Table of Contents
- 1 UNFCCC: United Nations Framework Convention on Climate Change
- 2 Kyoto Protocol
- 3 Flexible Market Mechanisms – Kyoto Protocol
- 3.1 Clean Development Mechanism (CDM) – Kyoto Protocol
- 3.2 Carbon Credits Trading [Carbon Trading] – Kyoto Protocol
- 3.3 Non-Compliance of Kyoto And Penalties
- 3.4 Joint Implementation (JI) – Kyoto Protocol
- 3.5 Benefits of Flexible Market Mechanisms
- 3.6 Criticism of Kyoto Protocol
- 4 Important Summits Post Kyoto
- International environmental treaty that came into existence under the aegis of UN.
- Signed ==> May 1992.
- Location ==> New York City, USA.
- As of March 2014, UNFCCC has 196 parties (almost all countries).
- UNFCCC is negotiated at the United Nations Conference on Environment and Development (UNCED).
- UNCED is informally known as the Earth Summit 1992, held in Rio de Janeiro, Brazil.
- Role: UNFCCC provides a framework for negotiating specific international treaties (called “protocols”) that aim to set binding limits on greenhouse gases.
- Objective of UNFCCC: Stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous consequences.
- Legal Effect: Treaty is considered legally non-binding: The treaty itself set no binding limits on greenhouse gas emissions for individual countries.
- The COP is the supreme decision-making body of UNFCCC.
- All States that are Parties to the Convention are represented at the COP.
- They review the implementation of any legal instruments that the COP adopts.
- They promote the effective implementation of the Convention.
- The first COP meeting was held in Berlin, Germany in March, 1995.
- The parties to the convention have met annually since 1995.
- In 1997, the Kyoto Protocol (3rd COP) was concluded and established legally binding obligations for developed countries to reduce their greenhouse gas emissions.
- The 2010 Cancun agreementsstated that future global warming should be limited to below 0 °C (3.6 °F) relative to the pre-industrial level.
- The 21st COP (2015) was held in Paris in 2015.
- The 22nd COP (2016) will be held at Marrakesh, Morocco.
List of UNFCCC Summits
- 1995: COP 1, The Berlin Mandate
- 1996: COP 2, Geneva, Switzerland
- 1997: COP 3, The Kyoto Protocol on Climate Change
- 1998: COP 4. Buenos Aires, Argentina
- 1999: COP 5, Bonn, Germany
- 2000: COP 6. The Hague. Netherlands
- 2001: COP 6, Bonn. Germany
- 2001: COP 7. Marrakech, Morocco
- 2002: COP 8, New Delhi, India
- 2003: COP 9, Milan, Italy
- 2004: COP 10. Buenos Aires. Argentina
- 2005: COP 11/CMP 1. Montreal, Canada
- 2006: COP 12/CMP 2, Nairobi. Kenya
- 2007: COP 13/CMP 3, Bali, Indonesia
- 2008: COP 14/CMP 4, Poznan. Poland
- 2009: COP 15/CMP 5, Copenhagen, Denmark
- 2010: COP 16/CMP 6, Canciin, Mexico
- 2011: COP 17/CMP 7, Durban, South Africa
- 2012: COP 18/CMP 8, Doha, Qatar
- 2013: COP 19/CMP 9, Warsaw, Poland
- 2014: COP 20/CMP 10. Lima, Peru
- 2015: COP 21/CMP 11, Paris, France
- 2016: COP 22/CMP 12, Marrakech, Morocco
- Nothing except Kyoto Protocol made any binding limits on GHG emissions.
- Never achieved its stated goals of reducing the emission of carbon dioxide.
- Negotiations are governed by consensus and small group of countries often block the negotiations.
- It is easy for the developed countries to escape from their responsibility: United States, one of the biggest polluters never ratified Kyoto Protocol. Canada pulled out of Kyoto Protocol citing wealth transfers out the country due to binding limits.
- Treaty doesn’t cover developing countries who now include the largest CO2 emitters (India and China).
- Japan, Russia didn’t sign second Kyoto term because it would impose restrictions on it not faced by its main economic competitors, China, India and Indonesia.
Important UNFCCC (COP) Summits are discussed below.
- The Kyoto Protocol was adopted in Kyoto, Japan, in 1997.
- India ratified Kyoto Protocol in 2002.
- The Kyoto Protocol came into force in February 2005.
- There are currently 192 Parties.
