CIAO DATE: 05/02

The Buenos Aires Climate Conference: Outcome And Implications

Christiaan Vrolijk

The Royal Institute of International Affairs

April 1999, New Series No. 2

The Kyoto Protocol is the result of a long negotiating process, culminating in the third Conference of Parties (COP-3) in Kyoto in December 1997. Many issues, however, were not well defined in the Protocol, or were deliberately left ambiguous. The follow-up meeting in Buenos Aires, COP-4, in November 1998, was supposed to fill in the gaps, and in particular to lay out the basics for the Kyoto mechanisms, international emissions trading, joint implementation and the clean development mechanism. The meeting did not resolve all these issues, but did adopt the Buenos Aires Plan of Action. This is an ambitious work plan aimed at resolving the outstanding issues of the Kyoto Protocol by the end of 2000, at the sixth Conference of Parties.

Introduction

The Kyoto Protocol agreed in December 1997 was a landmark, but not an end point. Negotiations are on going to fill in the gaps left in the Protocol. From 2 to 14 November the Conference of Parties met again to follow up on Kyoto in its fourth session (COP-4) in Buenos Aires. After the media hype of the Japan meeting, the lack of news coverage was not entirely deserved. Although discussions had to focus on filling in the details in the framework of the Kyoto Protocol, these details will determine just how big a step Kyoto was.

The Framework Convention on Climate Change (FCCC) was negotiated at the 'Earth Summit' in Rio de Janeiro in 1992 and has entered into force in 1994. Under the Convention the Parties have committed themselves to stabilize greenhouse gas concentrations 'at a level that would prevent dangerous anthropogenic interference with the climate system'. ¹ The headline commitment for the countries listed in Annex I of the Convention, the industrialized countries, is to return greenhouse gas emissions to 1990 levels, and to show a reversal in the trend of growing emissions before the year 2000. The Conference of Parties meets annually as the supreme body of the Convention, dealing with various issues related to it. The Kyoto Protocol, negotiated at COP-3 in Japan, is a Protocol to the FCCC, and as such was also on the negotiating table of the COP in Argentina. It sets out renewed, and now legally binding, emission reduction commitments for the Annex B Parties (the industrialized and former COMECON countries). The overall commitments add up to a 5% reduction from 1990 in a basket of greenhouse gases, including carbon dioxide, methane, nitrous oxide, some industrial gases (HFCs, PFCs, SF6) and emissions and removals from land-use change and forestry (LUCF). After its entry into force, the Meeting of Parties (to the Kyoto Protocol) will take over the responsibility for the Protocol issues.

Many Annex B Parties that have taken up commitments under the Kyoto Protocol stressed the importance at working on the rules for the mechanisms of the Protocol. The EU also stressed the need for limits on the use of these mechanisms and a compliance regime. The G77/China stressed the importance of a debate on the adverse effects and impact of responses. One of the commentators said that Article 17 on international emissions trading 'contains the basic principles, but its main feature is the fact that it can be interpreted to anyone's liking'. ² Many articles leave room for further work by the COP. Even if the text was not deliberately ambiguous, only general principles were described, so that the 170 Parties at the negotiations could reach agreement, with a later COP to decide on the details of the issue.

This paper will first briefly discuss the science of climate change and then consider the Buenos Aires Plan of Action and the most important individual issues of the conference.

Climate change science

The Second Assessment Report (SAR) of the Intergovernmental Panel on Climate Change (IPCC) in 1995 concluded that 'the balance of evidence suggests a discernible human influence on global climate'. ³ Some new reports use stronger language. The Hadley Centre, part of the UK Meteorological Office, for example, concludes that anthropogenic emissions have significantly enhanced the greenhouse effect in the last few decades. ⁴ Research by the National Center for Atmospheric Research in the United States also concluded that humans, and not some natural events such as volcano eruptions or sunspot activity, are responsible for global warming. Various new findings have weakened the position of the sceptics on climate change. One example is that the global cooling measured in the troposphere (the lowest 10—15km of the atmosphere) by satellites can be attributed to a drop in the altitude of their orbit and not to actual cooling taking place. ⁵ Another example is the continuing temperature records: each of the first eight months of 1998 sets an individual record of its own; ⁶ four of the five warmest years on record before 1998 occurred in the last decade. ⁷ Figure 1 overleaf shows the global temperature record of the last century; the trend of warming seems impossible to deny.

