Climate Change: The Kyoto Protocol, Bali "Action Plan,"and International Actions

Climate Change: The Kyoto Protocol,
Bali “Action Plan,” and International Actions
Updated May 30, 2008
Susan R. Fletcher
Specialist in International Environmental Policy
Resources, Science, and Industry Division
Larry Parker
Specialist in Energy Policy
Resources, Science, and Industry Division

Climate Change: The Kyoto Protocol,
Bali “Action Plan,” and International Actions
Summary
Concerns over climate change, often termed “global warming,” have emerged
both in the United States and internationally as major policy issues. Reports in 2007
by the United Nations Intergovernmental Panel on Climate Change (IPCC) provided
scientific underpinnings for these concerns, and the number of proposals and
international meetings devoted to these issues has grown, as discussed in this report.
In December 2007, the meeting of parties to the United Nations Framework
Convention on Climate Change (UNFCCC) convened in Bali, Indonesia, and agreed
on the “Bali Action Plan” to guide negotiations over the next two years, with the goal
of formulating by 2009 a decision that would identify the next round of commitments
by the nations of the world to address climate change. Several “Working Group”
meetings are scheduled to work on these issues during 2008, beginning with a
meeting in Bangkok, Thailand, in April that formulated a work plan for negotiations.
The first treaty to address climate change, the UNFCCC was completed and
opened for signature in 1992. It includes voluntary commitments to establish
national action plans for measures that would reduce greenhouse gas emissions. The
United States was one of the first nations to sign and ratify this treaty, and it entered
into force in 1994. However, it was soon concluded by parties to the treaty that
mandatory reductions in emissions of the six major greenhouse gases (of which
carbon dioxide, mainly from burning of fossil fuels, is the most prevalent) would be
required. The resulting Kyoto Protocol, which was completed in 1997 and entered
into force in February 2005, committed industrialized nations that ratify it to
specified, legally binding reductions in emissions of the six major greenhouse gases.
The United States has not ratified the Protocol, and thus is not bound by its
provisions. In March 2001, the Bush Administration rejected the Kyoto Protocol,
and subsequently announced a U.S. policy for climate change that relies on 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.
Under the Kyoto Protocol, the collective commitments of the industrialized
nations are to reduce the Parties’ emissions by at least 5% below their 1990 levels,
averaged over the “commitment period” 2008 to 2012. Over the past year, several
high-level meetings have focused on the need to deal with climate change, including
the G-8 meeting in June 2007 and meetings at the United Nations. President Bush
announced on May 31, 2007, that the United States would convene a meeting of
major economies to begin a series of meetings in Washington, D.C. through 2008 to
find a voluntary framework for dealing with energy security and climate change.
As of November 2007, the UNFCCC Secretariat listed 174 nations and the
European Union as parties to the Kyoto Protocol. Australia announced its ratification
at the December meeting in Bali. Annual meetings of the parties are to continue,
using the Bali “roadmap” agreed on in December 2007. Major challenges involve
finding agreement on the nature of legally binding commitments, if any, that would
prove acceptable to all major players: current parties, developing countries that are
major emitters, and the United States.

Contents
Introduction and Overview..........................................1
Key Existing Kyoto Protocol Provisions................................3
Obligations of All Parties........................................3
Emissions Reductions..........................................3
Implementation: “Flexibility” Mechanisms..........................4
Emissions Trading.........................................4
Clean Development Mechanism (CDM)........................5
Joint Implementation (JI)....................................6
Carbon “Sinks”...............................................6
Compliance Mechanism.........................................7
Leading up to COP-13/MOP-3 in Bali, Indonesia.....................7
Outcome of the Bali Negotiations: A Framework for Negotiating Post-Kyoto
Commitments ................................................9
Outcome in Bali: The “Bali Action Plan”...........................9
Prospects for Compliance by Kyoto Protocol Parties.....................12
Status of Annex I Countries on Compliance........................13
U.S. Positions....................................................16
Asia-Pacific Partnership on Clean Development and Climate..............18
“Major Economies” Initiative by President Bush on Climate Change........19
Other International Meetings........................................20
United Nations Security Council.............................20
Group of 8 (G-8) Meeting in Germany........................21
United Nations General Assembly............................21
List of Figures
Figure 1. 2005 Point Carbon Assessment of Potential Credit Supply.........15
Figure 2. 2005 Point Carbon Assessment of CDM and JI Transactions.......16
List of Tables
Table 1. Summary of Projected EU Kyoto Compliance...................14

Climate Change: The Kyoto Protocol,
Bali “Action Plan,” and International Actions
Introduction and Overview¹
Responding to concerns that human activities are increasing concentrations of
“greenhouse gases” (such as carbon dioxide and methane) in the atmosphere and
causing potentially damaging climate change and global warming, nearly all 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 establish national action plans
aiming to reduce their greenhouse gas emissions to 1990 levels by the year 2000, and
that all nations would undertake voluntary actions to measure and report greenhouse
gas emissions to the UNFCCC Secretariat.
The parties to the UNFCCC hold annual meetings called Conferences of the
Parties (COPs), at which unresolved issues are negotiated, rules of procedure are
established or amended, and reviews of progress are considered. As scientific
consensus grew that human activities are having a discernible impact on global
climate systems, contributing 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 many major nations such as the United States and Japan
would not be able to reduce their emissions to 1990 levels by 2000 — parties to the
treaty decided in 1995 that it would be necessary to move beyond voluntary measures
and to enter into legally binding commitments. 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, in keeping with
principles established in the UNFCCC, establish limitations only for the developed
countries — the 38 nations listed in Annex I to the UNFCCC, including the former
Communist countries, plus the European Union, and referred to as “Annex I
countries.” Developing countries are referred to as “non-Annex I countries.”
A basic principle established in the UNFCCC and continuing in negotiations on
the Kyoto Protocol is that parties have “common but differentiated responsibilities”
in dealing with climate change issues, and that first steps in reducing greenhouse gas

¹ This report provides discussion of international negotiations and other actions related to
decisions on climate change taken by nations. Underlying much of the growth in interest
and urgency have been the reports of the Intergovernmental Panel on Climate Change
(IPCC) that were issued during 2007. These scientific reports are not discussed in this
report; for discussion of the scientific findings and these reports, see CRS Report RL33849,
Climate Change: Science and Policy Implications, by Jane A. Leggett.

