Asia Pacific Energy Research Centre

Climate Change: History and Negotiation

Yonghun JUNG Ph.DVice President

Asia Pacific Energy Research Centre

Lecture Series at Stanford University 24 January, 2005

ContentsGlobal warmingClimate changePros and cons of global warmingHistory of negotiationProspect for Kyoto Protocol

What is Global Warming?

Green House EffectSome of the infrared radiation passes through the atmosphere, and some is absorbed and re-emitted in all directions by greenhouse gas molecules. The effect of this is to warm the earth’s surface and the lower atmosphere.

Some solar radiation is reflected by the earth and the atmosphere.

Infrared radiation is emitted from the earth’s surface.

Most radiation is absorbed by the earth’s surface and warms it.

Solar radiation passes through the clear atmosphere.

What is Climate Change?Physical science

Radiative forcing Global warming and greenhouse gases

Rising global mean temperature Ecological damage

Sea level rise Increase in ocean temperature Melting of arctic glaciers Change in coral reef Extreme weather condition

Radiative Forcing

Global Mean Temperature

Newinternationalist

NaturalResources

Forum

NewScientist(IPCC)

NASA,MIT, andUVA

Period 1996 - 2050 1996 - 2050 1997 - 2100 1997 - 2100

Temperature 3.0 – 5.0 ° C 1.5 – 4.5 ° C 1.5 – 4.5 ° C 1.0 – 1.5 ° C

Change in Global TemperatureChange in temperature （ 0C ）

1896: An article warned of global warming.

By 1950, scientists believed that most human induced CO2 was absorbed in the ocean.

1957: Roger Revelle and Hans Seuss published a thesis repudiating the conventional belief ; CO2 is concentrating on the atmosphere.

1970: Clean Air Act in the United States-the starting point of Modern Environmentalism

Late 1970’s: National Academy of Science Panel warned the significance of Global Warming

1985: the first scientific conference in Villach, Austria

1987: the first joint communication of scientists and policy makers in the Bellagio Conference

On Climate Change science

Some negative views on climate change scienceThere is no credible scientific evidence that the earth is warming.

The temperature record from weather stations is misleading because the record is influenced by local

conditions rather than global. Sea level measurements are biased. Stations for measuring sea levels are located close to ports, for which local factors give a greater impact. IPCC’s future projections are “scenarios”, which is based on experts’ judgment and knowledge, rather than scientific evidence.

Gray (2002) says that no model has ever predicted future

climate sequence. IPCC reports have not assessed increased GHG

emissions and their effects on climate.

Origin of the problem Economic development/growth

Derived demand for energy consumption Changes in lifestyle – political and social issues

“Tragedy of Commons” If property rights are well defined there will be no problem with production externalities, but

otherwise the outcome of economic interaction will

undoubtedly involve inefficiency

History of International Negotiations

History1987: Toronto conference (The World Commission on Environment and

Development) - Reduce CO2 emission 20% below the 1988 level in 20051988: Worst drought and record high temperature in the US1988: Establishment of IPCC (WMO and UNEP)1989: Norwijk Conference: No regret policy, soft target, CO2 equivalent concept.1990: IPCC First Assessment Report - the global mean temperature would rise by 0.3°C every 10 years.

Bergen Declaration: Stablization at 2000UN resolution 45/212 - Establishment of INC (Intergovernmental Negotiating Committee)

1992: Rio Summit: UN Framework Convention on Climate Change adopted1995: COP 1 at Berlin, Germany - Berlin Mandate - strictly for the North1997: COP 3 at Kyoto - Kyoto Protocol1998: COP 4 at Buenos Aires - Buenos Aires Plan of Action adopted1999: COP 5 at Bonn2000: COP 6 at the Hague – No agreement was made2001: COP 6 bis at Bonn – Bonn Agreement2001: COP 7 at Marrakech – Marrakech Accord2002: COP 8 at New Delhi – Dehli Declaration adopted2003: COP 9 at Milan2004: COP 10 at Buenos Aires

UNFCCCRio Summit in 1992 Objective: “Stabilization of GHG concentration” Principles

1)“Common but differentiated responsibility with respective capabilities”

2)”Precautionary measures” 3)”sustainable development”

Commitment: “aim of returning ,….., to 1990 levels”, ”by the end

of the present decade” - soft target for Annex 1 parties

Inventory and reporting: National communication for All parties

Country Positions at AGBM8Issue Aust. Canada EU Japan New Z. Norway Switz. USA G77&

