Canada: Between Fear and Hope: Recession, Obama And The Future Of The Kyoto Protocol

The future of a global climate treaty is still up in the air a few weeks after the end of the United Nations Framework Convention on Climate Change ("UNFCC") held in Poznan, Poland1 in December 2008. This new treaty would replace the Kyoto Protocol, but a successful conclusion is far from certain, as fears about the effects of a global recession are mixed with hopeful signals of a renewed commitment by the new U.S. administration under President Barack Obama. While little measurable progress was achieved in Poznan, the essential building blocks remain in place to finish the negotiation process at the next conference in December 2009 in Copenhagen, Denmark. In the meantime, a series of preliminary meetings in Bonn, Germany from March to June 2009 will likely provide some clues as to whether a new spirit of co-operation prevails or whether obstacles such as the word-wide economic downturn will stymie meaningful progress. The following is a discussion of the issues at stake.

The Poznan Conference

The Kyoto Protocol, the first global treaty to contain binding carbon dioxide ("CO2") emissions reduction goals for the participating nations, expires in 2012. The Poznan conference, which took place from December 1 to December 12, 2008, was the fourth meeting of the parties to the Kyoto Protocol ("CMP 4"). It was viewed as a crucial midway point in the process of developing a treaty to replace the Kyoto Protocol, which started at the last meeting in December 2007 in Bali ("CMP 3") and is expected to be finalized at the next meeting in December 2009 in Copenhagen ("CMP 5").

The Poznan conference was hampered from the outset because the official U.S. delegation, which was sent by the outgoing administration of President Bush, was not perceived as being representative of the position the Obama administration is expected to take on issues of climate change and CO2 reduction.2 To nobody's surprise, the Poznan conference did not achieve meaningful progress in a number of key areas, and in particular, in defining concrete reduction targets, and it is widely agreed that the "heavy lifting" in negotiations was left for the year 2009.3

Two areas where the Poznan conference did make progress were the reduction of emissions from deforestation and forest degradation ("REDD") and the Kyoto Protocol's Climate Change Adaptation Fund.4 Under the Kyoto Protocol's Clean Development Mechanism ("CDM"), countries can achieve their CO2 emission reduction goals by investing in projects that create certified emissions reduction credits ("CERs"). The CDM Executive Board grants CERs to projects where it has verified that real and sustainable reductions of CO2 emissions have been achieved.5 Through this system, the CDM has already provided the necessary financing for numerous projects, mostly in developing countries, but it has so far excluded projects where emission reductions are achieved by projects that curb deforestation and forest degradation. This is mostly because of the difficulties associated with measuring the success of such projects. The joint ministerial declaration on REDD issued at the Poznan conference paves the way for the inclusion of REDD projects in the CDM program under the successor treaty to the Kyoto Protocol, by committing a number of developed countries and key tropical developing countries to early action to reduce emissions from deforestation and forest degradation and by advancing the framework under which such projects can be captured in a future CDM system.

The Climate Change Adaptation Fund is designed to allow developing countries access to funds that finance measures necessary to adapt to the negative consequences of global warming. At the Poznan conference, key obstacles were removed to allow the fund to begin operating, including the decision to finance the fund through a 2 percent levy on the CDM program. While opening up access to the fund for developing countries was welcomed by many participants, others pointed out that the money currently available, about $60 million, is woefully inadequate to tackle a problem that was estimated by the UNFCCC itself to require between $28 and $67 billion a year by the year 2030.6

The Road to Copenhagen

At present, there is still enough time for negotiations to clear a path for a successful conclusion of a successor treaty to the Kyoto Protocol at the Copenhagen conference planned for December, 2009. It is crucial to finalize the text of such a treaty as early as possible to allow the signatory countries to ratify it before the Kyoto Protocol expires in 2012. A series of talks on climate change in Bonn, Germany (March 29 – April 8 and June 1 – 12, 2009) as well as another two-week meeting to be held in September or October are planned as the next major steps in this process.

Much hope has been placed in the fact that the Obama administration is expected to reinvigorate the process by fully engaging in the next round of negotiations (the U.S. did not ratify the Kyoto Treaty). Indeed, President Obama has sent out a number of hopeful signals that have been heralded as a "New Day on Climate Change".7 Not long ago, President Obama pledged to reduce U.S. greenhouse gas pollution by 80 percent from 1990 levels by the year 2050.8 In a major speech on January 26, 2009, President Obama declared that the U.S. is "ready to lead" on the issue of climate change.9 At the same time, he announced that he had ordered the Environmental Protection Agency to reconsider a decision it had taken under the Bush administration to block the state of California's efforts to set stricter greenhouse gas emissions standards on automobiles. At least a dozen other states are expected to follow in California's footsteps by setting tougher standards, once California has received the necessary permission. These concrete measures have reinforced the belief that the new U.S. administration intends to seriously follow up on repeated promises to actively to pursue a new global climate treaty.

The U.S. endorsement, however, does not come without qualifications. In his January 26 speech, President Obama reiterated the position that any meaningful global treaty must include some form of emissions restrictions for the world's leading developing economies, China and India, which have joined the ranks of the world's leading CO2 polluters.10 China and particularly India, for their part, have always maintained that the goals of catching up economically with the developed world and reducing poverty remain priorities that right now trump the need to limit greenhouse gas emissions, and that the main responsibility to achieve reductions lies with the developed world.11 China's and India's willingness to accept binding greenhouse gas limits remains questionable, and there is a danger that, as has happened in the past, the U.S. will use their reluctance as an excuse to pull out of climate treaty negotiations.

Another untimely development that threatens to derail the negotiation process is the prolonged global economic downturn. Recent polls suggest that the importance of environmental issues, including global warming, have taken a backseat to economic concerns in the public's perception.12 If industrial output continues to suffer and unemployment continues to rise throughout 2009, both in developed and in developing countries, the willingness of these countries to agree to significant CO2 emissions reductions will be severely tested. Whether old and new obstacles or revived hopes will ultimately predominate on the path to Copenhagen remains to be seen, but the year 2009 will likely be remembered as a crucial junction in the struggle to curb global warming and climate change.


1 "The United Nations Climate Change Conference in Poznan, 1-12 December 2008" United Nations

Framework Convention on Climate Change, online: .

2 "Interim Climate Pact Approved" Washington Post (December 12, 2008), online: ; "Global climate change decisions on hold for Obama administration" The Guardian (December 12, 2008), online: Guardian Unlimited .

3 "Poznan climate talks leave 'heavy lifting' for 2009" (December 15, 2008), online: .

4 All decisions adopted at the Poznan conference can be found on the UNFCC homepage, online: .

5 For details on the CDM program see UNFFC, "About CDM", online: .

6 United Nations Framework Convention on Climate Change, "Impacts Vulnerabilities and Adaptation in Developing Countries" (2007) at p. 5, online: .

7 "New Day on Climate Change" New York Times (January 27, 2009), online: .

8 "Obama jumps in on climate" Los Angeles Times (November 19, 2008), online: .

9 "US 'ready to lead' on climate change" Financial Times (January 27, 2009), online: .

10 Ibid.

11 "Melting Asia: China, India and climate change" The Economist (June 5th, 2008), online: .

12 The Pew Research Center for the People & the Press. "Economy, Jobs Trump All Other Policy Priorities In 2009", (January 22, 2009), online: ; "Interest in global warming cooling off" Vancouver Sun (January 15, 2009).

The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.

© Copyright 2009 McMillan LLP

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