INTERNATIONAL ENVIRONMENTAL LAW GLOBAL CLIMATE CHANGES: THE KYOTO PROTOCOL Attilio Balestreri

1. UNIVERSITY OF PADUAFACULTY OF ENGINEERING Second Cycle Degree in Environmental Engineering 2013-2014 INTERNATIONAL ENVIRONMENTAL LAW GLOBAL CLIMATE CHANGES:THE KYOTO PROTOCOL Attilio Balestreri attilio.balestreri@buttiandpartners.com www.buttiandpartners.com

2. Index • Introduction: increasing concentration of GHGs and global warming; • Timeline: the international climate change regulation; • 1992 Earth summit: the UNFCCC; • Kyoto Protocol.

3. 1. INTRODUCTION: GHGs EMISSIONS – CAUSES AND EFFECTS 2. GHGs reradiate the energy they absorb in all directions, including towards the earth surface 1. the Earth surface reflects solar energy upwards 3. Thismechanismcauses a rise in Earth’s surface temperature

4. GHG and Global Warming • Responsible gases: water vapor, CO2(carbon dioxide), CH4(methane), CFCs (chlorofluorocarbons), N2O (nitrous oxide), O3(ozone). • In the right quantities, GHGs help support life and ecosystems on Earth; but a build-up of GHGs can upset this important equilibrium, causing global warming. • In 1990 IPCC foresaw an increase of temperature of 0.3°C for each period of 10 years, while more recent reports predict an increase of 0.2°C every 2 years. In a worst case, the average surface temperature could rise 6°C by the end of the 21st century.

5. Humanresponsibilities Industrial agricolture (chemical fertilizers) and intensive livestock farming (methane production) Use of fossil fuels Deforestation

6. Consequences of Global Warming • extreme weather events; • aridity and desertification; • rise in sea levels due to the ice melting; • damage in biodiversity: habitat destruction and modification; • oceans acidification: CO2 dissolved in the seawater lowers its Ph, with a negative impacts on coral reefs and marine organisms in general.

7. 2. TIMELINE: THE INTERNATIONAL CLIMATE CHANGE REGIME • 1979: First World Climate Conference; • 1992: UNFCCC signed at Earth Summit; • 1994: UNFCCCenters into force; • 1995: Berlin Mandate agreed at Conference of Parties COP-1; • 1997: Kyoto Protocol concluded at COP-3; • 2001: U.S. repudiates Kyoto Protocol; • 2001: Marrakech Accords adopted at COP-7; • 2005: Kyoto Protocol enters into force; • 2005: EU Emissions Trading Scheme comes online; • 2011: Durban Conference, South Africa (COP-17); • 2012: Doha Conference, Quatar (COP-18)

8. 3. 1992 EARTH SUMMIT: THE UNFCCC Based on a 1990 UN Resolution, the Intergovernmental Negotiating Committee (INC) was enstablished to elaborate a framework convention on climate change. After a short negotiating process, the UN Framework Convention on Climate Change (UNFCCC) was signed in 1992 at the Earth Summit. Its primary objective is “to achieve…stabilization of GHGs concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system” (art. 2). FIRST INTERNATIONAL «MILESTONE» ABOUT GHGs

9. Principles(art. 3) • The Parties should take precautionary measures to anticipate, prevent or minimize the causes of climate change and mitigate its adverse effects. • Principle: Parties’ common but differentiated responsibilities and capabilities (“CBDR”): accordingly, the developed Countries – having the main responsibility with regard to GHGs emissions – should take the lead in fighting against climate change. The specific needs and economic and social conditions of developing Countries should be taken into account. Everyone must operate. • Lack of full scientific certainty should not be used as a reason for postponing such measures. Policies and measures should cover all relevant sources and comprise all economic sectors. • International cooperation: the Parties should cooperate to promote a supportive and open international economic system that would lead to sustainable economic growth and development.

10. Annexes In implementing the concept of CBDR, the UNFCCC created several classes of parties through Annexes: Annex I includes the wealthier OECD* (Italian OCSE) Countries, and the former East Bloc Countries “undergoing the process of transition to a market economy”. Annex II  Only OECD Countries.

11. Commitments All Parties(both developed and developing Countries) must: • promote and cooperate in the conservation and enhancement of sinks and reservoirs of all GHGs; • cooperate in preparing for adaption to the impacts of global warming; • promote and cooperate in research and development, exchange of information, education and public awareness; • create national programs to mitigate climate change by addressing GHGs emissions.

