There was never any doubt that the Kyoto negotiations would fail to produce an agreement that would be adequate from an environmental perspective. If we are to avoid a doubling in atmospheric concentrations of greenhouse gases (the level at which scientists have estimated the potential impacts of climate change), global emissions must be reduced by more than 60%. As a result, environmentalists were calling on industrialized countries to make an initial commitment in Kyoto to reduce their greenhouse gas emissions to 20% below 1990 levels by the year 2005.

Instead, industrialized countries agreed to reduce their total emissions of greenhouse gases to approximately 5% below 1990 levels in the period 2008-2012., with Canada agreeing to a 6% reduction. While developing countries did not adopt any quantified emission reduction commitments in Kyoto, the most intriguing part of the Kyoto agreement was the creation of a "Clean Development Mechanism" that will allow industrialized countries (or companies from those countries) to invest in projects that reduce greenhouse gas emissions in developing countries and to credit those emission reductions against their own Kyoto commitments.

While all this may sound like a good start to global efforts to protect the climate, four factors make the emission reductions promised by the Kyoto Protocol seem less significant than they appear at first glance.

First, greenhouse gas emissions in industrialized countries were, in 1995, already 4.6% below 1990 levels as a result of the economic collapse in Russia and other countries of Central and Eastern Europe. As a result, the Kyoto agreement does little more than hold greenhouse gas emissions from industrialized countries constant at current levels. Environmentalists will push for the adoption of stronger commitments by Canada and other industrialized countries, particularly when the adequacy of the Convention and Protocol are next reviewed. We will also continue to argue that any quantified emission reduction commitments by developing countries must only come into force when industrialized countries have demonstrated that they have met their commitments.
Second, it is not at all clear that the Kyoto agreement will always generate real emission reductions. For example, Russia's greenhouse gas emissions are now 30% below 1990 levels and it has only made a commitment to return greenhouse gas emissions to 1990 levels in the period 2008-2012. Most analysts believe that there is no way Russia's emissions will increase back up to 1990 levels in this time period. Nonetheless, the Kyoto Protocol's emission trading provisions leave the door open to the possibility that Russia will receive permits to pollute up to 1990 levels. If it then fails to do so, countries like Canada could potentially purchase these permits and claim emission reductions even though no actual emission reductions had occurred. Environmentalists will work to close this loophole and make these "paper" emission reductions invalid under the Protocol.

We will also monitor the future development of an international greenhouse gas emission trading system, and work to ensure that its design and operation is transparent, based on buyer beware principles, and open to the private sector (e.g., energy producers and users). The system will also have to address issues of equity and fairness, and produce certified emission reductions.

Third, the Kyoto Protocol will allow countries to count efforts to enhance carbon sequestration against their emission reduction commitments. Unfortunately, it is unclear specifically what sequestration activities will be allowed. For example, it is not yet clear how reforestation will be defined within the Protocol.

While enhanced carbon sequestration should certainly be encouraged, the methodologies for quantifying carbon dioxide removal from the atmosphere are very poorly developed. For example, every country that has estimated the impact of its activities that have increased carbon sequestration has used a different methodology and some countries, like Canada, still have not developed methodologies that would allow it to do this. Environmentalists will work to ensure that carbon sequestration does not become a major loophole in the agreement by pushing for it only to be credited (either within national accounts, emissions trading, or the Clean Development Mechanism) when solid methodologies have been developed and broadly accepted.

Fourth, it is not necessarily the case that commitments to reduce greenhouse gas emissions by specific industrialized countries will result in emission reductions in those countries. No limits have been placed on the ability of countries to use "flexibility" mechanisms like emissions trading and the Clean Development Mechanism to gain credit for actions they take that reduce emissions elsewhere. While the atmosphere is not concerned about where emission reductions occur, most of the emission reductions that will ultimately be required must come from industrialized countries and there is a need to get started. Environmentalists will work to ensure that some limits are put on the use of these flexibility mechanisms.

Some of the steps the federal government should take to begin its implementation of the Kyoto Protocol include:

Announce an initial package of measures in conjunction with the 1998 Federal Budget that will represent the first step in Canada's efforts to meet its Kyoto commitment.

Begin discussions with provincial governments and stakeholders early in 1998 to examine how to allocate responsibility for meeting Canada's Kyoto commitment and to identify, design and implement a more comprehensive set of actions to reduce greenhouse gas emissions.

Work with stakeholders and other levels of government in 1998 to examine, design, and make recommendations for the 1999 Budget with regard to the implementation of broad based economic instruments that will provide market signals that encourage greenhouse gas emission reductions.

We welcomed the opportunity to participate as members of the Canadian Delegation in Kyoto and we feel we made a serious and important contribution, on behalf of our groups, to many discussions and debates with other delegation members and representatives from other nations. We look forward to working with the federal government in the coming year as it begins to take action to meet its Kyoto commitments and engages in preparations for the Fourth Meeting of the Conference of the Parties.

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