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Christoph Bals, Manfred Treber, Klaus Milke, Dörte Bernhardt, Gerold Kier & Britta Horstmann
Translation by Susanne Theis and Gerold Kier
20 July 2001
1. Why do we actually need the Kyoto Protocol?
Five reasons which we think are most important:
First: trend reversal in industrialized countries' greenhouse gas emissions
The Kyoto Protocol has the potential to reverse the trend of greenhouse gas emissions in the industrialized countries. When it enters into force, the intense increase of greenhouse gas emissions in the industrialized world could be replaced by a reduction or stabilization until 2012. A trend reversal is usually the crucial moment in a long-time political process.
Second: a legally binding international agreement is essential
The Kyoto Protocol is the entrance to legally binding, internationally co-ordinated climate protection. This is a decisive qualitative difference compared to the stabilization target of the UN Framework Convention on Climate Change of 1992, a target which is toothless due to its non-binding character. The Kyoto Protocol on the other side does have a legally binding character and this is the reason why some of the main polluters - especially the U.S. - are trying to drop out of it.
Third: keep the option for an acceptable climate path open
Without the Kyoto Protocol the chances of reaching a climate path which is acceptable for both humanity and nature are greatly reduced. The Kyoto Protocol itself does not reach this path either. But at least it opens up the possibility of eventually taking the steps which are necessary for the next decades during the future negotiation process.
Those who reject the Kyoto Protocol because of its insufficient targets ride roughshod over the people who have to pay for the consequences of global warming (especially in developing countries). Already, since 1998, the presumably warmest year of the last millenium, environmental refugees have been outnumbering refugees from war zones on our planet, according to the International Red Cross Organization. The consequences of weather catastrophes - storms, floods, droughts - are becoming an essential safety problem in more and more countries and are posing a threat to world peace.
Fourth: an effective braking mechanism is necessary to a serious braking manoevre
The Kyoto Protocol is insufficient regarding its targets, but it could at least represent an effective braking mechanism with its absolute reduction goals for industrialized countries if it contained a somewhat efficient compliance mechanism and if the main loopholes were eliminated. Political pressure has to make sure that these brakes will actually be used in the future, i.e. common ground has to be found in agreeing on the necessary aims. The brakes have to be in working condition - without new negotiations which would take another couple of years - when the political willingness to take action develops. (Maybe only future catastrophes will produce such a political willingness.) It is necessary to reduce global greenhouse gas emissions by 60% until the middle of this century. For the industrialized countries this means a reduction of 80%.
Fifth: prevent undermining the legitimation of the UN
It is not only international climate protection which is at stake when negotiating the Kyoto Protocol. It is also the legitimation of the UN to regulate the uninhibited globalization. Especially in the U.S. there is a widespread - also rooted within the government - political movement of anti-multilateralism which aims at suppressing the influence of the UN as much as possible and which favors bilateral solutions which offer better possibilities of taking influence. The Kyoto process is the most prominent and far-reaching attempt to regulate globalization in an ecological way. If the Kyoto Protocol was doomed after ten years of negotiations, the UN's competence in solving problems would be questioned far beyond the climate issue. It has to be anticipated that future strategies concerning the climate issue may be developed within organizations such as G8, NAFTA, WTO or OECD which are not legitimized. This would shift the decision decision making criterion from "one country, one vote" to "one dollar, one vote".
2. In which case is the Bonn Climate Summit a success and in which case not?
During the high-level segment of the summit (Thu 19 – Mon 23 July) a political document must be adopted. The majority needed for ratification must regard this document as being sufficient to start the ratification process and to finish it before the RIO + 10 Summit in Johannesburg (2002). The document must provide for the necessary trend reversal in greenhouse gas emissions of the industrialized contries in a legally binding way. If a consensus cannot be reached on such a document, the conference has to be considered as a failure.
It would be a partial success, if such a document was produced and some countries which are necessary for the agreement to come into force (such as Japan) took their time checking whether it is suitable for them to ratify. In this case it would be very important to determine a deadline by which this checking process must have come to an end. It should be a relatively early deadline which would still allow the agreement to come into force in 2002. The remaining countries would be able to start their ratification process immediately after the Bonn conference on the basis of the adopted text. However, the protocol would only enter into force if a sufficient number of industrialized countries ratified it.
3. How many and which countries have to participate, so the Kyoto will come into force?
The Kyoto Protocol will come into force as soon as 55 or more parties have ratified, provided that these parties account for at least 55 percent of the emissions in industrialized countries in the year 1990. It will be no problem getting over the first hurdle, as 33 countries have already ratified.
