Questions & Answers: The entry into force of the Kyoto Protocol

What is required for the Kyoto Protocol to enter into force?

The Kyoto Protocol is an international treaty agreed in 1997 by the Parties to the 1992 United Nations Framework Convention on Climate Change (UNFCCC) as a protocol to this Convention. Its entry into force is governed by rules agreed on by the UNFCCC Parties. The rules demand that at least 55 Parties to the UNFCCC ratify the Kyoto Protocol and that those include industrialised countries accounting for at least 55% of CO2 emissions among industrialised countries in 1990.

While so far 126 countries have ratified, the industrialised countries among them account for only 44.2% of CO2 emissions by industrialised countries in 1990. Apart from the US, which accounted for 36.1% but withdrew from the Protocol in 2001, only Russia - accounting for 17.4% - can bring the Protocol into force.[1]
Following the Russian State Duma's positive vote on Kyoto ratification, what are the next steps necessary for it to enter into force?

The Duma now has five days to pass the bill to the Council of the Federation, the upper house of the Russian Parliament - the Council must consider federal laws that ratify international treaties. If the Council, as expected, also approves the ratification, it has five days to pass the bill to the Russian President. He in turn has 14 days to sign it into law. After Russia deposits its instrument of ratification with the UN, the Kyoto Protocol will come into effect 90 days later. This means that the Protocol could enter into force early next year.
How many countries have ratified the Kyoto Protocol and what are their obligations?

So far, 126 countries have ratified the Protocol.

Based on provisions in the UNFCCC, the Protocol differentiates between industrialised and developing countries. Industrialised countries have to achieve binding greenhouse gas[2] emission targets during the "first commitment period", which runs from 2008 to 2012. Developing countries are also required to limit their emissions, but have no targets.

This distribution reflects the UNFCCC principle of "common but differentiated responsibilities": industrialised countries are responsible for most of the global greenhouse gas emissions and also have the institutional and financial capacities for reducing them, so they have to take the lead.

Among the 126 countries that have ratified the Protocol are 33 industrialised countries with targets. They include all EU Member States except Cyprus and Malta, which as yet have no targets.

The EU-15 reduction target is 8% below 1990 levels until 2008-2012. This target is shared between the EU-15 Member States under a legally binding burden-sharing agreement, which sets individual emissions targets for each of them.[3] With regard to the new Member States, the Baltic States, the Czech Republic, Slovakia and Slovenia have to achieve reductions of 8% below 1990 levels; Hungary and Poland reductions of 6% below 1990 levels; and Cyprus and Malta have currently no targets.
What will change when the Kyoto Protocol comes into force?

Once the Protocol is in force, the industrialised countries with targets will be legally obliged to reduce their greenhouse gas emissions.

Kyoto's entry into force will also trigger the early start-up of several market-based instruments envisaged by the Protocol, which will create global emissions trading markets. These instruments will allow the Parties with reduction targets to meet their commitments cost-effectively, but also help developing countries to limit their emissions. The instruments include:
international emissions trading under which countries with targets will be able to buy and sell emissions credits among themselves; this will keep reduction costs low;
the "Clean Development Mechanism" (CDM) under which countries with targets will be able to carry out emission reduction projects in countries without targets and count the achieved reductions against their own targets; this too will help keep costs low and at the same time assist developing countries in building their economy and social development on a climate-friendly path;
"Joint Implementation" (JI) under which countries with targets will be able to carry out emission reduction projects in other countries with targets and count the achieved reductions against their own targets; this, too, is a cost reduction measure that will help spread clean technologies.

In addition, the entry into force of the Kyoto Protocol will reinvigorate global efforts to combat climate change. At least 126 countries will be co-operating with each other in reducing greenhouse gases, signalling to the rest of the world that this is not only possible, but can also be done in a cost-effective way.

It will also provide the legal base for international negotiations on a climate change regime post-2012 to start next year. The reductions envisaged by the Protocol are only a modest first step, but the implementation of the Protocol is vital for getting started to fight climate change. Particularly the flexible mechanisms CDM and JI have never been tried on an international scale. Thus, implementing the Protocol will provide important lessons for designing a cost-effective global climate policy post 2012.

Furthermore, the Protocol's entry into force will send a strong political signal around the world that there is increasing political will to move towards a global ?climate-friendly? economy. This alone will provide additional incentives for the private sector and the research community to drive innovation and develop competitive and clean technologies for the future.
How will EU citizens notice that the Kyoto Protocol has come into force?

As a strong supporter of the Kyoto Protocol and convinced that the best way is to lead by example, the EU has already passed legislation that makes all the Protocol's provisions legally binding in the EU. All Member States have reduction targets under EU law, already report emission trends as required by the Protocol, and there are also instruments, such as the EU emissions trading scheme, which will allow the EU as a whole, as well as each Member State, to achieve their Kyoto targets cost-effectively - presupposing that the efforts at EU level are complemented by national action.

Insofar, EU citizens will not notice any changes as compared to a situation in which the Protocol were not in force. But regardless of the Protocol's status, the coming years will see more discussions about climate change and more measures to reduce greenhouse gas emissions because the effects of climate change are likely to increase in frequency and intensity. Many of those will now take place in the framework of the Protocol.
What will happen if a country with a target misses it?

