Climate Change and the Future of Kyoto
By Bart Mongoven

A great bedtime exercise for insomniacs is reading the minutes from United Nations conferences. The following is an actual summary of a 2004 climate-change meeting composed by a reliable Canadian observer:

"At COP 10 in Buenos Aires in December 2004, delegates agreed to the Buenos Aires Programme of Work on Adaptation and Response Measures. Parties also took decisions on technology transfer, LULUCF, the UNFCCC's financial mechanism, and education, training and public awareness. However, some issues remained unresolved, including items on the LDC Fund, the SCCF, and Protocol Article 2.3 (adverse effects of policies and measures). Meanwhile, lengthy negotiations were held on the complex and sensitive issue of how Parties might engage on commitments to combat climate change in the post-2012 period."

Even more amazing is the fact that dozens of people around the globe actually understand everything in that paragraph. Almost all of those people are currently in Montreal at the 11th Conference of Parties to the Framework Convention on Climate Change/First Meeting of Parties to the Kyoto Protocol (COP/MOP-1). At COP/MOP-1, delegates from countries that have ratified the Kyoto Protocol are discussing, among other things, the current implementation rules, the way success or failure will be measured and, most important, the "second commitment period," a term that refers to the deal that follows the Kyoto Protocol.

While all the alphabet soup of policies and measures from the 2004 meeting remain unresolved and on the table, the last item -- what policies to enact during the post-2012 second commitment period -- has the most important long-term implications. The Kyoto Protocol addresses only the period 2008 to 2012, and it calls for the negotiation of a follow-on treaty to begin in 2005. Essentially, COP/MOP-1 is the first of what will likely be many years of negotiation on the "next Kyoto."

Of course, the most important consideration about the second commitment period is whether there will, in fact, be a Kyoto Protocol at all in 2012. While the Kyoto Protocol will certainly continue to exist in formal, legal terms, its connection to the actual behavior of countries allegedly subject to it is growing tenuous. It looks increasingly likely that the EU and Japan will not meet their emissions-reduction commitments; the United States originally signed the treaty but never ratified it; and the U.S., Australian and major Asian economies seem ready to introduce a competitor to Kyoto. This alternative protocol could credibly lead to far fewer greenhouse gas emissions than would be projected under business-as-usual or, possibly, under a Kyoto regime that does not include the United States and China. Ultimately, while the ministers meet in Montreal to discuss the details and nuances of Kyoto going forward, the elephant in the room is the question of whether Kyoto has a future at all.

Kyoto's problems stem from the fact that the binding limitations it placed on parties were far more difficult to meet than people had anticipated. In 1997, representatives from more than 70 countries signed the pact, which committed members to collectively reduce greenhouse gas emissions 5 percent below 1990 levels by 2012. The United States signed (but never ratified) the treaty and agreed to cut its emissions by 7 percent; Japan agreed to 6 percent; the EU agreed to a collective 8 percent reduction. By the time the ink was dry on the treaty in late 1997, all of the most significant signatories were already 5 to 10 percent above their 1990 emission levels, so the agreements actually amounted to emissions reductions of more than 10 percent. These already ambitious goals were made even more difficult by the continued economic growth of the late 1990s. Economic activity requires fuel, and while the ratio of gross domestic product (GDP) to tons of greenhouse gas emissions has been reduced considerably over the past several years, economic growth has stymied countries' attempts to meet their targets and timetables.

Partly because the goals appeared so difficult, the United States never ratified Kyoto, and U.S. President George W. Bush formally announced in 2001 that his administration was not going to support the protocol and would withdraw from active negotiations. Following the U.S. withdrawal from the treaty, several countries that ratified Kyoto attempted to persuade the Bush administration to rejoin it by offering to negotiate on a variety of provisions designed to blunt the expected economic impact of emissions cuts on the U.S. economy, but these efforts were not successful.

Meanwhile, Washington, Beijing and Canberra began negotiations on an alternative climate accord that committed the three countries to reducing the greenhouse gas intensity of their economic growth. The alternative accord, which cuts emissions per unit of GDP -- but not necessarily the overall national emissions -- had little language relating to implementation and measuring. The agreement did not conflict with Kyoto but proposed technology-sharing arrangements and investment options that, if implemented, would likely make a difference in each signatory's greenhouse gas emissions. Perhaps most important, the U.S.-Asia accord brought China to the table in a way that Kyoto did not, and as the discussions moved forward in 2004 and 2005, Japan and other Asian countries joined the negotiations as well.

The U.S.-Asia accord was announced in June -- essentially coinciding with the G-8 leaders acknowledging, in a joint declaration at a June 2005, meeting in Gleneagles, Scotland, that the United States would not be rejoining Kyoto. In the declaration, G-8 leaders agreed to pursue different paths toward reducing greenhouse gas emissions.

That pretty much closed the book on U.S. participation in Kyoto and, as a result, called into serious question the value of a greenhouse-gas reduction agreement that would never include the world's largest greenhouse gas emitter. A further nail was driven into Kyoto's coffin when, as summer turned to fall, many European countries began to acknowledge that they were unlikely to meet their Kyoto targets. The United Kingdom pleaded economic success, arguing that its economy had simply grown too quickly since 1990 to meet its commitment of a 20 percent reduction. Germany's growth has been slower and its regulatory approach to greenhouse gases has been remarkably strict, but it too will fail to meet its 25 percent reduction commitment.

