Senin, 03 Januari 2011

The Kyoto Protocol's Dilemma

An Assessment of the Effectiveness of the Flexible Mechanisms
in Addressing Climate Change

by. Agung Wardana


Abstract
Climate change has been the biggest environmental problem facing humanity. The international community has responded to it by releasing The Kyoto Protocol, which provides three flexible mechanisms to help developed countries meet their commitment in reducing greenhouse gas emissions, the major cause of climate change. The effectiveness of the mechanisms has been assessed using library-based research in this project. As a result, it has been found that the flexible mechanisms, which are based on market and offsetting schemes, are ineffective in tackling the root causes of climate change. However, it does not mean that the Kyoto Protocol, in general, has failed and should be replaced by a new agreement. Considering the current political context at international level, an attempt to terminate the Kyoto Protocol may jeopardise the entire climate negotiation because the new agreement would be not legally binding and without global emissions reduction target. Hence, the project suggests that improvements of the Kyoto Protocol’s weaknesses are needed, and this may be the most feasible solution for reducing emissions in the future.

Introduction

For decades, the issue of climate change has seemed to be one of the hottest political debates at both national and international levels (Zillman 2001:xix and Bugge 2001:39). For years, several skeptical groups [consisting of economists, corporate lobbyists and politicians] have appeared to argue that a report from the International Panel on Climate Change (IPCC) was not based on scientific evidence, but that it was based on political interest instead, and therefore climate change was not occurring (Cameron 2001:7). In contrast, groups of scientists and environmental organizations tried to counter the skeptical arguments by campaigning the issue massively to inform the public.

It seems that more open debates on climate change may have started since the IPCC, a global experts’ and scientists’ panel on climate change, released a report called the First Assessment Report in 1990. In the report, the IPCC provided scientific evidence on climate change and its impacts for human life and the environment. In addition, IPCC recommended that an international legal instrument was needed in order to address climate change (Grubb, Vrolijk & Brack 1999:5-7). Therefore, in 1992, a convention named ‘United Nations Framework Convention on Climate Change’ (UNFCCC), the first international consensus on climate change, was released during the Earth Summit in Rio de Janeiro.

The convention aims to stabilise the concentration of greenhouse gases “at a level that would prevent dangerous anthropogenic interference with the climate system” (Article 2 UNFCCC). Since it is general a framework, however, the convention does not provide a specific target on emissions reduction for its participating countries, so a protocol, which is a more specific legal instrument, was needed to implement the convention effectively (Malanczuk 1997:52). Five years after the convention, the participating countries agreed to release the ‘Kyoto Protocol to the United Nations Framework Convention on Climate Change,’ otherwise known as the Kyoto Protocol, in 1997.

As far as the international negotiations on climate change are concerned, the penetration of neo-liberalism with its free market principles seems to be influencing the processes as well as the Kyoto Protocol (Grubb, Brack, and Vrolijk 1999:137, Dabhi 2009: 138 and Lohmann 2009:25). The most significant effort to involve the market in the Kyoto Protocol was the accommodation of three flexible mechanisms, namely Emissions Trading (ET), Joint Implementation (JI) and the Clean Development Mechanism (CDM), to solve the climate problems. These mechanisms have been the central debates on how effective the Kyoto Protocol is.

Therefore, this project aims to provide a discussion of the effectiveness of the Kyoto Protocol’s flexible mechanisms in reducing greenhouse gas emissions in developed countries, and to propose possible solutions for the Kyoto Protocol’s dilemma.

1. The Kyoto Protocol’s Mechanisms
The flexible mechanisms have been accommodated in the Kyoto Protocol in order to provide flexibility for developed countries to meet their commitment in a cost-efficient manner. There are three flexible mechanisms. Firstly, Joint Implementation (JI) is a project-based scheme between two developed countries to reduce emissions. The developed country that funds the project will receive a credit called “emission reduction units” so that the country does not need to reduce its emissions domestically. Secondly, Emissions Trading (ET) is a scheme in which a developed country can buy allowances in releasing emissions, known as “Assigned Amount Units” (AAU), from another developed country. Finally, the Clean Development Mechanism (CDM), in principal, is the same with the JI; however, it is a partnership between a developed country and a developing country.