The second hurdle is a much greater obstacle. The U.S. alone is responsible for 36 per cent of the emissions in the industrialized world. Up to now, only one industrialized country - Romania - has ratified. In concrete terms this means: At least the EU, Switzerland, Norway, the East European countries, Russia and Japan have to participate. If Japan as well as the US don't ratify, practically all remaining industrialized countries would have to ratify, including Canada and Australia who are usually tow the U.S. line.
4. Why is the number of countries which have ratified so small? Doesn't this show that hardly anybody is in favour of the Kyoto Protocol?
This argument is not justified, even if the U.S. keeps repeating it all the time. One year after Kyoto the parties to the convention agreed in Buenos Aires to decide upon the details of the Kyoto Protocol (handling the flexible mechanisms, inclusion of sinks, non-compliance mechanism, financial mechanism with regard to developing countries, etc) until the year 2000, so they wouldn't be ratifying 'a pig in a poke'. Initially, ratification was planned to take place after the climate summit in The Hague. In The Hague, however, the Parties failed to reach agreement on the details. At the climate summit in Bonn it will be crucial whether the ministers will agree upon a document which triggers the beginning of the ratification process in the industrialized countries, a process which should be finished by 2002.
5. Why does Japan hold the key to Kyoto?
The EU, Norway and Switzerland intend to ratify the Kyoto Protocol (the biggest element of uncertainty within the EU is Italy).
The Eastern European countries also seem to be following this step. Romania has already ratified. (The biggest impediment for these countries is the discontent with the high payments which have to be made to the developing countries according to Pronk's paper.)
Russia knows on the one hand that they are in a position to prevent the Kyoto Protocol from entering into force. Hence, in addition to 'hot air' they are trying to obtain even 'forest air' (loans for the growth of sinks on a large scale and (almost) free of charge). On the other hand, all the other countries know that Russia would be the big winner of the Kyoto Protocol anyway, both in terms of finance and in terms of technology transfer (although without the participation of the US this would only be true to a smaller extent compared to a scenario where the US buys large quantities of allowances). That's why most observers are expecting that Russia will eventually ratify - even if no further concessions are made.
In this case, Japan holds the key to Kyoto. Will they use the key to help Kyoto come into force?
Japan has kept its options open so far. They are announcing two - apparently - incompatible principles.
- The U.S. must participate should the Kyoto Protocol come into force.
- The Kyoto Protocol must come into force by 2002.
GERMANWATCH interprets the Japanese strategy as follows:
- As a first step, Japan will try hard to get the U.S. on board after all. Japan is even willing to accept a modification of the base year or the reduction targets, if this persuaded the U.S. to join in.
- Japan will continue to stick to this attempt until the last minute. This will improve Japan's position in the negotiation, because the EU and others will have to make concessions in order to win Japan over to a ratification strategy.
- In the last minute, though, Japan could come round and save the Kyoto Protocol. Japan could hope for a general approval in the ratification process at home, because they would be able to claim that they have done everything to persuade the U.S.; and because they would have obtained as many concessions as possible from Europe and the developing countries.
- It remains unclear, however, how Japan defines 'the last minute'. Will it be the last minute of the high level segment in Bonn? Or will it be the climate summit in Marrakesh in November 2001? Or even later?
It will remain unclear until the end, whether Japan is actually willing to go ahead without the U.S. Japan is currently involved in an economic reformation process and has to rely on the support of the U.S. Japan will be very careful not to put off their closest ally.
6. How can the Kyoto Protocol actually be useful without the participation of the U.S. as the main polluter?
Undoubtedly, the U.S. (as the biggest polluter and economically most powerful country) must eventually take a meaningful part in the international climate protection regime. This prior concession is also necessary in order to reach future agreements which aim at the limitation of emission growth in those developing countries which are most important in terms of climate politics.
In the opinion of GERMANWATCH, Kyoto coming into force would be the most powerful instrument to persuade the U.S. to eventually join in later on. Especially an emerging international emissions trading market would be a strong incentive for the U.S. to participate in the Kyoto Protocol within a few years. The big transnational companies will put more and more pressure on, if they have to participate in the emissions trading market in Japan and Europe and won't be able to set up an emission trading mechanism within the company just because the U.S. is not a player in the market.
7. Wouldn't it lead to a competitive disadvantage, if the Kyoto Protocol came into force without the participation of the U.S.?
The opposite would happen - at least in the long and medium run. Europe is in the lead with a surge of innovative initiatives heading towards an age of a sustainable energy future. Sooner or later, the necessity of climate protection will force everyone to follow suit. That's why countries which are intensively investing in energy efficiency and renewable energy today, will profit from a significant competitive advantage tomorrow.
