The U.S. View FACT SHEET ON THE KYOTO PROTOCOL

t a conference held December 1–11, 1997, in Kyoto, Japan, the Parties to A the UN Framework Convention on Climate Change agreed to an historic Protocol to reduce greenhouse gas emissions by harnessing the forces of the global marketplace to protect the environment.

Key aspects of the Kyoto Protocol include weather, either of which could spike emissions targets, timetables for industrial- emissions in a particular year. ized nations, and market-based measures for meeting those targets. The Protocol • The first budget period will be makes a down payment on the meaning- 2008–2012. The parties rejected bud- ful participation of developing countries, get periods beginning as early as but more needs to be done in this area. 2003, as neither realistic nor achiev- Securing meaningful developing country able. Having a full decade before the participation remains a core U.S. goal. start of the binding period will allow more time for companies to make the transition to greater energy efficiency Emissions Targets and/or lower carbon technologies. A central feature of the Kyoto Protocol is a set of binding emissions targets for • The emissions targets include all six developed nations. The specific limits major greenhouse gases: carbon diox- vary from country to country, though ide, methane, nitrous oxide, and three those for the key industrial powers of the synthetic substitutes for ozone-deplet- European Union, Japan, and the United ing CFCs that are highly potent and States are similar—8 percent below 1990 long-lasting in the atmosphere. emissions levels for the European Union, 7 percent for the United States, and 6 • Activities that absorb carbon, such as percent for Japan. planting trees, will be used as offsets against emissions targets. “Sinks” The framework for these emissions tar- were also included in the interest of gets includes the following provisions: encouraging activities like afforesta- tion and reforestation. • Emissions targets are to be reached over a five-year budget period rather Accounting for the role of forests is than by a single year. Allowing emis- critical to a comprehensive and envi- sions to be averaged across a budget ronmentally responsible approach to period increases flexibility by helping climate change. It also provides the to smooth out short-term fluctua- private sector with low-cost opportu- tions in economic performance or nities to reduce emissions. The U.S. View FACT SHEET ON THE KYOTO PROTOCOL

International a group could further contribute to cost- Emissions Trading effective solutions to this problem. The Kyoto Protocol allows nations with emissions targets to trade greenhouse gas Joint Implementation allowances. Using this mechanism, Among Developed countries can achieve reductions at the Countries lowest cost. Emissions trading was devel- Countries with emissions targets may oped in the United States to reduce sul- obtain credit toward their targets through fur dioxide that causes acid rain and has project-based emission reductions in been successful beyond expectations. other such countries. The private sector may participate in these activities. Under an emissions trading regime, countries or companies can purchase less Additional details may be agreed upon expensive emissions permits from coun- by the Parties at future meetings. tries that have more permits than they need (because they have met their targets with room to spare). Structured effective- Clean Development Mechanism ly, emissions trading can provide a pow- erful economic incentive to cut emissions Another important market-based com- while also allowing important flexibility ponent of the Kyoto Protocol is the so- for taking cost-effective actions. called Clean Development Mechanism (CDM). The CDM embraces the con- The Kyoto Protocol established emis- cept of joint implementation for credit sions trading. Rules and guidelines—in in developing countries. With the Clean particular for verification, reporting, and Development Mechanism, developed accountability—will be developed. countries will be able to use certified emissions reductions from project activi- The inclusion of emissions trading in the ties in developing countries to con- Kyoto Protocol reflects an important tribute to their compliance with green- decision to address climate change house gas reduction targets. through the flexibility of market mecha- nisms. The Conference rejected proposals This Clean Development Mechanism to require all Parties with targets to will allow companies in the developed impose specific mandatory measures, such world to enter into cooperative projects as energy taxes. A number of countries, to reduce emissions in the developing including Australia, Canada, Japan, New world—such as the construction of Zealand, Russia, Ukraine, and the United high-tech, environmentally sound power States, reached a conceptual agreement to plants—for the benefit of both parties. pursue, through an umbrella group, the The companies will be able to reduce implementation of a trading regime. Such emissions at lower costs than they could

2 The U.S. View FACT SHEET ON THE KYOTO PROTOCOL

at home, while developing countries will Protocol identifies various sectors be able to receive the kind of technology (including the energy, transport, and that can allow them to grow more sus- industry sectors as well as agriculture, tainably. The CDM will certify and forestry, and waste management) in score projects. The CDM can also allow which national programs should be developing countries to bring projects developed to combat climate change. forward in circumstances where there is The Protocol also provides for more no immediate developed country partner. specific reporting on actions taken.

Under the Clean Development Mechan- Securing meaningful participation from ism, companies can choose to make key developing countries remains a pri- investments in projects or to buy emis- ority for the United States. The sions reductions. In addition, Parties will Administration has stated that without ensure that a small portion of proceeds such participation, it will not submit the are used to help particularly vulnerable Kyoto Protocol to the Senate for advice developing countries, such as island and consent to ratification. states, adapt to the environmental conse- quences of climate change. Compliance and Enforcement Importantly, certified emissions reductions achieved starting in the year 2000 can The Protocol contains several provisions count toward compliance with the first intended to promote compliance. These budget period. This means that private include requirements related to measure- companies in the developed world will be ment of greenhouse gases, reporting, and able to benefit from taking early action. review of implementation.

The Protocol also contains certain con- Developing Countries sequences for failure to meet obligations. Various Protocol provisions, taken togeth- For example, a Party that is not in com- er, represent a down payment on develop- pliance with its measurement and ing country participation in efforts to reporting requirements cannot receive reduce greenhouse gas emissions. credit for joint implementation projects.

Developing countries will be engaged Effective procedures and a mechanism to through the Clean Development determine and address noncompliance Mechanism noted above. are to be decided at a later meeting. For both environmental and competitiveness The Protocol advances the implementa- reasons, the United States will be work- tion by all Parties of their commitments ing on proposals to strengthen the com- under the 1992 Framework Convention pliance and enforcement regime under on Climate Change. For example, the the Protocol.

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Entry Into Force became the first developing country to The Kyoto Protocol opened for signa- announce its intention to take on a bind- ture in March 1998. To enter into force, ing emissions target for the 2008–2012 it must be ratified by at least 55 coun- time period. Kazakhstan announced that tries, accounting for at least 55 percent it intended to do so as well. of the total 1990 carbon dioxide emis- During the Buenos Aires conference, on sions of developed countries. U.S. ratifi- November 12, 1998, the United States cation will require the advice and con- signed the Kyoto Protocol at the United sent of the Senate. Nations in New York. Signing reaffirms the United States’ commitment to work Buenos Aires with other nations to meet the Protocol’s Action Plan ambitious environmental goals and At the Fourth Session of the Conference of ensures a continued strong U.S. role in the Parties (CoP-4) held November 2–13, settling issues left unresolved at Kyoto. 1998, in Buenos Aires, Argentina, the Signing does not impose an obligation Parties to the UN Framework Convention on the United States to implement the on Climate Change agreed to a two-year Kyoto Protocol. (The Protocol cannot action plan for advancing the ambitious become binding on the United States agenda outlined in the historic Kyoto without the approval of the United Protocol. States Senate.) The President will not submit the Protocol to the U.S. Senate CoP-4 also saw a significant break- for approval without the meaningful through on the issue of developing coun- participation of key developing countries try participation in international efforts in efforts to address climate change. to address climate change. Argentina

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