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Background
Background
Kyoto Protocol
On 16 February 2005 the Kyoto Protocol entered into force and industrialized countries have taken binding limits on their greenhouse gas (GHG) emissions. They aim to reduce overall GHG emissions by 5.2% below their 1990 levels between the years 2008- 2012. Six GHGs are covered including: CO2, CH4, N2O, HFCs, PFCs and SF6.
This agreement authorizes four flexible mechanisms in order to reduce the cost of meeting this target. These are: emissions trading, the Clean Development Mechanism, and Joint Implementation.
Under Article 17 of the Kyoto Protocol, emissions trading allows the trading of 'assigned amounts' among Annex B nations. Under Article 12, The Clean Development Mechanism was designed to enable industrialized countries to finance emissions-reduction projects, bringing about sustainable development, in developing countries and receive credit for doing so. Under Article 16, Joint Implementation is the transfer or acquisition of emission reduction units resulting from activities that aim to reduce anthropogenic emissions or enhance their removals. Finally, under Article 4, provisions to facilitate Joint Action (bubbles) by members of established regional groupings such as the EU, is where countries agree to achieve their reduction targets jointly, provided that their combined aggregate anthropogenic carbon dioxide equivalent emissions of GHGs (as listed in annex A) do not exceed their assigned commitments as listed in their QELROs in annex B.
The Buenos Aires Plan of Action adopted at COP4 in November 1998, provides that final decisions on all the mechanisms under Articles 6, 12, 17 of the Kyoto Protocol will be taken at COP6 in 2000. For more background information on the Kyoto Protocol see the UNFCCC website.
“Trading is a market mechanism that has considerable appeal. It forces companies to look at what options they have available to reduce emissions, in a very quantitative way. And when the market exists, it makes companies ask themselves why competitors are finding lower cost options than they have found themselves. It is a stimulus to bringing new technology into practice, because it sets a real cost on emissions and provides market incentives to reduce that cost.” (BP Amoco, September 1999)
Briefings on the Kyoto Protocol negotiations
Useful Studies and Reports
European Union (Ceiling on Kyoto Mechanisms)
The EU governments recently reached an agreement on a proposal to cap industrialized countries' use of the flexible mechanisms, and presented the proposal at the subsidiary bodies meeting in Bonn in June. Under the proposal, parties could meet up to 50% of their emission reduction target through the use of the mechanisms. Domestic action is believed to facilitate a necessary change in unsustainable consumption patterns and to facilitate investments in new technology that can diminish our need for fossil fuels to create wealth. However, as an initial response, the Umbrella group complained that the proposal would « re-open » the package agreed in Kyoto, reduce the flow of new resources to developing countries, impede the cost effectiveness of the mechanisms, hinder wider acceptance of the Protocol by domestic constituencies, and create a double standard by not clarifying how it applies to Protocol Article 4 (EU « bubble »).
For more information, contact: Ulrich Hackenbruch at Germany's Permanent Mission to the EU
For the International Energy Agency (IEA) analysis of the EU proposal on ceilings for the use of the Kyoto Mechanisms, see www.iea.org under "climate change"