At the end of November, UN delegates will gather in Paris for the 21st Conference of the Parties (COP) and engage in the annual Framework Convention on Climate Change (UNFCCC). Nearly two decades after the Kyoto Conference and 10 years since the implementation of the Kyoto Protocol, the United Nations is still struggling to create a legally binding solution to climate change. As Paris looms, there’s a sense of cautious optimism that this conference may finally promote the action to avert the climate change threat on the horizon. Read on to find out about the major events of the conferences over the last 18 years and the impacts they have made.

What can we expect from this year’s Climate Change Conference?

Why Climate Change Matters to World Leaders

Scientific consensus has concluded that the human production of greenhouse gasses (GHGs) beginning with the industrial revolution have impacted, and are continuing to impact, the global environment. GHGs include carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons, and perfluorocarbons.

A 1995 report from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) concluded that “the balance of evidence suggests a discernible human influence on global climate.” In 1997, the Kyoto Conference produced the Kyoto Protocol, which attempted to establish caps on industrialized nations’ carbon emissions. Most European countries agreed to the legally binding treaty, but the U.S. Senate failed to ratify it. In 2001, the Bush administration formally rejected the Kyoto Protocol.

Climate change currently holds a prominent place in the U.S. Intelligence Community’s annual Worldwide Threat Assessment. Global climate change threatens strategic resources, habitable coastal regions, food supplies, promotes the spread of infectious diseases, leads to more extreme weather events, and exacerbates humanitarian crises. The generally accepted figure for average global temperature rise in the last century is 0.8 degrees Celsius and the projected rise in the next century will be an additional 1.2 degrees. However, many scientists fear the temperature rise could be more severe, projecting as much as a 4 degrees Celsius rise from pre-industrial levels by 2100.

Such an increase would reduce the amount of habitable land available, cripple agriculture, and lead to major flooding in coastal regions. Nations previously resistant to the idea of a severe climate change threat are coming around to engage in the international discussion.

History: Framework Convention on Climate Change (UNFCCC)

Kyoto (1997)

After the 1995 report from the Intergovernmental Panel on Climate Change (IPCC) concluded that the evidence supports the existence of human-influenced climate change, the United Nations sought to create a treaty to deal with the issue. In 1996, U.S. undersecretary for global affairs Timothy Wirth stated that the Clinton Administration accepted the findings of the Intergovernmental Panel on Climate Change and called for legally binding targets for greenhouse gas reductions to be drafted. In 1997, the Conference of the Parties met again, this time adopting the Kyoto Protocol. The conference acknowledged that the majority of the burden to halt climate change fell on the industrialized Annex-I countries (developed countries like the United States, Japan, Russia, and most of Western Europe). Several developing (Annex-B) nations also accepted the stipulations of the Kyoto Protocol.

The Kyoto Protocol introduced mechanisms such as emissions trading, a global fund–to assist developing countries to minimize their emissions–and a monitoring system to measure emissions and ensure compliance. Nations that ratified the agreement had to independently find solutions to cut their emissions. However, the Protocol allowed for flexibility, acknowledging that the cost of reducing emissions varied among countries.

Enforcement of the Protocol was relatively weak, but still present. A nation failing to hit its initial emission reduction target would be required to increase its secondary target by 30 percent and would be barred from the emissions trading program.

Although President Clinton signed the agreement, the Senate refused to ratify the Protocol due to the exemption of countries like China and India, which the protocol classified as developing. Ultimately, the United States feared that the protocol would damage its economic competitiveness.

Bonn (2001)

Early in his presidency, George W. Bush rejected the Kyoto Protocol for the same reasons the 1998 Senate refused to ratify it. The United States also did not participate in the 2001 Climate Change Conference held in Bonn, Germany, choosing to observe.

The previous conference in the Hague in 2000 devolved rapidly into an argument over enforcement policies and political disagreements. The disagreement created between the United States and the European Union eventually caused the talks to be suspended and resumed at a later date. As a result, there were low expectations for the 2001 conference. One of the major remaining issues was the role of carbon sinks in net carbon reduction (championed by the United States) versus direct source reduction (preferred by the E.U.). With the U.S.’s withdrawal in 2001, many feared the Kyoto Protocol would collapse.