This is also an important reason why over 130 international companies have joined the business initiative 'e-misssion 55' which calls for a fast ratification of the Kyoto Protocol by the necessary ratification majority. It is the first time that such a great number of business representatives declare themselves in favour of a legally binding climate regulation, even knowing that the U.S. won't participate in the first step. Apart from the main initiator 'Deutsche Telekom' the following companies are among the signatories: Metro (Europe's biggest retail trade business), Otto (the world's biggest mail order business), Credit Suisse (second largest bank in Europe), Swiss Re (second largest reinsurance company worldwide), Shimano (globally leading manufacturer of bicycle components), CGNU (biggest insurance company of Great Britain), Deutsche Bahn (Europe's leading railroad company), Fiege (leading middle-class logistics company), SolarWorld (leading middle-class photovoltaic and wind power company), OBI (leading supermarket for building materials), etc. Every day new sponsors are joining: Quelle, Karstadt, Haeraeus, ...
This business initiative is supported by GERMANWATCH and WWF as well as by the European Business Council for a Sustainable Energy Future (e5).
The initiative 'e-mission 55' has presented the full list of participating companies at a press conference on 17 July 2001. Further information is available on the website 'www.emission55.com'.
8. Can the U.S. or the developing countries obstruct the negotiations by a veto?
In principle this is possible. The climate summit has to decide by common consent. This means that no important group and no superpower should obstruct the adoption of the necessary document. The way some countries negotiate, however, shows that they do not agree with the aims of the Framework Convention on Climate Change. Thus the objections of Saudi Arabia and some other oil countries were not considered during many significant decisions for climate protection.
At the summit of Goteborg (Sweden) the U.S. declared that they would not obstruct the process by a veto. At preliminary talks in The Hague at the end of June they said that they intended to seriously take part in negotiations which might set a precedent for any other multilateral ecological agreement.
Yet, this could imply that the U.S. are intending to use their veto against the legally binding character of the Kyoto Protocol and the non-compliance mechanisms. This could be in fact the end of Kyoto.
The developing countries belong to the beneficiaries of the Kyoto Protocol in two respects. On the one hand, they would profit most from a mitigation of the climate threat. On the other hand, they will - according to Jan Pronk - receive a billion dollars every year (starting in 2005) for adaptation and technology transfer. This might however actually provide a reason for a veto by developing countries. Since the U.S. probably won't ratify, a large part of the promised money would be lost. Also the Eastern European countries are refusing to raise their portion of the finances for developing countries. Anger about this could lead to an obstruction by the G77 group.
9. Won't the emission growth in developing countries ruin all of the emission reduction achievements in the industrialized countries?
Historically, the industrialized countries are responsible for about 80% of the accumulated emissions in the atmosphere. Today they are responsible for 60% of the emissions of CO2, the most important greenhouse gas. Furthermore, the industrialized countries possess the largest amount of money and the most advanced technology. They determine the future path of technology to a large extent. That's why it was decided in common consent at the climate summit in Berlin (1995) that it is the industrialized world which has to take the first step in accordance with the principle of common but differentiated responsibility.
Nobody denies that those developing countries which are economically potent and significant for the emission growth rate will have to accept restriction targets of their greenhouse gas emissions in future commitment periods. If the U.S. are really interested in a participation of the newly industrialized countries - as they continue to claim - , then they are pursuing a self-destructive strategy by rejecting the Kyoto Protocol. If the U.S. drops out, future commitments of newly industrialized countries become more and more unlikely.
In the point of view of GERMANWATCH, the principle of "One man, one emisssion unit" must be the very first principle when assigning future emission allowances. The emission of greenhouse gases should not remain a long-term privilege of the rich in our world.
Today already, many measures for climate protection are in accordance with the economic and social development of developing countries. China, for example, has substantially reduced its CO2-emissions - contrary to all predictions - for economic reasons. Whereas China used to be the world's biggest consumer of coal (adversely affecting the climate) in 1999, the U.S. overtook even China in the year 2000. Until 1996 the use of coal had immensely increased in China. Since then the use of coal as well as the CO2-emissions have decreased by almost 30 per cent. In the U.S., however, there was the world's largest absolute increase in the use of coal during the 90's (cf. paper of GERMANWATCH/Ludwig-Bölkow-Systemtechnik: Analysis of BP Statistical Review of World Energy with respect to CO2-Emissions, 2nd edition, July 2001 - www.germanwatch.org / www.lbst.de). The U.S. criticism of the Kyoto Protocol that developing countries - especially China - should be included already today, sounds more and more absurd. The country with the largest greenhouse gas emissions acts as if they tried to ensure themselves the privilege of blowing out a vast amount of greenhouse gases which is many times the amount other states emit. This trend in the U.S. reduces the chances that important developing countries will agree to a limitation of their emission growth rate within the next commitment period.
