The impact of surplus units from the first Kyoto period on achieving the reduction pledges of the Cancún Agreements

Countries with emission levels below their emission allowances have surplus Assigned Amount Units (AAUs) or other emission credits. Under the Kyoto Protocol, these surplus credits may effectively be carried from the first to a following commitment period. In the climate negotiations, various rules for carry-over and sale of surplus allowances have been put forward. This paper analyses the effect of these options on the reduction pledges for 2020, taking into account the estimated credits from the Clean Development Mechanism, Joint Implementation projects, and land-use activities for the first commitment period. For current Kyoto Protocol rules of unlimited carry-over of surplus allowances and limited carry-over of other credits, the environmental effectiveness of reduction pledges could be seriously undermined. For the group of countries that showed a willingness to participate in a second commitment period, it could imply that instead of an aggregated 2020 target resulting from the pledges of 18 to 28?% below 1990 levels by 2020, their emissions could return to business-us-usual emission projections. For the EU, a 30?% target by 2020 could imply higher emissions compared to a 20?% target, if surplus allowances would be used for achieving the 30?% but not for the 20?% target. Restricting the use of Kyoto surplus units to domestic use only, would limit the problem, but still seriously undermine the effectiveness of 2020 reduction targets.     

The case for Japanese—Russian joint implementation in implementing the Kyoto Protocol

The Doha Amendment allows surplus Assigned Amount Units (AAUs) to be carried over from the first commitment period, but limits their use for offsetting emission growth beyond commitment levels. Amendment 7ter simultaneously ‘shaves’ AAU allocation to a level equivalent to the average 2008–2010 emissions for countries that pledged a growth target under the second commitment period of the Kyoto Protocol. This means that economies in transition (EITs) are not allocated headroom for growth, and makes their commitments starkly different from their original pledges. The ‘bubble’ arrangement within the EU adds uncertainty to whether new Member States will avoid the ‘shaving’ of 7ter due to their pooled target. This would put Annex I EITs into an unequal position as a result of the Doha Amendment.     

Non-Kyoto radiative forcing in long-run greenhouse gas emissions and climate change scenarios

Climate policies must consider radiative forcing from Kyoto greenhouse gases, as well as other forcing constituents, such as aerosols and tropospheric ozone that result from air pollutants. Non-Kyoto forcing constituents contribute negative, as well as positive forcing, and overall increases in total forcing result in increases in global average temperature. Non-Kyoto forcing modeling is a relatively new component of climate management scenarios. This paper describes and assesses current non-Kyoto radiative forcing modeling within five integrated assessment models. The study finds negative forcing from aerosols masking (offsetting) approximately 25 % of positive forcing in the near-term in reference non-climate policy projections. However, masking is projected to decline rapidly to 5–10 % by 2100 with increasing Kyoto emissions and assumed reductions in air pollution—with the later declining to as much as 50 % and 80 % below today’s levels by 2050 and 2100 respectively. Together they imply declining importance of non-Kyoto forcing over time. There are however significant uncertainties and large differences across models in projected non-Kyoto emissions and forcing. A look into the modeling reveals differences in base conditions, relationships between Kyoto and non-Kyoto emissions, pollution control assumptions, and other fundamental modeling. In addition, under climate policy scenarios, we find air pollution and resulting non-Kyoto forcing reduced to levels below those produced by air pollution policies alone—e.g., China sulfur emissions fall an additional 45–85 % by 2050. None of the models actively manage non-Kyoto forcing for climate implications. Nonetheless, non-Kyoto forcing may be influencing mitigation results, including allowable carbon dioxide emissions, and further evaluation is merited.     

The role of the land use, land use change and forestry sector in achieving Annex I reduction pledges

Annex I Parties may receive credits or debits from Land Use, Land Use Change and Forestry (LULUCF) activities, contributing to achieving individual emission reduction targets. In the Durban climate negotiations, Parties agreed new LULUCF accounting rules for the second commitment period of the Kyoto Protocol (CP2). By using these new rules, this paper presents key differences among Parties at the minimum (assuming no additional action) and potential (assuming additional actions) contribution of the forest-related LULUCF activities in achieving the pledges for 2020. Overall, the potential contribution of LULUCF is relatively modest (up to about 2 % of 1990 emissions) for the EU, the Annex I Parties likely joining the CP2, and for the Annex I Parties that joined the CP1 as a whole. However, for specific Parties, LULUCF can make a substantial contribution to achieving the pledges. For New Zealand, for instance, the potential contribution of future LULUCF credits may equal 33 % of its 1990 emission level. For Australia, the pledges are expressed relative to 2000 emission levels including LULUCF emissions. Given that LULUCF emissions have strongly declined between 1990 and 2000, and a further decline in foreseen by 2020 (based on Australia’s projections), the minimum contribution of LULUCF to meet the Australian pledges appears to be about 19 % and 7 % relative to its 1990 and 2000 emission level, respectively. A further 3 % potential contribution is estimated from additional actions.     

