Japanese ratification of the Kyoto Protocol

Abstract

This paper discusses Japan's quantitative Kyoto target in the context of the country's socio-economic and political background and its desire to express international leadership. Japan's initial negotiating target was developed as a compromise between domestic industrial considerations and its international ambitions, and was strengthened further under the pressures to achieve success at Kyoto.

The original projections relied heavily upon nuclear expansion that will not be realized. Though economic stagnation has helped emissions to decline from their mid-1990s peak, it has also reduced the attention devoted to climate change and the willingness to bear costs, and Japan's commitment remains daunting. Japanese bureaucrats and diplomats are called to work closer together and in an integrated manner in order to develop a new, more realistic policy package for achieving their target. This report analyses various scenarios for additional policies for Japan, including fuel switching, carbon taxation and emissions trading, and concludes that the introduction of gas in the context of energy market liberalization is a key possibility. It also considers the sink and the nuclear energy issues both of high importance for the country.     

Anticipated economic costs and benefits of ratification of the Kyoto Protocol by the State of Qatar

Abstract

Further ratification of the Kyoto Protocol by non-Annex 1 countries such as the State of Qatar will not affect the entrance into force of the Treaty; however, ratification remains an important decision due to other considerations, primarily the economic costs and benefits associated with ratification. As a member of the Organization of Petroleum Exporting Countries (OPEC), Qatar's economic position is closely allied with revenue generated from its oil and natural gas resources. Qatar expects adverse impacts from implementing the Kyoto Protocol, though the estimated magnitude varies enormously with different models. Also, the impacts depend significantly on how the implementation is done; for example, the kind of policies that other countries use. Qatar is able to counter adverse impacts by exploiting its greater share of natural gas and developing energy-intensive industries that produce nonenergy goods such as steel, petrochemicals, and chemicals. Furthermore, it is clear that clauses in the Protocol can be developed to protect OPEC interests, and if Qatar does not ratify the Protocol, it will be excluded from the subsequent rule-making processes. On balance, there are benefits to ratifying the Treaty, and there is also a strong need for extensive further research.     

Sinks and the Kyoto Protocol

Deliberate land management actions that enhance the uptake of CO₂ or reduce its emissions have the potential to remove a significant amount of CO₂ from the atmosphere over the next three decades. The quantities involved are large enough to satisfy a substantial portion of the Kyoto Protocol commitments for many countries, but are not large enough to stabilise atmospheric concentrations without also implementing major reductions in fossil fuel emissions. ‘Sinks’ can be deployed relatively rapidly at moderate cost and thus could play a useful bridging role while new energy technologies are developed.There is no difference in climatological effect between CO₂ taken up by the land and CO₂ reductions due to other causes. There are potential regulatory differences, related to the security with which the CO₂ is held and to the accuracy with which it can be measured and verified. A variety of policy approaches are available to address these differences.     

Sinks and the Kyoto Protocol

Abstract

Deliberate land management actions that enhance the uptake of CO₂ or reduce its emissions have the potential to remove a significant amount of CO₂ from the atmosphere over the next three decades. The quantities involved are large enough to satisfy a substantial portion of the Kyoto Protocol commitments for many countries, but are not large enough to stabilise atmospheric concentrations without also implementing major reductions in fossil fuel emissions. ‘Sinks’ can be deployed relatively rapidly at moderate cost and thus could play a useful bridging role while new energy technologies are developed.

There is no difference in climatological effect between CO₂ taken up by the land and CO₂ reductions due to other causes. There are potential regulatory differences, related to the security with which the CO₂ is held and to the accuracy with which it can be measured and verified. A variety of policy approaches are available to address these differences.     

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.     

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.     

Economics of the Kyoto Protocol for Russia

Abstract

In this article we propose a careful analysis of the economic consequences of the Kyoto Protocol for Russia, taking into account the most recently available data and the latest developments in the trends regarding Russian economic recovery. We present a review of different GHG forecasts for Russia and develop a new forecast for uncertain GDP growth and changing elasticity of GHG emission per GDP. Since the rate of growth remains uncertain, elasticity could change over time, as well as the fuel mix. We apply the Monte-Carlo method to simulate these uncertainties and to produce a reasonable interval for CO₂ emissions in 2010. The probability of Russia exceeding its Kyoto emissions budget is essentially zero. Further, we discuss the benefits for Russia from the Kyoto Protocol, and more generally from implementation of GHG mitigation policy. Ancillary benefits from Kyoto Protocol implementation will bring essential reductions in risk to human health. On the other hand, potential negative changes in the fuel mix and GDP structure, as well as a slowing of the innovation process, could exacerbate existing health problems. Alternatives to the Kyoto Protocol may bring much tougher commitments to Russia. We conclude that the Kyoto Protocol is the best possible deal for Russia. Therefore, Russia most will ratify it.     

