Global Climate Change: The Kyoto Protocol

CRS Report for Congress
Global Climate Change: The Kyoto Protocol
Updated July 21, 2005
Susan R. Fletcher
Specialist in Environmental Policy
Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Global Climate Change: The Kyoto Protocol
Negotiations on the Kyoto Protocol to the United Nations Framework
Convention on Climate Change (UNFCCC) were completed December 11, 1997,
committing the industrialized nations to specified, legally binding reductions in
emissions of six “greenhouse gases.” The Protocol entered into force on February
16, 2005, and its emissions reduction requirements are binding on the 35
industrialized countries that have ratified it; the United States disengaged from the
Protocol in 2001 and has not ratified it.
As structured in the negotiations completed in 1997, this treaty would commit
the United States — if it were to ratify the Protocol — to a target of reducing
greenhouse gases by 7% below 1990 levels during a “commitment period” between
2008-2012. Because of the fact that “sinks,” which remove and store carbon from
the atmosphere, are counted and because of other provisions discussed in this report,
the actual reduction of emissions within the United States that would be required to
meet the target was estimated to be lower than 7%.
The United States signed the Protocol on November 12, 1998. However, the
Clinton Administration did not submit the Protocol to the Senate for advice and
consent, acknowledging that one condition outlined by S.Res. 98, passed in mid-1997
— meaningful participation by developing countries in binding commitments
limiting greenhouse gases — had not been met. In late March 2001, the Bush
Administration rejected the Kyoto Protocol. The United States continued to attend
the annual conferences of the parties (COPs) to the UNFCCC, but did not participate
in Kyoto Protocol-related negotiations. In February, 2002, President Bush announced
a U.S. policy for climate change that will rely on domestic, voluntary actions to
reduce the “greenhouse gas intensity” (ratio of emissions to economic output) of the
U.S. economy by 18% over the next 10 years.
Following the ratification of the Kyoto Protocol by Russia in November 2004,
it entered into force on February 16, 2005, and as noted above, obligates the 35
developed nations that have ratified it to meet their commitments to reduce their
greenhouse gas emissions by the amounts specified in the Protocol over the period
2008 to 2012. A total of 141 nations, including developing countries — which have
no binding obligations under the treaty — had ratified the Protocol when it entered
into force. In order to enter into force, the Protocol had to be ratified by developed
(Annex I) nations representing 55% of the level of their emissions in 1990. Only
those countries that have ratified the Protocol are bound by its terms; therefore,
although the United States had signed the Protocol, it is not bound by its terms, since
it has not ratified it.
This report is intended to provide background on the Kyoto Protocol and its
terms. It will be updated annually or as events warrant.

Background ..................................................1
Major Provisions of the Kyoto Protocol............................2
Emissions Reductions......................................3
Developing Country Responsibilities..........................3
Emissions Trading and Joint Implementation....................4
Buenos Aires Action Plan.......................................5
COP-6 Negotiations, The Hague..................................6
Bush Administration Policy..................................9
COP-6 Resumed, Bonn, Germany................................10
COP-7 and Subsequent Conferences of the Parties...................11
Current U.S. Policy...........................................11
Ratification Issues........................................12
Legislation ..............................................13

Global Climate Change:
The Kyoto Protocol
Responding to concerns that human activities are increasing concentrations of
“greenhouse gases” (such as carbon dioxide and methane) in the atmosphere, most
nations of the world joined together in 1992 to sign the United Nations Framework
Convention on Climate Change (UNFCCC). The United States was one of the first
nations to ratify this treaty. It included a legally non-binding, voluntary pledge that
the major industrialized/developed nations would reduce their greenhouse gas
emissions to 1990 levels by the year 2000, and that all nations would undertake
voluntary actions to measure, report, and limit greenhouse gas emissions.
However, as scientific consensus grew that human activities are having a
discernible impact on global climate systems, significantly contribuing to a warming
of the Earth that could result in major impacts such as sea level rise, changes in
weather patterns, and health effects — and as it became apparent that major nations
such as the United States and Japan would not meet the voluntary stabilization target
by 2000 — parties to the treaty decided in 1995 that it would be necessary to enter
into a legally binding, not voluntary, agreement. Negotiations began on a protocol
to establish legally binding limitations or reductions in greenhouse gas emissions.
It was decided by the parties that this round of negotiations would establish
limitations only for the developed countries (the 38 nations listed in Annex I to the
UNFCCC, including the former Communist countries, and referred to as “Annex I1
countries.” (Developing countries are referred to as “non-Annex I countries.”) This
was referred to as the “Berlin Mandate,” which reflected continuation of the principle
established in the UNFCCC that parties bore “common but differentiated
responsibilities” in dealing with climate change issues, and that first steps in reducing
greenhouse gas emissions should be taken by the Annex I countries.
During negotiations that preceded the December 1-11, 1997, meeting in Kyoto,
Japan (COP-3), little progress was made, and the most difficult issues were not
resolved until the final days — and hours — of the Conference. There was wide
disparity among key players especially on three items: (1) the amount of binding
reductions in greenhouse gases to be required, and the gases to be included in these
requirements; (2) whether developing countries should be part of the requirements
for greenhouse gas limitations; and (3) whether to include emissions trading and joint
implementation, (which allow credit to be given for emissions reductions to a country
that provides funding or investments in other countries that bring about the actual
reductions in those other countries or locations where they may be cheaper to attain).