ChinaCommon policies andmeasures (P&M's)

no no yes no no - yes no no

P&M's to suit nationalcircumstances

yes yes no yes yes - no yes yes

Include all GHG yes yes no no yes no no yes no

Flat rate QELROS no no yes no no no no no yes

Differentiated targets(QELROS)

yes yes no yes no yes yes no no

Net emissions (sourcesminus sinks)

yes yes no yes no yes no yes no

Single year budgetperiod

no no no no no no yes no yes

Demonstrable progressby 2005

no no yes no no no no no yes

EU bubble no no yes no no no no no -

Emissions trading - yes - yes yes yes no yes no

AIJ/JointImplementation

yes yes no yes yes yes yes yes no

Limitations on tradingand AIJ/JI

no no yes yes - - yes no yes

Evolution into Annex 1 yes yes no - yes - - yes no

Legally bindingcommitments

no yes yes yes yes yes yes yes yes

Developing countrycompensation

no no no no no no no no yes

COP3: Kyoto Meeting Emission reduction targets for Annex B Parties

Annex B Parties agreed to commitments to reduce overall remissions of 6 GHG gasses by at least 5 percent below 1990 levels during the first commitment period (2008-2012)

Kyoto Protocol Commitment on emissions Rules governing compliance Procedural rules

Marrakech Accord: Major Outcomes from COP 7 Kyoto Mechanisms: Decisions were made on the operational

details of the Mechanisms. Eligibility on the use of the use of the Mechanisms Fungibility Details of banking Conditions for issuing ERU under Joint Implementation Operational details of CDM project implementation such as CER, Operational Entities, Additionality

Compliance: Members of COP agreed that legal form relating to compliance will be decided at

the COP/MOP.Capacity Building: Decisions were made on the funding scheme for assisting the countries vulnerable to the impacts from climate change.

World Summit on Sustainable Development (WSSD) in Johannesburg The Summit produced a declaration reaffirming the principles of

the Rio Declaration and action oriented plan of implementation. Over 220 partnerships (with $235 million in resources) were identified in advance of the Summit and around 60 partnerships were announced during the Summit by a variety of countries.

On energy, following items were identified as important areas to be improved.Renewable energy

Diversify energy supply and substantially increase the global share of renewable energy sources in order to increase its contribution to total energy supply.Access to Energy

Improve access to reliable, affordable, economically viable, socially acceptable and environmentally sound energy services and resources, sufficient to achieve the Millennium Development Goals, including the goal of halving the proportion of people in poverty by 2015.Energy Markets

Remove market distortions including the restructuring of taxes and the phasing out of harmful subsidies. Support efforts to improve the functioning, transparency and information about energy markets with respect to both supply and demand, with the aim of achieving greater stability and to ensure consumer access to energy services.Energy efficiency Establish domestic programs for energy efficiency with the support of the international community. Accelerate the development and dissemination of energy efficiency and energy conservation technologies, including the promotion of research and development.

Outcomes of COP10Adaptation

SBSTA (Subsidiary Body for Scientific and Technological Advice) agrees to exchange information and share experience, and requested the Secretariat to organise an workshop at SBSTA-22 to share information .

Kyoto Mechanisms Parties confirmed the importance of Kyoto Mechanisms for meeting the

emissions reduction target, and discussed the operational details of CDM, methodological issues relating to LULUCF and format for registering emissions credit.

Support for Developing Countries Parties discussed about development and transfer of technologies,

capacity building and financial mechanism and agreed on priorities, and programs.

Non-Annex I National Communication SBI (Subsidiary Body for Implementation) discussed about the maintaining

capacity in national teams, assuring updating by non-Annex I parties of greenhouse gas inventories, and timing of completion. They agreed to hold workshops for capacity building and sharing information.

Prospect for Kyoto Protocol

Kyoto ProtocolKyoto in 1997 Objective:Ultimate objective of convention Commitment:

On average -5.2% GHG emission reduction in terms of 1990 level between 2008 - 2012 among Annex B parties

New features A basket of 6 gases Inclusion of sinks Flexibility Mechanism:Bubble, JI, CDM, ET :

Introduction of economic instruments

Required Reduction to meet the targetRReeggiioonn aanndd

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MMeettrriicc ttoonn))

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TThhee UUnniitteeddSSttaatteess

11,,334466 11,,779900 11,,225522 --3300

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993366 11,,002211 886622 --1166

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FFSSUU 999911 666666 999900 4499

EEaasstteerrnn EEuurrooppee 229999 227700 332200 4400

AAuussttrraalliiaa 9900 111133 9977 --1144

Source: International Energy Outlook, ‘1999, EIA/DOE

Flexibility MechanismWhy do we need these?