The effectiveness of the EU Emissions Trading Scheme

How effective is the EU Emissions Trading Scheme (EU ETS) in promoting emissions reduction for compliance with the Kyoto Protocol commitment? A theoretical benchmark is determined in order to assess the stringency of the ETS cap and to evaluate whether emissions allowances have been over-allocated. This analysis clarifies how the emissions reduction effort has been divided between ETS and non-ETS sectors, highlighting the extent to which Member States effectively rely on the ETS to comply with their Kyoto commitments. Finally, inefficiencies relating to the over-allocation of allowances are analysed; namely cross-subsidization from non-ETS to ETS sectors, national subsidies to the ETS sectors, and distortion of competition.     

Implementing the Kyoto Protocol without Russia

Abstract

This paper examines implementation of the Kyoto Protocol without Russia. It concludes that implementation without Russia is possible, although it requires political will on the part of the countries that wish to proceed with the Protocol. It would lead to higher compliance costs for Annex B buyer regions, but other regions, except Russia, would benefit financially. Russia would forego revenue of at least $20 billion for the first commitment period. Implementation without Russia could improve the environmental performance of the Protocol. It would reduce reliance on Annex B sinks, use of surplus assigned amount units (AAUs) for compliance, and the quantity of Kyoto units banked for subsequent commitment periods. Actual emissions by Kyoto Protocol Parties would fall, but the reduction may be offset by leakage to the US and Russia.     

Sharing the reduction effort to limit global warming to 2°C

In order to stabilize long-term greenhouse gas concentrations at 450 ppm CO₂-eq or lower, developed countries as a group should reduce emissions by 25–40% below 1990 levels by 2020, while developing countries' emissions need to be reduced by around 15–30%, relative to their baseline levels, according to the IPCC and our earlier work. This study examines 19 other studies on the emission reductions attributed to the developed and developing countries for meeting a 450 ppm target. These studies considered different allocation approaches, according to equity principles. The effect of the assumed global emissions cap in these studies is analysed. For developed countries, the original reduction range of 25–40% by 2020 is still within the average range of all studies, but does not cover it completely. Comparing the studies shows that assuming a global emissions cap of 5–15% above 1990 levels by 2020 generally leads to more stringent reduction targets than when a global emissions cap of 20–30% above 1990 levels is assumed. For developing countries, the reduction range of 15–30% below their baseline levels by 2020 corresponds to an increase on the 1990 level from 70% (about the 2006 level) to 120%. Reducing deforestation emissions by 50% below baseline levels by 2020 may relax the emission reductions for either group of countries; for developing countries by about 7% or for developed countries by about 15% (but not for both).     

第二承诺期土地利用、土地利用变化与林业规则的各方观点及对策建议

 由土地利用、土地利用变化和林业（LULUCF）活动产生的生态系统的固碳作用,是降低大气中温室气体浓度增加速度的重要途径之一。1997-2001年,经历了长达4 a的艰苦谈判,最终达成了第一承诺期附件一国家利用LULUCF的规则。2008年开始,国际社会开始磋商第二承诺期附件一国家如何利用LULUCF活动的规则。主要缔约方就第二承诺期LULUCF规则提出了各自的观点,发达国家的观点主要包括提高开展碳汇活动的积极性、降低LULUCF规则的复杂性和减少成本、增加《京都议定书》3.4条款下的合格活动等,其目的是在第二承诺期能够利用更多的碳汇完成减排义务;发展中国家主要提出要系统地考虑土地利用造成的温室气体排放和CO2的吸收。最后,针对附件一缔约方在第二承诺期利用LULUCF活动规则,提出了我国应采取的对策建议。     

