The argument that Kyoto was pointless without the US misidentified the problem. The US administration’s problem is less with the protocol itself than with any system that requires it to tackle CO2 emissions seriously before developing countries do so, and with any treaty that adheres to the principle in the UN Framework Convention on Climate Change (UNFCC) that industrialised countries should lead action to reduce emissions.

Aubrey Meyer is wrong to argue that the 1997 Byrd-Hagel resolution offers a radical alternative that is a more realistic way forward. The essence of that vote was that the US would not take on binding limits unless developing countries did so simultaneously. But developing countries are adamant that the rich world must first demonstrate leadership and willingness to tackle the problem. This is an argument that 43 out of 100 United States senators accepted when they voted for the 2003 McCain-Lieberman bill, which was reintroduced to the senate in February 2005.

The US is not alone in looking to the growth in developing country emissions as the scapegoat. Many lobbyists throughout the rich world point that way, when faced with the need to do something themselves to honour the commitments their governments have now made. Never mind that developing countries have contributed only a fraction of the increases in greenhouse gases to date, and that their emissions per capita remain far below those of the west. All the leaders of rich industrialised countries, including the current US President’s father George H.W. Bush, agreed in the framework convention in 1992 that the first step had to be for industrialised countries to start to reduce their emissions.

Developing countries are still waiting for that. Indeed the most solid plank of the US critique has been scepticism that the other rich countries would honour their commitments.

Of course, if the US were willing to negotiate targets, and developing countries abandoned their view that the US must be amongst the leaders and were willing to negotiate targets for themselves, it would be a great step forward for the global environment. One of the options for nation-states to negotiate over could then indeed be something like “contraction and convergence”. It is still hard to see why countries would want to throw away a global framework like Kyoto, which requires only that they move on to negotiate a future round of emission targets. It sets no constraints on how those should be designed, or who should participate.

But at the moment, the central focus should not be on the US or developing countries, but on whether the countries that have accepted targets have the means and the will to implement them.

Europe’s promise

The centrepiece of international implementation is now the European Union’s Emissions Trading System (EU ETS), launched in January 2005. This sets limits on emissions from European heavy industry and power generation while enabling them to trade their allocations. It covers energy and industrial sector emissions in twenty-five of the thirty-four industrialised countries that are party to Kyoto; it is, in short, the “big beast” of implementation policies.

Canada has expressed a desire to link its implementation system to the European Union’s. Japan is watching closely. Russia and the developing countries are waiting to see if the EU ETS can drive foreign investment in clean technology.

The EU ETS is structurally sound but has got off to a weak start, with many EU governments handing out overly generous emission allocations that do not correspond with their Kyoto targets. Barely a week after Tony Blair, the British prime minister, reiterated warnings about the risks to the planet, his government announced a big increase in emission allowances to industry. Setting targets (whether in real-world negotiations, or in imagined global solutions) is the easy part: the key now is to deliver.

The present weak start may allow European industry to bury its head in the sand for another couple of years – but not more. It also illustrates why the process must be based on legally binding caps. The first period of the EU ETS is a trial before the Kyoto period of 2008-12, so governments have faced no constraint. When the next round of industry allocations are negotiated, for the Kyoto period, governments will face the reality that surplus allocations to one sector are at the expense of others.

Kyoto is the central achievement of a decade and a half of climate diplomacy. Europe’s public and international credibility now hinges on effective implementation. The European Union’s ETS is itself a monumental achievement, but its weak implementation could threaten everything. Unless the British government and its partners demonstrate a more serious and effective commitment to deliver, all the rhetoric at the G8 and EU presidency will be, dare I say, hot air. The governments of the world have created the tools to start tackling climate change in earnest. They must now start using them.