Environmental Policy: Kyoto, Carbon Trading,

and California

• Why should we be concerned about global warming? What is our responsibility towards the earth and future generations?

• Can we do anything that would make a difference? Who is responsible?

• What has been proposed? What measures are already in place?

• What is the U.S. doing on the national and local scale?

Major Questions

Precautionary Principle

• If there is a risk that some action, policy, or event will cause harm, we should act to prevent such harm, even if scientific consensus about the hazard has not been reached.

Intergovernmental Panel on Climate Change (IPCC)

IPCC Background• Established by the United Nations

Environment Programme (UNEP) and World Meteorological Organization (WMO) in 1988

• Open to all members of the UN or WMO• Does not carry out its own research;

bases its assessments on peer reviewed scientific articles

Source: http://ipcc.ch/

• Working Group I: Assesses the scientific aspects of climate change

• Working Group II: Assesses the vulnerability of society and natural systems to climate change; options for adaptation and possible consequences

• Working Group III: Assesses options for mitigating climate change

IPCC Background

Publications• Authors are nominated by governments or selected

for their expertise; come from more than 100 countries

• Approval process for reports:– Reports are sent to experts with “significant

expertise and publications” in certain fields– Second drafts are sent to governments and all

IPCC authors for review and comments– Final drafts are presented for approval of their

general content

• Approval process for Summaries for Policymakers:– Undergo the same expert and government review– Final drafts are presented for approval on a line-

by-line basis

4th Assessment Report• “Most of the observed increase in global

average temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations.” – AR4, WG I, Summary for Policymakers

Source: AR4, WGI, Summary for Policymakers

IPCC Emissions Scenarios• A1B (mid-range): Rapid economic growth; global

population peaking mid-century; rapid introduction efficient technologies; more communication between nations; balance across fossil fuel intensive sources and non-fossil energy sources

• *A2 (high emissions scenario): nations self-reliant; little cooperation; continuously growing population; economic development regionally oriented

• *B1 (low emissions scenario): population peaks mid-century; rapid economic change towards services; more clean technologies introduced; convergent world; reduced materialism

Source: AR4, WGI, Summary for Policymakers

AR4, WG II, Summary for Policy Makers

AR4, WG III, Summary for Policy Makers

Kyoto Protocol

Background

• Kyoto Protocol to UN Framework Convention on Climate Change (1992)

• Negotiated in Kyoto, Japan in December 1997; closed in March 1999

• Entered into force on 16 February 2005–Needed at least 55% of Annex I countries,

accounting for at least 55% of total GHG emissions to ratify (Russia ratified)

Source: http://unfccc.int/

Background (continued)

• Objective: “to stabilize the greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system”

• Mandatory emission targets for countries that have ratified the protocol

Source: http://unfccc.int/

TerminologyGreenhouse Gases under Kyoto:• Carbon dioxide (CO2)• Methane (CH4)• Nitrous Oxide (N2O)• Hydrofluorocarbons (HFCs)• Perflurocarbons (PFCs)• Sulphur hexafluoride (SF6)

• Annex I countries: developed countries; have GHG reduction mandates; must submit annual GHG inventories– Examples: U.S., Japan, Denmark, Germany

• Non-Annex I countries: developing countries; no GHG reduction mandates– Examples: China, India

Structure• Aim: to reduce emissions of

participating countries an average of 5% below 1990 levels by the end of the first enforcement period (2008-2012)

• Limitations range from 8% reductions for the EU to 10% increase for Iceland

• Three mechanisms to reduce emissions:– Purchase GHG emission reductions from

elsewhere (carbon credits)– Clean Development Mechanism (CDM)– Joint Implementation (JI)

Emission Targets

Emissions Trading

• “Cap and Trade” system• Allows Annex I parties to acquire

carbon credits from other Annex I parties

• In practice, countries give carbon credits to individual parties, e.g. power plants

• Why would you buy carbon credits?• What are possible problems with this

system?

Clean Development Mechanism (CDM)

• Allows Annex I parties to invest in projects in Non-Annex I countries in order to acquire Certified Emission Reductions (CERs)

• “The CDM is expected to generate investment in developing countries, especially from the private sector, and promote the transfer of environmentally-friendly technologies in that direction.” –http://unfccc.int/

• What are possible problems with this system?

CDM Projects• 813 projects registered to date• Biggest investors: UK, Netherlands,

Japan• http://cdm.unfccc.int/Projects/registere

d.html

CDM Project Examples• Huitengxile Windfarm

Project (June 2005)– Sponsoring nation:

Netherlands– Host nation: China

• La Vuelta and La Herradura Hydroelectric Project– Sponsoring nation: Japan– Host nation: Columbia– Building hydroelectric

plant to capture energy from La Herradura river

Joint Implementation

• Allows Annex I parties to invest in emission-reducing projects in other Annex I countries in order to receive Emission Reduction Units (ERUs)

• Problems with this system?

Consequences of Missed Targets

• Countries must make up the difference plus a penalty of 30% in the next enforcement period

• Countries are excluded from selling credits in emission trading system

• No direct fine for non-compliance

Is it working?

• Only came into force in 2005• No mandatory reporting until 2008• No need to meet goals until 2012• Treaty ends after 2012. What

happens next?

