The Kyoto Protocol

Scientists have known about the greenhouse effect for over a century. Swedish chemist Svante Arrhenius described the basic mechanism as early as 1896.¹ The greenhouse effect is caused by the Sun’s radiation that is reflected off the Earth’s surface and trapped by carbon dioxide (CO₂) and other greenhouse gases (GHGs) in the atmosphere. This natural greenhouse effect increases the global mean temperature to about 15 degrees Celsius, warm enough to sustain life on Earth. By burning fossil fuels and releasing more CO₂ into the atmosphere, humans have altered this basic mechanism leading to an additional human induced greenhouse effect also known as “global warming”.

Governments were the decisive players in the Kyoto process, as only they were competent to adopt the Kyoto Protocol. Their negotiating behaviour and positioning was not only influenced by the state of scientific knowledge, but also by their perceived or real interests. For example, dependence on production and use of fossil fuels varies greatly, building the basis of differing “polluter interests”. Also, countries’ vulnerability to the impacts of climate change varies, as does their interest in climate change mitigation and adaptation. The availability of affordable options to reduce GHG emissions and adapt to climate change is another crucial factor (“helper interest”) Finally, the players’ goals are also influenced by factors related only indirectly to climate change, e.g. cultural pre-determinations and institutional structures.¹ These are the main elements of a country’s constellation of interests. A country dominated by polluter interests can be expected to be less enthusiastic about elaborating stringent action to curb GHG emissions. Countries greatly affected by the impacts of climate change and/or strong helper interests will lean more towards supporting such action, while others might be positioned in the middle ground.²

The legal basis for the Kyoto process was established in the United Nations Framework Convention on Climate Change (FCCC), adopted on 9 May 1992 in New York. Negotiated over five sessions within 15 months, the Convention was opened for signature at the Earth Summit in Rio de Janeiro in June 1992.¹ Within one year, it was signed by 165 countries and the European Community. Three months after the 50^th ratification had been submitted, the Convention entered into force on 21 March 1994. By the time of the Kyoto conference in December 1997, 167 States and the European Community were Parties to the international regime on climate change established by the Convention.

The political process that started immediately after the Rio Conference and included the negotiations leading to the Kyoto gathering is the subject of this Chapter. The FCCC established the playing field and some fundamental rules for the game of international climate policy. More specific rules of the game were developed later, in the ensuing process. The first session of the Conference of the Parties (COP 1), then set the stage for the Kyoto process with the adoption of the Berlin Mandate (Sections 4.1 and 4.2). The special negotiating body established to carry out the Berlin Mandate, the Ad hoc Group on the Berlin Mandate (AGBM), took further important strategic decisions (Sections 4.3–4.6). The process leading to Kyoto can be divided in two phases before and after COP 2, with the adoption of the Geneva Declaration at COP 2 being a watershed (Section 4.5). Up until Kyoto, governments used the AGBM process to define and narrow down the available options (Section 4.6). However, the most contentious issues remained unresolved before the gathering in Japan.

Mitigating climate change requires changing the dominant pattern of economic and social development. As such, it is one of the most important issues on the sustainable development agenda, cutting across all areas of society. Consequently, the Kyoto process received a degree of attention of world leaders that has been unprecedented in international environmental affairs. Unlike other environmental issues, “foreign environmental policy”¹ on climate change has involved foreign ministers and Heads of State, elevating climate change to “high politics”.

When delegates flew to Japan at the end of November 1997, all the big players were holding their cards firmly to their chests. None was sure of the outcome, but they were acutely aware that world public opinion expected an agreement at Kyoto. Japan, in particular, was keen to host a successful conference. On that basis, the Kyoto Summit became one of the most extraordinary and remarkable events in international environmental diplomacy, bringing together more than 2,200 delegates from 158 Parties to the Convention and six observer states, nearly 4,000 observers from NGOs and international organisations and more than 3,700 media representatives.¹

The Kyoto Protocol to the United Nations Framework Convention on Climate Change, being one of the most ambitious treaties ever adopted, it is probably also one of the most ambiguous legal instruments. Much of its content represents “unfinished business” and requires further elaboration in the future. The Protocol features 28 Articles of varying length and detail and two Annexes (see Table 8.1). This chapter gives a brief overview of the main provisions that are dealt with in more detail in the subsequent chapters 9–20. The full text of the Kyoto Protocol can be found in the Annex to this book.

