Download The Kyoto Protocol

MEMO/05/49
Brussels, 16 February 2005
The Kyoto Protocol
What is the Kyoto Protocol?
The United Nations Framework Convention on Climate Change (UNFCCC) and its
Kyoto Protocol provide the only international framework for combating climate
change.1
The UNFCCC, the first international measure to address the problem, was adopted
in May 1992 and came into force in March 1994. It obliges all its signatories to
establish national programmes for reducing greenhouse gas emissions and to
submit regular reports, and requires the industrialised signatory countries2, but not
developing countries, to stabilise their greenhouse gas emissions at 1990 levels by
the year 2000.
By differentiating between industrialised and developing countries, the UNFCCC
recognises that industrialised countries are responsible for most of the current
buildup of greenhouse gases in the atmosphere and also have the institutional and
financial capacities for reducing their emissions. The Parties meet annually to review
progress and discuss further measures, and a number of global monitoring and
reporting mechanisms are in place to keep track of greenhouse gas emissions.
Even in 1994 it was recognised that the initial UNFCCC commitments would not be
enough to halt the global increase in greenhouse gas emissions. On 11 December
1997, governments took a further step and adopted a protocol to the UNFCCC in the
Japanese town of Kyoto: the Kyoto Protocol. Building on the UNFCCC framework,
the Protocol sets legally binding limits on greenhouse gas emissions from
industrialised countries and envisages innovative market-based implementation
mechanisms aimed at keeping the cost of curbing emissions low.
Under the Kyoto Protocol, industrialised countries are required to reduce their
emissions of six greenhouse gases (CO2, which is the most important one, methane,
nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride) on
average by 5.2 % below the 1990 level during the first “commitment period” from
2008 to 2012. There are no emission targets for developing countries.
1
2
Comprehensive information on the UNFCCC and the Kyoto Protocol can be found at
http://unfccc.int.
The UNFCCC divides countries into two main groups: As of 7 February 2005, there are
189 Parties to the Convention, out of which 36 industrialised countries are listed in the
Convention’s Annex I, and the remaining 153 are known as non-Annex I countries.
Annex I countries include the 25 industrialised countries that were members of the
organisation for Economic Co-operation and Development (OECD) in 1992, the 25 EU
Member States and 11 countries with economies in transition to a market economy,
including Russia.
A five-year commitment period was chosen rather than a single target year to
smooth out annual fluctuations in emissions due to uncontrollable factors such as
weather.
International negotiations on commitments after 2012 are scheduled to start in 2005.
On 9 February 2005, the Commission adopted a Communication3 setting out the key
elements of the EU’s post-2012 strategy
With the Protocol’s entry into force on 16 February 2005, the commitments entered
into by ratifying countries become legally binding. The rules for entry into force
require that at least 55 Parties to the UNFCCC ratify the Protocol and that those
include industrialised countries (Annex I countries) accounting for at least 55% of
CO2 emissions in 1990. The first threshold was met some time ago, with no fewer
than 140 countries plus the European Community having ratified to date. Russia’s
ratification on 18 November 2004 allowed the 55% threshold to be met and started
the countdown to the Protocol’s entry into force today, 90 days later. Only three
countries with targets under the Protocol have not ratified it: Australia, Monaco and
the United States.
After the Kyoto Protocol was adopted, negotiations on the details of the mechanisms
it envisages and on the rules of implementation continued. The final negotiations
were concluded with the Marrakesh Accords in 2001. The EU played a major role in
bringing these negotiations to a successful conclusion.
What does the Protocol’s entry into force change?
The Protocol’s entry into force:
- Reinvigorates global efforts to combat climate change. It means that 140 and
the EU are co-operating in addressing this challenge, signalling to the rest of the
world that this is not only possible but can also be done in a cost-effective way.
- Means that the industrialised countries with targets are legally obliged to limit or
reduce their greenhouse gas emissions by 2012
- Triggers the early start-up of market-based instruments envisaged by the
Protocol which will create global emissions trading markets. These instruments
allow the Parties with reduction targets to meet their commitments costeffectively and also help developing countries to limit their emissions.
Experience with them will provide important lessons for designing a costeffective global climate policy for the period after 2012.
- Provides the legal basis for international negotiations on a post-2012 climate
change regime to start. The first Meeting of Parties to the Protocol will be held
in November 2005.
- Sends a strong signal that there is increasing political will to move towards a
global ‘climate-friendly’ economy. This will provide additional incentives for the
private sector and the research community to drive innovation and develop
competitive and clean technologies for the future.