Criticisms of Kyoto• Doesn’t do enough:

– No mandated emission limits for developing countries (even large emitters such as China and India)

– 5% emission reductions below 1990 levels aren’t large enough to make much of a difference for atmospheric CO2concentrations; chosen arbitrarily for political reasons

• Does too much:– Imposes too stringent of regulations on

developed countries; hurts their economies while allowing developing countries to freely emit

But still important…

• Represents a shared commitment to reduce GHG emissions

• Establishes the institutions and framework for future, more stringent regulations

Allocation

• Emission limits in the Kyoto Protocol are based on a “grandfathering rule”: countries may emit some portion of what they emitted in 1990

• What are other options?– Per capita basis: consuming carbon is a

basic human right and should be shared equally

– Per capita basis with historical accountability: takes into consideration what countries have emitted in the past

U.S. and Kyoto• The U.S. is a signatory to the Kyoto

Protocol but has not ratified it. Emission limits therefore are not binding.

• 25 July 1997: before the protocol was finalized, the U.S. Senate unanimously passed the Byrd-Hagel Resolution, which stated that the Senate did not support signing the protocol (Clinton administration)

• Bush has stated that he will not submit the treaty for ratification because he believes China and India should be held responsible for their emissions–Argues that “adhering to Kyoto

would have wrecked our economy”(“Bush: Kyoto Treaty would have hurt economy,” AP, 30 June 2005)

U.S. and Kyoto

Bush administration• Belief in market mechanisms; refusal to

implement emission limits on industry• June 2002: US EPA released “Climate

Action Report 2002”• July 2005: Asia-Pacific Partnership on

Clean Development and Climate– Together with Australia, India, Japan,

China, South Korea (account for 50% of emissions)

– Allows member states to set their own emission goals

– No enforcement

Source: http://www.asiapacificpartnership.org/

"It's in our vital interest to diversify America's energy supply -- the way forward is through technology. We must continue changing the way America generates electric power, by even greater use of clean coal technology, solar and wind energy, and clean, safe nuclear power.” – George W. Bush, 24 January 2007

Source: http://mmdnewswire.com

Relying on Uncertainty

• In a Congressional Insiders Poll conducted by the National Journal in February 2007, congressmen and women were asked, “Do you think it’s been proven beyond a reasonable doubt that the Earth is warming because of man-made problems?”– 95 percent of Democrats said yes– 13 percent of Republicans said yes

Source: http://syndication.nationaljournal.com/images/203Insiderspoll_NJlogo.pdf

Chicago Climate Exchange (CCX)• The only voluntary, legally

binding GHG reduction and trading system in North America

• Trading allowances since 2003• Companies joining exchange

agree to reduce GHG emissions by 6% by 2010

• Members: Ford, Rolls Royce, Motorola, Sony, Safeway, National Farmers Union, University of Michigan, City of Berkeley

Source: http://chicagoclimatex.com

Other U.S. Policies• Renewable Fuel

Standard– Took effect 1 September

2007– EPA-enforceable standard

that gasoline in the U.S. must contain 2.78 % renewable fuel (produced from plant or animal products or waste)

– Transformation of corn and soybeans from food to fuel

– Price of corn way up!– Who will this affect?

20-in-10 Plan (February 2007)

• US EPA ordered by Supreme Court to regulate GHG emissions from cars under Clean Air Act

• Plan to reduce gas usage by 20% in 10 years through alternative fuels, higher fuel efficiency for cars

• BUT: 20% cut refers only to projection of gas consumption in 2017

Source: http://www.whitehouse.gov/infocus/environment/

California• 1 June 2005: Schwarzenegger established

statewide emission targets:– By 2010, reduce to 2000 emission levels– By 2020, reduce to 1990 emission levels– By 2050, reduce to 80% below 1990 levels

• Established Climate Action Team to coordinate between different gov’t agencies

• CA Air Resources Board approved motor vehicle regulations that will reduce GHG emissions from new cars sold in CA 30% by 2016

• CA Attorney General Bill Lockyer has challenged Bush Administration’s new fuel economy standards (May 2006)

Source: http://climatechange.ca.gov

U.S. Cities• Many U.S. cities have

committed to reducing their emissions to levels specified by the treaty

• Portland (1993): First city to adopt strategies to reduce CO2 emissions– Goal: emissions 10% below

1990 levels by 2010 (more than Kyoto!)

– Energy efficiency programs, green building standards, public transit and infrastructure for bicycle ridership, education and outreach

Source: http://portlandonline.com/

San Francisco• 2004: Mayor Newsom’s Climate Action

Plan set emission goal of 20% below 1990 levels by 2012

• Mass transit fleet: 57% zero-emission vehicles (transportation accounts for 50% of emissions in SF)

• Partnering with PG&E to increase energy efficiency

• Solar powerprojects: MosconeConvention Center

Source: http://sfenvironment.org

Discussion Questions

As governor of California (or president of the U.S.), what policies would you implement to reduce GHG emissions?– What specific programs? What are your emission

goals? What mechanisms will you use?– How will you justify these programs to the public?

Where will the money come from?– What are possible criticisms of your programs? How

can you address these?

*Use what you’ve learned today and any information from the “Wedges” article!