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International Climate Change Law by Bodansky, Daniel; Brunnée, Jutta; Rajamani, Lavanya (25th May 2017)

6 Kyoto Protocol

From: International Climate Change Law

Daniel Bodansky, Jutta Brunnée, Lavanya Rajamani

Specialized treaty frameworks — Climate change — Environmental disputes — United Nations (UN)

(p. 160) Kyoto Protocol

I.  Introduction

The 1997 Kyoto Protocol supplements the framework laid out in the FCCC, by establishing internationally-negotiated, legally binding, quantitative emissions targets for Annex I parties. Although the Kyoto negotiations were hard fought, the range of issues was much narrower than in the FCCC or Paris processes, since the Kyoto negotiations focused only on Annex I emissions, and Annex I parties generally agreed on the need for legally binding targets. That left two central issues in contention: (1) the stringency of the targets, and (2) the flexibility states would have in implementing them. On one side, the European Union (EU) favored strong targets and limited flexibility; on the other, the United States (US) and other non-EU developed states generally favored weaker targets and greater flexibility. The Kyoto Protocol represents a trade-off between the EU preference for stringency and the US preference for flexibility. It established comparatively strong, economy-wide emissions targets for Annex I parties, backed by stringent requirements for reporting and review as well as enforcement measures. But it gave states considerable flexibility in meeting their targets: flexibility in choosing which sectors and greenhouse gases (GHGs) to focus on, and what specific measures to use (for example, energy efficiency standards, a carbon tax, and so forth); flexibility as to when to reduce emissions (as a result of the protocol’s five-year commitment period and the option to bank emissions units for later use); and flexibility in where to reduce emissions (as a result of the protocol’s market mechanisms, including emissions trading and the Clean Development Mechanism (CDM)).

The Kyoto Protocol was finalized and adopted in December 1997, but many of its key provisions were skeletal in character and required further elaboration. Matters requiring further work included:

  • •  The rules for accounting of removals of carbon dioxide (CO2) by carbon sinks.

  • •  The system for reporting and review of Annex I emissions.

  • •  The rules for the protocol’s market mechanisms.

  • •  The rules and procedures for the protocol’s compliance mechanism.

Because these issues had huge implications for states’ obligations under the protocol, many states were unwilling to ratify the protocol until they had been resolved. As discussed in Chapter 4, it took an additional four years of negotiations to elaborate (p. 161) the detailed rules needed to make the Kyoto Protocol operational. This work was completed in 2001 with the adoption of the Marrakesh Accords, which serve as the Kyoto Protocol’s rule-book.1

The Kyoto Protocol is one of the most complex and ambitious environmental agreements ever negotiated. Not surprisingly, it has proven deeply controversial and, as a result, has had a chequered history. The US rejected the protocol shortly after President George W. Bush came into office in 2001, and, without US support, it took eight years to enter into force. Negotiations for Kyoto’s second commitment period took an additional seven years, were deeply contentious and resulted in amendments that may never enter into force (although they are being provisionally applied). Even if these amendments do enter into force, they run only through 2020 and the future of the Kyoto Protocol beyond 2020 is doubtful. Nevertheless, the Kyoto Protocol has played a decisive role in the evolution of the climate regime. The experience under the protocol has also provided valuable lessons for the design and implementation of future climate agreements. Its many innovative provisions, including those pertaining to emissions targets, market mechanisms and compliance, thus merit close examination.

This chapter discusses the Kyoto Protocol in depth, first by exploring four overarching issues, cutting across the three instruments in the UN climate regime—the FCCC, the Kyoto Protocol, and the Paris Agreement—and then through a detailed analysis of the protocol’s key provisions.

II.  Overarching Issues

In contrast to the Paris Agreement negotiations, the mandate for which left virtually every issue open, many of the key features of the Kyoto Protocol were decided, at the outset, by the 1995 Berlin Mandate, which initiated the negotiations and established the Ad Hoc Group on the Berlin Mandate (AGBM): (1) the Kyoto Protocol would be a treaty; (2) its architecture would have a significant top-down element, in the form of internationally-negotiated emissions targets; (3) its scope would be limited almost entirely to mitigation; and (4) it would be highly differentiated, establishing emissions targets for Annex I parties, but no new commitments for non-Annex I parties.

A.  Legal bindingness

The Berlin Mandate stipulated that the outcome of the process was to be a ‘protocol or another legal instrument’.2 At the time, it was clear that ‘another legal (p. 162) instrument’ referred to an amendment.3 So, in essence, the Berlin Mandate was to negotiate either a protocol or an amendment to the FCCC. An amendment would have required only a three-fourths majority vote for its adoption,4 whereas a protocol in practice required consensus, since the FCCC does not specify a voting procedure for the adoption of protocols and the Conference of the Parties (COP) has never been able to agree on rules of procedure.5 Some parties favored keeping both options on the table over concerns about gathering the consensus necessary for the adoption of a protocol. By the Kyoto conference, however, agreement had emerged on adopting a protocol to the FCCC, and the option for an amendment was deleted from the negotiating text.6

The legal character of the GHG targets in the Kyoto Protocol was also at issue in the negotiations, but in a far more muted form than in the negotiation of the Paris Agreement. The Berlin Mandate required the AGBM process to aim, ‘in the process of strengthening the commitments in Article 4.2(a) and (b) of the Convention … to set quantified limitation and reduction objectives within specified time-frames’.7 The commitments in Article 4.2(a) and (b), discussed in Chapter 5, are non-binding targets.8 The reference in the Berlin Mandate to strengthening these non-binding targets could be interpreted as tipping the balance toward legally binding targets in the Kyoto Protocol. But the Berlin Mandate did not provide explicit guidance on the legal character of the GHG targets to be negotiated. The EU and Alliance of Small Island States (AOSIS) favored legally binding GHG targets from the beginning of the negotiations, and at the 1996 Geneva Conference that marked the mid-point of the two-year negotiating process, the US also expressed a preference for legally binding targets.9 The Geneva Ministerial Declaration, taken note of by the Geneva COP, endorsed ‘quantified legally-binding objectives’.10 In Geneva, Australia alone remained opposed to legally binding targets, and disassociated itself from this part of the Declaration, but by the time the Kyoto conference convened, its opposition too had fallen away, and the negotiating text used mandatory terms (‘shall’) in relation to individual emissions commitments.11

There was thus clarity by the Kyoto conference, both about the legal form of the instrument to be adopted, as well as the legal character of its mitigation commitments—the Kyoto Protocol would be a legally binding instrument with (p. 163) legally binding mitigation targets. In this regard, the Kyoto and Paris negotiations were very different, since in the Paris process, the questions of legal form and legal character were deeply contentious and remained at issue until the end. This contrast can, at least in part, be attributed to the instruments’ respective approaches to differentiation. The Berlin Mandate stipulated that the Kyoto Protocol’s commitments were to apply to Annex I parties alone, whereas the Paris Agreement’s negotiating mandate provided that it would be ‘applicable to all’.12 Since developed countries were much more willing than developing countries to accept legally binding commitments, the limitation of commitments to developed countries meant that legal bindingness was less of an issue in the Kyoto than the Paris negotiations. The early agreement on the issue of legal bindingness, in turn, allowed states to begin considering, in advance of the Kyoto conference, the processes and mechanisms to facilitate implementation of these commitments and to promote compliance.13

B.  Architecture

The architecture of the Kyoto Protocol was also pre-determined by its negotiating mandate. Inspired by the 1987 Montreal Protocol, the Berlin Mandate launched a process to set quantified emission limitation and reduction objectives (QELROs) within specified time frames for developed countries. Although parties initially proposed their own targets, these targets were multilaterally negotiated thereafter. In addition, many aspects of these targets were multilaterally determined, including the fact that the targets were absolute and virtually economy-wide, covered the six gases listed in Kyoto Annex A, and, with some exceptions, had a common base year (Article 3). The targets were also subject to multilaterally agreed accounting procedures, and elaborate reporting, review, and compliance procedures (Articles 5, 7, 8, and 18). In addition, parties negotiated a common set of rules relating to the market mechanisms (Articles 6, 12, and 17). The Kyoto Protocol is thus considered a ‘top-down’ international agreement.14

C.  Scope

The Kyoto Protocol has a much narrower scope than the FCCC. As specified in the Berlin Mandate, its primary purpose is to strengthen the mitigation commitments of Annex I parties in Article 4.2 of the FCCC.15 The Kyoto Protocol does so through targets and timetables. The Kyoto Protocol addresses adaptation only in passing, by reiterating the obligation of all parties under Article 4.1(b) of the FCCC to formulate, implement, publish, and regularly update programs containing (p. 164) measures to facilitate adaptation.16 And it establishes a dedicated stream of funding for adaptation, by channelling 2% of the proceeds from the CDM, one of the market mechanisms, to an Adaptation Fund.17 The focus of the Kyoto Protocol, however, is squarely on mitigation. And, since this focus was established in the Berlin Mandate, it was not in dispute during the AGBM negotiations.

The main issues in the Kyoto Protocol negotiations relating to scope concerned the gases and sectors to be covered. Parties had differing views on whether the Kyoto Protocol should focus on CO2 emissions alone, address three gases –CO2, methane (CH4), and nitrous oxide (N2O)—or take a more comprehensive approach that addresses emissions of other GHGs including hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6). Serious disagreements persisted throughout the negotiations on whether the three synthetic gases—HFCs, PFCs, and SF6—should be included. These gases have high global warming potentials (GWPs), and their use has grown rapidly. The US and other Umbrella Group countries, such as Australia, Canada, and Norway, supported their inclusion, in order to enhance states’ flexibility in achieving their Kyoto targets. The EU, however, was concerned about the uncertainties regarding sources and sinks of different GHGs, and proposed that these gases be added later. Japan was concerned about the 1990 base year, which would have disadvantaged them given the rapid increase in their use of HFCs since that year.18 The protocol struck a balance between these concerns by covering all six gases, but offering parties the option of using a later baseline of 1995 for HFCs, PFCs, and SF6.19 Given the rapid increases in the emissions of these gases between 1990 and 1995, the later baseline translated into a more modest reduction required of parties. The 2012 Doha Amendment, yet to enter into force, added a seventh gas, nitrogen trifluoride, to Annex A for the second commitment period.20

The Kyoto Protocol identifies in Annex A the six gases covered. It regulates these gases in a ‘basket of gases’ rather than a ‘gas by gas’ approach. The ‘basket of gases’ approach, favored by the US, permits all gases to be considered together for the purposes of achieving the Kyoto targets.21 This approach requires defining the GWP of each gas listed in Annex A22 in order to have a common metric to compare and measure their relative contributions to global warming.23 Using their GWPs, (p. 165) emissions of non-CO2 gases can be translated into CO2 equivalent (CO2e) terms.24 The emissions limitation targets specified in the protocol apply to a party’s CO2e emissions. The protocol also identifies in Annex A the sectors covered, which are energy, industrial processes, solvents and other product use, agriculture, and waste. The ‘basket of gases’ approach, coupled with the wide range of sectors identified in Annex A, allows parties considerable flexibility in choosing which gases and sectors to focus on in implementing their targets.25

Although the Kyoto Protocol is broad in its coverage, it does not regulate all GHGs and GHG-intensive sectors. GHGs controlled by the Montreal Protocol are explicitly excluded from the Kyoto commitments.26 Furthermore, the protocol provides that emissions from international civil aviation and maritime transport should be regulated through the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO), respectively,27 although the protocol does require parties to report on both domestic and international emissions from aviation and maritime fuels (‘bunker fuels’).28

Finally, the question of whether, and to what extent, emissions and removals by sinks should be covered under the Kyoto Protocol was highly controversial.29 The protocol requires parties to report on emissions and removals by sinks.30 There was a range of views, however, regarding how such emissions and removals should count toward achievement of parties’ Kyoto targets. In a carefully balanced compromise, the protocol provides that parties may receive credit, up to specified limits, for the removal of CO2 from the atmosphere through certain sink activities such as afforestation, reforestation, forest management and agricultural lands management, and may also receive credit through the CDM for certain sink projects in developing countries.31

D.  Differentiation

The Berlin Mandate provided for radical differentiation in the Kyoto Protocol by limiting GHG targets and timetables to Annex I countries, and by explicitly excluding ‘any new commitments’ for non-Annex I parties.32 Even proposals by (p. 166) the US and other developed countries to allow developing countries to ‘voluntarily’ accept emissions targets were rejected by developing countries on the grounds that such proposals were inconsistent with the Berlin Mandate. The sharp differentiation between countries with respect to central mitigation obligations—such that Annex I countries have GHG targets and timetables while non-Annex I countries do not—proved increasingly controversial over time. The US rejection of the Kyoto Protocol in 2001,33 and the eventual withdrawal of many major developed countries from the Kyoto Protocol’s second commitment period, can be traced, in part, to concerns about such differentiation in the Kyoto Protocol.

The Kyoto Protocol contains only one explicit reference, and a few implied references, to the principle of common but differentiated responsibilities and respective capabilities (CBDRRC). The preamble refers to FCCC Article 3 and the Berlin Mandate, both of which include the CBDRRC principle. Kyoto Article 10, discussed below, containing commitments for all parties, refers to ‘common but differentiated responsibilities’ and ‘specific national and regional development priorities, objectives and circumstances’. Nevertheless, the differentiation in the Kyoto Protocol is traced by most commentators to this principle, and the associated notion of developed country leadership. Indeed, the climate regime, in particular the Kyoto Protocol, has been characterized as the ‘clearest attempt to transform, activate and operationalize CBDR from a legal concept into a policy instrument’.34

The following sections explore the protocol’s stark differentiation between Annex I and non-Annex I countries,35 as well as the differentiation within the category of Annex I countries. They also consider more closely the (failed) attempt to introduce ‘voluntary commitments’ for developing countries during the Kyoto negotiations, which would have partially bridged the Annex I—non-Annex I divide.

