Global Climate Change: The Kyoto Protocol

Order Code RL30692

CRS Report for Congress

Received through the CRS Web

Global Climate Change: The Kyoto Protocol

Updated July 21, 2005

name redacted

Specialist in Environmental Policy

Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Global Climate Change: The Kyoto Protocol

Summary

Negotiations on the Kyoto Protocol to the United Nations Framework

Convention on Climate Change (UNFCCC) were completed December 11, 1997,

committing the industrialized nations to specified, legally binding reductions in

emissions of six “greenhouse gases.” The Protocol entered into force on February

16, 2005, and its emissions reduction requirements are binding on the 35

industrialized countries that have ratified it; the United States disengaged from the

Protocol in 2001 and has not ratified it.

As structured in the negotiations completed in 1997, this treaty would commit

the United States — if it were to ratify the Protocol — to a target of reducing

greenhouse gases by 7% below 1990 levels during a “commitment period” between

2008-2012. Because of the fact that “sinks,” which remove and store carbon from

the atmosphere, are counted and because of other provisions discussed in this report,

the actual reduction of emissions within the United States that would be required to

meet the target was estimated to be lower than 7%.

The United States signed the Protocol on November 12, 1998. However, the

Clinton Administration did not submit the Protocol to the Senate for advice and

consent, acknowledging that one condition outlined by S.Res. 98, passed in mid-1997

— meaningful participation by developing countries in binding commitments

limiting greenhouse gases — had not been met. In late March 2001, the Bush

Administration rejected the Kyoto Protocol. The United States continued to attend

the annual conferences of the parties (COPs) to the UNFCCC, but did not participate

in Kyoto Protocol-related negotiations. In February, 2002, President Bush announced

a U.S. policy for climate change that will rely on domestic, voluntary actions to

reduce the “greenhouse gas intensity” (ratio of emissions to economic output) of the

U.S. economy by 18% over the next 10 years.

Following the ratification of the Kyoto Protocol by Russia in November 2004,

it entered into force on February 16, 2005, and as noted above, obligates the 35

developed nations that have ratified it to meet their commitments to reduce their

greenhouse gas emissions by the amounts specified in the Protocol over the period

2008 to 2012. A total of 141 nations, including developing countries — which have

no binding obligations under the treaty — had ratified the Protocol when it entered

into force. In order to enter into force, the Protocol had to be ratified by developed

(Annex I) nations representing 55% of the level of their emissions in 1990. Only

those countries that have ratified the Protocol are bound by its terms; therefore,

although the United States had signed the Protocol, it is not bound by its terms, since

it has not ratified it.

This report is intended to provide background on the Kyoto Protocol and its

terms. It will be updated annually or as events warrant.

Contents

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Major Provisions of the Kyoto Protocol . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Emissions Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Developing Country Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Emissions Trading and Joint Implementation . . . . . . . . . . . . . . . . . . . . 4

Buenos Aires Action Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

COP-6 Negotiations, The Hague . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Bush Administration Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

COP-6 Resumed, Bonn, Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

COP-7 and Subsequent Conferences of the Parties . . . . . . . . . . . . . . . . . . . 11

Current U.S. Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Ratification Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Global Climate Change:

The Kyoto Protocol

Background

Responding to concerns that human activities are increasing concentrations of

“greenhouse gases” (such as carbon dioxide and methane) in the atmosphere, most

nations of the world joined together in 1992 to sign the United Nations Framework

Convention on Climate Change (UNFCCC). The United States was one of the first

nations to ratify this treaty. It included a legally non-binding, voluntary pledge that

the major industrialized/developed nations would reduce their greenhouse gas

emissions to 1990 levels by the year 2000, and that all nations would undertake

voluntary actions to measure, report, and limit greenhouse gas emissions.

However, as scientific consensus grew that human activities are having a

discernible impact on global climate systems, significantly contribuing to a warming

of the Earth that could result in major impacts such as sea level rise, changes in

weather patterns, and health effects — and as it became apparent that major nations

such as the United States and Japan would not meet the voluntary stabilization target

by 2000 — parties to the treaty decided in 1995 that it would be necessary to enter

into a legally binding, not voluntary, agreement. Negotiations began on a protocol

to establish legally binding limitations or reductions in greenhouse gas emissions.