Only two paragraphs were dedicated to rapid climate change in the SAR, but scientists have found much more proof for this thesis. So global warming may not be gradual, 'but rather like a sudden switch to a new climate system'. ⁸ A study by the Potsdam Institute, for example, predicts the slowdown (which is already happening) and even shut-down of the Gulf Stream that warms northwestern Europe. ⁹ The reason for this is the increased inflow of fresh water from the melting Arctic into the North Atlantic. Higher carbon concentration will probably boost forest growth, also moderating warming in the short term, but in 50 years' time the heat could kill the tropical forests, causing 'runaway' warming. The Third Assessment Report will report extensively on the issue of rapid climate change.

The most extreme El Niño on record, floods in Bangladesh, flooding of the Yangtze river in China, forest fires in Indonesia and Russia and Hurricane Mitch, to name but a few of the worst weather/climate disasters in 1998, have caused 50,000 deaths and economic damage costing more than $90bn. ¹⁰ The ever-increasing costs of weather-related losses have grabbed the attention of insurance companies, which are now committed in the climate change debate. Hurricane Mitch caused disaster in Central America during the negotiations in Buenos Aires. The COP expressed 'to the people and governments of Central America its strongest solidarity in the tragic circumstances they are facing, which demonstrate the need to take action to prevent and mitigate the effects of climate change', and urged 'all [Parties]...to take steps to achieve the early entry into force of the Kyoto Protocol.' ¹¹

The Buenos Aires Plan of Action

An intensive two-and-a-half-year negotiating process on the basis of the Berlin Mandate, formulated at COP-1 in 1995, resulted in the agreement of the Kyoto Protocol. During these initial negotiations by the Ad-hoc Group on the Berlin Mandate (AGBM) most of the issues that finally ended up in the Protocol were discussed. Some of the elements, such as the clean development mechanism (CDM), were introduced in the last few days, but even here the principal ideas had been around before. However, most texts of the articles were completely new, on 'established' subjects and novel articles alike; this has opened up a new debate about the interpretation of the Kyoto Protocol's articles. On other issues, such as emissions trading and policies and measures, agreement was reached on the broad idea only, with the specifics left open for later negotiating rounds. In Article 17, for example, the Protocol states merely that the COP 'shall define the relevant principles, modalities, rules and guidelines...for emissions trading.'

Many of the commentators pointed to details in the Protocol that needed to be filled in. The COP did recognize many of the problems and shortcomings of the Kyoto Protocol; however, most of these details have not been resolved. After twelve days of intense negotiations President Maria Julia Alsogaray, Secretary of Natural Resources and Sustainable Development of Argentina, opened the final plenary of the COP (after a night of high-level negotiations behind closed doors) at 6 am on the Saturday morning. Eleven decisions and two resolutions were adopted in this last hour of negotiations, including the Buenos Aires Plan of Action as a framework for these decisions: 'The Conference of Parties, determined to strengthen the implementation of the United Nations Framework Convention on Climate Change and prepare for the future entry into force of the Kyoto Protocol to the Convention, and to maintain political momentum towards these aims, adopts a Plan of Action, as specified in its separate decisions.' ¹²

These separate decisions are dealt with below. Although the Swiss delegation complained about the lack of transparency in the final hours, the pressure of the deadline saved the day, as it did in Kyoto.