第二承诺期土地利用、土地利用变化与林业规则的各方观点及对策建议

由土地利用、土地利用变化和林业（LULUCF）活动产生的生态系统的固碳作用,是降低大气中温室气体浓度增加速度的重要途径之一。1997-2001年,经历了长达4 a的艰苦谈判,最终达成了第一承诺期附件一国家利用LULUCF的规则。2008年开始,国际社会开始磋商第二承诺期附件一国家如何利用LULUCF活动的规则。主要缔约方就第二承诺期LULUCF规则提出了各自的观点,发达国家的观点主要包括提高开展碳汇活动的积极性、降低LULUCF规则的复杂性和减少成本、增加《京都议定书》3.4条款下的合格活动等,其目的是在第二承诺期能够利用更多的碳汇完成减排义务;发展中国家主要提出要系统地考虑土地利用造成的温室气体排放和CO2的吸收。最后,针对附件一缔约方在第二承诺期利用LULUCF活动规则,提出了我国应采取的对策建议。     

Estimating the CDM market under the Marrakech Accords

The agreement on implementation of the Kyoto Protocol achieved at COP7 in Marrakech has important implications for investment in greenhouse gas emission reduction projects in developing countries through the Clean Development Mechanism (CDM). The required actual emission reductions for participating Annex B countries overall will be relatively small, as the United States do not intend to ratify the protocol and significant amounts of carbon sequestered in domestic sinks can be credited. In addition, the potential supply of surplus emission permits (hot air) from Russia and other economies in transition may be as high as total demand in the first commitment period. Thus, even under restraint of hot air sellers, CDM demand will be limited, and a low demand, low price carbon market scenario appears likely.The magnitude of the CDM will be influenced by a host of factors both on the demand and the supply-side. We analyse these using a quantitative model of the global carbon market, based on marginal abatement cost curves. Implementation and transaction costs, as well as baseline and additionality rules affect the CDM’s share in the carbon market. Demand for the CDM is sensitive to changes in business-as-usual emissions growth in participating Annex B countries, and also to crediting for additional sinks. Permit supply from Russia and other economies in transition is possibly the most crucial factor in the carbon market.     

Slovenia's climate policy efforts: CO2 tax and implementation of EU ETS

Slovenia is required to reduce its greenhouse gas emissions to an average of 8% below the base year 1986 in the period 2008–2012, due to the ratification of the Kyoto Protocol in 2002. It was the first of the transition countries to implement a CO₂ tax in 1997. At the beginning of 2005, Slovenia joined other EU Member States by implementing the Emissions Trading Scheme. In contrast with other new EU Member States, Slovenia will be a net buyer of allowances. Therefore future movements on the emissions market will play an important role in the compliance costs of achieving the Kyoto target. The main purpose of this article is to present the establishment and characteristics of the first national allocation plan (NAP1) and to describe the main elements of the second national allocation plan (NAP2) for Slovenia within the EU Emissions Trading Scheme, the expected movements on the emissions allowances market in Slovenia, the expected compliance cost of achieving the Kyoto target and to present the main characteristics and efficiency of the CO₂ tax in Slovenia.     

欧盟将民航运输纳入欧盟排放交易体系问题探析

按照欧盟法律,自2012年1月1日起在欧盟境内起降的航班排放将被纳入欧盟排放交易系统。通过详细解读欧盟这一法律,指出欧盟排放交易体系是典型的"上限-交易"系统,即通过规定排放上限与进行配额交易实现减排目标。欧盟此举本质目的是强化气候变化主导权,最终为经济谋利,加快完善欧盟碳交易市场以建设欧元货币权力体系。其结果可能引发其与《联合国气候变化框架公约》及《京都议定书》等国际法之间的法律冲突,购买配额将对民航运输发展造成制约,"可测量、可报告和可核实"将对发展中国家能力建设提出挑战,并将一定程度影响《联合国气候变化框架公约》下的行业减排谈判走向。     

Estimating the CDM market under the Marrakech Accords

Abstract

The agreement on implementation of the Kyoto Protocol achieved at COP7 in Marrakech has important implications for investment in greenhouse gas emission reduction projects in developing countries through the Clean Development Mechanism (CDM). The required actual emission reductions for participating Annex B countries overall will be relatively small, as the United States do not intend to ratify the protocol and significant amounts of carbon sequestered in domestic sinks can be credited. In addition, the potential supply of surplus emission permits (hot air) from Russia and other economies in transition may be as high as total demand in the first commitment period. Thus, even under restraint of hot air sellers, CDM demand will be limited, and a low demand, low price carbon market scenario appears likely.

