Economics

Kyoto Protocol

Published Apr 29, 2024

Definition of Kyoto Protocol

The Kyoto Protocol is an international treaty that commits its Parties to reduce greenhouse gas (GHG) emissions, based on the premise that (a) global warming exists, and (b) human-made CO2 emissions have caused it. It was adopted on December 11, 1997, in Kyoto, Japan, and entered into force on February 16, 2005. The detailed rules for the implementation of the Protocol were adopted at COP 7 in Marrakech, Morocco, in 2001, and are referred to as the “Marrakech Accords.” Its parties are classified into industrialized (Annex I) and developing (non-Annex I) countries. The former have binding targets to reduce emissions, while the latter do not.

Example

Under the Kyoto Protocol, Annex I countries committed to reduce their collective GHG emissions by an average of 5% below 1990 levels for the commitment period 2008 to 2012. For example, the European Union agreed to an 8% reduction, the United States (which signed but never ratified the treaty) had agreed to a 7% reduction, and Russia to a 0% reduction, meaning it would not increase its emissions from 1990 levels.

One of the mechanisms introduced by the Kyoto Protocol is the international emissions trading scheme, which allows countries with excess emissions reductions to sell them to countries that are underachieving their targets. This scheme is intended to provide a flexible and cost-effective means for Annex I countries to meet their obligations under the Protocol.

Why the Kyoto Protocol Matters

The Kyoto Protocol was one of the first global efforts to confront climate change by reducing GHG emissions. Its significance lies in its recognition of the industrialized nations’ historical contribution to current levels of atmospheric greenhouse gases. By establishing legally binding reduction targets, the Protocol aimed to prevent dangerous anthropogenic (i.e., human-induced) interference with the climate system.

Despite its limitations and the fact that some major emitters have either not ratified it (the United States) or are not required to reduce emissions (developing countries), the Kyoto Protocol paved the way for subsequent international climate agreements, including the Paris Agreement. It also demonstrated the potential for global cooperation on climate change and highlighted the importance of flexibility mechanisms, such as emissions trading, in addressing environmental challenges.

Frequently Asked Questions (FAQ)

What are the main mechanisms established under the Kyoto Protocol?

The Kyoto Protocol established three market-based mechanisms to assist countries in meeting their emission reduction targets economically. These are: International Emissions Trading (IET), the Clean Development Mechanism (CDM), and Joint Implementation (JI). IET allows countries that have emission units to spare (emissions permitted them but not “used”) to sell this excess capacity to countries that are over their targets. CDM and JI enable industrialized countries to finance GHG reduction projects in developing countries or other industrialized countries, respectively, and receive credit for the reductions achieved.

What are the major criticisms of the Kyoto Protocol?

Critics argue that the Kyoto Protocol’s targets for reducing GHG emissions were not ambitious enough to significantly affect global warming. Additionally, the exclusion of developing countries from having binding reduction targets has been a point of contention, particularly given the rapid economic growth and rising emissions from these countries. There’s also the issue of the United States, one of the world’s largest emitters, not ratifying the Protocol, which undermines global effort and effectiveness.

How does the Kyoto Protocol relate to the Paris Agreement?

The Paris Agreement, adopted in 2015, builds upon the Kyoto Protocol and—for the first time—brings all nations into a common cause to undertake ambitious efforts to combat climate change. Unlike the Kyoto Protocol, which set legally binding emission reduction targets for developed countries only, the Paris Agreement requires all countries to put forward their best efforts through “nationally determined contributions” (NDCs) and to strengthen these efforts in the years ahead. This approach reflects the change in global economic dynamics and emissions profiles since the adoption of the Kyoto Protocol.