Introduction
to Economics
Lesson
02/2007
THE KYOTO
PROTOCOL
Kyoto
is a city in Japan. It is
the former Imperial capital, very old, with many historical and
beautiful buildings and monuments, for which reason it is reputed to
have been spared major destruction by the allies during WW2.
It is situated on Honshu, the main island of Japan, near to
Osaka. It is the nation’s
seventh biggest city.
In
1997 Kyoto hosted an international conference, the third session of the
Conference of the Parties of the U.N Framework Convention on Climate
Change, which gave birth to a major international treaty, the so-called
Kyoto Protocol. [A protocol is a set of rules or guidelines, agreed or
widely accepted to be used in a particular circumstance or situation.] Depending on your point of view, the Kyoto Protocol
bodes well to become either one of the greatest boons or the greatest
banes to humanity of the 21C.
AIMS
OF THE KYOTO PROTOCOL
The
goal of the Kyoto Protocol is to cause a reversal in the rising
emissions by developed nations of so-called anthropogenic [or man made]
greenhouse gases into the atmosphere, in order to achieve the ultimate
objective of the Convention, namely preventing dangerous anthropogenic
interference with the climate system.
The
Protocol identifies 6 gases or groups of gases considered to be
particularly likely to be dangerous; carbon dioxide [CO2], methane
[CH4], nitrous oxide [N2O], hydrofluorocarbons [HFCs], perfluorocarbons
[PFCs] and sulphur hexafluoride [SF6].
By a complicated, arbitrary procedure each member nation’s
emission of such gases is calculated and combined by use of the concept
of a CO2- equivalent to arrive ultimately at a single CO2-equivalent
figure for each member nation.
Depending
on the perceived level of development of the particular member nation
concerned, targets and a timetable for change are set, which are
required to be met. The
Protocol seeks an overall reduction of 5% in total emissions from the
1990 level, to be measured on an average over the years 2008-2012.
But some countries are merely required to stablize at their
existing level and some even permitted to increase the level of their
emissions. This last group includes Australia, which is permitted an
increase of 8%.
Some
examples of other nations’ targets include a reduction of 8% by the
European Union as a whole, albeit distributed unequally between members,
7% for the USA, the world’s biggest emitter of greenhouse gases, with
one of the highest per capita levels, 6% for Canada and Japan,
stabilization at existing levels for Russia and New Zealand and
permitted increases of 10% for Iceland and 1% for Norway.
Amongst
the member nations of the EU, reductions have been set for Luxembourg
[28%], Germany [27%], and the UK [12.5 %], France is required to
stabilize, and increases permitted for Portugal [27%], Greece [25%] and
Ireland [13%].
To
come into effect the Protocol required firstly, ratification by 55
parties to the Convention and secondly ratification by developed
countries responsible for 55% of total emissions.
The first requirement was met in 2002 when Iceland became the 55th
party to ratify whilst the second was satisfied in 2004 when Russia,
with 17% of the world’s emissions ratified.
As a consequence, the Protocol came into effect on 16 February
2007. However neither the
USA or Australia have ratified it.
Pursuant
to the Convention, the Parties thereto, both developed and developing,
are required, singularly and in cooperation, to limit emissions, to
research and prepare for climate change and to promote general awareness
of the concept The Protocol is intended to encourage and facilitate the
parties to the Convention to achieve its goals.
In particular it requires developed nations to accept a greater
and more equitable share of the burden and encourages them to assist the
developing nations, particularly with financial and technical aid, to
enable them to help achieve the Convention’s overall goal.
AUSTRALIA
Currently
Australians per head are the world’s greatest emitters of greenhouse
gases although the country’s total volume of emissions places it
overall only in tenth place.
The federal government has declined to ratify the Protocol
although it claims Australia’s reduction of emissions to date is in
line with the voluntary obligations set for it by the Protocol for the
initial voluntary period.
The
government cites a number of reasons for its refusal to ratify; the
developing nations, particularly the 2 economic powerhouses of China and
India, are causing major increases in the level of emissions, but are
exempt from the Protocol’s mandatory requirements.