As far as the effectiveness of a legal system is concerned, according to Friedman (1987), there are three components that need to be assessed. Friedman names them as legal culture, legal substance, and legal structure (Friedman 1987:16). Firstly, the legal culture is related to paradigms and attitudes that shape “social forces” to obey or to disobey the rules (ibid:15). Secondly, the legal substance consists of essential norms and laws on what should be done by organizations or institutions (ibid:14). Thirdly, the legal structure is the physical form of a system, the institutions and the fixed foundations that maintain the system operating on its tracks (ibid:14).

Hence, the effectiveness of the flexible mechanisms in the Kyoto Protocol, as a part of an international legal system, is discussed based on Friedman’s categories in this section.

1.1. The Culture of the Kyoto Protocol
With regard to legal culture, it seems that economic reasons, namely economic stability, growth and employment, have been the major argument in postponing taking actions on climate change. The US, for instance, has refused to ratify the Kyoto Protocol, although it was the architect of the flexible mechanisms. In addition, Australia had delayed its ratification until Kevin Rudd, who pledged to ratify the Kyoto Protocol during his campaign, was elected as the Prime Minister in 2007.

It is a common argument that the Kyoto Protocol is ineffective because the US is not participating. The US, the biggest contributor of greenhouse gas emissions, produces approximately 25% of total global emissions and the highest per capita carbon footprint; thus, the international community projects the US as an indicator of success in reducing emissions at global level (Grubb, Brack, and Vrolijk 1999:31).

To some extent, it seems that the Kyoto Protocol, particularly the flexible mechanisms, may be seen as an ineffective legal instrument to tackle climate change. However, instead of being caused by the absence of the US, this ineffectiveness may be caused by a paradigm of exploiting the issue of climate change in terms of economic self-interest. This leads to failure in pursuing an effective answer to the issue as a top priority. Therefore, the legal culture, in terms of the counterproductive attitude and self-serving paradigm showed by participating countries, seems to influence the ineffectiveness of the Kyoto Protocol as an international legal system to address climate change.

1.2. The Substance of the Kyoto Protocol
Driven by a neo-liberal paradigm, the flexible mechanisms based on market and offsetting schemes have become the core of the Kyoto Protocol. They aim to provide economic opportunities instead of addressing the main causes of the problems effectively. Thus, debates on economic and environmental perspectives in these mechanisms seem to be important issues with regard to measuring the effectiveness of the substance of the Kyoto Protocol.

From the economic point of view, it is frequently pointed out that the flexible mechanisms have positive impacts for both developed and developing countries. Most importantly, the mechanisms, argued by their proponents, are the cheapest solution to tackle climate change, particularly for developed countries (Böhm and Dabhi 2009:14). For developing countries, the mechanisms, primarily the Clean Development Mechanism (CDM), provide opportunities and economic advantages in addressing climate change (Victor 2001:7). This means that the flexible mechanisms may be as delaying schemes for developed countries from reducing their emissions domestically, and as fundraising schemes for developing countries.

However, from the environmental perspective, particularly to reduce emissions, the flexible mechanisms do not appear to solve the root causes of the climate problems. The impacts of the CDM in reducing emissions, for instance, according to the U.S General Accountability Office (GAO), is difficult to calculate precisely (Checker 2009:44). Moreover, the Institute for Applied Ecology cited in Melisa Checker (2009) reports that 49 % of the CDM projects registered up to 2007 were doubtful to have reduced emissions. Hence, although the developed countries may hold CER credits from CDM projects, there were no emissions that have been reduced from the projects.

The same problems also occur in the two other mechanisms, such as Emissions Trading and Joint Implementation. According to Rising Tide, a grassroots environmental organisation, the emission-trading mechanism in the European Union, the European Emissions Trading Scheme (EU-ETS), has failed due to “fraud and market manipulation”. Nearly half of all the spots traded for the scheme are “unsatisfactorily monitored” (Rising Tide North America n.d: 9).