1 For additional information on the negotiations in Kyoto and related background, see CRS
Issue Brief IB89005, Global Climate Change.

Following completion of the Protocol in December of 1997, decisions and
details regarding a number of the more difficult issues remained to be negotiated and
resolved (see below). At the fourth Conference of the Parties (COP-4) held
November 2-13, 1998, in Buenos Aires, Argentina, it was apparent that these issues
could not be resolved at this meeting as had been expected. Instead, parties
established a two-year “Buenos Aires Plan of Action” (BAPA) to deal with these
issues, with a deadline for completion at the COP-6 meeting in The Hague,
Netherlands, November 13-24, 2000.
The difficulty in resolving these issues was underlined by the collapse of
discussions at COP-6 in The Hague, without agreement. As discussed below, COP-6
resumed in the latter half of July 2001, following U.S. President Bush’s
announcement that the United States would not continue participating in negotiations
on the Kyoto Protocol, and would develop an alternative approach. The U.S.
delegation remained on the sidelines, declining to negotiate the key remaining issues
related to the Protocol. During the July meeting, the other parties reached final
agreement on most outstanding issues, with additional agreements reached on some
details at the next meeting, COP-7, in Marrakech, Morocco, October 29-November
9, 2001. (See discussion below) In the annual meetings of parties to the UNFCCC
in the years since the Marrakech meeting, major continuing issues regarding the
Kyoto Protocol — including the issues related to future participation of developing
countries — were not taken up or resolved.
In order to enter into force, the Protocol had to be ratified by nations
representing 55% of these emissions. In November, Russia ratified the protocol,
completing the requirements for bringing the Protocol into force within 90 days, and
on February 16, 2005, it officially entered into force. The Protocol’s provisions will
apply only to those countries that have ratified it.
Major Provisions of the Kyoto Protocol
The Kyoto Protocol was opened for signature March 16, 1998, and entered into
force February 16, 2005, becoming legally binding for countries that have ratified
it. The Protocol conditions required that it would be in force only when 55 nations
had ratified it, provided that these ratifications included Annex I Parties that account
for at least 55% of total Annex I carbon dioxide emissions in 1990.
On November 12, 1998, the United States signed the Protocol, in part because
the Clinton Administration wanted to revitalize what was seen as some loss of
momentum during COP-4. However, the treaty was not subsequently submitted to
the Senate for approval in recognition of S.Res. 98, the 1997 resolution indicating
disapproval of any treaty that did not include legally binding commitments for
developing countries. In the United States, ratification of treaties can occur only after
being submitted to and approved by the U.S. Senate. In 2001, early in his first term,
President George W. Bush rejected the Kyoto Protocol, as noted above and discussed
below, and U.S. policy has disengaged from formal negotiations on the Protocol.
The major commitments in the treaty on the most controversial issues are as

Emissions Reductions. The United States would be obligated under the
Protocol to a cumulative reduction in its greenhouse gas emissions of 7% below 1990
levels for three major greenhouse gases, including carbon dioxide, (and below 1995
levels for the three other, man-made gases), averaged over the commitment period

2008 to 2012. The Protocol states that Annex I Parties are committed —

individually or jointly — to ensuring that their aggregate anthropogenic carbon
dioxide equivalent emissions of greenhouse gases do not exceed amounts assigned
to each country in Annex B to the Protocol, “with a view to reducing their overall
emissions of such gases by at least 5% below 1990 levels in the commitment period

2008 to 2012.” Annex A lists the 6 major greenhouse gases covered by the treaty2.