emissions should be taken by the Annex I countries. Because developed countries
have emitted the largest share of the greenhouse gases already in the atmosphere
(carbon dioxide releases remain in the atmosphere for many decades), and because
they are wealthier and more able to incur costs of any necessary changes in their
economies, it was agreed by negotiators of the UNFCCC, and subsequently the
Kyoto Protocol, that this principle would be a basic tenet of climate negotiations.
The Kyoto Protocol negotiations were completed in late 1997. The protocol
establishes legally binding, mandatory emissions reductions for the six major
greenhouse gases². It requires that Annex I countries (listed again in Annex B of the
Protocol) reduce their aggregate greenhouse gas emissions by 5% below 1990 levels
(1990 is the baseline for carbon dioxide, methane, and nitrous oxide; 1995 is the
baseline year for the other 3 gases), averaged over the “commitment period” of 2008
to 2012. Each country was assigned individually negotiated targets which differed
according to their situations.
The United States signed the Protocol in 1998. However, no country is subject
to the provisions of a treaty until it has been ratified, which in the United States
requires the consent of the U.S. Senate. Because the Senate was on record in mid-
1997 in S.Res. 98, objecting to a treaty that had no mandatory obligations for
developing countries, President Clinton did not submit the Protocol to the Senate for
advice and consent; therefore the United States did not ratify the Protocol during his
Administration. Then in March 2001, soon after President George W. Bush took
office, he rejected the Kyoto Protocol, and the United States declined further
participation in Kyoto Protocol negotiations. After several years, the required
number of Annex I countries had ratified, and the Protocol entered into force in
February 2005. As of December 2007, following the announcement that Australia
had ratified the Protocol, 175 nations plus the European Union had ratified it,
representing over 62% of Annex I countries’ 1990 greenhouse gas emissions. Since
the United States has not ratified the Protocol, it is not subject to its terms.
Negotiations continued after the 1997 treaty was finalized in order to put in
place the detailed rules for how the Kyoto Protocol would operate and to establish
procedures for how its provisions would be carried out. These negotiations were
continued through two subsidiary bodies that address technical issues, and then
decisions were made at the annual conferences of the parties (COPs) to the UNFCCC
until February 2005 when the Kyoto Protocol had achieved the necessary ratifications
to enter into force; the annual meeting is now a UNFCCC COP, combined with a
“meeting of the parties (MOP)” to the Protocol. Thus the annual meetings are now
referred to as COP/MOP meetings. The United States continues to participate in the
discussions and negotiations of the COPs, but as it is not a party to the Kyoto

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. Concentrations of carbon dioxide in the atmosphere have increased
from 280 parts per million (ppm) in 1850 to some 380 ppm in 2006.

Protocol, it does not participate in Kyoto-related (MOP) negotiations, attending those
as an observer.
In December 2007, COP-13/MOP-3 convened in Bali, Indonesia, and began the
process of formulating an agreement that would succeed the Kyoto Protocol when its
commitment period ends in 2012. As summarized below in the section on the Bali
Action Plan, the negotiations at this meeting were closely watched for signs that the
process agreed on would produce an outcome that would be sufficient to the
challenge of mitigating and adapting to climate change. Final decisions on what the
commitments of developing and developed countries would be were not expected at
Bali, but the considerations to be included in negotiations toward these decisions are
outlined in the “Bali Action Plan.”
Key Existing Kyoto Protocol Provisions
The major commitments in the treaty on the key issues are as follows:
Obligations of All Parties
The Kyoto Protocol calls on all Parties — developed and developing — to take
a number of steps outlined in Article 10 to contribute to scientific research and
monitoring of the climate system and greenhouse gases in their countries. They are
also committed to formulate national and regional programs to improve local
emission factors; carry out steps to promote and transfer environmentally sound
technologies; strengthen national capacity building activities; and conduct national
inventories of greenhouse gas emissions and sinks that remove these gases from the
atmosphere.
In keeping with the principle of common but differentiated responsibilities, the
UNFCCC and the Kyoto Protocol recognize the relatively low per capita greenhouse
gas emissions in developing countries, and the need to take into account the
development activities of these countries that will require increased energy use. The
Protocol does not impose any binding requirements on developing countries; the
commitments in Article 10 are regarded as essentially voluntary.
Obligations to reduce greenhouse gas emissions by Annex I countries are the
focus of most of the Kyoto Protocol, which outlines the legally binding emissions
reductions that the Parties to the treaty are to undertake, and provides for
development of procedures and rules that apply to Parties as they move toward
meeting these binding obligations. These are briefly summarized below.
Emissions Reductions
The Kyoto 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, “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.” Negotiations on the

Kyoto Protocol included a nation-by-nation allocation of the percentage each Annex
I country would be obligated to reduce its greenhouse gas emissions in order to
collectively reach the overall 5% reduction agreed to in the Protocol.
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 in this annex as percentages of the base year, 1990 (except
for some former Communist countries, which use a more recent year), and range
from 92% (a reduction of 8%) for most European countries — to 110% (an increase
of 10%) for Iceland. In negotiations on the Protocol, the United States agreed to a
commitment on this list to 93%, or a reduction of 7% below 1990 levels. These
commitments refer to averages that would be below each Party’s 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. (As noted above, only nations that ratify the Protocol are subject to its terms;

the United States later rejected participation, and thus is not bound by it.)³
However, two of the most difficult issues unresolved in 1997 at Kyoto and still
under discussion are related to counting emissions of a nation, specifically how to
take into account: (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. These are discussed below.
Implementation: “Flexibility” Mechanisms
Emissions Trading. Emissions trading is one of three “flexibility”⁴
mechanisms contained in the Kyoto Protocol (article 17). Under the Kyoto Protocol,
developed countries are given greenhouse gas emissions “budgets” (or emissions
“caps”) for the compliance period 2008-2012 based on a percentage of their 1990 or
1995 emissions levels (depending on the particular greenhouse gas). If a country
determined that it would exceed its emissions limit during the compliance period,
emissions trading would permit it to purchase emissions reductions “credits”⁵ from

³ When the United States signed the Protocol, and 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 have been between 20% and 30%
below where it would be otherwise by the 2008-2012 commitment period. However,
inclusion of greenhouse gas sinks [Greenhouse gases, especially CO², are absorbed by a
number of processes in forests, soils, and other ecosystems. These are called “sinks.”] —
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 have been substantially less.
⁴ The other mechanisms are Joint Implementation (Article 6) and the Clean Development
Mechanism (Article 12).
⁵ A credit would generally represent the reduction of one metric ton of carbon dioxide
(continued...)

