Continuing impasse

Print edition : November 21, 1998

COP4, which was convened primarily to discuss the implementation of the Kyoto Protocol, was dominated by the U.S.' articulation of its market-based approach in almost all the matters that were raised.

THE Argentine capital of Buenos Aires hosted the Fourth Session of the Conference of the Parties of the United Nations Framework Convention on Climate Change (COP4) from November 2 to 14. Delegates from 150 countries participated in the conference, the first round of comprehensive talks since the COP3 session in Kyoto, Japan, in December 1997, which produced the Kyoto Protocol (Frontline, January 9, 1998). The Kyoto Protocol was the first substantive attempt to check the potentially catastrophic effects of global warming caused by the emission of greenhouse gases (GHGs). Scientific evidence has established that the global greenhouse effect is largely caused by the burning of fossil fuels.

Based on the international consensus that developed countries account for an overwhelming part of GHG emission, the Kyoto Protocol's emission reduction targets were made applicable mainly to industrialised countries. The Protocol prescribes targets for reduction of emission levels in the case of six GHGs by industrialised countries, which are mentioned in Annexe I of the Protocol.

Annexe I lists 24 original members of the Organisation of Economic Cooperation and Development (OECD), members of the European Union (E.U.) and 11 East European countries. The Protocol stipulates that the GHGs emitted by these countries during the period A.D. 2008-2012. should be at least 5.2 per cent lower than the 1990 levels. Quantitative targets are applicable to emissions of carbon dioxide, sulphur dioxide, nitrous oxide, methane, hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6).

COP4 was convened primarily to discuss the implementation of the Kyoto Protocol, to consider communications from the various parties detailing national positions on various parameters related to the emission of GHGs, and to discuss issues relating to the transfer of technologies, particularly those related to the energy sector. COP4 also debated the three controversial "flexible mechanisms" - Clean Development Mechanism, International Emission Trading, and Joint Implementation. The United States, which accounts for about a quarter of the world's emission of carbon dioxide, lobbied hard at Kyoto to have the three mechanisms included in the Protocol. It argued that this was essential if it were to assume substantial reduction targets.

The politics and economics of global warming, which played a crucial role in shaping the Kyoto Protocol (Frontline, December 26, 1997), continued to dominate the proceedings at Buenos Aires. The U.S., which had demanded "meaningful participation" from developing countries in the matter of fixing targets at Kyoto, raised this issue again. Although developing countries managed to avoid such a commitment at COP3, the Protocol is generally considered by environmentalists the world over as a weak agreement.

ENVIRONMENTALISTS' fears are based on two factors. First, there is apprehension that developed countries, particularly the U.S., have fixed targets that are far below levels that would enable the earth to recover from the effects of global warming. Citing scientific evidence of increases in global temperatures in the 1990s, they argue that substantial reductions are needed immediately.

At COP4, the World Meteorological Organisation (WMO) submitted that 1998 was likely to be the hottest year ever recorded. The WMO also stated at the plenary session that the 1997-98 El Nino (the climatic phenomenon believed to be responsible for causing disasters, including the recent Hurricane Mitch that lashed Central America: story on page 65), was the strongest in recorded history. There are apprehensions that insufficient leadership on the part of leading polluting nations - implying lower emission targets and delayed time-scales for their implementation - may prove to be disastrous for the planet.

The second set of fears are based on the manner in which the Protocol was crafted at Kyoto. While developing countries argued that since they were not primarily responsible for the problem of global warming they should not be involved in the first stage of target-fixing. This ethical argument was enshrined in the principle of "common but differentiated responsibilities" for the nations of the world adopted by the UNFCCC. However, the U.S., fully aware that without its participation a meaningful agreement was bound to fail, extracted several concessions.

Typically, the U.S. has used the carrot-and-stick approach in the COP negotiations. While threatening to make its own reductions contingent upon "meaningful participation" by developing countries, it has offered symbolic gestures of questionable value to other parties and to world opinion at large. While U.S. negotiators reiterated their long-held positions and advocated a free-market approach to the question of global warming at COP4, the U.S. signed the Kyoto Protocol at the United Nations headquarters in New York on November 12, 1998. (The U.S. was the 60th party to sign the Protocol. The Kyoto Protocol is open for signature by parties until March 15, 1999. It enters into force 90 days after at least 55 parties, accounting for at least 55 per cent of the level of global carbon dioxide emission that prevailed in 1990, ratify it.) However, the ratification by the U.S. is by no means certain because of opposition from the U.S. Senate.

