PRESS BRIEFING ON KYOTO PROTOCOL

Press Briefing

PRESS BRIEFING ON KYOTO PROTOCOL

The Protocol to the United Nations Framework Convention on Climate Change, which was opened for signature today at Headquarters, paved the way for the development of a global market in emissions permits that would join other financial instruments traded internationally, the Executive Secretary of the Bonn-based secretariat of the Convention, Michael Zammit Cutajar, told correspondents at a Headquarters press briefing this afternoon.

The Kyoto Protocol, which was adopted in the city of Kyoto on 11 December 1997, will remain open for signature at Headquarters through 15 March 1999. It contains legally binding emissions targets for developed countries for the post-2000 aimed at reducing the emissions levels of key greenhouse gases -- most importantly, carbon dioxide, methane, and nitrous oxide.

Mr. Cutajar said that the Protocol was signed this morning by representatives of Maldives, Samoa, and Antigua and Barbuda. Switzerland, Saint Lucia and Argentina were expected to be among the signatories by the end of the day. The strong representation by island developing countries was not surprising, given their vulnerability to the adverse effects of climate change. The political key to the Protocol, however, was not its signing, but its ratification.

An interesting element of its entry into force was the need for weight and not just numbers, he said. While it required ratification by 55 parties, those had to include developed countries that together represented at least 55 per cent of the total carbon dioxide emissions of that group of countries. The overall commitment adopted by developed countries in Kyoto was to reduce their emissions of greenhouse gases by some 5.2 per cent below 1990 levels by a budget period of 2008 to 2012. While that percentage did not seem significant, it represented emissions levels that were about 29 peer cent below what they would have been in the absence of the Protocol. That was "really a significant bite" in the emissions of gases, which were an integral part of industrialization.

He said that one measure of the economic importance of the Kyoto Protocol was that it not be perceived as a traditional instrument for conserving an environmental resource, but rather as an attempt to shift the world economy onto a more sustainable path. Another measure of its economic importance were the options available to developed countries to achieve that "big reduction". They could undertake technological measures to reduce emissions or induce changes in consumption patterns, or they could go out and buy those reductions elsewhere through various market mechanisms. Much remained to be done on the "unfinished business" of Kyoto, which included launching and defining those market mechanisms. In addition, many countries had expressed the need to progress beyond the present generation of commitments to a new one that would

include deeper cuts by developed countries, as well as the progressive involvement of developing countries.

Asked about his confidence in obtaining the necessary 55 signatures in the short term, and how many were expected in the coming weeks, Mr. Cutajar said that the Protocol was opened for signature for 12 months as of today, adding that countries had the option of acceding to it after that period. So, there was no real need to set targets. What was really important was the ratification by 55 States, which would likely take years rather than months. Moreover, given the political importance of that instrument, including the political attention it was getting in the United States, its entry into force would likely take some time. The United States accounted for a "very weighty" 36 per cent of the carbon dioxide emissions of developed countries.

Replying to a question about the specific tasks that lay ahead for the upcoming meetings in Bonn and in Buenos Aires, Mr. Cutajar said that the Bonn meeting would be one of regrouping and resuming the pre-Kyoto agenda, for example, the reporting by States parties about domestic activities in the area of climate change, a key element of the Convention. Reporting by developing countries was still being elaborated, including, in particular, the method for reviewing such reports. Another topic was the confirmation of the Global Environment Facility as the "financial operator" under the Convention.

Continuing, he said that the decisions adopted in Kyoto had given rise to a new series of mandates, which were perceived as the core of the Buenos Aires agenda. Specifically, those concerned the three new mechanisms for the "offshore implementation" of the Protocol. Those involved the joint implementation among developed countries, whereby, for example, Norway could get credit for activities undertaken in Poland. There was a similar arrangement under the heading of the "clean development mechanism", which extended to developing countries. In such cases, for example, the United States could get credit for an arrangement it undertook in China. Then, there was emissions trading whereby countries could trade parts of their commitments with each other. "Putting flesh on those bones" would be the main focus of the Argentina conference. Another issue might be the question of extending commitments to developing countries, voluntarily or otherwise. "And that, of course, was the hot potato", he added.

Concerning the relative weight of the United States, and given its wariness about some parts of the Convention, was it possible to have a successful climate control convention without adherence by the United States? another correspondent asked. Mr. Cutajar said that, no, it is not possible. The United States was "an essential part of the solution", and it was too important in the world economy and in the world's carbon economy for a climate regime to function well without it on board. Among those countries that had undertaken commitments in that regard, the United States was the biggest emitter, followed by the Russian Federation. In the long run, China, India and other large developing countries were likely to catch up as big emitters.

Kyoto Protocol Briefing - 3 - 16 March 1998

Overall, it was important, one way or the other, to get all the big players on board.

Did he think that the oil-producing countries would be less able to sign the Protocol this year, and how was the Protocol expected to affect oil prices? another correspondent asked. He said signing by oil producers was not currently being sought. They had all along expressed concerns about the effect of measures to reduce emissions, notably of carbon dioxide, on their exports. However, the oil exporters were part of the consensus in Kyoto, which was the first time that a major decision under the Climate Change Convention was adopted in unanimity.

Another correspondent sought clarification on the ratification process. He said that while there was no time limit for ratifying the Protocol, whenever something dragged on too long, it ran out of political steam. The Convention had entered into force within two years of its adoption, but the Protocol was more difficult because "it really bites". While the Convention provided an overall framework, the Protocol had a legally binding commitment which carried with it economic consequences. It was also tied up with politics and was, therefore, expected to take longer. His best guess was that the "millennium would turn" before the Protocol entered into force. Moreover, much remained to be done to construct the mechanisms in a way that would enable their activation upon the Protocol's entry into force.

To a follow-up question concerning the remaining work needed to "put flesh on the bones", he said that one important issue was building confidence in a new market, such as the one envisaged by the Protocol. Another issue involved the trading of portions of permits between States. Although that simple trade could be done on the back of an envelope, the introduction of private traders buying and selling emissions permits across boundaries required measures of national accountability. In other words, it was crucial to be able to trace the myriad of individual sales to the commitment of a certain country. He recalled that he had been asked whether the Protocol gave rise to a United Nations "climate police". He had said then that it would, by no means, do so, although the development of a new market required rules in order to build confidence, and accountants in order to ensure that those rules were respected.

* *** *