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INTERNATIONAL ENVIRONMENTAL LAW GLOBAL CLIMATE CHANGE: THE KYOTO PROTOCOL

UNIVERSITY OF PADUA FACULTY OF ENGINEERING Second Cycle Degree in Environmental Engineering 2010-2011. INTERNATIONAL ENVIRONMENTAL LAW GLOBAL CLIMATE CHANGE: THE KYOTO PROTOCOL dott.ssa Manuela Molinaro B&P Avvocati manuela.molinaro@buttiandpartners.com www.buttiandpartners.com.

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INTERNATIONAL ENVIRONMENTAL LAW GLOBAL CLIMATE CHANGE: THE KYOTO PROTOCOL

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  1. UNIVERSITY OF PADUAFACULTY OF ENGINEERING Second Cycle Degree in Environmental Engineering 2010-2011 INTERNATIONAL ENVIRONMENTAL LAW GLOBAL CLIMATE CHANGE:THE KYOTO PROTOCOL dott.ssa Manuela Molinaro B&P Avvocati manuela.molinaro@buttiandpartners.com www.buttiandpartners.com

  2. GLOBAL CLIMATE CHANGES:THE KYOTO PROTOCOL. INDEX • INTRODUCTION: INCREASING GHGs • TIMELINE: THE INTERNATIONAL CLIMATE CHANGE REGIME • 1992 EARTH SUMMIT: THE UNFCCC • KYOTO PROTOCOL

  3. 1. INTRODUCTION: GHGs EMISSIONS – EXTENT AND CONSEQUENCES • The greenhouse effect: • the earth’s surface reflects solar energy upwards • Greenhouse gases (GHGs) reradiate the energy they absorb in all directions, including towards the earth surface • this mechanism allows GHGs to trap some of the energy radiated by the surface, increasing the equilibrium temperature of the earth • In the right quantities, GHGs help support life and ecosystems on earth; but a build-up of GHGs can upset this important equilibrium and cause a rise in surface temperature • Responsible gases: water vapor, CO2, CH4, CFCs, N2O, O3

  4. 1. INTRODUCTION: GHGs EMISSIONS – EXTENT AND CONSEQUENCES • The increase of GHGs is the main cause of global warming. Other consequences are: • extreme weather events • aridity and increase of desert • increase of see level • Human responsibilities: use of fossil fuels, cement production, deforestation … • IPCC reports: • 1990: IPPC foresaw an increase of temperature of 0.3°C for each period of 10 years (more recent reports: increase of 0.2°C every 2 years) • Increase of see levels: 20 cm in 2030, 65 cm in 2100

  5. 2. TIMELINE: THE INTERNATIONAL CLIMATE CHANGE REGIME • 1979: First World Climate Conference • 1988: IPCC established • 1992: UNFCCC signed at Earth Summit • 1994: UNFCCC enters into force • 1995: Berlin Mandate agreed at COP-1 • 1997: Kyoto Protocol concluded at COP-3 • 2001: U.S. repudiates Kyoto Protocol

  6. 2. TIMELINE: THE INTERNATIONAL CLIMATE CHANGE REGIME • 2001: Marrakech Accords adopted at COP-7 • 2004: Russian Federal ratifies the Kyoto Protocol • 2005: Kyoto Protocol enters into force • 2005: EU Emissions Trading Scheme comes online • 2007: Bali Road Map • 2009: Copenhagen Conference (COP-15) • 2010: Cancun Conference (COP-16)

  7. 3. 1992 EARTH SUMMIT: THE UNFCCC • The United Nations Framework Conference on Climate Change was signed at 1992 Earth Summit. The conference stated the first main remedies for global warming Article 2 “The ultimate objective of this Convention and any related legal instruments that the Conference of the Parties may adopt is to achieve, in accordance with the relevant provisions of the Convention, stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Such a level should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner”

  8. 3. 1992 EARTH SUMMIT: THE UNFCCC • In 1990 the UN General Assembly created the Intergovernmental Negotiating Committee: the UNFCCC was concluded after 2 years • The short negotiating period, combined both with the enormous economic stakes and a substantial amount of scientific uncertainty, resulted in the adoption of only cautious controls in the final version of the treaty • However, UNFCCC is not an empty framework treaty! • At that time, States were not ready to adopt specific commitments to reduce GHGs emissions: they accepted general commitments and created the basis for more specific instruments

  9. 3. 1992 EARTH SUMMIT: THE UNFCCC • The UNFCCC adopted for the first time the principle of “common but differentiated responsibility” (art. 3,1): • only international cooperation will help to resolve a problem of the magnitude of global warming, but in responding to the problem different states have different social and economic conditions • developed countries share the main responsibility with regard to GHGs emissions