Annex B to the Kyoto Protocol lists 39 nations, including the United States, the
European Union plus the individual EU nations, Japan, and many of the former
Communist nations (the same countries as Annex I to the UNFCCC). The amounts
for each country are listed as percentages of the base year, 1990 (except for some
former Communist countries), and range from 92% (a reduction of 8%) for most
European countries — to 110% (an increase of 10%) for Iceland. The United States
agreed to a commitment on this list to 93%, or a reduction of 7%below 1990 levels,
to be achieved as an average over the five year commitment period, 2008-2012.
Based on projections of the growth of emissions using current technologies and
processes, the reduction in greenhouse gas emissions required of the United States
would likely be between 20% and 30% below where it would be otherwise by the
2008-2012 budget period.3 However, inclusion of greenhouse gas sinks4 — which
the Protocol adopted as urged by the United States — and emissions trading, means
that the domestic U.S. emission reductions from fossil fuels needed to meet a 7%
target would be substantially less. However, two of the most difficult issues
unresolved at Kyoto, and responsible in large part for the breakdown of the COP-6
negotiations in November 2000, are related to (1) emissions trading — specifically,
how much of a country’s obligation to reduce emissions can be met through
purchasing credits from outside, vs. taking domestic action; and (2) the extent to
which carbon sequestration by forests, soils and agricultural practices can be counted
toward a country’s emission reductions.
Developing Country Responsibilities. The United States had consistently
taken a firm position that “meaningful participation” of developing countries in
commitments made in the Protocol is critical both to achieving the goals of the treaty
and to its approval by the U.S. Senate. This reflects the requirement articulated in
S.Res. 98, passed in mid-1997, that the United States should not become a party to

2 The six gases covered by the Protocol are carbon dioxide (CO2), methane (CH4), nitrous
oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur
hexafluoride (SF6). The most prominent of these, and the most pervasive in human
economic activity is carbon dioxide, produced when wood or fossil fuels such as oil, coal,
and gas are burned.
3 See CRS Report 98-235 ENR, Reducing Greenhouse Gases: How Much from What
4 Greenhouse gases, especially CO2, are absorbed by a number of processes in forests, soils,
and other ecosystems. These are called “sinks.”

the Kyoto Protocol until developing countries are subject to binding emissions
targets. The U.S. government also argued that success in dealing with the issue of
climate change and global warming would require such participation. The
developing country bloc argued that the Berlin Mandate — the terms of reference of
the Kyoto negotiations established at COP-1 in 1995 — clearly excluded them from
new commitments in this Protocol, and they continued to oppose emissions limitation
commitments by non-Annex I countries.
The Kyoto Protocol was concluded without such commitments, and the Clinton
Administration indicated that it would not submit the Protocol for Senate
consideration until meaningful commitments were made by developing countries.
At COP-4 in Buenos Aires, Argentina — host country of the meeting — became the
first developing country to indicate that it will make a commitment to take on a
binding emissions target for the period 2008-2012. Kazakhstan also announced its
intention to take similar action. At this meeting, the United States announced it
would sign the Kyoto Protocol, which it did on November 12, 1998. To date, none
of the largest developing countries, such as China, India or Brazil, have shown a
willingness to make commitments to reducing greenhouse gas emissions.
The Protocol does call on all Parties — developed and developing — to take a
number of steps to formulate national and regional programs to improve “local
emission factors,” activity data, models, and national inventories of greenhouse gas
emissions and sinks that remove these gases from the atmosphere. All Parties are
also committed to formulate, publish, and update climate change mitigation and
adaptation measures, and to cooperate in promotion and transfer of environmentally
sound technologies and in scientific and technical research on the climate system.
Emissions Trading and Joint Implementation. Emissions trading, in
which a Party included in Annex I “may transfer to, or acquire from, any other such
Party emission reduction units resulting from projects aimed at reducing
anthropogenic emissions by sources or enhancing anthropogenic removals by sinks
of greenhouse gases” for the purpose of meeting its commitments under the treaty,
is allowed and outlined in Article 6, with several provisos. Among the provisos is
the requirement that such trading “shall be supplemental to domestic actions.” The
purpose of this proviso is to make it clear that a nation cannot entirely fulfill its
responsibility to reduce domestic emissions by relying primarily on emissions trading
or joint implementation to meet its targets. Joint implementation is project-based
activity in which one country can receive emission reduction credits when it funds
a project in another country where the emissions are actually reduced.
One of the more contentious issues in the negotiations concerning how the
Kyoto Protocol would work has been this issue of “supplementarity” — finding
agreement on what proportion of a nation’s obligations could be met through these
mechanisms versus domestic actions to reduce emissions within a nation’s own
borders. At the negotiations in Bonn, Germany, in mid-2001 (COP-6 “bis” discussed
below), this issue was resolved with language that indicated there would be no
quantitative limit on the credit a country could claim from use of these mechanisms,
but that domestic action must constitute a significant element of the efforts of each
Annex B country to meet their targets.

