Key aspects of the Kyoto Protocol include
emissions targets, timetables for industrial-
ized nations, and market-based measures
for meeting those targets. The Protocol
makes a down payment on the meaning-
ful participation of developing countries,
but more needs to be done in this area.
Securing meaningful developing country
participation remains a core U.S. goal.
Emissions Targets
A central feature of the Kyoto Protocol
is a set of binding emissions targets for
developed nations. The specific limits
vary from country to country, though
those for the key industrial powers of the
European Union, Japan, and the United
States are similar—8 percent below 1990
emissions levels for the European Union,
7 percent for the United States, and 6
percent for Japan.
The framework for these emissions tar-
gets includes the following provisions:
• Emissions targets are to be reached
over a five-year budget period rather
than by a single year. Allowing emis-
sions to be averaged across a budget
period increases flexibility by helping
to smooth out short-term fluctua-
tions in economic performance or
weather, either of which could spike
emissions in a particular year.
• The first budget period will be
2008–2012. The parties rejected bud-
get periods beginning as early as
2003, as neither realistic nor achiev-
able. Having a full decade before the
start of the binding period will allow
more time for companies to make the
transition to greater energy efficiency
and/or lower carbon technologies.
• The emissions targets include all six
major greenhouse gases: carbon diox-
ide, methane, nitrous oxide, and three
synthetic substitutes for ozone-deplet-
ing CFCs that are highly potent and
long-lasting in the atmosphere.
• Activities that absorb carbon, such as
planting trees, will be used as offsets
against emissions targets. “Sinks”
were also included in the interest of
encouraging activities like afforesta-
tion and reforestation.
Accounting for the role of forests is
critical to a comprehensive and envi-
ronmentally responsible approach to
climate change. It also provides the
private sector with low-cost opportu-
nities to reduce emissions.
A
t a conference held December 1–11, 1997, in Kyoto, Japan, the Parties to
the UN Framework Convention on Climate Change agreed to an historic
Protocol to reduce greenhouse gas emissions by harnessing the forces of the global
marketplace to protect the environment.
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International
Emissions Trading
The Kyoto Protocol allows nations with
emissions targets to trade greenhouse gas
allowances. Using this mechanism,
countries can achieve reductions at the
lowest cost. Emissions trading was devel-
oped in the United States to reduce sul-
fur dioxide that causes acid rain and has
been successful beyond expectations.
Under an emissions trading regime,
countries or companies can purchase less
expensive emissions permits from coun-
tries that have more permits than they
need (because they have met their targets
with room to spare). Structured effective-
ly, emissions trading can provide a pow-
erful economic incentive to cut emissions
while also allowing important flexibility
for taking cost-effective actions.
The Kyoto Protocol established emis-
sions trading. Rules and guidelines—in
particular for verification, reporting, and
accountability—will be developed.
The inclusion of emissions trading in the
Kyoto Protocol reflects an important
decision to address climate change
through the flexibility of market mecha-
nisms. The Conference rejected proposals
to require all Parties with targets to
impose specific mandatory measures, such
as energy taxes. A number of countries,
including Australia, Canada, Japan, New
Zealand, Russia, Ukraine, and the United
States, reached a conceptual agreement to
pursue, through an umbrella group, the
implementation of a trading regime. Such
a group could further contribute to cost-
effective solutions to this problem.
Joint Implementation
Among Developed
Countries
Countries with emissions targets may
obtain credit toward their targets through
project-based emission reductions in
other such countries. The private sector
may participate in these activities.
Additional details may be agreed upon
by the Parties at future meetings.
Clean Development
Mechanism
Another important market-based com-
ponent of the Kyoto Protocol is the so-
called Clean Development Mechanism
(CDM). The CDM embraces the con-
cept of joint implementation for credit
in developing countries. With the Clean
Development Mechanism, developed
countries will be able to use certified
emissions reductions from project activi-
ties in developing countries to con-
tribute to their compliance with green-
house gas reduction targets.