12. The short negotiating period (2 years) resulted in the adoption of only cautious control. At that time, Stateswerenot ready to adopt specific commitments to reduce GHGs emissions: they accepted only general commitments. UNFCCC created the basis for future cooperation. (The Kyoto Protocol will increase and specify the Parties commitments in reducing GHGs emissions).

13. Conference of the Parties Conference of the Parties (COP) is the supreme body of the UNFCCC. The Conference has the legislative power to create additional protocols and amendments to the Convention. It has the purposes of monitoring the individual obligations of Parties and promoting the development of joint projects between Parties. The first UNFCCC COP (COP-1) assembled in 1995 in Berlin to address additional commitments, financial and technical support to developing countries and administrative issues involving climate change. In 1997, at the COP-3 assembled in Kyoto, the Kyoto Protocol was adopted.

14. International treaties: steps for the entry into force • Negotiation phase • Signature phase • Ratification phase

15. 4. THE KYOTO PROTOCOL • The Protocol was adopted in 1997 at COP-3 and entered into force in 2005, “on the 90th day after the date on which not less than 55 Parties to the UNFCCC have ratified/accepted/approved the Protocol”. • As of November 2011, 192 Countries and the EU have ratified the agreement. These Countries represent over the 64% of the 1990 emissions from Annex I Countries (Annex I of the UNFCCC). • The US still refuses to participate. But this is an evolving situation.

16. Kyoto Protocol Participation Map Green = Countries that have signed and ratified the treaty (Annex I & II countries in dark green); Grey = Countries that have not yet decided; Brown = No intention to ratify at this stage.

17. United States United States, representing 36%of the 1990 emission levels of the Annex I Countries, are the only remaining signatory Country not to have ratified the protocol. The US Clinton administration signed the Protocol in 1998, but the Congress refused to ratify it. In 2001Bush rejected the Kyoto protocol, arguing that it was too costly and unrealistic. Currently the Democrat leadership has expressed its willingness to reduce US emissions. Regional approach  Many States and local governments in the US, in the absence of the federal government’s participation in the Kyoto Protocol, have individually committed in order to reduce GHGs emissions. This initiatives are highly significant. “Self-made” GHSs reduction program.

18. Kyoto Protocol’s commitments Unlike the UNFCCC, the Kyoto Protocol set out quantified emissions reduction targetsanda timetable for their achievement. Developed Countries were required to reduce their GHGs emissions by at least 5% below 1990 emissions levels in the first commitment period, from 2008 to 2012 (different targets for each of the Parties). Developed Countries are also required to transfer financial resources and technology to the developing Countries, in order to help them fulfil their procedural duties. Developing Countries must only meet some procedural obligations. Not even the rapidly developing countries which show considerable increases of GHGs emissions, such as China, India and Brazil, are required to make any emission cuts. International cooperation

19. Kyoto Protocol’s targets Annex I Countries have committed themselves to reduction targets  “quantified emission limitation”. Different from Annex II (not quantified) Targets were set considering as benchmark the 1990 emission level. For the first committment period (2008-2012) the general target was the reduction of GHGs emissions by at least 5% below the 1990 level. Individual targets were provided, and each State should not exceed its Assigned Amount* (AA).

20. Kyoto Protocol’s original targets (……)

21. How should Countries reduce their emissions? • Individually or jointly (Parties can reach agreements to fulfil their commitments jointly, e.g. EU); • By projects aimed at reducing anthropogenic emissions, such as land use, land-use change and forestry (LULUCF) activities; • Using flexibility mechanisms.

22. Flexibility mechanisms In addition to bindings emission reduction targets, the Protocol contains 3flexibility mechanisms: • Joint Implementation (JI – art. 6); • Clean Development Mechanism (CDM- art. 12); • International Emission Trading (IET – art. 17). The main purpose of these mechanisms is to achieve the overall reduction target at a lower cost.

23. Flexibility mechanisms These mechanisms allows: • a process of compensation between a non-reduction in one place and an increased reduction in another; • reductions to be made where it is economically speaking most efficient. If Parties can reduce their own emissions in other parts of the World, they will choose to reduce them where costs are lower. This way they can: • reduce emissions concerning their own Country; • export clean technologies in developing Countries or in Countries with a less advanced technological state.

24. Joint Implementation and ERUs GHGs emissions avoided through the realization of projects generate Emission Reduction Units (ERUs). JI mechanism permits to Annex I Parties to fulfil their reduction obligation by transferring to, or acquiring from, other Annex I Parties, ERUs from projects in any sector of the economy. ONLY FOR ANNEX I PARTIES. These kind of projects are generally realized in the former Eastern Bloc Countries (where costs are lower). The Assigned Amounts of the two Countries involved in each projects remain the same.

