Kyoto Protocol

The Kyoto Protocol (Japanese: 京都議定書, Hepburn: Kyōto Giteisho) was an international treaty which extended the 1992 United Nations Framework Convention on Climate Change (UNFCCC) that commits state parties to reduce greenhouse gas emissions, based on the scientific consensus that global warming is occurring and that human-made CO2 emissions are driving it. The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force on 16 February 2005. There were 192 parties (Canada withdrew from the protocol, effective December 2012) to the Protocol in 2020.

The Kyoto Protocol implemented the objective of the UNFCCC to reduce the onset of global warming by reducing greenhouse gas concentrations in the atmosphere to "a level that would prevent dangerous anthropogenic interference with the climate system" (Article 2). The Kyoto Protocol applied to the seven greenhouse gases listed in Annex A: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), nitrogen trifluoride (NF3). Nitrogen trifluoride was added for the second compliance period during the Doha Round.

The Protocol was based on the principle of common but differentiated responsibilities: it acknowledged that individual countries have different capabilities in combating climate change, owing to economic development, and therefore placed the obligation to reduce current emissions on developed countries on the basis that they are historically responsible for the current levels of greenhouse gases in the atmosphere.

The Protocol's first commitment period started in 2008 and ended in 2012. All 36 countries that fully participated in the first commitment period complied with the Protocol. However, nine countries had to resort to the flexibility mechanisms by funding emission reductions in other countries because their national emissions were slightly greater than their targets. The 2008 financial crisis reduced emissions. The greatest emission reductions were seen in the former Eastern Bloc countries because the dissolution of the Soviet Union reduced their emissions in the early 1990s. Even though the 36 developed countries reduced their emissions, the global emissions increased by 32% from 1990 to 2010.

A second commitment period was agreed to in 2012 to extend the agreement to 2020, known as the Doha Amendment to the Kyoto Protocol, in which 37 countries had binding targets: Australia, the European Union (and its then 28 member states, now 27), Belarus, Iceland, Kazakhstan, Liechtenstein, Norway, Switzerland, and Ukraine. Belarus, Kazakhstan, and Ukraine stated that they may withdraw from the Kyoto Protocol or not put into legal force the Amendment with second round targets. Japan, New Zealand, and Russia had participated in Kyoto's first-round but did not take on new targets in the second commitment period. Other developed countries without second-round targets were Canada (which withdrew from the Kyoto Protocol in 2012) and the United States (which did not ratify). Canadian Environment Minister Peter Kent announced the decision to withdraw in December of 2011, stating that Canada would have been forced to pay $14 billion if they had remained in the protocol. As of October 2020, 147 states had accepted the Doha Amendment. It entered into force on 31 December 2020, following its acceptance by the mandated minimum of at least 144 states, although the second commitment period ended on the same day. Of the 37 parties with binding commitments, 34 had ratified.

Negotiations were held in the framework of the yearly UNFCCC Climate Change Conferences on measures to be taken after the second commitment period ended in 2020. This resulted in the 2015 adoption of the Paris Agreement, which is a separate instrument under the UNFCCC rather than an amendment of the Kyoto Protocol.

Chronology

1992 – The UN Conference on the Environment and Development is held in Rio de Janeiro. It results in the Framework Convention on Climate Change (UNFCCC) among other agreements.

1995 – Parties to the UNFCCC meet in Berlin (the 1st Conference of Parties (COP) to the UNFCCC) to outline specific targets on emissions.

1997 – In December the parties conclude the Kyoto Protocol in Kyoto, Japan, in which they agree to the broad outlines of emissions targets.

2004 – Russia and Canada ratify the Kyoto Protocol to the UNFCCC bringing the treaty into effect on 16 February 2005.

2011 – Canada became the first signatory to announce its withdrawal from the Kyoto Protocol.

2012 – On 31 December 2012, the first commitment period under the Protocol expired.

The official meeting of all states party to the Kyoto Protocol is the annual Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC). The first conference was held in 1995 in Berlin (COP 1). The first Meeting of Parties of the Kyoto Protocol (CMP) was held in 2005 in conjunction with COP 11.