- USA never ratified Kyoto Protocol.
- Canada withdrew in 2012.
- Goal: Fight global warming by reducing greenhouse gas concentrations in the atmosphere to “a level that would prevent dangerous anthropogenic interference with the climate system.”
- Kyoto protocol aimed to cut emissions of greenhouse gases across the developed world by about 5 per cent by 2012 compared with 1990 levels.
- The Protocol is based on the principle of common but differentiated responsibilities.
- Kyoto Protocol is the only global treaty with binding limits on GHG emissions.
- It puts 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.
- CBDR divides countries into two categories.
- Historically biggest polluting developed countries like US, UK, France, Japan, Russia etc. (they are polluting the earth since Industrial Revolution).
- Recently polluting developing countries like China, India, Brazil, etc. (polluting since 1950s).
- “Common” = Every country (both developing and developed) must take part in the fight against climate change.
- “But differentiated responsibilities” = Historically biggest polluters should do more compared to the recent polluters = Responsibilities proportional to pollution caused.
- So under CBDR, developed countries like US, UK, Russia etc. must contribute more to reduce GHGs (greenhouse gases).
- They must accept to certain binding limits on GHG emissions.
- They must contribute funds towards reducing GHG emissions in developing and least developed countries.
- On the other hand, developing and least developed countries should do everything possible to cut down their GHG emissions. But nothing is binding and every initiative is voluntary.
- Developing countries may volunteer to become Annex I countries when they are sufficiently developed.
- Under Kyoto Protocol, there are two commitment periods:
- 2008 – 2012 and
- 2013 – 2020.
- The second commitment period was agreed on in 2012, known as the Doha Amendment to the protocol.
- Each commitment period has its own binding targets set for developed countries to reduce their GHG emissions.
- Nations that miss their Kyoto target in 2012 will incur a penalty of an additional third added to whatever cut they agree under a new treaty in Copenhagen.
- During first commitment period (2008-12), more than 35 countries had binding targets.
- Canada withdrew in 2012 after the first commitment period.
- Japan, New Zealand and Russia have participated in Kyoto’s first-round but have not taken on new targets in the second commitment period.
- As of November 2015, 55 states have accepted the Doha Amendment, while entry into force requires the acceptances of 144 states.
- So second commitment period is an epic failure.
- Negotiations were held in Lima in 2014 to agree on a post-Kyoto legal framework that would obligate all major polluters to pay for CO2 emissions.
- China, India, and the United States (three big villains) have all signaled that they will not ratify any treaty that will commit them legally to reduce CO2 emissions.
- Carbon dioxide (CO2),
- Methane (CH4),
- Nitrous oxide (N2O),
- Sulphur hexafluoride (SF6),
- groups of hydro fluorocarbons (HCFs) and
- groups of Per fluorocarbons (PFCs).
- Countries bound to Kyoto targets have to meet them largely through domestic action— that is, to reduce their emissions onshore.
- But they can meet part of their targets through three “market-based mechanisms”.
The Kyoto Flexible Market Protocol mechanisms:
- Clean Development Mechanism (CDM)
- Emission Trading
- Joint Implementation (JI)
- The Clean Development Mechanism (CDM), defined in the Kyoto Protocol, allows a country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol (Annex B Party) to implement an emission-reduction project in developing countries.
[Hypothetical E.g. of CDM: Australia takes up or finances some environment benefitting project in India (solar power projects, wind power projects, afforestation etc.) and earns some carbon credits (certified emission reduction credits). Now it shows these earned carbon credits to the world and tells them how it is working towards meeting its Kyoto targets.]
- Such projects can earn saleable certified emission reduction (CER) credits, each equivalent to one tonne of CO2, which can be counted towards meeting Kyoto targets.
- In simple terms: Developed countries emit more and lose carbon credits. They provide financial assistance to developing and least developed countries to create clean energy (solar, wind energy etc.) and gain some carbon credits = meet their Kyoto Quota (Kyoto units) of emissions without violations.
- Suppose a developed country has a Kyoto Quota of 100 Carbon Credits ==> It can emit 100 tonnes of CO2.
- Due to negligence it emits 110 tonnes of CO2 = 10 carbon credits lost = Kyoto Quota violation.
- Now the country has to make up for its lost carbon credits to avoid penalty.
