G8’s Gradual Move toward Post-Kyoto Climate Change Policy

Toni Johnson, Staff Writer

Council On Foreign Relations' Backgrounder - June 22, 2007

Introduction

This year’s G8 Summit ended with a pledge from the United States to “seriously consider” significant cuts by 2050 to man-made greenhouse gas emissions (NYT), which have been linked with global climate change. That fell short of German Chancellor Angela Merkel’s aim for mandated emissions cuts and raised questions about talks for replacing Kyoto Protocol commitments set to expire in 2012. The United States is the only G8 country that has refused to ratify Kyoto, which set mandatory emissions targets for developed countries. In 2001, President Bush rejected the treaty on the grounds that it would harm the U.S. economy. Bush has not softened his opposition to mandatory caps much, but that stance grows increasingly tenuous. A growing number of prominent lawmakers and industry leaders are joining the call for mandatory emissions cuts. Even with the United States on board for post-Kyoto framework discussions later this year, emerging industrial powerhouses China and India have indicated opposition to any mandatory emissions cap scheme (Telegraph). Meanwhile, a number of Kyoto signatories struggle to meet their emissions targets.

What has happened since the Kyoto Protocol was signed?

The accord went into force in 2005 after Russia's ratification helped it meet the threshold of membership accounting for 55 percent of global emissions. So far, more than 174 countries have ratified the treaty, with most of the responsibility for reducing emissions falling on thirty-five nations including European countries, Canada, and Japan. As of 2002, the twenty-seven-member European Union ranked the second-largest emitter (BBC) of greenhouse gases, after the United States. Now, recent estimates suggest China may overtake the United States (BosGlobe) as the top emitter.

Some Kyoto participants have found it difficult to meet their assigned targets—ranging from 5 percent to 8 percent below 1990 levels (except EU countries, which have special targets). Collectively, the European Union agreed to a target of 8 percent below 1990 levels. The protocol allowed the EU to assign individual countries their own targets, which go as high as 28 percent below 1990 levels. A June 2007 report from the EU’s environmental agency suggests that with reductions of nearly 7.9 percent as of 2005, it is on track to meet its Kyoto goal. The EU report shows that a few EU countries, such as Britain and Sweden, are expected to meet or exceed their individual targets, but other countries, such as Spain, could be headed in the wrong direction.

Some critics say mismanagement of the European emissions trading program launched in 2005 resulted in many industries not having to reduce emissions (PDF) very much. Under the program, industries are allocated emissions caps and then allowed to purchase credits that offset their carbon output above those caps. Greenhouse gas trading prices were higher than expected when the market first opened but then devalued significantly once it was discovered that the European Union had handed out too many credits, creating a market surplus—thus allowing industries to make little or no emissions reductions (Energy Business Review). The Economist notes that “carbon reduction makes sense until the marginal cost of cutting carbon emissions is equal to the marginal benefit of cutting emissions.” An article in Newsweek suggests emissions trading is “politically popular” because it is open to the type of lobbying that led to a surplus of credits in the European Union.  

How have G8 members done under the protocol so far?

The EU’s environment agency projects Britain and France will to meet their Kyoto obligations but other G8 members are struggling:

• Canada: Emissions have gone up as much as 35 percent since 1990 because of continued increases in the exploitation of the country’s oil resources (AP), calling into question whether Canada can make its 5 percent reduction target.
• Japan: The second-largest economy in the world is also in jeopardy of not making its assigned goal. Japanese emissions have risen over 8 percent, which means the country will now have to reduce emissions more than 14 percent by 2012 to meet its Kyoto target of 6 percent emissions cuts.
• Italy: Greenhouse gases have increased more than 12 percent above 1990 levels. Italy’s target is a 6 percent decrease by 2012.
• Germany: The world’s sixth-biggest carbon dioxide emitter faces criticism from environmental advocates and the EU for plans to build twenty-six new coal-fired power plants (Spiegel), considered one of the main sources of greenhouse gas pollution. A German plan to exempt coal plants from Kyoto requirements adds to concerns (NYT). Although Germany has managed a 17 percent reduction in emissions (very close to its overall goal of 21 percent under the protocol), much of those reductions came from shutting down power plants in former East Germany.
• Russia: Russia was not faced with mandatory cuts since its greenhouse gas emissions fell well below the 1990 baseline due to a drop in economic output (Business Week) following the breakup of the Soviet Union. Yet Russia has recently approved joining the emissions trading market. As the largest corporate emitter of greenhouse gases in the world, it stands to realize large profits from selling carbon credits to other industrialized countries.