10. Why should we support the Kyoto Protocol, even though its climate protection targets are insufficient?
The Kyoto Protocol itself would not ensure at all that the earth will follow a safe path of climate. It opens up the chances, though, that this may be achieved in a future negotiation process.
The Kyoto process is a 'caterpillar',
so to speak. Accordingly, it is moving ahead very slowly. Its targets are
limited just like a caterpillar's scope of action. The Kyoto process does
have the potential, though, to turn into a 'butterfly'. At the moment,
there is no such thing as a butterfly or another caterpillar as a realistic
alternative. Only cynics will advise trampling on the one caterpillar alive.
11. Why is the inclusion of sinks still a major point of disagreement, having also caused the failure of the climate summit at The Hague?
Of course, the protection and enlargement of forests can make a contribution to climate protection. In Kyoto it would have made sense to agree upon forest protection targets on the one hand, and on emissions reduction targets on the other hand. However, it is problematic to balance the carbon bound by sinks with emissions targets.
The binding of carbon in sinks is not enduring - forest fires, e.g., can release the CO2 at any time. Furthermore we have to fear that at higher temperatures forest soils release much of the carbon they bind. Thus in a few decades most forests might release more CO2 than they bind.
All this warns us to be careful when balancing sinks and emissions reductions. Sinks have the potential to become the largest loophole of the Kyoto Protocol. It is highly problematic to include such uncertainties and "paper entries" which lack a basis in reality into the system. This is valid both for reasons of climate protection and for economic reasons when building up an emissions trading market. As a minimum requirement, we need strict limitations in numbers when including sinks and minimum standards for the protection of biodiversity.
However, many industrialized countries see their targets becoming more and more unreachable because of their inactivity in terms of climate policy. These countries press for a reduction of their targets "through the back door" by means of the generous inclusion of sinks. There are also some developing countries in Latin America and Africa which hope to get at least some of the CDM projects when forest projects are included. The climate summit at The Hague failed mainly due to the dispute over these different interests which are difficult to harmonize.
12. International emissions trading: isn't it a huge loophole?
No, emissions trading is not a loophole. Emissions trading will only be permitted among countries which have accepted legally binding targets. When the emissions of some countries are lower than their targets, they will be allowed to sell the difference in emissions to other countries which do not reach their targets. As a result, the appointed emissions reductions target of industrialized countries as a whole is neither getting smaller nor larger. The so-called "hot air" doesn't reduce the appointed five percent reduction target of industrialized countries, either. If hot air can be limited, the 5 % reductions of Kyoto will be increased to 10 %. However, the fact that the USA has abandoned the Kyoto Protocol represents a real loophole as this reduces the target which can be reached.
Depending on how it is designed, the Clean Development Mechanism (CDM) could also also become a loophole. In the framework of the CDM, players from industrialized countries are allowed to fund climate protection projects in developing countries and to subtract the resulting emissions reductions from their own reduction targets. Both the industrialized country who funds the project and the project partner in the developing country are interested in the amount of certified emissions reductions resulting from a project being as high as possible. This is true for the industrialized country because it then gets more certificates and for the developing country because it can thus be generous and have the highest possible amount of investments directed towards the country without having the certificates being subtracted from its own emissions target. It would be particularly problematc if all projects which, due to normal technical progress, are better than projects started a few years ago could get certificates. These projects would then become "paper entries" and thus loopholes.
There is another loophole which the Kyoto Protocol only addresses to a small extent: the emissions from international air traffic are excluded from quantitative reductions in the first commitment period. Due to their growth, half of the Kyoto reductions could be neutralized. In September 2001 governments meet in Montreal at the Assembly of the International Civil Aviation Organization to agree upon measures in order to prevent such a development.
13. What are the minimum requirements for emissions trading to work?
It is crucial that the question of liability in case of fraud or negligence in emissions trading is solved. Who is liable if more emissions are sold than the own quota allows? Legal certainty is a crucial basic condition for any market - in this case for the stability of the currency CO2.
A working international emissions
trading market would exert a salutary pressure on all industrialized countries
to actually reach their targets, because for all companies who buy assigned
amount units ("allowances"), the non-compliance of a country has an inflation-like
effect and thus lowers the value of the acquired allowance.