Kyoto Risks Dying, No New Climate Deal In Sight

Alister Doyle and David Fogarty, PlanetArk 19 Feb 10;

OSLO/SINGAPORE - Efforts to extend the Kyoto climate pact framework risk collapse in a setback to years of diplomatic bargains, as chances fade that the United States will join other rich nations in capping emissions.

December's U.N. climate conference in Denmark failed to cite the U.N.-brokered Kyoto pact as a touchstone -- sapping hopes for a global carbon price to guide billions of dollars in investments from nuclear plants to solar panels.

"We are probably seeing the beginning of the end for the Kyoto Protocol in its current form," said Johan Rockstrom, head of the Stockholm Resilience Center at Stockholm University.

"But it's also very clear that we are still in a situation where there is no alternative. So we are in a fix."

Plans to extend the Kyoto Protocol, the world's main pact for fighting climate change, beyond 2012 hinge on bridging a divide between rich and poor countries over the cost of switching from carbon-intensive technologies.

U.S. ROLE IS KEY

The Denmark summit came up with a Copenhagen Accord aimed at limiting global warming to below 2 degrees Celsius (3.6 F) above pre-industrial times, and also pledged $100 billion a year from rich nations in climate aid for the poor from 2020.

But the accord barely mentions Kyoto, which binds 37 rich nations excluding the largest emitter, the United States, to cut greenhouse gas emissions by an average of 5 percent below 1990 levels between 2008-12.

Developing nations led by China and India insist the rich must extend the Kyoto Protocol to 2020 before they take on commitments to slow rising emissions in a new treaty also with 2020 targets for all nations.

President Barack Obama has tried to commit mandated cuts in U.S. emissions "in the range of 17 percent" below 2005 levels by 2020, a cut of 4 percent below 1990 levels. But the U.S. Senate has stalled legislation in that direction.

Obama announced this week $8.3 billion in loan guarantees to build the first U.S. nuclear power plant in the U.S. in nearly three decades to help break the legislative logjam by cajoling conservatives to support a climate bill, though analysts say it's unlikely to work.

"It's not just the Protocol that looks in danger, the whole legal architecture for post-2012 looks in danger," said Stephen Howes, a director at the Crawford School of Economics and Government at the Australian National University in Canberra.

"Whether we'll have a legal architecture in place by 2012 looks very questionable."

THREAT OF PATCHWORK PLANS

With no legal certainty, Kyoto could split into a patchwork of unilateral promises to fight climate change, such as the European Union's plan to cut emissions by 20 percent from 1990 levels by 2020.

"There is a risk of Kyoto dissolving," said Jennifer Morgan, climate and energy program director of the World Resources Institute in Washington.

"You do need either a Kyoto-type framework or a clearer commitment to markets -- such as in the United States and Australia. You need clear signals going forward about the price of carbon," she said.

Some in the carbon credit trading market however expect the Kyoto carbon-offset framework to survive regardless of whether there is an extension because it underpins demand for cap and trade policies by the European Union and other local programs.

"I don't think Kyoto is dead," said Robert Stavins, director of the Harvard Environmental Economics Program, who said U.S. carbon caps were still possible in 2010.

He pointed to the $6.5 billion Clean Development Mechanism under Kyoto that promotes low-carbon investments in developing nations, and which is widely supported by them.

Trading of the offsets by investors such as banks as well as brokers has also created big profits. Europe is a major buyer of the offsets, which can be used in the EU emissions trading scheme.

Still, regional or local efforts are seen as too limited to make a dent in global emissions that a global pact could provide and see the extension as a litmus test for the world.

"At the end of the day you only have the European Union left" as the main cheerleader for Kyoto, said Alden Meyer, of the Union of Concerned Scientists.

(Editing by Ed Lane)

Factbox: What Next For The Kyoto Protocol?
Alister Doyle and David Fogarty, PlanetArk 19 Feb 10;

Uncertainty is growing over the future of the Kyoto Protocol, the first legally binding treaty to cut greenhouse gases blamed for heating up the planet.

Nearly 40 industrialized nations -- all except the United States -- are supposed to meet agreed emissions targets during the pact's 2008-12 first phase but some countries are way behind their targets and will likely miss them.

The disappointing outcome from December's climate talks in Copenhagen has cast a cloud over whether Kyoto will be extended for a second period from 2013, raising questions over the shape of a future legally binding climate pact that all nations can agree on.

Here are some questions and concerns about Kyoto:

* WHAT IS THE KYOTO PROTOCOL?

It is a pact agreed by governments at a 1997 U.N. conference in Kyoto, Japan, to reduce greenhouse gases emitted by developed countries by an average of 5.2 percent below 1990 levels during 2008-12.

A total of 189 nations have ratified the pact. Developing nations do not have binding emissions targets under Kyoto but are encouraged to take voluntary steps to curb the growth of carbon dioxide pollution from power stations, cars and industry.

* IS IT LEGALLY BINDING?

Kyoto has legal force from February 16, 2005. It represents more than 60 percent of developed nations' total emissions.

The United States, the world's second largest greenhouse gas emitter after China, decided against implementing Kyoto in 2001, reckoning it would be too expensive and wrongly omitted developing nations from a first round of targets to 2012.

* HOW WILL IT BE ENFORCED?

Countries overshooting their targets in 2012 will have to make both the promised cuts and 30 percent more in a second period from 2013.

* WILL ALL COUNTRIES MEET THEIR TARGETS?

Unlikely. Kyoto targets for 37 rich nations that are committed to cut emissions range from an 8 percent cut for the European Union from 1990 levels to a 10 percent rise for Iceland. But some countries, including Canada and Spain, say they will miss their targets by a wide margin, despite the threat of penalties.

This has led to criticism that Kyoto is a failure, raising doubts nations will meet much tougher targets for the second compliance period from 2013.

* SO WILL KYOTO FADE AWAY?

There's a real risk of this happening. The current U.N. climate talks remain far apart on deciding the shape of a future, broader, climate pact that extends the fight against climate change.

One idea is to extend Kyoto into a second period and create another climate treaty, perhaps based on the Copenhagen Accord, which wasn't formally adopted by the U.N. meeting in Denmark in December, and is therefore not legally binding.

Big developing nations India and China, while broadly supporting the Accord, firmly back Kyoto and the current U.N. talks to try to extend it and do not want to turn the Accord into a legal text. The United States refusal to join Kyoto and the failure of the U.S. Congress to pass emissions targets is another big uncertainty.

WHAT ABOUT KYOTO'S CARBON MARKET MECHANISMS?

A key part of Kyoto is a scheme that allows rich nations to meet a part of their emissions targets by buying carbon offsets from clean-energy projects in developing nations.

Called the Clean Development Mechanism (CDM) it has generated billions of dollars in investment in wind farms, hydro power plans, solar water heaters and biomass power generators in poorer nations, creating valuable offsets that can be traded for profit or used to meet greenhouse gas targets.

If U.N. climate talks drag on and Kyoto isn't extended, a major issue is what happens to the CDM after 2012, since the whole notion of binding emissions caps drives the market for the offsets.

(Editing by Ed Lane)