[Climate Change] Kyoto Protocol, Carbon Trading, Copenhagen Accord: Meaning, Explained

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  1. What is Rio Summit/ Earth Summit ?
  2. What is the UNFCCC?
  3. What is Conference of the Parties (COP)?
  4. What is Kyoto Protocol?
  5. What is “common but differentiated responsibilities”?
  6. Annex
  7. Kyoto protocol: How does it actually work?
    1. #1 Emissions Trading / Carbon Trading
    2. #2 Clean Development Mechanism (CDM)
    3. #3 Joint Implementation (JI)
  8. Why USA did not ratify Kyoto Protocol?
  9. Canada Quits Kyoto protocol
  10. What is the Copenhagen Accord?
  11. Important Players in climate change
    1. United States
    2. BASIC Countries
    3. European Union (EU)
    4. Alliance of Small Island State (AOSIS)

What is Rio Summit/ Earth Summit ?

  • It was a United nations summit, held in Rio de Janeiro (Brazil) in 1992.
  • It led to creation of United Nations Framework Convention on Climate Change (UNFCCC)

What is the UNFCCC?

  • United Nations Framework Convention on Climate Change (UNFCCC)
  • Created because of the Rio Summit/ Earth Summit of 1992.
  • It is an international treaty for reducing greenhouse gas emissions.
  • Nearly every country on Earth is a party to the UNFCCC.

What is Conference of the Parties (COP)?

  • The nations, who’ve signed UNFCCC convention, meet every year to discuss climate change strategy.
  • These meetings are called Conference of the Parties (COP)
  • The first COP (COP 1) was held in Berlin.
  • Third COP (COP 3) held in Kyoto, Japan. It was here the famous Kyoto Protocol came in to existence.
  • 2011: COP held in Durban, S.Africa.
  • 2012: COP will be held in Doha, Qatar in November 2012 (so it becomes important topic for next prelims!)

What is Kyoto Protocol?

  • 1997: third meeting of UNFCC nation (also known as Conference of Parties/COP3),
  • In this meeting Kyoto Protocol was created.
  • Kyoto protocol wants the Industrialised nations to reduce their green house gas emission by around 5.2% by 2012. (measured against 1990 levels)
  • Before dwelling much into Kyoto, some important terms.

What is “common but differentiated responsibilities”?

  • The developed countries such as US,UK have already polluted the atmosphere with greenhouse gases (GHGs) through industrialization. So they’re the one who created/started global warming and all the mess.
  • While Developing countries (India and Brazil) have started polluting the world only recently.
  • Therefore, the developing countries such as India, Brazil should share less of the burden of lowering overall emissions.
  • And Developed countries (US,UK) should bear more responsibility in fixing this global warming mess etc. because they’re the one more responsible for it.
  • So, while it is the “Common” responsibility of every nation of this world, to reduce Green house gas emission, but there should be some difference between the responsibility given to developed countries and developing countries.
  • Kyoto Protocol follows that principle and assigns separate responsibilities to the countries.

Annex

Annex means some elaboration/detail given at the end of a book/treaty.

Annex What?
Annex I
  • List of industrialized countries and economies in transition: US, France, Japan etc.
  • These countries had pledged to reduce their greenhouse gas emissions to 1990 levels by the year 2000.
Annex II
  • A sub-group of Annex 1 Countries, these Annex II countries are required to give financial assistance and technology to the developing countries (non-Annex countries).
Non Annex
  • Developing countries like India, Brazil, China.
  • They donot have compulsory binding targets to reduce green house gas emission, although they are encouraged to do it.
Annex A It gives the list of 6 Green House gases that are responsible for the whole problem

  1. Carbon dioxide (CO2);
  2. Methane (CH4);
  3. Nitrous oxide (N2O);
  4. Hydrofluorocarbons (HFCs);
  5. Perfluorocarbons (PFCs); and
  6. Sulphur hexafluoride (SF6)
Annex B
  • This gives the Annex I countries (Developed countries) – compulsory binding targets to reduce green house gas emission.
  • For example USA is required to cut down its emission by 7%

Back to Kyoto Protocol

  • Ok, so far we learned that
  • In Earth Summit, Rio De Janero, Brazil, they formed a treaty called UNFCCC
  • The UNFCCC gangsters meets every year, there is item song, gun-firing, consumption of desi-liquor and deliberations on how to fix the global warming problem and these meetings are called Conference of Parties “COP”.
  • In third such COP meeting @Kyoto, Japan, they come up with an idea under which
    • Developed nations like US, will compulsorily reduce their green house gas (GHG) emission by 2012.
    • Developing nations like India, should reduce GHG emission but not compulsory.
  • Although various countries signed Kyoto Protocol in 1997, it did not came into force immediately.
  • Kyoto protocol came into force only after required number of Annex 1 Countries ratified it.
  • So this was achieved only in 2005.
  • Thus, Kyoto although signed in 1997, came into force in 2005.