3
“Winning
the
Battle
Against
Global
Climate
Change,”
http://www.europa.eu.int/comm/environment/climat/pdf/comm_en_050209.pdf).
2
(see
EU commitments under Kyoto and progress towards meeting them
Under the Protocol, the EU has committed itself to reducing its greenhouse gases
emissions by 8% during the first commitment period from 2008 to 2012. This target is
shared between the 15 countries that were EU Member States at the moment of the
EU’s ratification of the Protocol on 31 May 2001 under a legally binding burdensharing agreement. This agreement sets an individual emissions target for each EU15 Member State4. Of the ten Member States that acceded on 1 May 2004, eight
have individual reduction targets of 6 or 8%. Only Cyprus and Malta are not included
in Annex I to the Convention and thus do not have a target.
The EU more than met its UNFCCC commitment to stabilise its greenhouse gas
emissions at 1990 levels by 2000: it reduced emissions by 3.3% over the period.
The Commission’s latest progress report,5 released in December 2004, shows that in
2002 the greenhouse gas emissions of the EU-25 were 9% below the 1990 level.
Emissions from the EU-15 were 2.9% below 1990 emissions. With the effective
implementation of existing and additional policies and measures, as well as the use
of the Kyoto mechanisms, the EU is projected to meet its Kyoto target. However, the
report also shows that a number of Member States will need to work hard to get their
emissions on track. (See Annex for details).
What will happen if a country with a target misses it?
The compliance regime for the Kyoto Protocol is among the most comprehensive
and rigorous in the international arena. If a Party fails to meet its emissions target,
the Protocol requires it to make up the difference in the second commitment period
(after 2012), with an additional 30% penalty. It must also develop a compliance
action plan, setting out the actions that it will take to meet the target and the
timetable for doing so. In addition, its eligibility to “sell” under the Protocol’s
international emissions trading will be suspended.
If one of the 15 Member States bound by the EU’s burden-sharing agreement
misses its target, the European Commission can decide to start an infringement
procedure, which may, in the end, result in daily fines imposed by the European
Court of Justice.
For these EU-15 Member States, the Kyoto Protocol compliance procedures will only
apply if the EU-15 as a whole misses its 8% reduction target. Should this occur, then
each Member State will be held to its target under the burden-sharing agreement,
and the EU as a whole will be in non-compliance with its obligation to reach the -8%
target.
The remainder of the EU-25 are bound to their individual targets as set out in the
Kyoto Protocol, both under the Kyoto Protocol’s non-compliance procedures and
under EU law.
4
5
Council Decision 2002/358/EC of 25 April 2002
Catching
up
with
the
Community’s
Kyoto
Target”,
http://www.europa.eu.int/comm/environment/climat/progress_report.htm
3
see
Kyoto’s market-based mechanisms
The Kyoto Protocol envisages three market-based mechanisms: emissions trading,
Joint Implementation and the Clean Development Mechanism. These are to allow
industrialised countries to meet their targets through trading emission allowances
between themselves and gaining credits for emission-curbing projects abroad. Joint
Implementation refers to projects in countries that have emission targets, whereas
the Clean Development Mechanism refers to projects in developing countries with no
targets.
The rationale behind these three mechanisms is that greenhouse gas emissions are
a global problem and that the place where reductions are achieved is immaterial in
scientific terms. In this way, reductions can be made where costs are lowest, at least
in the initial phase of combating climate change.
Detailed rules and supervisory structures have been set up to ensure that these
mechanisms are not abused.
Emissions trading
Anticipating the Protocol’s entry into force, and in order to tackle its greenhouse gas
emissions, the EU has implemented its own internal emissions trading scheme. This
system, which started on 1 January 2005, covers all 25 EU Member States and is
the first multi-national emissions trading scheme in the world.
Under the EU scheme, the EU Member States have set limits on CO2 emissions
from energy-intensive companies (around 12,000 steel factories, power plants, oil
refineries, paper mills, and glass and cement installations) by issuing allowances that
determine how much CO2 these companies are allowed to emit. Companies that
emit less than the number of allowances they received can sell the surplus to
companies that have problems staying within their limits or for which emissions
reduction measures are too expensive in comparison with what the allowances will
cost. Any company may also increase its emissions above the level of its allowances
by acquiring more allowances from the market.
This scheme induces companies to make emission cuts where they are cheapest,
thereby ensuring that reductions are made at the lowest possible cost to the
economy and that innovation is fostered.
