Market-based Mechanisms: Kyoto or not?

In order to give the United States flexibility in meeting its emission reductions targets, the Clean Development Mechanism (CDM) was created in Kyoto. Under the CDM, developed countries support a project in a devloping country that reduces emissions for the developed country. Since the U.S. is (and was in Kyoto, as well) the world’s largest historical polluter and has one of the highest per capita consumption of fossil fuels in the world, it was important to engage the US in reducing greenhouse gas emissions and transitioning to a carbon-free economy. Unfortunately the US never ratified the Kyoto Protocol, but the CDM remains. Today re-engaging the US in international climate negotiations has meant complicating the process by creating a second negotiating track. The goal of the United States is to take what they like about Kyoto (flexible mechanisms such as the CDM) and keep out what they don’t (legally binding emission reductions targets). In Copenhagen the US started moving the world onto a pledge and review path – each country decides on its own how much it is willing to do. These targets are neither science-based nor enforceable. While the US can be proud of its success, it is a death sentence for the planet.
Furthermore, Russia, Japan and Canada have jumped onto the US bandwagon by stating in no unequivocal terms that they will not sign onto a second commitment period of the Kyoto Protocol. New Zealand and Australia are on the brink of jumping ship.
One of the major bargaining chips that developing countries had to keep developed countries in the Kyoto Protocol was the CDM. But in Bonn, developed countries made it clear that even in the absence of a second commitment period, demand for carbon credits will continue. Therefore developed countries have ensured that CDM is also being discussed under the new negotiating track. By allow developed countries to do this, developing countries ceded even more ground.
Furthermore, developing countries have made it clear that they would like to expand the scope of markets. The proposal that is gaining the most ground is sectoral crediting – crediting emissions reductions in a manufacturing sector, such as steel or cement, if the whole sector reduces its emissions. Developed countries would like to link this to NAMAs. In essence this would mean creating a new category of NAMAs that are credited. As NAMAs are supposed to record carbon mitigation by developing countries, crediting NAMAs could result in the double counting of emissions reductions. It is also another way by which developed countries can continue to push their responsibility of reducing emissions onto developing countries. Lastly, India excepted, South Asian countries will not be able to take advantage of such a scheme.
It is important that developing countries fight the expansion of markets and convince developed countries to clean up the mess that they created. As the Bangladeshi delegation rightly pointed out, why should we depend on the market to solve the climate crisis, when it caused it in the first place?
While the Kyoto Protocol has flaws, it does commit developed countries to take on legally-binding emission reductions targets.
As the United States never ratified the Kyoto Protocol, getting it to take action in the fight against climate change has complicated the negotiations.
Unfortunately the United States, the world’s largest historical polluter and a countrnever ratified the Kyoto Protocol, which has resulted in two negotiating tracks, in order to ensure that the United States takes on comparable efforts in the fight against climate change. Unfortunately other developed countries, including Russia, Japan and Canada are using this as an opportunity to back out of the Kyoto Protocol and have it replaced with a new agreement. While the Protocol has many flaws, it is the revolutionary because it legally binds developed countries to reduce their emissions. The new agreement that developed countries are trying to craft would let each country decide what their targets are and there would be little enforcement of these targets. Furthermore, the developed countries are looking to see action taken by developing countries
The latest round of climate negotiations wrapped up in Bonn, Germany last week. Although progress was slow, there were some interesting discussions around market-based mechanisms and emission allowances that have implications for South Asia.