Emerging Trend in Efforts to Tackle Global Warming, and Efforts to Create Unified International Standards
Confrontations over political methodologies split the world into three camps over the issue of climate change: Europe and Japan, who have ratified the Kyoto Protocol, the United States and some industrialized countries, which rejects the protocol, and developing countries, which are virtually exempt of any obligation to abate global warming. But trends are emerging among private-sector specialists to create, under the auspices of the International Organization for Standardization (ISO), unified standards for evaluating concrete measures undertaken by the respective leagues of industrialized countries. This may provide an answer as to the best approaches to be taken during and after the second commitment period of the protocol.
Kyoto Protocol and a World Split
In response to the second report of the Intergovernmental Panel on Climate Change (IPCC) warning of a discernable human influence on the global climate system, the United Nations Framework Convention on Climate Change (UNFCCC) was signed at the Earth Summit in Rio de Janeiro in 1992, then made effective with its ratification by a number of countries, including the U.S., Japan, and European nations. The convention (which is quite worth reading) was meant to serve as a tentative virtual treaty until around fiscal 2000, when a protocol on concrete measures was to have been enacted. Under the framework of the convention, a series of projects called "Activities Implemented Jointly (AIJ)" were implemented as a forerunner to "Clean Development Mechanism (CDM)" and "Joint Implementation (JI)," as later defined under the Kyoto Protocol. Many readers may be surprised to learn that the U.S. has been the most assiduous in implementing AIJ projects, followed by Norway, Canada, Australia, Japan and other industrialized countries who are not current members of the European Union.
As part of efforts leading up to an agreement on the Kyoto Protocol at the Third Conference of Parties to the U.N. Framework Convention on Climate Change (COP3) in 1997 in Kyoto and the subsequent process toward the adoption of the Marrakech Accords - a set of rules, regulations, and guidelines for the implementation of the Kyoto Protocol and the U.N. convention - countries at the COP7 meeting in Marrakech, Morocco, were divided between the pros and cons of exempting developing countries from greenhouse gas limits. They clashed over the methodologies which industrialized countries would be allowed to use in achieving their reduction goals (whether or not to permit use of non-domestic measures such as emission trading) with the same tired points of contention brought up again and again in varying forms. In the end, negotiations concluded with countries agreeing to the principle that developed countries should place first priority on domestic measures, while exempting developing countries of any obligations to reduce greenhouse gas emissions. Thus, the Kyoto Protocol ended up as a narrowly defined protocol under which certain industrialized countries voluntarily promise to reduce greenhouse gas emissions, primarily through domestic measures.
Let's take a look at the issue from a different angle.
Concerns over environmental issues are not necessarily lacking in the U.S. or other industrialized countries which have not ratified the protocol. The U.S. withdrew from the protocol due to conflicts over political methodologies. Domestic sentiment in the U.S. has led to pressure on the government to increase efforts to combat global warming. In February 2002, the administration of President George W. Bush announced a set of policies to reduce its greenhouse gas emissions per gross domestic product by 18 percent over the next 10 years. To date, the U.S. has launched some 50 AIJ projects, representing nearly 50 percent of the global total. The U.S. has thus set the precedent in implementing concrete projects (including large-scale hydroelectric and afforestation projects) to curb greenhouse gas emissions, although such projects would earn no credits under the Kyoto Protocol. These are the kinds of efforts that deserve greater appreciation. Based on my own experience as a negotiator on the climate change issue, I was left with the impression that EU member states placed an undue emphasis on the principle of reducing emissions through domestic measures as they felt indebted for having little achievement in AIJ projects, turning debates into incoherent arguments. There is no question that the EU supports the Kyoto Protocol. But as saying goes, "too much spoils" and the EU may as well be blamed for splitting the global community by causing the U.S. and some other strategically important industrialized countries to break away from the protocol.
Discussions at ISO and Speculation of Each Developed Country
ISO's Technical Committee 207 (ISO-TC207) is credited with a number of achievements in developing the ISO14000 series of standards on environmental management. Following the adoption of the UNFCCC/Marrakech Accords, the committee in June 2002 established a new working group (WG5) on greenhouse gas measurement.
In its fundamental mission, the WG5 is similar to the Clean Development Mechanism Executive Board - a supervisory organ for the implementation of CDM project under the Kyoto Protocol, on which RIETI Chairman Sozaburo Okamatsu serves as vice chairman - with a certain degree of redundancy between the two organs. But the WG5 was created with the assent of the overwhelming majority of technical committee members, including the U.S. As to why this is, I learned the following in discussions with representatives from other countries at a recent plenary meeting of the ISO-TC207WG5 in Berlin.