The compliance regime for the Kyoto Protocol is among the most comprehensive and rigorous in the international arena. If a Party fails to meet its emissions target, the Protocol requires it to make up the difference in the second commitment period, with an additional 30% penalty. It must also develop a compliance action plan, setting out the actions that it will take to meet the target and the timetable for doing so. In addition, its eligibility to ?sell? under the Kyoto Protocol?s international emissions trading will be suspended.

The EU's target under Kyoto is collective (a reduction of 8% below 1990 levels), applying to the 15 Member States that were Member States when the Protocol was negotiated. But under EU law this target is shared between the EU-15 Member States under a legally binding burden-sharing agreement (see question 3). If one of these 15 Member States misses its target, the European Commission can decide to start an infringement procedure, which may, in the end, result in daily fines imposed by the European Court of Justice.

For these EU-15 Member States, the Kyoto Protocol compliance procedures will only apply if the EU-15 as a whole misses its 8% reduction target. Should this occur, then each Member State will be held to its target under the burden-sharing agreement, and the EU as a whole will be in non-compliance with its obligation to reach the -8% target.

The ten new Member States, to which the EU?s burden sharing agreement does not apply, are bound to their individual targets as set out in the Kyoto Protocol, both under the Kyoto Protocol?s non-compliance procedures and under EU law.
What will happen after 2012? Will there be new targets?

Discussions on post-2012 are due to start next year. In September 2004, the European Commission launched a stakeholder consultation to gather ideas, thoughts and research results from stakeholders with regard to the global climate change regime in the future, and there will be a stakeholder conference on 22 November.[4] The comments and information gathered will feed into a report by the Commission on medium and long term strategies to address climate change, including targets, which in turn will provide the basis for discussions at the traditional Spring Meeting of EU leaders in March 2005. The heads of state and government are expected to provide guidance on what the global climate change regime should look like in the future.

What is clear already now is that the greenhouse gas reductions required by Kyoto from industrialised countries will not be enough. The EU's target is to limit the increase in global average temperature to 2°C above pre-industrial level - an increase believed to be within our adaptive capacities. The accomplishment of this target will require much greater reductions: in the order of 50-70% compared to 1990.

It seems also already clear that the future regime should include more countries than Kyoto does - notably the United States and some developing countries - and that more countries than currently under Kyoto will at some point have to take on measurable reduction commitments, according to their "common but differentiated responsibilities."
Is it true that Russia can make money from the Kyoto Protocol?

When the Kyoto Protocol enters into force, any Party to the Protocol with a target will be able to participate in the Kyoto mechanisms: international emissions trading, Clean Development Mechanism and Joint Implementation (see question 4).

The Kyoto Protocol requires that Russia do not exceed the 1990 levels of its greenhouse gas emissions during 2008-2012. Currently, Russia?s greenhouse gas emissions are some 30% below 1990 levels. This means that Russia will have a significant surplus of emission quotas that it can sell to other countries with targets when international emissions trading starts.

The amount of money that Russia can earn by selling emission credits under the Kyoto Protocol will depend on the total amount of quotas it decides to sell and the market price of such quotas. Russia will be the dominant seller on such a market and therefore has the possibility to influence the price, for example by saving some of its quotas for later commitment periods. Besides the EU, Canada and Japan will also be looking for emission credits from Russia. So it is really in Russia?s hands to decide when and how it wants to benefit from the Kyoto Protocol.

Russia can also invite other countries with emission targets to carry out emission reductions projects in Russia - Joint Implementation projects - from which Russia can sell emission credits. JI is an excellent opportunity to make Russian industry, especially in the energy sector, more efficient and less pollution-intensive.

At the same time it could help industry and municipalities to modernise and acquire new technology, for example in the district heating sector. There is a great interest in the EU to do such project in Russia. Several European countries, such as the Netherlands, Denmark, Sweden, Finland and Italy are already preparing for this.
On the other hand, some people in Russia say that by ratifying Kyoto Russia will commit itself to costly emission reductions that it cannot afford. What about this argument?

One reason why the Kyoto Protocol gives Russia a generous emission target is that it recognises the fact that Russia?s fall in greenhouse gas emissions since 1990 has occurred to a large extent because of a decline in energy and industrial output and that these changes have led to economic hardships. According to the Russian government?s own estimates in its Energy Strategy until 2020, Russia is not likely to reach 1990 emission levels before 2020. Even if Russia?s GDP doubles in the next ten years, which would be accompanied by an increase in emissions, Russia would still have a substantial surplus of emission credits to sell to other countries. The Kyoto Protocol only concerns the period 2008-2012. By ratifying the Kyoto Protocol, Russia does not commit itself to any emission reductions beyond 2012.
Can the EU Emissions Trading Scheme start before the Kyoto Protocol enters into force?

Yes. The European Emissions Trading Scheme is based on a Directive which entered into force in October 2003. It is part of the EU?s general policy on climate change and, as such, does not depend on the entry into force of the Kyoto protocol. The scheme will start in January 2005.

See also MEMO/04/44 on emissions trading.


[1] For ratification status, see

http://unfccc.int/essential_background/kyoto_protocol/status_of_ratification/items/3135.php


[2] The Kyoto Protocol regulates emissions of six greenhouse gases: carbon dioxide (CO2), which is the most important one, as well as methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride.

[3] Council Decision 2002/358/EC of 25 April 2002

[4] See http://www.europa.eu.int/comm/environment/climat/future_action.htm and http://www.europa.eu.int/comm/environment/climat/registration.htm