The Protocol could only be ratified if agreed upon by nations making up 55 percent of global carbon dioxide emissions from 1990. The United States was responsible for 35 percent of GHG emissions in 1990, so its withdrawal meant that countries such as Russia (17.4 percent) and Japan (8.5 percent) had strengthened negotiating positions. Without either of these two nations, the Protocol would likely collapse.

Despite the high stakes and low expectations, an agreement was reached. The Bonn agreement allowed for nations to use various mechanisms, such as carbon sinks, to achieve their target emissions reduction without necessarily reducing their GHG production. The agreement tackled forest and crop management which had proved significant to negotiation breakdowns at The Hague, allowing for countries to credit land allocations toward their GHG reduction, but included a hard cap to these credits. The success of the negotiations at Bonn set the Kyoto Protocol on the path to international ratification.

Nairobi (2006)

In 2005 in Montreal, Canada the Kyoto Protocol entered into force at the first annual Meeting of the Parties. The Protocol was extended beyond its initial 2012 expiration and set in motion plans to negotiate deeper cuts to GHG emissions. The optimism for the future of the Kyoto Protocol dimmed a little in Nairobi the following year. While certain steps were taken to include developing nations in the Protocol, the negotiations also faced criticism. Observers like BBC corrospondent Richard Black criticized many delegates for failing to effectively discuss cutting emissions for fear of economic costs and competitiveness. This has been a recurring criticism of the global effort to reduce GHG emissions.

In order for countries to pursue solutions based on national interests, they would need to see climate change mechanisms as opportunities to increase economic growth rather than costs. The concern is always that making money, rather than reducing emissions, is the priority for governments at these conferences. The Nairobi conference also raised questions as to whose climate problem the U.N. is solving. The responsibility to reduce emissions lies largely with the wealthy, developed nations while the impact is most strongly felt by poorer, less developed nations.

These concerns eventually led the international community to re-evaluate the Kyoto Protocol and begin new negotiations on emissions cuts, suggesting global emissions would need to see a 50 percent cut in the near future. Work on technology transfer to developing countries was extended but only on a limited basis.

Copenhagen (2009)

Prior to the 2009 Meeting of the Parties, most anticipated that an emissions reduction goal would be agreed upon, as the first commitment period to the Kyoto Protocol was to end in 2012. However, leading up to the conference, world leaders elected to put off the crafting process for a later date. Most of the major negotiations fell short and one of the few takeaways from the Copenhabgen conference was an external agreement between the U.S., China, South Africa, India, and Brazil. This conference is widely considered a failure by those preparing to attend the 2015 Paris Conference.

Because the five-nation agreement was external, it was not considered binding by the U.N. Although it calls for individual nations to track pollution-related goals and allocate funds for developing nations, the agreement failed to produce the long-term goals. Developing nations felt excluded, as did the E.U., while all parties felt the conference itself was sub-optimally organized and run.

Durban (2011)

The Durban conference set in motion the events leading up to the Paris conference of this year. It was agreed that a legally binding deal would be ratified by all countries in 2015 to take effect in 2020. Additionally, the framework for the Green Climate Fund (GFC), which had been established the previous year, was adopted. The GCF would assist poorer countries adapt to the climate change challenges. The president of the conference declared the Durban Meeting of the Parties a success, though scientists warned that more drastic action was needed to avert the 2 degrees Celsius increase predicted for 2050.

What to Expect from Paris

So far, 148 out of 196 countries have met the U.N. deadline to submit emissions reduction plans leading up to the Paris conference. The U.N. argues that if more countries submit these plans, it is more likely that the conference will result in a strong global treaty. India’s plan drew attention by stating that the country would require 2.5 trillion USD to meet its emissions goals. While it is unclear how much of that money India intends to draw from foreign investments, it is clear that it will have to be a significant amount.

As more plans are submitted, temperature predictions have been established and updated. At present, the current projection for global temperature rise is 2.7 degrees Celsius above pre-industrial levels–an improvement from the earlier projection of 3.1 degrees Celsius.

The IPCC has also elected a new chairman for the first time in 13 years. Hoesung Lee of South Korea will chair the Paris conference. While it is still very early, many have approved of the selection, suggesting he could serve as a link in negotiations between the developed and developing countries.

