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(January 2008)
Emissions of greenhouse gases have a global impact, unlike some other forms of pollution. Whether they are emitted in Asia, Africa, Europe, or the Americas, they rapidly disperse evenly across the globe. This is one reason why efforts to tackle global warming have been addressed through international collaboration and agreement.
The principal forum for international climate change action has been the United Nations, which has led to the Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol. However, more recently other international approaches have been put in place, the Asia Pacific Partnership and agreements under the G8, starting with their 2005 meeting in Gleneagles, UK.
In 1988 the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP) set up the Intergovernmental Panel on Climate Change (IPCC), an expert body that would assess scientific information on climate change. As a reaction to the concerns raised in the IPCC's First Assessment Report the UN General Assembly established the Intergovernmental Negotiating Committee for a Framework Convention on Climate Change. The UN Framework Convention on Climate Change (UNFCCC) was adopted in May 1992 and entered into force in 1994. The convention included the commitment to stabilise greenhouse gas emissions at 1990 levels by 2000.
The first Convention of the Parties to the UNFCCC (COP 1) was held in 1995. Negotiations at this and two subsequent COPs led to agreement on the Kyoto Protocol in 1997. The Kyoto Protocol set out specific commitments by individual developed countries to reduced emissions by an average of 5.2% below 1990 levels by the period 2008-2012. However, it would take three further meetings until the "Marrakesh Accords" were agreed, which provide sufficient detail on the procedures for pursuing objectives set out in the Kyoto Protocol.
The Kyoto Protocol involved several decisions:
In order for the Kyoto Protocol to enter into force and become legally binding it had to be ratified by at least 55 countries and for those ratifying countries to include enough Annex I (developed) countries to represent at least 55% of the total global emissions in 1990. In 2001 the US Government (which had earlier signed the Protocol) announced that it would not ratify the Protocol. As the USA emits more than a quarter of all greenhouse gas emissions from developed countries, this put the ratification of the Protocol in jeopardy. Australia also declared that it would not ratify, though it would pursue emission reductions as agreed.
Eventually, entry into force depended on the decision of Russia, another large greenhouse gas emitter. After some delay Russia notified the United Nations of its decision to ratify the Protocol in November 2004 and 90 days later, on February 19, 2005, the Protocol finally came into force.
While countries that are party to the Protocol are expected to rely mainly on reducing their own emissions domestically, three "flexibility mechanisms" were identified to improve the economic efficiency of reductions and make it easier for parties to comply. The three mechanisms are emissions trading, Joint Implementation and the Clean Development Mechanism.
Emissions Trading: A market-based approach to achieving environmental objectives that allows those countries or entities reducing greenhouse gas emissions below what is required to use or trade the excess reductions to offset emissions at another source, inside or outside the country. In general, trading can occur at the domestic, regional (EU), international and intra-company levels. A precedent is the USA acid rain program, which successfully trades permits for sulfur dioxide.
Joint Implementation (JI): A project-based mechanism, whereby one developed country - with emissions caps - can work with another to reduce emissions or enhance sinks, and share the resulting emission reduction units accordingly.
The Clean Development Mechanism (CDM): A project-based mechanism where certified projects proposed by developed countries - or companies from those countries - can be used to reduce emissions in developing countries. The developed country - or company - earns certified emission reduction units, which may be used against the country's own reduction commitment. CDM is primarily focused on development aid and secondly on emission reduction.
The role of nuclear energy in combating climate change received a lot of attention during the UNFCCC negotiations between COP 4 and COP 7 (1998-2002). This was due to the entrenched anti-nuclear position of some of the environment NGOs lobbying at the negotiations and the tendency for national delegations to be dominated by those from Environmental Departments, with a historically more negative position towards nuclear energy than their overall national position.
Nuclear energy is discriminated against within the Marakesh Accords, specifically within the sections dealing with the Clean Development Mechanism and Joint Implementation, but currently the effect of this discrimination is largely symbolic.
The Marakesh Accords state:"Recognizing that Parties included in Annex I are to refrain from using (credits from CDM or JI projects) generated from nuclear facilities to meet their commitments under Article 3, paragraph 1" This text is convoluted, reflecting perhaps a compromise reached during the negotiations. It should be noted that CDM and JI projects involving nuclear facilities are not banned. Parties are free to put forward such projects, as they would do any other candidate project.
However, the text says that developed counties (Annex I) Parties should refrain from using any credits earned from those projects for meeting their commitments - which are the emissions targets agreed under the Kyoto Protocol. The meaning of "should refrain" is a matter of debate. Annex I Parties are also meant not to exceed their emissions targets. Should they refrain from using nuclear project credits unless it means they would miss their target?