25. Joint Implementation example In the North of Romania an inefficient carbon station supplies some cities with electricity, producing 120.000 tons of CO2 per year. A new project provides the substitution of the carbon station with some power generators that use wind energy with a potential of 60 MW. The new power generators will not produce CO2 emissions: the Party that proposed and realized the project will receive an amount of credits (ERUs) that correspond to 120.000 tons of CO2 per year. These credits can be sold and traded.

26. JI Project’s Requirements • The Project shall permit an emission reduction of at least one of the GHGs listed in the Kyoto Protocol; • The reduction shall be additional to any that would otherwise occur in the absence of the certified project activity ( No emission “discount” for a JI Projects, but costs might be lower!); • Nuclear projects are excluded.

27. Clean Development Mechanism and CERs Contrary to IJ, the CDM allows for interaction between Annex I Parties and non-Annex I Parties: Annex I Parties may comply with their own reduction targets by performing projects in non-Annex I Countries, which do not have quantified reduction obligation for their own. The GHGs emissions avoided through the realization of CDM projects produce Certified Emission Reduction (CERs) that can be used by parties to comply with their own reduction targets.

28. Clean Development Mechanism example In Brazil a big landfill releases a huge amount of methane through the decomposition process. A CDM project provides the recovery of the methane and its utilization in a power plant, for the production of electricity to be sold. The methane emissions avoided produce CERs that can be traded and sold.

29. CDM Project’s Requirements • The home Country shall confirm that the CDM Project contributes to the sustainable development; • The Project shall generate an emission reduction of at least a GHGs listed in the Kyoto Protocol; • Emissions avoided shall be officially estimated and social and economic impact of the Project shall be analyzed. • The reduction shall be additional (No emission “discount”related to the Project, but costs might be lower!); • The Project shall not use public funds officially bound to the home Country development.

30. Involved Parties’ Requirements Parties involved must: • have ratified the Kyoto Protocol; • have created a National Emissions Register; • have presented every year the Emissions Inventory; • have presented written consent of voluntary participation to the CDM project.

31. Credits GHG emissions avoided through IJ projects  ERUs GHGs emissions avoided through CDM projectsCERs Both credits can be sold and traded

32. Phases of JI and CDM Projects PLANNING PHASE Project’s Idea Validation Registration

33. Phases of JI and CDM Projects REALIZATION PHASE Realization Monitoring Verification Certification ERUs CreditsRelease CERs

34. International Emission Trading (IET) IET is an economic instrument for Annex I Partiesintended to trade and sell credits obtained through GHGs emissions reduction. Public Entities or private companies – to which an assigned amount is accorded on the basis of a national assignation plan – can trade: • Assigned Amount Units (AAUs); • Removal Units; • ERUs; • CERs. All these units are equivalent and each represents one metric ton of CO2 emissions.

35. Kyoto Protocol compliance in the EU (1) European Community identified climate change as a priority for action. Members of the Community have jointly committed to achieve an 8% reduction in GHG’s emissions by 2008 to 2012 (compared to 1990 levels). European Directive 2003/87 established an Emission Trading Scheme, in order to provide a more efficient GHG’s emissions trading within the Community. with the least possible diminution of economic development and employment

36. Kyoto Protocol compliance in the EU (2) Objective of the Emissions Trade System is to make more convenient for operators investing in clean technologies than buying emission allowances and paying emission penalties. European Community abandoned the method of “Command and Control” in approaching global warming and climate change issues, in favor of a “Market Based Instrument” (economic-financial instrument aimed to pursue environmental protection through marked based mechanisms).

37. European Directive 2003/87 Emissions Trading Scheme (1) Member States shall ensure that, from January 1st 2005, no installation undertakes any activity listed in Annex I, unless its operator has a permit issued by the competent Authority. For every 3 or 5 years period, each Member State shall develop a national plan stating the total quantity of allowances that it intends to allocate for that period. The plan shall be based on objective and transparent criteria, shall be approved by the Commission, and then published. The plan shall distribute allowances among operators (e.g. Companies). Any operator who does not deliver sufficient allowances by April 30 of each year, in order to cover its emissions, shall pay an excess emissions penalty.