The Paris conference will be tasked with ratifying a legally binding treaty much like the one produced at Bonn in 2001. While almost all of the U.N. member nations have accepted the reality of human-influenced climate change, there will likely be intense debate over how net emissions ought to be reduced. As always, the weight of economic and competitive costs will weigh on the minds of delegates from developed countries while delegates from developing countries will continue to press for climate change adaptation funds. There is currently a very real sense from the global community that something must be done and a cautious sense of optimism that something will be.

Conclusion

The history of the U.N. Framework Convention on Climate Change is long and messy. While most agree on the necessity for global emissions reduction, there are numerous disagreements over how to do so and who is primarily responsible. Most agree that the primary blame for climate change lies with the developed nations, but there are questions regarding how much these nations should help those that are currently developing. The role of emissions sinks has been contested before and may come up again in Paris. Meanwhile, India, China, and the United States will play major roles in determining the success of the Paris conference, and the ultimate effectiveness of any agreement reached. While the UNFCCC has been successful in reducing global emissions over the last 10 years, there is still much more work to do, and only time will tell if the nations of the world are up to the challenge.

Resources

Primary

UNFCCC: Durban Climate Change Conference

UNFCCC: The Green Climate Fund

UNFCCC: Provisional Agenda for the 21st session of the Conference of the Parties

The White House: President Barrack Obama at UN Climate Change Summit

The White House: President Barrack Obama’s Climate Change Plan 2015

105th Congress: Byrd-Hagel Resolution

Netherlands Environmental Assessment Agency: Trends in Global CO2 Emissions 2014 Report

Senate Armed Services Committee: Worldwide Threat Assessment of the US Intelligence Community

IPCC: Climate Change 1995 The Science of Climate Change

UNFCCC: The Kyoto Protocol

Additional

BBC: Climate Talks a Tricky Business

NYTimes: Many Goals Remain Unmet in 5 Nations’ Climate Deal

NYTimes: Leaders will Delay Deal on Climate Change

The Guardian: Durban Deal will not Avert Catastrophic Climate Change, says Scientists

Hoesung Lee: The Risk of No Action

BBC: UN Battle Looms over Finance as Nations Submit Climate Plans

BBC: Paris Climate Summit: Don’t Mention Copenhagen

BBC: Why did Copenhagen Fail to Deliver a Climate Deal?

Matthew Vespa: Climate Change 2001: Kyoto at Bonn and Marrakech

Ehsan Masood: United States Backs Climate Panel Findings

BBC: Kyoto: Why Did the US Pull Out?

TedxTalks: Climate Change is Simple: David Roberts

TedxTalks: The Reality of Climate Change: David Puttnam

Samuel Whitesell

Samuel Whitesell is a graduate of the University of North Carolina at Chapel Hill having studied History and Peace, War, and Defense. His interests cover international policy, diplomacy, and politics, along with some entertainment/sports. He also writes fiction on the side. Contact Samuel at Staff@LawStreetMedia.com.

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While debate still surrounds issues involving climate change, scientists have agreed that global carbon emissions must begin to be reduced by the year 2020 in order to avoid the worst effects of climate change. Unsurprisingly, however, this agreement has spawned new debates concerning what to do about it. One solution that has gained political momentum in the past decade is a process commonly referred to as “Cap and Trade”.

What is Cap and Trade?

Cap and Trade, as one might surmise from its name, is a two-step system that attempts to definitively lower carbon emissions and provide an incentive for carbon-reducing technological innovations. In step one, a governing body (be it state, regional, federal, or global) sets a maximum limit of carbon emissions for all participating entities that is a certain degree lower than current emissions. Each year this cap will be gradually reduced until the coalition meets its reduction goal in x amount of years. Simple enough.

Step two involves quantifying the carbon emissions allowable under the cap into carbon credits or permits. Each permit would represent a definable amount, such as one ton of carbon emitted. These credits would then be distributed amongst polluting entities such as factories, refineries, companies, and others, forcing these entities to pollute no more than the amount of carbon credits they possess. If a company comes in under their pollution amount, they can sell their excess credits to carbon brokers or to other companies for a profit. In this way, the trade system incentivizes technological innovations that reduce carbon emissions and the companies that invest in them. In turn, companies that are in danger of exceeding their given amount or are in the process of implementing long-term carbon reduction plans, the results of which would not be seen for a number of years, will purchase carbon credits so as not to exceed their limit. The ability to purchase credits off the carbon market allows for flexibility in the way polluting entities choose to reduce their emissions. Overall, there are only as many credits as the cap allows, and as the cap is incrementally reduced each year, companies will gradually receive less credits, ensuring carbon emissions are reduced annually until a specific goal is reached.