It was decided by the parties that this round of negotiations would establish

limitations only for the developed countries (the 38 nations listed in Annex I to the

UNFCCC, including the former Communist countries, and referred to as “Annex I

countries.” (Developing countries are referred to as “non-Annex I countries.”)1 This

was referred to as the “Berlin Mandate,” which reflected continuation of the principle

established in the UNFCCC that parties bore “common but differentiated

responsibilities” in dealing with climate change issues, and that first steps in reducing

greenhouse gas emissions should be taken by the Annex I countries.

During negotiations that preceded the December 1-11, 1997, meeting in Kyoto,

Japan (COP-3), little progress was made, and the most difficult issues were not

resolved until the final days — and hours — of the Conference. There was wide

disparity among key players especially on three items: (1) the amount of binding

reductions in greenhouse gases to be required, and the gases to be included in these

requirements; (2) whether developing countries should be part of the requirements

for greenhouse gas limitations; and (3) whether to include emissions trading and joint

implementation, (which allow credit to be given for emissions reductions to a country

that provides funding or investments in other countries that bring about the actual

reductions in those other countries or locations where they may be cheaper to attain).

1

For additional information on the negotiations in Kyoto and related background, see CRS

Issue Brief IB89005, Global Climate Change.

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Following completion of the Protocol in December of 1997, decisions and

details regarding a number of the more difficult issues remained to be negotiated and

resolved (see below). At the fourth Conference of the Parties (COP-4) held

November 2-13, 1998, in Buenos Aires, Argentina, it was apparent that these issues

could not be resolved at this meeting as had been expected. Instead, parties

established a two-year “Buenos Aires Plan of Action” (BAPA) to deal with these

issues, with a deadline for completion at the COP-6 meeting in The Hague,

Netherlands, November 13-24, 2000.

The difficulty in resolving these issues was underlined by the collapse of

discussions at COP-6 in The Hague, without agreement. As discussed below, COP-6

resumed in the latter half of July 2001, following U.S. President Bush’s

announcement that the United States would not continue participating in negotiations

on the Kyoto Protocol, and would develop an alternative approach. The U.S.

delegation remained on the sidelines, declining to negotiate the key remaining issues

related to the Protocol. During the July meeting, the other parties reached final

agreement on most outstanding issues, with additional agreements reached on some

details at the next meeting, COP-7, in Marrakech, Morocco, October 29-November

9, 2001. (See discussion below) In the annual meetings of parties to the UNFCCC

in the years since the Marrakech meeting, major continuing issues regarding the

Kyoto Protocol — including the issues related to future participation of developing

countries — were not taken up or resolved.

In order to enter into force, the Protocol had to be ratified by nations

representing 55% of these emissions. In November, Russia ratified the protocol,

completing the requirements for bringing the Protocol into force within 90 days, and

on February 16, 2005, it officially entered into force. The Protocol’s provisions will

apply only to those countries that have ratified it.

Major Provisions of the Kyoto Protocol

The Kyoto Protocol was opened for signature March 16, 1998, and entered into

force February 16, 2005, becoming legally binding for countries that have ratified

it. The Protocol conditions required that it would be in force only when 55 nations

had ratified it, provided that these ratifications included Annex I Parties that account

for at least 55% of total Annex I carbon dioxide emissions in 1990.

On November 12, 1998, the United States signed the Protocol, in part because

the Clinton Administration wanted to revitalize what was seen as some loss of

momentum during COP-4. However, the treaty was not subsequently submitted to

the Senate for approval in recognition of S.Res. 98, the 1997 resolution indicating

disapproval of any treaty that did not include legally binding commitments for

developing countries. In the United States, ratification of treaties can occur only after

being submitted to and approved by the U.S. Senate. In 2001, early in his first term,

President George W. Bush rejected the Kyoto Protocol, as noted above and discussed

below, and U.S. policy has disengaged from formal negotiations on the Protocol.

The major commitments in the treaty on the most controversial issues are as

follows:

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Emissions Reductions. The United States would be obligated under the

Protocol to a cumulative reduction in its greenhouse gas emissions of 7% below 1990

levels for three major greenhouse gases, including carbon dioxide, (and below 1995

levels for the three other, man-made gases), averaged over the commitment period

2008 to 2012. The Protocol states that Annex I Parties are committed —

individually or jointly — to ensuring that their aggregate anthropogenic carbon

dioxide equivalent emissions of greenhouse gases do not exceed amounts assigned

to each country in Annex B to the Protocol, “with a view to reducing their overall

emissions of such gases by at least 5% below 1990 levels in the commitment period

2008 to 2012.” Annex A lists the 6 major greenhouse gases covered by the treaty2.