Kyoto protocol: How does it actually work?

  • Suppose Abdul, Bhide and Champak (ABC) goto a Gujarati dining hall. This hall serves only ‘fixed dish’ i.e. 1 sabji, 4 roti,dal and rice. And each dish costs Rs.50. If you want more roti then you’ll have to pay extra 5 rupees per roti.
  • Now Champak is an old man so he cannot eat all the 4 rotis served in his plate. He eats only two rotis.
  • On the other hand, Abdul and Bhide are quite hungry, so they want more, they take 1-1 roti each from Champak’s plate and agree to pay 5-5 rupees to him.
  • Another example: You know how broadband internet billing works= there are plans for example 2GB plan for Rs.500 That means as long as you download music, movies etc. worth less than or equal to 2GB then you’ll get bill of Rs.500 but if you download more files above 2GB quota, then company will charge you Rs.1 per MB of extra download.
  • Similarly, Under Kyoto Protocol, each Annex-B country is given emission target “quota” (Kyoto Units).
  • For example, for the year 2009, Australia’s allowed quota was 2,957,579,143 Kyoto units. (each unit is equivalent to 1 ton of carbon dioxide)
  • Now, as long as Australia emits that much green house gas= no problem.
  • So first of all, Australian Government should do all steps to make sure it doesn’t cross that quota for example
    • Making compulsory anti-pollution laws: for example a Tire making company with daily output of 200 tires must not emit more than 200 tonnes of green house gas per year.
    • Promoting solar energy, reducing tax on solar cells, wind mill equipments etc.
    • If a family buys second car then it will have to pay higher tax (just like China’s one child policy but with cars!)
    • if a kid is found bunking his college lecture and loitering on his motorbike then he’ll be fined for polluting the environment.
  • But even after all these measures, if Australia wants to emit more green house gas, then it will have to buy additional ‘quota or units’ from another country. Kyoto Protocol allows three mechanisms to do so

#1 Emissions Trading / Carbon Trading

Carbon trading in Kyoto Protocol

  • Suppose two Annex B parties are Japan and Australia.
  • Japan was given quota of 100 units
  • And Australia was given quota of 200 units.
  • But Austrialian Government is unable to maintain this limit and Australia emits 210 units of green house gas, in given year.
  • On the other side, Japanese Government takes very strong steps to control emission and hence they only emit 90 units of Green House gas. So it has spare 10 Kyoto Units.
  • Now, under Emission trading system, Australia can buy this 10 spare kyoto units from Japan and thus remain within its limit.
  • In real life scenario, each annex B country makes law giving fixed quota to the companies.
    • Suppose steel factory cannot emit more than 1 ton of Green house gas
    • Tire company cannot emit more than 2 tonnes of green house gas.
    • So if tire company owner buys superfine machinaries that produce less gas so he has some spare credit/quota (say 1 ton)
    • While Steel factory emits more than its allowed quota (suppose it was allowed 2 tonnes but emitted 3 tonnes)
    • Then the steel company can pay the tire company and get a certificate that we’ve purchase 1 ton quota from this xyz tire company. This Is the essence of “Carbon Trading.”
  • Here are some charts to understand it better. But the text in below image is hard to read (because the original images were in low quality). Solution =just hold down “Ctrl” Key on your keyboard and move your mouse-wheel upwards and it’ll zoom the image.

#2 Clean Development Mechanism (CDM)

  • Suppose Annex B country Australia is given emission quota of 200 units, but it emits 210 units of green house gas.
  • But Australia can finance a solar power project in some village of India (Non-Annex or developing Country) and get certificate that the solar plant led to reduction of 10 units of green house gas. In this way, Australia will remain in its quota/limit.
  • Similarly, suppose Australian Government has passed a law that a steel production company with output of 200 tonnes of steel per a day, must not emit more than 10 units of green house gas in a year.
    • But this company wants to produce more steel, then its green house gas emission has increased to 11 units. (1 more unit above the quota)
    • So this company can also do some solar-projects in India, Brazil etc. and get a certificate that it has led to reduction of 1 unit of GHG emission. = problem solved.