Assign economic value to GHG emission reduction internationally

Market principle : Cost reduction Private sector participation Participation by developing countries Enhance cooperation in technology

development and diffusion

Where are we?Unresolved issues in the Negotiation

Equity issue Developing country compensation (Article 4.8

and 4.9 of the convention): Historical responsibility and emissions entitlement

Developing country participation Transparency: monitoring, reporting and review Flexible mechanism: rules, modalities and

guidelines Enforcement - compliance and non-

compliance

Prospect for Kyoto Protocol Negotiation is not easy: there is no “rule of procedure” Only consensus is available Too many issues are at stake - Long list of work plan with conflicting issues

Bleak Future of Meeting the Target Flexibility Mechanisms

“Nothing happens unless the issue becomes institutionalized” Joseph F. Coates

Developing Country Issues Evolution Voluntary Commitment

Absence of US Trading partner

CO2 Emissions from Energy Consumption: Selected Annex B countries

(Source) APEC data is from APERC (2002), “APEC Energy Demand and Supply Outlook 2002”, France, Germany and UK data is from EIA (2004), “International Energy Outlook 2004” and EU data is from IEA (2003), “World Energy Outlook”.

1990 2010 2020 2010/1990 2020/1990Australia 260 397 485 52.7% 86.5%Canada 421 604 696 43.5% 65.3%Japan 1049 1246 1343 18.8% 28.0%

NZ 23 33 40 43.5% 73.9%Russia 2326 2043 2514 -12.2% 8.1%USA 4846 6715 7773 38.6% 60.4%

France 374 390 400 4.3% 7.0%Germany 995 851 943 -14.5% -5.2%

UK 600 608 665 1.3% 10.8%EU 3111 3422 3689 10.0% 18.6%

CO2 emissions: CO2 Mt % change since 1990

Bleak Future of Meeting the Target

-30% -20% -10% 0% 10% 20% 30% 40% 50% 60%

% change since 1990

1990-2010 (Reduction Target)1990-2010 (Outlook)

Australia

Canada

JapanNZ

Russia

USA

France

Germany

UK

EU

(Source) APEC data is from APERC (2002), “APEC Energy Demand and Supply Outlook 2002”, France, Germany and UK data is from EIA (2004), “International Energy Outlook 2004” and EU data is from IEA (2003), “World Energy Outlook”.

Will “Hot Air” be Available?

(Source) Russian Energy Ministry, IEA, APERC

0

500

1,000

1,500

2,000

2,500

3,000

1990 2000 2005 2010 2015 2020

CO2 Mt

Russia Energy Ministry: Upper TargetRussia Energy Ministry: Lower TargetRussia IEA 2000 (Reference Case)Russia APERC 2002 Japan APERC 2002 (JPN)

KyotoTarget

Implementation CDM Project in Developing Countries (A Summary from Dr. Sathye’s Paper)

Impact of climate change can be mitigated through cost effective options such as energy efficiency and fossil fuel substitution options in the energy sector.

Greater potential for GHG emissions reduction for improving energy efficiency project for coal-fired power plants.

However, many market barriers prevent adoption of cost effective options.

Project Level: High first cost of equipment, lack of capability to monitor project. Sector Level: Presence of subsidies. Macro Level: Barrier for foreign investment in energy sector, High tariffs on import of energy technology.

Removal of barriers will improve developing countries’ access to financing and advanced technology.

Impact of Kyoto Protocol: Japan APERC’s projection on CO2 emissions from Japan’s

energy sector in 2010

Assuming that price of carbon will be USD 20/ton APERC estimates that Japan would have to pay 1.4 billion USD (or

3.8 million USD/day) in 2010 for their carbon emissions reduction. Due to the rise in oil price, Japan pays roughly extra 90 million USD/day for their crude oil imports.

Price of crude oil: 30$/bbl → 48$/bbl: difference 18$/bbl A question is raised.

Carbon price vs Fuel Price Differential

1990 (Million Ct) 2010 (Million Ct) Target (Million Ct)Difference from

the Target(Million Ct)

Japan 286 340 269 71

US PerspectiveMultilateral Negotiation vs Bilateral Negotiation

US prefers bilateral negotiation US has not ratified some international environmental conventions that had entered into force.

Basel Convention on the Control of Transboundary Movements of Hazardous Wastes

and Their Disposal Convention on Biological Diversity Kyoto Protocol to the United Nations Framework Convention on Climate Change

US initiatives on environment Alternative to the Kyoto Protocol

US is not “one country”. Coordination among the states would be impossible.

US Initiatives: Alternative to the Kyoto Protocol

Climate Change Research Initiative in 2001 Promotes a vision focused on the effective use of scientific knowledge in policy and management decisions and evaluation of management

strategiesand choices.

National Climate Change Technology Initiative in 2001

Develops a science based climate change policy and fund research on “breakthrough technologies” that would help meet the long-run climate change challenges

Clear Skies Initiative in February 2002 The Initiative calls for significant reductions in emissions of various pollutants (mercury, nitrogen oxide, sulfur dioxide) and the reduction of thegreenhouse gas intensity of the US economy by 18 percent between 2002 and 2012.

Contact information

Jung@aperc.ieej.or.jp

www.ieej.or.jp/aperc