- So it invests some money (equal to 10 carbon credits) in developing and LDCs to build clean energy infrastructure like solar plants, wind farms etc. and will make up for its 10 lost carbon credits and avoid penalty.
- Carbon trading is the name given to the exchange of emission permits.
- This exchange may take place within the economy or may take the form of international transaction.
- Under Carbon Credits Trading mechanism countries that emit more carbon than the quota allotted to them buy carbon credits from those that emit less.
- In Carbon trading, one credit gives the country or a company right to emit one tonne of CO2.
- A country having more emissions of carbon (less carbon credits) is able to purchase the right to emit more from a country having less emissions (more carbon credits).
- More carbon emitting countries, by this way try to keep the limit of carbon emission specified to them.
- A developing nation such as India, turns out to be a seller of such credits, which eventually provides them with monetary gains.
- Carbon credits are traded at various exchanges across the world.
- Multi-Commodity Exchange of India (MCX) launched futures trading in carbon credits in 2009.
Types of Carbon trading
- Emission trading and
- Offset trading.
- Emissions trading allows countries that have emission units to spare – emissions permitted them but not “used” – to sell this excess capacity to countries that are over their targets.
- Carbon is now tracked and traded like any other commodity. This is known as the “carbon market.”
Other trading units in the carbon market
- A removal unit (RMU) by reforestation.
- An emission reduction unit (ERU) generated by a joint implementation project (explained below).
- A certified emission reduction (CER) generated from a clean development mechanism project activity.
- Another variant of carbon credit is to be earned by a country by investing some amount of money in such projects, known as carbon projects, which will emit lesser amount of greenhouse gas in the atmosphere.
- For example, suppose a thermal plant of 800 megawatt capacity emit 400 carbon-equivalent in the atmosphere. Now a country builds up a 800 megawatt wind energy plant which does not generate any amount of emission as an alternative of the thermal plant. Then by investing in this project the country will earn 400 carbon-equivalent.
Offset Trading is a variant of Emission Trading or Carbon Trading.
- It is a tax on all fossil fuels in proportion to carbon dioxide emissions.
- Proposed in may developed and developing countries.
- The proposal faced political resistance (politician – corporate nexus, people feared more burden).
- India has a carbon tax of sorts. Budget of 2010-11 introduced a cess of Rs. 50 per tonne of both domestically produced and imported coal. Later it was increased to Rs. 100.
- This cess is used to raise revenues for the National Clean Energy Fund.
- Like most things in life, failure to comply with the Protocol carries penalties.
- If a country does not meet the requirements for measurements and reporting said country loses the privilege of gaining credit through joint implementation projects.
- If a country goes above its emissions cap, and does not try to make up the difference through any of the mechanisms available, then said country must make up the difference plus an additional thirty percent during the next period.
- The country could also be banned from participating in the ‘cap and trade’ program.
- The mechanism known as “joint implementation,” allows a country with an emission reduction commitment under the Kyoto Protocol (Annex B Party) to earn emission reduction units (ERUs) from an emission-reduction project in another Annex B Party, each equivalent to one tonne of CO2, which can be counted towards meeting its Kyoto target.
- Joint implementation offers Parties a flexible and cost-efficient means of fulfilling a part of their Kyoto commitments, while the host Party benefits from foreign investment and technology transfer.
Regarding “carbon credits”, which one of the following statements is not correct?
- The carbon credit system was ratified in conjunction with the Kyoto Protocol
- Carbon credits are awarded to countries or groups that have reduced greenhouse gases below their emission quota
- The goal of the carbon credit system is to limit the increase of carbon emission quota
- Carbon credits are traded at a price fixed from time to time by the United Nations Environment Programme.
Answer d) Carbon credit prices are traded on an exchange. So their prices are never fixed.
- Stimulating green investment in developing countries.
- Including the private sector in this endeavor to cut and hold steady GHG emissions at a safe level.
- It also makes “leap-frogging” –– possibility to skip older, dirtier technology for newer, cleaner infrastructure and systems, with obvious longer-term benefits.
- Strengthen the Protocol’s environmental integrity, support the carbon market’s credibility and ensures transparency of accounting by Parties.
- Under Kyoto Protocol, Annex 1 countries can meet their targets by cutting emissions or buying unused allowances (carbon credits, carbon trading) from other countries.
- This kind of approach ignores long term social and economic costs. It is like committing only half of what one needs to commit.
- Kyoto Protocol is based on the “common but differentiated responsibility” approach to global warming. Under CBDR, many countries were allowed to increase pollution.