Objectives

The main goal of the Kyoto Protocol was to control emissions of the main anthropogenic (human-emitted) greenhouse gases (GHGs) in ways that reflect underlying national differences in GHG emissions, wealth, and capacity to make the reductions. The treaty follows the main principles agreed in the original 1992 UN Framework Convention. According to the treaty, in 2012, Annex I Parties who have ratified the treaty must have fulfilled their obligations of greenhouse gas emissions limitations established for the Kyoto Protocol's first commitment period (2008–2012). These emissions limitation commitments are listed in Annex B of the Protocol.

The Kyoto Protocol's first round commitments are the first detailed step taken within the UN Framework Convention on Climate Change. The Protocol establishes a structure of rolling emission reduction commitment periods. It set a timetable starting in 2006 for negotiations to establish emission reduction commitments for a second commitment period. The first period emission reduction commitments expired on 31 December 2012.

The first-round Kyoto emissions limitation commitments were not sufficient to stabilize the atmospheric concentration of GHGs. Stabilization of atmospheric GHG concentrations will require further emissions reductions after the end of the first-round Kyoto commitment period in 2012.

The ultimate objective of the UNFCCC is the "stabilization of greenhouse gas concentrations in the atmosphere at a level that would stop dangerous anthropogenic interference with the climate system." Even if Annex I Parties succeed in meeting their first-round commitments, much greater emission reductions will be required in future to stabilize atmospheric GHG concentrations.

For each of the different anthropogenic GHGs, different levels of emissions reductions would be required to meet the objective of stabilizing atmospheric concentrations. Carbon dioxide (CO2) is the most important anthropogenic GHG. Stabilizing the concentration of CO2 in the atmosphere would ultimately require the effective elimination of anthropogenic CO2 emissions.

To achieve stabilization, global GHG emissions must peak, then decline. The lower the desired stabilization level, the sooner this peak and decline must occur. For a given stabilization level, larger emissions reductions in the near term allow for less stringent emissions reductions later. On the other hand, less stringent near term emissions reductions would, for a given stabilization level, require more stringent emissions reductions later on.

The first period Kyoto emissions limitations can be viewed as a first-step towards achieving atmospheric stabilization of GHGs. In this sense, the first period Kyoto commitments may affect what future atmospheric stabilization level can be achieved.

Principal concepts

Some of the principal concepts of the Kyoto Protocol are:

Binding commitments for the Annex I Parties. The main feature of the Protocol is that it established legally binding commitments to reduce emissions of greenhouse gases for Annex I Parties. The commitments were based on the Berlin Mandate, which was a part of UNFCCC negotiations leading up to the Protocol.

Implementation. In order to meet the objectives of the Protocol, Annex I Parties are required to prepare policies and measures for the reduction of greenhouse gases in their respective countries. In addition, they are required to increase the absorption of these gases and utilize all mechanisms available, such as joint implementation, the clean development mechanism and emissions trading, in order to be rewarded with credits that would allow more greenhouse gas emissions at home.

Minimizing Impacts on Developing Countries by establishing an adaptation fund for climate change.

Accounting, Reporting and Review in order to ensure the integrity of the Protocol.

Compliance. Establishing a Compliance Committee to enforce compliance with the commitments under the Protocol.

Flexibility mechanisms

The Protocol defines three "Flexibility Mechanisms" that can be used by Annex I Parties in meeting their emission limitation commitments. The flexibility mechanisms are International Emissions Trading (IET), the Clean Development Mechanism (CDM), and Joint Implementation (JI). IET allows Annex I Parties to "trade" their emissions (Assigned Amount Units, AAUs, or "allowances" for short).

The economic basis for providing this flexibility is that the marginal cost of reducing (or abating) emissions differs among countries. "Marginal cost" is the cost of abating the last tonne of CO2-eq for an Annex I/non-Annex I Party. At the time of the original Kyoto targets, studies suggested that the flexibility mechanisms could reduce the overall (aggregate) cost of meeting the targets. Studies also showed that national losses in Annex I gross domestic product (GDP) could be reduced by the use of the flexibility mechanisms.

