Early Credit for Emissions Reductions
The latest attempt to implement the Kyoto Protocol without Senate ratification is a scheme to use the threat of future mandatory emission reductions to compel industry to “voluntarily” reduce emissions. In return, they will receive valuable emissions credits. Dirk Forrister, chairman of the White House Task Force on Climate Change, told a conference that “credit for early action, would encourage industry to begin curbing greenhouse gas emissions in the expectation that emission reductions eventually may become mandatory. The credits earned through voluntary action could be applied to any required cuts in emissions or traded domestically or internationally.”
The Clinton Administration has developed a set of guiding principles for an early credit system. The system should give credit for reductions of all six of the major greenhouse gases “from any source in any sector of the economy.” It should also give credit for any actions that offset carbon emissions, such as land use and forestry changes. The system should also:
- “be simple and straightforward, not complicated;
- provide a fair reward for environmental improvement;
- appeal to industry broadly and not just attract companies with newer, more efficient technologies;
- provide information to the public about credits, helping to ensure that businesses get the same amount of credit for similar actions or efforts;
- be consistent with an international emission trading system for greenhouse gases, which is under development, to ensure that credits earned through the program could be traded abroad; and
- not create prejudices about a possible domestic greenhouse gas emission trading system.”
Forrister said that the administration formulated its principles through discussions with various industry sectors such as aluminum, steel, electric power, forest products, cement, natural gas pipeline, and commercial real estate industries (BNA Daily Environment Report, December 8, 1998).
The “Paper of Record” Assesses Buenos Aires
Very little of note happened at the fourth conference of the parties in Buenos Aires, other than a largely symbolic signing of the Kyoto Protocol by the United States. The two largest points of controversy, developing country participation, and emissions trading, were not resolved, even though the U.S. delegation claimed otherwise.
New York Times (December 8, 1998) writer John Cushman performed a post-mortem on the international gabfest and tried to put the best face possible on the proceedings. Regarding the two major issues Cushman said, “Negotiators at the conference settled on an ambitious two-year timetable for resolving those and other sticking points. But that means approval cannot come until after the 2000 elections, if it occurs at all.”
Eileen Claussen, former State Department negotiator and executive director of the Pew Center on Global Climate Change said “Kyoto is not dead. But I dont know if this can be done in two years.” Michael Oppenheimer for the Environmental Defense Fund said, “If significant progress is not made by the year 2000, we will never make the 2008 deadlines of the treaty. We have to get the rules in place, or the time will slip away.” Connie Holmes, the chairman of the Global Climate Coalition doesnt believe that the Kyoto Protocol will be ratified. “In about 2001 or 2002, people are going to say, . . . we cant do this, lets stretch this thing out. You need more time if you are going to change as radically as this.”
Regarding the issue of developing country participation, Cushman pointed out that China and India are still resistant to accepting emissions reduction targets. Latin America and Africa are interested but “want guarantees that they will get their share of the aid.” And as Stuart Eizenstat, the chief U.S. negotiator, said “The monolithic phalanx that we saw in Kyoto in opposition to any and all participation has completely broken down.” This was prompted by Argentinas and Kazakhstans agreeing to accept emissions reductions.
The issue of emissions trading saw very little progress. The European nations are still insisting that there be a limit on the extent to which emissions trading can be used to reduce emissions. Many developing nations are also opposed to unlimited trading. Michael Oppenheimer of the Environmental Defense Fund claims that the other nations are using this as a bargaining chip against the U.S., but that resistance is weakening.
One issue that is becoming important is “credit for early action.” Cushman wrote, “Many companies have already invested in energy saving and other approaches to cut their emissions, or are planning to do so soon.” Legislation has been introduced to give them credit for doing so. According to Todd Stern, the White House official who coordinates the Administrations climate policy, “This is really the one area involving the whole issue of greenhouse gases where I think everybody ought to be able to agree.” Indeed, says Cushman, companies who are opposed to the Kyoto Protocol “are lobbying hard to get credits for early action, just in case.”