A number of specific issues related to the rules on how joint implementation and
emissions trading would work were left at Kyoto to be negotiated and resolved in
subsequent meetings; in the years since the Protocol was completed, it became
increasingly clear that this is an extremely complex issue. The European Union has
designed a system to be used within the EU whether or not the Kyoto Protocol enters
into force, and they have set a goal of initiating emissions trading in early 2005.
However, citing scientific issues yet to be resolved, the EU system will not include
sinks or land use issues.
Another major “mechanism” for meeting obligations in the Protocol is provided
by the establishment of a “clean development mechanism” (CDM), through which
a modified form of joint implementation between developed and developing
countries would occur. The United States had pushed hard for joint implementation,
and early proposals were formulated with the expectation that “JI” projects would be
primarily bilateral. Instead, negotiations resulted in agreement to establish the clean
development mechanism to which developed Annex I countries could contribute
financially, and developing/non-Annex I countries could benefit from financing for
approved project activities; Annex I countries could then use certified emission
reductions from such projects to contribute to their compliance with part of their
emission limitation commitment. Emissions reductions achieved through this
mechanism could begin in the year 2000 to count toward compliance in the first
commitment period (2008-2012). Like emissions trading, making the CDM
operational appears likely to be a difficult and complex process.
Buenos Aires Action Plan
Although it had been expected just after the 1997 Kyoto conference that the
November, 1998, COP-4 meeting in Buenos Aires, Argentina, would resolve some
of the more difficult issues left unresolved in Kyoto, it became clear during the year
leading up to COP-4 that parties were far from agreement on all of these issues.
Additional time for parties to analyze, negotiate, and work on these issues would be
required. Therefore, the parties arrived in Buenos Aires with an agenda focused on
formulating an “action plan” that would allow for the needed additional work to be
done. It was decided that the work plan should be completed by the end of 2000, and
should focus on the key issues, including the following:
— Rules and guidelines for the “market-based mechanisms” that allow
flexibility to parties in meeting their obligations. These include
emissions trading, joint implementation, and the Clean Development
Mechanism (CDM). The list of critical issues to be considered
include whether there should be quantified limits on how much of a
country’s emission reduction requirement could be met through these
mechanisms, as argued by the European Union, or no quantified limit,
as argued by the United States; “transparency” in making it possible
to effectively track emission units; allocating risk in emissions trades
— including the question of assigning liability, or responsibility,
when emissions trading involves “false” credits; and key
measurement, reporting and verification issues.

— Rules and procedures that would govern compliance, including
provisions covering non-compliance with the treaty’s commitments.
This issue was left entirely open at Kyoto and remained one of the
major challenges facing negotiators.
— Issues concerning development and transfer of cleaner, lower-
emitting technologies, particularly to developing countries.
— Consideration of the adverse impacts of climate change and also the
impacts of measures taken to respond to it, an issue of particular
importance to developing countries, who argue the need for financial
assistance in order to help them cope with these impacts.
Carbon sinks. Another issue under active negotiation and consideration by the
parties, but outside the action plan itself, is defining application of the concept of
carbon sinks, including how to measure and verify the categories of carbon sinks.
The scientific panel that provides analysis to the parties, the Intergovernmental Panel
on Climate Change (IPCC), conducted a comprehensive study on land use, land-use
change, and forestry activities to identify their roles as carbon sinks and deal with the
measurement and verification issues related to them.
Following the release of this report, which indicated that a large amount of
carbon could be stored in a variety of carbon sinks, including not only forests, but in
soils, vegetation, grazing lands, etc., the United States made a comprehensive
proposal for the COP-6 negotiations to broaden the scope of acceptable carbon sinks.
The Kyoto Protocol accepts in principle that a nation’s forests — management
practices, reforestation or afforestation — may be included in the accounting of net
greenhouse gas emissions and their reduction. This would be important to the United
States, as its large land area and extensive potential for greater absorption of carbon
due to land management changes could greatly reduce the amount of emissions
reductions needed from energy production. In a submission to the Secretariat of the
UNFCCC, the United States proposed in late summer 2000 that elaboration at COP-6
of land use changes acceptable under the Protocol should also include soil carbon
sequestration and vegetation.
Few decisions were reached, nor were they expected, on the more difficult
issues outlined in the Buenos Aires Plan of Action at the COP-5 meeting in Bonn,
Germany, held October 25-November 24, 1999.
COP-6 Negotiations, The Hague
The November 2000 COP-6 meeting in The Hague was the last negotiation
session on the Kyoto Protocol in which the United States participated. After
President George W. Bush became President in January 2001, he rejected the Kyoto
Protocol and opted out of participation in Kyoto-related negotiations.
The negotiations at the COP-6 meeting were illustrative of some of the most
contentious issues of the Kyoto Protocol, and the difficulties of reaching agreement
on them led to the ultimate collapse of these talks. Leading up to the COP-6 meeting,
there were two intersessional negotiation sessions of the UNFCCC Subsidiary Bodies