With regard to the European Union, the European Commission claims that they reduced 3.6 % emissions below 1990 levels between 2007-2008 using about 1,500 CDM projects. However, new research conducted by Michael Wara, a law professor at Standford University, reports that European Countries increased their emissions approximately 1 % above 1990 levels in 2008 (Checker 2009:44). According to the Subsidiary Body for Implementation (SBI) of the UNFCCC, the emissions from Annex 1 Countries [developed countries] increased by 3.1 % from 2000 to 2007 (SBI 2009).

This implies that the flexible mechanisms provided by the Kyoto Protocol seem to be ineffective in meeting the aim of the UNFCCC and the Kyoto Protocol in stabilizing the earth’s temperature. Since 2000, when the first flexible mechanism was implemented, there were no significant reductions in emissions. Indeed, greenhouse gas emissions have continued to increase.

1.3. The Structure of the Kyoto Protocol
With respect to institutions on the flexible mechanisms, the most crucial to be assessed is the CDM Board. In addition, the enforcing body of the Kyoto Protocol, the Enforcement Branch, also plays an important role in ensuring the aims of the UNFCCC and the Kyoto Protocol are accomplished. Thus, in this section, the CDM Board and the Enforcement Branch under the Kyoto Protocol are discussed in order to assess their effectiveness.

As far as enforcement is concerned, the Enforcement Branch may be the main body to ensure whether the developed countries reach their commitment. In addition, the Branch also regulates the flexible mechanisms in terms of eligibility to implement the mechanisms (Depledge and Yamin 2004:393).

However, these functions seem difficult to apply for various reasons. Maljean-Dubois (2010) argues that the market-based mechanisms would depend on the market and not the Branch’s decision (Maljean-Dubois 2010:79). In addition, the members of the Enforcement Branch may tend to be unprofessional because they represent strong political and economic interests from their home countries or groups (Kolari 2006:877). Moreover, members of the Branch who are coming from poor countries may face difficulties in forcing the rich and powerful countries to meet their commitments (Agarwal 2002: 382).

In terms of the role of the CDM Board, Wara and Victor argue that the Board has no adequate data or information on every single CDM project, and the Board is also pressed by both developed and developing countries to approve their projects (Gilbertson and Reyes 2009:64). Additionally, a project proponent requires hiring CDM validators during the project assessment; as a result, the validators may face a conflict of interest in making an objective decision (Haya, B. 2007:10).

Therefore, the structure of the Kyoto Protocol Mechanism appears to be ineffective due to the lack of professionalism, data and procedures, different interests of the participating countries, and aid-dependency of poor countries on rich countries.

2. Terminating or Improving the Kyoto Protocol
In spite of being the cheapest way to address climate change, the flexible mechanisms seem to create new problems by providing a delaying scheme to tackle the root causes of climate change. Thus, possible solutions are needed that are more effective to regulate the participating countries’ ability to take actions on adaptation and mitigation of the impacts of climate change.

Currently, there are two main proposals at the international level in response to the ineffectiveness of the Kyoto Protocol. The first proposal has been promoted by several groups, namely the US, academic institutions, and corporate lobbyists saying that a new agreement is needed. In the fifteenth Conference of Parties (COP 15) in Copenhagen in 2009, the US tried to terminate the UNFCCC and the Kyoto Protocol in order to propose a new treaty. Using its economic and political power, the US pushed developing countries to agree with this proposal. On the other hand, the other developed countries, including Germany and the United Kingdom, pushed China and India to reduce their emissions due to the absence of the US in the Kyoto Protocol, even though they are developing countries (Li Lin 2010:1).

The second proposal is to improve the weaknesses of the Kyoto Protocol instead of terminating it. This proposal has been endorsed by the major groups of developed countries as well as developing countries, environmentalists, and carbon-traders. However, they have different stances on what should be done to improve the Kyoto Protocol, whether strengthening the market-based and offsetting mechanisms or shifting these mechanisms into non-market and domestic based emissions reduction.

2.1. An Attempt to Terminate the Kyoto Protocol
As far as the collapse of the Kyoto Protocol is concerned, it seems clear that the best solution is not to terminate the UNFCCC and the Kyoto Protocol considering the legal status of the agreements and limited time to act. With regard to the legal status, the Kyoto Protocol is the only legally binding agreement on climate change at international level. Terminating the Kyoto Protocol would allow countries to emit greenhouse gasses into the atmosphere without any legally binding regulations. Although the proponents argue that they would promote a new agreement on climate change after terminating the Protocol, it seems that the new agreement would be voluntarily based instead of legally binding.