1.  Differentiation between Annex I and non-Annex I parties

The sharp differentiation between Annex I and non-Annex I countries in the Kyoto Protocol is illustrated most clearly by the fact that GHG mitigation targets and timetables are limited to Annex I countries. Indeed, this focus on Annex I is envisioned even for subsequent commitment periods, although the protocol does allow (p. 167) for the possibility of non-Annex I parties assuming emissions targets at some point in the future by establishing an amendment procedure for Annex B.36

Since emissions targets apply only to Annex I parties, the provisions of the protocol designed to monitor compliance with the targets are limited to Annex I parties, including the obligation to establish a national system for the estimation of GHG emissions by sources and removals by sinks,37 the informational requirements in relation to annual inventories and national communications,38 and the expert review processes.39 The Kyoto Protocol’s compliance procedure, considered below, is also tailored to the differentiated obligations of parties, and thus establishes an enforcement-oriented approach to compliance by Annex I parties with their emissions targets and related procedural commitments, and a facilitative approach to compliance by non-Annex I parties with the protocol’s general and much more flexible and contextualized commitments.40 In keeping with this bifurcation, the Compliance Committee consists of two branches, an enforcement and a facilitative branch.41 The facilitative branch, which is empowered to provide financial and technical assistance and/or advice, is required to do so ‘taking into account the principle of common but differentiated responsibilities and respective capabilities’.42 In addition, the facilitative branch may ‘formulat[e] … recommendations … taking into account Article 4, paragraph 7, of the Convention’43—a provision stressing the centrality of financial assistance and technology transfer to the performance of obligations by developing countries.44

In addition, the Kyoto Protocol draws on the FCCC and specifies a range of obligations for Annex II parties to assist non-Annex I parties, outlined below.45 The protocol also creates an Adaptation Fund drawing on a share of the proceeds from the CDM.46

2.  Differentiation within the category of Annex I parties

In addition to the differentiation between Annex I and non-Annex I parties, the Kyoto Protocol contains several provisions that differentiate among Annex I parties in relation to defining and implementing commitments. For instance, economies (p. 168) in transition (EITs) are allowed to adopt a base year or period other than 1990 in defining their emissions targets.47 Annex I parties also have different ‘targets and timetables’. This differentiation is considered below, in the context of ‘targets and timetables’.

3.  Voluntary commitments for developing countries

A number of parties, including the members of AOSIS, the US, Australia, New Zealand, the EU, Japan, Poland, and Switzerland, aired concerns during the AGBM negotiations about the lack of emissions targets for non-Annex I parties.48 In response, the AGBM Chair inserted a provision in the draft negotiating text on ‘voluntary commitments for non-Annex I parties’,49 aiming to allow developing countries to assume voluntary country-specific emissions limitation or reduction commitments and thereby become eligible to participate in joint implementation and emissions trading.50 However, in Kyoto, discussions on the proposed voluntary commitments article were acrimonious. The strongest opposition came from China and India. These countries questioned both the legality of creating a new category of parties under the convention and the ‘voluntary’ nature of the commitments under discussion.51 Meanwhile the question of the ‘evolution’ of the commitment regime was raised as well. The US had originally introduced the concept of evolution in 1996, proposing that ‘the Parties shall adopt, by [2005], binding provisions so that all Parties have quantitative greenhouse gas emissions obligations and so that there is a mechanism for automatic application of progressive greenhouse gas emissions obligations to Parties based upon agreed criteria’.52 At the Kyoto COP, New Zealand called for ‘progressive engagement’ of developing countries according to their relative levels of development. It recommended launching a review process in 1998, to be concluded in 2002, to set legally binding commitments for all parties (except least developed countries (LDCs)) for future commitment periods.53 This suggestion was rejected by the EU as ‘not helpful to the negotiations and contrary to the Berlin Mandate’,54 and by the G-77/China because it was ‘not the time to address developing country commitments, but to strengthen developed country commitments’.55 The G-77/China threatened to boycott the negotiations if the proposal on evolution of commitments was not dropped.56 Their reaction to this (p. 169) proposal dovetailed with their reaction to the notion of voluntary commitments. As a result, both the voluntary commitments article and the proposal on ‘evolution’ were discarded.57 Commentators note that, although the US was successful in shaping many aspects of the protocol, including in particular the protocol’s market and other flexibility mechanisms, it suffered a ‘decisive defeat’ on the issue of new commitments for developing countries.58 Developing countries may still voluntarily assume targets, but only through an amendment to Annex B—a lengthy and cumbersome process.59

III.  Preamble and Definitions (Article 1)

The Kyoto Protocol, unlike both the FCCC and the Paris Agreement, contains a short preamble, confined to referencing the objective, provisions, and principles of the convention, as well as the Berlin Mandate that launched negotiations toward the Kyoto Protocol.

The Kyoto Protocol’s definition section is similarly short, incorporating by reference the definitions contained in the FCCC. In addition, it defines: ‘Conference of the Parties’, ‘Convention’, ‘Intergovernmental Panel on Climate Change’, ‘Montreal Protocol’, ‘Party’, and ‘Party included in Annex I’.60

IV.  Commitments (Articles 2, 3, 5, 7, 8, 10, and 11)

Like the FCCC, the Kyoto Protocol sets out different commitments for different categories of parties including: (1) general commitments that apply to all parties, both developed and developing, which track existing commitments under Article 4.1 of the FCCC (Article 10); (2) new commitments relating to policies and measures, GHG mitigation targets and timetables, reporting, and review that apply only to Annex I parties (Articles 2, 3, 5, 7, and 8); and (3) specific commitments on financial resources that apply only to Annex II parties (Article 11). In keeping with (p. 170) the Berlin Mandate, this structure reflects the Kyoto Protocol’s focus on advancing the mitigation commitments of Annex I parties.

A.  General commitments

Article 10 sets forth general commitments for all parties, which serve ‘to advance the implementation’ of Article 4.1 of the FCCC and ‘to achieve sustainable development’. Since Article 10 applies to both developed and developing countries, it contains several contextualizing and qualifying phrases. In particular, it provides that parties are to take into account their ‘common but differentiated responsibilities and their specific national and regional development priorities, objectives and circumstances’. It also specifically states that it does not introduce ‘any new commitments’ for non-Annex I parties, but rather ‘reaffirm[s] existing commitments’ under Article 4.1 of the FCCC. Moreover, it specifically ‘tak[es] into account Article 4, paragraphs 3, 5, and 7, of the Convention’,61 thereby linking the implementation of commitments in Article 4.1 to the FCCC’s commitments on financial assistance and technology transfer.

The negotiating history of Article 10 is instructive. Developing countries argued that advancing the implementation of existing commitments would need to be coupled with similar advances in the implementation of financial commitments by Annex II parties.62 Indeed, there was considerable resistance from the G-77/China to Article 10(b) on mitigation and adaptation programs, even though it merely reiterated existing commitments under the FCCC, and it had to be gavelled through by the Chair over their objections.63 In the context of Article 10, a proposal for the creation of a specific fund was discussed at length, but eventually discarded. Article 10 was, however, placed immediately before the article on the financial mechanism, to reflect the view that the issues addressed by the two articles were related: advancing commitments for developing countries would require increased financial support.64

B.  Specific commitments for Annex I and Annex II parties

1.  Policies and measures (Article 2)

Kyoto Article 2 requires Annex I parties to implement and/or further elaborate policies and measures (PAMs) in accordance with their national circumstances. It proceeds to list areas, in an illustrative manner (‘such as’), in which PAMs could be taken, including enhancement of energy efficiency; protection and enhancement of GHG sinks; promotion of sustainable agriculture; research on renewable energies, carbon sequestration, and other environmentally-sound technologies; progressive reduction or phasing out of subsidies and other market imperfections in GHG (p. 171) emitting sectors; reforms in relevant sectors (including, in particular, the transport sector) to limit and/or reduce GHG emissions; and limitation or reduction of methane emissions (Article 2.1(a)). In negotiating this article, parties disagreed on whether it should identify specific mandatory policies and measures. The EU favored including an annex identifying PAMs that all parties would be required to adopt and implement.65 In contrast, the US, Australia, Canada, and New Zealand believed parties should retain flexibility in selecting PAMs.66 Eventually the latter view prevailed, but the listing of specific PAMs in Article 2 generates expectations that parties will consider these in implementing the protocol.67 This debate, among others, illustrates the long-standing and deep-seated differences between states on whether international climate regulation should be prescriptive or facilitative. These differences have existed from the inception of the UN climate regime and played a key role in shaping the 2015 Paris Agreement.

Article 2 requires parties to cooperate to enhance the effectiveness of their PAMs, including by exchanging information (Article 2.1(b)). Further, it provides that the Conference of Parties serving as the Meeting of the Parties to the Protocol (CMP) shall consider ways and means to elaborate such coordination, if it decides that cooperation would be beneficial (Article 2.4). These provisions are remnants of proposals by the EU and AOSIS requiring parties to coordinate the implementation of PAMs. The US, Australia, and other Umbrella Group countries did not favor such mandatory coordination, and the text reflects their view. Parties have since tasked the Subsidiary Body for Scientific and Technological Advice (SBSTA) with facilitating information exchange and sharing of experiences on PAMs of Annex I parties.

2.  Mitigation targets and timetables (Article 3)

Article 3 contains the core commitments of Annex I parties under the protocol. Article 3.1 reads: ‘The Parties included in Annex I shall, individually or jointly, ensure that their aggregate anthropogenic carbon dioxide equivalent emissions of the greenhouse gases listed in Annex A do not exceed their assigned amounts, calculated pursuant to their quantified emissions limitation and reduction commitments inscribed 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’.

The Kyoto Protocol’s approach to emissions targets is innovative, and strikes a balance between strictness and flexibility. On the one hand, the targets are legally binding, quantitative (and hence precise), absolute, and economy-wide. On the other hand, the protocol allows parties to achieve their targets in a flexible manner. Noteworthy features of Article 3 including the following.

(p. 172) a)  Legal character

Article 3.1 uses mandatory terms (‘shall’) in relation to the individual targets of Annex I parties and is clear and precise, thus rendering these targets, as discussed above, legally binding obligations of result.

b)  Differentiated targets

Each Annex I party has an individual, differentiated target listed in Annex B, covering a basket of six gases listed in Annex A to the protocol. The individual country targets were the outcome of intense negotiations, and reflected politics rather than science. The G-77/China, the EU, AOSIS, and others initially proposed uniform targets for all Annex I parties, whereas the US, Australia, Japan, and other Umbrella Group countries supported differentiated commitments tailored to national circumstances.68 Proposed criteria for differentiation included CO2e emissions per capita, CO2e emissions per unit of GDP, GDP per capita, and GDP per capita growth.69 The disagreements between those that supported uniform targets and those that supported differentiated targets—and within the latter group, between those supporting different objective criteria for differentiation—persisted until the Kyoto conference. In Kyoto, however, the EU softened its stance and began seeking ‘equivalence of effort’ rather than a uniform target.70 No agreement on objective criteria was forthcoming but targets had begun to filter through the process in the lead up to and in Kyoto. The Chair exerted pressure on parties to negotiate these targets at Kyoto. However, when no agreement emerged, the Chair drew up a list of targets based on announcements by parties and his consultations. After a series of bilateral meetings with parties to gather their reactions to his list of targets, the Chair left Annex B blank, and, in the final plenary, he invited parties to submit their revised, final targets to the podium. As parties did so, their targets were inserted into Annex B by the secretariat.71

This historical context is instructive, and offers a useful comparison with the process of establishing nationally determined contributions (NDCs) under the Paris Agreement. Both the initial Kyoto targets announced by parties and the NDCs offered by parties in the context of the Paris Agreement were nationally determined. But, in Kyoto, the targets were the subject of intensive negotiations among Annex I parties, whereas in Paris, multilateral negotiation of NDCs was never even proposed. Hence, in Kyoto, unlike in Paris, the targets of key countries and groups changed over the course of the conference, as a result of negotiations with other parties and persuasion by the AGBM Chair, Raul Estrada. The outcome (in some cases) was stronger targets than initially proposed.72 For example, the US initially (p. 173) proposed a GHG stabilization target at 1990 levels, the AGBM chair assigned them a reduction of 5% from 1990 levels, and on the last day the US accepted a reduction of 7% from 1990 levels.73 Similarly, Canada initially proposed a reduction of 3% from 1990 levels, the chair assigned them a reduction of 5% from 1990 levels, and on the last day Canada accepted a reduction of 6% from 1990 levels.74 Annex B contains a list of differentiated targets for thirty-eight countries, ranging from an 8% reduction from 1990 levels for the EU and a 7% reduction for the USA, to an 8% increase from 1990 levels for Australia and a 10% increase for Iceland.75 Emissions in most Annex I countries were projected to increase due to economic growth, so the targets for most Kyoto countries represented a bigger departure from business-as-usual than the target numbers themselves suggested.76 The targets for Russia and Ukraine were notable exceptions. Since these countries’ targets were considerably higher than their expected emissions, their targets gave them a large supply of surplus credits (popularly known as ‘hot air’) that they could potentially sell to other countries through the emissions trading mechanism.77

The thirty-eight Annex B countries accounted for 39% of 2010 global GHG emissions.78 Excluding the US (which rejected the protocol) and Canada (which withdrew from it), the remaining thirty-six countries accounted for 24% of 2010 global GHG emissions. These thirty-six Kyoto parties were in full compliance with their first commitment period targets.79

