• Ethan Olson

Looking Back on Kyoto: Leaving Developing Countries Out of Climate Change Agreements

BY ETHAN OLSON


A bustling street in Thailand's capital of Bangkok.


Over two decades ago, world leaders met in Kyoto, Japan to create an international agreement for mitigating climate change. The Kyoto Protocol was a step forward, but it ultimately fell far from its goal of putting a stop to increasing average global temperatures. One reason? It’s exclusion of the developing world, and the concerns of developed countries — most notably the United States — about the negative impacts such an omission might have on their economies. The following text is pulled from an earlier research paper I wrote about the Kyoto Protocol, and goes into further detail about what leaving developing countries out of the picture meant for the success of the global climate change regime.


ANNEX 1 v NON-ANNEX 1 AND AMERICAN INACTION


One of the most oft-spoken criticisms of the Kyoto Protocol was its distinction of “Annex 1” and “Non-Annex 1” nations. Annex 1 nations included most of the developed world — the United States, the E.U, Australia, Canada, Japan, etc. They also included nations of the former Soviet Union and its satellite states in central and eastern Europe, which were moving towards market-based economies. The prior group also belonged to an Annex 2 category, and were required to provide financial aid to the poorer countries of Annex 1 to fund emission abatement measures. What Kyoto notably left out of the Annex 1 group was the entirety of the developing world. These were creatively labeled “Non-Annex 1 Parties,” and were not given emission caps or reduction goals.


AMERICAN OPPOSITION


The most well-known effect of this division was the U.S Senate’s decision not to ratify the treaty. William Sweet points out that despite early opposition from the U.S regarding the exclusion of developing nations from emission reduction requirements, European diplomats saw the leading role of the developed world as natural on the road to decreasing global emissions. It was believed that if the wealthy, influential powers of the world began the process of greening their economies, Non-Annex 1 countries would be pressured, overtime, to adopt similar measures. But this did not predict the massive wave of growth China would experience in coming years, and the difficult dilemma imposed by its growing emissions and power on the world stage. American influence was certainly present in Kyoto, but it was not strong enough to bring developing countries into the protocol.


Although the agreement was signed by President Bill Clinton in 1997, it could not be ratified due to the Byrd-Hagel Resolution (passed 25 July, 1997) — a bipartisan decision by the U.S Senate that American ratification of any climate agreement would not be made unless developing countries were actively engaged.


Multiple explanations are made for American disapproval. A sense of unfairness was chief among them — why should Americans reduce emissions and harm their economy while other nations grew wealthy off fossil fuels? The subsequent administration (under President George W. Bush, who officially withdrew from the agreement in 2001) gave a similar justification, pointing out how the world’s two most populous nations — China and India — were not parties to the protocol. The administration also boldly claimed that since the world economy was dependent upon the health of the United States, adopting emission cuts would destroy global markets. Whether or not the final decision was made due to this incorrect sense of altruism, concern for an American economy built on fossil fuels, or the influence of Big Oil lobbyist, it was clear that the Kyoto Protocol would fall dead in the U.S Senate, regardless of President Clinton’s signature on the document.


With the world’s (then) largest emitter no longer participating, the Kyoto Protocol was dealt a serious blow. Much of the demand for emission credits through the cap-and-trade system was expected to come from the United States. This drop in demand meant that these credits were cheapened, and nations who wished to sell them no longer had a strong reason to reduce emissions at home so they could sell their extra credits abroad. This also meant that the Kyoto-supporting members of the E.U possessed far less leverage in persuading other nations to adhere to strict emission requirements. Russia, Japan, and Canada, for example, were given massive amounts of credits for the role of their forests as carbon sinks. Being lenient on other nations was the only way to ensure that enough nations joined the protocol to bring it into effect. The United States’ objection thus led to a situation in which other countries were allowed to pollute more under the Kyoto Protocol.


As said before, Kyoto’s passivity towards pulling developing nations into the climate policy fold also did not account for the rapid industrialization of several economies — most notably India, who now accounts for roughly 7 percent of global carbon emissions, and China, whose emissions rose to surpass the United States and now account for roughly 28 percent of global carbon emissions. Climate change cannot be realistically confronted without serious pressure placed upon these countries and others experiencing rapid growth. Kyoto’s postponement of figuring out how to account for these industrializing countries created unwanted difficulties later on, when it became clear that international climate talks must include these parties. India, for example, defended its categorization as a Non-Annex 1 nation when refusing to adopt binding targets for emissions prior to the 2009 Copenhagen climate conference. The delineation of Non-Annex 1 parties created a dichotomy in international debates where the developed nations, who had benefited from historically high levels of emissions during their periods of industrialization, wished to strip the developing world from those same resources, impeding their ability to grow their economies by limiting their use of fossil fuels.


LEAKAGE


Lastly, the problem of “leakage” should be addressed. When certain nations are under pressure to reduce emissions under an international climate agreement, and others are not, there is a possible incentive for businesses in developed countries to move to those that are less expensive to operate in because they lack strong emission policies. This allows companies who find it profitable to pollute to continue doing so, and adds the cost of losing jobs that emigrate out of the developed country.

As Barrett notes, however, the true scale of leakage is relatively unknown. He stresses how leakage is often used as a political argument for opposing international regimes that do not provide complete coverage of all nations. This was seen in Robert Byrd’s testimony to the Senate, where he stated that the Kyoto Protocol would “siphon off American industries.”


Similarly, Victor says that leakage is “probably a much overstated fear.” Unless heavy controls on emissions are implemented, there is not enough incentive for most businesses to relocate to different countries. He compares the fear brought about by Kyoto to that of “industrial flight,” — the idea that opening a nation such as the U.S to free trade would result in the outpouring of jobs to countries with cheaper labor (As the U.S steadily increased its free trade practices, such fears turned out to be conflated). Victor does note however that if emission reduction measures are made stricter, leakage could become a formidable problem. A possible solution to this issue would involve giving nations in the World Trade Organization the ability to put restrictions on imports based on the process through which they are made. Those produced via manufacturing procedures that emit too much carbon dioxide, for example, can be blocked or taxed by nations, discouraging businesses from moving to new countries with more lax emissions standards.


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