Ultimately, this is a symbolic discussion, as the current low price of CDM and JI credits and the short time period over which credits would be awarded mean that the availability of such credits is unlikely to be a significant factor in the decision on whether to invest in nuclear energy.
Concerns over the efficacy of CDM and JI in general have been expressed, many potential investors in projects being frustrated by the bureaucratic process involved in gaining approval for a project and the relatively small rewards for doing so. Moreover, there are concerns over the limited geographical distribution of CDM projects, with the majority of projects taking place in China, India and Brazil.
However, in the longer term the CDM and JI may become a more viable mechanism for encouraging low carbon projects and development. The discrimination against nuclear projects is increasingly seen as inappropriate.
The question of emission permits of some kind as a basis for trading in them or trading them off has been approached in several different ways. They may be auctioned, or they can be allocated to firms on the basis of historical emissions (known as grandfathering). Within countries, emissions (eg carbon) taxes may be used rather than emissions trading, but still linked to the price of permits. The attractiveness of tradable permits is that any national scheme can be linked internationally, though experience so far shows that emissions trading proposals and schemes now in place vary from country to country.
The best developed arrangement is the European Emission Trading Scheme (ETS). The ETS is seen as providing the core of a wider scheme to limit carbon emissions worldwide. In the first half of 2006, carbon to the value of EUR 12 billion was traded on ETS, five times more than in the same period in 2005, according to The Economist.
However in May 2006 the price of emission allowances under the ETS for the first commitment period (2005-2007) plunged to less than half their previous value, causing intense discussion on the efficacy of the whole scheme and questions as to whether the caps in some states were low enough to promote investment in emission reduction. Most EU countries had issued so many allowances on the basis of padded applications that they did not reach their quotas in the first year of phase one (2005-07) of the ETS, which undercut the value of traded allowances. Allowances in late May were trading at EUR 18/tonne CO2, representing over 1.5 cents/kWh on coal-fired generation and providing a weak disincentive to using coal, especially in Germany where output constraints apply on nuclear power. For most of 2005 and until May, permits were trading at over EUR 25.
Overall in the EU, 1785 million tonnes of CO2 were emitted in 2005 against quotas of 1829 Mt, though this does not necessarily represent any decrease from what emissions would have been in the absence of the EU ETS. The UK was 33 Mt (16%) over its quota, reflecting the low target set by its government, and a swing back to coal from gas. This means that generators (particularly) in the UK needed to purchase allowances and pass the cost on to consumers. However, it was thought that many generators had already passed on much of the price of the carbon allowances allocated to them as an "opportunity cost".
The EU ETS has now entered its second commitment period (2008-2012). Emissions allowance allocations have been reduced from those in the first commitment period. In some cases, for example Germany, Ireland, Latvia, Lithuania, Luxembourg, Sweden and Slovakia, the European Commission required admendments to be made to the draft National Allocation Plans submitted by those countries to reduce the overall quantity of allowances to be allocated, compared with their first proposals.
At one level it may be argued that the low price of emissions allowances in the first period could be considered as a success of the EU ETS, promoting the discovery of low-cost carbon avoidance measures. However, the credibility of the EU ETS as a part of broader climate change policies will depend on whether governments have set emissions allocations for the second period sufficiently tightly that they ensure the industries covered make a proportionate contribution towards meeting national Kyoto Protocol targets, as part of the EU15's overall 8% target."
In January 2008 the European Commission proposed changes to the EU ETS in the third period which would strengthen and extend the scope of the trading scheme. The third commitment period will run from 2013-2020. National allocation plans would be scrapped, to be replaced by a single EU-wide cap. The annual cap will decrease by 1.74 % each year and it is intended that the annual reduction will continue after 2020, with a review of the magnitude of the annual reduction to take place by 2025 at the latest. During the third commitment period a much larger share of emissions allowances would be auctioned instead of allocated free of charge. The scheme would broadened to include new industries (e.g. aluminium and ammonia producers) and new gases (nitrous oxide and perfluorocarbons).
The shift from free allocation to auctioning of emissions allowances, as well as the tightening of emissions allowance caps, will benefit nuclear energy and other forms of low carbon generation. Although it is thought that the cost of emissions allowanaces has already been incorporated as an opportunity cost, the free allocation of allowances means that fossil fuel power plant operators have not faced a true cost themselves for much of the emissions of their plant. In particular, when new electricity generation capacity is considered, fossil fuel generation will have to incorporate the cost of carbon allowances into the economic assessment of the plant. In addition, the tightening allowance cap is likely to lead to higher allowance prices, increasing the cost of greenhouse gas emissions.
The protracted delays before the eventual entry into force of the Kyoto Protocol have meant that the UNFCCC Negotiations began to consider what emissions reduction regime should follow the first commitment period, which will end in 2012 soon after the entry into force of the Kyoto Protocol in 2005.