The 2012 Doha Amendment, yet to enter into force, contains individual differentiated targets for Annex B parties for the second commitment period, 2013–20. These targets are consistent with the targets Annex B parties put forward under the Cancun Agreements for 2020.80 For instance, the EU’s Kyoto target is a reduction of 20% from 1990 levels, the same as its Cancun pledge. Moreover, in a footnote to its Kyoto target, the EU reiterated the conditional offer made in its Cancun pledge to move up to a 30% reduction from 1990 levels, if other developed countries committed themselves to comparable emissions reductions and developing countries contributed adequately according to their responsibilities and (p. 174) respective capabilities.81 Similarly, some countries, such as Australia, had pledged in Cancun reductions from reference years other than 1990. In these cases, the Doha Amendment lists the party’s Kyoto target with reference both to the 1990 base year as well as the reference year chosen by the party, but clarifies that only the former is internationally legally binding.82

c)  Collective target

In addition to the individual targets listed in Annex B, Article 3 contains a collective target for Annex I parties of ‘at least 5% below 1990 levels’. This collective target was introduced to address G-77/China fears that including targets only in an annex to the protocol rather than in the protocol itself would marginalize the targets.83 The Article 3 collective target was not negotiated separately or chosen based on environmental grounds (for example, based on an assessment of the reduction in Annex I emissions necessary to put the world onto a safe emissions pathway). Rather, it merely reflects the sum of the individual country targets listed in Annex B. Moreover, the legal character of this collective target differs from that of the individual targets listed in Annex B.84 Unlike the mandatory terms that frame the individual targets, the collective target is prefaced by the phrase ‘with a view to’. This wording signals an objective or goal rather than a legal obligation. In any case, the collective target was based on the assumption that all Annex B parties would become parties to the protocol. As this outcome was not within the control of individual parties, a collective target could not have been rendered as a legal obligation. Without the US and Canada, the effective collective target dropped to a 4% decrease in emissions for the thirty-six remaining Annex B parties.85 The 2012 Doha Amendment, yet to enter into force, contains a collective target of 18% below 1990 levels for the second commitment period, 2013–20.86

d)  Base year

The targets are generally set to a 1990 base year.87 Early agreement emerged on the choice of 1990 as the base year, in part because it was the FCCC base year, and in part because reliable data was not available for the period before 1990. In line with the flexibility offered to EITs in the FCCC, the Kyoto Protocol also allows EITs to use a base year other than 1990,88 and five countries—Bulgaria, Romania, Hungary, Poland,89 and Slovenia90—did so. In order not to disadvantage Annex (p. 175) I parties that had taken early action on HFCs, PFCs, and SF6, Annex I countries are allowed to choose between 1990 and 1995 base years for these gases.91

e)  Assigned amount units

The Kyoto targets are expressed in terms of ‘assigned amount units’ (AAUs), each representing one ton of CO2e emissions. At the beginning of a commitment period, a party’s initial assigned amount is calculated by taking its base year CO2e emissions, multiplied by the number of years in the commitment period, and then multiplied again by the party’s emissions target. By way of example, if a country emitted one million tons of CO2e in 1990, and was assigned a minus 6% emissions target for the first commitment period (ie a target allowing it to emit 94% of its base year emissions), its initial assigned amount would have been 4.7 million tons (1 million times 5 times .94). After a party’s initial assigned amount is issued according to this formula, it is deposited in a registry maintained by the secretariat and can be added to or subtracted from, over the course of the commitment period, using the market mechanisms described in Section V below, as well as through sink activities that generate removal units (RMUs).92 In order to comply with its emissions target, a party must have enough units in its account to cover its actual emissions over the commitment period.93 Parties have adopted detailed modalities for the accounting of assigned amounts.94

f)  Sinks

The Kyoto Protocol allows Annex I parties to take into account afforestation,95 reforestation,96 and deforestation97 and other agreed land use, land-use change, and forestry (LULUCF) activities in meeting their commitments under Article 3.98 Critical links exist between LULUCF activities and climate change. Forests, croplands, and grazing lands can be sources, sinks, or reservoirs of GHGs.99 When they are damaged or destroyed, they release CO2 and other GHGs into the atmosphere. When they are restored, they remove GHGs from the atmosphere.

The negotiations on sinks proved to be among the most contentious, both in Kyoto and in the post-Kyoto negotiations leading to the Marrakesh Accords.100 (p. 176) One issue concerned accounting of sinks, since there are considerable uncertainties surrounding the storage rate of biospheric sinks, and inherent difficulties in defining, monitoring, and accounting for them. Many Annex I parties did not report on LULUCF in their national communications at the time and among those that did, the methodologies used were not consistent or comparable; in some cases, uncertainty estimates were very high. Nevertheless, many Umbrella Group countries, including Australia, Canada, New Zealand, and the US, favored the inclusion of sinks in the first commitment period to assist parties in meeting their GHG targets. Among them, Australia preferred a ‘net-net’ approach, which would have taken sinks into account both in calculating a Party’s base year emissions as well as its emissions during the commitment period. New Zealand advocated a ‘gross-net’ approach, in which sinks are taken into account only in calculating a party’s net emissions during the commitment period, for the purposes of assessing compliance with targets.101 The majority of developing countries, including in particular the small island states, opposed the inclusion of sinks on the grounds that it would weaken the environmental integrity of the targets. The EU initially opposed the inclusion of sinks, but changed its position in the course of the negotiations.

The compromise in Article 3.3 specifically allows a limited set of LULUCF activities—afforestation, reforestation, and deforestation—undertaken since 1990 to be counted toward compliance with Kyoto targets (a ‘gross-net’ approach). The changes in emissions, however, must be the result of ‘direct human induced land use change and forestry activities’. In addition, Article 3.4 authorizes the CMP to allow parties to count emissions and removals of GHGs by other sink activities. The Marrakesh Accords decision on sinks provides for the crediting of human-induced removals of GHGs by cropland, forest, and grazing land management—a major win for Umbrella Group states—but imposes country-specific caps on credits for forest management and provides for net-net accounting of agricultural and grazing lands management,102 thus limiting the overall number of sinks credits (RMUs) allowed into the Kyoto system.103

g)  Multi-year commitment period

The Kyoto targets apply to a multi-year commitment period—for the first commitment period, a five-year period running from 2008–12, and for the second commitment period, if it enters into force, an eight-year period running from 2013–20. This multi-year approach emerged from a US proposal supported by Japan, New Zealand, Norway, and the Russian Federation. A multi-year target, (p. 177) they argued, would offer greater flexibility to countries to take into account annual fluctuations, and better complement the market mechanisms the US had also proposed.104 The G-77/China, AOSIS, and the EU preferred a single-year target, but the Chair worked to persuade them of the transparency, verifiability, and quantifiability of multi-year targets, and ultimately they accepted this approach. The start date of the first commitment period, 2008, was also subject to debate. While AOSIS, the EU and many countries and groups favored earlier single-year or multi-year time frames, the US and Canada were insistent on 2008–12. Although the 2008–12 commitment period was eventually accepted, as a compromise it was coupled with a requirement for ‘demonstrable progress’ by 2005.105 The requirement for ‘demonstrable progress’ was framed in mandatory terms (‘Parties shall … have made … demonstrable progress’). Nevertheless, since ‘demonstrable progress’ is an undefined concept, the actual legal impact of this provision was limited.106 Parties agreed through a series of decisions to request reports by 1 January 2006 from Annex I parties demonstrating progress with their Kyoto targets,107 and they tasked the secretariat with preparing a synthesis report.108 The second CMP considered this synthesis report, acknowledged the progress made by those Annex I parties that had submitted reports, noted that much of the decrease in total aggregate emissions was from Annex I EITs, and urged parties to intensify their efforts to meet their Kyoto targets.109

h)  Banking

The Kyoto Protocol allows parties to bank their excess AAUs from one commitment period for use in subsequent commitment periods.110 This provision was proposed by the US, New Zealand, and Russia,111 among others, and was also designed, like multi-year targets, to offer parties flexibility to determine when they reduce their emissions. The US also proposed ‘borrowing’ from future commitment periods, but this idea was not accepted.112 The final negotiations (p. 178) for the second commitment period proved difficult in part because Russia, Ukraine, and some EU member states (most vocally Poland) sought to bank, without restriction, their excess AAUs from the first commitment period, characterized by Ukraine as ‘legitimately acquired sovereign property’.113 As noted earlier, these countries’ targets gave them a large number of surplus allowances, because the targets were based on their 1990 emissions, before their emissions plunged as a result of the collapse and restructuring of their economies following the break-up of the USSR. Allowing these countries to bank and then trade their ‘hot air’ from the first commitment period would have limited the effort needed from other countries, as well as diluted the environmental integrity of the second commitment period of the Kyoto Protocol. Ultimately, the Doha Amendment resolved this issue by allowing banking, but restricting the extent to which banked units can be traded.114 Moreover, several Annex I parties, including the EU, Australia, Norway, Japan and Switzerland, recorded political declarations that they would not use surplus AAUs carried over from the first commitment period to meet their targets under the second commitment period.115

i)  Joint fulfilment

The phrase ‘individually or jointly’ allows any group of Annex I parties to meet their emissions targets jointly. Article 4 contains further authorization for and operational details on ‘joint fulfilment’ of emissions targets. The EU-15 (at the time) established a collective target under Article 4 with a burden sharing agreement that reallocated the Kyoto targets amongst the EU member states. Thus, for instance, although the common EU target for the first commitment period was an 8% reduction from 1990 levels, Germany agreed to a 21% reduction and Portugal was allowed to increase its emissions by 28% over 1990 levels under the internal EU burden-sharing agreement.116 The understanding at the time was that only the EU would avail itself of Article 4, but this understanding is not reflected in the text, as others were unwilling to create a special deal for the EU. The Doha Amendment targets are also premised on joint fulfilment by the EU.117

(p. 179) 3.  Financial Support (Article 11)

In addition to mitigation commitments, the protocol reiterates the financial commitments of Annex II parties under Articles 4.3 and 4.5 of the FCCC, including to provide ‘new and additional financial resources to meet the agreed full costs’ incurred by developing countries in improving the quality of data/models for the preparation of national inventories, and the ‘agreed full incremental costs’ for the implementation of existing commitments that are ‘agreed’ between the developing country and the operational entity of the financial mechanism.118

Like the FCCC, the protocol provides that the implementation of Annex II parties’ existing commitments shall ‘take into account the need for adequacy and predictability in the flow of funds and the importance of appropriate burden sharing among developed country Parties’.119 The lack of precision in these terms provides Annex II parties with considerable flexibility, particularly since no guidance exists on what constitutes an adequate and predictable flow of funds, and, no formula exists to determine what might be an appropriate sharing of the burden.

V.  Mechanisms (Articles 6, 12, and 17)

From almost the beginning of the Kyoto Protocol negotiations, the US made it clear that its acceptance of binding emissions targets would be conditional on the inclusion of market-based approaches, which would allow Annex I parties to achieve their targets cost-effectively.120 The Kyoto Protocol largely reflects the US position by establishing three market mechanisms—although, in an ironic twist, this did not stop the US from later rejecting the protocol. Two of these mechanisms are project-based: joint implementation (JI) and the CDM. The third mechanism is emissions trading.

The three market mechanisms are intended to assist parties in achieving compliance with their GHG emissions targets. They are based on the rationale that emissions reductions have the same effect in slowing global warming wherever they occur, and that therefore reductions should be made where it is most cost-effective to do so. The protocol prescribes, however, that the market mechanisms are to be ‘supplemental to domestic action’.121 This ‘supplementarity’ qualification was a result of bitter and protracted negotiations on the limits to which use of these market mechanisms should be subject.122 Many developing countries opposed the (p. 180) unrestricted use of the mechanisms, as they believed that domestic action in Annex I parties would better serve equity. The EU and others also wanted to limit use of the mechanisms because of concerns about their impact on the integrity of the protocol, including due to ‘hot air’ in the system.123 For the US and other Umbrella Group countries, however, acceptance of the Kyoto targets was premised on being able to use the market mechanisms without any quantitative limits (known in the negotiations as ‘concrete ceilings’). Thus, in the end, only a qualitative restriction on the use of the mechanisms proved possible, namely, that ‘domestic action shall … constitute a significant element of the effort’ made by Annex I parties in meeting their targets,124 and this requirement was put within the purview of the compliance committee’s facilitative rather than enforcement branch.125

The Kyoto Protocol’s mechanisms involve transfers of four types of emissions units: (1) AAUs, generated directly from a party’s emissions target, (2) RMUs, generated by afforestation, reforestation, forest management, and other sink activities undertaken pursuant to Articles 3.3 and 3.4; (3) emission reduction units (ERUs), generated by JI, and (4) certified emission reductions (CERs), generated by the CDM.126 To ensure that all the Kyoto units can be traded in a single market,127 each is denominated as a unit equal to one metric ton of CO2e and there is full fungibility (or interchangeability) between them.128

A.  Joint implementation (Article 6)

The JI mechanism129 builds on provisions of the FCCC, in particular on Activities Implemented Jointly, discussed in Chapter 5.130 Many of the proposals for JI in the AGBM negotiations envisaged projects between Annex I and non-Annex I countries. The G-77/China, however, opposed such projects both because they believed action should primarily be taken by and in Annex I countries and because they believed the terms of such arrangements would favor Annex I countries.131 When the CDM emerged in the final days of the Kyoto conference as a mechanism (p. 181) allowing Annex I parties to undertake projects in non-Annex I parties, the JI mechanism came to be limited to Annex I countries.