  10. 3. 1992 EARTH SUMMIT: THE UNFCCC In implementing the concept of CBDR, the UNFCCC creates several classes of parties through annexes. • ANNEX I: includes the wealthier Organization for Economic Cooperation and Development (OECD) countries, and the former Eastern Bloc countries “undergoing the process of transition to a market economy” • ANNEX II: only OECD countries

  11. 3. 1992 EARTH SUMMIT: THE UNFCCC • COMMITMENTS OF ANNEX I PARTIES (OECD AND FORMER EASTERN BLOC PARTIES) • Aim to return to 1990 emissions levels for all GHGs by the year 2000 • COMMITMENTS OF ALL PARTIES (DEVELOPED AND DEVELOPING COUNTRIES) • Promote and cooperate in the conservation and enhancement, as appropriate, of sinks and reservoirs of all greenhouse gases • Cooperate in preparing for adaptation to the impacts of global warming • Promote and cooperate in research and development, exchange of information and education, training and public awareness • Take climate change considerations into account in domestic policies and actions, employing appropriate methods of environmental impact assessment • Create national programs to mitigate climate change by addressing GHGs emissions

  12. 3. 1992 EARTH SUMMIT: THE UNFCCC • Many political issues arose in facing the problem of the reduction of GHGs emissions • Based on specific problems and situations, different alliances were created: • AOSIS: Alliance on Small Islands (the impact of global warming on these islands is particularly strong) • SINKS: alliances between States with an important presence of sinks (Brazil, Malaysia…) • OIL RESOURCES (alliances among institutions as OPEC and States as USA…) These alliances arose because the framework convention (UNFCCC) and the Kyoto Protocol could influence the energy system based on fossil fuels (seeking alternative solutions to reduce oil production and consumption)

  13. 3. 1992 EARTH SUMMIT: THE UNFCCC THE COMPREHENSIVE APPROACH • In the original push towards the creation of the UNFCCC, the international community generally limited its focus to the reduction of CO2emissions. • Late in the negotiation game, the United States presented a different approach: parties could choose any mix of GHGs reductions and removals by sinks in meeting their respective commitment to reduce their contribution to global warming. • In the end, the UNFCCC adopted the comprehensive approach presented by USA

  14. 3. 1992 EARTH SUMMIT: THE UNFCCC INSTITUTIONS • the Conference of the Parties (COP) is the supreme body of the UNFCCC • it possesses the legislative power to create additional protocols and amendments to the convention • it must facilitate the development of joint implementation projects between parties • it must continue to monitor the individual obligations of the parties

  15. 3. 1992 EARTH SUMMIT: THE UNFCCC INSTITUTIONS • The Secretariat of the UNFCCC serves as the administrative arm of the COP • It works to organize new meetings of the COP, to compile and transmit reports submitted by the Parties and to help finding assistance for developing countries in compiling their respective reports • The Subsidiary Bodyfor Scientific and Technological Advice (SBSTA) has the primary function to advise the COP on technical matters • It plays an important information role towards the COP • It must continually assess the state of scientific knowledge concerning climate change and the effects of measures taken under the convention

  16. 3. 1992 EARTH SUMMIT: THE UNFCCC HISTORY • The first UNFCCC COP (COP-1) assembled on March 28, 1995, in Berlin to address additional commitments, financial mechanisms, technical support to developing countries, administrative and procedural issues involving climate change • Under the BERLIN MANDATE developed countries agreed to future negotiation of a protocol containing express targets and timetables for emissions reductions • COP-2, convened in July 1996, produced several important developments; in particular the U.S. shifted its position toward a legally-binding agreement to accomplish the objectives of the Berlin Mandate and the UNFCCC

  17. 4. THE KYOTO PROTOCOL HISTORY • Significant steps in the global response to climate change where taken at COP-3 in Kyoto in 1997 • The Kyoto Protocol, adopted at the end of COP-3, entered into force on February 16, 2005 Art. 25: the Protocol enters into force “on the ninetieth day after the date on which not less than 55 Parties to the Convention, incorporating Parties included in Annex I which accounted in total for at least 55% of the total carbon dioxide emissions for 1990 of the Annex I countries, have deposited their instruments of ratification, acceptance, approval or accession” • As of November 2009, 186 countries and one regional economic organization (the EC) have ratified the agreement, representing over 63.9% of the 1990 emissions from Annex I countries. The U.S. signed the protocol, but it has not ratified it! (U.S. was responsible for 36.1% of the 1990 emission levels of Annex I countries)