Michael Zammit Cutajar, the Executive Secretary of the FCCC, called this a solid plan of action and firm deadlines that would generate results over the next two years. 'The crunch will come at the sixth session of the COP at the end of the year 2000,' he said. Although some object that very little concrete progress has been made and that this is simply postponing real action, nicknaming the action plan Mañana Mandate, many negotiators are more positive. Ritt Bjerregaard, EU Environment Commissioner, called the outcome 'a success for the global process'. Stuart Eizenstat, Head of the US delegation, noted a 'sea change in attitude [for the better]'. All Parties, including industry, are becoming more involved with the process; and part of this involvement is the access of inter- and non-governmental organizations to the contact groups. ¹³

Financial mechanism

The financial mechanism, ¹⁴ Article 11 of the FCCC, provides funding for actions taken by the developing countries under the Convention. Apart from mitigation, these actions can include some adaptation and response measures, preparation of National Communications, and capacity building. This mechanism is funded by the industrialized countries. Under the interim arrangements of the Convention the Global Environment Facility (GEF) was entrusted with the operation of the financial mechanisms. The GEF was set up in 1991 and funds activities benefiting the global environment in four areas: climate change, biodiversity, international waters and the ozone layer. After years on an interim basis COP-4 decided that the GEF would be the operator of the financial mechanism, which is now also used under the Protocol Development and transfer of technologies a part from financial support, transfer of technology ¹⁵ is also part of the FCCC; the financial mechanism could play a role in supporting these transfers. Developing countries need environmentally sound technologies to honour their sustainability commitments under the Convention. Most developing countries, however, do not have these technologies, nor do they have the possibility of acquiring them. Annex I Parties argue that they cannot transfer technologies they do not own; the technologies are private property protected by patents. After a long deadlock some progress was made at COP-4, where a consultative process was set up. The COP requests Annex II Parties (the OECD countries of Annex I), to 'take all practicable steps to promote...the transfer of...technologies'. Non-Annex I Parties are urged to submit their particular technology needs. Parties were requested to provide submissions by March 1999, so that the Subsidiary Body for Scientific and Technological Advice (SBSTA) would be able to report on the consultation process by end of 1999.

Adverse effects ¹⁶

Another issue high on the agenda of many developing countries is adverse effects — here meaning the effects of climate change itself and the effects of the implementation of response measures to climate change and the commitments of the Kyoto Protocol. They include droughts and floods, weather extremes, destruction of fragile ecosystems, but also impacts on international trade, and social, environmental and economic impacts. There was substantial progress on this issue: a work programme has been set out, calling for a workshop and initial action at COP-5, and further decisions at COP-6 in 2000; the basic elements of the analysis are listed; and the IPCC is invited to report on adverse effects in its Third Assessment Report. These issues have also been included in the work programme on the mechanisms of the Kyoto Protocol (see below). Although (financial) compensation ¹⁷ is far from the political reality, the 'specific needs and concerns of developing country Parties arising from such adverse effects and impacts [of the implementation of response measures], is high on the agenda of the future COPs. The insistence of the G77/China, and in particular of some oil-exporting countries, on the need to address these issues has paid off.

Activities implemented jointly ¹⁸

The FCCC indicates that Parties can act on their commitments jointly with other Parties. The Convention itself did not establish a (then controversial) mechanism for joint implementation. ¹⁹ However, the activities implemented jointly (AIJ) pilot phase was set up in Berlin, as a first step towards such a mechanism. COP-1 also promised a 'conclusive decision on the pilot phase and the progression beyond that, no later than the end of the present decade'. ²⁰ Experience has been gained in the last few years with just over a hundred projects, but many developing countries have had little, if any, experience. Of the 95 projects in the second synthesis report, ²¹ only 27 took place in the developing countries; the other 68 were situated in the Annex I economies in transition. The African countries in particular gained virtually no experience, with just one project; the Asia-Pacific region also has a poor record, with only six projects. Therefore developing countries, opposing the AIJ pilot phase in Berlin in 1995, were now calling for an extension of the programme. The COP decided to continue the AIJ pilot phase, for continued capacity building — especially in the Parties of Annex B with economies in transition and the developing countries that lacked experience so far. The pilot phase must lay the groundwork for the (project-based) Kyoto mechanisms. The review process should now start at the tenth Subsidiary Bodies meeting in Bonn in May and June 1999 with a third assessment report, and finish at or before COP-6 in 2000. This would mean that the final conclusions of the pilot phase experience would be drawn before the start of the CDM (possible from 2000). Informal consultation resulted in a text proposal for crediting of AIJ projects, but was rejected by the G77/China. ²²