1) Implementation of domestic measures by countries that have ratified the Kyoto Protocol
The Kyoto Protocol provides for no penalty provisions. Nevertheless, each ratifying county commits itself to achieving its designated quantitative emission reduction target. In this regard, it is necessary to coordinate policies internationally with respect to how respective countries will achieve their targets through taxation and regulatory schemes, what specific domestic measures should be implemented to ensure such schemes will generate the intended results, and how strict compliance measures should be. Britain, the Netherlands, and North European countries (Norway, Sweden, Denmark, and Finland) have already implemented taxation and other domestic measures to control greenhouse gas emissions at the corporate level. Further measures, including emission rights trading, have been introduced in Britain and Denmark. But if respective governments are to design all necessary institutional arrangements on their own, it will take too much time and policy discords may arise among countries. It is thus strongly acknowledged that operational rules in implementing and certifying policy measures should be established by nongovernmental international organizations in a unified manner.
Regulations hitherto introduced in European nations are not necessarily consistent with the reality or customary business practices of multinational companies. Nor are these regulations entirely consistent with each other. The European business community is gravely concerned of the future course of debates on climate change abatement measures under governments' initiatives.
2) Substantive implementation of the UNFCCC and the Kyoto Protocol
The Marrakech Accords, which set rules for the implementation of the UNFCCC and the Kyoto Protocol, is the child of political compromise, authored by diplomats as a memorandum. But in actually operating under the rules, private sectors must take substantial supplementary measures and it is necessary to decide how they should cope with this challenge. The ratifying countries in Europe generally lack detailed rules concerning the implementation and certification of projects, as required under the Marrakech Accords. The prevailing view within the EU business community at the moment is that investment in greenhouse gas reduction projects entails too much risk. For instance, de minimus levels of greenhouse gas emissions, a threshold level below which emissions would be deemed negligible in measurements of greenhouse gases, and specific methods of handling statistical estimates and marginal errors have yet to be established. These points pose a major obstacle in implementing actual projects.
3) Measures taken by the U.S. and other UNFCCC member countries that withdrew from the Kyoto Protocol
The U.S. and some other UNFCCC member countries that have dropped out of the Kyoto Protocol have begun groping for initiatives based on their own ideas. To evaluate such initiatives, an internationally-agreed upon criteria needs be created. In the U.S., private sector companies have implemented a number of vanguard AIJ projects since 1992, producing tangible results not only in the U.S., but in Central and South American regions.
Debates on the Kyoto Protocol virtually ignored all these efforts, producing a political settlement in which the U.S. broke away from the protocol. But calls have grown from within the private sector to re-evaluate such vanguard projects in a new light, free of the atmosphere of political manipulation. The protocol includes forests but no other forms of sinks - ecosystems that can absorb or remove greenhouse gases from the atmosphere - in CDM. Likewise, large-scale hydroelectric projects are not considered to be CDM activities. It is quite clear now that an extremely strong backlash resulted from the exclusion of such non-forest sinks and hydroelectric projects, despite U.S. industry officials' enthusiastic presentation on the actual results and scientific evidence on relevant AIJ projects, in CDM under the Kyoto Protocol, due to the excessive insistence of EU countries on the domestic measures principle.
New Trend at ISO and Emerging Possibility of Reintegrating Global Efforts
For now, the ISO-TC207WG5 is becoming the "point of contact" or "melting pot" of all these contentious issues, presenting a microcosm of world trends concerning climate change from the Marrakech Accords onward. The private sectors in every country concerned feel urgently compelled by the need to reintegrate the hitherto-split global community from a purely technical perspective, apart from differences in political methodologies. Coordination among representatives from various countries is already underway. In the recent plenary meeting in Berlin, it was confirmed that private sectors should cooperate in efforts toward the early establishment of "universal standards" that remain applicable despite differences in political systems.
The ISO-TC207WG5's task is to study and standardize the following: (1) the definitions of terminologies concerning concrete measures to reduce emissions and increase sinks to be carried out under various initiatives, including the Kyoto Protocol and the new Global Climate Change Initiatives of the U.S.; (2) the methodologies of emissions measurement; and (3) certification method and procedures. These efforts are intended to provide a "technical foundation" that will set a new stage for countries across the world to discuss emission reduction measures, using a common measurement basis. The ongoing discussions at the working group may become the moving force of a new current toward debates in and after the second commitment period of the protocol. Thanks to efforts by Keio University Professor Mitsutsune Yamaguchi and others, Japan is now playing a core role, serving as a coordinator for two ad hoc groups of the ISO-TC207WG5, namely, the AHG2, responsible for issues related to project measurement, and the AHG5, a small group responsible for drafting standards. Many people in Japan believe that the Kyoto Protocol is the only feasible global policy for meeting the challenge of climate changes. As an individual closely involved in the relevant negotiations, I find such this perception too one-sided. I believe that current efforts at the ISO-TC207WG5 will undoubtedly offer up a real solution to breaking the current impasse in the global community. Japan must not settle for merely political solutions to these issues. It must also strive for progress in the technical arena to help reintegrate global efforts under the initiative of private sectors, seeking the support and cooperation of all concerned parties in Japan.
November 26, 2002
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