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5 The ETS and the Kyoto Protocol

 The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change (UNFCCC or FCCC). The UNFCCC is an international environmental treaty with the goal of achieving stabilisation of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.

The Kyoto Protocol was adopted in December 1997 and came into effect in February 2005. By the end of 2009, 187 states had signed and ratified the protocol. The first commitment period ended in 2012.

Annex I countries, i.e. 39 industrialised countries and the European Union, agreed to reduce their collective greenhouse gas emissions by 5.2% from the 1991 level by the year 2012. Nonetheless, worldwide CO2 emissions caused by burning fossil fuels have increased by 2,3 % in 2013. According to Global Carbon Project those are the highest figures of human-induced climate change ever measured.

Detailed targets for each Annex I country are defined in Annex B of the Kyoto Protocol. Emission limits do not include emissions by international aviation and shipping.

Countries have five option to comply with their emission reduction targets

  • Reduce their own emissions
  • Using Joint implementation (JI), Annex I states can be credited with emission reductions attained by investing in other industrialized countries and can then trade the reductions as Emission Reduction Units (ERUs)
  • Using the Clean Development Mechanism (CDM), Annex I states can earn Certified Emission Reductions (CERs) for climate projects in developing countries
  • International Emissions Trading (IET) allows countries to buy and sell AAUs in order to reach their reduction targets
  • Transnational trading schemes such as the EU ETS can be used to transfer the authority of trading emission allowances from state to business level

These flexible mechanisms are subject to the principle of supplementarity, i.e. cooperation with other states may only be used to supplement domestic emission reductions. The main aim of the KP is to change industrialised countries’ GHG emissions patterns.

The Kyoto protocol is enforced by the Compliance Committee’s enforcement branch (the other branch being the facilitative branch).

If the enforcement branch determines that an Annex I country is not in compliance with its emissions limitation, the country must make up the difference plus an additional 30% and will be suspended from making transfers under an emissions trading program. Thus, the explicit consequences of non-compliance of the treaty are weak compared to domestic law.

In the non-binding “Washington Declaration” agreed on in February 2007, governments from 13 states agreed on the outline of a successor to the KP consisting of a global cap-and-trade system for industrialised and developing countries.

The talks in Copenhagen and Cancún in 2009 and 2010 have failed to deliver clear results. The same applies for the COP in Durban 2011 when Canada left the Kyoto Protocol. But in 2012 at Doha the remaining member states agreed to extend the treaty until 2020. Then they shall draft a contract with binding ruels – worldwide. Negotiations in Warsaw in 2013 brought about the 2 degrees target. This year the United Nations Climate Change conference will take place in Lima. Negotiations for a successor of the Kyoto Protocol are supposed to continue in 2015 at Paris.

The Kyoto Protocol1 (KP) was adopted on 11/12/1997 and came into effect on 16/02/2005. By the end of 2009, 187 states had signed and ratified the protocol. The first commitment period ends in 2012.
Annex I countries2 agreed to reduce their collective greenhouse gas emissions by 5.2% from the 1991 level by the year 2012. Detailed targets for each Annex I country are defined in Annex B of the Kyoto Protocol. Emission limits do not include emissions by international aviation and shipping
Countries have five option to comply with their emission reduction targets
Reduce their own emissions
Using Joint implementation (JI) Annex I, states can be credited with emission reductions attained by investing in other industrialized countries and can then trade the reductions as Emission Reduction Units (ERUs)
Using the Clean Development Mechanism (CDM), Annex I states can earn Certified Emission Reductions (CERs) for climate projects in developing countries
International Emissions Trading (IET) allows countries to buy and sell AAUs in order to reach their reduction targets
Transnational trading schemes such as the EU ETS can be used to transfer the authority of trading emission allowances from state to business level
These flexible mechanisms are subject to the principle of supplementarity, i.e. cooperation with other states may only be used to supplement domestic emission reductions. The main aim of the KP is to change industrialized countries’ GHG emission patterns
The Kyoto protocol is enforced by the Compliance Committee’s enforcement branch (the other branch being the facilitative branch)
If the enforcement branch determines that an Annex I country is not in compliance with its emissions limitation, the country must make up the difference plus an additional 30% and will be suspended from making transfers under an emissions trading program.Thus, the explicit consequences of non-compliance of the treaty are weak compared to domestic law
In the non-binding Washington Declaration agreed on 16/02/2007, governments from thirteen states agreed on the outline of a successor to the KP consisting of a global cap-and-trade system for industrialized and developing countries
The talks in Copenhagen in 2009 failed to deliver results it is unlikely that a KP successor will be in effect by 01/2013. The next talks are in Cancun (2010), South Africa (2011), and Quatar or South Korea (2012