Kyoto Protocol enters into force

The Kyoto Protocol, which was adopted in 1997, finally enters into force today.

What implications does this have?

The Kyoto Protocol sets out various commitments, agreed by 136 countries, in relation to mitigating, measuring and adapting to climate change. Until now, these commitments have merely been guidelines, but as of 16 February 2005 they become legally binding obligations and sanctions may be imposed if these obligations are not met.

The most onerous obligations fall on the industrialised countries (including economies-in-transition), as they have actual emissions reduction targets to meet. These countries are now legally bound to reduce their emissions of greenhouse gases by an aggregate of at least 5% of their 1990 emissions levels by the end of the first phase, 2008 - 2012. This implies that these countries will have to bring their emissions back to where they were before 1990.

Least developed countries do not have specific emissions-reduction targets. However, all parties (including least developed countries) are required to develop and implement programmes to address the issue of climate change, including co-operating in scientific research, promoting know-how and developing related education schemes.

A summary of the main commitments for the parties is shown below.

Annex I (Industrialised countries and economies in transition)

• Aggregate reduction of greenhouse gas emissions of at least 5% of 1990* levels (or, for economies in transition only, an alternative base year), by 2012
• "Demonstrable progress" toward the above goals to be shown by 1 January 2006

* For hydro fluorocarbons, per fluorocarbons and sulphur hexafluoride, a base year of 1990 or 1995 can be chosen

All Parties

• Formulate programmes to improve the quality of local emissions data to mitigate climate change and to facilitate adequate adaptation to climate change
• Co-operate in the promotion, facilitation and financing of environmentally sound technologies, know-how, practices and processes pertinent to climate change
• Co-operate in scientific and technical research and promotion of observation systems and data archives relating to the climate system
• Co-operate in and promote development and implementation of education and training programmes relating to climate change?
• Report annually to the COP on programmes and activities undertaken pursuant to obligations of the Protocol

Flexible mechanisms - game on

The aim of the Kyoto Protocol is to reduce global greenhouse gas emissions, and it therefore allows for countries to meet their targets through international as well as domestic action. More specifically, the mechanisms allow industrialised countries to both trade credits, and invest in emissions-reducing projects in developing countries (through the Clean Developments Mechanism (CDM)) or in other industrialised countries (through Joint Implementation (JI)), and count the reductions achieved towards their own targets.  For a more detailed description of these mechanisms please click here.

Two CDM projects have already been registered: a landfill gas project sponsored by the Netherlands in Brazil, and a small scale hydroelectric plant sponsored by Finland, in Honduras.

As for JI it is expected, at least initially, that the bulk of projects will be located in Central and Eastern Europe, notably Russia and the Ukraine. These countries are obvious host countries as their emissions targets under the Kyoto Protocol are actually higher than their current emissions levels, leaving them with excess allowances to trade.

Linking Kyoto to European trading system

Credits generated from CDM and JI projects can be used to help meet targets under the European Union Emissions Trading Scheme, which opened on 1 January 2005.

The European Commission is already looking ahead to beyond 2012 and on 9 February 2005 they issued a Communication on "Winning the Battle Against Global Climate Change", setting out the elements to be included in future climate change strategies and preparing the EU position for future international negotiations.

The Kyoto Protocol entering into force signifies the single most significant international step towards tackling the issue of global climate change. It will bring with it related opportunities in the field of climate change, both for policy makers and for private sector developers.