International treaties usually begin with a preamble, often followed by defmitions. So too does the Kyoto Protocol. Although these are standard elements of international law, neither the preamble nor the definitions in the Protocol create specific obligations and thus they will have limited impact on the development of the regime. Neither provision caused major disputes during the negotiations and the text was agreed early on in Kyoto. The following Chapter is confined to a brief analysis of the content of these introductory elements of the Kyoto Protocol.

Common and co-ordinated policies and measures for combating climate change — informally referred to as PAMs — were a major issue during the pre-Kyoto process because of the high priority the EU attached to this subject. However, the provisions on PAMs finally agreed on in the Kyoto Protocol are hardly far-reaching. In particular, they lack specificity and do not legally require Parties to take any further action. This sharply contrasts with the great importance which the PAMs issue had possessed over long stretches of the negotiations.

The negotiations on quantitative targets, the so-called “quantified emission limitation and reduction objectives” (QELROs), were at the core of the pre-Kyoto negotiating process. Lacking legally binding obligations, the Convention had proven inadequate in bringing about a real change of domestic climate policies in almost all industrialised countries (see Chapter 4). Acknowledging the inadequacy of existing commitments, the Berlin Mandate passed at COP 1 set the stage to establish, for the first time in history, specific, legally binding obligations in the Kyoto Protocol to limit or reduce those greenhouse gases primarily responsible for global warming. The Kyoto Protocol to the FCCC contains, for those industrialised countries listed in Annex B, legally binding, differentiated reduction (or limitation) obligations for a basket of four gases (CO₂, CH₄, N₂O, SF₆) and two groups of fluorinated gases that are supposed to amount to an overall reduction in the commitment period from 2008–2012 of at least 5%.

With the inclusion of Article 4 into the Kyoto Protocol, the European Union achieved one of its major goals: the possibility to “bubble”. In combination with Article 3.1, Article 4 allows any group of Parties to jointly fulfil their commitments under the Protocol. It specifies that the combined assigned amounts in Annex B may be redistributed through internal agreement and notified to the Secretariat.

The concept of Joint Implementation (JI) is based on classic economic theory: measures to limit GHG emissions should preferably be taken where they are cheapest or even profitable. Mitigation costs differ among countries, mainly due to differences in the efficiency of energy use. Thus, emission reductions in developing countries and CEIT countries are thought to be cheaper than in OECD countries. To save on resources and maximise emission reductions, Parties from the OECD (or their industries) are striving to receive credit for carrying out climate protection projects abroad. Benefits would accrue to both project partners: the recipient country would receive additional funds, modern technology and know-how, whereas the investing country would acquire CO₂ credits at a lower cost than taking action at home. Although having intellectual appeal, many practical and political difficulties exist that must be solved in order to actually reap the benefits of this instrument.¹

The Clean Development Mechanism (CDM) was the “Kyoto surprise”,¹ elaborated with little public debate in the final days of COP 3. Taking many developing countries’ concerns into account, the CDM establishes a multilateral framework for project-based joint implementation between industrialised and developing countries. This was only possible because some key negotiators built a winning coalition between AOSIS, several major developing countries and industrialised countries. AOSIS and other developing countries particularly vulnerable to climate change will benefit from a fee levied on CDM activities, developing countries in general will benefit from additional financial and technological resources transferred through the CDM, and industrialised countries were eager to achieve substantial participation of developing countries in the Protocol and to be able to earn emission credits from project-based activities in developing countries.

Along with “meaningful participation of developing countries”, the inclusion of so-called “flexibility instruments” into the “protocol or another legal instrument” to be adopted at COP 3 constituted top priority for the US and was of vital importance for other industrialised countries outside of the European Union and for Russia. These instruments were Emissions Tradings, joint implementation between industrialised countries and the “Clean Development Mechanism” (CDM), a project-based instrument for offsetting emissions with developing countries (see Chapters 13 and 14 and Figure 13.1). First among those flexibility instruments, however, was the possibility to trade surplus emission reductions with other Parties.

The Kyoto Protocol contains several means for addressing non-compliance and enforcement of its obligations. None of them is particularly innovative and much will depend on subsequent elaboration by the COP/MOP. This is in line with the process-oriented character of the climate regime, i.e. its potential to develop and evolve over time.¹ The basis for determining non-compliance is the system of national communications and the review procedure for those reports contained in Articles 7 and 8 of the Protocol, which will be based upon methodologies for the emission inventories to be elaborated under Article 5 of the Protocol.

As the most vulnerable countries, developing countries have a profound interest in mitigating and adapting to climate change. At the same time, the dominant development pattern established by industrialised countries and followed by most developing countries depends to a large extent on the availability and the use of fossil fuels. Hence, many developing countries perceive action to limit and reduce GHG emissions as a potential threat to their economic future. Even action by industrialised countries is worrisome for a number of developing countries because of the possible negative repercussions on their own economic development.