What has the Bush administration done since it rejected Kyoto?

The United States would have been required to reduce its emissions 7 percent below 1990 levels had it not refused ratification of Kyoto. Instead, U.S. emissions rose more than 16 percent (PDF) between 1990 and 2005.

The Bush administration and Republican lawmakers opposed to emissions caps have been touting the Asia-Pacific Partnership on Clean Development and Climate, which consists of Australia, China, India, Japan, and South Korea. The aim of the initiative was to foster cooperation on ways to improve clean energy development and lower emissions without global mandates.

But since the initiative started, the United States, India, and China have come under increased domestic pressure to move toward mandatory emissions controls. California is among several U.S. states that have entered into partnerships or passed laws for controlling greenhouse gases ahead of the federal government, leading to a showdown with congressional lawmakers. Major U.S. cities have also instituted a host of policies designed to cut greenhouse gases (WashPost).

What are the prevailing views among G8 members on how to deal with climate change?

Dealing with climate change falls into two major camps, mandatory emissions controls and voluntary programs. There is a consensus among the group’s seven Kyoto signatories that, despite initial difficulties, the first round of the protocol represents an important step toward tackling global warming (AP). Europe and Japan back tougher mandatory emissions measures for the next round of climate commitments. Discussions also are under way in Canada to move toward taxing greenhouse gas pollution. Former French president, Jacques Chirac, called for a carbon import tax on goods from nations that have not ratified Kyoto to help European companies disadvantaged by tougher environmental rules (The Australian), a measure that also could be pushed by France’s new president, Nicolas Sarkozy.

The Bush administration has been adamant in its rejection of mandatory caps. Some government employees contend the administration has tried to silence or obscure public information (CBS) on global warming. But recently, the United States has turned into a battleground over how to handle climate change. Several states are in court fighting the auto industry over whether they have jurisdiction to impose restrictions on cars, which could end up resulting in a de facto nationwide standard on auto emissions (CSMonitor). The U.S. Supreme Court already has said the Environmental Protection Agency has the authority to regulate greenhouse gases from automobiles, overruling the Bush administration’s position that the agency did not.

What is the G8 perspective on the carbon emissions of developing countries?

The United States maintains that action on global warming will not work without the participation of all big emitters. Other G8 members seem to support that view. Ahead of this year’s meeting, German environment minister Sigmar Gabriel said “the G8 wants to dispel the notion in the developing world it must pay for the excesses of the rich nations (ABC Money).” China and India, while beginning to consider what to do about their own growing emissions, have maintained that developed nations are responsible for the current level of greenhouse gases and should take the lead (Yale Global).

What did the 2007 G8 talks on climate change accomplish?

Opinions differ on the outcome of the talks. Sally McNamara, a senior policy analyst in European affairs at the Heritage Foundation, said the “extremely mixed” outcome of this year’s summit has been “giantly overplayed.” She notes the final 2007 language on global warming mirrored language that came out of the 2005 G8 summit, which contained no real targets for reducing emissions. Bryan K. Mignone, science and technology fellow at the Brookings Institution said the agreement reached could “ultimately lead to something constructive,” though he expressed some reservations.

But experts agree talks for the next round of international global warming commitments—set for Bali in December—will be the time for making decisions. Mignone pointed out that Kyoto advocates did leave with an agreement from the United States to participate in talks among major emitting countries ahead of the Bali meeting. He said the United States would need to “play the part of leader” to ensure the major emitter discussions are fruitful.

Without the United States and developing countries entering into binding commitments, other Kyoto signatories may be unwilling to agree to additional international commitments, said Elliot Diringer, director of international strategies for the Pew Center on Global Climate Change —even though the European Union would likely forge ahead on its own to reduce its greenhouse gas emissions 20 percent by 2020.  

How does the outcome of the G8 climate discussion affect U.S-Europe relations?

Experts said the outcome illustrated improved relations between the United State and Europe. Diringer said it was a “step forward” for both the G8 and the United States because a dialogue among major emitters paves the way for “significant progress.” McNamara said the agreement showed a lessening of some of the tensions between Europe and the United States that have arisen in the last few years over stiff ideological differences on global warming and the Iraq war.

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