KYOTO PROTOCOL

OUTLINE

Climatic changes & need for Climate policy

Run up to Kyoto Protocol

Kyoto Protocol– Commitment– Implementation– Compliance– Minimizing impact on developing countries

Kyoto Protocol at Present

Indian context

Conclusions and the Way Ahead

CLIMATIC ISSUES

• The greenhouse effect: natural vs. human• Since beginning of industrial revolution (1700) the

major Green House Gases have increased (Greenhouse Gases: CO2, CH4, N2O, HFCs, PFCs, SF6)

• Most of the warming (of 0.1°C per decade) observed over the last 50 years, is attributable to human activities

Potential impacts: increase in frequency and intensity of extreme

climate events increase in risk of desertification human health

What could happen next !!!!!!!!!!!!!!!!!!!!!!!!

• 1990's was most likely the warmest decade

ever, and 1998 the warmest year• Precipitation patterns have changed• Snow cover and ice extent have decreased • Global average sea level has risen • Oceans are warming • Glaciers are shrinking• Circulation patterns are changing

WHY DO WE NEED CLIMATE POLICY?

Because:• Climate change is human induced• Climate change is complex issue and economic

characteristics highlight difficulty to cope with• Joint international efforts, collective actions and control

are needed, but• Due to large economic and environmental asymmetries

among world regions, actions are needed internationally coordinated and harmonized :

Mauna Loa Curve

Green House Gases

SCIENTIFIC FACTS 1

SCIENTIFIC FACTS 2

Time Line of the Kyoto Protocol

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Political initiativesPolitical initiatives

1988 Establishment of IPCC by the WMO and UNEP

1989 Establishment by the UNGA of the Intergovernmental Negotiating Committee (INC)

1992 UN Framework Convention on Climate Change (UNFCCC) signed in Rio de Janeiro, Brazil

1994 UNFCCC entered into force

1995 First Conference of the Parties (COP1) to the UNFCCC.

1997 Kyoto Protocol adopted at COP3 in Kyoto, Japan.

February 16, 2005 Kyoto Protocol entered into force

2005 First Conference of the Parties serving as Meeting of the Parties to the Kyoto Protocol (COP/MOP1)

KYOTO PROTOCOL

What is the Kyoto Protocol?

The Kyoto Protocol is an agreement made under the United Nations Framework Convention on Climate Change (UNFCCC). Countries that ratify this protocol commit to reduce their emissions of carbon dioxide and five other greenhouse gases, or engage in emissions trading if they maintain or increase emissions of these gases.

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Kyoto ProtocolKyoto Protocol

• Greenhouse gas emissions reduction in the industrialized countries at 5 percent below 1990 levels by 2008 – 2012;

• Quantitative emissions limitation and reduction commitments by industrialized countries;.

• Can be undertaken individually or jointly with other countries through “flexibility mechanisms”:– Emissions Trading;– Joint Implementation;– Clean Development Mechanism;

4 elements of Kyoto Protocol

• Commitments ( general & specific)

• Implementation

• Compliance

• Minimizing Impacts on developing countries

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ParticipantsParticipants

The Convention divides countries into three main groups according to differing commitments:– Annex I Parties: OECD + countries with economies in transition (the

EIT Parties), including the Russian Federation, the Baltic States, and several Central and Eastern European States.

– Annex II Parties: OECD members of Annex I excluding the EIT Parties.

– Usually net buyers of emission permits

– Non-Annex I : India is part of this.• Usually net sellers of emission permits

Commitments: General

• All Parties to the Protocol are subject to a set of general commitments that mirror those of the Framework Convention.

• These include:• Taking steps to improve the quality of emissions data.• Promoting environmentally-friendly technology transfer.• Supporting climate change education, training and public

awareness.• Cooperating on international climate observation.

Commitments : Specific

• At the real heart of the Kyoto Protocol lies its set of legally-binding emissions targets for industrialized countries. These emissions targets amount to a total cut, among all Annex I Parties, of at least 5% from 1990 levels by 2008-2012.

• The collective 5% reduction is shared out so that each Annex I Party has its own individual emissions target.

• However, all individual emissions targets must be achieved by the same commitment period of 2008-2012.