The magnitude of the CDM will be influenced by a host of factors both on the demand and the supply-side. We analyse these using a quantitative model of the global carbon market, based on marginal abatement cost curves. Implementation and transaction costs, as well as baseline and additionality rules affect the CDM's share in the carbon market. Demand for the CDM is sensitive to changes in business-as-usual emissions growth in participating Annex B countries, and also to crediting for additional sinks. Permit supply from Russia and other economies in transition is possibly the most crucial factor in the carbon market.     

The impact of the unilateral EU commitment on the stability of international climate agreements

The negotiation strategy of the European Union was analysed with respect to the formation of an international climate agreement for the post-2012 era. Game theory was employed to explore the incentives for key players in the climate policy arena to join future climate agreements. A ?20% unilateral commitment strategy by the EU was compared with a multilateral ?30% emission reduction strategy for all Annex-B countries. Using a numerical integrated assessment climate—economy simulation model, we found that leakage, in the sense of strategic policy reactions on emissions, was negligible. The EU strategy to reduce emissions by 30% (compared with 1990 levels) by 2020, if other Annex-B countries follow suit, does not induce the participation of the USA with a comparable reduction commitment. However, we argue that the original EU proposal can be reshaped so as to stabilize a larger and more ambitious climate coalition than the Kyoto Protocol in its first commitment period.     

LULUCF在《京都议定书》履约中的作用

根据主要附件I缔约方2011年向《联合国气候变化框架公约》递交的1990—2009年国家温室气体（GHG）排放清单数据,包括报告的《京都议定书》土地利用、土地利用变化和林业（LULUCF）活动数据,对其LULUCF GHG源/汇趋势、《京都议定书》缔约方LULUCF相关活动在履约中的作用进行系统的对比分析,对缔约方会议确定的森林管理活动汇清除的限额进行评估。分析表明,1990—2009年,附件I缔约方LULUCF总体表现为净GHG汇清除,且总体上呈波浪式增加趋势,20年增加了65.9%,但年际波动较大。1990年LULUCF汇清除相当于GHG排放总量的7.41%, 2009年上升到13.68%。《京都议定书》第一承诺期的最初两年（2008—2009年）,各缔约方每年可从合格的LULUCF活动中获得2.38亿t CO2当量的汇清除,相当于这些缔约方基准年源排放的1.91%,可抵消其减限排额的45%。汇清除主要来自森林管理活动,而其他活动的汇清除所占份额很小。LULUCF活动使《京都议定书》的实施效果大打折扣,为一些缔约方过多地使用森林管理活动的汇清除来完成其减限排指标提供了机会,特别是俄罗斯、日本和意大利等国。这为目前正在谈判的第二承诺期LULUCF规则,特别是如何利用森林管理汇清除的规则敲响警钟。     

Compliance of the Parties to the Kyoto Protocol in the first commitment period

This article provides an ex post analysis of the compliance of the Parties to the Kyoto Protocol during the first commitment period (2008–2012) based on the final data for national GHG emissions and exchanges in carbon units that became available at the end of 2015. On the domestic level, among the 36 countries that fully participated in the Kyoto Protocol, only nine countries emitted higher levels of GHGs than committed and therefore had to resort to flexibility mechanisms. On the international level – i.e. after the use of flexibility mechanisms – all Annex B Parties are in compliance. Countries implemented different compliance strategies: purchasing carbon units abroad, stimulating the domestic use of carbon credits by the private sector and incentivizing domestic emission reductions through climate policies.

Overall, the countries party to the Protocol surpassed their aggregate commitment by an average 2.4 GtCO₂e yr^–1. Of the possible explanations for this overachievement, ‘hot-air’ was estimated at 2.2 GtCO₂e yr^–1, while accounting rules for land use, land-use change and forestry (LULUCF) further removed 0.4 GtCO₂e yr^–1 from the net result excluding LULUCF. The hypothetical participation of the US and Canada would have reduced this overachievement by a net 1 GtCO₂e yr^–1. None of these factors – some of which may be deemed illegitimate – would therefore on its own have led to global non-compliance, even without use of the 0.3 GtCO₂e of annual emissions reductions generated by the Clean Development Mechanism. The impact of domestic policies and ‘carbon leakage’ – neither of which is quantitatively assessed here – should not be neglected either.

Policy relevance

Given the ongoing evolution of the international climate regime and the adoption of the Paris Agreement in December 2015, we believe that there is a need to evaluate the results of the first commitment period of the Kyoto Protocol. To our knowledge there has been no overarching quantitative ex post assessment of the Kyoto Protocol based on the final emissions data for 2008–2012, which became available in late 2015. This article attempts to fill this gap, focusing on the domestic and international compliance of the Parties to the Kyoto Protocol in the first commitment period.     