The mechanisms of the Kyoto Protocol ²³

Before Kyoto some Parties were pushing for flexibility in the commitments. This took shape in many proposals for differentiation of emission targets between Parties and in the development of some form of international trading of emissions quota, which was especially strongly backed by the United States. The flexibility idea was mostly opposed by developing countries, but during the final negotiations in Kyoto the opposition was not sustained. Joint implementation (Article 6), the clean development mechanism (CDM, Article 12), international emissions trading (Article 17) were unofficially christened 'flexibility mechanisms', but unease with the term in the negotiations led at COP-4 to the introduction of the politically correct name 'Kyoto mechanisms'. The bubbling provision (Article 4, allowing a group of countries, for example the EU, to redistribute their commitments and jointly reach their targets) is sometimes considered to be part of the mechanisms for flexibility, but is not covered in this decision on the mechanism.

Before the Buenos Aires meeting the United States stressed the need for a quick start. The EU wanted a compliance system in place first, and also proposed ceilings on the use of the mechanisms. Australia, in particular, promoted the idea of fungibility (or exchangeability) between the mechanisms and gases, which seemed to be authorized by the fact that the COP dealt with the three mechanisms as a group. The Annex I Parties asked for a parallel development of the mechanisms, but the G77/China wanted a step-by-step approach, starting with the CDM.

Jacoby et al. stated a few months before Buenos Aires that 'the key piece of unfinished business from Kyoto is implementing a system for trading...In negotiating the details of this system, now scheduled for COP-4, a focus on clear definitions, vigilant monitoring, and strict enforcement is essential.' ²⁴ Michael Grubb stressed the need to establish liability rules and to elaborate the supplementarity of the mechanisms to domestic action. ²⁵ He also raised the important issues of the possible 'hot air' (emission allowances that even without any mitigation action would not be used) in some economies in transition and 'devaluation' of the commitments by too much flexibility.

The Kyoto Protocol merely provides a framework for the mechanisms, but deferred the design of rules and guidelines to later sessions of the COP. Buenos Aires resulted in a work programme 'taking decisions on all the mechanisms under Articles 6, 12 and 17 of the Kyoto Protocol at its sixth session'. The mechanisms will be developed in parallel, with priority given to the CDM, steering a careful course between the Annex B and developing countries' standpoints.
The EU, Switzerland and the African group called for ceilings in the use of the mechanisms, which were heavily opposed by most other Annex B Parties. The EU has submitted proposals for establishing quantitative and qualitative ceilings to the Subsidiary Bodies, for further consideration in Bonn in May—June 1999, but failed to agree internally on a single best option. The African group asked for regional ceilings to enforce equity in the CDM, with the need for capacity building in African countries for implementation of CDM projects — one of the reasons for extension of the AIJ pilot phase. Brazil said that the CDM should not be operational before ratification of the Kyoto Protocol and implementation of domestic measures. Article 12 opens the possibility of early credit accumulation from the year 2000; however, its feasibility is questionable. The rules for investment in CDM projects will only be finalized at COP-6 if the work programme is met. Allowing time for the organizations to be put in place, for the development of projects, and for certification and the usual red tape, the first projects are not likely to start in the first few years of the new millennium. The hostile response to the idea for an interim phase for the CDM, and the opposition to the proposal for crediting AIJ projects, do not suggest much scope for early action in developing countries. If entry into force of the Protocol is required before the Kyoto mechanisms are put in place, very little of the pre-commitment period crediting of CDM projects is likely to be used.