another country that determined it would achieve more emissions reductions than
necessary to comply. With emissions trading, countries that can make relatively
inexpensive emissions reductions have an incentive to reduce emissions below the
level required by the Kyoto Protocol, and sell the extra credits to other countries
whose emissions control costs are more expensive. Thus, both the seller and the
buyer would have lower costs by virtue of the seller’s profit and the buyer’s savings.
This type of implementation scheme is commonly called a “cap-and-trade” program.⁶
This mechanism, however, comes with significant restrictions under the Kyoto
Protocol. First, emissions trading is restricted to countries that have legally binding
greenhouse gas emission limitations — the Annex 1 parties, which as noted above
includes only developed, industrialized countries that have ratified the Protocol.⁷
Another requirement is that emissions credits must “be supplemental to domestic
actions for the purpose of meeting quantified emission limitations and reduction
commitments....”⁸ However, the Protocol is vague as to what “supplemental” means,
and the term is subject to continuing interpretation.
Currently, the largest emissions trading scheme in use under the Kyoto Protocol
is the European Union’s Emissions Trading system (ETS). The EU-ETS is a
cornerstone of the EU’s efforts to meet its obligation under the Kyoto Protocol, and
it currently covers more than 11,500 energy-intensive facilities across the now 27 EU
Member countries, including oil refineries, powerplants over 20 megawatts in
capacity, coke ovens, and iron and steel plants, along with cement, glass, lime, brick,
ceramics, and pulp and paper installations. Covered entities emit about 45% of the
EU’s carbon dioxide emissions. The trading program does not cover emissions of
non-CO² greenhouse gases, which account for about 20% of the EU’s total
greenhouse gas emissions. The first trading period began January 1, 2005. A second
trading period is scheduled to begin in 2008, covering the period of the Kyoto
Protocol, with a third period planned for 2013.⁹
Clean Development Mechanism (CDM). The Kyoto Protocol supplements
the cap-and-trade implementation scheme discussed above with two project-based
schemes that permit Annex 1 countries to obtain additional credits that they can use
to meet their emission caps. The first is CDM — the only mechanism under the
Kyoto Protocol that involves non-Annex 1 countries. Under its provisions,

⁵ (...continued)
equivalent emissions.
⁶ For a detailed discussion, see CRS Report RL33799, Climate Change: Design Approaches
for a Greenhouse Gas Reduction Program, by Larry Parker.
⁷ Although called “Annex 1” countries in reference to Annex 1 of the Framework
Convention on Climate Change (FCCC), the correct reference is to Annex B of the Kyoto
Protocol. The lists of countries in Annex 1 and Annex B are very similar, but not identical.
CRS uses the common usage term, Annex 1, in this report.
⁸ Article 17, Kyoto Protocol.
⁹ For more information, see CRS Report RL33581, Climate Change: The European Union’s
Emission Trading System (EU-ETS), by Larry Parker; and CRS Report RL34150, Climate
Change: The EU Emissions Trading Scheme (ETS) Gets Ready for Kyoto, by Larry Parker.

industrialized countries can receive Certified Emissions Reduction credits (CERs)
for reductions achieved from a greenhouse gas reduction project in a “host” non-
Annex 1 country. CERs can then be used by the industrialized country to meet its
compliance requirements. The process is overseen by a CDM Executive Board that
registers and validates projects, issues CERs, and manages a series of panels and
working groups. A critical component of the process is the requirement that CERs
issued under the CDM represent only reductions in excess of those that would have
occurred in the absence of the project. CERs can be issued from appropriate projects
initiated after 2000. In 2005, China, India, and Brazil were estimated by Point
Carbon to be responsible for about 63% of the total volume of all projects at the
Project Design Document (PDD) stage of development.¹⁰ In the case of China, large
volumes of CDM contracts are primarily the result of a few large HFC-23 reduction
projects.
Joint Implementation (JI). In contrast, JI is a program in which
industrialized countries can receive Emission Reduction Units (ERUs) from
greenhouse gas reduction projects conducted jointly between two Annex 1 countries.
Like CERs, ERUs can be used by the participating countries for compliance
purposes. There are two tracks under JI (called Track 1 and Track 2). Track 2
mirrors the process used by the CDM but involves different institutions. Track 1 is
a simplified process that puts more of the responsibility on the host country. Like the
CDM, ERUs issued under JI must represent reductions achieved in addition to those
that would have occurred in the absence of the project. Unlike CDM projects, ERUs
can only be transferred beginning in 2008. Romania has been the most active host
JI country. However, it should be noted that in 2005, the volumes involved in the
project markets were overwhelmingly the result of CDM projects, which accounted
for 93% of tonnage transacted (397 million metric tons (MMt) compared with 28
MMt for JI).¹¹
Carbon “Sinks”
One of the most contentious issues in the negotiations over Kyoto Protocol rules
has been how to give nations credit for carbon “sinks”: forests and land uses that
absorb (sequester) carbon from the atmosphere and have the effect of reducing the
net additions a country makes to atmospheric CO² levels. This has been negotiated
under the term “Land Use, Land-Use Change, and Forestry” (LULUCF). Issues
include how to allocate credit for existing forest cover (of which some nations, like
the United States, have a great deal and others have very little) and what actions in
relation to LULUCF would constitute legitimate carbon reductions. Only increased
sequestration above 1990 levels, achieved by specific sequestration activities, would
be counted.
The final decisions were that only certain activities would be eligible for use as
offsets against Protocol obligations: afforestation (planting forest cover where there

¹⁰ Point Carbon, Carbon 2006: Towards a Truly Global Market (26 February 2006), p. 14.
Point Carbon is a company that provides in-depth analysis, forecasting, market intelligence
and news about carbon emission markets.
¹¹ Point Carbon, Carbon 2006: Towards a Truly Global Market (26 February 2006), p. 22.

had been none); reforestation (re-planting tree cover where it had been removed);
deforestation prevention; forest management; cropland management; grazing land
management; and revegetation. The rules of the Protocol do not put an overall cap
on sinks for countries, but instead incorporated country-specific limits on each of the
categories of sinks activities, listed in an Appendix Z. Exactly how carbon absorbed
in sinks will count toward a nation’s obligations is still the subject of on-going
discussion and refinement.
Compliance Mechanism
Achieving agreement among Kyoto Protocol negotiators on compliance — in
particular, penalties for non-compliance by Annex B Protocol parties — was
difficult, and took several years after the Protocol was finalized in 1997. This was
one of several controversial issues that was resolved as part of the Marrakech accords
at the COP-7 meeting in 2001. In the final rules on compliance, parties agreed that
if a Party falls short of its emissions target during the first commitment period (2008
to 2012), it must make up the difference in the second commitment period plus a
penalty of 30%. Such a party will lose its eligibility for emissions trading, and must
develop a “compliance action plan.”
This decision included establishment of a Compliance Committee, composed
of a plenary, an operational bureau, and two branches: the Facilitative Branch and the
Enforcement Branch. The Facilitative Branch is intended to provide advice and
assistance to Parties, and to provide an “early warning” to Parties that may be in
danger of not complying; the Enforcement Branch would have the responsibility of
applying consequences for Parties that do not meet their commitments. A Protocol
rulebook provides procedures for considering cases of non-compliance or possible
non-compliance, and a procedure for reviewing the cases regarding eligibility to
participate in the Protocol’s financial and other mechanisms.
Compliance involves not only meeting emissions reductions commitments, but
also preparation of adequate GHG inventories and several other procedural
requirements; there are no penalties for failures of compliance in these areas.
However, the mechanism’s penalties for failure to meet emissions reductions targets
would come into play only when the commitment period is well underway; there
remain a number of uncertainties as to how it will function. It does appear, as
discussed below, that many parties to the Protocol may find that achieving their
emissions reductions obligations will prove to be difficult or impossible within the
commitment period.
Leading up to COP-13/MOP-3 in Bali, Indonesia
At the first “Meeting of the Parties” of the Kyoto Protocol in^th
November/December 2005 (the 11 COP of the UNFCCC) — COP-11/MOP-1 —
in Montreal, Canada, both the United States and developing countries were resistant
to the idea of negotiating new legally binding commitments for the post-Kyoto (after