The WTO and the Kyoto Protocol: interaction issues

Abstract

This article builds upon the broad survey of climate-trade interactions in Part 1, by focusing upon the specific issues in the interaction of the WTO and the Kyoto Protocol.¹ It classifies the various issues into three groups according to their potential to cause problems and relative urgency. The article gives special attention to issues that are problematic because of the likelihood of occurrence of specific conflicts and the significance of their economic and/or political consequences. It concludes that although there are many interactions that are not problematic and some that offer the potential for win—win outcomes, the possibility of offsetting border measures that could be applied against energy-intensive imports from the USA may become a particularly nettlesome issue.     

The emperor's new clothes: redressing the Kyoto Protocol

Abstract

US President Bush repudiated the Kyoto Protocol because, in his view, it is ‘fatally flawed in fundamental ways’. This paper evaluates seven proposals to redress the protocol according to their potential to deal with three key issues that have reinforced US intransigence: hot air, cost uncertainty and developing country participation. It argues that negotiations on intensity targets hold the most promise. Because intensity targets limit hot air, but do not limit economic growth, and a high variance of carbon intensity exists among countries with similar GDP per capita, intensity targets based on best practice levels might be agreeable to developing countries and the US. If a protocol specifying such targets were implemented, less warming would be associated with larger world GDP than would otherwise be the case, and countries' carbon intensity and emissions per capita would tend to converge to best practice levels at every stage of development.     

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。     

Introducing top-down methods in assessing compliance with the Kyoto Protocol

Abstract

The Kyoto Protocol has an ambitious reporting and review system to assess Parties' compliance with their emission commitments. It is based on a ‘bottom-up’ approach; that is, each Party is required to submit detailed inventories of emissions and removals. This requires considerable resources and may still not detect all important cases of non-compliance. We consider the case for introducing ‘top-down’ methods; that is, independent inverse modelling methods that calculate probable emissions using measured concentrations of gases in the atmosphere and meteorological models. We argue that the top-down methods are at present too inaccurate, too cumbersome, and politically too problematic to serve as independent alternatives to the reported emission inventories for assessing compliance, although they could be useful in monitoring the global success of the protocol. We conclude that these top-down approaches may supplement the traditional emission inventories, in particular those dealing with fluorinated gases, thereby providing input for improving the emission inventory methods.     

California RECLAIM's market failure: lessons for the Kyoto Protocol

Abstract

The failure of Los Angeles' RECLAIM emission trading market in the summer of 2000 uncovers important issues that have direct relevance for the various systems now emerging for exchanging greenhouse gas credits. Two primary causes for the breakdown of RECLAIM are apparent. On the one hand, RECLAIM did not succeed because of a series of unpredictable events that included manipulation of the market by brokers and the California energy shortage. On the other hand, several potentially foreseeable program design flaws contributed to the failure. This study examines the structure of RECLAIM and concludes that there was sufficient resilience to endure the two unexpected crises. However, the problematic program design features created a market that was fatally flawed and, regardless of impinging circumstances, was ultimately bound to collapse. We also investigate the status of the rapidly developing international greenhouse gas market and identify several lessons from the RECLAIM experience: the need for a holistic approach to market design that includes the role of a bank, the interface with project-based credits, the similarities of the industries enrolled in the program, and need to carefully consider how to handle the problems caused by the end of the trading period.     

Russian behaviour in the market for permits under the Kyoto Protocol

After the US withdrawal from the Kyoto Protocol and the extension of national quotas in the Bonn and Marrakesh agreements, meagre environmental effects and a low price of emission permits are likely to be the outcome of implementation. This paper attempts to analyze this scenario, mainly in relation to the Russian case. I discuss on the basis of certain key assumptions the strategic options open to the supply side of the permit market and Russia’s potentially incompatible interests as a producer of oil and gas on the one hand and a dominating seller of emission permits under the Kyoto Protocol on the other. The analysis shows that Russian oil and gas interests are likely to boost Russia’s inclination to sell permits, ultimately resulting in lower permit prices.     

Russian behaviour in the market for permits under the Kyoto Protocol

After the US withdrawal from the Kyoto Protocol and the extension of national quotas in the Bonn and Marrakesh agreements, meagre environmental effects and a low price of emission permits are likely to be the outcome of implementation. This paper attempts to analyze this scenario, mainly in relation to the Russian case. I discuss on the basis of certain key assumptions the strategic options open to the supply side of the permit market and Russia's potentially incompatible interests as a producer of oil and gas on the one hand and a dominating seller of emission permits under the Kyoto Protocol on the other. The analysis shows that Russian oil and gas interests are likely to boost Russia's inclination to sell permits, ultimately resulting in lower permit prices.     