The CDM and JI are called "project-based mechanisms", in that they generate emission reductions from projects. The difference between IET and the project-based mechanisms is that IET is based on the setting of a quantitative restriction of emissions, while the CDM and JI are based on the idea of "production" of emission reductions. The CDM is designed to encourage production of emission reductions in non-Annex I Parties, while JI encourages production of emission reductions in Annex I Parties.

The production of emission reductions generated by the CDM and JI can be used by Annex I Parties in meeting their emission limitation commitments. The emission reductions produced by the CDM and JI are both measured against a hypothetical baseline of emissions that would have occurred in the absence of a particular emission reduction project. The emission reductions produced by the CDM are called Certified emission reductions (CERs); reductions produced by JI are called emission reduction units (ERUs). The reductions are called "credits" because they are emission reductions credited against a hypothetical baseline of emissions.

Only emission reduction projects that do not involve using nuclear energy are eligible for accreditation under the CDM, in order to prevent nuclear technology exports from becoming the default route for obtaining credits under the CDM.

Each Annex I country is required to submit an annual report of inventories of all anthropogenic greenhouse gas emissions from sources and removals from sinks under UNFCCC and the Kyoto Protocol. These countries nominate a person (called a "designated national authority") to create and manage its greenhouse gas inventory. Virtually all of the non-Annex I countries have also established a designated national authority to manage their Kyoto obligations, specifically the "CDM process". This determines which GHG projects they wish to propose for accreditation by the CDM Executive Board.

International emissions trading

Intergovernmental emissions trading

The design of the European Union Emissions Trading Scheme (EU ETS) implicitly allows for trade of national Kyoto obligations to occur between participating countries. The Carbon Trust found that other than the trading that occurs as part of the EU ETS, no intergovernmental emissions trading had taken place.

One of the environmental problems with IET is the large surplus of allowances that are available. Russia, Ukraine, and the new EU-12 member states (the Kyoto Parties Annex I Economies-in-Transition, abbreviated "EIT": Belarus, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovakia, Slovenia, and Ukraine) have a surplus of allowances, while many OECD countries have a deficit. Some of the EITs with a surplus regard it as potential compensation for the trauma of their economic restructuring. When the Kyoto treaty was negotiated, it was recognized that emissions targets for the EITs might lead to them having an excess number of allowances. This excess of allowances were viewed by the EITs as "headroom" to grow their economies. The surplus has, however, also been referred to by some as "hot air", a term which Russia (a country with an estimated surplus of 3.1 billion tonnes of carbon dioxide equivalent allowances) views as "quite offensive".

OECD countries with a deficit could meet their Kyoto commitments by buying allowances from transition countries with a surplus. Unless other commitments were made to reduce the total surplus in allowances, such trade would not actually result in emissions being reduced (see also the section below on the Green Investment Scheme).

"Green Investment Schemes"

The "Green Investment Scheme" (GIS) is a plan for achieving environmental benefits from trading surplus allowances (AAUs) under the Kyoto Protocol. The Green Investment Scheme (GIS), a mechanism in the framework of International Emissions Trading (IET), is designed to achieve greater flexibility in reaching the targets of the Kyoto Protocol while preserving environmental integrity of IET. However, using the GIS is not required under the Kyoto Protocol, and there is no official definition of the term.

Under the GIS a party to the protocol expecting that the development of its economy will not exhaust its Kyoto quota, can sell the excess of its Kyoto quota units (AAUs) to another party. The proceeds from the AAU sales should be "greened", i.e. channelled to the development and implementation of the projects either acquiring the greenhouse gases emission reductions (hard greening) or building up the necessary framework for this process (soft greening).

Trade in AAUs

Latvia was one of the front-runners of GISs. World Bank (2011) reported that Latvia has stopped offering AAU sales because of low AAU prices. In 2010, Estonia was the preferred source for AAU buyers, followed by the Czech Republic and Poland.

