Select Committee on Environmental Audit Second Report

Buenos Aires, the Fourth Conference of the Parties to the Convention on Climate Change

    12. In our Fourth Report we noted that the Kyoto protocol was only a start in reducing emissions of greenhouse gases and that its success was not assured. To a large extent its success depended on the United States, and the United States Senate had determined that there should be meaningful participation by developing countries before the US ratified the Protocol.[29] We were therefore pleased to hear that there had been some progress on this front. The US has now, as a first step, signed the Protocol.[30] It was Mr Meacher's view that there had been some change in the industrial scene in the United States, that its Government was committed to the Protocol and would ratify it, although this was unlikely before the presidential and congressional elections.[31] And Mr Meacher also detected some change in developing countries' attitudes, particularly in China and India, and stressed that it was important not to underestimate the degree to which developing countries were making progress without signing up to targets.[32] He discussed the progress there had been on three conditions for the developing countries volunteering to adopt realistic targets within the Climate Change process.

13. Firstly, Mr Meacher told the Committee that it would take a few more years before developing countries could be persuaded that the developed countries, who were responsible for the problem of climate change, were putting in place actions to address the problem.[33]

14. Secondly, Mr Meacher pointed to the compelling argument in developing countries for growth, higher living standards and prosperity and the need for them to be convinced for themselves that they could achieve these goals without being penalised by environmental requirements.[34] He believed that at Buenos Aires developing countries had moved away from the first condition because they had seen the attractions of the clean development mechanism, for example in terms of technological and financial transfers.[35] In Mr Meacher's opinion developing countries are looking to use the opportunity to ensure that developed countries pay more to win their involvement in the process.[36]

15. On the question of funding, we were pleased to see a widening of the scope of the Global Environment Facility at Buenos Aires. Since 1995 the Facility has provided funds for the identification of the impacts of climate change on vulnerable countries and regions and the development of policy options and capacity building for those countries. At Buenos Aires it was agreed that developing countries could also receive funding for implementing adaptation response measures, identifying their technology transfer needs, and for further capacity building measures.[37] We understand that the Facility's resources are determined separately in a periodic vote on the "replenishment" of the fund, and that the consequences of this extension to the Facility's coverage will therefore need to be considered when the Facility next needs replenishing. We urge the Government to give early consideration to the scale of funds needed in the light of these new objectives and to discuss this with other donors in advance of replenishment.

16. Thirdly, and in response to questions about the place for equitable emissions levels for all nations, contraction and convergence, Mr Meacher restated his view that there was a role for the question of equity in the long-run and said that he expected that developing countries would increasingly assert their demands for a fair share in the capacity for economic development and of the costs.[38] But he considered equity was not the main issue being raised by representatives of key developing countries such as China, Brazil, Indonesia etc, although India, in particular, had raised it both at Kyoto and Buenos Aires.[39] He once again argued that the Kyoto Protocol represented a contraction in emissions by developed countries and that developing countries' emissions would certainly increase over the period representing a convergence.[40] However, the emissions figures provided by the Government, whilst showing that the Kyoto Protocol limits represent a reduction in the range of emissions per capita from 1.9 - 6.7 to 1.7 - 5.8, still also show that there is a difference of over three times between emissions from a country at the top of the scale and one at the bottom of the scale. Although acknowledging the EU interest in the subjects of convergence and equity at the Environment Council, Mr Meacher did not indicate that the EU was strongly pursuing them. Indeed, he considered that no deadlines could be attached to the adoption of equitable emissions per capita targets.[41]

17. We welcome Mr Meacher's repeated assurances that the atmosphere of the negotiations is changing and his optimism that in two or three years time quite a few countries may sign up.[42] But we also note his cautions to the effect that perceived short­term self­interest is still very dominant in the United States and amongst the developing countries.[43] We note that Argentina and Kazakhstan have now stated their willingness to adopt targets[44], and we support the case for setting a mechanism in place for voluntary participation by developing countries by COP 5.

18. Mr Meacher told us that there had been no agreement at Buenos Aires on the adequacy of the Protocol commitments. He said that the matter would be pursued at COP5.[45] Given the scale of the climate change problem and the need for concerted action to address emissions for the foreseeable future we believe the pressure for convergence in countries' targets will continue. This will present a significant challenge to the UK and other developed countries. We would urge the Government to start preparing now for the need to agree tighter targets beyond the current commitment period.

19. The so-called "flexible mechanisms" were drafted into the Kyoto Protocol to allow the emission reductions to be achieved at a lower overall cost. As discussed above, the clean development mechanism would offer developing countries the opportunity of inward investment incorporating new, clean technology. For developed countries the clean development mechanism and the trading of emissions would allow countries with high costs of reducing their own emissions to achieve their target by paying for others to reduce their emissions. At Buenos Aires it was decided that the rules for the operation of these flexible mechanisms would be agreed at COP6, with preparatory work being undertaken at workshops, in submissions from Parties and in discussions at the Subsidiary Bodies in June 1999. Within this workplan priority was to be given to the clean development mechanism with a view to putting it into place in the year 2000.[46]

20. Key questions on the role for flexible mechanisms remain to be addressed — of whether there should be a cap on their use; and how to avoid the trading of "hot air", that is of emission allowances to countries whose economies had significantly changed and so would not now have "business as usual" emissions at as high rates as was envisaged at the time the binding targets were set. These issues appear to us to be highly significant in the light of the negotiations to ensure ratification by the United States and the involvement of developing countries. If trading, and in particular the trading of "hot air", allows Parties not to make meaningful reductions in their own emissions this may lead to the charge by developing countries that developed countries have not taken their responsibility for emissions seriously. On the other hand any caps on the use of flexible mechanisms will also limit the scope of the clean development mechanism.

