December 5, 2005

UN Climate Change Conference adopts Kyoto Protocol "rule book"

The first week of negotiations at the United Nations Climate Change Conference in Montreal saw the adoption by parties to the Kyoto Protocol of the Marrakesh accords, a series of 21 decisions that together constitute a "rule book" for the Protocol. It is a major step in making the Protocol fully operational, noted federal Environment Minister St├ęphane Dion, who is also the conference president.

Richard Kinley, acting head of the UN Climate Change Secretariat said, "The adoption of the Marrakesh accords formally launches emissions trading and the other two mechanisms under the Kyoto Protocol.

"Carbon now has a market value," Kinley continued, adding, "Under the clean development mechanism, investing in projects that provide sustainable development and reduce emissions makes sound business sense."

Under the decisions adopted, parties to the Kyoto Protocol established the Joint Implementation Supervisory Board. Joint Implementation (JI) is one of the Kyoto mechanisms which allows developed countries to invest in other developed countries, particularly central and eastern European nations, whose economies are in transition, and thereby earn carbon allowances which they can use to meet their emission reduction commitments.

In addition, the clean development mechanism (CDM) is fully established, clearing the way for industrialized countries to invest in sustainable development projects in developing countries and thereby earn carbon allowances.

Other Marrakesh accord decisions define a wide range of operational considerations for running the Protocol, such as: how the emissions of countries are accounted for; precise guidelines on the data systems that have to be set up; and the rules governing how absorption of carbon dioxide by agricultural soils and forest is measured.

"With these decisions in place, we now have the infrastructure to move ahead with the implementation of the Kyoto Protocol," Kinley explained, adding, "It sets a solid basis for future steps to bring emissions down."

The 1997 landmark treaty, which entered into force February 16, 2005, commits more than 30 industrialized countries to specific, legally binding emission reduction targets for the initial compliance period 2008-2012. Another key focal point of the conference, which runs to December 9, is Article 3.9 of the Protocol, which calls for the launching of discussions about emission reduction targets for the post-2012 period.

The Kyoto Protocol broke new ground by defining three innovative mechanisms designed to lower the overall costs of achieving its emissions targets: emissions trading, the CDM and the JI. These mechanisms enable signatory nations (known as Parties) to take advantage of cost-effective opportunities to reduce emissions or to remove carbon from the atmosphere in other countries. While the cost of limiting emissions varies considerably from region to region, the benefit for the atmosphere is the same, wherever the action is taken.

All three mechanisms under the Kyoto Protocol are based on the Protocol's system for the accounting of targets. Under this system, the amount to which an Annex I Party must reduce its emissions over the five-year commitment period (known as its "assigned amount") is divided into units, each equal to one tonne of carbon dioxide equivalent (CO2e). These assigned amount units (AAUs), and other units defined by the Protocol, provide the basis for the Kyoto mechanisms by allowing a Party to gain credit from action taken in other Parties that may be counted towards its own emissions target.

Negotiations on the mechanisms have focused largely on ensuring their integrity. This was based on concerns that the mechanisms not confer a "right to emit" on Annex I Parties (i.e. industrialized countries) or lead to exchanges of fictitious credits which would undermine the Protocol's environmental goals.

The negotiators of the Protocol and the Marrakesh Accords therefore sought to design a system that fulfilled the cost-effectiveness promise of the mechanisms, while addressing concerns about environmental integrity and equity.

At the 2001 COP 7 meeting in Marrakesh, as part of the Marrakesh accords, the Parties completed a package of decisions on the mechanisms and recommended it to COP/MOP 1 for adoption. Since COP 7, further decisions have been made in relation to the Kyoto mechanisms and a great deal of work has been done to implement them, especially regarding the CDM and emissions trading.

(ELW spent two days at the UN Climate Change Conference; next week's issue will feature a special section of conference highlights, including reports on selected side events dealing with topics such as implementing emissions trading systems, action targets as a new form of climate change commitment, and new funding programs for adaptation projects.)

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