2012) period.¹² The Kyoto Protocol parties were also reluctant to discuss new
commitments in the post-Kyoto period if they did not include all the major emitters
— including the United States, China, and India. By the end of that meeting a
compromise was reached in which two processes were set in motion to consider next
steps:
^!An “Ad hoc Working Group” (AWG) was established under the
Protocol to begin consideration of next steps for developed country
parties in the Post-Kyoto period; since the United States is not a
party to the Protocol, it does not play a role in this process (except,
of course, as an observer — from which vantage point its position
has generally been made known and generally taken into account by
the parties).
^!A non-binding, two-year “dialogue on long-term cooperation” was
launched under the auspices of the UNFCCC that includes the
United States and all parties to the UNFCCC (virtually all of the
world’s countries). The decision on establishing the dialogue
specifically ruled out including any negotiations leading to new
commitments. Its goals are to support implementation of existing
commitments under the Convention, support voluntary actions by
developing countries, and to support development of national and
international responses to climate change. The areas of focus for
these discussions are: sustainable development, adaptation,
technology development and transfer, and market-based
opportunities.
Both of these processes involve workshops and meetings with reports to the
COP/MOP meetings in 2006 and 2007. Neither involves any deadlines for
completion of the discussions or negotiations.
At COP-12/MOP-2 held in Nairobi, Kenya, in November 2006, both the AWG
and the Dialogue were involved in workshops and discussions, and the AWG
formulated a work program for future meetings that involve analytical subjects that
would underlie any consideration of post-2012 targets for developed countries. The
Nairobi meeting also included the beginning of a review of the Protocol’s
effectiveness — a somewhat controversial issue because of the implications the
review process is thought to have for future commitments. Little progress was made
at this COP/MOP, however, and decisions on the scope and content of the review
were put off until the COP-14/MOP-4 to be held in 2008. Issues related to adaptation
to climate change focused primarily on administration of an Adaptation Fund
established to assist adaptation efforts in developing countries.

¹² For more detailed summaries of the COP and COP/MOP meetings, see the reports of the
Earth Negotiations Bulletin (ENB) at [http://www.iisd.ca/process/climate_atm.htm] and the
Pew Center on Climate Change at [http://www.pewclimate.org/what_s_being_done/in_the_
world/].

Outcome of the Bali Negotiations: A Framework for
Negotiating Post-Kyoto Commitments
During 2007, climate change gained widespread attention as a critical issue
facing the nations of the world, and the negotiations held in Bali, Indonesia,
December 3-14, 2007, were widely regarded as a key next step in continuing to chart
an international course to mitigate global warming and deal with its impacts.
The Kyoto Protocol was always intended to be a first step in moving toward
reducing global accumulations of greenhouse gases in the atmosphere. Negotiators
recognized that the goals of the Protocol, even if met by all the parties, would not
produce the stabilization of atmospheric greenhouse gases posited as the goal of the
UNFCCC. The Protocol set forth a timetable for reviewing progress of actions
undertaken to meet the Protocol’s goals and to consider “next steps.” It has been
generally anticipated that next steps after 2012 would include measures to be taken
by both developed and developing countries. Throughout the process preceding the
Bali meeting, developing countries had been unwilling to make binding
commitments on greenhouse gas limitations or management.
The Kyoto Protocol commitment period begins in 2008 and runs through 2012;
it was widely expected when the Protocol was negotiated that by 2008, next steps for
the post-2012 period would be either decided or under active negotiation. However,
the challenge at the COP/MOP meeting in Bali and the negotiations to follow
remains how to find agreement on the nature of commitments, if any, that would be
acceptable to all the major players — including Kyoto Protocol parties with existing
obligations, developing countries that are major GHG emitters, and the United States,
whose role is regarded as critical by all potential participants in the post-2012 period.
Outcome in Bali: The “Bali Action Plan”
The outcome of negotiations at the Bali COP/MOP was expected to be, at best,
what was termed a “road map” for future negotiations. It was agreed by all parties
that negotiations need to be completed by the end of 2009. Some observers have
noted that this is a very tight time frame, in that many parties are aware that the
current U.S. administration continues to reject mandatory greenhouse gas emissions
reductions, and they expect that further progress on mandatory GHG limitations
cannot be made unless a new administration in 2009 is willing to participate. Further,
it appears unlikely that major developing — and developed — countries will be
willing to make legally binding commitments in the absence of such a commitment
by the United States.
At a preliminary meeting leading up to the December COP/MOP, four key
elements were outlined as the focus for a “Bali road map”: 1) mitigation of climate
change; 2) adaptation to impacts of climate change; 3) financial assistance issues; and
4) technology development and transfer. While future negotiations will likely grapple
with the effort to obtain some form of legally binding, mandatory commitments from
all parties, the recognition of differing national circumstances and differing abilities
of nations to take on various types of commitments, will continue to be major
elements in the discussions.

With this context, it was no surprise that negotiations in Bali, Indonesia, in
December 2007 were highly contentious, and extended a day beyond the original
ending date of December 14 in order to reach consensus on what is termed the “Bali
Action Plan.” However, despite some compromises, participants generally lauded
the final agreement as one that sets a negotiating framework in place, and includes
developed and developing countries in the negotiations on “considerations” for a
final agreement that would include mitigation measures to address greenhouse gas
emissions, adaptation measures, financial support for developing countries, and
technology transfer issues.
Key elements and issues of the Bali Action Plan¹³ concerning mitigation
include:
— Need for “deep cuts in global emissions”: the decision at Bali recognized
“that deep cuts in global emissions will be required to achieve the ultimate objective
of the Convention [avoiding dangerous climate change] and emphasiz[ed] the
urgency to address climate change as indicated in the Fourth Assessment Report” of
the IPCC. Some developed countries, notably EU members, had argued that specific
goals should be articulated in terms of atmospheric concentrations of GHG that
should not be exceeded, but this was opposed by others, including the United States,
and as a compromise, the limits discussed by the IPCC were referenced in general,
with a footnote citation to the specific numbers.
— Negotiations process: A two-track negotiating process was launched: (1)
an Ad hoc Working Group on Long-Term Cooperative Action was established as a
subsidiary body under the UNFCCC to conduct the process of negotiating agreement
by 2009 on measures to be undertaken by all parties to the Convention — developing
and developed. This was regarded as a breakthrough because it established
negotiations (not just, as previously, “dialogue”) that would include developing
countries and would address mitigation measures, as well as the other items listed for
consideration; and (2) the Ad hoc Working Group under the Protocol will continue
to consider action by developed countries to succeed the 2012 conclusion of the
Kyoto Protocol (no explicit reference to this AWG was made in the Bali decision
document, thus it simply continues).
— Long-term cooperative action and differentiated responsibilities: A
shared vision for cooperative action was agreed on, “including a long-term global
goal for emission reductions, to achieve the ultimate objective of the Convention, in
accordance with the provisions and principles of the Convention, in particular the
principle of common but differentiated responsibilities and respective capabilities,
and taking into account social and economic conditions and other relevant factors.”
— Mitigation action: The actions to be considered for/by developing country
Parties in the negotiations under the Bali Action Plan proved to be one of the most
controversial points, and almost led to breakdown of negotiations on the final day in

¹³ See [http://unfccc.int/meetings/cop_13/items/4049.php] for the full text of the Bali Action
Plan.