The JI mechanism allows one Annex I party to receive credits (ERUs) for projects in another Annex I party that reduce emissions or enhance the removal of GHGs by sinks, provided such emissions reductions or enhanced removals are ‘additional’ to any that would have otherwise occurred.132 The protocol provides that the parties ‘may’ elaborate guidelines for JI, including guidelines for verification and accounting,133 which were adopted as part of the Marrakech Accords.134

The Marrakesh Accords established an Article 6 Supervisory Committee, under the authority of the CMP, inter alia, to supervise the verification of ERUs generated through Article 6 projects.135 The Article 6 guidelines identify eligibility requirements for parties to participate in JI: they must be a Kyoto party, their assigned amount must have been duly calculated and recorded,136 and they must have fulfilled their commitments under Articles 5 and 7, discussed above.137 If a host party meets these eligibility requirements, it can approve projects, verify for itself that emissions reductions from a JI project are ‘additional’, and issue the appropriate quantity of ERUs.138 In contrast, if a party does not meet all of the eligibility requirements, the verification of ‘additionality’ must occur through the Article 6 Supervisory Committee.139 The former procedure is termed ‘Track 1’ and the latter ‘Track 2’. When ERUs are transferred between parties, they are subtracted from one party’s registry and added to the other’s to ensure that there is no double counting of emissions reductions.140

In JI, unlike in the CDM, AAUs are converted into an equivalent number of ERUs before they are issued, so JI merely involves the transfer of existing units between Annex I parties, rather than the creation of additional emissions units that would expand the overall emissions budget of Annex I parties. Nevertheless, the limited international oversight as well as transparency of JI Track 1 activities has led many to question their environmental integrity,141 in particular in relation to the quality of auditing services, the use of inappropriate and inconsistent methodological approaches, project approval, and monitoring of emissions reductions.142 Indeed, some studies find that JI may have enabled global GHG emissions to be about 600 million tonnes of carbon dioxide equivalent (tCO2e) higher than they would have been if each Annex I party had met its emissions target domestically.143 (p. 182) As of 1 January 2016, 871 million ERUs had been issued, the overwhelming majority for Track 1 activities.144 Nearly 60% of these ERUs have been issued by Ukraine and 30% by Russia.145 As these countries have large surpluses of AAUs, some NGOs have argued that they are engaging in ‘hot-air laundering’, ie exporting surplus AAUs in the form of ERUs, rather than actually undertaking additional emissions reduction projects.146 Independent studies flag ‘significant environmental integrity concerns’ with 80% of ERUs issued by Ukraine and Russia.147 This would, if true, compromise both the environmental integrity of the Kyoto Protocol as well as the stability of the carbon market. The Doha CMP requested the Subsidiary Body for Implementation (SBI) to draft revised joint implementation guidelines for consideration by parties.148 It identified the key attributes that should characterize the future operation of the JI, including a single unified track for JI projects, closely aligned or unified accreditation procedures for JI and CDM, clear and transparent information, and clear, transparent, and objective requirements to ensure reductions are additional to those that would have occurred anyway.149 The future of JI as well as of the other Kyoto mechanisms, however, is unclear at this moment, as discussed below.150

At the heart of the environmental integrity concerns that have beset the operation of JI thus far is the issue of ‘additionality’, ie whether the emissions reduction would have happened anyway, in the absence of the project activity. As this is a key issue for both project-based mechanisms—JI and the CDM—it will be discussed below.

B.  Clean Development Mechanism (Article 12)

The CDM owes its origins to a Brazilian Proposal for a clean development fund, which sought to impose financial penalties on Annex I parties for non-compliance and to channel the funds to non-Annex I parties for addressing climate change.151 In the course of the negotiations, Brazil’s clean development fund and a similar proposal by the G-77/China transformed into the CDM,152 which gives Annex I parties additional flexibility in meeting their targets, and involves developing countries in emissions mitigation efforts. The CDM drew inspiration from ideas raised in the (p. 183) context of the negotiations on JI and from activities implemented jointly under the convention,153 and, in essence, became a mechanism for joint implementation between Annex I and non-Annex I parties.

The CDM allows Annex I parties to undertake or invest in project activities in non-Annex I countries and to use the CERs that accrue from the project toward compliance with their Kyoto emissions targets.154 The purpose of the CDM is ‘to assist Parties not included in Annex I in achieving sustainable development and in contributing to the ultimate objective of the convention, and to assist Parties included in Annex I in achieving compliance with their quantified emission limitation and reduction commitments under Article 3’. To generate CERs, the emissions reductions from CDM projects must be ‘additional’ to any that would have otherwise occurred.155 The protocol provides that the CDM shall be subject to the authority and guidance of the CMP, and be supervised by the CDM Executive Board.156 It also provides that parties ‘shall’ elaborate modalities and procedures with the objective of ensuring transparency, efficiency, and accountability through independent auditing and verification of project activities.157

The Marrakesh Accords specify modalities and procedures for the operation of the CDM.158 These list the eligibility requirements for participation in the CDM,159 and outline a rigorous process of monitoring, verification, and certification for emissions reductions from CDM projects.160 Parties also launched the CDM (‘prompt start’) in advance of entry into force of the Kyoto Protocol.161 As of 31 December 2016, the CDM Executive Board had registered 754 projects, expected to produce CERs amounting to over 8.48 billion tonnes of CO2e.162 Several issues have arisen in the course of the CDM’s operations that offer lessons for the design of any future market mechanisms under the climate regime. These include the following.

1.  Additionality

Additionality, a key requirement in the context of both JI and the CDM, has proven difficult to define, implement, and secure. The Kyoto Protocol requires CERs to (p. 184) be certified as ‘additional to any that would occur in the absence of the certified project activity’.163 The Marrakesh Accords define additionality in similarly general terms.164 Additionality is assessed in relation to a business-as-usual ‘baseline’—that is, what would have occurred in the absence of the CDM project activity.165 The climate change process has struggled to clearly define additionality and set baselines. The CDM methodologies panel, which supports the CDM Executive Board, has over time developed and refined detailed guidance, including ‘tools’ to demonstrate and assess additionality and identify baselines.166 Nevertheless, assessing additionality and setting baselines involves considerable subjectivity.167

Additionality is critical to the environmental integrity of the protocol, even more so in the case of the CDM than JI. As noted earlier, JI involves the transfer of emissions allowances between two Annex I parties, both of which have targets, and thus does not increase the overall number of allowances in the system. In contrast, CDM projects generate additional emissions allowances, since they are undertaken in non-Annex I parties, which do not have any emissions targets. CERs thus loosen the cap on Annex I emissions. As a result, if CERs are generated from emissions reductions that are not additional, in that they would have occurred anyway, the environmental integrity of the Annex I targets is undermined.168 For this reason, Article 12.5 requires that CERs from CDM projects be certified internationally before they are created, by an operational entity designated by the CDM Executive Board. Nevertheless, many studies over the years have questioned the extent to which CDM projects have resulted in emissions reductions that are truly additional.169 Further, the very notion of additionality can create perverse incentives for developing countries to refrain from adopting progressive climate regulations and (p. 185) measures, as these will then be built into their baseline, making additionality more difficult to demonstrate in the future.170

2.  Sustainable development

Sustainable development, the stated purpose of the CDM in relation to developing countries,171 has also proven difficult to define, implement and secure. The notion of sustainable development is defined neither in the FCCC nor in the Kyoto Protocol. Efforts to introduce sustainable development indicators in the climate negotiations proved fruitless, and the Marrakesh Accords chose merely to characterize sustainable development as a host country ‘prerogative’.172 A designated national authority in each country has to confirm that project participation is voluntary, and that the project helps it achieve sustainable development.173

The extent to which the CDM has contributed to sustainable development in developing countries is difficult to assess, yet available evidence suggests that the benefits have been limited.174 There is a variance in definitions and approaches across host countries. Developing countries have relied on different approaches to determine if CDM projects contribute to their sustainable development. These can be broadly categorized into: the guidelines approach, where broad (generally ambiguous and indeterminate) guidelines are prescribed; the checklist approach, where either a positive and/or negative checklist is developed (for instance, renewable energy development and energy efficiency may be part of the positive checklist, and large hydro development part of the negative checklist); and, the scoring approach, where projects are rated based on set criteria.175 Brazil uses a combination of the guidelines, checklist, and scoring approaches,176 China combines the guidelines and checklist approach,177 and India employs a pure guidelines approach, (p. 186) which invests its designated national authority with considerable discretion.178 It is fair to say that host countries have an incentive to compete for CDM projects by lowering ‘sustainable development’ requirements. Some scholars note that the ‘reality’ of CDM projects is that they focus on maximizing CERs rather than promoting sustainable development.179 In response to the perceived failures of a decentralized system for assessing sustainable development in relation to the CDM, in 2003 the World Wildlife Fund and other international NGOs established the ‘gold standard’. The Gold Standard is a standard and certification body that has created a best practice benchmark for energy projects incorporating sustainability criteria such as access to basic services and improving health, income and gender equality.180 Thus far, it has certified over 1100 projects in seventy countries.181 These projects trade for a premium in the carbon market.

3.  Project eligibility

In light of the CDM’s sustainable development requirement, the negotiations leading to the Marrakesh Accords focused on the types of projects permitted under the CDM. The EU proposed a ‘positive list’ of safe and environmentally sound projects from which CDM projects could be drawn,182 including renewable energy, energy efficiency, and demand-side management projects.183 The EU argued that a positive list would ensure environmental integrity, increase certainty for investors, and help garner political and public support. While the Umbrella Group believed such a list to be unnecessary, others disagreed over which types of projects should be included on the list.184 For instance, India and China wished to allow nuclear energy projects under the CDM, while AOSIS and the Organization of the Petroleum Exporting Countries (OPEC) opposed allowing them. Similarly, the Umbrella Group and several South and Central American countries wished to (p. 187) include sinks projects in the CDM, while the EU, AOSIS, Brazil, China, and India opposed such projects.185

The negotiations on whether to allow sinks projects proved particularly contentious. In addition to the concerns over measurement and uncertainty, referred to earlier, sinks projects raise concerns relating to non-permanence and leakage. Non-permanence is a risk because the enhancement of carbon stocks from sinks projects is potentially reversible through human activities, natural disturbances, and environmental change, including climate change.186 Also, the reduction of deforestation in one area does not necessarily imply a reduction in deforestation worldwide. In fact, the resulting decrease in timber supply in one area might accelerate deforestation elsewhere. When this phenomenon—termed leakage—occurs, allowing credits under the CDM causes overall global GHG levels to increase, because global deforestation continues while Annex I parties use the credits they have acquired through the CDM projects to offset additional domestic GHG emissions.

Nevertheless, many developing countries were keen to use their natural capital and engage in sinks projects, and the Umbrella Group strongly supported the inclusion of sinks projects in the CDM. The compromise reached in the Marrakesh Accords allows sinks projects, but limits them to reforestation and afforestation projects, not projects to avoid deforestation.187

To address broader concerns with sinks projects, specific methodologies have since been developed for afforestation and reforestation projects,188 and GHG removals from such projects can only be used to help meet emissions targets up to 1% of a party’s base year emissions for each year of the commitment period.189 To address non-permanence, the rules distinguish between temporary CERs (tCERs) and long-term CERs (lCERs).190 In relation to nuclear projects, the Marrakesh Accords urge parties ‘to refrain from using certified emissions reductions generated from nuclear facilities to meet their targets.191 Beyond these two restrictions, however, parties are free to choose any type of CDM project. In practice, however, (p. 188) the market for credits from certain types of projects has been shaped by buyer preferences. The EU, the principal buyer of CDM credits, has qualitative and quantitative restrictions on the credits that can be brought into the EU market.192 In addition, individual EU member states have incorporated qualitative and quantitative restrictions into their state-funded programs for purchasing CDM (and JI) credits.193

4.  Project types

a)  Unilateral CDM

The permissive nature of the Marrakesh Accords has also given rise to innovative institutional arrangements for CDM projects such as ‘unilateral CDM’.194 Unilateral CDM projects are developed, financed, and implemented directly by developing countries, with no Annex I country investor and no identified buyers before certification of the emissions reductions.195 As of 31 July 2016, 30% of all CDM projects are unilateral,196 many in India.

b)  Programmatic CDM

Given the limited impact that single projects can have on emissions trends and the high transaction costs, the CDM Executive Board has permitted project developers to register a ‘programme of activities’ consisting of several component project activities under the CDM.197 Such programs encourage coordinated implementation of policies, reduce transaction costs, and decrease project risk and uncertainties.

c)  Other project types

In a similar vein, the CDM Executive Board has developed simplified modalities and procedures198 as well as tailored methodologies for small-scale (p. 189) projects.199 Modalities and procedures, as well as methodologies, were adopted also for carbon capture and storage projects.200 These were adopted after protracted negotiations due to concerns over the additionality, permanence, and sustainability of such projects.201