This tendency can be seen in the Copenhagen Accord, the result of COP 15. In the Accord, there is neither a global emissions target nor binding commitment for developed countries. Therefore, it will not be sufficient to maintain the rise in temperature below 2 degree Celsius [the safest level estimated by IPCC]; in fact, it is predicted that emissions from developed countries will increase 10-20 %, meaning that the temperature will rise more than 3 degree Celsius in 2100 (Khor 2010, and Rogelj, at al. 2010).

In terms of time frame, the impacts of climate change have been faced by several countries, particularly small island states and other developing countries (Friends of the Earth International 2007:3). It seems that there is not enough time to negotiate a new climate change agreement since it would take time and postpone urgent actions that are needed. The Kyoto Protocol, for instance, took more than a decade, from 1992-2005, to be negotiated and entered into effect. Therefore, the new agreement may require even more time to put into force in light of the more complex debates on climate change, particularly concerning the current economic and political situation after a global financial crisis. This discussion could serve as a delaying tactic during the negotiation process.

2.2. The Improvement of the Kyoto Protocol
It appears that the most possible solution may be to improve the Kyoto Protocol, particularly the flexible mechanisms. Instead of strengthening the market-based and offsetting mechanisms that have failed, the improvement of the legal substance of the Kyoto Protocol’s mechanisms may need to focus on non-market and domestic based emissions reduction schemes. Non-market and domestic-based schemes mean that developed countries may not sell or buy the “right to emit” from another country in order to meet their commitment by reducing emissions in their home countries. To avoid market involvement, financial support for this solution may come from a public fund to which developed countries can make contributions without any conditionality.

In terms of the legal structure, the Enforcement Branch will need to be reformed in order to make it more robust and powerful. In addition, an “international environmental court”, as proposed by Malanczuk (1997), seems to be an effective institution to complement the Branch in arbitrating the countries that do not fulfill a legal obligation. Moreover, a change in the legal culture, namely a paradigmatic shift from economic and political interest to climate justice principles, may be needed.

Climate justice is a set of principles based on human rights and global justice perspectives in order to tackle climate change (International Climate Justice Network 2002). In practice, the climate justice principles would require a “rapid phasing out of fossil fuel use” by halting the extraction of fossil fuel, demanding energy efficiency, acknowledging ecological debt and Indigenous People’s rights, promoting sustainable local farming and food sovereignty, and creating incentives through taxation (Gilbertson and Reyes 2009:92).

In addition, financial aid and technology transfers from developed countries to developing countries should be based on historical responsibilities from the Industrial Revolution when developed countries emitted large amounts of greenhouse gases into the atmosphere, now causing climate change. Moreover, unlike developing countries, developed countries have adequate resources to adapt and mitigate the impacts of climate change. Therefore, developed countries have to take a lead in addressing climate change, and helping developing countries to adapt and mitigate its impacts.

In short, the improvement of the Kyoto Protocol’s mechanisms, namely non-market and non-offsetting based schemes, may be the most possible and safest solution in order to enforce the protocol in an effective manner. Furthermore, the future mechanisms should be based on climate justice principles so that every country can stand equally in order to address climate change, the biggest environmental problem on earth.


Conclusion
The flexible mechanisms, namely Emission Trading, Joint Implementation and the Clean Development Mechanism, have been the central debate on the effectiveness of the Kyoto Protocol in reducing emissions in developed countries. As a part of an international legal system, these mechanisms have been assessed by using three components of the legal system: the structure, the substance and the culture, and to provide possible solutions for the future climate regime.

Due to limited time and sources, this project has found that the Kyoto Protocol’s flexible mechanisms are ineffective in meeting the aims of the UNFCCC and the Kyoto Protocol to stabilise the earth’s temperature. Considering the attitude of participating countries, market-based solution, and the lack of an enforcement body, the mechanisms are far from solving the root causes of climate change.