It seems odd that the various ministers at COP/MOP-1 are acting as if none of this has happened. They have already announced one major agreement -- the acceptance of the implementation plan drawn up at the last conference of parties -- and they are now looking forward to a spirited discussion of the so-called second commitment period.

Despite appearances, the ministers are not oblivious, and it is unlikely they are in collective denial. These are smart, savvy people, and their refusal to publicly acknowledge the fact that national commitments to Kyoto targets are falling like dominoes is deliberate and has an objective. Specifically, the rhetoric surrounding the second commitment period suggests that the participants in COP/MOP-1 are trying to simultaneously accentuate the virtues of emissions reductions in the minds of the public globally, while also trying to find a way -- using the second commitment period -- to encourage national governments to stay on top of the climate-change issue.

In other words, the architects of Kyoto are concerned that if they acknowledge the failures of the first commitment period to significantly reduce emissions, there will never be a second. These government officials and the environmental groups that advise them believe that a second commitment period is essential if the negative impacts of climate change are to be staved off. But even those environmental groups have recently grown openly skeptical of the Kyoto Protocol as a vehicle for global emissions reductions. For example, in a recent report, the influential Washington-based Pew Center on Global Climate Change essentially conceded that the Kyoto Protocol is -- for the time being, at least -- dead in the water, and that alternative venues and ideas are needed to achieve emissions reductions somewhere other than on paper.

Nongovernmental organizations (NGOs) are calling for COP/MOP-1 participants to begin discussions of the second commitment period on the baseline that a temperature rise of more than 2 degrees Celsius will amount to significant harm to people and the global ecosystem. With that in mind, the NGOs argue, the participants must agree to cut emissions to a level that will allow for an additional increase of only 2 degrees. That sounds like a decent plan with a sound rationale behind it. Under the models prepared by the United Nations and World Meteorological Organization, however, meeting that goal would require global emissions cuts of up to 50 percent from 1990 levels by 2030.

But if Kyoto's supporters have not been able to get the United States to sign up for a 7 percent reduction by 2012, it is hard to imagine trying to sell it on a regime that will require global cuts of 50 percent under any timeline. Given increasing energy prices, new technology and general public and corporate attention to climate change, reaching this goal is altogether possible. However, the United States would prefer to explore the possibility of achieving this goal in its own time and its own way, rather than submitting to an international treaty regime that has hitherto been successful only in setting the bar too high.

The failure of some of the most prominent backers of Kyoto to approach their emissions-reduction targets, the increasing disinterest in participation by the United States, China and Australia and the general consensus among U.S. environmental groups that Kyoto is obsolete represent a series of body blows that the climate-change treaty is unlikely to be able to sustain. Kyoto is nearing a farce. Canada, the country hosting the Montreal meetings, has a Kyoto emissions reduction target of 6 percent below 1990 levels. But, as of 2003, Canada was releasing emissions at levels 24 percent above 1990 levels -- and this under the administration of a pro-Kyoto Labor Party government that fell to a no-confidence vote the day the Montreal meetings began.

In an attempt to support the Montreal meetings by presenting Kyoto as a success, the European Commission issued a report Dec. 1 claiming that, despite all indications to the contrary, the EU would succeed in meeting its Kyoto emissions of 8 percent below 1990 targets two years before the 2012 deadline. A close reading of the report, however, shows that the commission concedes that the most recent data available indicates that, by 2003, only 1.7 percent reductions had been achieved. The data also shows that, under existing policies, reduction will actually decrease to 1.6 percent by 2010. To make the extrapolative leap from forecasting a disappointing 1.6 percent reduction to reach a relatively astonishing 9.3 percent decrease, the European Commission claims that these significant emissions cuts will be achieved through "additional measures being planned," and by obtaining emissions credits from countries outside the EU.

In the plain language that infrequently survives whatever torturous processes create EU documents, this means that the European Commission acknowledges that the EU's emissions will actually rise between 2003 and 2010 unless some currently unavailable but hoped-for technology causes them to drop sharply in the next several years. The European Commission's report was intended to support the Montreal meetings by presenting Kyoto as a success, but the dramatic difference between the EU's actions on climate change and its words speaks for itself.

Doing Mark Antony one better, participants in COP/MOP-1 meetings have come to both praise the Kyoto Protocol and to bury it. They understand that the treaty's failures have condemned it to irrelevance but they must put a good face on things if international efforts to reduce greenhouse gas emissions are to have a future. The real action at the Montreal meetings will take place when delegates leave the official meetings for smaller venues, and privately ask each other, "So, now what do we do?"

The answer to that question increasingly looks like the path that the Bush administration set out upon in 2001 -- a series of binational and multinational agreements on technology transfer and possibly greenhouse-gas intensity. The key variables in this new trend are the degree to which U.S. policy will change -- some form of carbon cap still seems likely -- and the degree to which Kyoto's most ardent backers will accept other emerging forums as well. We expect that the latter will take little time; within this decade, many new agreements will be signed around the globe (many using the mechanisms set up under Kyoto, such as emissions trading) that will lead to significant reductions in greenhouse gas emissions, compared to a business-as-usual approach, but not likely to be in the range that those discussing the second commitment period are advocating right now in Montreal.