The impact of flexibility
The total scope of 'flexibility' (including the mechanisms and the basket of gases) in the Kyoto Protocol could greatly reduce the costs of meeting the targets. A model by MIT projects a cost reduction of around 20% by inclusion of the other greenhouse gases, without trading. Annex B trading would result in a total cost saving of more than 50%. Inclusion of the CDM reduces costs by comparison with domestic action, by 75% for the OECD and 90% for the whole of Annex B. ²⁶ Other studies show similar large savings from trading and inclusion of the basket of gases. Combining these effects gives a very large savings potential. ²⁷ Grubb warned that the combined impact of all the 'flexibility' in the Protocol might be much greater than the negotiators had ever realized, and that this could have adverse consequences. ²⁸ He stressed the need to keep sufficient incentives for innovation, so that the mechanisms do not simply become vehicles for avoiding the changes necessary. Others at a joint IEA—UNEP meeting also highlighted the risk of inflation of the commitments. ²⁹ The potential for 'hot air' is part of this problem of inflation and has been put on the work programme for the mechanisms. In the MIT study the effect on the emission distribution is profound: the 'constraint Parties would import nearly three-quarters of their required reduction, 60% coming from the CDM. The target emissions for these Parties is 6% below 1990 levels, but they could go up by a staggering 24% with the CDM.

Preparations ³⁰

When 55 Parties have ratified the Kyoto Protocol, including Annex I Parties that are responsible in total for at least 55% of 1990 CO2 emissions, the Protocol enters into force (after 90 days). The Conference of Parties (to the FCCC), after its entry into force, will also serve as a Meeting of the Parties to the Kyoto Protocol (COP/MOP-1). The preparations for this meeting are under way and include work on the elements of the Protocol related to compliance and on policies and measures.

Parties are requested to submit information on the main elements of preparations. The work plan divides the tasks between the Subsidiary Bodies which organize a workshop and report to the COP. The compliance issue has been given priority, with a report scheduled for COP-5 in October 1999. COP-5 must take further steps, possibly setting up an ad-hoc working group on compliance, to reach a decision at COP-6 in 2000. On policies and measures the SBSTA is requested to report to COP-6.

Land-use change and forestry ³¹

The question of including emissions from land-use change and forestry (LUCF) was much debated before Kyoto. On the one hand, these emissions have the same effect on global warming. On the other hand, natural sinks and sources, uncertainty in measuring the emissions, and problems with mitigation opportunities made inclusion less popular with some Parties. In the Kyoto Protocol LUCF has been included. Jacoby et al. commented: 'Kyoto is likely to yield far less than the targeted emission reduction. That failure will most likely be papered over with creative accounting, shifting definitions of carbon sinks, and so on. If this happens, the credibility of the international process for addressing climate change will be at risk.' ³² In an attempt to resolve some of the issues, LUCF was discussed by the SBSTA, whose draft decisions were adopted by the COP without much debate. For example, it had asked the COP the confirm the meaning of Article 3.3 of the Kyoto Protocol, which it did: both when LUCF is a sink and when it is a source it is part of the assigned amount. ³³ Further decisions are postponed until after the completion of the IPCC special report, due in May 2000.

The need for further research was stressed again by the huge difference in the reported inventories available at Buenos Aires, compared with one year earlier. Australia, for example, reported base-year emissions only half as large as the previous year's; the new inventory also reported that LUCF in 1995 was a source of more than 10% of the country's CO2 emissions, compared with a substantial sink (again more than 10%) reported a year before. The same large differences could be found in the US reporting: base-year LUCF was reported to be two-and-a-half times as large, while for 1995 the numbers were nearly double. Other countries, such as France and the UK (the latter, like Australia, a source), also had differences of more than 10% compared with the previous year. ³⁴

LUCF is also one of the issues of debate for the CDM. Article 12 of the Protocol does not mention sinks as part of the mechanism. On the other hand, much of the developing country AIJ experience so far has been in LUCF projects: a third of the number of projects and over half of the emission reductions. Special attention has to be given to the long-term durability of these projects and their contribution towards long-term climate change and development goals.

Single projects ³⁵

Iceland drafted a proposal on the impact of single projects on small economies. Any project initiated after 1990 with emissions larger than 5% of the Parties' greenhouse gas emissions (provided it is smaller than 0.05% of Annex B emissions) could be excluded from the target in the first commitment period. The Alliance of Small Island States (AOSIS) objected that this could affect the integrity of the Protocol; and it is also questionable given the (trading) mechanisms of the Protocol. Iceland therefore narrowed down the range of eligible projects to those having global benefit (reducing leakage). Parties that might profit from this proposal— Liechtenstein, Monaco and Iceland — have maximum emissions of around 2MtC, . For Iceland a project with emissions comparable to those of a 20—25 MW coal-fired power plant could be eligible. The COP asked the SBSTA for advice on a decision at the next meeting.