  18. 4. THE KYOTO PROTOCOL CONTENT • Under the Protocol, Annex I countries have committed themselves to reduction targets (formally called "quantified emission limitation and reduction objectives”) • Targets were set in relation to 1990 emission levels(benchmark) • The general target is the reduction of GHGs emissions by at least 5% below the 1990 between the years 2008 and 2012 (the so call “commitment period”) • Individual targets are provided: each state should not exceed its ASSIGNED AMOUNT (AA) (e.g. if the AA of a State is “92”, the State should reduce GHGs emissions by 8% below the 1990 level. Multiplying by 5 the Assigned Amount it’s possible to obtain the total amount of GHGs that the State can release in the commitment period 2008-2012)

  19. 4. THE KYOTO PROTOCOL CONTENT • In addition to binding emission reduction targets for Annex I countries, the Kyoto Protocol contains three “flexibility mechanisms”: • Joint implementation (JI – art. 6) • Clean Development Mechanism (CDM – art. 7) • International Emissions Trading (IET - art. 17) The flexibility mechanisms permit to lower the cost of compliance to Kyoto’s commitments by allowing emission reductions to take place where they have the lowest possible costs

  20. 4. THE KYOTO PROTOCOL CONTENT • Annex I countries shall individually or jointly reduce their aggregate GHGs emissions • To meet the specific reduction commitments, each Party included in Annex I can use removals by sinks resulting from direct human-induced land-use change and forestry activities, limited to forestation, reforestation and deforestation since 1990 • Burden sharing agreements: parties can reach an agreement to fulfil their commitments jointly (e.g. European Community)

  21. 4. THE KYOTO PROTOCOL JOINT IMPLEMENTATION (JI) • Annex I parties are permitted to fulfil their reduction obligation by transferring to, or acquiring from, other Annex I parties, emission reduction units resulting from projects in any sector of the economy • These kind of projects are generally realized in the former Eastern Bloc countries (where costs are lower) • The AA amounts of the two countries involved in each projects remain the same.

  22. 4. THE KYOTO PROTOCOL JOINT IMPLEMENTATION (JI) • Objective of the JI mechanism: to reduce the comprehensive cost of fulfillment of Kyoto targets • GHGs emissions avoided through the realization of these projects generate “Emissions Reduction Units” (ERUs), that can be sold to other Parties or collected.

  23. 4. THE KYOTO PROTOCOL JOINT IMPLEMENTATION (JI) • 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 carbon dioxide 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.

  24. 4. THE KYOTO PROTOCOL JOINT IMPLEMENTATION (JI) Some requirements of a JI project : • The projects shall permit an emission reduction of at least one of the GHGs listed in the Kyoto Protocol • The reduction of GHGs emissions shall be additional to any that would otherwise occur in the absence of the certified project activity • Nuclear projects are excluded • The verification of reductions in GHGs emissions shall occur through the verification procedure under a Supervisory Committee • The project shall comply with the guidelines set for JI projects by the Supervisory Committee

  25. 4. THE KYOTO PROTOCOL CLEAN DEVELOPMENT MECHANISM (CDM) • Under the Clean Development Mechanism, Annex I countries may comply with their own reduction targets by engaging in projects in non-Annex I countries • In 1990 (the benchmark) China and India were not considered developed countries, so that they were not included in Annex I Objectives of the CDM mechanism: • Developing countries can have clean technologies at their disposal and pursue the target of sustainable development; • the comprehensive costs deriving from Kyoto commitments are reduced

  26. 4. THE KYOTO PROTOCOL CLEAN DEVELOPMENT MECHANISM (CDM) • The GHGs emissions avoided through the realization of CDM projects produce Certified Emission Reductions (CERs) that can be used by Parties to comply with their own reduction targets 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 Certified Emission Reductions that can be traded and sold.

  27. 4. THE KYOTO PROTOCOL CLEAN DEVELOPMENT MECHANISM (CDM) Some of the requirements for the Parties involved: • to have ratified the Kyoto Protocol; • to have created a national emissions register; • to have presented every year the national emissions inventory requested; • to have presented written consent of voluntary participation to the CDM project

  28. 4. THE KYOTO PROTOCOL CLEAN DEVELOPMENT MECHANISM (CDM) Some of the requirements for the PROJECT: • the home country shall confirm that the CDM project contributes to its own sustainable development; • environmental, social and economic impacts of the project shall be analyzed; • the project shall generate an emissions reduction at least of one of the GHGs listed in the Kyoto Protocol; • the reduction of GHGs emissions shall be additional to any that would otherwise occur in the absence of the certified project activity • emissions avoided shall be estimated through official methods; • nuclear projects are excluded; • the project shall not use public funds officially bound to the home country development

  29. 4. THE KYOTO PROTOCOL PHASES OF JI AND CDM PROJECTS PLANNIG PHASE • planning idea and valuation • project document • validation • registration REALIZATION PHASE • realization and monitoring • verification and certification • credits release (ERUs or CERs).