(the key mechanisms for considering Kyoto issues between COP meetings) in 2000,
June 12-16 and September 11-15, dealing with the issues of the Buenos Aires
workplan and attempting to fashion a negotiating text for final consideration at the
November 13-24 COP-6 meeting. At the conclusion of the meeting in Lyon, it was
reported that language on aspects of some issues had been agreed upon, but that the
negotiating text had been expanded to some 200 pages, much of it “bracketed.”
(Brackets indicate that no agreement has been found on the language in brackets, and
often several alternative possibilities are reflected within brackets.) Thus, though
there was negotiating text on most issues, disagreements remained on most key
issues. Observers reported that political positions remained entrenched and little
movement toward compromise appeared evident in Lyon. The end result was that
many participants felt doubtful that many of the key issues could be completely
resolved in November, 2000, at COP-6.
As talks began at COP-6 in The Hague, Netherlands, on November 13, they
centered initially on the “Buenos Aires Plan of Action” (BAPA), but evolved into a
high-level negotiation over the major political issues. These included major
controversy over the United States’ proposal to allow credit for carbon “sinks” in
forests and agricultural lands, satisfying a major proportion of the U.S. emissions
reductions in this way (between half and one-quarter, according to various versions
of the U.S. proposal); disagreements over consequences for non-compliance by
countries that did not meet their emission reduction targets; and difficulties in
resolving how developing countries could obtain financial assistance to deal with
adverse effects of climate change and meet their obligations to plan for measuring
and possibly reducing greenhouse gas emissions.
In the final hours of COP-6, despite some compromises agreed between the
United States and some EU countries, the EU countries as a whole, reportedly led by
Denmark and Germany, rejected the compromise positions, and the talks in The
Hague collapsed. Jan Pronk, the President of the COP, suspended COP-6 without
agreement. Discussions between the EU and the “Umbrella group” that includes the
United States, Canada, Japan and Australia, were held in Ottawa, Canada, during the
week of December 4, 2000, in order to try and salvage some of the agreement
reached at the end of the talks in The Hague. However, the U.S. negotiators reported
that these talks were “inconclusive” and the differences were still in place, or even
exacerbated, after this meeting.
At the end of 2000, based on discussions at The Hague and in Ottawa, the issues
particularly in contention were as follows:
Mechanisms, especially emissions trading: The main issue here was
“supplementarity” — the position of the United States was that there
should not be quantitative limits to the amount of emissions reductions that
are allowed toward a country’s obligations through emissions trading or
joint implementation. The EU and others argue there should be such
limitations, in order to force nations to take more extensive domestic
action to reduce emissions. This issue is related to the commitment
outlined in the Kyoto Protocol that emissions trading should be
“supplemental” to domestic action. The United States was supported by
the “umbrella group” in which it is joined by New Zealand, Japan, Canada,