Other issues

Ratification

As of 15 March 1999, the closing date for signature, 84 Parties had signed the Kyoto Protocol, including Russia and Ukraine, which signed in the last few days. ³⁶ Among the other nearly 100 Parties, Annex B Parties Hungary and Iceland had not yet signed. At the start of COP-4 only 59 Parties, among them Japan and the EU, had signed. The United States seemed to be withholding its signature to achieve increased bargaining power. Indeed, near the end of the two-week negotiations it became the 60th signatory so as to add momentum and show willingness on the last hard day of the high-level meetings.

To date, only Fiji, Tuvalu, and Trinidad and Tobago have ratified the Protocol. The October 1998 joint IEA—UNEP meeting highlighted the risk of non-ratification, blaming the US insistence on meaningful participation of developing countries. ³⁷

Although it is technically possible for the Protocol to enter into force without US ratification, the latter is considered crucial for its success. In his State of the Union address on 19 January 1999 President Clinton said: 'Our most fateful new challenge is the threat of global warming'. But the US Administration has promised not to send the Kyoto Protocol to the Senate for ratification until developing countries commit to 'substantial participation'. However, 'the longer any nation delays adopting serious controls on greenhouse gas emissions, the higher the cost of meeting its Kyoto obligations and the more difficult it will be to generate the requisite domestic political support. The current US policy involves a long delay.' ³⁸ On the other hand, ratification is simply impossible at present; Senator Chuck Hagel commented on the signing of the Kyoto Protocol by Clinton: 'The President blatantly contradicts the will of the US Senate. The Byrd-Hagel Resolution...was very clear.' ³⁹

Voluntary commitments

The ultimate objective of the FCCC is to stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. For this, the negotiations ultimately need to address the evolution and expansion of developing-country commitments. In Kyoto the provisional Article 10, the voluntary opt-in possibility for developing countries, was deleted at the last minute, resulting in a very unclear procedure for voluntary commitments. The first day of negotiations in Buenos Aires saw a hostile debate on this issue. China mentioned that the issue could destroy the G77's unity, and the EU supported the G77, stating that COP-4 should focus on a work programme for implementation of the Protocol. Many other Annex I Parties expressed regret that the issue could not be discussed, stressing that Parties wanting to take on commitments should be encouraged to do so. AOSIS's Samoa acknowledged that evolution of commitments was necessary in the long run, but also that the discussion could not take place at this time. Voluntary commitments were subsequently deleted from the agenda. The President set up informal consultations for interested Parties.

The contact group on adequacy of commitments (of the FCCC, i.e. stabilizing emissions at 1990 level) agreed that they were inadequate. The group, however, was not in agreement on the reasons for inadequacy or on what actions to take; some argued that developing countries had to join commitments to stabilize concentrations, others that the Annex I Parties were not committed to reaching their targets. Four different text proposals were considered. China interpreted the proposals from both the United States and Australia, and the former's insistence on 'substantial participation', as an attempt to force voluntary commitments from developing countries; their response was that the IPCC's work showed that global action was needed. No decision could be made other than to forward this issue to COP-5. ⁴⁰ .

Despite all the opposition and uncertainty Kazakhstan announced its intention to take on full Annex I commitments and join Annex B of the Protocol. Argentina pledged to take up commitments at COP-5 and other Parties too displayed a positive attitude.

US Ambassador Sturart Eizenstat said that this constituted the kind of 'meaningful participation'' by developing countries that his country needed for ratification. Consequently the United States became the 60th Party to sign the Protocol.