And any realistic application of the mandatory requirements is
likely to devastate the nation’s economy, its level of employment and
its standard of living. Some
members of the government have also expressed doubts about the
scientific bases of global warming and climate change.
The
federal opposition supports the Protocol and has announced its
intention, if elected, to ratify and implement its provisions. It claims that this will be a painless exercise for
Australia, since it picks up on the government’s own claim that
Australia is, to date, up to its required level of voluntary reductions.
This claim however, is in turn, based on a somewhat optimistic
and imaginative accounting of the significance of the changed policy on
land clearing in Australia.
EMISSION
OR CARBON TRADING
A
consequence of the Convention and of the Protocol is that various
governments have begun to ration and control the emission of greenhouse
gases and, in effect, to issue licences permitting individuals, firms,
industries, regions and so forth to emit such volume as permitted by the
licence. Given
transferability, markets have been created or sprung up for the buying
and selling of such quotas. Similar
trading can also occur between nations.
Apart
from licences, markets in credits are also arising. Trees for example are a natural absorber or ‘sink’ for
carbon dioxide. A broker
can pay a farmer for instance to grow trees, which will not be harvested
but be used to receive, in effect, carbon credits.
These credits can then be sold to those who need them, to offset
the purchasers own greenhouse gas emissions, or to sell them on.
The
potential size of such markets is huge and existing markets are growing
very rapidly. There has
effectively been created a major new industry.
Under the Australian Constitution, the environment remains
largely a State responsibility. NSW
has already introduced its own carbon trading scheme and plans are afoot
to expand it to include the other States and the Territories.
The Prime Minister however is opposed to the concept and sees no
merit in the proposal.
THE
PRECAUTIONARY PRINCIPAL
Fundamental
to any appreciation of the Protocol and the Convention is an
understanding of the Precautionary Principal and the role that it has
played. The Precautionary
Principal is a measure now widely employed in the making of public
policy. Basically it proposes that where a threat of harm to an
individual or community exists or arises, precautionary measures should
be taken, even if cause and effect are not clearly established or
understood. Where a threat
of harm exists, the onus of proof should be reversed; rather than having
to prove the potential for harm, opponents of a precautionary measure
should have to prove that it is not necessary.
As it is sometimes expressed “When
in doubt, throw it out.”
With
respect to global warming and climate change, the Convention and the
Protocol have accepted and employed the precautionary principal.
This is a major change from the practice of the recent past.
To understand more fully the significance of the change and the
arguments for and against it we would need to revisit the lesson on the
subject of risk. Suffice to
say at this stage, that it is a matter of much contention.
SCEPTICS
& CRITICS
Despite
suggestions to the contrary, there are many sceptics of global warming
or climate change and critics of the Kyoto Protocol, both professional
and lay people. They raise a number of concerns and arguments such as;
·
The
concept of a recent rise in temperature being sudden and unique, and
hence the result of an anthropogenic cause, is a myth.
Evidence suggests that the Earth has gone through many such warm
periods, during the last of which Greenland was inhabited, before being
abandoned, due to the increasing cold of the Little Ice Age, in the
1400s. The nadir of the
Little Ice Age was probably 1680, when the Thames at London froze a
metre deep, since when the Earth has been gradually warming.
·
Despite
emissions and the volume of CO2 in the atmosphere continuing to rise,
statistics suggest global temperatures have been falling since 1998. Hence
the change of terminology from ‘global warming’ to ‘climate
change’. Rather than warming, some leading climatologists are
suggesting the onset of another ice age.
·
When
the mandatory reduction period set down in the Protocol commences in
2008, reduction targets will generally be revised drastically upward for
most countries, to at least 20%. This
is because optimistic expectations of reductions during the preliminary
voluntary period prior to 2008 have not been met
·
If
reductions in greenhouse emissions are to occur at a level sufficient to
eliminate any additions to the atmosphere, the reality is that either
the population of the Earth must be reduced by 80% or the standard of
living of the existing population reduced back to the primitive, at
which stage a large proportion of the existing population will die off
anyway.
David Sharp
27
February 2007