Buenos Aires—The Kyoto Protocol is dead. There will be no further global treaties that set binding limits on the emissions of greenhouse gases (GHG) after Kyoto runs out in 2012. Under the Kyoto Protocol, industrialized countries are supposed to reduce their emissions of greenhouse gases 5.2 percent below their 1990 emissions levels by 2012. The European Union agreed to reduce its overall GHG emissions by 8 percent during that period. To cut its carbon emissions, the European Union has established a carbon trading scheme in which companies must purchase permits to emit carbon. The number of carbon permits is capped at 8 percent below 1990 emission levels. The European Union and environmentalist activists have been pushing for negotiations to establish more stringent emissions limits for a commitment period after 2012. It's not going to happen.
The conventional wisdom that it's the United States against the rest of the world in climate change diplomacy has been turned on its head. Instead it turns out that it is the Europeans who are isolated. China, India, and most of the rest of the developing countries have joined forces with the United States to completely reject the idea of future binding GHG emission limits. At the conference here, Italy shocked its fellow European Union members when it called for an end to the Kyoto Protocol in 2012. These countries recognize that stringent emission limits would be huge barriers to their economic growth and future development.
"I've been wondering if a cap and trade system for reducing carbon emissions would be successful," said Taishi Sugiyama, a senior researcher at Japan's Central Research Institute of Electric Power Industry. "I think the answer is no. The market for carbon credits will likely shrink to be only within Europe after 2012." Sugiyama was participating in a panel discussion looking at "Options for post-2012 global climate regime". The consensus of the panel members—including HenrikHasselknippe of the Point Carbon trading consultancy, Jonathan Sinton from the Lawrence Berkeley National Laboratory, and Axel Michaelowa the head of the International Climate Policy Program at the Hamburg Institute of International Economics—was that the Kyoto process is over. Sugiyama flatly predicted that Kyoto signatories Canada, Japan, and Russia will withdraw from the treaty after 2012.
So what now? Two different but complementary paths for addressing any future climate change have emerged from the COP-10 Climate Change Conference. The Europeans and activists have been pushing the first, which envisions steep near-term reductions (next 20 years) in the emissions of GHG as a way to mitigate projected global warming. On the other hand, the United States has been advocating a technology-push approach in which emissions continue to rise and then GHG concentrations and emissions are cut steeply beginning in about 20 years. Over that time, the US sees the development of new energy efficient technologies, the creation of low cost methods for capturing and storing carbon dioxide both as emissions and atmospheric concentrations, and the invention of low carbon energy supplies. Such an approach has the advantage of fostering economic growth in the developing countries lifting hundreds of millions from abject poverty over the next 20 years.
Sugiyama recommended that the technology-push approach be formalized outside of the Kyoto Protocol process with a Zero Emissions Technology Treaty. Such a treaty would have broad appeal because it avoids the inevitable conflicts over allocating emissions targets and because most countries recognize the importance of long-term technological progress. Sugiyama argued that a global cap and trade system is way too premature for developing countries to join because effective low-cost ways to cut carbon emissions simply don't exist. "I cannot imagine a cap and trade system over the whole globe without low cost energy and emissions control technologies," said Sugiyama. However, as advanced energy technologies emerge over the next couple of decades, implementing a global cap and trade system becomes a more realistic prospect because developing countries will have access to effective technologies. In the meantime, the world could learn from the regional European carbon market what works and what doesn't work.
History will record that the COP-10 Climate Change Convention is where it was first widely recognized that the Kyoto Protocol is a dead end. And where humanity chose to embark on a high-tech path toward confronting whatever challenges any future global warming may present.