What are some examples of Cap and Trade programs?

Cap and Trade systems exist at different levels of government and have been created for pollutants other than carbon. The 1990 amendment to the Clean Air Act, which created a permits program for sulfur pollution in an attempt to improve air quality, is seen as one of the earliest of these programs and is often hailed by advocates as a successful Cap and Trade program. However, carbon is the principal greenhouse gas affecting climate change, and proponents of Cap and Trade claim that this program can be adapted for carbon as well as a number of other pollutants.

The 1997 Kyoto Protocol, an international treaty to reduce greenhouse gases, implemented the Cap and Trade system as part of its global approach to emissions reductions. The trading program is operated by the United Nations and binds 37 industrialized countries to global emissions reductions, using several carbon emission trading schemes to accomplish the task. The global carbon market is unfortunately, to a degree, at the mercy of global politicians as they attempt to negotiate a post-Kyoto program, with the first commitment period having ended in 2012. Also at the international level, the European Trading System is a carbon Cap and Trade system created in 2005 and run by the European Union. This trading program is factory-based and distributes its emissions credits to individual companies, factories, power plants, etc. Because of this, the European Trading System is the largest Cap and Trade system in the world, incorporating more than 11,000 individual entities in 31 countries.

At the state and national levels, New South Wales and New Zealand have Cap and Trade emissions reduction systems, created in 2003 and 2009, respectively. Additionally, China plans to establish a nation-wide Cap and Trade system in 2016 in response to social unrest over increasing pollution levels in Chinese cities.

In North America, a number of American states and Canadian provinces in the American Northeast participate in the Regional Greenhouse Gas Initiative, an organization aiming to reduce carbon emissions by 10 percent by 2020 from the 2009 levels. Pennsylvania, New Brunswick, Ontario, and Quebec act as observers to the coalition, and while New Jersey was a founding member, Governor Chris Christie withdrew the state from the program in 2012. California also implemented an economy-wide Cap and Trade system in 2013 that seeks to reduce emissions by 16 percent between 2013 and 2020.

What are the advantages of a Carbon Trading program?

Advocates of Cap and Trade list a number of advantages this system has over rival emissions-reduction solutions, such as a flat carbon tax. Cap and Trade creates an assured and definite outcome, provides flexibility for the participating entities in their emission reduction methods, incentivizes technological innovation, and represents a global solution.

A flat carbon tax does not necessarily guarantee reduced emissions; it merely makes carbon more expensive in the hope of deterring polluters. Cap and Trade ensures a definite outcome through the cap on total emissions of the participating entities. As the cap is gradually lowered each year, the total emissions within that program decreases, regardless of the number of carbon permits any particular entity owns.

The gradual decrease in the emissions cap and the ability to purchase carbon credit creates the flexibility inherent in this system and the incentive for technological progress. Instead of making carbon significantly more expensive overnight, the cap is reduced in increments while the polluting parties learn to adjust to the new restrictions. It provides companies, factories, and countries time to research, develop, and implement a plan for carbon emissions reduction and provides them with more breathing room in terms of how they want to address their concerns. Some entities might want to implement long-term plans which may have large effects but the results will not be seen for a number of years, while others may want to experiment with new, emerging technology. If the plan does not work the first time around, they can purchase more carbon credits for that particular segment of the process and try something else. Entities that have more successful pollution reduction methods, however, will spend less time and less money, prompting industry and economy-wide investment in clean technology.

Lastly, Cap and Trade represents a global solution to a global problem. Because the trading aspect of the system requires a coalition of entities working in tandem and agreeing to common pollution reduction goals, the carbon market makes an international, far-reaching solution possible. The Kyoto Protocol and the European Trading System are examples of this kind of cooperative effort. A carbon tax, unless agreed upon in the United Nations (an unlikely event), can only feasibly be employed on a national level. However, pollution is a global problem, and a reduction in pollution in one country will not reduce the pollution in others.