  30. 4. THE KYOTO PROTOCOL PHASES OF JI AND CDM PROJECTS • voluntary and flexible mechanisms • economic objects: if Annex I Parties can reduce their emissions in other parts of the world, they will choose to reduce them where costs are lower. In this way, they can: - reduce emissions within their country; - export clean technologies in developing countries or in countries with a less advanced technological state • COMPANIES INVESTING IN THESE PROJECTS SHALL OBTAIN A PROFIT: The GHGs reduction obtained through the implementation of flexible mechanisms is recompensed with: - CERTIFICATED EMISSIONS REDUCTIONS (CERs) for CDM Projects - EMISSION REDUCTIONS UNITS (ERUs) for JI Projects

  31. 4. THE KYOTO PROTOCOL INTERNATIONAL EMISSION TRADING • The international emission trading is an economic instrument intended to trade and sell credits obtained through the reduction of GHGs emissions • Public entities or private companies – to which an assigned amount is accorded on the basis of a national assignation plan – can trade: - AAU (Assigned Amount Units) - RMU (Removal Units) - CERs (Certificated Emission Reductions) obtained through CDM - ERUs (Emission Reduction Units) obtained through JI • ALL THESE UNITS ARE EQUIVALENT (for compliance purposes) • They represent one metric ton of CO2 equivalent emissions

  32. 4. THE KYOTO PROTOCOL INTERNATIONAL EMISSION TRADING • The 2001 Marrakech accords adopted at COP-7 elaborated the modalities, rules and procedures governing international emissions trading • Each of Annex I Parties can take part in the international emission trading if: • it has ratified the Kyoto Protocol • calculate and record its assigned amount according to specific modalities; • have a national system for the estimation of GHGs emission by sources and removals also by sinks; • have submitted annually the most recent required GHGs emissions inventory; • have submitted supplementary information on AA.

  33. 4. THE KYOTO PROTOCOL KYOTO PROTOCOL COMPLIANCE IN THE EUROPEAN COMMUNITY • European Community identified climate change as a priority for action and provides for the establishment of a Community-wide emissions trading scheme by 2005 • The Community is committed to achieving an 8% reduction in emissions of GHGs by 2008 to 2012 compared to 1990 levels: the Community and its Member States have agreed to fulfill their commitments to reduce anthropogenic GHGs emissions under the Kyoto Protocol jointly • European Directive 2003/87 established a scheme for GHGs emission allowance trading within the Community: it aims to contribute to fulfilling the commitments of the European Community and its Member States more effectively, through an efficient European market in GHGs emission allowances, with the least possible diminution of economic development and employment

  34. 4. THE KYOTO PROTOCOL KYOTO PROTOCOL COMPLIANCE IN THE EUROPEAN COMMUNITY Scheme provided by European Directive 2003/87/EC : • Member States shall ensure that, from 1 January 2005, no installation undertakes any activity listed in Annex I resulting in emissions specified in relation to that activity unless its operator holds a permit issued by a competent authority (or the installation is temporarily excluded from the Community scheme) • For every referential period (3 or 5 years), each Member State shall develop a national plan stating the total quantity of allowances that it intends to allocate for that period and the allocation of those allowances to the operator of each installation. The plan shall be based on objective and transparent criteria, taking account of comments from the public • The plan shall be published and notified to the Commission for its approval • The plan shall distribute the allowances to release GHGs among subjects (e.g. companies carrying out activities listed in Annex I of the Directive)

  35. 4. THE KYOTO PROTOCOL KYOTO PROTOCOL COMPLIANCE IN THE EUROPEAN COMMUNITY • Any operator who does not deliver sufficient allowances by 30 April of each year to cover its emissions during the preceding year shall pay an excess emissions penalty. • The excess emissions penalty shall be EUR 100 for each ton of carbon dioxide equivalent emitted by that installation for which the operator has not delivered allowances. • Payment of the excess emissions penalty shall not release the operator from the obligation to surrender an amount of allowances equal to those excess emissions when surrendering allowances in relation to the following calendar year: Excess emissions penalty + delivery of allowances equal to emissions released