Australia, Russia, Ukraine, Norway and Iceland. Another related issue was
whether carbon sinks can be included in the Clean Development
Mechanism (CDM) in which a contributing developed country can claim
credit for actions to reduce emissions in developing countries. There were
significant divisions on this issue not among developed countries, but
among developing countries, as well.
Compliance issues: Decisions on how non-compliance with Protocol (and
UNFCCC) obligations should be handled was a very controversial issue.
The United States position was that there should be binding consequences,
but these should be in the form of additional obligations in subsequent
commitment periods, and not in the form of financial penalties. There was
considerable disagreement at The Hague over whether financial penalties
should be allowed. Agreement on binding consequences would probably
require an amendment to the Protocol, which would be separately agreed
to, and separately ratified. Opponents to binding consequences include
Japan, Russia, and Australia, who were concerned, among other things,
about opening the Protocol to an amendment process. On the structure of
a compliance regime, there was substantial agreement on a likely outcome:
a single compliance body with two functions or branches — (1) to
facilitate and assist compliance (mainly for developing countries), and (2)
an enforcement function where decisions would be made on whether
compliance violations have occurred and what consequences should be
applied. Consequences under consideration, in addition to financial
penalties, included losing access to mechanisms like emissions trading
and/or subtracting from future allocations of allowable carbon emissions.
Land use and land use change and forestry (LULUCF): As noted above,
the Kyoto Protocol accepts in principle that a nation’s forests —
management practices, reforestation or afforestation — may be included
in the accounting of net greenhouse gas emissions and their reduction. The
United States proposed at COP-6 that land use changes acceptable under
the Protocol should also include soil carbon sequestration and vegetation.
Major issues were how to attain precision in measuring absorption and
release of carbon from land-based sources, how permanent such land use
mechanisms would be, and the extent to which land use absorption
counted by a nation is “additional” to business as usual.
The United States made a series of controversial proposals on how to count
carbon sequestration, beginning with basically counting most of the carbon
sequestration in its extensive forest cover toward its obligations. It
subsequently revised this proposal and put forward a formula that included
three parts: a first “interval” allowing up to 20 million tons of carbon to be
counted at 100% for any country with forests absorbing that much; a
second interval of a certain amount in which credit for a certain percentage
would be allowed up to a certain threshold; then full credit for tons
absorbed beyond the threshold (which would be historically determined in
relation to baseline absorption amounts). The EU opposed the U.S.
proposal, mainly on the issue of forests, and the extent to which a country
like the United States would receive credits for a “business as usual”

scenario that did not involve the harder emissions reductions from fuel
sources and technological measures. When the United States put numbers
to this proposal, the U.S. credits from carbon sinks appeared to represent
about 125 million tons of carbon, against a likely need to reduce emissions
by about 600 million tons of carbon to meet its commitment in 2008-2012.
This was strongly opposed by the EU and other countries, and a stalemate
over this issue, despite several revisions downward of the U.S. position
and tentative acceptance of a much smaller amount by the EU, was thought
to be a major factor in the collapse of the November COP-6 negotiations
at The Hague.
Developing country participation: The United States had been seeking
additional commitments from developing countries in a series of informal
discussions and consultations during the period since the Kyoto Protocol
was completed in late 1997, but only Argentina and Kazakhstan have
shown a willingness to make such commitments. Little willingness to do
so has been shown by other developing countries. The possibility that it
would be discussed under an agenda item dealing with “adequacy of
commitments” did not occur at The Hague.
Bush Administration Policy. Just over two months after the COP-6 talks
collapsed, President George W. Bush took office, and announced his Administration
would carry out a cabinet-level review of climate policy. However, the Bush
Administration announced in late March 2001 that it would not be interested in
continuing discussion on the Kyoto Protocol, which was characterized as “dead” in
terms of U.S. policy. The cabinet-level review of U.S. climate policy was on-going,
and the Administration indicated that it would be interested in pursuing alternative
approaches or cooperative efforts such as market-based incentives and voluntary
measures, to address climate change concerns.
The EU nations and others, such as Japan, expressed deep concern and dismay
at this new U.S. position, and a high-level delegation of EU officials visited the
United States to attempt to re-engage the United States in the Kyoto Protocol process.
This effort was reported as having been “rebuffed.” Some observers began
considering the implications of the new U.S. position for the Protocol, and whether
the EU and other nations would ratify the Protocol, and try to bring it into force
without the United States.
President Bush made a policy statement in mid-June, 2001, resulting from the
continuing cabinet-level review of climate change options, in which he confirmed the
U.S. approach as rejecting the Kyoto Protocol and favoring voluntary actions,
increased scientific research, and market mechanisms. President Bush also outlined
a U.S. Climate Change Research Initiative, and the National Climate Change
technology Initiative. During his mid-June trip to Europe, President Bush discussed
climate policy with European heads of state and met strong opposition to the U.S.
position. The outcome was that Europe and the United States would “agree to
disagree” on climate. The Europeans announced they would proceed with ratification
of the Kyoto Protocol, without the United States if necessary.