Economic consequences of the US withdrawal from the Kyoto/Bonn Protocol

Abstract

The US decision not to ratify the Kyoto Protocol and the recent outcomes of the Bonn and Marrakech Conferences of the Parties have important implications for both the effectiveness and the efficiency of future climate policies. Among these implications, those related with technical change and with the functioning of the international market for carbon emissions are particularly relevant, because these variables have the largest impact on the overall abatement cost to be borne by Annex B countries in the short and in the long run. This paper analyses the consequences of the US decision to withdraw from the Kyoto/Bonn Protocol both on technological innovation and on the price of emission permits (and, as a consequence, on abatement costs). In particular, the analysis highlights mechanisms and feedbacks related to technological innovation, technological spillovers and R&D which could be relevant and which modify some policy relevant conclusions. First, we identify two feedback effects which explain why our results lead to a less significant fall in the price of permits than in most empirical analyses recently circulated. We show that the US defection from the Kyoto Protocol, by inducing a decline in the demand and price of emission permits, lowers the incentives to undertake energy-saving R&D. As a consequence, emissions increase and feed back on the demand and supply of permits, thus implying a lower decline in the price of permits than previously estimated. At the same time, as a result of the reduced R&D investments and the augmented emissions, climate change damages intensify and require an increase in investments that are again coupled with a growth of emissions. By thus again increasing the demand for permits and reducing their supply, this effect enhances the previous mechanism. Notwithstanding the lower decline in the price of permits, the paper still identifies a smaller price than would occur with a US participation. Therefore, we emphasise in a second step the crucial role of Russia in climate negotiations due to a large increase in Russia's bargaining power.     

Economic consequences of the US withdrawal from the Kyoto/Bonn Protocol

The US decision not to ratify the Kyoto Protocol and the recent outcomes of the Bonn and Marrakech Conferences of the Parties have important implications for both the effectiveness and the efficiency of future climate policies. Among these implications, those related with technical change and with the functioning of the international market for carbon emissions are particularly relevant, because these variables have the largest impact on the overall abatement cost to be borne by Annex B countries in the short and in the long run. This paper analyses the consequences of the US decision to withdraw from the Kyoto/Bonn Protocol both on technological innovation and on the price of emission permits (and, as a consequence, on abatement costs). In particular, the analysis highlights mechanisms and feedbacks related to technological innovation, technological spillovers and R&D which could be relevant and which modify some policy relevant conclusions. First, we identify two feedback effects which explain why our results lead to a less significant fall in the price of permits than in most empirical analyses recently circulated. We show that the US defection from the Kyoto Protocol, by inducing a decline in the demand and price of emission permits, lowers the incentives to undertake energy-saving R&D. As a consequence, emissions increase and feed back on the demand and supply of permits, thus implying a lower decline in the price of permits than previously estimated. At the same time, as a result of the reduced R&D investments and the augmented emissions, climate change damages intensify and require an increase in investments that are again coupled with a growth of emissions. By thus again increasing the demand for permits and reducing their supply, this effect enhances the previous mechanism. Notwithstanding the lower decline in the price of permits, the paper still identifies a smaller price than would occur with a US participation. Therefore, we emphasise in a second step the crucial role of Russia in climate negotiations due to a large increase in Russia’s bargaining power.     

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.     

Climatic Implications of the Kyoto Protocol: The Contribution of International Spillover

We explore the long-run impact of the Kyoto Protocol commitments to limit greenhouse gas emissions under various assumptions about the international spillover arising from actions led by the industrialised countries. International spillover comprises many complex processes including substitution due to price effects, diffusion of technology innovations, and policy and political spillovers. We represent these in terms of their aggregate impact on emission intensities over the next century. Limiting industrialised country emissions alone has limited environmental benefit if there is no international spillover; in our base case atmospheric concentrations by the end of the century rise to 730 ppm. However, this implies a large divergence of emission intensities, contrary to both empirical long term aggregate trends, and to identifiable influences towards convergence associated with economic globalisation. In contrast, if spillover leads to convergence of emission intensities by 2100, atmospheric concentrations are kept to below 560 ppm and are close to stabilising. Weargue that zero or negative international spillover, as assumed in manyanalyses, is not credible; we estimate the most likely range for the international spillover parameter in our model to be 0.5–1.0. For our base scenario this would imply a mean global average temperature change from pre-industrial levels by 2100 of 2.7–3.4 °C instead of 4.2 °C,and rising at only 0.15–0.29 °C/decade instead of 0.45 °C/decade.Long-run sea-level rise is greatly curtailed. The regional benefits to the industrialised countries are also magnified because of the spillover to developing county emissions. Although the aggregate degree of spillover is uncertain, the available evidence suggests that it will be important and environmentally beneficial in aggregate. Spillover will help to spread the global effectiveness of the Kyoto first period and subsequent commitments, and deserves much further scrutiny.