• All individual targets are listed in Annex B of the Protocol

1. Commitments: Annex B

Country Target – 1990*

EU-15 -8%

US** -7%

Canada -6%

Japan -6%

Russian Federation 0

Norway +1%

Australia +8%

Iceland +10%

*Some EITs have baseline year other than 1990.**US does not intend to ratify the Protocol.

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GHG REGULATED BY KPGHG REGULATED BY KP

– Carbon dioxide (CO2)

– Methane (CH4)

– Nitrous oxide (N20)

– Hydrofluorocarbons (HFCs)

– Perfluorocarbons (PFCs)

– Sulphur hexafluoride (SF6)

Commitments : Conclusion

Ultimately, the Kyoto Protocol’s targets may appear relatively modest. However, given the fact that the emissions of many industrialized countries – except for developing countries – have continued to rise since 1990 the task of achieving the Protocol’s collective 5% reduction target becomes much more difficult than it sounds.

Commitments : United States

Implementation: Policies and Measures

To achieve the Protocol’s targets, Annex I Parties will need to implement domestic climate change policies and measures. Possible policies/measures include:•Enhancing energy efficiency•Protecting/enhancing GHG sinks•Promoting sustainable agriculture•Promoting renewable energy and environmentally friendly technologies•Tackling transport sector emissions

Implementation: LULUCF Sector

The LULUCF (Land Use: Land Use Change and Foresty) sector can provide national governments with relatively low cost opportunities to combat climate change, either by:•Increasing the removal of greenhouse gases from the atmosphere through carbon sinks, or by•Reducing emissions from the LULUCF sector itself.

Implementation: Mechanisms

The Kyoto Protocol broke new ground with its three innovative mechanisms:

• Joint implementation• Clean development mechanism (CDM) • Emissions (carbon) trading.

All three mechanisms aim to “maximize the cost-effectiveness of climate change mitigation by allowing Parties to pursue opportunities to cut emissions, or enhance carbon sinks, more cheaply abroad than at home”.2

Implementation: Mechanisms

All three mechanisms operate on the basis of accounting units.

– Joint implementation projects result in emission reduction units (ERUs)

– CDM projects generate certified emission reductions (CERs) and,

– Under emissions trading, Annex I Parties may exchange assigned amount units (AAUs).

Implementation: Joint Implementation

• Joint implementation (JI) allows Annex I Parties to implement projects that reduce emissions, or increase removals by sinks, in the territories of other Annex I Parties.

• ERUs generated by JI projects can then be used by the investing Annex I Parties to help meet their own emissions targets.

Implementation: Clean Development Mechanism(1)

• Allows Annex I Parties to implement projects that reduce emissions in territories of non-Annex I Parties.

• CER’s are generated

• Like ERUs, CERs can also be used by Annex I Parties

• CDM serves two purposes– Help to achieve sustainable development – contribute to the objective of the Framework Convention.

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Industrialized

countries

Developingcountries

How does CDM work?How does CDM work?

Emissions Reduction

CertifiedEmissions Reduction

Targeted Emissions Reduction

Implementation: Clean Development Mechanism(2)

• CERs generated subject to a levy • Contribution towards a common fund

• Helps vulnerable developing countries

Implementation: Emissions Trading(1)

• Assigned amount units (AAUs) can be acquired

• An assigned amount refers to the “total emissions that an Annex I Party may emit over the commitment period and still meet its emissions target”.

• Specific assigned amount for each country

Implementation: Emissions Trading(2)

• Also allows to acquire– CERs (from CDM projects), – ERUs (from JI projects), or – RMUs (from sink activities)

• The minimum level (90% of the assigned amount) is known as the commitment period reserve and cannot be traded

Compliance:

• Consists of a Compliance Committee

• Has two branches – Facilitative branch and – An Enforcement branch

Compliance: Facilitative Branch

• Acts as a facilitator

• Responsibilities include

– Advice and assistance

– Early-warning to parties

– Mobilize financial and technical resources

Compliance: Enforcement Branch

• More power

• Ensures parties adhere to their commitments

• In cases of non-compliance with emission targets, Annex I Parties are granted 100 days after the current commitment period to make up any shortfall in compliance

Minimizing the impacts on developing countries(1)

• The Protocol commits Annex I Parties to strive to implement their emissions targets through policies that will minimize adverse impacts on developing countries.