However, it does not mean that the Kyoto Protocol should be terminated because an attempt to do so may jeopardise general commitment to the issue of climate change. To terminate the Kyoto Protocol as promoted by the US would replace the legally binding commitment with a voluntary agreement since developed countries tend to seek more flexible ways in reducing emissions without legal and political sanctions.

It seems that the best possible solution in responding the Kyoto Protocol’s dilemma is to improve its components with regard to non market-based and domestic emissions reduction schemes, to reform enforcement bodies and to promote climate justice principles. Therefore, more detail studies on how the components work will need to be conducted in order to tackle climate change effectively.


(Studying LLM in Environmental Law at the University of Nottingham)

List of References
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Böhm, S., and Dabhi, S. (2009) ‘Upsetting the Offset: An Introduction’. In Upsetting the Offset: The Political Economy of Carbon Market. Ed.by Bohm and Dabhi [online] 9-24. London: MayFlyBooks. available from [14 May 2010]

Bugge, H. Christian (2001). ‘The Kyoto Protocol and the International Energy Industry: the Norwegian Perspective’. In Kyoto: From Principles to Practice. ed.by. Peter D. Cameron and Donald Zillman. The Hague: Kluwer Law International, 39-48

Cameron, D. Peter (2001). ‘The Kyoto Protocol Process: Past, Present and Future’. In Kyoto: From Principles to Practice. ed.by. Peter D. Cameron and Donald Zillman. The Hague: Kluwer Law International, 3-22

Checker, Melissa (2009) ‘Double Jeopardy: Pursuing the Path of Carbon Offsets and Human Rights Abuses’. In Upsetting the Offset: The Political Economy of Carbon Market. Ed.by Bohm and Dabhi [online] 41-56. London: MayFlyBooks. Available from [14 May 2010]

Dabhi, Siddharta (2009) ‘Where is Climate Justice in India’s First CDM Projects? In Upsetting the Offset: The Political Economy of Carbon Market. ed. by Bohm and Dabhi [online] 138-147. London: MayFlyBooks. available from [14 May 2010]

Depledge, J. and Yamin, F (2004) The International Climate Regime: A Guide to Rules, Institutions and Procedures. Cambridge: Cambridge University Press

Friedman, M. Lawrence (1987) The Legal System: a Social Science Perspective. New York: Russell Sage Foundation [online]. Available from [3 May 2010]

Friends of the Earth International (2007) Voices from Communities Affected by Climate Change. Amsterdam: FOEI
Gilbertson, T., and Reyes, O. (2009) Carbon Trading: How it Works and Why it Fails [online]. Uppsala: Dag Hammarskjold Foundation. available from [14 May 2010]

Grubb, M., Brack, D., Vrolijk, C. (1999) The Kyoto Protocol: A Guide and Assessment. London: Royal Institute of International Affairs

Haya, Barbara (2007) Failed Mechanism: How the CDM is Subsidizing Hydro Developers and Harming the Kyoto Protocol [online]. Berkeley: International Rivers. available from [14 May 2010]

International Climate Justice Network (2002) Bali Principles of Climate Justice [online] available from available from [27 May 2010]

Khor, Martin (2010) ‘Dire Warning by Scientists as Climate Talks Resume’. In TWN in Bonn Update No.1 [online]. Bonn: Third World Network. available from [31 May 2010]

Kolari, T. (2006) ‘International Environmental Treaties and State Behavior. Factors Influencing Cooperation. & Implementing the Climate Regime. International Compliance’. Book Review, European Journal of International Law 17, 874-879 [online] available from [17 May 2010]

Lim Li Lin (2010) ‘Kyoto Protocol Work Continues in 2010 Despite Threats to its Future’. In TWN Bonn Climate Change Update No.5 [online]. Bonn: Third World Network. available from [5 May 2010]

Lohmann, Larry (2009) ‘Neoliberalism and the Calculable World: the Rise of Carbon Trading’. In Upsetting the Offset: The Political Economy of Carbon Market. ed. by Bohm and Dabhi [online] 25-40. London: MayFlyBooks. available from [14 May 2010]

Malanczuk, P. (1997) Akehurst’s Modern Introduction to International Law. 7th edn. London: Routledge
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