How Not to Repeat the Mistakes of the Kyoto Protocol

Most countries recognize the need for a reduction in greenhouse gas emissions. But for any climate treaty to succeed at reducing emissions, all countries – especially the big emitters – must participate. Otherwise, trade leakage will result, as emitting industries concentrate in the nations with the fewest restrictions. For such reasons, the Kyoto Protocol to the UN Framework Convention on Climate Change was a failed treaty, suggests Scott Barrett, environmental economist and professor at Johns Hopkins University. Unlike Kyoto, the Montreal Protocol on Substances that Deplete the Ozone Layer did achieve its goals, limiting ozone-depleting substances, through international cooperation and a carrots-and-sticks approach. Barrett compares the two international treaties – Kyoto and Montreal – and lists the necessary ingredients for a successful climate treaty. – YaleGlobal

How Not to Repeat the Mistakes of the Kyoto Protocol

The world has to build on the model of a successful climate treaty – the Montreal Protocol on Ozone
Scott Barrett
Wednesday, November 14, 2007
Misplaced optimism: Even if the Kyoto Protocol had worked as planned, emissions

would still rise; as the world plans for a climate treaty, the Montreal Protocol could serve as a model

WASHINGTON: It’s not enough for countries to want to slow climate change. Countries have a much harder task – figuring out exactly how the world can cooperate to counteract climate change. Unfortunately, the Kyoto Protocol is not a model.

The Kyoto Protocol was an early attempt at collective action. However, even if the Kyoto Protocol works exactly as intended, global emissions and atmospheric concentrations of greenhouse gases will continue to rise. Compared with Kyoto’s base year, 1990, emissions have already risen 28 percent. Kyoto aims to limit the emissions of only a subset of countries by just 5 percent. Emissions thus continue to rise even as we enter the implementation period next year. To meet a goal such as stabilizing atmospheric concentrations of greenhouse gases, emissions eventually must decline – and dramatically.

Al Gore, who won the Nobel Prize for Peace this year along with the UN Intergovernmental Panel on Climate Change, has said emissions should fall 90 percent by 2050. How can the world move from the current situation, in which emissions are rising steadily, to the desired one, in which emissions are falling – fast?

An effective international agreement for climate change mitigation must do three things.

First, a treaty must attract broad participation. This is not only because all countries emit greenhouse gases. It is also because, should only some countries reduce emissions, comparative advantage in the carbon-intensive industries may move to the other countries, causing these other countries to increase their emissions – a phenomenon known as “trade leakage.” Kyoto failed to convince the world’s biggest emitter and only superpower, the United States, that it should participate – reason enough to call the agreement a failure.

I blame the agreement rather than George Bush. The Clinton-Gore administration did not attempt to get the US Senate to ratify Kyoto. Nor did it pass legislation to reduce US emissions. And President Bush, the unilateralist, did bend to another international agreement. When the World Trade Organization authorized Europe to impose trade restrictions against the US for illegal steel tariffs, Bush withdrew the tariffs. This is what a good treaty needs to do – change the behavior of states by changing the incentives that cause states not to cooperate. The World Trade Organization does this. The Kyoto Protocol does not.

Second, a treaty must deter countries from not complying. Canada’s Parliament ratified the Kyoto Protocol; its participation in the treaty is thus not a problem. Under the agreement, however, Canada must reduce its greenhouse gas emissions 6 percent below the 1990 level through 2008-2012, and in 2005 Canada’s emissions were 33 percent above the Kyoto target.

Canada’s government has given up on the idea of meeting the Kyoto target. It aims instead to reduce the rate of growth in emissions, hoping that emissions will peak from 2010. However, a government-funded roundtable of experts has concluded that the government’s own policies will not meet even this modest goal. Canada’s previous government predicted that Canada’s emissions would exceed the Kyoto target by 45 percent by 2010. It now looks like that prediction will not be far off.