It is estimated that the companies currently participating in the scheme account for
around 45% of the EU’s total CO2 emissions. Other sectors, such as aluminium
producers, the chemicals industry and the transport sector, might be brought in later.
The EU has also indicated its willingness to link the EU scheme to trading schemes
in other countries that have ratified the Kyoto protocol.
Joint Implementation and the Clean Development Mechanism
Under the Protocol, Joint Implementation (JI) and the Clean Development
Mechanism (CDM) will allow industrialised countries to achieve part of their emission
reduction commitments by conducting emission-reducing projects abroad and
counting the reductions achieved toward their own commitments. JI will allow for
projects in other industrialised countries with Kyoto targets, while CDM projects are
carried out in countries without targets, i.e. developing countries.
4
A condition for the issue of credits in respect of the reductions achieved is that the
projects result in real, measurable and long-term climate change benefits.
In October 2004 the EU adopted an amendment to the Emissions Trading Directive,
the so-called “Linking Directive”6, which allows European companies covered by the
EU emissions trading system to use credits from CDM projects (from 1 January
2005) and from JI projects (from 1 January 2008) towards meeting their
commitments under the trading scheme. (Governments will be allowed to use credits
from JI and CDM projects towards meeting their commitments under the Kyoto
Protocol during the first Kyoto commitment period from 2008 to 2012).
The reasoning behind JI and CDM is similar to that behind emissions trading: It does
not matter where emissions reductions are achieved since climate change is a global
problem. The important thing is that they take place. Allowing the use of CDM and JI
credits under the emissions trading scheme lowers the annual compliance costs for
companies covered by the scheme. JI and CDM projects also transfer
environmentally sound technology to countries with economies in transition (JI) and
developing countries (CDM), which will help them move onto a sustainable path of
development.
The directive excludes nuclear projects, in line with the Kyoto Protocol’s rules, as
well as carbon “sinks.” Carbon sinks - planting forests to soak up CO2 - have been a
contentious issue at UN level because they do not bring technology transfer, they
are inherently temporary and reversible, and uncertainty remains about the effects of
emission removal by carbon sinks. While there is international agreement on what
types of forestry projects might be acceptable for use by governments under the
Protocol, a number of technical and political issues remain to be resolved before
such credits can be used by companies in the EU trading scheme.
EU action to combat climate change
Combating climate change is one of the main commitments under the EU’s
sustainable development strategy as endorsed by the European Council in Göteborg
in 2001, which also reaffirmed the EU's commitment to meeting its Kyoto target. The
Brussels European Council of 20-21 March 2003 invited the Member States to
accelerate progress towards meeting the Kyoto Protocol targets. Climate change is
also one of the four priority areas under the Community’s 6th Environmental Action
Programme, which calls for full implementation of the Protocol as a first step towards
reaching a long-term target of 70% in emission cuts.7
The backbone of the Commission’s effort to implement the Protocol is the “European
Climate Change Programme” (ECCP), which was launched in March 2000.
Complementing the efforts of the Member States, the ECCP’s goal is, with all the
relevant stakeholders, cost-effective measures that will help the EU meet its 8%
emissions reduction target. Since the ECCP was launched, more than 200
stakeholders have been involved in 11 different working groups.
6
Directive 2004/101/EC of 27 October 2004 amending Directive 2003/87/EC establishing a
scheme for greenhouse gas emission allowance trading within the Community, in respect
of the Kyoto Protocol’s project mechanisms.
7
Decision 1600/2002/EC of the European Parliament and the Council of 22 July 2002.
5
The findings of the Second ECCP Progress Report issued in April 2003 suggest that
plenty of cost-effective measures exist to meet the EU’s Kyoto target.8 Forty-two
potential emission reduction measures at a cost of less than €20 per tonne of CO2
equivalent have been identified, with a total emission reduction potential of up to 700
million tonnes of CO2 equivalent. The emission reduction needed to meet the EU's
Kyoto target is estimated at around 340 million tonnes of CO2 equivalent.
While the emissions trading scheme is the measure that offers the most potential for
cost-effective emissions reductions, the Council and the European Parliament have
also adopted several other initiatives proposed by the Commission. These include
legislation to promote renewable sources of electricity production and bio-fuels in
road transport, legislation on the energy efficiency of buildings, the directive linking
JI/CDM to the EU’s emission trading scheme and a directive to promote combined
heat and power generation. Other measures proposed by the Commission, for
example legislation regulating fluorinated gases, are still under consideration. The
Commission has also negotiated an agreement with all European, Japanese and
Korean carmakers to cut CO2 emissions from new cars by an average of 25% below
1995 levels by 2008/2009.