As in the case of the FCCC¹ and most other recent multilateral environmental agreements², negotiators of the Kyoto Protocol faced a dilemma with respect to the institutional arrangement. Principles of “institutional economy” (i.e. using existing bodies) stood against the advantages of a fresh start that could be achieved with the help of new institutions better suited to the requirements of this particular treaty. Most debates in the negotiations leading up to Kyoto concerned the question of whether the Protocol should use the existing institutions of the Convention and, if so, whether these institutions should be identical (i.e. whether the Conventions′ bodies should simply take over tasks under the Protocol) or whether they should have their own identity due to the potentially different membership of the respective treaties. The negotiating history is dealt with in Section 18.1 below)

Provisions on regular review and assessment are amongst the most important for the dynamic evolution of international treaties. ¹ These programme norms² therefore are increasingly used in international environmental agreements³ in order to regularly adjust the rules to new scientific findings, technological and economic developments or enhanced concern about environmental degradation. They furthermore can provide windows of opportunity for adjusting treaty rules to changing political circumstances and serve to keep up the regulatory pressure on laggard states. This increasing importance is reflected by the fact that these clauses are frequently only agreed on at the end of the negotiating processes as part of a package deal.

The final provisions of the Kyoto Protocol on signature, ratification and entry into force generally follow the established practice under international law. Therefore, no major disputes arose on the relevant articles of the Protocol with the exception of Article 25 on the entry into force of the Protocol. This is dealt with in more detail in Section 20.1. Subsequently, the provisions on voting rights, the Depositary of the treaty, reservations and withdrawal are presented (see Section 20.2).

Apart from the fascinating details of the Kyoto process, a number of more general lessons can be derived from the negotiating process. These are related to the importance of leadership, including the ability of the European Union to exert such leadership in international environmental affairs (Section 1.1), and the outstanding role of certain situational factors in bringing about the final agreement (Section 1.2). Furthermore, the Kyoto process provides clear signs of the evolving role of climate policy in world politics on the threshold to the 21^st century as well as of the intergovernmental and non-governmental character of politics in this field (Section 1.3).

The Kyoto Protocol, despite its apparent flaws, can be regarded as a milestone in the history of climate protection. For the first time in history, the vast majority of countries, among them all the world’s major players, have recognised the fact that economic and social prosperity is not necessarily linked to the unfettered emission of GHGs. Since the Protocol was adopted unanimously by all Parties to the Convention present at COP 3, this recognition is shared even by oil-producing states. After this statement, all future battles will be battles of retreat and battles over the allocation of burden.

International institutions and treaties on the environment have proliferated over the last few decades, as they have in other policy areas as well.¹ As a result, the potential for linkage and overlap among these institutions has increased steadily, providing both the opportunity for creating synergies and the danger of conflicts between those international institutions — be it international organisations or, more importantly, international treaty regimes.² It is hardly surprising then, that numerous linkages exist between the climate change regime and other international institutions, which have been touched upon throughout this book. Examples include the IMO and ICAO in the issue of GHG emissions from bunker fuels (Chapter 10) and the GEF in the context of being the Financial Mechanism of the FCCC (Chapter 3). Without aiming at exhaustiveness, this Chapter spells out some of the issues involved in the most pertinent relationships between the climate change regime and other instruments. These are the World Trade Organization (WTO) (see Section 23.1), the Montreal Protocol on Substances that Deplete the Ozone Layer (see Section 23.2), as well as the Convention on Biological Diversity (CBD) and the Convention to Combat Desertification (CCD) (see Section 23.3).

The future of the international co-operation on climate change depends on whether and when the Kyoto Protocol will be ratified and implemented by the major players. This, in turn, is heavily influenced by both their strategic considerations and their domestic climate politics. In the emerging global civil society, domestic and international climate policies are furthermore affected by non-governmental forces. The following sections draw a picture of the international landscape of climate politics and the prospects of the Kyoto Protocol as a part of this landscape. For this purpose, the post-Kyoto situation on the international level, in the major countries and regions and in respect to non-governmental developments at the turn of the century is taken under review.

Following the third Conference of the Parties (COP 3) at Kyoto in November 1997, the Kyoto Protocol was regarded with a certain awe and was characterised as a “koan” in the Zen tradition.’ Since then, the international process has become entrenched in battles of retreat, most notably with regards to the concrete design of the various flexibility instruments, the so-called “Kyoto Mechanisms” (see Section 24.1).