5.  Equitable geographical distribution of CDM projects

Even as the CDM and its rules were being negotiated, many LDCs and African nations expressed concerns that, given the limited scale of emissions reductions possible in their countries, they would receive very few CDM projects. These concerns have proven to be well founded. The vast majority of the 8.4 billion CERs anticipated from the CDM thus far will be generated from projects located in China (nearly 50%), followed by India (20%).202 Only a miniscule number of projects are located in Africa.203 The African Group had sought, early in the negotiations of the Marrakesh Accords, to introduce the concept of ‘emissions avoidance’, arguing that the CDM should be designed to reward not just projects that reduce emissions, but also projects that avoid emissions by promoting sustainable development using clean technologies. This proposal was not accepted. But persistent calls from LDCs, the African Group, and small island developing states to ensure ‘equitable geographical distribution of CDM projects’ has led to efforts to address the lack of CDM projects in LDCs and small island states,204 including through financial and other support to enhance skills and to strengthen human and institutional capacity (p. 190) to develop CDM projects.205 Simplified modalities and procedures as well as tailored methodologies for small-scale projects have also proven helpful. Ultimately, however, market forces drive the private sector to low-risk, high-opportunity locations and projects, and the skewed distribution of CDM projects has continued. Note, however, that EU rules have permitted new CERs only from projects based in LDCs to enter the EU emissions trading system (EU-ETS) from 2013.206

6.  Share of proceeds

The Kyoto Protocol requires a ‘share of the proceeds’ from CDM projects to be used to cover the CDM’s administrative costs, as well as to assist developing country parties that are particularly vulnerable to climate change.207 The Marrakesh Accords set the share of proceeds at 2% of the CERs issued for a CDM project activity, and channel these CERs to the Adaptation Fund.208 The accords exempt CDM projects in LDCs from this requirement. For the second commitment period, in response to a long-standing call by LDCs, the share of proceeds levy has been extended to JI and emissions trading.209

C.  Emissions trading (Article 17)

The US, New Zealand, Canada, Australia, Norway, and France submitted proposals in favor of emissions trading.210 The EU, however, took a more cautious approach, due to concerns that unrestricted emissions trading would allow the available ‘hot air’ in the system to dilute the effort required to meet the Kyoto targets.211 The US and other developed countries argued that the EU’s joint-fulfilment was in effect emissions trading, and that other developed countries should be offered the same opportunity.212 After considerable negotiation, Annex I parties reached a compromise that struck a balance between the strength of the Kyoto targets and flexibility in achieving them. However, developing countries, in particular China and India, continued to oppose emissions trading on principle, arguing that it could be interpreted as a right to pollute.213 Their opposition until the final hours of the Kyoto conference resulted in a bare bones Article 17, far shorter than the provisions (p. 191) on CDM and JI, and much whittled down from the earlier provision on emissions trading in the negotiating text.214

Kyoto Article 17 permits an Annex I party215 to engage in ‘emissions trading’—transferring or acquiring AAUs, ERUs, CERs, or RMUs to or from another Annex I party—to meet its commitments under the protocol, provided that such trading is ‘supplemental’ to domestic actions. The protocol ensures environmental integrity by requiring the transferring party to deduct the transferred units from its assigned amount before the acquiring party can add the transfer to (and thus increase) its assigned amount.216

The protocol provides that parties ‘shall define the relevant principles, modalities, rules and guidelines, in particular for verification, reporting and accountability for emissions trading’.217 These rules were finalized, along with the rules for the CDM and JI, in the Marrakesh Accords.218 The modalities, rules, and guidelines list the eligibility requirements for participation in emissions trading.219 They also establish a ‘commitment period reserve’, set at 90% of a party’s assigned amount.220 A commitment period reserve is the minimum number of emissions units (AAUs, ERUs, CERs, and RMUs) a country must have in its national registry at any given time. The reserve is designed to limit a party’s ability to over-sell allowances and end up in breach of its Kyoto targets.221 The accords set out detailed modalities for the accounting of assigned amounts, including institutional requirements relating to the establishment of national registries, and an independent international transaction log, maintained by the FCCC secretariat, to verify the validity of transactions222 and to prevent double counting.223

(p. 192) The Kyoto emissions trading system provided the impetus for the creation of emissions trading schemes at the regional level by the EU, at the national level by countries like Kazakhstan, New Zealand, South Korea, and Switzerland, and at the subnational level by individual states, provinces, and cities, including British Columbia, California, Ontario, Quebec, Saitama, and Tokyo.224 China is also set to launch its emissions trading scheme, expected to be the world’s largest, in 2017.225 The options for linking these carbon markets are also being actively explored. Linking carbon markets can increase cost-effectiveness, improve market liquidity, and reduce price volatility, although it can also undermine environmental effectiveness.226 The EU ETS, launched in 2005, now in its third phase, covers over 11,000 installations in thirty-one countries and airlines operating between these countries.227 In total, it covers around 45% of the EU’s GHG emissions.228 Although the EU initially resisted the inclusion of an emissions trading option in the Kyoto Protocol, today the international carbon market, valued at 48 billion Euro,229 is primarily driven by the EU ETS.230

D.  Outlook

There is considerable uncertainty about the future of the Kyoto mechanisms. The demand for ERUs and CERs has dried up in recent years.231 The price of credits has dropped dramatically,232 attributed by scholars to the oversupply of credits, quantitative limits on their use in the EU ETS, and reduced demand due in part to the post-2007 economic crisis.233 In addition, the 2020 targets have not been strengthened by parties, which would have increased demand for Kyoto credits. And, it is unclear whether and how the CDM and the JI will be used beyond 2020. (p. 193) All of these factors have had a chilling effect on the registration of new projects.234 Indeed, half of the projects that had issued CERs by 2012 ceased issuance beyond this point.235 The Paris Agreement and its accompanying decision are silent on the future of the JI and CDM, but the decision accompanying the Paris Agreement encourages parties to promote voluntary cancellation of Kyoto credits.236 The Paris Agreement establishes a new mechanism (christened by some as the sustainable development mechanism (SDM)), which merges the functionality of the CDM and JI by encompassing emissions reductions in both developed and developing countries.237 The Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement (CMA) is tasked with developing rules, modalities, and procedures for this mechanism,238 inter alia based on ‘[e]xperience gained with and lessons learned from existing mechanisms and approaches adopted under the Convention and its related legal instruments’.239 Although the Kyoto Protocol is not explicitly mentioned, due to sensitivities among non-Kyoto parties, the Kyoto Protocol is a ‘related legal instrument’, so lessons learned from the Kyoto mechanisms are clearly relevant. It is possible that the SDM will build on elements of JI and CDM but it is unclear, at this stage, how and in what ways this will occur.

VI.  Reporting, Review, and Compliance (Articles 5, 7, 8, and 18)

A.  Reporting and review (Articles 5, 7, and 8)

A strong measurement, reporting and verification (MRV) regime is an essential component of any compliance system.240 In the case of the Kyoto Protocol, a rigorous approach was seen as especially important in promoting and assessing compliance with emissions-related commitments, and in securing the operation and integrity of the Kyoto mechanisms.241 The Kyoto Protocol, therefore, provides for a robust MRV system, building on the national GHG inventories and national communications already required under the FCCC,242 but also supplementing these with additional requirements to fit the specific needs of the protocol.243 The US (p. 194) and the EU played a key role in crafting the reporting regime, and with Japan, the review process.244

Article 5 of the protocol requires Annex I parties to have in place a national system for the estimation of anthropogenic emissions by sources and removals by sinks of GHGs.245 Guidelines for such national systems, incorporating methodologies adopted by the IPCC,246 were included in the Marrakesh Accords.247 The national monitoring systems required by Article 5 are intended to facilitate the preparation by each Annex I party of an annual inventory of greenhouse gas emissions and removals, required under Article 7.248 These requirements enable the assessment of parties’ compliance with their emissions reduction commitments. Inventory and reporting commitments, then, provide a crucial interface between parties’ implementation efforts and the compliance assessment process. Article 7 of the protocol builds on the FCCC’s extensive reporting obligations.249 It regulates the collection and submission of supplementary information necessary to demonstrate compliance with the provisions of the protocol.250 Guidelines for the preparation of this information were also part of the Marrakesh Accords.251

Again emulating the approach of the FCCC,252 expert review teams (ERTs) are to undertake an initial assessment of the information submitted by each Annex I party pursuant to Article 7 of the protocol. According to Article 8, these reviews of individual countries are to provide ‘a thorough and comprehensive technical assessment of all aspects of the implementation by a Party of [the] Protocol’.253 On the basis of these reviews, the ERTs are to identify ‘any potential problems’, raising ‘questions of implementation’ for further consideration.254 The idea was to carve out a technical, depoliticized role for ERTs and to clearly separate them from potentially sensitive assessments of compliance with protocol commitments. Therefore, ERTs are comprised of technical experts rather than state representatives, chosen from a roster of experts maintained by the FCCC.255 However, ERTs have (p. 195) come to play a larger, and according to some observers more politicized,256 role in the Kyoto Protocol’s compliance system than originally envisaged. Not only do ERTs, through the abovementioned ‘questions of implementation’, provide a ‘trigger’ for the involvement of the protocol’s Compliance Committee, but they have also come to take on the work that was meant to be undertaken by the Compliance Committee’s ‘facilitative branch’, as discussed in Section VI.B.3 below.257

B.  Compliance procedures and mechanisms

1.  Context and goals

Article 18 of the Kyoto Protocol called for the development of ‘appropriate and effective procedures and mechanisms to determine and address cases of non-compliance’.258 Negotiators recognized early on that the compliance regime could not simply adopt existing models, such as the Montreal Protocol’s non-compliance procedure,259 but had to be tailored to the unique features of the protocol.260 AOSIS, the EU, Canada, Japan, Norway, and the US played a key role in advocating compliance procedures and mechanisms during the Kyoto negotiations.261

In order to understand the protocol’s compliance system, it is important to recall that central components are contained in several articles, not only in Article 18. An essential foundation for the Article 18 ‘procedures and mechanisms’ is provided by the protocol’s elaborate MRV system, consisting of the aforementioned inventory and reporting requirements under Articles 5 and 7, and the expert review process operating under Article 8.262 Indeed, until the final months of the AGBM negotiations, compliance was discussed in the context of Article 8, and there was no separate article in the negotiating text on compliance.263

In addition, the rules governing the Kyoto mechanisms, set out in the Marrakesh Accords,264 contain important elements of the protocol’s compliance strategy. Most notably, the mechanism eligibility rules make participation contingent upon (p. 196) compliance with the inventory and reporting commitments in Articles 5 and 7.265 These eligibility requirements seek to ensure the availability of reliable information on parties’ emissions reduction performance, and to help prevent uses of the mechanisms that would detract from rather than support the protocol’s emissions reduction goals.

The Kyoto Protocol’s compliance system266 remains the most ambitious and elaborate of the multilateral environmental agreements’ (MEA) compliance regimes in operation today. Notably, to account for the unique features of the Kyoto Protocol, including the strong differentiation between Annex I and non-Annex I party commitments and the reliance on the Kyoto mechanisms, the purposes of the ‘procedures and mechanisms’ are to ‘facilitate, promote and enforce compliance’ with the protocol.267 The explicit reference to enforcement of compliance distinguishes these procedures and mechanisms from the largely facilitative range of approaches of existing non-compliance procedures.268

2.  Triggers

The compliance process can be triggered by questions of implementation raised by the expert reviews or by a protocol party, either with respect to itself or with respect to another party.269 The expert review trigger is intended to ensure that all questions of implementation pertaining to emissions-related commitments come before the Compliance Committee, a feature that is designed to enhance transparency with respect to parties’ performance, as well as the predictability and credibility of the compliance procedure.270 Indeed, in the practice of the compliance regime, all but one submission, by South Africa on behalf of the G-77/China,271 has come to the Compliance Committee through questions of implementation raised by ERTs. However, according to some observers, the quasi-automatic nature of the ERT trigger has been diluted by a growing practice of ERTs to exercise a degree of discretion in determining whether and when to identify an issue as a question of implementation for mandatory review by the Compliance Committee.272

(p. 197) 3.  The Compliance Committee and its process

In view of its facilitative as well as enforcement purposes, the Kyoto regime includes distinctive institutional and procedural arrangements. The Compliance Committee established under the protocol has a ‘facilitative branch’ and an ‘enforcement branch’.273 The full committee has twenty members, with each branch comprising ten members.274 Elected by the meeting of the parties to the protocol, committee members are experts who serve in their personal capacities.275 Each branch must include one member from each of the five UN regional groups and one member from a small island developing state. Of the remaining four members, each branch must include two Annex I and two non-Annex I party members.276 When a question of implementation is received by the Compliance Committee, its bureau (ie the chairs and co-chairs of each branch) decides to which branch to allocate the issue.277

a)  The facilitative branch

As set out in the Marrakesh Accords, the task of the facilitative branch is to promote compliance with protocol commitments through advice and assistance, taking into account the FCCC’s CBDRRC principle.278 The facilitative branch is responsible for questions concerning the implementation of protocol commitments other than those related to Annex I parties’ emissions reduction commitments.279 Emissions reduction commitments and the related inventory and reporting commitments are within the purview of the facilitative branch only when referred to it by the enforcement branch, or prior to and during a given commitment period, when the facilitative branch can play an ‘early warning’ role.280 In keeping with the role of the facilitative branch, the compliance tools at its disposal include advice and facilitation of assistance to individual parties, facilitation of financial and technical assistance, and recommendations to the party concerned.281

In practice, the facilitative branch has been almost entirely dormant.282 Its inactivity is due in large part to the larger than anticipated facilitative role played by expert reviews.283 In effect, ERTs removed the need for additional facilitation by resolving issues in cooperation with the party during the review process.284 As a result, during the protocol’s first commitment period, not a single question of implementation was referred to the facilitative branch.285 Only one submission, by South Africa on behalf of the G-77/China, was made to the facilitative branch in 2006, pertaining to the alleged failure by several developed countries to submit (p. 198) reports on their progress in achieving their targets, as required by Article 3.2 of the protocol.286 This submission, however, did not proceed to the merits because the members of the facilitative branch could not reach a decision on whether a submission by the G-77/China met the requirement of a submission by a party.287

b)  The enforcement branch

The mandate of the enforcement branch is to resolve all questions relating to Annex I parties’ compliance with their emissions reduction commitments, the attendant inventory and reporting commitments, and the eligibility requirements for the Kyoto mechanisms.288 The enforcement branch both determines whether a party is in compliance with its commitments and applies ‘consequences’ in the event of non-compliance.289