Impacts of climate change
The effects of climate change are already beginning to show and are expected to
become stronger as temperatures rise further. Over the 20th century the global
average temperature rose by about 0.6°C and the mean temperature in Europe
increased by more than 0.9°C. Globally, the 1990s were the warmest decade since
1861, and the 10 warmest years on record have all occurred since 1991.
The Intergovernmental Panel on Climate Change (IPCC), which brings together the
world's leading experts in this field, stated in its Third Assessment Report in 2001
that the globally averaged surface temperature is projected to increase by between
1.4 and 5.8°C from 1990 to 2100 under business-as-usual, and sea levels by
between 9 and 88 centimetres over the same period. If nothing is done to prevent or
limit these changes, they will have major consequences for the ecosystem and our
economies.
These consequences will include geographic shifts in the occurrence of different
species and/or the extinction of species. Changes in rainfall patterns will put
pressure on water resources in many regions, which will in turn affect both drinking
water supplies and irrigation. Extreme weather events and floods will become more
frequent with their well-known economic costs and human suffering. Warm seasons
will become dryer in the interior of most mid-latitude continents, increasing the
frequency of droughts and land degradation. This will be particularly serious for
areas where land degradation, desertification and droughts are already severe.
Developing countries will suffer particularly, and tropical diseases will extend their
geographic range.
The IPCC’s findings were reinforced in a report by the European Environment
Agency issued in August 2004,9 which concludes that Europe is warming faster than
the global average. The temperature in Europe is projected to climb by a further 2.06.3 °C this century as emissions of greenhouse gases continue building up.
8
9
Second ECCP Progress Report - "Can we meet our Kyoto targets?", April 2003.
“Impacts of Europe's changing climate”, EEA Report No 2/2004, available through:
http://reports.eea.eu.int/climate_report_2_2004/en/.
6
The report identifies a broad range of current and future impacts of climate change in
Europe, including the following:
- Almost two out of every three catastrophic events since 1980 have been directly
attributable to floods, storms, droughts or heatwaves. The average number of
such weather and climate-related disasters per year doubled over the 1990s
compared with the previous decade. Economic losses from such events have
more than doubled over the past 20 years to around €8.5 billion annually. This is
due to several reasons, including the greater frequency of such events but also
socio-economic factors such as increased household wealth, more urbanisation
and more costly infrastructure in vulnerable areas.
- The annual number of floods in Europe and the numbers of people affected by
them are rising. Climate change is likely to increase the frequency of flooding,
particularly of flash floods, which pose the greatest danger to people.
- Climate change over the past three decades has caused decreases in
populations of plant species in various parts of Europe, including mountain
regions. Some plants are likely to become extinct as other factors, such as
fragmentation of habitats, limit the ability of plant species to adapt to climate
change.
- Glaciers in eight of Europe's nine glacial regions are in retreat, and are at their
lowest levels for 5,000 years.
- Sea levels in Europe rose by 0.8-3.0 mm per year in the last century. The rate of
increase is projected to be 2-4 times higher during this century.
- Projections show that by 2080 cold winters could disappear almost entirely and
hot summers, droughts and incidents of heavy rain or hail could become much
more frequent.
What will happen after the Kyoto Protocol ends in 2012?
Discussions in the international community on post-2012 action to combat climate
change are due to start this year. What is already clear is that the greenhouse gas
reductions by industrialised countries required under the Protocol will not be enough
to solve the problem of climate change. The EU's target is to limit the increase in
global average temperature to 2°C above the pre-industrial level - an increase
believed to be within our adaptive capacities. The accomplishment of this target will
require much greater reductions in global greenhouse gas emissions.
It also seems clear that the future regime should include action by a wider range of
countries than Kyoto does and that more countries will at some point have to take on
measurable reduction commitments, based on "common but differentiated
responsibilities."
In spring 2004 the European Council invited the Commission to prepare a cost/
benefit analysis on emissions reduction strategies, including mid- and longer-range
targets. In response to this request the European Commission launched, in
September 2004, a stakeholder consultation to gather ideas and research results
from stakeholders on a global climate change regime for the future. A stakeholder
conference was held on 22 November.10 The comments and information gathered
fed into the Commission’s report for the Council, the Communication “Winning the
Battle Against Global Climate Change,” which the Commission adopted on 9
February 2005.11
10
11
See http://www.europa.eu.int/comm/environment/climat/stakeholder_conf.htm
See http://www.europa.eu.int/comm/environment/climat/pdf/comm_en_050209.pdf
7
The Communication recommends five key elements for the EU’s post-2012
negotiating strategy:
- broader international participation
- commitments from a greater number of industrial sectors (especially aviation
and maritime transportation),
- increased development and uptake of low-carbon technologies,
- use of market mechanisms
- adaptation to the impacts of climate change
This report will provide the basis for discussions at the spring European Council
Meeting of EU leaders in March 2005. The heads of state and government are
expected to provide guidance on what the global climate change regime should look
like in the future.
