What amount of GHG emission reductions will actually be reached domestically?

Kyoto and Kyoto Mechanisms (KMs)

The Kyoto protocol, signed in 1997, included three flexible mechanisms to lower the overall cost of implementation: Clean Development Mechanism (CDM), Joint Implementation (JI), and Emission Trading (ET). They are also called ‘the Kyoto Mechanisms’ (KMs). KMs allow countries to reach their domestic Kyoto target by taking actions abroad, in countries where the cost of reducing greenhouse gas (GHG) emissions is lower. The protocol stipulates that this should only be ‘supplemental to domestic action’, but it does not quantify this statement.

So let’s take a look at how European countries plan to use these KMs to reach their 2012 emission targets.

The use of KMs in Europe

The Netherlands and Luxemburg are planning to bridge the gap between their current emission rate and their 2012 target entirely with KMs. That is, to say the least, a very flexible interpretation of the word ‘supplemental’. However it does speak in their favour that they are planning to go further than their compulsory contribution.

The problem with CDM

But what is really wrong with the KMs? Well, nothing. In theory these are valuable systems to optimise the global cost-efficiency of the Kyoto implementation, but in practice, they have been the target of much criticism, in particular CDM and ET (see yesterday’s post by Hans Nilsson).

The CDM gives industrialised countries the opportunity to invest in GHG reduction actions in developing countries. The main problem is that the additionality of such actions should be proven. In other words, CDM should not promote ‘free rides’ — actions that would have been executed anyway.

Statistics from CD4CDM show that until now, about half of the CDM actions were aimed at reducing the HFC-23 emissions of Asian chemical plants manufacturing HCFC-22 (a refrigerant). However, China and other developing countries have an obligation to stabilise their HCFC-22 production by 2016 and phase it out completely by 2040. This phase-out programme could now be under pressure because of the CDM. Since they represent cheap CDM opportunities, industrialised countries are indirectly stimulating the construction of new HCFC-22 production plants in Asia.

The Carbon Finance Unit of the World Bank has recently suggested that CDM projects should also help in financing Efficient Lighting Programmes (see recent blog post). It is hoped that some European countries will act upon this advice when searching for CDM projects. And hopefully other types of energy efficiency programmes will receive some CDM attention as well.