  36. 4. THE KYOTO PROTOCOL KYOTO PROTOCOL COMPLIANCE IN THE EUROPEAN COMMUNITY EUROPEAN DIRECTIVE 2004/101/EC (“LINKING” DIRECTIVE): USE OF CERs AND ERUs FROM PROJECT ACTIVITIES IN THE COMMUNITY SCHEME • The use of “CERs” emission credits on European market was consented starting from 2005 • The use of “ERUs” emission credits on European market was consented starting from 2008

  37. 4. THE KYOTO PROTOCOL KYOTO PROTOCOL COMPLIANCE IN THE EUROPEAN COMMUNITY • Objective of ETS: to make more convenient for operators investing in clean technologies than buying emissions allowances and paying emissions penalties • EC 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)

  38. 4. THE KYOTO PROTOCOL KYOTO PROTOCOL COMPLIANCE IN ITALY: OUTLINES • Law n. 120/2002 (“Ratification and implementation of Kyoto Protocol”) • Law Decree n. 273/2004, converted by Law n. 316/2004 (“Urgent dispositions for the implementation of European Directive 2003/87/CE establishing a scheme for greenhouse gas emission allowance trading within the Community”) • Implementation of the ETS through some Ministerial Decree concerning: • GHGs emissions allowances • guidelines for emissions monitoring and communication to competent Authorities • rules regarding public entities that verify emissions data • The first national allocation plan (PNA1), referred to period 2005-2007, was approved by European Commission on May 25, 2005

  39. 4. THE KYOTO PROTOCOL KYOTO PROTOCOL COMPLIANCE IN ITALY: OUTLINES • Directive 2003/87/EC was formally transposed through Legislative Decree n. 216/2006 • The second Italian allocation plan (PNA2), referred to period 2008-2012 was submitted to European Commission on December 15th 2006; with the Decision of May 15th 2007, the European Commission authorized the plan, imposing some further conditions (e.g., the reduction of the total amount of emission permits to be assigned and the reduction of the maximum amount of CERs and ERUs that can be used for the compliance with the Kyoto targets) • The Italian National committee for the implementation of directive 2003/87/EC prepared a scheme for a decision of assignation referred to the period 2008-2012: the scheme was submitted to public consultation on January 2008 • In February 2008, the National committee definitely approved the Decision of assignation of allowances for the period 2008-2012.

  40. 4. THE KYOTO PROTOCOL KYOTO PROTOCOL COMPLIANCE IN ITALY: OUTLINES Examples of sectors involved in the Emission Trading system (listed in annex A of Legislative Decree n. 216/2006): • 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 • Manufacture of glass including glass fibre with a melting capacity exceeding 20 tones per day

  41. 4. THE KYOTO PROTOCOL CRITICAL EVALUATION • 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 should have aimed at institutionalizing laws and policies for obtaining and securing renewable and sustainable energy to replace global warming casing hydrocarbons • The fact that 85% of the burgeoning energy needs of the world are now, and will continue through the next 30 years to be based on hydrocarbons [EIA, International Energy Outlook 2006] means that CO2 will continue to increase

  42. 4. THE KYOTO PROTOCOL CRITICAL EVALUATION 2. Kyoto failed to address a number of intrinsically interconnected 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 reach a point where oil supply will no longer be able to meet demand. This will be the time when world demand for oil will be increasing at a massive rate • In 2000, the U.S. Energy Information Administration estimated that oil would peak in 2037: if this would happen, it will cripple transport!

  43. 4. THE KYOTO PROTOCOL CRITICAL EVALUATION 3. Kyoto assumed that the answers to global warming via carbon dioxide reduction could be found without the active participation of developing countries: • The need for developing countries to be involved in the partnership to find alternative sources of energy becomes self evident in face of the fact that developing (non OECD) countries will be consuming more energy than the OECD countries by 2015 • Instead, Kyoto directed developed (annex I countries) to cut down their GHG emissions by 5 to 7 % below 1990 levels between 2008 and 2012, but developing (non annex I countries) were not bound by these legal restrictions. • Moreover, focusing only on global warming Kyoto has thwarted sustainable development among developing countries

  44. 4. THE KYOTO PROTOCOL CRITICAL EVALUATION • Five years after its entry into force, the result and impacts of Kyoto have been disappointing: • Carbon dioxide emissions continue to increase almost inexorably • 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 projected temperature increases, with all countries doing only what is required under Kyoto and then continuing with business as usual, would be a scant of 0.06 °C to 0.11°C shaved off the total warming, roughly a 3% reduction CONCLUSIONS: GHGs REDUCTIONS – in the face of increasing energy demand – CAN NOT OCCUR UNLESS THERE ARE ALTERNATIVE SOURCES OF ENERGY

  45. - END OF PRESENTATION - THANKS FOR YOUR ATTENTION

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