What are the disadvantages of a Cap and Trade system?

Despite the goals it sets out to accomplish, there is significant opposition to Cap and Trade as a pollution reduction mechanism. Opponents often favor alternate solutions such as a flat carbon tax or increased public investment in emerging green technologies. Many groups find fault with Cap and Trade because they feel it will create problems with the price of carbon within the artificial carbon market, making it difficult to sustain and even more difficult to produce actual beneficial effects for the economy. James Hansen, in his New York Times Op-ed article “Cap and Fade”, argues that if all or even a large majority of participating bodies were to reduce their carbon emissions in a given year, the market would be over-saturated with carbon permits. The price of carbon would plummet and the artificial Cap and Trade market would collapse. At that point, the individual bodies will see little incentive in continued participation in the program, and Cap and Trade will have ultimately done little to reduce pollution.

Opponents also malign the various “offsets,” or alternatives to carbon reduction that are included within Cap and Trade programs. These offsets raise the overall cap for such measures as the avoidance of deforestation in Brazil or planting trees in a former industrialized area. Opponents point out that reduced pollution in one area should not allow increased pollution in another area. These offsets end up producing no net decrease in overall pollution, hindering the main purpose for which Cap and Trade systems are created.

Another issue critics have with Cap and Trade is that unless it is implemented on a global scale, with as many countries participating as possible, much of the world will continue polluting unabated. If Norway enters into a global program or creates a domestic cap and trade carbon market, that’s great, good for Norway. However, this does not compel another country, say India, to join as well. Climate change does not discriminate where its effects will be felt, and the climate over Norway will be affected the same as the climate over India, regardless of who is participating in a cap and trade program. Therefore, if not all major polluters join the cause, what incentive does that give to the countries or entities that are willing?

Critics also point to the problems experienced in the European Trading System’s carbon market in recent years as a sign that large-scale carbon trading is not a sustainable or effective solution. In early 2013 carbon prices within the European market fell considerably, so low that it threatened to destabilize the market altogether, and forced the European Union to delay credits distribution and take other measures to drag prices back up to a reasonable level. While many advocates argue that a carbon market would regulate itself, many look at the example of the ETS and remain skeptical.

Many are also afraid that Cap and Trade lends itself to corruption and big-business manipulation. Already in the carbon trading programs that currently exist, carbon brokers have materialized to service the buying and selling of carbon permits, in an attempt to get in on a piece of the Cap and Trade pie. Because Cap and Trade relies on the price of carbon and the machinations of a free market, opponents worry that a program will become another appendage of Wall St. without producing real environmental benefits.

Conclusion

Due to economic downturn in 2008 and the increased costs to consumers as a result of a carbon cap, the drive to implement a national carbon trading scheme in the United States has slowed considerably. However, Cap and Trade programs continue to appear in various shapes and sizes, and as the debate surrounding its effectiveness continues, we will wait and see how successful the current programs in effect prove to be.

Resources

Primary 

United Nations: Kyoto Protocol

European Commission: EU Emissions Trading System

Regional Greenhouse Gas Initiative: Model Rule

California Environmental Protection Agency: Cap and Trade Program

Additional 

Forbes: Four Reasons California Cap and Trade Had an Extraordinary First Year

Clean Technica: Five Good Things Cap and Trade Has Done for You

Environmental Leader: Why Cap and Trade is Good for Environmental Marketing

Environment 360: The Flawed Logic of the Cap and Trade Debate

The New York Times: Cap and Fade

Chron: Risks of Cap and Trade

Grist: Beyond Baby Steps: Analyzing the Cap and Trade Flop

Washington Post: The Folly of Unilateral Cap and Trade

Council on Foreign Relations: The Debate Over Greenhouse Gas Cap and Trade

Environmental Defense Fund: How Cap and Trade Works

Center for Climate and Energy Solutions: What Is Cap and Trade?

Ecosystem Market Place: Washington State to Pursue Cap and Trade Program

Joseph Palmisano

Joseph Palmisano is a graduate of The College of New Jersey with a degree in History and Education. He has a background in historical preservation, public education, freelance writing, and business. While currently employed as an insurance underwriter, he maintains an interest in environmental and educational reform. Contact Joseph at staff@LawStreetMedia.com.

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