Tropical Deforestation and the Kyoto Protocol

The current annual rates of tropical deforestation from Brazil and Indonesia alone would equal four-fifths of the emissions reductions gained by implementing the Kyoto Protocol in its first commitment period, jeopardizing the goal of Protocol to avoid “dangerous anthropogenic interference” with the climate system. We propose the novel concept of “compensated reduction”, whereby countries that elect to reduce national level deforestation to below a previously determined historical level would receive post facto compensation, and commit to stabilize or further reduce deforestation in the future. Such a program could create large-scale incentives to reduce tropical deforestation, as well as for broader developing country participation in the Kyoto Protocol, and leverage support for the continuity of the Protocol beyond the 2008–2012 first commitment period.     

Common but differentiated convergence (CDC): a new conceptual approach to long-term climate policy

Abstract

This article describes a new concept for an international climate regime for differentiation of future commitments: the ‘common but differentiated convergence’ approach (CDC). Under CDC, Annex-I countries' per-capita emission allowances converge within a convergence period to a low level. Individual non-Annex-I countries' allowances converge to the same level also within the same period (‘common convergence’), but starting when their per-capita emissions are a certain percentage above global average (‘differentiated’). Until then they may voluntarily take on ‘positively binding’ targets. This approach eliminates two concerns often voiced in relation to gradually converging per-capita emissions: (i) advanced developing countries have their commitment to reduce emissions delayed and their targets are not the same as Annex-I countries with equal per-capita emissions; (ii) CDC does not provide excess emission allowances to the least developing countries. Under CDC, stabilizing greenhouse gas concentrations at 550 and 650 ppm CO₂-equivalent can be reached with participation at roughly 0% and 50% above global average and convergence to around 3 and 4.5 tCO₂-eq/cap within 40 years. Even if the CDC approach is not implemented in its entirety, it is possible that the step-by-step decisions on the international climate regime can be guided by the principles provided in the CDC approach.     

Reaching a climate agreement: compensating for energy market effects of climate policy

Because of large economic and environmental asymmetries among world regions and the incentive to free ride, an international climate regime with broad participation is hard to reach. Most of the proposed regimes are based on an allocation of emissions rights that is perceived as fair. Yet, there are also arguments to focus more on the actual welfare implications of different regimes and to focus on a ‘fair’ distribution of resulting costs. In this article, the computable general equilibrium model DART is used to analyse the driving forces of welfare implications in different scenarios in line with the 2?°C target. These include two regimes that are often presumed to be ‘fair’, namely a harmonized international carbon tax and a cap and trade system based on the convergence of per capita emissions rights, and also an ‘equal loss’ scenario where welfare losses relative to a business-as-usual scenario are equal for all major world regions. The main finding is that indirect energy market effects are a major driver of welfare effects and that the ‘equal loss’ scenario would thus require large transfer payments to energy exporters to compensate for welfare losses from lower world energy demand and prices.

Policy relevance

A successful future climate regime requires ‘fair’ burden sharing. Many proposed regimes start from ethical considerations to derive an allocation of emissions reduction requirements or emissions allowances within an international emissions trading scheme. Yet, countries also consider the expected economic costs of a regime that are also driven by other factors besides allowance allocation. Indeed, in simplified lab experiments, successful groups are characterized by sharing costs proportional to wealth. This article shows that the major drivers of welfare effects are reduced demand for fossil energy and reduced fossil fuel prices, which implies that (1) what is often presumed to be a fair allocation of emissions allowances within an international emissions trading scheme leads to a very uneven distribution of economic costs and (2) aiming for equal relative losses for all regions requires large compensation to fossil fuel exporters, as argued, for example, by the Organization of Petroleum Exporting Countries (OPEC).     

欧盟第二承诺期减排目标初步分析

 欧盟提出了到2020年将温室气体排放在1990年水平上降低20%的目标,并提出了相应的政策措施。文章首先分析了1990-2005年欧盟减排成果,认为欧盟老成员国很难在第一承诺期内实现其在《京都议定书》之下的承诺。在这样的基础上提出进一步减排目标,必须有更严格的政策措施作保障,但现在的行动计划缺乏足够力量和信心。中东欧新成员国的加入有助于欧盟实现其第一承诺期目标,但随着经济发展的逐步恢复,这将给欧盟第二承诺期的减排目标带来挑战。