This Clean Development Mechanism
will allow companies in the developed
world to enter into cooperative projects
to reduce emissions in the developing
world—such as the construction of
high-tech, environmentally sound power
plants—for the benefit of both parties.
The companies will be able to reduce
emissions at lower costs than they could
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at home, while developing countries will
be able to receive the kind of technology
that can allow them to grow more sus-
tainably. The CDM will certify and
score projects. The CDM can also allow
developing countries to bring projects
forward in circumstances where there is
no immediate developed country partner.
Under the Clean Development Mechan-
ism, companies can choose to make
investments in projects or to buy emis-
sions reductions. In addition, Parties will
ensure that a small portion of proceeds
are used to help particularly vulnerable
developing countries, such as island
states, adapt to the environmental conse-
quences of climate change.
Importantly, certified emissions reductions
achieved starting in the year 2000 can
count toward compliance with the first
budget period. This means that private
companies in the developed world will be
able to benefit from taking early action.
Developing Countries
Various Protocol provisions, taken togeth-
er, represent a down payment on develop-
ing country participation in efforts to
reduce greenhouse gas emissions.
Developing countries will be engaged
through the Clean Development
Mechanism noted above.
The Protocol advances the implementa-
tion by all Parties of their commitments
under the 1992 Framework Convention
on Climate Change. For example, the
Protocol identifies various sectors
(including the energy, transport, and
industry sectors as well as agriculture,
forestry, and waste management) in
which national programs should be
developed to combat climate change.
The Protocol also provides for more
specific reporting on actions taken.
Securing meaningful participation from
key developing countries remains a pri-
ority for the United States. The
Administration has stated that without
such participation, it will not submit the
Kyoto Protocol to the Senate for advice
and consent to ratification.
Compliance and
Enforcement
The Protocol contains several provisions
intended to promote compliance. These
include requirements related to measure-
ment of greenhouse gases, reporting, and
review of implementation.
The Protocol also contains certain con-
sequences for failure to meet obligations.
For example, a Party that is not in com-
pliance with its measurement and
reporting requirements cannot receive
credit for joint implementation projects.
Effective procedures and a mechanism to
determine and address noncompliance
are to be decided at a later meeting. For
both environmental and competitiveness
reasons, the United States will be work-
ing on proposals to strengthen the com-
pliance and enforcement regime under
the Protocol.
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Entry Into Force
The Kyoto Protocol opened for signa-
ture in March 1998. To enter into force,
it must be ratified by at least 55 coun-
tries, accounting for at least 55 percent
of the total 1990 carbon dioxide emis-
sions of developed countries. U.S. ratifi-
cation will require the advice and con-
sent of the Senate.
Buenos Aires
Action Plan
At the Fourth Session of the Conference of
the Parties (CoP-4) held November 2–13,
1998, in Buenos Aires, Argentina, the
Parties to the UN Framework Convention
on Climate Change agreed to a two-year
action plan for advancing the ambitious
agenda outlined in the historic Kyoto
Protocol.
CoP-4 also saw a significant break-
through on the issue of developing coun-
try participation in international efforts
to address climate change. Argentina
became the first developing country to
announce its intention to take on a bind-
ing emissions target for the 2008–2012
time period. Kazakhstan announced that
it intended to do so as well.
During the Buenos Aires conference, on
November 12, 1998, the United States
signed the Kyoto Protocol at the United
Nations in New York. Signing reaffirms
the United States’ commitment to work
with other nations to meet the Protocol’s
ambitious environmental goals and
ensures a continued strong U.S. role in
settling issues left unresolved at Kyoto.
Signing does
not impose an obligation
on the United States to implement the
Kyoto Protocol. (The Protocol cannot
become binding on the United States
without the approval of the United
States Senate.) The President will not
submit the Protocol to the U.S. Senate
for approval without the meaningful
participation of key developing countries
in efforts to address climate change.
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