38. Penalty Excess emission penalty for each ton of CO2 emitted by that installation for which the operator has not delivered allowances. Payment of the penalty shall not release the operator fromthe obligation to surrender an amount of emissions equal to those excess emissions, when surrendering allowances in relation to the following year. Penalty + reduction duty

39. ANNEX I - CATEGORIES OF ACTIVITIES TO WHICH DIRECTIVE 2003/87/EC APPLIES (examples) • Combustion of fuels in installations with a total rated thermal input exceeding 20 MW (except in installations for the incineration of hazardous or municipal waste) • Refining of mineral oil • Production of coke • Production or processing of ferrous metals and non ferrous metals (if some specific conditions are met) • Production of cement clinker • Manufacture of glass and ceramics • Aviation (flights which depart from or arrive in an aerodrome situated in the territory of a Member State to which the Treaty applies)

40. The EU climate and energy package The climate and energy package is a set of binding legislation which aims to ensure the European Union meets its ambitious climate and energy targets for 2020. These targets, known as the "20-20-20" targets, set three key objectives for 2020: • a 20% reduction in EU greenhouse gas emissions from 1990 levels; • raising the share of EU energy consumption produced from renewable resources to 20%; • a 20% improvement in the EU's energy efficiency. Today, wehave a new proposal from EuropeanCommission; targets for 2030: • 40% reduction of GHGsemissions; • 27% energy from renewableresources.

41. November 2011 COP-17: a shift in China’s position? • China has repeatedly stated that as a developing nation, with no historical responsibility for carbon emissions, it cannot be held to the same standards as industrialized countries; • US delegation said that any future global deal would have to be equally binding on all countries. Major developing country emitters, like China and India, must be part of any legally binding agreement, as a condition for negotiations; • At COP-17 Chinese delegation said China might be willing to sign a legally binding agreement for reducing emissions, post-2020, if other countries keep their commitments, and depending on China’s state of development.

42. COP-17: Canada’s withdrawal Canada’s decision to withdraw from the Protocol has been defined regrettable and surprising by the UNFCCC Executive Secretary. Developed Countries, whose emissions have risen significantly since 1990, have been urged to meet their responsibilities under the UNFCCC and “raise their ambition to cut emissions and provide the agreed adequate support to developing countries, to build their own clean energy future and adapt to climate change impacts they are already experiencing”. As the Secretary stated, these Countries – such as Canada - are not in the position to call on developing countries to limit their emissions. The Durban Agreement was signed by the Parties at COP-17. It consists in a package of decisions, known as the Durban Platform, which includes the launch of a protocol or another legal instrument that would apply to all members, a second commitment period for the existing Kyoto Protocol, and the launch of the Green Climate Fund.

43. November 2012 COP- 18: Doha, Quatar

44. Kyoto Protocol: critical evaluation (1) • According to some experts, Kyoto offers the wrong diagnosis, mistaking symptoms for causes: • It focuses only on GHG emissions produced by the burning of fossil fuels; • Kyoto’s objective should have been the creation of laws and policies for obtaining renewable and sustainable energy; • The fact that 85% of the burgeoning energy needs of the world are now (and will continue in the next 30 years to be) based on hydrocarbons [EIA, International Energy Outlook 2006] means that CO2 will continue to increase.

45. Kyoto Protocol: critical evaluation (2) 2.Kyoto failed to address a number of connected issues: • We live in a civilization built on oil and we are dependent upon oil for our most important life support systems from transport, food and agriculture, health and medicine, technology, to military security; • According to one estimate, world energy consumption is predicted to increase 71% from 2003 to 2030: natural resources of oil are limited and the increasing demand for conventional oil will no longer be able to meet demand; • In 2000, the U.S. Energy Information Administration estimated that oil would peak in 2037: if this would happen, it will cripple transport!

46. Kyoto Protocol: critical evaluation (3) 3. Kyoto assumed that the CO2 reduction could be found without the active participation of developing countries: • The importance of developing countries’ participation becomes self evident, since such countries (non OECD) will be consuming more energy than the OECD countries by 2015; • Instead, Kyoto directed developed (annex I countries) to reduce their GHG emissions by 5 to 7 % below 1990 levels between 2008 and 2012, but developing (non Annex I) countries were not subjected to these legal restrictions. • This will be probably the target of “Kyoto 2”

47. Kyoto Protocol: critical evaluation (4) • Many years after its entry into force, the results and impacts of Kyoto have been disappointing: • CO2 emissions continue to increase; • Overall the world developed countries have not reduced their emissions to anywhere near 5% below 1990 levels as required by Kyoto; • A recent authoritative study concluded that the impact on temperature increases, with all countries doing only what is required under Kyoto, would be a 3% reduction (0.06 °C to 0.11°C ).

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