Annex B to the Kyoto Protocol lists 39 nations, including the United States, the

European Union plus the individual EU nations, Japan, and many of the former

Communist nations (the same countries as Annex I to the UNFCCC). The amounts

for each country are listed as percentages of the base year, 1990 (except for some

former Communist countries), and range from 92% (a reduction of 8%) for most

European countries — to 110% (an increase of 10%) for Iceland. The United States

agreed to a commitment on this list to 93%, or a reduction of 7%below 1990 levels,

to be achieved as an average over the five year commitment period, 2008-2012.

Based on projections of the growth of emissions using current technologies and

processes, the reduction in greenhouse gas emissions required of the United States

would likely be between 20% and 30% below where it would be otherwise by the

2008-2012 budget period.3 However, inclusion of greenhouse gas sinks4 — which

the Protocol adopted as urged by the United States — and emissions trading, means

that the domestic U.S. emission reductions from fossil fuels needed to meet a 7%

target would be substantially less. However, two of the most difficult issues

unresolved at Kyoto, and responsible in large part for the breakdown of the COP-6

negotiations in November 2000, are related to (1) emissions trading — specifically,

how much of a country’s obligation to reduce emissions can be met through

purchasing credits from outside, vs. taking domestic action; and (2) the extent to

which carbon sequestration by forests, soils and agricultural practices can be counted

toward a country’s emission reductions.

Developing Country Responsibilities. The United States had consistently

taken a firm position that “meaningful participation” of developing countries in

commitments made in the Protocol is critical both to achieving the goals of the treaty

and to its approval by the U.S. Senate. This reflects the requirement articulated in

S.Res. 98, passed in mid-1997, that the United States should not become a party to

2

The six gases covered by the Protocol are carbon dioxide (CO2), methane (CH4), nitrous

oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur

hexafluoride (SF6). The most prominent of these, and the most pervasive in human

economic activity is carbon dioxide, produced when wood or fossil fuels such as oil, coal,

and gas are burned.

3

See CRS Report 98-235 ENR, Reducing Greenhouse Gases: How Much from What

Baseline?

4

Greenhouse gases, especially CO2, are absorbed by a number of processes in forests, soils,

and other ecosystems. These are called “sinks.”

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the Kyoto Protocol until developing countries are subject to binding emissions

targets. The U.S. government also argued that success in dealing with the issue of

climate change and global warming would require such participation. The

developing country bloc argued that the Berlin Mandate — the terms of reference of

the Kyoto negotiations established at COP-1 in 1995 — clearly excluded them from

new commitments in this Protocol, and they continued to oppose emissions limitation

commitments by non-Annex I countries.

The Kyoto Protocol was concluded without such commitments, and the Clinton

Administration indicated that it would not submit the Protocol for Senate

consideration until meaningful commitments were made by developing countries.

At COP-4 in Buenos Aires, Argentina — host country of the meeting — became the

first developing country to indicate that it will make a commitment to take on a

binding emissions target for the period 2008-2012. Kazakhstan also announced its

intention to take similar action. At this meeting, the United States announced it

would sign the Kyoto Protocol, which it did on November 12, 1998. To date, none

of the largest developing countries, such as China, India or Brazil, have shown a

willingness to make commitments to reducing greenhouse gas emissions.

The Protocol does call on all Parties — developed and developing — to take a

number of steps to formulate national and regional programs to improve “local

emission factors,” activity data, models, and national inventories of greenhouse gas

emissions and sinks that remove these gases from the atmosphere. All Parties are

also committed to formulate, publish, and update climate change mitigation and

adaptation measures, and to cooperate in promotion and transfer of environmentally

sound technologies and in scientific and technical research on the climate system.

Emissions Trading and Joint Implementation. Emissions trading, in

which a Party included in Annex I “may transfer to, or acquire from, any other such

Party emission reduction units resulting from projects aimed at reducing

anthropogenic emissions by sources or enhancing anthropogenic removals by sinks

of greenhouse gases” for the purpose of meeting its commitments under the treaty,

is allowed and outlined in Article 6, with several provisos. Among the provisos is

the requirement that such trading “shall be supplemental to domestic actions.” The

purpose of this proviso is to make it clear that a nation cannot entirely fulfill its

responsibility to reduce domestic emissions by relying primarily on emissions trading

or joint implementation to meet its targets. Joint implementation is project-based

activity in which one country can receive emission reduction credits when it funds

a project in another country where the emissions are actually reduced.