Bali. The document outlining the Plan contains two separate paragraphs for
mitigation considerations — (i) for developed country considerations, and (ii) for
developing countries. Initially, both paragraphs stated that “Enhanced
national/international action on mitigation of climate change” would include
consideration of: “Measurable, reportable and verifiable nationally appropriate
mitigation actions” – by both developed and developing parties. Some developing
countries objected that this language was not what had been agreed to, and a reversal
of clauses in the language of paragraph (ii) regarding actions by developing countries
was proposed by India. This was opposed by the United States, nearly causing the
breakdown in negotiations.¹⁴ The phrase as adopted after other countries loudly
booed the United States over its objection, and after several developing countries
stated that the change in language did not change their agreement to consider
mitigation actions, is as follows:
[consideration of mitigation actions that would include:] (ii) Nationally
appropriate mitigation actions by developing country Parties in the context of
sustainable development, supported and enabled by technology, financing and¹⁵
capacity building, in a measurable, reportable and verifiable manner;
Those supporting this language argued that the financing, technology transfer
and capacity building actions by developed countries should also be measurable,
reportable, and verifiable. As the language was debated in the final plenary session,
some of the developing countries reassured participants that they had made a
commitment to consider mitigation actions in the negotiations that would follow.
However, the United States was concerned that “measurable, reportable and
verifiable” in the adopted language appears to apply mainly or only to the financing,
technology and related actions, and its applicability to mitigation actions by
developing countries is unclear. The language as adopted does appear ambiguous on
this point. However, this language, like the entire decision document, applies only
to the framework for future negotiations, and those negotiations can themselves deal
with any ambiguities and with concerns that arise as the negotiations proceed.
— Emissions from deforestation and forest degradation: The decision to
include reducing emissions from deforestation and forest degradation among the
considerations in the negotiations to follow Bali is widely regarded as a major
positive step by many participants in the process, opening the door to discussions of
incentives for developing countries to reduce and avoid deforestation. The decision
states that mitigation considerations in the negotiations should include “(iii) Policy
approaches and positive incentives on issues relating to reducing emissions from
deforestation and forest degradation in developing countries; and the role of

¹⁴ Agreements at COP meetings, like most international negotiations, are reached on the
basis of consensus, not through voting. Therefore, objections by any Party can serve as a
“veto,” and prevent consensus.
¹⁵ The original version, found in the document FCCC/CP/2007/L.7, distributed early on
December 15, 2007, stated: “(ii) Measurable, reportable and verifiable nationally
appropriate mitigation actions by developing country Parties in the context of sustainable
development, supported by technology and enabled by financing and capacity-building;”

conservation, sustainable management of forests and enhancement of forest carbon
stocks in developing countries.”
— Other Major Elements in the Action Plan: Adaptation considerations were
also listed among considerations for negotiations, including international support for
adaptation actions; risk management and risk reduction strategies; disaster reduction
strategies and means to address loss and damages associated with climate change
impacts in developing countries; and ways to strengthen the role of the Convention
in encouraging multilateral bodies and all sectors of society to support adaptation
activities.
Considerations for ways to improve access and provide support concerning
technology development are also included, as well as enhanced action on provision
of financial resources and investments to spur both mitigation and adaptation
activities.
The decision mandates that the work of the Ad Hoc Working Group on Long-
term Cooperative Action under the UNFCCC is to complete its work in 2009 and^th
present the outcome of its work to the 15 COP/MOP, which is due to meet in
Copenhagen, Denmark, November 30 to December 11, 2009. No statement is
included concerning the Ad Hoc Working Group under the Kyoto Protocol, but many
observers expect that at some point, the two working groups will find a way to
connect their considerations. The question of making this linkage has not been
directly addressed in negotiations to date, but will be important if a comprehensive
agreement is to be achieved.
The first sessions of the UNFCCC working groups met March 31 – April 4,
2008 in Bangkok, Thailand. A broad array of work was agreed upon, including a
series of eight workshops to discuss specific issues such as sector approaches. It was
also agreed that the AWGLCA will complete its work program for 2009 no later than
at its fourth session in December 2008. Discussions in Bangkok involved a
continuation of the variety of approaches taken by countries in the past, signaling the
challenges faced by negotiators, but ended on a generally positive note, according to
reports from those attending. The next workgroup meetings in 2008 are Bonn,
Germany, June 2 –13, and Accra, Ghana, August 21 – 27. The two Working Groups
will meet concurrently with the COP-14/MOP-4 meeting in Poznan, Poland,
December 1 –12, 2008
Prospects for Compliance by
Kyoto Protocol Parties
As parties to the Kyoto Protocol contemplate future commitments in the post-
2012 period, the question of whether existing commitments are likely to be met is
important. This section reviews the status of the parties to the Protocol in relation
to their existing commitment and current GHG emissions. Many are facing major
challenges to achieving emissions reductions, given the increase in emissions they
have had in recent years.

Status of Annex I Countries on Compliance
The Kyoto Protocol mandates compliance over a five-year averaging period —
2008 to 2012. Thus, it is an uncertain business attempting to forecast what countries
will be achieving throughout the entire compliance period. Compliance with the
Kyoto Protocol is focused on Europe (particularly the European Union (EU) and
Russia), New Zealand, Canada and Japan. These countries constitute the vast
majority of Annex 1 signatories to the Kyoto Protocol.
The most comprehensive effort at compliance has been in Europe. For the EU,
the situation puts considerable pressure on the European Commission’s (EC) current
review of Member countries’ National Allocation Plans for the Kyoto commitment
period. In October 2007, the EC completed its review of the 27 Members’ proposed
plans and at least conditionally approved all of them.¹⁶ As noted earlier, the focus of
the EU’s compliance effort is the Emissions Trading Scheme (ETS) that is
completing a three-year trial “learning by doing” period in preparation for Kyoto
compliance. After a rocky start resulting primarily from data shortcomings, several
positives have emerged from the “learning by doing” exercise that may assist the ETS
in making the Kyoto compliance phase run more smoothly, including (1) greatly
improving emissions data, (2) encouraging development of the Kyoto Protocol’s
project-based mechanisms — Clean Development Mechanism (CDM) and Joint
Implementation (JI), and (3) influencing corporate behavior to begin pricing in the
value of allowances in decision-making, particularly in the electric utility sector.
However, several issues that arose during the trial phase remain contentious as the
ETS moves into its Kyoto phase, including allocation schemes, shutdown credits and
new entrant reserves, and others. In addition, the expansion of the EU and the
implementation of the directives linking the ETS to the Kyoto Protocol project-based
mechanisms created new issues to which the EC has had to respond.
The EU has consistently stated that it will meet its commitments under the
Kyoto Protocol and is currently developing targets for the post-2012 period. In 2006,
the European Environmental Agency (EEA)projected the 15 EU Members that had
jointly agreed to reduce GHGs by 8% below 1990 levels during the Kyoto
compliance period would meet their obligation as a whole, although seven of those
countries would not meet their individual obligations.¹⁷ The status of EU countries
as estimated by the EEA is shown in Table 1. As shown, the EEA estimated that all

10 of the new Member countries with obligations under the treaty would meet them.