Japan's national policy to meet their Kyoto target includes the purchase of AAUs sold under GISs. In 2010, Japan and Japanese firms were the main buyers of AAUs. In terms of the international carbon market, trade in AAUs are a small proportion of overall market value. In 2010, 97% of trade in the international carbon market was driven by the European Union Emission Trading Scheme (EU ETS).

Clean Development Mechanism

Between 2001, which was the first year Clean Development Mechanism (CDM) projects could be registered, and 2012, the end of the first Kyoto commitment period, the CDM is expected to produce some 1.5 billion tons of carbon dioxide equivalent (CO2e) in emission reductions. Most of these reductions are through renewable energy commercialisation, energy efficiency, and fuel switching (World Bank, 2010, p. 262). By 2012, the largest potential for production of CERs are estimated in China (52% of total CERs) and India (16%). CERs produced in Latin America and the Caribbean make up 15% of the potential total, with Brazil as the largest producer in the region (7%).

Joint Implementation

The formal crediting period for Joint Implementation (JI) was aligned with the first commitment period of the Kyoto Protocol, and did not start until January 2008 (Carbon Trust, 2009, p. 20). In November 2008, only 22 JI projects had been officially approved and registered. The total projected emission savings from JI by 2012 are about one tenth that of the CDM. Russia accounts for about two-thirds of these savings, with the remainder divided up roughly equally between Ukraine and the EU's New Member States. Emission savings include cuts in methane, HFC, and N2O emissions.

Details of the agreement

The agreement is a protocol to the United Nations Framework Convention on Climate Change (UNFCCC) adopted at the Earth Summit in Rio de Janeiro in 1992, which did not set any legally binding limitations on emissions or enforcement mechanisms. Only Parties to the UNFCCC can become Parties to the Kyoto Protocol. The Kyoto Protocol was adopted at the third session of the Conference of Parties to the UNFCCC in 1997 in Kyoto, Japan.

National emission targets specified in the Kyoto Protocol exclude international aviation and shipping. Kyoto Parties can use land use, land use change, and forestry (LULUCF) in meeting their targets. LULUCF activities are also called "sink" activities. Changes in sinks and land use can have an effect on the climate, and indeed the Intergovernmental Panel on Climate Change's Special Report on Land use, land-use change, and forestry estimates that since 1750 a third of global warming has been caused by land use change. Particular criteria apply to the definition of forestry under the Kyoto Protocol.

Forest management, cropland management, grazing land management, and revegetation are all eligible LULUCF activities under the Protocol. Annex I Parties use of forest management in meeting their targets is capped.

First commitment period: 2008–2012

Under the Kyoto Protocol, 37 industrialized countries and the European Community (the European Union-15, made up of 15 states at the time of the Kyoto negotiations) commit themselves to binding targets for GHG emissions. The targets apply to the four greenhouse gases carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulphur hexafluoride (SF6), and two groups of gases, hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs). The six GHG are translated into CO2 equivalents in determining reductions in emissions. These reduction targets are in addition to the industrial gases, chlorofluorocarbons, or CFCs, which are dealt with under the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer.

Under the Protocol, only the Annex I Parties have committed themselves to national or joint reduction targets (formally called "quantified emission limitation and reduction objectives" (QELRO) – Article 4.1). Parties to the Kyoto Protocol not listed in Annex I of the convention (the non-Annex I Parties) are mostly low-income developing countries, and may participate in the Kyoto Protocol through the Clean Development Mechanism (explained below).

The emissions limitations of Annex I Parties varies between different Parties. Some Parties have emissions limitations reduce below the base year level, some have limitations at the base year level (no permitted increase above the base year level), while others have limitations above the base year level.

Emission limits do not include emissions by international aviation and shipping. Although Belarus and Turkey are listed in the convention's Annex I, they do not have emissions targets as they were not Annex I Parties when the Protocol was adopted. Kazakhstan does not have a target, but has declared that it wishes to become an Annex I Party to the convention.