One of the more contentious issues in the negotiations concerning how the

Kyoto Protocol would work has been this issue of “supplementarity” — finding

agreement on what proportion of a nation’s obligations could be met through these

mechanisms versus domestic actions to reduce emissions within a nation’s own

borders. At the negotiations in Bonn, Germany, in mid-2001 (COP-6 “bis” discussed

below), this issue was resolved with language that indicated there would be no

quantitative limit on the credit a country could claim from use of these mechanisms,

but that domestic action must constitute a significant element of the efforts of each

Annex B country to meet their targets.

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A number of specific issues related to the rules on how joint implementation and

emissions trading would work were left at Kyoto to be negotiated and resolved in

subsequent meetings; in the years since the Protocol was completed, it became

increasingly clear that this is an extremely complex issue. The European Union has

designed a system to be used within the EU whether or not the Kyoto Protocol enters

into force, and they have set a goal of initiating emissions trading in early 2005.

However, citing scientific issues yet to be resolved, the EU system will not include

sinks or land use issues.

Another major “mechanism” for meeting obligations in the Protocol is provided

by the establishment of a “clean development mechanism” (CDM), through which

a modified form of joint implementation between developed and developing

countries would occur. The United States had pushed hard for joint implementation,

and early proposals were formulated with the expectation that “JI” projects would be

primarily bilateral. Instead, negotiations resulted in agreement to establish the clean

development mechanism to which developed Annex I countries could contribute

financially, and developing/non-Annex I countries could benefit from financing for

approved project activities; Annex I countries could then use certified emission

reductions from such projects to contribute to their compliance with part of their

emission limitation commitment. Emissions reductions achieved through this

mechanism could begin in the year 2000 to count toward compliance in the first

commitment period (2008-2012). Like emissions trading, making the CDM

operational appears likely to be a difficult and complex process.

Buenos Aires Action Plan

Although it had been expected just after the 1997 Kyoto conference that the

November, 1998, COP-4 meeting in Buenos Aires, Argentina, would resolve some

of the more difficult issues left unresolved in Kyoto, it became clear during the year

leading up to COP-4 that parties were far from agreement on all of these issues.

Additional time for parties to analyze, negotiate, and work on these issues would be

required. Therefore, the parties arrived in Buenos Aires with an agenda focused on

formulating an “action plan” that would allow for the needed additional work to be

done. It was decided that the work plan should be completed by the end of 2000, and

should focus on the key issues, including the following:

— Rules and guidelines for the “market-based mechanisms” that allow

flexibility to parties in meeting their obligations. These include

emissions trading, joint implementation, and the Clean Development

Mechanism (CDM). The list of critical issues to be considered

include whether there should be quantified limits on how much of a

country’s emission reduction requirement could be met through these

mechanisms, as argued by the European Union, or no quantified limit,

as argued by the United States; “transparency” in making it possible

to effectively track emission units; allocating risk in emissions trades

— including the question of assigning liability, or responsibility,

when emissions trading involves “false” credits; and key

measurement, reporting and verification issues.

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— Rules and procedures that would govern compliance, including

provisions covering non-compliance with the treaty’s commitments.

This issue was left entirely open at Kyoto and remained one of the

major challenges facing negotiators.

— Issues concerning development and transfer of cleaner, loweremitting technologies, particularly to developing countries.

— Consideration of the adverse impacts of climate change and also the

impacts of measures taken to respond to it, an issue of particular

importance to developing countries, who argue the need for financial

assistance in order to help them cope with these impacts.

Carbon sinks. Another issue under active negotiation and consideration by the

parties, but outside the action plan itself, is defining application of the concept of

carbon sinks, including how to measure and verify the categories of carbon sinks.

The scientific panel that provides analysis to the parties, the Intergovernmental Panel

on Climate Change (IPCC), conducted a comprehensive study on land use, land-use

change, and forestry activities to identify their roles as carbon sinks and deal with the

measurement and verification issues related to them.

Following the release of this report, which indicated that a large amount of

carbon could be stored in a variety of carbon sinks, including not only forests, but in

soils, vegetation, grazing lands, etc., the United States made a comprehensive

proposal for the COP-6 negotiations to broaden the scope of acceptable carbon sinks.