The consequences that can be applied by the enforcement branch for non-compliance differ depending on the commitment that is at issue.290 In cases of non-compliance with inventory or reporting commitments, consequences consist in a declaration of non-compliance and in the requirement that the party prepare a ‘compliance action plan’.291 That plan must include an analysis of the causes of non-compliance, the measures that the party intends to take to remedy the non-compliance, and a timetable for their implementation. Progress in the implementation of the plan must be reported to the enforcement branch.292 Where the enforcement branch has determined that a party has not met one or more of the eligibility requirements for the Kyoto mechanisms, the consequence is suspension of the party from participation in the mechanisms.293

The process concerning parties’ emissions reduction targets includes a ‘true-up’ period after the completion of the expert review, during which parties can acquire emissions allowances or credits to bring themselves into compliance.294 When a party nonetheless exceeds its emissions target, it will be suspended from eligibility to transfer emissions units under Article 17, and will be required to develop a compliance action plan.295 In addition, the excess emissions will be subtracted, at a rate of 1.3 times the amount of excess emissions, from that party’s assigned amount for the next commitment period.296 This 1.3 rate for ‘subtraction of tons’ (as this consequence was generally called) was intended to discourage parties from simply postponing their emissions reductions to the subsequent commitment period, effectively ‘borrowing’ from a future allowance.297 It is worth noting that since all (p. 199) protocol parties complied with their first commitment period targets, there was no need to apply this consequence.298

An additional aspect of these consequences is worth highlighting: the Compliance Committee itself does not determine whether or not to impose consequences, or which consequences to impose. Its role is only to determine whether a party is in non-compliance and, if so, to apply consequences that were predetermined by the protocol parties in the procedures and mechanisms adopted pursuant to Article 18. This ‘pre-determined’ nature of the consequences was meant both to depoliticize the role of the Compliance Committee and to make the compliance regime more predictable for parties.299

Formally, the consequences applied by the enforcement branch are not legally binding, since the protocol provides that any procedure entailing binding consequences must be adopted by an amendment to the protocol,300 rather than by a CMP decision, as was the case. Nevertheless, the enforcement branch process has been described as the ‘most judicial’ compliance mechanism among MEAs.301 This assessment is no doubt accurate. In view of its mandate and the role of its decisions in the operation of the Kyoto Protocol (notably in relation to the Kyoto mechanisms), the timelines and steps for the enforcement branch process are tightly specified.302 Furthermore, the procedures and mechanisms set out a series of due process elements, such as rights to written submissions and hearings.303 Perhaps most unusually for an MEA-based compliance regime, the procedures and mechanisms allow for an appeal to the CMP of enforcement branch decisions relating to a party’s compliance with its emissions target. Since these decisions expose parties to the most significant consequences, the procedures and mechanisms permit an appeal if the affected party ‘believes it has been denied due process’.304 However, save for this limited right of appeal,305 the decisions of the enforcement branch are final.

During the protocol’s first commitment period, the enforcement branch successfully handled questions of implementation regarding the compliance of eight (p. 200) parties with inventory and reporting commitments, and eligibility for participation in the Kyoto mechanisms.306 Except for one case, involving Ukraine,307 the branch did not have occasion to apply the consequences that attach to non-compliance with parties’ emissions targets.

4.  Outlook

The most distinctive features of the Kyoto Protocol’s compliance mechanism are tightly connected to the protocol’s binding emissions targets, MRV regime, market mechanisms, and sharp differentiation between Annex I and non-Annex I parties. So the protocol’s compliance system is not likely to exert significant influence on the development of the Paris Agreement’s implementation and compliance mechanism, since the Paris Agreement relies upon ‘nationally determined’ contributions, which do not establish legally binding targets and are applicable to all, rather than only developed states. In particular, the enforcement-oriented, ‘quasi-judicial’, aspects of the Kyoto Protocol’s approach to compliance are unlikely to be replicated under the Paris Agreement.308 Nevertheless, the experience with the enforcement branch provides useful lessons, which could influence the design of other MEA compliance regimes. As far as the Paris Agreement is concerned, the facilitative aspects of Kyoto’s procedures and mechanisms constitute a more likely repository of ideas for the design of the agreement’s mechanism to ‘facilitate implementation’ and ‘promote compliance’.

VII.  Institutions (Articles 13, 14, and 15)

The Kyoto Protocol uses the existing institutional structure of the FCCC—the Conference of Parties to the FCCC serves as the Meeting of Parties to the Kyoto Protocol. Those states that are not party to the Kyoto Protocol can participate as observers.309 The subsidiary bodies to the FCCC serve the Kyoto Protocol,310 and both the FCCC and the Kyoto Protocol share a secretariat.311 The Kyoto Protocol also established the CDM Executive Board.312 In addition to operationalizing the CDM Executive Board, the Marrakesh Accords created a range of new institutions (p. 201) including the joint implementation Supervisory Committee and the Compliance Committee.

VIII.  Multilateral Consultative Process (Article 16)

The Kyoto Protocol requires parties to consider applying the convention’s multilateral consultative process (MCP) to the protocol.313 As discussed in Chapter 5, since parties were unable to agree upon the composition of the multilateral consultative committee, the MCP is not in operation. In the Kyoto Protocol, the creation of a facilitative branch within the Compliance Committee under Article 18 removed the need for the application of the MCP.

IX.  Final Clauses (Articles 19–28)

The Kyoto Protocol includes a standard set of final clauses. Parties must express their consent to be bound by means of ratification, acceptance, or approval.314 Entry into force involves a ‘double trigger’, requiring acceptance by at least fifty-five states that account for at least 55% of Annex I greenhouse gas emissions.315 The protocol entered into force on 16 February 2005.

The Kyoto Protocol incorporates by reference the FCCC’s provision on dispute settlement.316 Reservations are expressly disallowed,317 but parties may withdraw beginning three years after the agreement’s entry into force by giving one year’s notice.318 Canada withdrew in 2011.319 Amendments can be proposed by any party, are subject to a six-month notice rule, and in the absence of consensus can be adopted by a three-fourths majority.320 Annexes are an integral part of the protocol. Similarly, annexes and amendments to annexes can be proposed by any party, are subject to the six-month notice rule, and in the absence of consensus can be adopted by a three-fourths majority.321 As discussed in Chapter 3, the protocol specifies that Annex B amendments require the written consent of the party concerned (Article 21.7).

(p. 202) X.  The Second and Future Commitment Periods of the Kyoto Protocol

Climate pundits had begun proclaiming the death of the Kyoto Protocol even before the US rejection of it in 2001.322 Scholarly commentary too frequently referred to a ‘post-Kyoto’ climate regime, conflating the end of the first commitment period with the end of the Kyoto regime. Kyoto, however, was intended to establish a long-term architecture, with multiple commitment periods. Its Article 3.9 specified the process for establishing commitments for the second commitment period, calling for the initiation of negotiations no later than 2005, seven years before the end of the first commitment period. Developing countries, for which the Kyoto model has obvious attractions because they are exempt from emissions targets, were keen to extend the protocol for a second and future commitment periods. Kyoto Annex B parties, in contrast, were reluctant to do so, for some countries because of Kyoto’s prescriptive architecture, and for others because they did not want to be subject to emissions targets if the US, China, and other large emitters were not.323

At the protocol’s first CMP, parties launched an Ad Hoc Open-Ended Working Group to consider further commitments for developed countries beyond 2012 under the Kyoto Protocol (AWG-KP), in accordance with Article 3.9.324 The AWG-KP process took seven years to reach agreement. The process was hampered from the start by considerable political uncertainty. It was unclear, given the ongoing parallel negotiations under the FCCC, whether the outcome of the FCCC process would complement or supplant the Kyoto Protocol.325 If it were to complement the Kyoto Protocol, it was unclear how any commitments of the US under the FCCC process could be matched in legal character, ambition and accountability with the commitments of other developed countries under Kyoto’s second commitment period. At the same time, it was clear that an FCCC outcome that was applicable to all countries could not be structured in a prescriptive, Kyoto-like manner. While the AWG-KP negotiations continued, parties put forward actions and commitments in a parallel process under the 2009 Copenhagen Accord. These were later incorporated into the 2010 Cancun Agreements. Japan and Russia indicated that they would not take on second commitment period targets under the Kyoto Protocol, but undertook climate commitments under the Cancun Agreements.326 (p. 203) In an effort to create a ‘bridge’ between the Kyoto and FCCC tracks, the Cancun Agreements placed mitigation proposals from all developed countries in an information document327 that was deliberately ambiguous as to whether it related to the FCCC or to the Kyoto Protocol.328

Ending years of speculation and uncertainty, parties agreed in Durban in 2011 to extend the Kyoto Protocol for a second commitment period. The EU struck a deal with developing countries at Durban that they would accept Kyoto second commitment period targets if developing countries joined the consensus on launching negotiations toward a 2015 agreement ‘applicable to all’. The details of the Kyoto amendment, however, were not worked out until the following year in Doha. Parties disagreed on several issues including: the length of the commitment period—whether it should be five years (like the first commitment period) or eight years (to coincide with the scheduled launch of the 2015 agreement); the scale and ambition of the collective and individual targets; the extent to which parties not participating in Kyoto’s second commitment period could continue to use the Kyoto mechanisms; and the extent to which surplus assigned amount units could be banked for use in subsequent commitment periods. In the Doha Amendment, parties agreed to:

  • •  Expand the list of GHGs in Annex A to include nitrogen trifluoride.

  • •  Extend the second commitment period to 2020.

  • •  Accept a collective target of 18% below 1990 levels.

  • •  Accept individual targets consistent with the ones Annex B parties had agreed to under the Cancun Agreements, but translated into quantified emissions limitation and reduction objectives for the entire commitment period, 2013–20.

  • •  Revisit targets by 2014 in line with a reduction of 25 to 40% below 1990 levels by 2020.

  • (p. 204) •  Restrict the eligibility of non-Doha Amendment parties to participate in the Kyoto mechanisms.

  • •  Allow banking of excess AAUs, but restrict the extent to which and conditions under which these can be traded.329

  • •  Automatically adjust the Doha Amendment targets so as to disallow any growth in emissions as against the average of a party’s annual emissions from 2008 to 2010.330

  • •  Continue the 2% share of proceeds of the CDM and extend its application to the first international transfers of AAUs and the issuance of ERUs for JI projects.331

The Doha Amendment will enter into force when 144 parties have deposited their instruments of acceptance.332 To date, only seventy five have done so, including only a handful of Annex B parties.333 Among the developed countries, New Zealand has crafted a special position for itself. It has accepted the Doha Amendment but without a target under Annex B. In practice, this means that New Zealand will be held accountable only for the protocol’s reporting and review requirements, and not for the achievement of a target. Parties provided for provisional application of the Doha Amendment, pending entry into force. Parties that choose not to apply it provisionally are nonetheless required to ‘implement their commitments and other responsibilities in relation to the second commitment period, in a manner consistent with their national legislation or domestic processes’.334 This provision is significant, in that it allows for de facto application of the Doha Amendment, even if it never enters into force.

In 2014, a high-level ministerial round table took place, as required by the Doha Amendment, on revisiting the ambition of Annex B targets.335 The FCCC secretariat received four submissions—the EU and Iceland, Norway, Liechtenstein, and Australia—in time for the round table, and no commitments for enhanced ambition were made at the meeting or thereafter. The G-77/China proposed a contact group on the issue, but Australia, Switzerland, the EU, and Norway opposed this proposal, and the issue has been deferred to future sessions.

What is the future of the Kyoto Protocol? In the two decades it has been in existence, major developed countries—including the US, Canada, Russia, and Japan—have disassociated themselves from the Kyoto Protocol, and only a subset (p. 205) of Annex B parties—the EU, Australia, Iceland, Liechtenstein, Monaco, Norway, and Switzerland—have adopted targets for the second commitment period, covering only a fraction of global GHG emissions.336 Indeed, the second commitment period amendment was adopted only because many developing countries made it a pre-condition for securing their agreement to launch negotiations toward a 2015 Paris Agreement ‘applicable to all’. At that critical juncture in the negotiations, such an extension was an indispensable confidence-building gesture.

Neither the Doha Amendment nor the 2015 Paris Agreement offers any clarity on the survival (or termination) of the Kyoto Protocol beyond 2020. However, the near universal support for the Paris Agreement—its scope, coverage, and breadth, its hybrid architecture, and its distinctive approach to differentiation—is a strong signal that the political commitment underpinning the Kyoto Protocol has long since dissipated. The political appetite among developed countries for extending the Kyoto Protocol beyond 2020 does not exist. Indeed, the eight-year duration of the second commitment period was chosen so as to end when the Paris Agreement’s NDCs were expected to take effect, and thus to avoid a commitment gap.

The Kyoto Protocol does not contain a provision on its termination. In the absence of such a provision, its termination may take place in one of three ways: (1) ‘by consent of all the Parties after consultation with other contracting States’,337 (2) by ‘conclusion of a later treaty relating to the same subject-matter’,338 or (3) by desuetude or abrogation by virtue of non-application over a prolonged period of time.339

In relation to the first option, it is unlikely that developing and industrialized countries will agree on terminating Kyoto. Instead, some (or many) Annex I parties may choose to withdraw from it.340 Even if these withdrawals lead to a situation in which the number of parties representing the necessary proportion of Annex I GHG emissions falls below the requirements for entry into force,341 Kyoto will not terminate as a result.342 But it will have little effect, since it will not be binding on those countries that have withdrawn, and there may be little of Kyoto left to operationalize.