The EEA also estimated that non-EU countries Iceland and Switzerland would meet
their obligations, while Liechtenstein and Norway would not. Interestingly, in
October 2007, the EC announced agreement on linking the ETS with emission

¹⁶ For more information on EU activities, see CRS Report RL34150, Climate Change: The
EU Emissions Trading Scheme (ETS) Gets Ready for Kyoto, by Larry Parker.
¹⁷ Permitted under the Kyoto Protocol, a “bubble” is a regulatory device that permits two or
more countries to be treated as one for purposes of the Protocol — their emissions can be
averaged in order to reach their targets.

trading systems in Norway, Iceland, and Liechtenstein.¹⁸ The other major European
signatory, the Russian Federation, is anticipated to meet its obligations under the
treaty.
Table 1. Summary of Projected EU Kyoto Compliance
^E^E^A^{Projected Status}^Countries
^P^r^oj^{ected to be in}^com^p^lian^{ce w}^ith^Ky^oto^EU-^{15 “}^B^u^{bble,” B}^u^lg^{aria, C}^zech^R^e^pu^blic,
^Prot^ocol^O^b^lⁱ^g^atⁱ^oⁿ^s^Es^tonⁱ^{a, Fin}^l^an^{d, Fran}^{ce, Germ}^an^y^,^Greece,
^H^unga^r^y^,^La^t^vⁱ^a^,^Li^t^huaⁿⁱ^a^,^Luxe^m^b^o^u^r^g^,
^Neth^er^lan^d^{s, P}^o^lan^d^{, Ro}^m^aⁿⁱ^{a, Slo}^v^en^{ia, Slo}^v^ak^ia,
^S^w^eden^{, U}ⁿⁱ^t^e^{d K}ⁱⁿ^g^dom
^P^r^oj^{ected to be in}ⁿ^oⁿ^-^com^p^lian^{ce w}^ith^A^u^s^t^{ria, B}^e^lg^iu^m^,^Den^m^ark^,^Irelan^{d, Italy}^,
^K^y^ot^{o Prot}^ocol^O^b^lⁱ^g^atⁱ^oⁿ^s^P^o^r^t^uga^l^,^Sp^aⁱⁿ
^N^o^n-A^nne^{x 1}^E^U^Co^unt^rⁱ^e^s^Cy^p^r^us,^M^a^l^t^a
^S^o^u^rce:^E^u^r^o^p^e^aⁿ^E^nvi^r^o^nm^eⁿ^t^A^g^eⁿ^c^y^,^G^r^eenhous^{e G}^a^s^Emⁱ^s^sⁱ^{on T}^r^ends^{and Pr}^oj^ectⁱ^onsⁱⁿ^Eur^ope
²⁰⁰⁶^(C^open^h^a^g^eⁿ^,^{2006), p. 8.}
Outside Europe, the primary Kyoto signatories are New Zealand, Canada, and
Japan. In September 2007, the New Zealand government decided to phase in an
emission trading scheme beginning in 2008 (last stage beginning in 2013) to assist
New Zealand in complying with its Kyoto obligations.¹⁹ However, the Government’s
most recent analysis estimates the country will not comply with its Kyoto obligations,
although that projection only reflects policies adopted as of April 2007.²⁰ In contrast,
Canada has simply stated that it cannot meet its Kyoto obligations and the
government has adopted alternative goals.²¹ Finally, Japan is anticipated to have
difficulties meeting its Kyoto obligations, and has been developing strategies to
acquire substantial credits from the Kyoto flexibility mechanisms (JI and CDM) in
an attempt to bridge the expected gap between Japanese emissions and Japan’s Kyoto
target.
Because of the flexibility mechanisms discussed above, potential compliance
with Kyoto is not necessarily threatened by emissions growth in some countries,
since such nations can purchase emissions credits to offset some of their emissions
increases. Indeed, current analyses of credits available from economies in transition
(mostly eastern European countries) indicate that sufficient surplus credits will exist
in such countries to cover the deficit created by emissions growth in other countries.

¹⁸ European Commission, Emissions Trading: Commission announces linkage EU ETS with
Norway, Iceland, and Liechtenstein (Brussels, October 26, 2007).
¹⁹ New Zealand Ministry for the Environment, Emissions Trading Scheme (Wellington,
September 2007).
²⁰ New Zealand Ministry for the Environment, Projected Balance of Emissions Units During
the First Commitment Period of the Kyoto Protocol (Wellington, September 2007).
²¹ Governor General (Canada), Strong Leadership. A Better Canada — Speech from the
Throne (Ottawa, October 16, 2007).

Specifically, as indicated by Figure 1, surplus credits are anticipated in Russia,
Ukraine, and other eastern European countries — sufficient surplus credits for other
countries anticipated to have deficits (such as parts of the EU, Japan, and New
Zealand) to purchase them in order to cover their compliance requirements.
Figure 1. 2005 Point Carbon Assessment
of Potential Credit Supply

^Source:^P^oⁱⁿ^{t Car}^b^oⁿ^,^C^a^r^{bon 2006: T}^o^w^a^r^d^s^{a T}^r^ul^{y G}^l^obal^M^a^r^ket^(F^ebru^ary^{2006), p. 8.}
This long position with respect to credits does not include anticipated CERs and
ERUs from CDM and JI projects. As indicated by Figure 2, the potential for
additional credits from these sources is substantial, particularly from China. Of
course, there is a range of risk with respect to these sources (including the possibility
that any given project may not be built or may not be certified as valid for issuing
CERs or ERUs), but indications are that additional credits will be available from
these sources.
There are some potential potholes on the road to compliance. Perhaps the most
important is the requirement that credits gained through emissions trading and joint
implementation be “supplemental to domestic actions.” This requirement under
Article 17 has been subject to extensive discussion and interpretation. Resisting
efforts by the EU to place a quantitative limit on the procurement of credit via these
mechanisms, the Conference of Parties decided to put no quantitative limit on such
mechanisms, but that “the use of the mechanism shall be supplemental to domestic
action and domestic action shall thus constitute a significant element of the effort
made by each party.”²² No means of determining the significance of domestic actions
²² Preparations for the first session of the Conference of the Parties serving as the Meeting
(continued...)