The Kyoto Protocol accepts in principle that a nation’s forests — management

practices, reforestation or afforestation — may be included in the accounting of net

greenhouse gas emissions and their reduction. This would be important to the United

States, as its large land area and extensive potential for greater absorption of carbon

due to land management changes could greatly reduce the amount of emissions

reductions needed from energy production. In a submission to the Secretariat of the

UNFCCC, the United States proposed in late summer 2000 that elaboration at COP-6

of land use changes acceptable under the Protocol should also include soil carbon

sequestration and vegetation.

Few decisions were reached, nor were they expected, on the more difficult

issues outlined in the Buenos Aires Plan of Action at the COP-5 meeting in Bonn,

Germany, held October 25-November 24, 1999.

COP-6 Negotiations, The Hague

The November 2000 COP-6 meeting in The Hague was the last negotiation

session on the Kyoto Protocol in which the United States participated. After

President George W. Bush became President in January 2001, he rejected the Kyoto

Protocol and opted out of participation in Kyoto-related negotiations.

The negotiations at the COP-6 meeting were illustrative of some of the most

contentious issues of the Kyoto Protocol, and the difficulties of reaching agreement

on them led to the ultimate collapse of these talks. Leading up to the COP-6 meeting,

there were two intersessional negotiation sessions of the UNFCCC Subsidiary Bodies

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(the key mechanisms for considering Kyoto issues between COP meetings) in 2000,

June 12-16 and September 11-15, dealing with the issues of the Buenos Aires

workplan and attempting to fashion a negotiating text for final consideration at the

November 13-24 COP-6 meeting. At the conclusion of the meeting in Lyon, it was

reported that language on aspects of some issues had been agreed upon, but that the

negotiating text had been expanded to some 200 pages, much of it “bracketed.”

(Brackets indicate that no agreement has been found on the language in brackets, and

often several alternative possibilities are reflected within brackets.) Thus, though

there was negotiating text on most issues, disagreements remained on most key

issues. Observers reported that political positions remained entrenched and little

movement toward compromise appeared evident in Lyon. The end result was that

many participants felt doubtful that many of the key issues could be completely

resolved in November, 2000, at COP-6.

As talks began at COP-6 in The Hague, Netherlands, on November 13, they

centered initially on the “Buenos Aires Plan of Action” (BAPA), but evolved into a

high-level negotiation over the major political issues. These included major

controversy over the United States’ proposal to allow credit for carbon “sinks” in

forests and agricultural lands, satisfying a major proportion of the U.S. emissions

reductions in this way (between half and one-quarter, according to various versions

of the U.S. proposal); disagreements over consequences for non-compliance by

countries that did not meet their emission reduction targets; and difficulties in

resolving how developing countries could obtain financial assistance to deal with

adverse effects of climate change and meet their obligations to plan for measuring

and possibly reducing greenhouse gas emissions.

In the final hours of COP-6, despite some compromises agreed between the

United States and some EU countries, the EU countries as a whole, reportedly led by

Denmark and Germany, rejected the compromise positions, and the talks in The

Hague collapsed. Jan Pronk, the President of the COP, suspended COP-6 without

agreement. Discussions between the EU and the “Umbrella group” that includes the

United States, Canada, Japan and Australia, were held in Ottawa, Canada, during the

week of December 4, 2000, in order to try and salvage some of the agreement

reached at the end of the talks in The Hague. However, the U.S. negotiators reported

that these talks were “inconclusive” and the differences were still in place, or even

exacerbated, after this meeting.

At the end of 2000, based on discussions at The Hague and in Ottawa, the issues

particularly in contention were as follows:

Mechanisms, especially emissions trading: The main issue here was

“supplementarity” — the position of the United States was that there

should not be quantitative limits to the amount of emissions reductions that

are allowed toward a country’s obligations through emissions trading or

joint implementation. The EU and others argue there should be such

limitations, in order to force nations to take more extensive domestic

action to reduce emissions. This issue is related to the commitment

outlined in the Kyoto Protocol that emissions trading should be

“supplemental” to domestic action. The United States was supported by

the “umbrella group” in which it is joined by New Zealand, Japan, Canada,

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Australia, Russia, Ukraine, Norway and Iceland. Another related issue was

whether carbon sinks can be included in the Clean Development

Mechanism (CDM) in which a contributing developed country can claim

credit for actions to reduce emissions in developing countries. There were

significant divisions on this issue not among developed countries, but

among developing countries, as well.

Compliance issues: Decisions on how non-compliance with Protocol (and

UNFCCC) obligations should be handled was a very controversial issue.

