Most of the talks at The Hague were occupied with discussion on these questions. The arguments divided into two clear camps: the EU, occupying the environmental high(er) ground, and encouraged along by eco-lobbyists; and the "umbrella group" aggregation of carbon dioxide polluters anxious to avoid taking domestic action: the USA, Canada, Japan and Australia at its core.
Take the question of "hot air" – the name given to carbon credits from the former Soviet Union. With the collapse of Russian industries, Russia has found that it has more than met its Kyoto targets by accident, and is therefore the proud "owner" of megatonnes of carbon credits. But should these be tradable to, say, the USA?
No, say most EU countries, pointing out that this "hot air" fails to meet the basic principle of additionality. Or at the very least, they say there should be caps on the amount of hot air that can be transferred to other countries. Yes, insists the "umbrella group", which sees hot air as a handy, low-cost mechanism to avoid doing anything at home.
The talks ended without this being resolved, and with no definition on how to tell if a carbon credit is genuinely "additional". The way therefore remains open (or at least unclosed) not only for hot air, but also for a host of "free rider" projects that claim carbon credits for business-as-usual activities (and thus reduce the cost of producing the so-derived carbon credits to precisely $0).
What about nuclear power? For all its problems, it is a low carbon dioxide technology. So could the big carbon dioxide polluters simply build nuclear power stations abroad (mainly in developing countries) in order to meet their Kyoto targets, at the same time boosting their declining nuclear industries? One outcome of The Hague welcomed by eco-lobbyists is that nuclear power was dealt a firm (if not decisive) "no" and is now unlikely to qualify under any of the FMs. The question of whether large dams, another environmentally damaging technology, would qualify under the FMs was left unresolved, so expect more arguments there.
Then there is the question of compliance. No sanctions regime is in place for countries that do not meet their obligations, and adherence to the Kyoto protocol is thus governed by little more than an "honour system". The initial US position at The Hague was that there should be no financial penalties for non-compliance, and that countries could "borrow" carbon credits from their own future commitment periods (post 2012) to meet the demands of the present.
By the time the talks ended, the US position had softened only to allow weak financial penalties, for example by per-tonne payment into a "voluntary fund". However, one unclosed loophole would leave open the prospect of a low cap on the voluntary fund price, which would in turn knock on to the traded price of carbon credits, ruling out more expensive credits in renewable energy that have the potential to contribute most positively to sustainable development.
Another unresolved compliance question: what happens if country A sells carbon credits to country B, and then country A fails to actually deliver them? The "umbrella group" position is that there should be 100 per cent seller liability, so that country B would "own" valid carbon credits even though the credits were non-existent. This would allow developed countries to meet their carbon dioxide reductions with "junk" credits that will never deliver actual carbon dioxide reductions. This question too was never resolved.
With so many complex questions to be decided, one has to sympathise with French environment minister Dominique Voynet, who reportedly declared herself "too tired" to focus on the fine details of the Prescott deal at 5.30am. It may even be too much to hope that all the detail can be tied up before Clinton leaves office, except at the price of a toothless protocol unable to deliver the modest cuts in carbon dioxide agreed in Kyoto.
Some observers are even asking whether a COP6 agreement would make any real difference. The US Senate has stated that it will not ratify the Kyoto protocol until and unless developing countries, in particular China, India and Brazil, are in "meaningful participation" with the process.
The idea that the emissions of developing countries should be included is often seen as a purely American point of view. However it also wins support from some non-governmental organisations (NGOs), which believe that all countries must co-operate to solve the global warming problem. Developing countries could instead operate within a cap allowing limited growth in emissions, and trade any "undershoot".
One increasingly influential proponent of this kind of approach is the London-based Global Commons Institute (www.gci.org.uk), which has long been advocating a scenario of "contraction and convergence". This supposes that countries work towards an equal-per-capita level of carbon dioxide emissions (convergence) to produce an atmospheric level of carbon dioxide low enough to ensure the good health of our planet (contraction) at some time in the future. Low-emitting countries could actually increase their emissions, while high-emitting countries would face substantial cuts.
What is clear is the need to go beyond the Kyoto protocol, whose targets are only a starting point towards meeting the goals of the UNFCCC.
However there is little chance of any more radical measures taking place if the Kyoto protocol is not passed. Given that the US is unlikely to ratify it no matter what – at least in the near future – our best bet is for an agreement which is at least acceptable to everybody else. In this scenario, the US and other umbrella group members would make concessions in negotiations, and other countries (though not the US) would ratify the treaty.
The protocol would come into force once ratified by 55 countries contracting to the UNFCCC, including sufficient developed countries to account for 55 per cent of developed country greenhouse gas emissions in 1990 (not requiring a US ratification) and at least 19 undeveloped countries.
Is this likely? As the US representative Frank Loy said: "We will not give up. The stakes are too high, the science too decisive and our children too precious."
Herald Online feature: Climate change
Intergovernmental Panel on Climate Change
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Summary: Climate Change 2001
United Nations Environment Program
World Meteorological Organisation
Framework Convention on Climate Change