has been finalized. As noted, some countries, such as Japan, are anticipated to use the
mechanisms substantially in meeting their requirements.
Figure 2. 2005 Point Carbon Assessment
of CDM and JI Transactions

^Source:^P^oⁱⁿ^{t Car}^b^oⁿ^,^C^a^r^{bon 2006: T}^o^w^a^r^d^s^{a T}^r^ul^{y G}^l^obal^M^a^r^ket^(F^ebru^ary^{28, 2006) p. 23.}
Another major issue to be resolved is the volatility of the credit markets at the
current time. Credit prices for the ETS during its “learning by doing” phase have
ranged from less than 1 euro a ton to about 30 euro a ton — currently the price is less
than 1 euro. Such volatility makes planning, implementation, and participation in
emissions reduction programs difficult.
U.S. Positions
The United States took an active role in the negotiations that shaped the 1997
Kyoto Protocol. It signed the Protocol in 1998, but President Clinton did not submit
it to the Senate for approval, citing the Byrd-Hagel resolution, S.Res. 98, that passed
unanimously just prior to the completion of the Protocol in Kyoto. This non-binding
resolution expressed the sense of the Senate that it would not support a treaty that did
not include obligations for developing countries, or that would harm the U.S.
economy.
²² (...continued)
of the Parties to the Kyoto Protocol (Decision 8/CP.4): Decision 5/CP.6 implementation of
the Buenos Aires Plan of Action, FCCC/CP/2001/1.7 (July 24, 2001).

In March 2001, President George W. Bush rejected the Kyoto Protocol, and the
United States has not formally participated in further negotiations on the Protocol.
Meetings to negotiate details and procedures of the Kyoto Protocol’s rules occurred
annually in conjunction with the conference of parties (COP) to the UNFCCC. The
United States has attended these meetings and has participated in discussions or
negotiations pertaining only to the UNFCCC; it also has been active behind the
scenes in discussions of Kyoto Protocol issues, but has not formally participated.
Regaining U.S. participation and ratification of the Kyoto Protocol remains a major
goal for parties to the Kyoto Protocol, along with engaging major developing country
participation, since meaningful reduction in global greenhouse gas emissions would
depend on reductions in emissions by the largest emitters.
In February 2002, President Bush announced a U.S. policy of reducing the net
“greenhouse gas intensity” of the U.S. economy by 18% over the next 10 years.²³
Greenhouse gas intensity measures the ratio of greenhouse gas emissions to
economic output. GHG intensity has been declining in the United States, and the
18% reduction goal compares to a projected “business as usual” decline in intensity
of 14%²⁴ for the 10-year period. According to some, the 18% goal would not achieve
reductions of greenhouse gases significantly more than the existing trend.
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) expected under
“business as usual” to 151 metric tons in 2012. The plan noted 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.
On April 16, 2008, President Bush delivered a statement in advance of the
Major Economies Meeting in Paris (see below) in which he announced “a new
national goal to stop the growth in U.S. greenhouse gas emissions by 2025.”²⁵
U.S. actions related to climate change include extensive scientific and research
programs²⁶, and continuing international activities to cooperate on a bilateral basis
or through other international forums to support voluntary action.
Among the most prominent international U.S. activities have been the initiative
taken in the Asia-Pacific Partnership on Clean Development and Climate, and the
initiative by President Bush to convene a series of Major Economies Meetings on

²³ See the White House website for a summary and discussion of this policy, at
[ ht t p: / / www.whi t e house.gov/ news/ r el eases/ 2002/ 02/ cl i mat echange.ht ml ] .
²⁴ See CRS Report 98-235, Global Climate Change: U.S. Greenhouse Gas Emissions —
Status, Trends, and Projections, by John Blodgett and Larry Parker.
²⁵ Fact Sheet: Taking Additional Action to Confront Climate Change” at
[ ht t p: / / www.whi t e house.gov/ news/ r el eases/ w008/ 04/ 20080416-7.ht ml ]
²⁶ See CRS Report RL33817, Climate Change: Federal Expenditures, by Jane A. Leggett.

Energy Security and Environment, that began in September 2007, including the
largest greenhouse-gas-emitting countries — developed and developing — to
discuss how to deal with climate change. These are discussed below.
Asia-Pacific Partnership on
Clean Development and Climate
On July 27, 2005, the United States announced formation of a six-nation Asia-
Pacific Partnership on Clean Development and Climate (commonly denoted by the
acronym ‘APP’), which would work on cooperatively reducing greenhouse gas
intensity of their economies. This partnership agreement included three of the
world’s largest emitters of greenhouse gases: the United States, China, and India,
plus Japan, Australia, and South Korea. Of the three developed country nations in
the partnership — the United States, Australia, and Japan — only Japan has ratified
the Kyoto Protocol.
The participants described the focus of the partnership as technology
development and reduction of greenhouse gas intensity, on a voluntary basis. No
specific targets were announced. The members of the partnership indicated that their
goal was to “complement, but not replace the Kyoto Protocol.” However, concerns
have been raised by some observers as to whether this partnership and its approach
would in fact reinforce the resistance of the two largest developing country
greenhouse gas emitters — China and India — to taking on mandatory emissions
commitments in the next phase of the Kyoto Protocol.
The purposes identified by partnership members include to “Create a voluntary,
non-legally binding framework for international cooperation to facilitate the
development, diffusion, deployment, and transfer of existing, emerging and longer-
term cost-effective, cleaner, more efficient technologies and practices among the
Partners through concrete and substantial cooperation so as to achieve practical
results.”²⁷
Task forces focused on eight industrial or business sectors were established to
review the status of their sectors with regard to clean development and climate, to
identify cost and performance objectives and realistic goals, and report on
recommended actions within their sectors. The eight Task Forces are: (1) Cleaner
Fossil Energy, (2) Renewable Energy and Distributed Generation, (3) Power
Generation and Transmission, (4) Steel, (5) Aluminum, (6) Cement, (7) Coal Mining,
and (8) Buildings and Construction. The task force reports, termed Action Plans, are
now complete and can be accessed on the partnership website.
The Executive Summary of the Task Force Action Plans describes the projects
to be undertaken, which include sectoral assessments, identifying best practices,
capacity building, and technology research and demonstration. These activities are

²⁷ Extensive information about the partnership is available on its website at
[ ht t p: / / www.asi a paci f i cpar t ner shi p.or g] .