The United States position was that there should be binding consequences,

but these should be in the form of additional obligations in subsequent

commitment periods, and not in the form of financial penalties. There was

considerable disagreement at The Hague over whether financial penalties

should be allowed. Agreement on binding consequences would probably

require an amendment to the Protocol, which would be separately agreed

to, and separately ratified. Opponents to binding consequences include

Japan, Russia, and Australia, who were concerned, among other things,

about opening the Protocol to an amendment process. On the structure of

a compliance regime, there was substantial agreement on a likely outcome:

a single compliance body with two functions or branches — (1) to

facilitate and assist compliance (mainly for developing countries), and (2)

an enforcement function where decisions would be made on whether

compliance violations have occurred and what consequences should be

applied. Consequences under consideration, in addition to financial

penalties, included losing access to mechanisms like emissions trading

and/or subtracting from future allocations of allowable carbon emissions.

Land use and land use change and forestry (LULUCF): As noted above,

the Kyoto Protocol accepts in principle that a nation’s forests —

management practices, reforestation or afforestation — may be included

in the accounting of net greenhouse gas emissions and their reduction. The

United States proposed at COP-6 that land use changes acceptable under

the Protocol should also include soil carbon sequestration and vegetation.

Major issues were how to attain precision in measuring absorption and

release of carbon from land-based sources, how permanent such land use

mechanisms would be, and the extent to which land use absorption

counted by a nation is “additional” to business as usual.

The United States made a series of controversial proposals on how to count

carbon sequestration, beginning with basically counting most of the carbon

sequestration in its extensive forest cover toward its obligations. It

subsequently revised this proposal and put forward a formula that included

three parts: a first “interval” allowing up to 20 million tons of carbon to be

counted at 100% for any country with forests absorbing that much; a

second interval of a certain amount in which credit for a certain percentage

would be allowed up to a certain threshold; then full credit for tons

absorbed beyond the threshold (which would be historically determined in

relation to baseline absorption amounts). The EU opposed the U.S.

proposal, mainly on the issue of forests, and the extent to which a country

like the United States would receive credits for a “business as usual”

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scenario that did not involve the harder emissions reductions from fuel

sources and technological measures. When the United States put numbers

to this proposal, the U.S. credits from carbon sinks appeared to represent

about 125 million tons of carbon, against a likely need to reduce emissions

by about 600 million tons of carbon to meet its commitment in 2008-2012.

This was strongly opposed by the EU and other countries, and a stalemate

over this issue, despite several revisions downward of the U.S. position

and tentative acceptance of a much smaller amount by the EU, was thought

to be a major factor in the collapse of the November COP-6 negotiations

at The Hague.

Developing country participation: The United States had been seeking

additional commitments from developing countries in a series of informal

discussions and consultations during the period since the Kyoto Protocol

was completed in late 1997, but only Argentina and Kazakhstan have

shown a willingness to make such commitments. Little willingness to do

so has been shown by other developing countries. The possibility that it

would be discussed under an agenda item dealing with “adequacy of

commitments” did not occur at The Hague.

Bush Administration Policy. Just over two months after the COP-6 talks

collapsed, President George W. Bush took office, and announced his Administration

would carry out a cabinet-level review of climate policy. However, the Bush

Administration announced in late March 2001 that it would not be interested in

continuing discussion on the Kyoto Protocol, which was characterized as “dead” in

terms of U.S. policy. The cabinet-level review of U.S. climate policy was on-going,

and the Administration indicated that it would be interested in pursuing alternative

approaches or cooperative efforts such as market-based incentives and voluntary

measures, to address climate change concerns.

The EU nations and others, such as Japan, expressed deep concern and dismay

at this new U.S. position, and a high-level delegation of EU officials visited the

United States to attempt to re-engage the United States in the Kyoto Protocol process.

This effort was reported as having been “rebuffed.” Some observers began

considering the implications of the new U.S. position for the Protocol, and whether

the EU and other nations would ratify the Protocol, and try to bring it into force

without the United States.

President Bush made a policy statement in mid-June, 2001, resulting from the

continuing cabinet-level review of climate change options, in which he confirmed the

U.S. approach as rejecting the Kyoto Protocol and favoring voluntary actions,

increased scientific research, and market mechanisms. President Bush also outlined

a U.S. Climate Change Research Initiative, and the National Climate Change

technology Initiative. During his mid-June trip to Europe, President Bush discussed

climate policy with European heads of state and met strong opposition to the U.S.

position. The outcome was that Europe and the United States would “agree to

disagree” on climate. The Europeans announced they would proceed with ratification

of the Kyoto Protocol, without the United States if necessary.

