The Kyoto Protocol will complete its commitment period at the end of 2012, the same year RIO+20 will meet to hammer out another chapter of neoliberal green economics. But what was built from Kyoto and how will Kyoto continue? CTW has put together a short review outlining what the Kyoto Protocol is and what mechanisms will continue to function after 2012. This short review highlights Land Use and Land Use Change and Forestry (LULUCF) due to the critical importance this sector plays in policies and the expansion of future carbon markets.
The 1992 Earth Summit in Rio de Janeiro, Brazil created international
bodies on climate change and biodiversity. Within a neoliberal economic
system that coupled economic growth with ‘sustainability’, these
entities became the UN Framework Convention on Climate Change (UNFCCC)
and the UN Convention on Biological Diversity (CBD) which officially
began in 1994. The UNFCCC adopted the Kyoto Protocol at the third
Conference of the Parties (COP) in 1997, which entered into force in
February 2005. The Kyoto Protocol set the target of reducing emissions
by a minimum of 5.2 percent below 1990 greenhouse gas levels within a
five-year timeframe (2008-2012).
Emissions trading, the main mechanism adopted for achieving this
target, was introduced by the US in response to heavy corporate
lobbying during negotiations in the 1990s but later the Bush
administration pulled out of the agreement. The US has since never
ratified the Kyoto Protocol. Emissions trading was set up with a
combination of cap and trade
schemes. The arrangement partitions the atmosphere and institutes the
privitisation of emissions through buying and selling of ‘permits to
pollute’ just as any other international commodity.
What are rights to pollute and how can they be traded?
Due to historical responsibilities of emissions from Northern countries
recognized in the ‘common but differentiated responsibilities’
principle of the UNFCCC, under the Kyoto Protocol the ‘polluters’ are
industrialised countries (‘Annex I’, referring to a list of 37 such
countries under the UNFCCC) that have agreed to targets for reducing
their greenhouse gas emissions in a pre-defined timeframe, called a
‘commitment period’. Countries from the Global South do not have a
reduction target in this first commitment of the Kyoto Protocol
although are encouraged
to take on voluntary mitigation actions.
Under the cap and trade
mechanism, polluters are given a number of ‘emissions permits’ called
Assigned Amount Units (AAUs). The volume of permits is equivalent to
their 1990 levels of emissions plus/minus their reduction commitment.
These permits are measured in ‘tons of carbon dioxide equivalent’ gas
(tCO2e). Carbon dioxide (CO2) is one of the main greenhouse gases,
although the Protocol covers six gases in total (CO2, CH4, N2O, HFCs,
PFCs and SF6). The AAUs are permits to pollute up to the overall limits
set by the commitment agreed in Kyoto.
There are several ways in which the industrialised countries can use these permits:
1. If a polluting country has a surplus of permits it can sell them to
another polluting country or keep them for a future commitment period.
2. If a polluting country uses up all of its allowances, but pollutes
more, it must buy permits from another polluting country that has not
used up its full allowance.
3. The country (or companies within that country) can invest in
“emissions-saving” projects in other countries – mostly in the South –
and in this way ‘produce’ extra permits that can then be sold, banked,
or used to make up the deficit in its original allowance.
The first two options above occur in countries which can redistribute
their targets among themselves (industrialised countries), either
through direct re-allocations (called ‘burden sharing’) or by means of cap and trade
carbon markets. The largest such scheme is the European Union Emissions
Trading Scheme (EU ETS), which covers almost half of the greenhouse gas
emissions in 30 of the 37 Annex I countries.
The third option above is referred to as offsetting
For industrialised countries with targets that cannot be met, they can
buy offset credits to ‘compensate’ their pollution by investing in
‘emission-saving’ projects. Projects that are implemented in the global
South (countries with no reduction targets) can be registered under the
‘Clean Development Mechanism’ (CDM). Projects which take place in
countries with reduction targets come under ‘Joint Implementation’
(JI), these are mostly implemented in Eastern Europe.
These offset credits or permits, which are treated as equivalent to and
can be exchanged with AAUs, include: Emission Reduction Units (ERUs)
generated from the Joint Implementation mechanism; Certified Emission
Reductions (CERs) generated from the Clean Development Mechanism; and
Removal Units (RMUs) generated from land use, land use change and
forestry offset activities. The latter apply special rules since they
cannot be transferred to the next commitment period and are not
accepted under the EU Emissions Trading Scheme. Countries could then
use RMUs for their own compliance and hand out other types of credits
CDM and JI
projects can take a variety of forms: hydroelectric dams; basic
upgrading to polluting factories (mostly concerning potent greenhouse
gases other than CO2); methane capture from landfills; renewable energy
projects such as solar or wind power; enhancement to existing energy
generation; biomass and agrofuel projects; carbon sequestration from
monoculture tree plantations and so on.
The amount of credits earned by each project is calculated as the
difference between the level of emissions without the project and the
level of emissions with the implementation of the project. However, all
offset projects require the proof of ‘additionality’, which is to say
that all projects must ensure ‘real, measurable and verifiable emission
reductions that are additional
to what would have occurred
without the project’. With countless ‘without-project’ scenarios, a
corporate polluter can design huge estimates of the emissions that
would have been produced without the company’s offset project. The
bigger the hypothetical emissions, the bigger the reductions that can
be claimed and the larger the volume of credits that can be sold.
