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Impact of Climate Change on Arab Countries - (IPCC) - Working ...

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134<br />

CHAPTER 11<br />

INTERNATIONAL NEGOTIATIONS FOR A POST-KYOTO REGIME<br />

tati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> the Protocol will reduce developed<br />

country emissi<strong>on</strong>s by <strong>on</strong>ly 3%, and global emissi<strong>on</strong>s<br />

by less than 2%.<br />

To reduce the burden <str<strong>on</strong>g>of</str<strong>on</strong>g> compliance <strong>on</strong> developed<br />

countries, the Kyoto Protocol created three<br />

different ‘flexibility mechanisms’: a project-based<br />

mechanism within developed (‘Annex 1’) countries,<br />

also known as Joint Implementati<strong>on</strong> (JI); a<br />

project-based mechanism involving developing<br />

countries - the Clean Development Mechanism<br />

(CDM); and internati<strong>on</strong>al emissi<strong>on</strong>s trading<br />

am<strong>on</strong>gst Annex I countries. The European<br />

Uni<strong>on</strong> started an Emissi<strong>on</strong>s Trading Scheme<br />

even before the Protocol was ratified to gain<br />

experience with carb<strong>on</strong> trading.<br />

VI. MARKET-BASED MECHANISMS<br />

Market-based mechanisms are generally favoured<br />

by ec<strong>on</strong>omists and welcomed by industry, as they<br />

tend to reduce the costs to industry (or countries)<br />

<str<strong>on</strong>g>of</str<strong>on</strong>g> complying with targets. However, effective<br />

trading approaches require an overall cap <strong>on</strong><br />

emissi<strong>on</strong>s. Analysts are discovering that the<br />

administrative difficulties <str<strong>on</strong>g>of</str<strong>on</strong>g> implementati<strong>on</strong> and<br />

enforcement <str<strong>on</strong>g>of</str<strong>on</strong>g> cap-and-trade systems am<strong>on</strong>gst<br />

countries are not trivial. There have been published<br />

accounts <str<strong>on</strong>g>of</str<strong>on</strong>g> the weaknesses in the carb<strong>on</strong><br />

<str<strong>on</strong>g>of</str<strong>on</strong>g>fsets market with buyers paying either for<br />

reducti<strong>on</strong>s that do not take place or for reducti<strong>on</strong>s<br />

that would have taken place anyway. Partly<br />

for these reas<strong>on</strong>s, some ec<strong>on</strong>omists prefer the<br />

levying <str<strong>on</strong>g>of</str<strong>on</strong>g> taxes <strong>on</strong> activities that lead to the emissi<strong>on</strong>s<br />

<str<strong>on</strong>g>of</str<strong>on</strong>g> greenhouse gases.<br />

Carb<strong>on</strong> taxes are easier to implement than capand-trade<br />

schemes, ec<strong>on</strong>omically efficient, but<br />

politically difficult to legislate in some democratic<br />

regimes. A carb<strong>on</strong> tax would reduce carb<strong>on</strong><br />

emissi<strong>on</strong>s and increase revenues. Substantial<br />

benefits could be gained from carb<strong>on</strong> taxes in all<br />

countries based <strong>on</strong> the ‘comm<strong>on</strong> but differentiated’<br />

principle. In additi<strong>on</strong> to emissi<strong>on</strong>s reducti<strong>on</strong>s,<br />

they would generate resources for the<br />

development <str<strong>on</strong>g>of</str<strong>on</strong>g> clean energy sources as well as for<br />

the cost <str<strong>on</strong>g>of</str<strong>on</strong>g> adaptati<strong>on</strong> in poor developing countries.<br />

The CDM was created to support low-carb<strong>on</strong><br />

investment in developing countries. It allows<br />

both the private sector and governments to invest<br />

in projects that reduce emissi<strong>on</strong>s (as compared to<br />

emissi<strong>on</strong>s that would occur in a baseline scenario)<br />

in developing countries, and provides <strong>on</strong>e<br />

way to support links between different regi<strong>on</strong>al<br />

emissi<strong>on</strong>s trading schemes. However, it has<br />

encountered administrative and technical hurdles,<br />

and its future is clouded because <str<strong>on</strong>g>of</str<strong>on</strong>g> the<br />

uncertainty about the post-2012 regime. Initial<br />

CDM projects have been limited to a few countries,<br />

and a few gases, and have been plagued by<br />

bureaucratic procedures, with little c<strong>on</strong>tributi<strong>on</strong><br />

to sustainable development.<br />

With its limited targets, timeframe, and participati<strong>on</strong>,<br />

the Kyoto Protocol was never seen as a<br />

final soluti<strong>on</strong> to the climate problem. It was<br />

meant to be a first step, preparing for the broader<br />

engagement that will be necessary and establishing<br />

the legal, technical and instituti<strong>on</strong>al<br />

groundwork for future regimes, especially in<br />

internati<strong>on</strong>al emissi<strong>on</strong>s trading.<br />

Time and experience, however, have also revealed<br />

the limitati<strong>on</strong>s in the agreement - coverage <str<strong>on</strong>g>of</str<strong>on</strong>g><br />

some but not all <str<strong>on</strong>g>of</str<strong>on</strong>g> the developed world’s emissi<strong>on</strong>s,<br />

and inadequate provisi<strong>on</strong>s for m<strong>on</strong>itoring<br />

and enforcement.<br />

VII. LAGGING NEGOTIATIONS<br />

Because the Kyoto Protocol covered <strong>on</strong>ly the<br />

period from 2008 to 2012, it specified that negotiati<strong>on</strong>s<br />

for a sec<strong>on</strong>d “commitment period”<br />

should begin seven years in advance - i.e., in<br />

2005. However, the progress to date has been<br />

minimal. For example, the discussi<strong>on</strong>s at the<br />

Sec<strong>on</strong>d Ministerial Meeting <str<strong>on</strong>g>of</str<strong>on</strong>g> the Gleneagles<br />

Dialogue <strong>on</strong> <str<strong>on</strong>g>Climate</str<strong>on</strong>g> <str<strong>on</strong>g>Change</str<strong>on</strong>g> in M<strong>on</strong>terrey,<br />

Mexico, in October 2006 pointed to the urgency<br />

<str<strong>on</strong>g>of</str<strong>on</strong>g> early acti<strong>on</strong> but failed to decide <strong>on</strong> a process<br />

for reaching a new agreement. Likewise, at the<br />

November 2006 C<strong>on</strong>ference <str<strong>on</strong>g>of</str<strong>on</strong>g> the Parties to the<br />

UNFCCC in Nairobi, governments were unable<br />

to agree <strong>on</strong> a timetable for negotiating a post-<br />

2012 future despite widespread c<strong>on</strong>sensus <strong>on</strong> the<br />

diagnosis <str<strong>on</strong>g>of</str<strong>on</strong>g> the problem. This lack <str<strong>on</strong>g>of</str<strong>on</strong>g> progress<br />

increases the risk <str<strong>on</strong>g>of</str<strong>on</strong>g> failure in reaching an agreement<br />

to govern the post-2012 period. Those<br />

who have witnessed the glacial pace <str<strong>on</strong>g>of</str<strong>on</strong>g> these<br />

negotiati<strong>on</strong>s (and the North-South divide that<br />

appears to be widening) have identified several<br />

factors that may be c<strong>on</strong>tributing to this impasse.

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