On December 10, 1997, delegates from 160 nations completed negotiations on the Kyoto Protocol at the third Conference of the Parties. By providing that industrialized nations should adopt legally binding emission limits on greenhouse gases, the Kyoto Protocol took the significant step of moving from voluntary to binding commitments. While individual country commitments vary, the Protocol calls for reductions of aggregate industrialized country emissions by roughly 5 percent below 1990 levels.[10] Following the FCCC, the Protocol divides the world into two groups – industrialized, or “Annex I,” countries which committed to greenhouse gas emission limits, and developing or “non-Annex I,” countries with no binding limits. The Annex I group consists of 39 industrialized nations and economies in transition, including the United States, the European Union, Canada, Japan, the Czech Republic, and Russia.[11]
Under the Protocol, each Annex I country agreed to a specific greenhouse gas reduction target using its 1990 levels as a baseline. Parties negotiated these non-uniform targets in order to address varying national circumstances. For example, Japan and the United States committed to a 6 percent and 7 percent reduction from their 1990 emission levels, respectively, while Australia set its cap to an 8 percent increase. Japan received a lower target than the United States, as it is a relatively more energy efficient nation and therefore claimed that greater reductions would be more difficult than for the United States. Australia argued that its dependence on coal would make reductions, or even a stabilization at 1990 levels, too difficult.
The Protocol requires inventories of the six major greenhouse gases.[12] Carbon dioxide, the most prevalent of them, is emitted from energy production, transport, industry, and land-use conversion such as deforestation. Land-use changes primarily emit carbon dioxide, though methane and nitrous oxide are also emitted in trace quantities.
These reductions must be accomplished within the “commitment period,” 2008-2012, which provides increased timing flexibility. For example, Japan’s average yearly greenhouse gas emissions for 2008-2012 must be 6 percent below what they were in 1990. Emissions may be above the 6 percent reduction in any given year during the commitment period, but the average must be compensated in later years.
Annex I countries have four means by which to meet their Protocol commitments and to calculate their net emission inventory. They may:
- a) take any domestic action to reduce emissions from their industrial sectors, such as replacing fossil fuel use with renewable energy sources;
- b) take domestic action through a limited set of forest-sector activities – afforestation and reforestation that count as reductions, and deforestation that counts as an emission;
- c) use two market-based mechanisms (emissions trading and project-based credit trading) that allow them to buy, sell, or trade greenhouse gas reductions and emission allowances from other Annex I countries;and
- d) use a third market mechanism that allows buying or trading of project-based credits from non-Annex I countries – e.g., the Clean Development Mechanism.