#3 Joint Implementation (JI)

  • This is identical to CDM.
  • In CDM, Australia can do good project in a non-Annex country (developing country) e.g. India.
  • In Joint Implementation, Australia can do the good project in another Annex B country e.g. Japan to meet the quota.

Why USA did not ratify Kyoto Protocol?

  • US President George W Bush refused to ratify Kyoto protocol saying that it would gravely damage the US economy.
  • for example a US steel company would need to either buy Carbon Credits from another company or invest in some projects in a developing country), while an Indian or Chinese Steel company has no such obligation so their cost of production = low, hence they can sell their products @lower MRP = US steel company will loose customers.
  • So US Government feels is that the treaty is fatally flawed, because it does not require developing countries (especially India and China) to commit to emissions reductions.
  • After President Bush, President Obama too, didn’t ratify Kyoto protocol for the same reason. (plus we should also understand that the powerful US industrialist lobby may stop election funds to a candidate, if he is in favor of Kyoto protocol, so USA is unlikely to ratify Kyoto or any such future protocols that are legally binding!)

Canada Quits Kyoto protocol

  • In 2011, Canada, become the first country to quit the Kyoto Protocol on climate change, saying the 1997 accord was handicapped because top green house emitters like the United States and China not covered by it.
  • Because USA has refused to ratify the treaty and China being an Annex II country –has no compulsory responsibility to cut down emission.

What is the Copenhagen Accord?

  • Recall that UNFCCC countries meet every year and it is called Conference of Parties (COP).
  • 15th such meeting was held @Copenhagen, Denmark = COP15
  • In the meeting, the BASIC bloc—Brazil, South Africa, India and China—and the U.S., came up with a political agreement.
  • This agreement is known as the Copenhagen Accord.
  • It says all countries should pledge to reduce Green House Gas (GHG) emission but all of the pledges made under the Copenhagen Accord are voluntary; There are no binding obligations placed on these pledges by the UNFCCC or any other international body.
  • UNFCCC acknowledged the Copenhagen Accord and has assisted in collecting the GHG reduction pledges of various countries.
  • Copenhagen Accord also lays the groundwork for financial commitments from developed countries (US,UK) to developing countries (India,Brazil etc) for climate change mitigation and adaptation efforts.

Important Players in climate change

  • The First commitment period of Kyoto will end in 2012.
  • That’s why, the next meeting (COP18, Doha, Qatar in Nov’2012) becomes very critical.
  • So nowadays UNECC nations are trying to form factions (small gangs) to discuss what should be their stand in that meeting?
    • either extend commitments under Kyoto or
    • create a successor of Kyoto Protocol: a post-2012 international climate treaty.

United States

  • China is the world leader in total annual Green House Gas emissions
  • U.S. is second.
  • EU is third.
  • United States is the only Annex I country that has not ratified the Kyoto Protocol.
  • In line with the Copenhagen Accord, the U.S. has pledged a 17% reduction in GHG emissions, against a 2005 baseline, by 2020. (but this is not legally binding).
  • As we saw earlier, US is not in favour of any legally binding commitments. Besides, Obama has to face election in November.

BASIC Countries

  • Brazil, South Africa, India and China,
  • this group includes the world’s major emerging economies and some of its largest emitters
  • together, the group accounts for around 30% of global GHG emissions.
  • BASIC countries, along with the US, were the authors of the Copenhagen Accord and will continue to be some of the most influential players in the negotiations.
  • All of the BASIC countries have ratified the Kyoto Protocol.
  • But they’re not under any binding obligation to meet a specified target. (because these countries are not part of Annex B countries of Kyoto Protocol).
  • Under the Copenhagen Accord, China and India have pledged to reduce their carbon intensity—the amount of GHG emissions per unit GDP—by 40-45% and 20-25%, respectively, against 2005 levels by 2020. (again not legally binding).
  • BASIC countries recently met in Brazil in September 2012, and declared their intentions (what they want in COP meeting @Doha, Qatar in Nov.2012):
    1. rich countries should take on more of a burden to reduce emissions because of their historical contribution to global warming.
    2. new agreement should “respect the principles of equity and common but differentiated responsibilities,”
    3. new Kyoto commitment period should start on January 1, 2013

European Union (EU)

  • EU is a Party to both the Convention and the Kyoto Protocol.
  • EU is the 3rd largest GHG polluter, accounting for about 12% of global emissions
  • EU states have ratified Kyoto.