Because it is impossible to verify how many emissions would have been
generated without the project, the amount of credits generated through
‘additionality’ is largely exaggerated.
Land Use and Land-Use Change and Forestry (LULUCF)
The Kyoto Protocol maps out LULUCF based on the concept that trees
absorb carbon dioxide and therefore can assist in mitigating climate
change while at the same time land use and land use change releases
carbon dioxide and exacerbates climate change. The task of
establishing specific rules was mandated to the Subsidiary Body for
Scientific and Technological Advice (SBSTA) which were accepted at COP
7 in Marrakech in 2001, despite important uncertainties and concerns
Nonetheless, the Kyoto Protocol identifies separate rules for LULUCF activities for several reasons, including:
LULUCF activities can remove carbon dioxide from the atmosphere (called in the jargon removals by sinks
) – however this removal can be also reversed and result in emissions, i.e. by fires and fast-growing monocultures.
The estimation of LULUCF emissions and removals is way more uncertain
than those of fossil fuels since they rely mainly on biological
Forestry emissions and removals may still occur many years after a
project or intervention happens, while emissions from fossil fuels
occur immediately when the fuel is burnt.
The main features to the forest sector in Annex I countries (polluter
countries) of the LULUCF agreements are reflected in two articles of
the Kyoto Protocol:
Article 3.3, which requests these countries to take into account the
emissions and removals (carbon stock changes) of direct human-induced
afforestation (new forest areas), reforestation and deforestation since
1990. Accounting for these activities is mandatory and must be
considered in the national greenhouse gas balances.
Article 3.4 states that polluter countries may choose to account, in
order to meet their commitments, carbon stock changes (emissions and
removals) due to forest management, cropland management, grazing land
management or re-vegetation. If a country elects to account for any of
these activities, it must account on all lands subject to these
activity. Yet, including any of these activities under Article 3.4 is
voluntary. The main concern is that countries do not want to be
accountable for natural disturbances or other emissions over which they
have no control.
During the COP 9 in Milan in 2003, detailed rules on sinks under the
Clean Development Mechanism (CDM) were included, confining these to
afforestation and reforestation (A/R) activities and recognizing their
temporary nature. These offsets are restricted to areas that were not
forested in 1990 and are supposed to be also ‘additional’ to what would
have happened without the project. A/R credits can be used by polluting
countries for up to one per cent of its base year emissions times five.
This was a major step back in the struggle against the expansion of
large-scale monoculture plantations
in the South which entail heavy social, economic and environmental impacts.
The temporary nature of these A/R CDM projects is another important
difference. Polluting countries can choose between temporary (tCERs)
and long-term (lCERs) credits. The EU ETS excluded the use of any of
these credits in the first commitment period of the Protocol, which
ends in 2012.
During COP 11 in Montreal in 2005 a new process was initiated to
discuss ways to further reduce emissions from deforestation (RED) in
Southern countries and later on, added ‘degradation’ (the second D).
Afterwards, during the negotiations in Bali in 2007, the UNFCCC
repackaged the concept of forestry offsets and adopted REDD
which resides in both the AWG-LCA and the AWG-KP tracks (Ad Hoc Working
Groups on Long-Term Cooperative Action and on the Kyoto Protocol). By
adding an extra + (or ‘plus’) the Bali Action Plan includes the role
of ‘conservation’, ‘sustainable management of forests’ and
‘enhancement of forest carbon stocks’ for REDD+ projects.
The Intergovernmental Panel on Climate Change (IPCC) inventory
guidelines of 2006 merged the categories of Agriculture, Forestry and
Other Land Use (AFOLU) in one sector, adding the agriculture to LULUCF.
Agriculture as a whole though is being addressed under a separate
stream of negotiations referred to as the Ad Hoc Working Group on
Long-term Cooperative Action (or AWG-LCA). A compromise text from COP
17 in Durban 2011 requests the Scientific and Technological Advisory
Body of the UNFCCC to consider issues related to agriculture at its
next session in May 2012, in other words, agriculture is now on the
official UNFCCC agenda.
In this regard, REDD+, AFOLU and LULUCF are connected in the
negotiations because one outcome will affect another. Along with the
emissions trading markets, these three issues will undoubtedly continue
playing a substantial part of the post-2012 negotiations regardless if
and how Kyoto is resurrected. In fact, they are set up to be build-in
to the carbon trading markets.
As Christiana Figueres, Executive Secretary to the UNFCCC, announced
during Forest Day on 4th December 2011, “The governments of the world
are writing a global business plan for the planet . . . and REDD+ is
its spiritual core.”
“Kyoto is dead, long live Kyoto”
The shaky future of Kyoto was a raging debate in Durban at the UNFCCC
COP17 in December 2011 which took the form of whether or not to abandon
the Kyoto Protocol after its first commitment period ends in 2012. Most
industrialised countries called for the end of Kyoto, which is tied to
the UNFCCC convention and thus to the ‘common but differentiated
responsibilities’ principle, and pushed for a system of carbon trading
without a joint emission reduction target but with voluntary
commitments. After days of haggling over ‘to Kyoto or not to Kyoto’ the
countries agreed upon stalling the process until 2015 and
re-implementing a new system – which remains to be seen – set to begin
in 2020. This debate has generally manifested itself in the form of
which countries should have to comply to targets and technical debates
about the ‘legal form’ taken by a new global climate treaty.