- It excluded most polluting countries like China and India, which have since become the world’s largest and fourth largest polluters.
After the Kyoto Protocol, parties to the Convention have agreed to further commitments. These include the Bali Action Plan (2007), the Copenhagen Accord (2009), the Cancún agreements (2010), and the Durban Platform for Enhanced Action (2011) etc.
- COP 13, CMP 3.
- Adopted Bali Road Map that included
- The Bali Action Plan (BAP) [BAP: launch a comprehensive process to enable the implementation of the Convention through long-term cooperative action up to and beyond 2012.]
- Launch of the Adaptation Fund,
- Decisions on technology transfer and
- On reducing emissions from deforestation.
- All developed country Parties have agreed to “quantified emission limitation taking into account differences in their national circumstances.”
- So they will fix emission limits according to their convenience and try to achieve them.
- Developed countries stressed developing countries like India and China, which are increasing their emissions as they grow economically, also undertake some kind of emission cuts.
CMP: Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol.
COP11 / CMP 1 was held in Montreal, Canada in 2005 (Kyoto Protocol was ratified in 2005)
- COP 15, CMP 5.
- UNFCCC meet in Copenhagen, capital city of Denmark.
- Produced the Copenhagen Accord.
- This accord is an agreement between developing nations block called BASIC (Brazil, South Africa, India and China).
- According to this accord, all countries should pledge voluntary limits (no binding obligations) to reduce GHG emissions.
- Binding obligations could not be reached due to discord between developed and developing countries.
- Copenhagen Accord also laid the groundwork for financial commitments from developed countries to developing countries.
- Agrees a “goal” for the world to raise $100 billion per year by 2020. New multilateral funding for adaptation will be delivered, with a governance structure.
- The Accord states that global warming should be limited to below 2.0 °C (3.6 °F) to the pre-industrial level.
- COP 16, CMP 6.
- An agreement adopted by the COP called for a large “Green Climate Fund”, and an “Adaptation Committee” at global level to support developing countries in mitigation of GHGs.
- It looked forward to a second commitment period for the Kyoto Protocol.
- As per the Cancun Agreements, all Parties to the Convention (including the developed and developing countries) have agreed to report their voluntary mitigation goals for implementation.
Durban Summit, 2011
- COP 17, CPM 7.
- In 2011, parties adopted the “Durban Platform for Enhanced Action”.
- Parties have agreed to “develop a protocol, another legal instrument or an agreed outcome with legal force”. This new treaty is due to be adopted at the 21st COP, and implemented in 2020.
- Second phase of Kyoto Protocol was secured.
- India’s insisted Common but differentiated responsibility retained.
- COP 17 approved the Governing Instrument for the GCF.
- COP 18, CPM 8
- Kyoto Extended: It established a second commitment period (2013 – 2020) of the Kyoto Protocol.
- Japan, Russia and Canada refused to join the second commitment period under the Kyoto Protocol.
- It finalized the host for Green Climate Fund.
- At COP 16, Parties, decision 1/CP.16 established a Green Climate Fund (GCF) as an operating entity of the Financial Mechanism of the UNFCCC. ===> Decision Made to Establish GCF
- At COP 17 held in Durban, the Parties approved the Governing Instrument for the GCF. ===> Legal Approval
- Parties, at COP 18, endorsed the consensus decision of the GCF Board to select Songdo, Incheon, Republic of Korea as the host of the GCF. ===> Host for GCF finalized. Source: http://goo.gl/3L3dT4
- The Fund will start operating from2013.
- It is a mechanism to redistribute money from the developed to the developing world.
- GCF will help developing countries financially in adapting mitigation practices to counter climate change.
- It is intended to be the centerpiece of efforts to raise Climate Finance of $100 billion by 2020.
Which of the following statements regarding ‘Green Climate Fund’ is/are correct?
- It is intended to assist the developing countries in adaptation and mitigation practices to counter climate change.
- It is founded under the aegis of UNEP, OECD, Asian Development Bank and World Bank
Select the correct answer using the code given below.
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Answer: a) 1 only
- COP19, CMP9.
- 2013 United Nations Climate Change Conference.
- The G77 and China bloc led 132 poor countries in a walk out during talks about “loss and damage” compensation for the consequences of global warming.
- Poor countries have demanded that the developed world give them $100 billion annually by 2020.