Alliance of Small Island State (AOSIS)

  • Not really a ‘player’, these are the future victims if green house gas emission is not reduced.
  • AOSIS is an team of 43 small island and low-lying coastal countries (Barbuda, Bahamas, Barbados, Cuba etc.)
  • More green house gas = rise in global temperature = ice melts= sea level rise =many of these areas to become uninhabitable.
Indian History Freedom Struggle Pratik Nayak

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98 Comments on “[Climate Change] Kyoto Protocol, Carbon Trading, Copenhagen Accord: Meaning, Explained”

  1. sir
    please let me know the theme of NAM 2012

  2. Hi Mrunal,
    Could you please clear me that as India is is non-Annex country and has no quota associated, so can India earn the carbon credit?
    Thanks in advance.
    Rounak

    1. yes
      india can earn carban credit…via making green investment like afforestation ,by using eco frndly technique solar energy,bio fuel,wind energy etc(cdm project)…
      india can sell this credit and also earn handsome money 2 sell this credit 2 other country..

  3. THank you so much…

  4. IF U HAVE KNOWLEDGE ABOUT THE TOPIC ANYBODY CAN MAKE U UNDERSTAND;BUT IF U DON’T ONLY MRUNAL CAN….HATS OFF TO MRUNAL SIR….U R AWESUM AND NOW I HAVE DECIDED TO FOLLOW U ONLY AS A GUIDE AND I KNOW WITH YOUR SUPPPORT NO ONE CAN STOP ME TO ACHEIVE MY GOAL.

  5. Excellent piece of explanation. Read many articles on this topic from various current affairs journals but this one is really good. “khub khub dhanyavaad”, confusion reg. Annexure-1, 2 & others are cleared now. But,require confi. reg. one point in your article that you have men. that developing countries are non annex. parties in Annex table while China is mentioned as Annex-2 party under ‘Canada quits Kyoto protocol’ and Basic countries mentioned as Annex-B party under “Basic Countries” so status of developing parties are “non annex. parties”, right?

  6. Sir, How CDM is different from Carbon Trading ??

  7. Thanks Mrunal sir,
    this website have limited articles but you have written these so beautifully that we need not to search and dig more websites regarding the same topic. Happy to see more articles from you regularly.

  8. thankyou sir …for the wonderfull expalanation

  9. Bhai shaib! aaj tak mughe yeh protocols koi nahi samgha paya..aap ne samgha diya..hats off sir, and thanks

  10. Hi

    Its good one sir ji !!! but this article is a bit old…I recently saw article in The Hindu..

    Can u pls update it with some more information…also if it is updated pls try to send notification…thankss

  11. What is UNECC mentioned in the article? Please explain.

  12. Just 2 words… MIND BLOWING!! finally understood whats kyoto is all about.. Again Thanks A ton… :)

  13. MRUNAL SIR PLEASE UPDATE SOME MATERIAL ABOUT DECISION MAKING …

  14. sir very solil msterial , wonderfull information for competative aspirants and general knowledge for everyone. great..

  15. Thank u sir, for making things so simple. It can be more helpful if it is updated with all the events taking place..

  16. Sirji,
    One correction according to table given by you China is Non-Annex country.

    But in the heading “Canada Quits Kyoto protocol”, you have mentioned that China is Annex-II conutry.

    Is is correct?

    Thanks

  17. thankss mrunal sir…..doing a great job!!!

  18. sir can post the detail of cop19 warsaw climate talk thank you

  19. Sir I hav one favourite word for COP=(CONSUMPTION OF PEC) PARTIES, THT we can easily grasp. Right sir

  20. hats off sir …….for your help……….

  21. concepts ek dum clear …. thanks

  22. Comendable job !! Great analysis. Thank you Mrunal.

  23. Very sincere thanks to you Mrunal Sir. Being a late entrant (aspiring for 2014 UPSC CSE) and having never followed newspapers (except until recently, i.e. since last 2 months) I am devoid of background knowledge on many topics. Your articles are so simple yet so pithy. I am so much interested to keep reading and keep knowing. Thanks to you indeed. Request you to keep writing and helping people like me!

  24. Sir, the you prepare the articles that is really amazing.you make the concept crystal clear.

    1. Sir, the way you prepare the articles that is really amazing.you make the concept crystal clear.

  25. Dear Mrunal
    You r doing very nice job by giving so much study material on line.even we cant think how much pain u r taking by posting huge study material on line.
    real aspirants will always give blessings.

  26. The matter published by you is awesome.

  27. you are really next to god…you r doing very good job with your tremendous help to the people…thanks a lot…

  28. sir.. the way u have written is really very clear and worth praising.. thanks for making such a clear approach .. keep writing sir… no various topics thanks a lot

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