Activists under the banner of the World Wide Fund for Nature dressed up as Tony Blair, Bill Clinton, Boris Yeltsin and (Japanese Prime Minister) Keizo Obuchi, act out an auction of Russia's quota of greenhouse gas emissions, outside the venue of COP4 in Buenos Aires.-ENRIQUE MARCARIAN/ AP

INDEED, the backlog of issues that were raised by the U.S. at Kyoto burdened the agenda at Buenos Aires. At Kyoto, the U.S. accepted a 7 per cent cut in the 2008-2012 levels relative to emission levels in 1992. However, the data presented by the U.S. at COP4 show that its share of emissions of GHGs increased by 6 per cent between 1990 and 1995. Environmental groups estimate that the U.S.' emission levels in 2010 may actually be 20 per cent higher than the 1990 level. There is thus an apprehension that the U.S. has not even embarked on the road to a substantial reduction in its GHG emissions.

More important, bargaining by the U.S. resulted in what Greenpeace, an international Green movement, has described as "multiple loopholes" in the agreement. These "loopholes" have been caused by the U.S.' insistence that the Protocol should allow "flexible mechanisms" for countries that seek to achieve their targets. During the last days of COP3, the U.S. insisted that an International Emission Trading regime be established, allowing countries which pollute less than their "quotas" to "sell" part of their "entitlements" to countries that fail to stick to their limits. In the current situation, where only industrialised countries have limits to keep, developing countries are not in the picture as far as this mechanism is concerned.

The U.S. also sought that a Clean Development Mechanism be established, whereby the Governments and private entities of Annexe I parties would help undertake emission reduction projects in developing countries. Annexe I parties would receive credits for such ventures in developing countries. Proponents of this mechanism have argued that the Clean Development Mechanism would promote "sustainable development" in developing countries, while reducing global GHG emissions. The Protocol's scheme for Joint Implementation will enable Annexe I parties to take "credits" for emission abatement projects and activities among themselves. It is clear that these projects are likely to be located mainly in countries in Eastern Europe, where emission levels are projected to fall sharply in the next few years because of the severe economic slump. The U.S. insisted that market forces, led by private initiative, be given wide scope in the functioning of the three "mechanisms".

Environmentalists' apprehensions are centred round these "mechanisms". They fear that this kind of trading would lead to illusory reductions in the emission of GHGs in industrialised countries and may in fact, lead to increased levels of global emissions. The problems of dealing with the "flexible mechanisms" have been compounded by the inadequate compliance and regulatory frameworks governing these "mechanisms". Observers have, for instance, pointed out that private claims for "credits" may be difficult to verify or monitor. Indeed, some negotiators at COP4 alleged that the U.S. had deliberately left these aspects loose so that the market would give shape to an international regime governing "hot air" trading.

All this means that the wide gap between what the market will or can deliver and what the environment demands could result in a global disaster. At COP4, the U.S. adopted a hardline market-friendly approach, rebuffing the demands of developing countries led by the G-77/China (the Group of 77 and China, working together, form the biggest bloc at the COP negotiations) that technology transfers be made easier so that the objectives of the Convention may be achieved. The G-77/China said that this would enable developing countries to equip themselves with "environmentally sound technologies and knowhow". It said that this would facilitate the achievement of the objectives of the Convention, but on "non-commercial and preferential terms". The U.S. objected, and stated that the Convention was in favour of the market and that this was the "best way to proceed". The U.S. also demanded that an "enabling environment" be created for private investment. China, and later India, demanded that a distinction be maintained between the "luxury emissions" of developed countries and the "survival emissions" of developing countries.

The question of "voluntary commitments" for developing countries was raised again at Buenos Aires. Although Argentina introduced this in the agenda before the session started, the developing countries, led by the G-77/China, opposed this strongly. However, the announcement by Argentina and Kazakhstan towards the end of the session to assume commitments unilaterally, threatened to split the cause of the developing countries.

There are fears that many developing countries, starved of foreign exchange or facing other economic difficulties, may be enticed to break ranks with G-77/China, which has taken a principled position. The "voluntary commitments" of these countries may then bring them into the market for emission trading which would suit the interests of polluting countries that are at risk of failing to meet their Kyoto Protocol targets. This would also have the added advantage of deepening the worldwide market for international trading in emissions.

Indeed, several companies and trading exchanges have already started functioning in some developed countries. For instance, Natsource Inc., a U.S.-based broker working in emission markets for sulphur dioxide and oxides of nitrogen claims that it does business to the tune of $ 1 billion in "emission transactions".

COP4 was dominated by the U.S.' articulation of its market-based approach in almost all matters that were raised. The U.S. strategy is based on pressuring developing countries to undertake emission cuts and then using its own market clout to buy its way out of its obligations under the Kyoto Protocol. With loose compliance mechanisms and unregulated markets under private control, there is a real danger that sharp market practices will triumph over the needs of the earth.

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