President Bush indicated that the United States would continue to participate in
international meetings on climate change, but would not negotiate on Kyoto Protocol
issues. When the COP-6 meeting resumed in Bonn, Germany, in July 2001, the U.S.
delegation followed this approach, declining to participate in negotiations on most
Kyoto Protocol issues, and remaining on the sidelines as observers. The other parties
reached agreement on the key political issues and announced that the developed
countries would move toward ratification of the Kyoto Protocol without the United
COP-6 Resumed, Bonn, Germany
When the COP-6 negotiations resumed July 16-27, 2001, in Bonn, Germany,
little progress had been made on resolving the differences that had produced an
impasse in The Hague. However, this meeting took place after President George
Bush had rejected the Kyoto Protocol in March; as a result, the United States
delegation to this meeting declined to participate in the negotiations related to the
Protocol and chose to act as observers at that meeting. As the other parties
negotiated the key issues, agreement was reached on most of the major political
issues, to the surprise of most observers given the low level of expectations that
preceded the meeting. The agreements included:
(1) Mechanisms — the “flexibility” mechanisms which the United States had
strongly favored as the Protocol was initially put together, including
emissions trading; joint implementation; and the Clean Development
Mechanism (CDM), which provides funding from developed countries for
emissions reduction activities in developing countries, with credit for the
donor countries. One of the key elements of this agreement was that there
would be no quantitative limit on the credit a country could claim from use
of these mechanisms, but that domestic action must constitute a significant
element of the efforts of each Annex B country to meet its targets.
(2) Carbon sinks — credit was agreed to for broad activities that absorb carbon
from the atmosphere or store it, including forest and cropland
management, and revegetation, with no over-all cap on the amount of
credit that a country could claim for sinks activities. In the case of forest
management, an Appendix Z establishes country-specific caps for each
Annex I country; for example, a cap of 13 million tons could be credited
to Japan (which represents about 4% of its base-year emissions). For
cropland management, countries could receive credit only for carbon
sequestration increases above 1990 levels.
(3) Compliance — final action on compliance procedures and mechanisms that
would address non-compliance with Protocol provisions was deferred to
COP-7, but included broad outlines of consequences for failing to meet
emissions targets that would include a requirement to “make up” shortfalls
at 1.3 tons to 1, suspension of the right to sell credits for surplus emissions
reductions; and a required compliance action plan for those not meeting
their targets.

(4) Financing — three new funds were agreed upon to provide assistance for
needs associated with climate change; a least-developed-country fund to
support National Adaptation Programs of Action; and a Kyoto Protocol
adaptation fund supported by a CDM levy and voluntary contributions.
A number of operational details attendant upon these decisions remained to be
negotiated and agreed upon, and these were the major issues of the COP-7 meeting
that followed.
COP-7 and Subsequent Conferences of the Parties
At the COP-7 meeting in Marrakech, Morocco October 29-November 10, 2001,
negotiators in effect completed the work of the Buenos Aires Plan of Action,
finalizing most of the operational details and setting the stage for nations to ratify the
Protocol. The United States delegation continued to act as observers, declining to
participate in active negotiations. Other parties continued to express their hope that
the United States would re-engage in the process at some point, but indicated their
intention to seek ratification of the requisite number of countries to bring the Protocol
into force (55 countries representing 55% of developed country emissions of carbon
dioxide in 1990).
The main decisions at COP-7 included operational rules for international
emissions trading among parties to the Protocol and for the CDM and joint
implementation; a compliance regime that outlines consequences for failure to meet
emissions targets but defers to the parties to the Protocol after it is in force to decide
whether these consequences are legally binding; accounting procedures for the
flexibility mechanisms; and a decision to consider at COP-8 how to achieve to a
review of the adequacy of commitments that might move toward discussions of
future developing country commitments. Other parties reiterated their hope that the
United States would re-engage with the international cooperation efforts under the
Protocol, but also their decision to seek ratification by their governments and the
Protocol’s entry into force by the WSSD in 2002, as noted above.
At COP-8 (New Delhi, 2002), COP-9 (Milan, 2003), and COP-10 (Buenos
Aires, 2004) over the subsequent three years, no major policy issues were negotiated
or decided. The next Conference of the Parties, COP-11, is scheduled to take place
in Montreal, Canada, November 28 - December 9, 2005. This will be concurrent
meetings of the 11th Conference of the Parties to the UNFCCC and the first Meeting
of the Parties to the Kyoto Protocol; it is expected that discussion at this meeting
will focus on key issues involved in “next steps,” including what might be outlined
as steps to be taken by developing countries. It appears likely that this discussion
will be controversial among the parties, and that a key consideration will be the
question of how greenhouse gas emissions can be addressed without posing obstacles
for economic development in developing countries.
Current U.S. Policy
Disengagement from the Kyoto Protocol remains U.S. policy, with an emphasis
instead on domestic action. On February 14, 2002, President Bush announced a U.S.