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President Bush indicated that the United States would continue to participate in

international meetings on climate change, but would not negotiate on Kyoto Protocol

issues. When the COP-6 meeting resumed in Bonn, Germany, in July 2001, the U.S.

delegation followed this approach, declining to participate in negotiations on most

Kyoto Protocol issues, and remaining on the sidelines as observers. The other parties

reached agreement on the key political issues and announced that the developed

countries would move toward ratification of the Kyoto Protocol without the United

States.

COP-6 Resumed, Bonn, Germany

When the COP-6 negotiations resumed July 16-27, 2001, in Bonn, Germany,

little progress had been made on resolving the differences that had produced an

impasse in The Hague. However, this meeting took place after President George

Bush had rejected the Kyoto Protocol in March; as a result, the United States

delegation to this meeting declined to participate in the negotiations related to the

Protocol and chose to act as observers at that meeting. As the other parties

negotiated the key issues, agreement was reached on most of the major political

issues, to the surprise of most observers given the low level of expectations that

preceded the meeting. The agreements included:

(1) Mechanisms — the “flexibility” mechanisms which the United States had

strongly favored as the Protocol was initially put together, including

emissions trading; joint implementation; and the Clean Development

Mechanism (CDM), which provides funding from developed countries for

emissions reduction activities in developing countries, with credit for the

donor countries. One of the key elements of this agreement was that there

would be no quantitative limit on the credit a country could claim from use

of these mechanisms, but that domestic action must constitute a significant

element of the efforts of each Annex B country to meet its targets.

(2) Carbon sinks — credit was agreed to for broad activities that absorb carbon

from the atmosphere or store it, including forest and cropland

management, and revegetation, with no over-all cap on the amount of

credit that a country could claim for sinks activities. In the case of forest

management, an Appendix Z establishes country-specific caps for each

Annex I country; for example, a cap of 13 million tons could be credited

to Japan (which represents about 4% of its base-year emissions). For

cropland management, countries could receive credit only for carbon

sequestration increases above 1990 levels.

(3) Compliance — final action on compliance procedures and mechanisms that

would address non-compliance with Protocol provisions was deferred to

COP-7, but included broad outlines of consequences for failing to meet

emissions targets that would include a requirement to “make up” shortfalls

at 1.3 tons to 1, suspension of the right to sell credits for surplus emissions

reductions; and a required compliance action plan for those not meeting

their targets.

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(4) Financing — three new funds were agreed upon to provide assistance for

needs associated with climate change; a least-developed-country fund to

support National Adaptation Programs of Action; and a Kyoto Protocol

adaptation fund supported by a CDM levy and voluntary contributions.

A number of operational details attendant upon these decisions remained to be

negotiated and agreed upon, and these were the major issues of the COP-7 meeting

that followed.

COP-7 and Subsequent Conferences of the Parties

At the COP-7 meeting in Marrakech, Morocco October 29-November 10, 2001,

negotiators in effect completed the work of the Buenos Aires Plan of Action,

finalizing most of the operational details and setting the stage for nations to ratify the

Protocol. The United States delegation continued to act as observers, declining to

participate in active negotiations. Other parties continued to express their hope that

the United States would re-engage in the process at some point, but indicated their

intention to seek ratification of the requisite number of countries to bring the Protocol

into force (55 countries representing 55% of developed country emissions of carbon

dioxide in 1990).

The main decisions at COP-7 included operational rules for international

emissions trading among parties to the Protocol and for the CDM and joint

implementation; a compliance regime that outlines consequences for failure to meet

emissions targets but defers to the parties to the Protocol after it is in force to decide

whether these consequences are legally binding; accounting procedures for the

flexibility mechanisms; and a decision to consider at COP-8 how to achieve to a

review of the adequacy of commitments that might move toward discussions of

future developing country commitments. Other parties reiterated their hope that the

United States would re-engage with the international cooperation efforts under the

Protocol, but also their decision to seek ratification by their governments and the

Protocol’s entry into force by the WSSD in 2002, as noted above.

