More could be done to implement the Kyoto Protocol's three mechanisms meant to increase flexibility and share the burden in the struggle to combat global climate change.

The need to control climate change by reducing the world’s emissions of greenhouse gases is now accepted throughout the international community. One of the toughest problems in getting an international agreement to do so has been how to share the responsibility between the developed and developing world. Does the Kyoto Protocol have the solution?

Kyoto Mechanisms

The Kyoto Protocol was drawn up in 1997 and came into force in February 2005. At its heart the Protocol requires that by the period 2008-2012 a group of 40 developed countries will have reduced their greenhouse gas emissions by five percent below their 1990 levels. While the Protocol commits the developing countries to adopt appropriate policies to control their emissions, those countries are not committed to specific emissions targets.

The Protocol hands most of the responsibility for reducing emissions to the developed countries, but reductions anywhere in the world will ultimately have the same effect on the atmosphere and threats of global warming. Moreover some developed countries might find it easier and more cost effective to support emissions reductions in other developed or developing countries rather than at home.

Therefore the Kyoto Protocol includes three mechanisms to introduce flexibility to the developed countries’ approach and allowing them to make the most cost-effective emissions reductions without softening their commitment to the Protocol’s overall goals.

The Clean Development Mechanism

The CDM allows developed countries to pay for projects in developing countries that will control their emissions as their economies grow. Projects are assessed at certain levels of “Certified Emissions Reductions” that are set against the developed countries’ reduction commitments.

Projects may be modifications to existing installations to reduce their emissions, or new projects based on low- or zero-emissions technology. Since October 2005 538 projects have been initiated, with a total expected Certified Emissions Reduction of 197 million tons of CO2 equivalent over the projects’ lives. Of this total, China accounts for 49% in 171 projects and India 15% in 321 projects.

54 percent of projects are in the energy sector and 21 percent in waste management. So far only a single forestation project has been registered under the CDM, and only 3 percent of the projects are in sub-Saharan Africa.

Joint Implementation

The second Kyoto Mechanism provides for one developed country helping another developed country, usually part of the former USSR, to implement specific projects with low levels of emissions, either to replace or upgrade an existing high-emission facility or to adjust the design of a new project so as to lower its expected emissions. 126 project JI proposals were submitted by March 2008.

Two early examples will change from a wet to a dry process at a Ukraine cement works, reducing energy consumption by 53 percent by 2008-2012; and rehabilitate a Bulgarian hydropower project, with a 267,000 ton reduction of CO2 equivalent during 2008-2012.

In both these cases including the expected value of the emission reduction units in the investment analysis made the projects financially viable.

Emissions Trading

The Kyoto Protocol provides for developed countries to buy emissions reduction units if they cannot otherwise meet their emissions targets, and to sell them if they expect to exceed their targets. This enables countries for which reducing emissions levels is expensive to buy emission reduction units from countries where costs are lower, thus lowering the overall costs of reducing emissions.

Transfers and acquisitions of these units are tracked and recorded through national registry systems. Trading is also open to companies or other non-governmental organizations under the supervision of their respective countries.

In practice, most emissions trading has taken place within the framework of the EU Emissions Trading System, encompassing the 25 member states and, from 2008, another four non-EU members. The ETS allows members to use credits from the CDM and JI projects to cover their emissions.

Strengthening the Kyoto Mechanisms

The Mechanisms were not intended as a soft option for the developed countries, or to be used as more than “supplemental to domestic action” to achieve their reduction targets. Nevertheless the UNFCCC believes much more could be done through the CDM mechanism to promote projects in developing countries that reduce emissions or enhance carbon sinks through afforestation or reforestation.

The Nairobi Framework was launched in 2006 to help developing countries, especially in sub-Saharan Africa, to participate more in the CDM. The CDM Bazaar under the umbrella of the UNEP has been set up to facilitate the process of identifying, designing and submitting projects for CDM support. It remains to be seen how effective these initiatives will be.