What amount of GHG emission reductions will actually be reached domestically?
Hans De Keulenaer
Kyoto and Kyoto Mechanisms (KMs)
The Kyoto protocol, signed in 1997, included three flexible mechanisms to lower the overall cost of implementation: Clean Development Mechanism (CDM), Joint Implementation (JI), and Emission Trading (ET). They are also called 'the Kyoto Mechanisms' (KMs). KMs allow countries to reach their domestic Kyoto target by taking actions abroad, in countries where the cost of reducing greenhouse gas (GHG) emissions is lower. The protocol stipulates that this should only be 'supplemental to domestic action', but it does not quantify this statement.
So let's take a look at how European countries plan to use these KMs to reach their 2012 emission targets.
The use of KMs in Europe
- The Netherlands and Luxemburg are planning to bridge the gap between their current emission rate and their 2012 target entirely with KMs. That is, to say the least, a very flexible interpretation of the word 'supplemental'. However it does speak in their favour that they are planning to go further than their compulsory contribution.
- Austria, Belgium, Denmark, Ireland, Italy, and Spain are planning to reach a substantial part of their 2008-2012 emission reductions using KMs. Portugal will probably also join this list. For most of those countries, the emission projections are such that despite their abundant use of KMs, they are likely to miss their targets by a substantial margin. Those countries appear to have a structural problem with reaching their Kyoto contribution and KMs were clearly not conceived to solve such problems.
- Of all the EU-15 countries, only Sweden and the UK look like they will easily achieve their 2012 target without making any use of KMs. Germany will most probably get close to it. Finland, France, and Greece could achieve their target if they are willing to take some additional domestic measures. But they too might still decide to make use of KMs to some degree.
The problem with CDM
But what is really wrong with the KMs? Well, nothing. In theory these are valuable systems to optimize the global cost-efficiency of the Kyoto implementation. But in practice, they have been the target of much criticism, in particular CDM and ET (see yesterday's post by Hans Nilsson).
The CDM gives industrialized countries the opportunity to invest in GHG reduction actions in developing countries. The main problem is that the additionality of such actions should be proven. In other words, CDM should not promote 'free rides' — actions that would have been executed anyway.
Statistics from CD4CDM show that until now, about half of the CDM actions were aiming at reducing the HFC-23 emissions of Asian chemical plants manufacturing HCFC-22 (a refrigerant). But China and other developing countries have the obligation to stabilize their HCFC-22 production by 2016 and phase it out completely by 2040. This phase-out programme could now be under pressure because of the CDM. Since they represent cheap CDM opportunities, industrialized countries are indirectly stimulating the construction of new HCFC-22 production plants in Asia.
The Carbon Finance Unit of the World Bank has recently suggested that CDM projects should also help in financing Efficient Lighting Programmes (see recent blog post). It is hoped that some European countries will act upon this advice when searching for CDM projects. And hopefully other types of energy efficiency programmes will receive some CDM attention as well.
References
- The report 'Greenhouse gas emission trends and projections in Europe 2006', by the European Environment Agency (graphs pages 21, 60, 61 and 62)
- Publications and papers by CD4CDM