Why would Canada, a country in good standing in international affairs, fail to fulfill its legal obligations? One reason is that the cost to Canada of complying with Kyoto would be, in the words of the above roundtable, “considerable.” Another reason is that, unlike other agreements such as those under the World Trade Organization, Kyoto does not punish countries for non-compliance. A final reason is that Canada’s compliance with Kyoto would not prevent the climate from changing and indeed would have almost no discernible effect. Why should Canada undertake “considerable” sacrifice for that?

An effective international agreement must not only tell countries what to do; it must create incentives for countries to do what the treaty says must be done.

Third, an agreement must get countries to participate and comply with an agreement in which substantial action is required. It’s easy to get countries to participate and comply with an agreement that requires little. A prime example is the UN Framework Convention on Climate Change. Only four countries failed to ratify this agreement – Andorra, the Holy See, Iraq and Somalia. However, this agreement does not require that parties reduce their emissions. Similarly, the big emitting developing countries like China and India are parties to the Kyoto Protocol, but that’s because the treaty does not require them to limit emissions. Russia is also a party to the Kyoto Protocol, and its emissions are capped, but the cap is so generous that it has no effect.

An agreement that fails to induce the US to participate, that fails to create an incentive for Canada to comply and that fails to limit the emissions of the fastest growing large economies is a failed agreement.

While the world’s attention focuses on Kyoto, another international agreement works quietly behind the scenes to make a material difference. This is the Montreal Protocol – the agreement for protecting the ozone layer. Ozone-depleting substances, it turns out, are also greenhouse gases, but the relationship between ozone and climate change is complicated. Ozone is a greenhouse gas, so an agreement that protects ozone will increase warming. As well, in limiting the use of ozone-depleting substances, the Montreal Protocol has caused substitutes – including non-ozone-destroying HFCs, a greenhouse gas – to increase. The Kyoto Protocol controls HFCs. So the Montreal Protocol has positive and negative effects for the climate.

A recent study, however, has shown that the overall effect of the Montreal Protocol on greenhouse gases is helpful. The study by G.J.M. Velders et al., published in the Proceedings of the National Academy of Sciences, calculates that the Montreal Protocol has been, and will continue to be, more helpful than the Kyoto Protocol, even assuming that Kyoto is implemented perfectly. Already, this study estimates, the Montreal Protocol has achieved four times as much as the Kyoto Protocol could ever hope of achieving.

Indeed, only a month ago, the Montreal Protocol was revised again. This time, the agreement to phase out HCFCs, a greenhouse gas, was accelerated. Moreover, manufacture of HCFCs produces HFCs, as a byproduct. Preliminary estimates suggest that the agreement negotiated in Montreal in September will have more than twice the intended impact of the Kyoto Protocol. This is on top of the larger effect Montreal has already had in reducing the concentration of greenhouse gases.

What is the Montreal Protocol’s secret of success? One difference between Montreal and Kyoto is that Montreal imposed restrictions on all countries from the start. A second difference is that Montreal created strong incentives for participation and compliance – a combination of carrots and sticks. A final difference is that Montreal created a system for positive feedback, with each step in reducing ozone depletion creating incentives for countries to take yet another step.

Ten years after Montreal was first negotiated, the agreement had been adjusted and amended seven times. Ten years after Kyoto was negotiated, that agreement has not entered the implementation phase. Montreal is doing nearly as much as is possible to protect the ozone layer and much more than Kyoto to protect the climate. Kyoto, meanwhile, has made virtually no difference.

There’s a lesson in this for future climate negotiations. Rather than cap aggregate greenhouse emissions directly, attention should turn to the actions that can be taken to limit the emissions of individual gases. Montreal could do it, so why not a different kind of climate treaty? Any new climate treaty must break the problem up, addressing different gases in different ways and focusing on sectors rather than economy-wide targets.

Scott Barrett is a professor at the Johns Hopkins University School of Advanced International Studies. He was a lead author of an earlier assessment report by the Intergovernmental Panel on Climate Change. His new book – “Why Cooperate?” – was published by Oxford University Press in September 2007.

© 2007 Yale Center for the Study of Globalization