One of the major attractions for developing countries to take up commitments is the possibility of joining in the emissions trading scheme; by exporting quotas these countries could generate hard currency income. Setting the targets for newcomers is therefore very important: a Party will only sign up if the target is not too high, so that it can sell quotas; but a target that is too weak deliberately creates 'hot air'. The former is important in the case of Argentina, whose emissions growth is 5% per year. ⁴¹ The latter is especially important for the Kazakh commitment, where preliminary estimates for 1996—8 show a decline of 40% compared with 1990. However, the Kazakhs argue that the target should not be too strict, since emissions are projected to return nearly to 1990 levels in the commitment period, with a further 35% growth over 10 years. ⁴²

Industry involvement

Industry involvement in the negotiations is not limited to negative action; a more proactive approach seems to be becoming the norm. Two of the largest oil companies in the world, British Petroleum and Royal/Dutch Shell, have set themselves emission reduction targets larger than the Annex B average. Both companies have chosen to set up an internal emissions trading scheme, which will also generate experience for the international trading system later. Both companies have also invested heavily in the renewables industry in the last few years. Just before the start of COP-4 on 27 October 1998, General Motors, Monsanto, BP and the World Resources Institute launched a collaboration called 'safe climate, sound business', which recommends immediate action by governments and industry. The climate change debate is now penetrating new business and industry constituencies. IBM, for example, announced that it would cut PFC emissions (one of the basket of gases) by 40% per unit of production from 1995 levels by the year 2002, and make energy savings of 4% per year. ⁴³ The environment is getting closer to the core of business.

Conclusions

The Buenos Aires conference has resulted in an ambitious Plan of Action to resolve the outstanding issues of the Kyoto Protocol at the latest by the end of the year 2000, at the sixth Conference of Parties. The main focal points of Buenos Aires were the mechanisms of the Protocol and the preparations for the first COP serving as the Meeting of the Parties after ratification. Many practical and technical issues still have to be resolved, among them setting up a trading regime, developing the methods for defining the baselines for projects, counting emissions and removals from LUCF. These issues have been divided between the Subsidiary Bodies and the COP for attention. Some of the issues, such as adverse effects of climate change and mitigation efforts and LUCF, are first forwarded to the IPCC for scientific input. Another important outcome of Buenos Aires is that two developing countries have announced they will take up voluntary commitments, a move which is seen as crucial for some Parties to be able to ratify. Possibly the the most important outcome has been the change in attitude.

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Note 1:   1 FCCC, Article 2. Back.

Note 2:   Dr Hermann E. Ott, 'Emissions trading in the Kyoto Protocol — finished and unfinished business', in /linkages/journal/, Vol. 3, No. 4, 26 October 1998 (http://www.iisd.ca/). Back.

Note 3:   Climate Change 1995: The Science of Climate Change, p. 4 (Summary for Policymakers), or p. 439 (Chapter 8). For a full discussion of the outcome of the Second Assessment Report see Duncan Brack and Michael Grubb, Climate Change: A Summary of the Second Assessment Report of the IPCC, RIIA Briefing Paper No. 32, July 1996. Back.

Note 4:   Climate Change and its Impacts, Hadley Centre, November 1998. Back.

Note 5:   For example, 'The heat is on', New Scientist, 15 August 1998. Back.

Note 6:   See footnote 4. Back.

Note 7:   Climate Change Scenarios for the United Kingdom: Summary Report, UK Climate Impacts Programme, September 1998. Back.

Note 8:   Fred Pearce, 'Quick change', New Scientist, 14 November 1998.
14 November 1998. Back.

Note 9:   Side meeting in Buenos Aires. Back.

Note 10:   Reuters (Germany), 29 December 1998. Science, 19 February 1999, p. 1108, quotes 23,000 deaths and $33bn in damages for El Niño-related weather disasters alone. These costs far exceed the estimates of the mitigation costs; see, for example, 'The Kyoto Protocol and the President's Policies to Address Climate Change', US Administration, July 1998. Back.

Note 11:   Resolution 1/CP.4, 14 November 1998. Back.

Note 12:   Decision 1/CP.4, 14 November 1998. Back.

Note 13:   Decision 18/CP.4, 2 November 1998. Back.

Note 14:   Decisions 2/CP.4 and 3/CP.4, 14 November 1998. Back.

Note 15:   Decision 4/CP.4, 14 November 1998. Back.

