Commentary - 03 August 2001

The Kyoto Protocol after Bonn

In March this year, President Bush declared the Kyoto Protocol dead and many politicians and commentators were inclined to agree. Four months later, 180 nations meeting in Bonn took a significant step towards resolving their differences. However, despite the remarkable turn around many still doubt whether the Protocol will be ratified and, if it is, whether it retains any effectiveness. What is the situation?

For the Kyoto Protocol to come into force, 55 nations must ratify it including sufficient developed (Annex 1) countries to account for 55% of the 1990 greenhouse gas emissions. There is little doubt that 55 countries will ratify, so the question is whether enough countries will join the USA to prevent the 55% target being reached. The USA accounted for 36% of emissions in 1990 so it needs to be joined by nations accounting for another 9% to block ratification. Several European nations and Russia account for this amount, but they are unlikely to join the USA.

This brings the focus of attention to Japan with 8.5%. If they were to join the USA, it is virtually certain that other nations would follow with Canada and Australia seen as likely candidates. So ratification now hangs very much on Japan’s decision. Japan will find it difficult to meet the targets specified in the Protocol, but it is the “Kyoto” Protocol and, thus, there is an added reluctance to see it fail.

The agreement reached in Bonn (http://www.unfccc.int/resource/docs/cop6secpart/l07.pdf) surprised many negotiators and observers, particularly the USA. Is it possible that the Bush administration will change its mind? President Bush cites two flaws in the Kyoto Protocol. The first is that it does not sufficiently engage developing countries. Developing countries reply that the lion’s share of emissions to date have come from developed countries. For example, the USA and Europe have contributed ten times more greenhouse gas to the atmosphere than China.

Developing countries are encouraged by the UN Framework Convention on Climate Change to engage in activities to reduce their greenhouse gas emissions and Kyoto Protocol incorporates mechanisms to encourage investment to help this come about. China has also reduced its emissions by 17% while increasing its GDP by 36% during the 1990s, which overshadows the abatement efforts by most western countries. Developing nations remain adamant that they will not accept any binding obligations until they see real progress by the originators of the greenhouse problem.

The other flaw according to President Bush is that the Kyoto Protocol will harm the USA economy. Economic models almost all support the President on this, although most of them do not factor in the costs of climate warming. Most predict that the USA’s GDP will grow by about 1% less between now and the end of the first commitment period, 2012, if the USA were to comply with its targets. This means that US citizens would have to wait until about April 10th 2013 to be as wealthy as they expected to be on January 1st 2013. There are many other policy decisions that area likely to have far greater impacts on the US economy than meeting the first round of greenhouse gas reduction targets.

Even if the USA eventually changes its stance, has the Bonn agreement diluted the Kyoto Protocol to the point where it is no longer effective? The original target required developed countries to reduce their emissions to about 5% below 1990 levels by 2012. The decisions at Bonn reduce this to about 3.5%. However, without a protocol emissions in developed countries are likely to increase by about 25% from 1990 to 2012. Thus, the real dilution is from 25% to 23.5%; not a huge cost to reach agreement.

There are more fundamental problems with the original Protocol and the political compromises that have followed. The European Union will achieve its targets as a bloc by exploiting the UK’s shift from coal to gas and Germany’s restructuring of the former East German industries. Both difficult and costly tasks, but with little relationship to greenhouse issues. If the USA re-engages with the Kyoto process it will almost certainly claim credit for the uptake of carbon by its forests and arid lands. Most of this comes from regrowth following over enthusiastic clearing in the 19th and 20th centuries and again it has little to do with greenhouse issues.

It is likely that most national targets for the first commitment period will be achieved by actions largely unrelated to reducing our dependence on fossil fuels. But, it is the signals that the Protocol gives that matter at this stage. Compliance by the developed countries with the first commitment period targets implies international agreement to turn around their ever-increasing greenhouse gas emissions. Many of the actions being used to achieve targets are one-off, for example, Australia can achieve most of its target by reducing land clearing and engaging in much needed revegetation programs. But, as a nation we can play this card only once. The world needs to look forward to the second commitment period where the challenges will rest firmly with the fossil fuel users.

We need to turn around the increasing trend in global emissions by 2040 if we are to stabilise greenhouse gases at double their pre-industrial level. With a protocol in place we are still on a path to achieve this.

Professor Ian Noble
CRC for Greenhouse Accounting
Australian National University