At COP-8 (New Delhi, 2002), COP-9 (Milan, 2003), and COP-10 (Buenos

Aires, 2004) over the subsequent three years, no major policy issues were negotiated

or decided. The next Conference of the Parties, COP-11, is scheduled to take place

in Montreal, Canada, November 28 - December 9, 2005. This will be concurrent

meetings of the 11th Conference of the Parties to the UNFCCC and the first Meeting

of the Parties to the Kyoto Protocol; it is expected that discussion at this meeting

will focus on key issues involved in “next steps,” including what might be outlined

as steps to be taken by developing countries. It appears likely that this discussion

will be controversial among the parties, and that a key consideration will be the

question of how greenhouse gas emissions can be addressed without posing obstacles

for economic development in developing countries.

Current U.S. Policy

Disengagement from the Kyoto Protocol remains U.S. policy, with an emphasis

instead on domestic action. On February 14, 2002, President Bush announced a U.S.

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policy for climate change, based on voluntary domestic measures, characterized as

a “new approach for meeting the long-term challenge of climate change.” The

centerpiece of this announcement was the plan to reduce greenhouse gas intensity of

the U.S. economy by 18% over the next 10 years. Greenhouse gas intensity measures

the ratio of greenhouse gas emissions to economic output and has been declining in

the United States over the past several years. The Administration stated that the goal,

to be met through voluntary action, is to achieve efficiency improvements that would

reduce the 183 metric tons of emissions per million dollars of gross domestic product

(GDP) to 151 in 2012. The plan notes that “if, in 2012, we find that we are not on

track toward meeting our goal, and sound science justifies further policy action, the

United States will respond with additional measures that may include a broad,

market-based program” and other incentives and voluntary measures to accelerate

technology development.

In addition, the plan directs the Secretary of Energy in consultation with other

key agencies, to “substantially improve the emission reduction registry” to upgrade

the voluntary emission reduction program under section 1605(b) of the 1992 Energy

Policy Act, to bring about enhanced measurement accuracy, reliability, and

verifiability. Other measures include providing for protected, transferable emission

reduction credits, increased funding of $700 million in total climate-related spending,

and a new management structure to coordinate climate change and technology

research. Domestic policies such as tax incentives for renewable energy and new

technology, development of fuel-efficient vehicles and cleaner fuels, and carbon

sequestration were also proposed, along with several international bilateral initiatives

and relatively modest increases in foreign assistance.

Some observers praised the plan for taking a practical, conservative approach

to government action and for relying on voluntary measures. Critics observed that

voluntary approaches by themselves have not historically often been effective and

noted that the reductions in energy intensity are very little different from current

trends and would allow for significant increases in over-all greenhouse gas emissions

rather than reductions.

Ratification Issues. For the United States to ratify the Kyoto Protocol, the

treaty would have to be transmitted to the U.S. Senate by the President for advice and

consent. A two-thirds majority vote in the Senate is required for approval. As long

as the United States has not ratified the treaty, it is not subject to its terms and

obligations. President Clinton expressed strong support for the Kyoto Protocol,

though criticizing it for not including commitments for developing countries. During

his administration, the United States signed the Protocol on November 12, 1998. The

U.S. signature was criticized by several Members of Congress who opposed the

treaty on a number of grounds, including questions about the scientific justification

for it and about the likely economic impacts that might occur if the United States

were to attempt to meet its emission reduction commitments in the treaty.

In recognition of the opposition expressed in the Senate by S.Res. 98, which

passed 95-0 in the months before the 1997 Kyoto meeting, to a Protocol that does not

include requirements for emissions limitations by developing countries, President

Clinton did not submit the treaty to the Senate for advice and consent, citing lack of

meaningful developing country participation. Given the position announced by the

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Bush Administration, opposing the Kyoto Protocol, it continues to be unlikely that

it will be transmitted to the Senate.

Legislation. A number of bills have been introduced in the 109th Congress to

address ways of reducing greenhouse gas emissions in the United States. Debate

during consideration of the omnibus energy bill, H.R. 6, in the Senate included votes

on several amendments, including some that were adopted on technology

development, deployment and transfer, and a Sense of the Senate resolution that

recognizes that human activities are a substantial cause of greenhouse gas

accumulations in the atmosphere, causing average temperatures to rise. This

resolution also states that “Congress should enact a comprehensive and effective

national program of mandatory market based limits and incentives on emissions of

greenhouse gases that slow, top, and reverse the growth of such emissions...” in a

way that avoids harm to the U.S. economy and encourages comparable action by

other countries. (For additional information, see CRS Report RL32955, Climate

Change Legislation in the 109th Congress).

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