Note 16:   Decision 5/CP.4 on implementation of Article 4, paragraphs 8 and 9, of the Convention (covering also Articles 2.3 and 3.14 of the Kyoto Protocol). Back.

Note 17:   Some oil-exporting countries proposed at earlier meetings that they should receive financial compensation for loss of revenue from lower sales of fossil fuels; this obviously was a non-starter, but trade impacts on oil exporting countries are part of the concern in these articles. Back.

Note 18:   Decision 6/CP.4, 14 November 1998. Back.

Note 19:   Tim Forsyth, Joint implementation and technology transfer: joint benefits?, EEP Climate Change Briefing No. 7, October 1997. Back.

Note 20:   Decision 5/CP.1, 7 April 1995. Back.

Note 21:   FCCC/CP/1998/2. Back.

Note 22:   Crediting was explicitly denied in Decision 5/CP.1, 7 April 1995: 'The Conference of Parties, Recognizing that,...(b) Activities implemented jointly...will not be seen as fulfilment of current commitments of Annex I Parties under Article 4.2(b) of the Convention;...Decides:...That no credits shall accrue to any Party as a result of greenhouse gas emissions reduced or sequestered during the pilot phase from activities implemented jointly.' Back.

Note 23:   Decision 7/CP.4, 14 November 1998. Back.

Note 24:   Henry D. Jacoby, Ronald G. Prinn, and Richard Schmalense (MIT), 'Kyoto's unfinished business', in Foreign Affairs, July/August 1998. Back.

Note 25:   Michael Grubb, 'Economics and politics of global environmental protection: the case of the Kyoto Protocol', Michael Grubb, valedictory lecture given at RIIA, 20 October 1998. Back.

Note 26:   A. Denny Ellerman, et al.' The Effects on Developing Countries of the Kyoto Protocol and CO2 Emissions Trading, MIT JPSPGC Report No. 41, November 1998; and J. Reilly, et al.' Multi-Gas Assessment of the Kyoto Protocol, MIT JPSPGC Report No. 45, January 1999. Back.

Note 27:   Michael Grubb and Christiaan Vrolijk, Defining and Trading Emission Commitments: The Implications of Flexibility, EEP Climate Change Briefing No. 10, December 1997. This study showed a more-than-additive savings potential of the various flexibilities. Back.

Note 28:   See footnote 25. Back.

Note 29:   Earth Negotiations Bulletin, IISD, Vol. 12, No. 87, Monday 2 November. Back.

Note 30:   Decision 8/CP.4 on preparations for the first session of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol: matters related to decision 1/CP.3, paragraph 6. Back.

Note 31:   Decision 9/CP.4, 11 November 1998. Back.

Note 32:   See footnote 4. Back.

Note 33:   LUCF is only added to the 1990 emissions base year, Article 3.7 of the Kyoto Protocol, if it constitutes a net source. Back.

Note 34:   Compare FCCC/CP/1998/INF.9, 31 October 1998, with FCCC/SBI/1997/INF.4, 22 October 1997. Back.

Note 35:   Decision 16/CP.4, 11 November 1998. Back.

Note 36:   See http://www.unfccc.de/fccc/conv/signdate.htm. Back.

Note 37:   See footnote 29. Back.

Note 38:    See footnote 24. Back.

Note 39:   Earth Negotiations Bulletin, IISD, Vol. 12, No. 97, Monday 16 November. The Byrd-Hagel resolution states that 'the United States should not be a signatory to any Protocol that excludes developing countries from legally binding commitments or that causes serious harm to the US economy'' Back.

Note 40:   Decision 15/CP.4, 6 November 1998. Back.

Note 41:   'CO2 Emissions from Fuel Combustion, IEA, Paris 1997. This is substantially above the figure President Menem quoted in his announcement. Back.

Note 42:   Since Kazakhstan's circumstances are similar to Russia's, it will be very hard to deny its government the same (stabilization) target. Back.

Note 43:   Global Environmental Change Report, Vol. X, No. 21, 17 November 1998. Back.

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Christiaan Vrolijk is Research Fellow on Climate Change Policy in the Energy and Environmental Programme at the Royal Institute of International Affairs.