8
Annex
The following figures and tables give details of actual and projected trends in EU
emissions of the six greenhouse gases up to 2002. Further details can be found in
the Commission’s progress report from December 2004.12 Emissions from
international aviation and shipping, and emissions from/removals by land use
change and forestry, are not covered.
120
110
100
12
101.4
100
97.1
90
92.0
G HG em issions
Target path 2010
CO 2 em issions
CO 2 target 2000
2010
2005
2000
1995
80
1990
GHG emissions (base year = 100)
Figure 1: Total EU-15 greenhouse gas emissions in relation to the EU-15 Kyoto
target
G HG target 2010
Report from the Commission, “Catching up with the Community’s Kyoto Target”,
Brussels, 20.12.2004, COM(2004) 818 final.
9
Table 1: EU-25 greenhouse gas emission trends and Kyoto Protocol targets for
2008-2012
GHG
emissions
for base
13
year
(Mt CO2)
Reduction
14
target
GHG
emissions
2002
(Mt CO2)
Change
2002
relative to
base year
(in %)
Change
2002
relative to
2001
(in %)
Distanceto target
indicator
(index
points)
Austria
78,0
-13,0 %
84,6
+8,5 %
+0,3 %
+16,3
Belgium
146,8
-7,5 %
150,0
+2,1 %
+0,5 %
+6,6
Cyprus
--
--
--
--
--
--
Czech Republic
192,1
-8,0 %
142,8
-25,7 %
-3,5 %
-20,9
Denmark
69,0
-21,0 %
68,5
-0,8 %
-1,2 %
+11,8
Estonia
43,5
-8,0 %
19,5
-55,2 %
+0,3 %
-50,4
Finland
76,8
0,0 %
82,0
+6,8 %
+1,7 %
+6,8
France
564,7
0,0 %
553,9
-1,9 %
-1,4 %
-1,9
Germany
1253,3
-21,0 %
1016,0
-18,9 %
-1,1 %
-6,3
Greece
107,0
+25,0 %
135,4
+26,5 %
+0,3 %
+11,5
Hungary
113,1
-6,0 %
78,0
-31,0 %
-1,2 %
-27,4
Ireland
53,4
+13,0 %
68,9
+28,9 %
-1,6 %
+21,1
Italy
508,0
-6,5 %
553,8
+9,0 %
-0,1 %
+12,9
Latvia
28,9
-8,0 %
10,6
-63,1 %
-1,1 %
-58,3
Lithuania
50,9
-8,0 %
20,2
-60,2 %
-2,6 %
-55,4
Luxembourg
12,7
-28,0 %
10,8
-15,1 %
+10,4 %
+1,7
Malta
2,2
--
2,8
+28,5 %
0,0 %
--
The Netherlands
212,5
-6,0 %
213,8
+0,6 %
-1,1 %
+4,2
Poland
565,3
-6,0 %
382,8
-32,3 %
0,0 %
-29,0
Portugal
57,9
+27,0 %
81,6
+41,0 %
+4,1 %
+24,8
Slovakia
72,3
-8,0 %
51,9
-28,2 %
-0,8 %
-23,4
Slovenia
20,6
-8,0 %
20,4
-1,1 %
+0,6 %
+3,7
Spain
286,8
+15,0 %
399,7
+39,4 %
+4,2 %
+30,4
Sweden
72,3
+4,0 %
69,6
-3,7 %
+2,0 %
-6,1
United Kingdom
746,0
-12,5 %
634,8
-14,9 %
-3,3 %
-7,4
Total EU-15
4245,2
-8,0 %
4123,3
-2,9 %
-0,5 %
+1,9
Total EU-25
5334,1
--
4852,4
-9,0 %
+0,02 %
--
13
14
Base year for CO2, CH4 and N2O is 1990; for fluorinated gases 1995 is used as the
base year, as allowed for under the Kyoto Protocol. This reflects the preference of most
Member States.
EU-15 = burden sharing target
2