described as “a significant first step toward a more comprehensive set of actions to
address clean development and climate goals.²⁸
The remaining questions include the degree to which funding and investment
will be forthcoming for the work plan goals. Also unclear is the degree to which the
developing country partners will undertake activities in addition to those receiving
outside funding. Another question — critical to the future of the Kyoto Protocol, and
raised initially when the partnership was first announced — is whether the two
largest developing country emitters of greenhouse gases, China and India, will see
this parallel effort as indeed complementary to the Kyoto Protocol, or whether they
will continue to resist binding emissions reductions in the next commitment period
of the Kyoto Prtocol in favor of the non-binding, voluntary approach espoused by the
Asia-Pacific Partnership, with greenhouse gas intensity reduction as their focus.
“Major Economies” Initiative by President Bush
on Climate Change
Just prior to the G-8 meeting, President Bush announced May 31, 2007, that
the United States would convene a meeting in Washington in late September of
“major economies” — those that are “major emitters” of GHG — on “Energy
Security and Climate Change.” He indicated this would begin a series of meetings,
starting in September, to support “an effort to develop a new Post-2012 framework
on climate change by the end of 2008.” Some observers argued that this initiative
could undercut the Kyoto Protocol negotiations, but others seemed more positive in
hoping that all efforts toward dealing with climate change, especially when they
include major emitters like India and China, can prove useful.
A White House fact sheet indicated that this proposal “breaks new ground in
advancing areas of common interest between developed countries and the major
emerging economies” and indicated that this effort “will build on and advance U.S.
relations with the Asia-Pacific Partnership on Clean Development and Climate and
other technology and bilateral partnerships.”
In early August 2007, President Bush announced that the first meeting of this
initiative, held September 27-28, would include invitations to the European Union
(the current EU President and European Commission) plus France, Germany, Italy,
and the United Kingdom; and Japan, China, Canada, India, Brazil, South Korea,
Mexico, Russia, Australia, Indonesia, South Africa, and the United Nations. In his
letter of invitation to heads of governments of the invited nations, President Bush
noted that he was “... pleased to join the other G-8 leaders in June in recognizing the
vital need for the major economies to work together to achieve the common
objectives of reducing global greenhouse gas emissions, increasing energy security
and efficiency, and sustaining economic growth.”

²⁸ See Executive Summary at [http://www.asiapacificpartnership.org]. This Summary
provides examples of projects identified by each Task Force’s action plans.

Noting that the G-8 leaders had welcomed his proposed series of meetings, he
continued: “The United States is committed to collaborating with other major
economies to agree on a detailed contribution for a new global framework by the end
of 2008, which would contribute to a global agreement under the U.N. Framework
Convention on Climate Change by 2009.”²⁹
It was a matter of concern among G-8 nations prior to the G-8 meeting in June
2007 that this initiative could serve to undermine both the G-8 discussions on
climate, and the upcoming negotiations at the COP-13/MOP-3 meeting in Bali,
Indonesia. However, both the outcome of the G-8 meeting in June (discussed below)
and the final statements inviting participants to the September meeting emphasized
the integration of these high-level dialogues into a constructive contribution to the
UNFCCC negotiations.
Although some attendees had expressed their concerns that this initiative could
undercut the Kyoto Protocol negotiations, all attendees welcomed the
acknowledgment by the United States that climate change is a major global problem,
and the endorsement by the United States of the U.N. process as the major forum for
negotiating international action on climate change. The U.S. summary of the
September 27-28, 2007, Major Economies Meeting on Energy Security and Climate
Change stated, “Discussion reflected a common understanding that any long term
goal is aspirational, and that it should not be used as a basis for burden sharing.”
This continuing rejection of mandatory limits in favor of “aspirational goals” was a
disappointment to those (in particular, the European participants) who hoped for a
breakthrough in the U.S. approach. Follow-on meetings were held in late January, in
Honolulu, Hawaii, and in mid-April in Paris, France.³⁰
Other International Meetings
In addition to the UNFCCC and Kyoto Protocol processes, and the initiatives
by the United States discussed above, several major international meetings focused
on climate change took place in 2007.
United Nations Security Council. On April 17, 2007, the United Nations
Security Council held its first-ever debate on the relationship among climate change,
energy, peace, and security. The meeting was convened by the United Kingdom, in
its capacity as President of the Security Council for April. Some 50 delegations
spoke at the meeting, some objecting that climate change was better handled by
ongoing U.N. efforts (such as the UNFCCC), but others endorsing the need to deal
with climate change as a security issue. Secretary General Ban Ki-moon has
indicated that he places a high priority on dealing with climate change as part of the
United Nations agenda.

²⁹ [http://www.whitehouse.gov/news/releases/2007/08/20070803-7.html].
³⁰ For additional details on the Major Economies Meetings and discussion of U.S. actions
on climate change, see [http://www.whitehouse.gov/news/releases/2008/04/20080416-

7.html]

Group of 8 (G-8) Meeting in Germany. The Leaders of the “G-8” nations
— the United States, Canada, France, Germany, Italy, Japan, Russia and the United
Kingdom — met June 6-8, 2007, in Germany to discuss wide-ranging issues, with
climate change high on the agenda. The outcome of this meeting was widely
regarded as a key indicator of how successful negotiations on a post-Kyoto
framework could be. In preliminary discussions on the outcome of the meeting, the
European nations had encountered strong resistance by the United States to the
German Chancellor’s proposed framework, which included a 50% reduction in
greenhouse gas (GHG) emissions by 2050, limiting global warming to a rise of 2
degrees Celsius (3.6 degrees Fahrenheit), and establishing a global GHG trading
market. In the week preceding this meeting, President Bush announced a different
approach to include major GHG emitting developing and developed countries in a
process aimed at voluntary measures (discussed above).
The final declaration of the G-8 Summit on June 7 was widely described as a
“compromise” and as a “step in the right direction” by the United States and the G-8³¹
leaders. The Summit Declaration section on climate change stated that the G-8
nations are “committed to taking strong and early action to tackle climate change in
order to stabilize greenhouse gas concentrations...” at levels that would avoid
dangerous interference with the climate system. The declaration stated that the EU,
Canadian, and Japanese decisions that include halving global emissions by 2050
would be seriously considered. It welcomed the “wide range” of activities underway
in industrialized and developing countries and noted the need to address not only
climate change but also energy security, economic growth, and sustainable
development objectives.
The statement reiterated the UNFCCC principle of common but differentiated
responsibilities and capabilities of nations and stated, “We recognise however, that
the efforts of developed economies will not be sufficient and that new approaches for
contributions by other countries are needed.” It further acknowledged that “the UN
climate process is the appropriate forum for negotiating future global action on
climate change.” The statement noted that the G-8 members had met with the
representatives of Brazil, China, India, Mexico, and South Africa, and welcomed the
offer of the United States to host a meeting later this year to continue engaging “these
and other major energy consuming and greenhouse gas emitting countries to consider
the necessary components for successfully combating climate change.”
United Nations General Assembly. Reflecting the high priority for climate
change expressed by U.N. Secretary-General Ban Ki-moon, a high-level heads of
state and ministerial meeting on climate change was held at the U.N. General
Assembly meeting on September 24, 2007, at U.N. Headquarters in New York. The
meeting consisted of statements by many members of the General Assembly on the
importance of dealing with climate change. President Bush did not address this
meeting, but attended a dinner following the session.

³¹ See paragraphs 48-53 in the G-8 Summit Declaration of June 7, 2007, at
[ h t t p : / / www.whi t e house.go v/ g8 / 2007/ g8 agenda.pdf ] .