Discussions are following two parallel tracks, the first considering future emissions reduction commitments for Annex I Parties to the Kyoto Protocol, the second considering long-term global cooperative action to address climate change This second track has a more sensitive task, as it includes the USA, without emissions reduction targets for the first commitment period, and developing countries, which as yet do not have emissions reduction targets.
Decisions on appropriate action beyond 2012 have generated a great deal of controversy, and are likely to continue to do so. Emissions from developing countries are expected to rise as they increase their use of fossil fuels to meet their need for energy for development. Many developed countries want developing countries to limit the growth in their emissions. Developing countries point out that their per capita emission are still much lower than developed countries and believe that developed countries should show their commitment to reducing emissions first, before expecting developing countries to take action.
In 2008 and 2009 the number of meetings under the UNFCCC increased as parties worked towards a target of agreeing a legally binding agreement for after the first Kyoto Protocol commitment period. However, progress has been slower than hoped and it is now expected that the COP 15 COP/MOP 5 meeting in Copenhagen in December will focus on reaching a high-level political agreement, with a more detailed agreement to follow.
The negotiations have been considering the future of the CDM and JI mechanisms. Many options are currently being considered, ranging from the inclusion of nuclear projects for the period 2012 onwards through to further technology exclusions from the CDM in addition to current restriction on nuclear projects, for example the exclusion of CCS projects.
Short-term and long-term focus of UNFCCC Negotiations
The ultimate objective of the Framework Convention on Climate Change is the stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. This is a long-term objective that will require emissions paths to be reduced progressively over the 21st century and beyond.
However, the Kyoto Protocol has focussed attention on a relatively short-term emissions objective, namely the first commitment period between 2008 and 2012. The targets set for this period were first agreed in 1997, which gave governments 10-15 years to put in place policies to reach these targets.
Given such a short period between target setting and the commitment period it seems unlikely that governments will be able to put in place meaningful policies to meet the targets. This may lead governments to agree to little more than "business as usual" targets, as they will not want to commit themselves to targets they know they cannot meet.
More importantly, the current bias towards short-term targets does not provide an impetus to make the investments in long-term infrastructure changes, such as energy, transport and buildings, which are needed to bring sustainable reductions in greenhouse gas emissions.
Ahead of the Copenhagen meeting a number of countries have declared their own national emissions reduction targets, applying to a range of timeframes. In some cases, as with the EU, parties have agreed to take on more stringent emissions targets if a new agreement can be reached under the UNCCC.
The Asia-Pacific Partnership on Clean Development and Climate, now known informally as APP, is a non-treaty partnership established by Australia, India, Japan, China, South Korea and the United States in July 2005. The Partnership involves countries that account for about half of the world's population and more than half of the world's economy, energy use, and greenhouse gas emissions. In October 2007, Canada joined APP.
The objectives of the partnership include:
At the inaugural meeting of the (then) AP6 held in Sydney in January 2006 it was agreed that task forces would be established to work on:
By mid 2007 the eight Task Forces had identified 18 Flagship projects in the above areas.
When APP was first announced some parties, including some EU governments and green groups, expressed suspicions that APP was being established as a rival to the United Nations process. However, efforts have been made on both sides to portray APP as complementary to the UNFCCC, rather than a competitor. This was particularly important for Japan, which is a member of APP and an Annex I Party under the Kyoto Protocol.
Critics of APP point to the fact that participating countries have made no commitments in terms of emissions targets. However, with only seven countries participating, compared with the hundreds under the UN system, and without the bureaucracy that the UNFCCC negotiations have established, the APP is perhaps better placed to help develop the technology solutions that will help reduce greenhouse gas emissions.
Group of 8 (G8)
The Group of 8 (Canada, France, Germany, Italy, Japan, the Russian Federation, the United Kingdom, and the USA) hold annual economic and political summit meetings of the heads of government with international officials.
The 2005 meeting held in Gleneagles, Scotland under the UK Presidency placed Climate Change and Africa as joint priority agenda items. Throughout the preceding year a series of events were held in preparation for the final summit in July.
In February 2005, the Scientific Conference on Climate Changewas held at the Hadley Centre for Climate Research and Prediction in Exeter, where the latest scientific understanding of climate change was discussed. The proceedings of the meeting include a discussion of technology options, which recognises that the potential contribution of nuclear energy is almost without technical limits.
A ministerial roundtable meeting of Energy and Environment Ministers held in March 2005, involved 20 countries, including Brazil, China, India, Mexico and South Africa. The meeting concluded that the countries shared common goals of:
The Gleneagles Summit itself was distracted by other events and as a result limited progress was made in discussions on climate change. However, it was agreed that the topics of energy and climate change would continue to be discussed at future G8 meetings.