policy for climate change, based on voluntary domestic measures, characterized as
a “new approach for meeting the long-term challenge of climate change.” The
centerpiece of this announcement was the plan to reduce greenhouse gas intensity of
the U.S. economy by 18% over the next 10 years. Greenhouse gas intensity measures
the ratio of greenhouse gas emissions to economic output and has been declining in
the United States over the past several years. The Administration stated that the goal,
to be met through voluntary action, is to achieve efficiency improvements that would
reduce the 183 metric tons of emissions per million dollars of gross domestic product
(GDP) to 151 in 2012. The plan notes that “if, in 2012, we find that we are not on
track toward meeting our goal, and sound science justifies further policy action, the
United States will respond with additional measures that may include a broad,
market-based program” and other incentives and voluntary measures to accelerate
technology development.
In addition, the plan directs the Secretary of Energy in consultation with other
key agencies, to “substantially improve the emission reduction registry” to upgrade
the voluntary emission reduction program under section 1605(b) of the 1992 Energy
Policy Act, to bring about enhanced measurement accuracy, reliability, and
verifiability. Other measures include providing for protected, transferable emission
reduction credits, increased funding of $700 million in total climate-related spending,
and a new management structure to coordinate climate change and technology
research. Domestic policies such as tax incentives for renewable energy and new
technology, development of fuel-efficient vehicles and cleaner fuels, and carbon
sequestration were also proposed, along with several international bilateral initiatives
and relatively modest increases in foreign assistance.
Some observers praised the plan for taking a practical, conservative approach
to government action and for relying on voluntary measures. Critics observed that
voluntary approaches by themselves have not historically often been effective and
noted that the reductions in energy intensity are very little different from current
trends and would allow for significant increases in over-all greenhouse gas emissions
rather than reductions.
Ratification Issues. For the United States to ratify the Kyoto Protocol, the
treaty would have to be transmitted to the U.S. Senate by the President for advice and
consent. A two-thirds majority vote in the Senate is required for approval. As long
as the United States has not ratified the treaty, it is not subject to its terms and
obligations. President Clinton expressed strong support for the Kyoto Protocol,
though criticizing it for not including commitments for developing countries. During
his administration, the United States signed the Protocol on November 12, 1998. The
U.S. signature was criticized by several Members of Congress who opposed the
treaty on a number of grounds, including questions about the scientific justification
for it and about the likely economic impacts that might occur if the United States
were to attempt to meet its emission reduction commitments in the treaty.
In recognition of the opposition expressed in the Senate by S.Res. 98, which
passed 95-0 in the months before the 1997 Kyoto meeting, to a Protocol that does not
include requirements for emissions limitations by developing countries, President
Clinton did not submit the treaty to the Senate for advice and consent, citing lack of
meaningful developing country participation. Given the position announced by the

Bush Administration, opposing the Kyoto Protocol, it continues to be unlikely that
it will be transmitted to the Senate.
Legislation. A number of bills have been introduced in the 109th Congress to
address ways of reducing greenhouse gas emissions in the United States. Debate
during consideration of the omnibus energy bill, H.R. 6, in the Senate included votes
on several amendments, including some that were adopted on technology
development, deployment and transfer, and a Sense of the Senate resolution that
recognizes that human activities are a substantial cause of greenhouse gas
accumulations in the atmosphere, causing average temperatures to rise. This
resolution also states that “Congress should enact a comprehensive and effective
national program of mandatory market based limits and incentives on emissions of
greenhouse gases that slow, top, and reverse the growth of such emissions...” in a
way that avoids harm to the U.S. economy and encourages comparable action by
other countries. (For additional information, see CRS Report RL32955, Climate
Change Legislation in the 109th Congress).