• Furthermore, the Marrakech Accords require Annex I Parties to report (on an annual basis) on the actions they are taking to meet this commitment.

Minimizing the impacts on developing countries(2)

• Lastly, the aforementioned Adaptation Fund is to funded not only by the adaptation levy on CDM projects, but also by additional contributions from Annex I Parties.

• The Adaptation Fund will finance concrete adaptation projects and programs in developing countries; especially least developed countries (LCDs).

KYOTO PROTOCOL AT PRESENT

Year

Test Period EU

Emission Trading

1st Commitment Period

2nd Commitment Period

3rd Commitment Period

2017201220082005 2022

Where are we now? Ratified in 2005 US pulled out, but Russia's participating CDM and JI are operational EU ETS is in test phase The protocol is a first and small step compared to what will be needed

Commitments so far defined for the period from 1990 (base year) to 2012

New commitment discussionsfor 2nd period

Kyoto Protocol at Present

Result Upto Date

Country Change in GHG (1990-2004)

EU assigned Objective for 2012

Treaty Obligation 2008-2012

Germany -17% -21 % -8 %

Canada +27 % N/A -6 %Spain +49 % +15 % -8 %US +16 % N/A N/A

France -0.8 % 0.0 % -8 %Greece +27 % +25 % -8 %Japan +6.5 % N/A -6 %UK -14 % -12.5 % -8 %EU -15 -0.8 % N/A -8 %

KYOTO PROTOCOL

&

INDIA

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CDM - INDIA

Designated National Authorities (DNA) –IndiaDesignated National Authorities (DNA) –India

The National Clean Development Mechanism (CDM) AuthorityThe National Clean Development Mechanism (CDM) Authority

Ministry of Environment and ForestsMinistry of Environment and Forests115, Paryavaran Bhawan,115, Paryavaran Bhawan,CGO Complex,CGO Complex,Lodhi Road,Lodhi Road,New Delhi, India New Delhi, India

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National CDM Authority is a single window clearance for CDM projects in the country

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Benefits likely to be derived from CDM Benefits likely to be derived from CDM Projects in IndiaProjects in India

Cost of Emission Reduction

Country US$/Ton of Carbon

Japan 400

USA 200

India 25

Source: E&Y Report on CDM Project Development dated 07 February, 2005

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Some StatisticsSome Statistics

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• The National Clean Development Mechanism Authority (CDM) has cleared 200 CDM projects as of March 2006.

• Projects include – 62 - Renewable’s including biomass based cogeneration

projects– 28 for energy efficiency– 8 for Industrial Processes– 6 in Fuel switching – 3 in Municipal Solid Wastes

• Projects approved to generate 132 million CERs and facilitate investment of Rs 7,816 crores in India.

- Ministry of Environment & Forests (Climate Change Division)

CDM ProjectsCDM Projects

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• Gujarat Fluorochemicals to generate 4-6 million carbon credits annually– a deal to sell them to the Netherlands and a Japanese

firm

• Tyre cord maker SRF Ltd. signed deal with a unit of Royal Dutch Shell Plc to sell 500,000 CERs from a project it aims to commission.

• Firms with approval include Tata Steel Ltd., JSW Steel Ltd., Balrampur Chini Mills Ltd. Dhampur Sugar Mills Ltd., Indo Gulf Fertilisers Ltd. and Gujarat Ambuja Cements Ltd.

CERsCERs

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List of Companies at various stages of UNFCC Approval List of Companies at various stages of UNFCC Approval with Host Country Approvalwith Host Country Approval

The Way Ahead

In the non-binding 'Washington Declaration' agreed on February 16, 2007, Presidents or Prime Ministers from Canada, France, Germany, Italy, Japan, Russia, United Kingdom, the United States, Brazil, China, India, Mexico and South Africa agreed in principle on the outline of a successor to the Kyoto Protocol. They envisage a global cap-and-trade system that would apply to both industrialized nations and developing countries, and hoped that this would be in place by 2009