In relation to the second option for treaty termination, parties must have ‘intended that the matter should be governed’ by the later treaty, or the provisions of the later treaty must be so incompatible with the earlier one that they are not (p. 206) capable of being applied at the same time.343 If neither of these conditions is satisfied, either because of lack of appropriate ‘intention’ (which is notoriously difficult to determine) or because some aspects of the later treaty can be applied in conjunction with the protocol, then Kyoto will not be terminated or suspended, and Article 30 of the VCLT will govern the relations between the two treaties. If the parties to Kyoto are also parties to the later one, the earlier treaty applies only to the extent that it is compatible with the later treaty. If the parties are not entirely the same, as is likely to be the case here, the situation is rather more complex.344

In relation to the third option, desuetude or obsolescence, a treaty is terminated through disuse over a long period of time. This route to termination, however, is premised on the implied consent of parties as evidenced by their conduct.345 Kyoto is unlikely to merely fall into disuse through neglect, since there are institutional and budgetary implications to Kyoto’s continued existence. As long as states remain parties to Kyoto, they will have budgetary responsibilities.346 Parties also have reporting obligations under Kyoto that will not end merely because the second commitment period does. In the circumstances, if no agreement on its termination is reached, states are likely to withdraw from Kyoto after 2020.

XI.  Conclusion

The Kyoto Protocol has generated considerable controversy in the two decades it has been in existence. It took only two years to be negotiated, but another eight years to enter into force. It took a further seven years for its second commitment period targets to be negotiated, and the Doha Amendment is yet to (and may never) enter into force.

The Paris Agreement, set to take over from the Kyoto Protocol, represents a significant departure from the protocol: it has a hybrid architecture; it does not impose an obligation to achieve parties’ NDCs; and its principal mitigation commitments are applicable to all, albeit with some differences in the normative expectations placed on different parties or groups of parties. Reflecting this departure, the Paris Agreement does not specifically import elements from the Kyoto Protocol. It recognizes that the Kyoto Protocol Adaptation Fund ‘may serve’ the Agreement,347 but this is the only Kyoto Protocol body with an identified role in the network of institutional arrangements the Paris Agreement utilizes.

(p. 207) Nevertheless, the Kyoto Protocol is likely to leave an enduring imprint on the climate regime. The Kyoto Protocol has catalyzed a vibrant carbon market. Although in the negotiations of the Kyoto Protocol, the Umbrella Group alone was whole-heartedly in favor of market instruments to address climate change, there has been a rapid scale-up of interest and engagement in market-based approaches in the decades that followed. More than half the NDCs submitted in the context of the Paris Agreement contain references to carbon markets.348 Paris Agreement Article 6 recognizes that parties may engage in cooperative approaches, which may facilitate linking of national carbon markets.349 Many of these markets developed in response to the price that the Kyoto mechanisms placed on carbon. The new market mechanism established by the Paris Agreement may draw on the experience of the Kyoto mechanisms, as discussed above, in particular in relation to additionality, sustainable development, project eligibility, and methodologies.

The Kyoto Protocol also generated valuable experience with the building blocks for well-functioning carbon markets, including national inventories, a common accounting system, common time frames and uniform reporting formats. The transparency framework under the Paris Agreement is to build on and enhance the transparency arrangements under the convention,350 rather than the Kyoto Protocol. However, it is likely that Kyoto Protocol parties will draw on their experience with Kyoto Articles 5, 7, and 8 in developing modalities, procedures and guidelines for the transparency of action and support under the Paris Agreement. This is so particularly for the EU, since the procedures in Articles 5, 7, and 8 of the Kyoto Protocol are entrenched in EU legislation,351 and have proven to be a reliable and workable system. Those currently using the system will likely continue to use it in some form, and will seek to insert elements of it into the Paris Agreement’s transparency framework.

Thus, even if the Kyoto Protocol is eventually terminated or withers away, it has contributed significantly to the international policy response to the climate change problem. It created a complex global system essentially from scratch, triggered valuable experiments, generated useful experience, and built capacity to account, report, and manage GHG emissions. Arguably the Kyoto Protocol sought to do too much too quickly, and in advance of the requisite political will to maintain the regime it established. Yet its novelty, complexity, and ambition is a testament to the perseverance and creativity of those who negotiated it, and it will leave an enduring legacy in the climate regime.

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1  Decisions 2-24/CP.7, ‘The Marrakesh Accords’ (21 January 2002) FCCC/CP/2001/13/Add.1-3. The Marrakesh Accords were ratified by the first meeting of the Kyoto Protocol parties in 2005. See Decisions 2-30/CMP.1 (30 March 2006) FCCC/KP/CMP/2005/8/Add.1-4.

2  Berlin Mandate, preambular recital 3.

3  Joanna Depledge, ‘Tracing the Origins of the Kyoto Protocol: An Article-by-Article Textual History’ (25 November 2000) FCCC/TP/2000/2, 11–12.

4  FCCC, Art 15.

5  Ibid, Art 17. On the requirements for amendments in the climate regime, and the consensus issue, see Chapter 3, Sections II.D.1 and 2, and II.B.2.

7  Berlin Mandate, para 2(a).

8  See Chapter 5, Section IV.B.

10  Report of the Conference of the Parties on its second session, held in Geneva from 8 to 19 July 1996, Addendum (29 October 1996) FCCC/CP/1996/15/Add.1, Annex: The Geneva Ministerial Declaration.

11  Ad Hoc Group on the Berlin Mandate, Completion of a protocol or another legal instrument, Consolidated negotiating text by the Chairman (13 October 1997) FCCC/AGBM/1997/7. See also Depledge, Tracing the Origins of Kyoto Protocol (n 3) 31.

12  See Chapter 7, Section II.D.

14  Navroz K. Dubash and Lavanya Rajamani, ‘Beyond Copenhagen: Next Steps’, Climate Policy 10/6 (2010): 593; See also Daniel Bodansky, ‘A Tale of Two Architectures: The Once and Future U.N. Climate Change Regime’, Arizona State Law Journal, 43/6 (2011): 697.

15  Berlin Mandate, preambular recital 4.

16  Kyoto Protocol, Art 10(b).

17  Decision 10/CP.7, ‘Funding under the Kyoto Protocol’ (21 January 2002) FCCC/CP/2001/13/Add.1, 52.

18  Depledge, Tracing the Origins of Kyoto Protocol (n 3) 33–35. See generally Clare Breidenichet al., ‘The Kyoto Protocol to the United Nations Framework Convention on Climate Change’, American Journal of International Law, 92/2 (1998): 315, 321–2.

19  Kyoto Protocol, Art 3.8.

20  Doha Amendment, Art 1, Section B.

22  The GWPs listed in Annex A are those accepted by the Intergovernmental Panel on Climate Change (IPCC), as provided for in Kyoto Protocol, Article 5.3.

23  See Farhana Yamin and Joanna Depledge, The International Climate Change Regime: A Guide to Rules, Institutions and Procedures (Cambridge University Press, 2004) 78 (noting that GWPs are calculated as the ratio of the radiative forcing that would result from the emission of 1 kg of a GHG to that from the emission of 1 kg of CO2 over a specified period of time).

24  Ibid.

25  Ibid.

26  Kyoto Protocol, Arts 2.1(a)(ii), 2.2, 5.1, 5.2, 7.1, and 10(a).

27  Ibid, Art 2.2. See Chapter 8, Section IV.A.1 and 2.

28  See Decision 24/CP.19, ‘Revision of the UNFCCC reporting guidelines on annual inventories for Parties included in Annex I to the Convention’ (31 January 2014) FCCC/CP/2013/10/Add.3, 2; Decision 3/CP.5, ‘Guidelines for the preparation of national communications by Parties included in Annex I to the Convention, Part I: UNFCCC reporting guidelines on annual inventories’ (2 February 2000) FCCC/CP/1999/6/Add.1, 6. For a discussion of the new data collection requirements under the International Maritime Organization, which dovetail with the reporting obligations in the UN climate regime, see Chapter 8, Section IV.A.1.

29  ‘A sink is a process, activity or mechanism that removes GHGs from the atmosphere; a reservoir is part of the climate system that allows a GHG to be stored.’ FCCC, United Nations Framework Convention on Climate Change (Bonn: FCCC Secretariat, 2006) 24.

30  Decision 2/CP.3, ‘Methodological issues related to the Kyoto Protocol’ (25 March 1998) FCCC/CP/1997/7/Add.1, 31, para 1.

31  See below Section IV.B.2.f.

32  Berlin Mandate, para 2(a) and (b).

33  See Text of a Letter from the President to Senators Hagel, Helms, Craig, and Roberts (The White House, Office of the Press Secretary, 13 March 2001) <https://georgewbush-whitehouse.archives.gov/news/releases/2001/03/20010314.html> accessed 20 January 2017.

34  Remarks by Christopher C. Joyner, ‘Common but Differentiated Responsibilities’, American Society of International Law Proceedings, 96 (2002): 358. See also Christopher D. Stone, ‘Common but Differentiated Responsibilities in International Law’, American Journal of International Law, 98/2 (2004): 276, 281; and Michael Weisslitz, ‘Rethinking the Equitable Principle of Common but Differentiated Responsibility: Differential versus Absolute Norms of Compliance and Contribution in the Global Climate Change Context’, Colorado Journal of International Environmental Law and Policy, 13/2 (2002): 473, 483 (referring to the Kyoto Protocol as ‘CBDR in its most rigid application’).

35  The Kyoto Protocol employs the FCCC lists and categories of parties. See Kyoto Protocol, Art 1.7. Annex I to the FCCC and Annex B to the Kyoto Protocol were not, however, identical, as some Annex I Parties (Turkey and Belarus) had not ratified the FCCC when the Kyoto Protocol was being negotiated.

36  Kyoto Protocol, Art 3.9 which provides that ‘commitments for subsequent periods for Parties included in Annex I shall be established in amendments to Annex B to this Protocol’.

37  Ibid, Art 5.

38  Ibid, Art 7.

39  Ibid, Art 8.

40  See Decision 27/CMP.1, ‘Procedures and mechanisms relating to compliance under the Kyoto Protocol’ (30 March 2006) FCCC/KP/CMP/2005/8/Add.3, 92.

41  This is evident from the provisions relating to the mandate of the enforcement branch, which cover Annex I commitments alone (ie compliance with Kyoto Protocol Arts 3.1, 5.1, 5.2, 7.1, and 7.4, and eligibility requirements under Kyoto Protocol, Arts 6, 12, and 17). See ibid, Annex, Section V, para 4. The mandate of the facilitative branch extends generally to ‘promoting compliance by Parties with their commitments under the Protocol’. Ibid, Annex, Section IV, para 4.

42  Ibid, Annex, Section IV, para 4.

43  Ibid, Annex, Section XIV, para (d).

44  See for further details on the negotiating history of the Compliance Committee, Lavanya Rajamani, Differential Treatment in International Environmental Law (Oxford University Press, 2006) 203–5.

45  Kyoto Protocol, Art 11.

46  Decision 10/CP.7 (n 17). The share of proceeds was extended to emissions trading and joint implementation by the Doha Amendment. See below Section X.

47  Kyoto Protocol, Art 3.5.

49  The Chair’s text differed considerably from the text put forward by the parties. See ibid, 102–5, 103.

50  Completion of a protocol or another legal instrument (n 11) Art 10.

51  International Institute for Sustainable Development (IISD), ‘Summary of the Third Conference of Parties to the UNFCCC, 1–11 December, 1997’, Earth Negotiations Bulletin, 12/76 (1997): 1, 13.

53  See IISD, Summary of the Third Conference of the Parties to the FCCC (n 51). The proposal was supported by Australia, Canada, Japan, Poland, Slovenia, Switzerland and the US.

54  Ibid, 5.

55  Ibid,13. See Depledge, Tracing the Origins of Kyoto Protocol (n 3) 83. The proposal provoked forty-six interventions, mostly from non-Annex I countries recording their strong opposition to it.

56  Ibid, 14.

58  See Andreas Missbach, ‘Regulation Theory and Climate Change Policy’, in Paul G. Harris (ed), Climate Change and American Foreign Policy (New York: Palgrave Macmillan US, 2000) 140–2.

59  A non-Annex I party can choose voluntarily to become an Annex I party for the purposes of the Kyoto Protocol by the simple act of depositing a notification under FCCC, Article 4.2(g); however, if it wishes to take on an emissions limitation target, it needs to propose a formal amendment to Annex B, which requires acceptance by three-fourths of all Kyoto parties to enter into force, pursuant to Kyoto Protocol, Article 20.4. Belarus announced its intention to join Annex B in 2003, and after lengthy negotiations with other parties agreed to an emissions reduction target of 8% from 1990 levels, considerably stronger than its originally proposed stabilization target. Joanna Depledge, ‘The Road Less Travelled: Difficulties in Moving between Annexes in the Climate Change Regime’, Climate Policy, 9/3 (2009): 273, 282. The decision to amend Annex B to include Belarus was adopted in 2006, but has yet to enter into force. See Decision 10/CMP.2, ‘Proposal from Belarus to amend Annex B to the Kyoto Protocol’ (2 March 2007) FCCC/KP/CMP/2006/10/Add.1, 36.