21. Given this, the enormous scale of the "hot air" emissions is important. Mr Meacher pointed to Russia and Ukraine as particular examples of countries having targets agreed at Kyoto which are now well above their business as usual emission levels. He told us that for Russia most people consider that their appropriate target today should be something like minus 15 per cent, possibly as much as minus 30 per cent, compared to their agreed target of a zero reduction on 1990 levels.[47]

22. The Government appear to consider that the inclusion of references to a "concrete ceiling" and "hot air" in the work programme agreed at COP4 marks some form of progress through ensuring that the issues will be addressed and be the subject of a future agreement.[48] However, we note that Mr Meacher could see no immediate solution to the problem of how to get countries whose targets are now far too loose to renegotiate them to avoid the trading of "hot air".[49] Mr Meacher also considered it would be quite difficult to devise an internationally agreed regime to ensure the additionality of a clean development project.[50] We note that until these matters have been addressed satisfactorily in tight rules with appropriate mechanisms to check their application, there can be no assurance that even the small overall emission reduction target agreed at Kyoto, of 5.2 per cent, will deliver a real reduction compared to the business as usual scenario.

23. In our Fourth Report we drew attention to the flexibility in the emission inventory calculation methodologies allowed under the Convention.[51] We welcome the Government's contribution to reducing the uncertainties in emission calculations, through the chairing of a meeting of the Intergovernmental Panel on Climate Change.[52] Although this should result in progress being considered in 1999 at COP 5, we understand that there will not be discussion of systems for accounting for changes in carbon sinks until 2000. Mr Meacher commented that accounting for carbon sinks is extremely difficult, needing to take account of the absorption capability of the trees and to provide a fair and equitable method bearing in mind the hazards from forest fires.[53]

24. At COP 4 a working group was established with responsibility for developing a comprehensive compliance regime, with a view to finalising the work at COP 6 in readiness for agreement at COPMOP1.[54] In preparation for this Parties are to submit their views on compliance by 1 March 1999. We were pleased to hear Mr Meacher emphasise the importance of addressing the possibility of non-compliance. He did, however, also stress that it should be remembered that the Kyoto Protocol was an agreement entered into voluntarily, that no country could order another to pay a fine or meet some other default requirement, and that therefore agreement was required on monitoring and procedures to address non-compliance.[55]

25. We understand that within the EU arrangements for enforcing Member States' share of the "bubble" are still to be negotiated but are likely to be considered within the same timescale as was decided at Buenos Aires for the Protocol.[56] Mr Meacher expected the Environment Council to monitor progress and take action where a Member State appeared to be "off-track" for meeting its target. This would be based on annual reporting of emissions in the national inventories. He considered that the approach would probably be firstly to cross-question the Member State on its performance and then to consider whether assistance might be necessary. He considered sanctions would be the last resort.[57] We note that where the means to achieve the climate change targets are implemented through European Community legislation they could be enforced through infraction proceedings.[58] But we understand that the targets agreed within the European Union bubble do not themselves have legal force within the EU.

26. To clarify the position we asked the Environment Minister how the Kyoto Protocol could therefore be considered to be legally binding. Mr Meacher repeated that he did consider that enforcement mechanisms were needed, but that they have not yet been agreed. [59] Once again it is clear that there is a long way to go before the detail of the systems to devise sanctions to make the agreements reached in Kyoto in any real way binding will be in place. We would reiterate our view that progress on the methods for calculating emissions, monitoring and validating them and compliance mechanisms are crucial to the credibility of the Kyoto agreement and hence to the likelihood of achieving reductions in emissions.

29   Op. Cit. paragraph 14 Back

30   Government response to paragraph 18 Back

31   QQ14 & 63 Back

32   Q14 Back

33   QQ16 & 19 Back

34   Q16 Back

35   Q19 Back

36   Q19 Back

37   United Nations website Op.CitBack

38   Q17 Back

39   Q19 Back

40   Q17 Back

41   Q18 Back

42   Q23 Back

43   QQ 21&22 Back

44   Government response to paragraph 13 Back

45   Q13 Back

46   Government response to paragraphs 19 & 27 Back

47   QQ 32&33 Back

48   Government response to paragraph 21 Back

49   Q32 Back

50   Q39 Back

51   Op. Cit. paragraph 53 Back

52   Government response to paragraph 54 Back

53   Q37 Back

54   Government response to paragraph 65 Back

55   Q45 Back

56   Government response to paragraph 65 Back

57   Q46 Back

58   Q50 Back

59   Q51 Back

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Prepared 12 February 1999