The meeting in St Petersburg, Russia in 2006 focused on global energy security and climate change. There was agreement that the G8 would take action in the following key areas:
Included in the details of what was proposed to address these key areas included an endorsement of nuclear energy: "Those of us who have or are considering plans relating to the use and/or development of safe and secure nuclear energy believe that its development will contribute to global energy security, while simultaneously reducing harmful air pollution and addressing the climate change challenge."
The agreement highlighted the INPRO project and the Generation IV International Forum, interim solutions to address back-end fuel cycle issues and the importance of independent effective regulation of nuclear installations. The agreement also highlighted the USA GNEP proposal and the complementary proposals by Russia and the IAEA.
Global energy security and climate change were discussed further at meetings in Germany (June 2007) and Japan (2008).
Europe
In many respects Europe has been a leader in promoting action on global warming.
In March 2007 The European Council endorsed the European Commission's Strategic Energy Review and agreed on a unilateral cut of 20% in EU greenhouse gas emissions by 2020, relative to 1990 levels. The previous commitment was 8% reduction by 2012. This will require strengthening and extending carbon trading arrangements as well as deploying low- or zero-carbon technology. The European Council also endorsed the objective of making a 30% reduction in greenhouse gas emissions by 2020 and said that it would commit to this 30% target if other developed countries commited to (unspecified) comparable reductions in emissions and the more advanced developing countries (e.g. India, Brazil, China) "contributed adequately according to their responsibilities and respective capabilities". French President Chirac described the outcome as "one of the great moments of European history."
The European Council also set a target of meeting 20% of EU energy needs from renewables, leaving individual countries to decide their own policies in such a way as to allow nuclear power as part of their energy mix to be taken into consideration in allocating individual country targets for renewables. The Council noted "the European Commission's assessment of the contribution of nuclear energy in meeting the growing concerns about safety of energy supply and CO2 emission reductions" and it acknowledged the role of nuclear energy "as a low CO2-emitting energy source."
Contraction & Convergence
The concept of Contraction and Convergence is a long-term framework towards the ultimate object of climate change policy in terms of 'safe' emissions levels. The concept has gained some interest amongst politicians and climate change experts and is seen as potentially superseding the arbitrary short-term target setting of the current Kyoto Protocol process.
Under a Contraction and Convergence regime an international agreement would define to what level atmospheric greenhouse gas concentrations could rise before becoming unacceptable. Once this is defined, an estimate would be made of how much reduction in global greenhouse gas emissions is required to meet the target, taking into account the effect of sinks, and how quickly the target should be reached. This represents the 'contraction' element, and in itself it does not differ substantially from the aims of the UNFCCC to stabilize "greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system."
The key differentiating factor of Contraction and Convergence is the proposal that ultimately the 'right' to emit carbon dioxide is a human right which should be shared equally. Therefore, emissions targets should ultimately be allocated to countries on the basis of their populations. Emissions rights would be on a per capita basis and therefore require convergence from the present very unequal per capita levels to a universal per capita level.
During the convergence period, which should not be protracted, emission permits would be progressively adjusted from status quo to these new levels. Permits could be traded, and this would cause a major economic transfer from countries that have used fossil fuels to create wealth to those still struggling to alleviate poverty. After convergence, each country would receive the same allocation of carbon dioxide emission rights per head of population and further trading in permits is envisaged.
The fundamental principles of Contraction and Convergence have received some support from those who see the equal allocation of emissions rights as promoting social equity. However, these fundamental principles alone do not provide an alternative to the UNFCCC process, as they are no more than conceptual and much would be needed to turn them into a policy framework. Achieving political backing in developed countries is unlikely.
There are also concerns as to the fairness of the proposal. There are concerns that countries with rapidly expanding populations could be rewarded through this scheme, as their expanding populations could result in them having a greater allocation of emissions on a country basis. It might therefore be necessary to fix the overall country allocation on a specific national population on a specific date.
It has also been suggested that some countries have conditions that inherently require greater energy usage and consequent emissions, so therefore there should be differentiated emissions rights depending on local circumstances. For example someone living in the Arctic would have greater energy needs for heating and lighting than someone living in a more temperate region.
Carbon emission stocktake
The first complete set of data for the 41 industrialised parties of the UN Framework Convention on Climate Change (FCCC) was released at the Nairobi meeting and shows that greenhouse gas emissions continue to rise despite measures under the Kyoto Protocol. Figures for 1990 to 2004 show that apart from the temporary effect of restructuring in eastern Europe, emissions from industrialised countries rose 11% over the period. For all those countries emissions were down by 3% and for the 36 parties to the Protocol, emissions declined by 15%. Emissions from the USA were 16% up, those from Australia 25% up, and energy-related CO2 emissions for China rose 110% and for India 89% over the period - those from China exceeding Europe's. Most developed countries are targeting an 8% reduction to 2008-12.