60  Kyoto Protocol, Art 1.

61  Kyoto Protocol, Art 10, chapeau.

63  Ibid, 73.

64  Ibid.

65  Ibid, 19.

66  Ibid, 20.

69  Completion of a protocol or another legal instrument (n 11) Annex C.

71  Ibid, 46. See also Breidenich et al., Kyoto Protocol to the UNFCCC (n 18); and Hermann E. Ott, ‘The Kyoto Protocol: Unfinished Business’, Environment, 40/6 (1998): 16.

72  Depledge, Tracing the Origins of Kyoto Protocol (n 3) 46. Sebastian Oberthür and Hermann E. Ott, The Kyoto Protocol: International Climate Policy for the 21st Century (Springer-Verlag Berlin Heidelberg, 1999) 120 (noting that the final numbers were negotiated between the US, the EU, and Japan).

73  See FCCC, Conference of the Parties on its third session, held in Kyoto from 1 to 10 December 1997 (9 December 1997) FCCC/CP/1997/CRP.4, Agenda Item 5; and Depledge, Tracing the Origins of Kyoto Protocol (n 3) 45.

74  Oberthür and Ott, Kyoto Protocol (n 72) 118. See also Depledge, ibid.

75  The targets in Annex B of the Protocol are defined in terms of an assigned amount of emissions for each country listed in Annex B. Some argue that the targets that allow an increase in emissions (those of Australia, Iceland, and Norway) are the result of ‘intransigence, chutzpah and tough negotiating’: Ott, Kyoto Protocol—Unfinished Business (n 71) 20. Others question the ‘leadership’ demonstrated in such targets. See Duncan French, ‘1997 Kyoto Protocol to the 1992 UN Framework Convention on Climate Change’, Journal of Environmental Law, 10/2 (1998): 227, 233.

76  For example, if the US had joined the Protocol it would have needed to reduce its emissions by about a third from business-as-usual scenarios for the 2008–12 period.

77  David G. Victor, Nebojša Nakićenović, and Nadejda Victor, ‘The Kyoto Protocol Emission Allocations: Windfall Surpluses for Russia and Ukraine’, Climatic Change, 49/3 (2001): 263. See below Section IV.B.2.h. and V.A.

78  Igor Shishlov, Romain Morel, and Valentin Bellassen, ‘Compliance of the Parties to the Kyoto Protocol in the First Commitment Period’, Climate Policy, 16/6 (2016): 768.

79  Ibid.

80  See Chapter 4, Section V.C.

81  Doha Amendment, Art 1, Section A, fn 7.

82  Ibid, fn 1.

84  See French, 1997 Kyoto Protocol (n 75) 232.

86  Doha Amendment, Art 1, Section C.

87  Kyoto Protocol, Art 3.1.

88  Ibid, Art 3.5.

89  Decision 9/CP.2, ‘Communications from Parties included in Annex I to the Convention: guidelines, schedule and process for consideration’ (29 October 1996) FCCC/CP/1996/15/Add.1, 15.

90  Decision 11/CP.4, ‘National communications from Parties included in Annex I to the Convention’ (25 January 1999) FCCC/CP/1998/16/Add.1, 47.

91  Kyoto Protocol, Art 3.8.

92  Ibid, Arts 3.10, 3.11, and 312.

93  At the end of each commitment period, parties are given a brief period of time to ‘true-up’ their accounts through emissions trading, before compliance is determined.

94  Decision 13/CMP.1, ‘Modalities for the accounting of assigned amounts under Article 7, paragraph 4, of the Kyoto Protocol’ (30 March 2006) FCCC/KP/CMP/2005/8/Add.2, 23.

95  Afforestation refers to the ‘planting of new forests on lands which, historically, have not contained forests’. See Intergovernmental Panel on Climate Change (IPCC), Special Report on Land Use, Land-Use Change and Forestry (LULUCF) (Cambridge University Press, 2000) ch

96  Reforestation refers to ‘the establishment of trees on land that has been cleared of forest within the relatively recent past’. See ibid, ch

97  Deforestation refers to the ‘permanent removal of forest cover and withdrawal of land from forest use, whether deliberately or circumstantially’. See ibid, ch

98  Kyoto Protocol, Arts 3.3 and 3.4.

99  The definition of ‘forest’ has generated considerable debate in the climate change negotiations. See IPCC, Special Report on LULUCF (n 95) chs, 2.2.4.

100  Oberthür and Ott, Kyoto Protocol (n 72) 124–6; Michael Grubbet al., The Kyoto Protocol: A Guide and Assessment (London: Earthscan, 1999) 76–80.

102  Decision 16/CMP.1, ‘Land use, land-use change and forestry’ (30 March 2006) FCCC/KP/CMP/2005/8/Add.3, 3, Annex: Definitions, modalities, rules and guidelines relating to land-use, land-use change and forestry, paras 6–11.

103  For a detailed analysis of decisions relating to LULUCF in the climate regime see Ian Fry, ‘More Twists, Turns and Stumbles in the Jungle: A Further Exploration of Land Use, Land-Use Change and Forestry Decisions within the Kyoto Protocol’, Review of European Community and International Environmental Law, 16/3 (2007): 341.

105  Depledge, ibid, 38. See Kyoto Protocol, Art 3.2.

106  See nn 286–287 below and accompanying text.

107  Decision 22/CP.7, ‘Guidelines for the preparation of the information required under Article 7 of the Kyoto Protocol’ (21 January 2002) FCCC/CP/2001/13/Add.3, 14; and Decision 25/CP.8, ‘Demonstrable progress under Article 3, paragraph 2, of the Kyoto Protocol’ (28 March 2003) FCCC/CP/2002/7/Add.3, 54.

108  Decision 25/CP.8, ibid; and Subsidiary Body for Implementation, Synthesis of reports demonstrating progress in accordance with Article 3, paragraph 2, of the Kyoto Protocol, Note by the secretariat (9 May 2006) FCCC/SBI/2006/INF.2 (only half of the Annex B parties had submitted these reports by the deadline).

109  Decision 7/CMP.3, ‘Demonstration of progress in achieving commitments under the Kyoto Protocol by Parties included in Annex I to the Convention’ (14 March 2008) FCCC/KP/CMP/2007/9/Add.1, 23.

110  Kyoto Protocol, Art 3.13.

112  Oberthür and Ott, Kyoto Protocol (n 72) 117 (describing the US proposal that parties should have the flexibility to transfer emissions allowances from the next budget period to the current, if required).

113  ‘Information on the quantified emission reduction and limitation objectives (QELROs) of Ukraine for the second commitment period of the Kyoto Protocol’ <https://unfccc.int/files/meetings/ad_hoc_working_groups/kp/application/pdf/awgkp_ukraine_qerlo_06122012.pdf> accessed 20 January 2016.

114  Decision 1/CMP.8 ‘Amendment to the Kyoto Protocol pursuant to its Art 3, paragraph 9 (the Doha Amendment)’ (28 February 2013). FCCC/KP/CMP/2012/13/Add.1, 2, paras 23–6.

115  Ibid, Annex II.

116  Council Decision 2002/358/EC of 25 April 2002 concerning the approval, on behalf of the European Community, of the Kyoto Protocol to the United Nations Framework Convention on Climate Change and the joint fulfilment of commitments thereunder [2002] OJ L130/1, Annex II.

117  Doha Amendment, Art 1, Section A, footnote 4.

118  Compare FCCC, Art 11 and Kyoto Protocol, Art 10(a).

119  Kyoto Protocol, Art 11.2.

121  Kyoto Protocol, Arts 6.1(d) and 17.

122  Article 6 of the Kyoto Protocol states that the parties’ acquisition of ERUs shall be ‘supplemental’ to domestic actions for the purposes of meeting emissions reduction commitments. Article 12 of the protocol specifies that Annex I parties may use certified emission reductions (CERs) accruing from CDM activities to contribute to compliance only with ‘part of’ their emission reduction commitments. Article 17 permits Annex B parties to participate in emissions trading to meet their commitments under the protocol, provided such trading is ‘supplemental’ to domestic actions.

123  Lavanya Rajamani, ‘Re-negotiating Kyoto: A Review of the Sixth Conference of Parties to the Framework Convention on Climate Change’, Colorado Journal of International Environmental Law and Policy, 12/1 (2001): 201, 216–17.

124  Decision 15/CP.7, ‘Principles, nature and scope of the mechanisms pursuant to Articles 6, 12 and 17 of the Kyoto Protocol’ (21 January 2002) FCCC/CP/2001/13/Add.2, 2, preambular recital 7.

125  See Decision 27/CMP.1 (n 40) Annex, Section IV, para 5(b).

126  Kyoto Protocol, Arts 3, 6, 12, and 17.

127  It is worth noting, however, that there are distinctions between these units in relation to banking. CERs and ERUs can be banked up to 2.5% of a party’s AAU, whereas RMUs cannot be banked. Decision 13/CMP.1 (n 94) Annex, paras 15–16.

128  Ibid, Annex, paras 1–4. See generally on fungibility, Farhana Yamin (ed), Climate Change and Carbon Markets: A Handbook of Emission Reduction Mechanisms (London: Earthscan, 2005) 17–19.

129  The term ‘joint implementation’ does not occur in the text of Article 6, but this mechanism has from the start been called ‘joint implementation’, including in official FCCC documents.

130  FCCC, Arts 3.3 and 4.2 (a) and (b), and Decision 5/CP.1, ‘Activities implemented jointly under the pilot phase’ (6 June 1995) FCCC/1995/7/Add.1, 18. See Chapter 5, Section IV.B.3.

132  Kyoto Protocol, Art 6.

133  Ibid, Art 6.2.

134  Decision 9/CMP.1, ‘Guidelines for the implementation of Article 6 of the Kyoto Protocol’ (30 March 2006) FCCC/KP/CMP/2005/8/Add.2, 2.

135  Ibid, para 3.

136  In accordance with Decision 13/CMP.1 (n 94).

137  Decision 9/CMP.1 (n 134) Annex, para 21.

138  Ibid, para 22.

139  Ibid, para 23.

140  Kyoto Protocol, Arts 3.10 and 3.11.

141  Anja Kollmuss, Lambert Schneider, and Vladyslav Zhezherin, ‘Has Joint Implementation reduced GHG emissions? Lessons learned for the design of carbon market mechanisms’ (Stockholm Environment Institute Working Paper No. 2015-07, 2015) <https://www.sei-international.org/mediamanager/documents/Publications/Climate/SEI-WP-2015-07-JI-lessons-for-carbon-mechs.pdf> accessed 20 January 2017.

142  FCCC, Joint Implementation, Concept note: Input from the Joint Implementation Supervisory Committee to CMP 12, Version 01.0 (3 March 2016) JI-JISC38-AA-A05.

144  FCCC, ‘Emissions Reductions Units (ERUs) Issued’ <http://ji.unfccc.int/statistics/2015/ERU_Issuance_2015_10_15_1200.pdf> accessed 20 January 2017.

145  Calculation based on FCCC data, ibid.

146  Climate Action Network, ‘Submission on Joint Implementation’ (15 February 2013) <http://unfccc.int/resource/docs/2013/smsn/ngo/298.pdf> accessed 20 January 2017.

148  Decision 6/CMP.8, ‘Guidance on the implementation of Article 6 of the Kyoto Protocol’ (28 February 2013) FCCC/KP/CMP/2012/13/Add.2, 14, paras 14–16.

149  Ibid, para 15. The proposed modalities and procedures for Joint Implementation are currently under consideration by the SBI. SBI, Review of the Joint Implementation Guidelines, Draft Conclusions Proposed by the Chair (3 December 2015) FCCC/SBI/2015/L.30.

150  See Section V.D. below.

152  See Ken Johnson, ‘Brazil and the Politics of the Climate Change Negotiations’, The Journal of Environment and Development, 10/2 (2001): 178.

153  See Jacob Werksman, ‘The Clean Development Mechanism: Unwrapping the Kyoto Surprise’, Review of European, Comparative and International Environmental Law, 7/2 (1998): 147.

154  Kyoto Protocol, Art 12.

155  Ibid, Art 12.5(c).

156  Ibid, Art 12.4.

157  Ibid, Art 12.7.

158  Decision 3/CMP.1, ‘Modalities and procedures for a clean development mechanism as defined in Article 12 of the Kyoto Protocol’ (30 March 2006) FCCC/KP/CMP/2005/8/Add.1, 6.

159  For a non-Annex I country, it must be a Party to the Kyoto Protocol, and for an Annex I country its assigned amount must have been duly calculated and recorded, and it must have fulfilled its commitments under Articles 5 and 7. Decision 3/CMP.1, ibid, Annex, paras 30 and 31.

160  Ibid, Annex, paras 53–63.

161  Decision 17/CP.7, ‘Modalities and procedures for a clean development mechanism, as defined in Article 12 of the Kyoto Protocol’ (21 January 2002) FCCC/CP/2001/13/Add.2, 20. Kyoto Article 12.10 permits CERs obtained from 2000 up to 2008 to be used to achieve compliance in the first commitment period.

162  FCCC, ‘Project Activities’ <http://cdm.unfccc.int/Statistics/Public/CDMinsights/index.html> accessed 20 January 2017.

163  Kyoto Protocol, Art 12.5(c).

164  Decision 3/CMP.1 (n 158) Annex, para 43; see generally Axel Michaelowa, ‘Interpreting the Additionality of CDM Projects: Changes in Additionality Definitions and Regulatory Practices over Time’, in David Freestone and Charlotte Streck (eds), Legal Aspects of Carbon Trading: Kyoto, Copenhagen and Beyond (Oxford University Press, 2009) 248.

165  Michael Gillenwater, ‘What is Additionality?’ (Greenhouse Gas Management Institute, January 2012) <http://ghginstitute.org/wp-content/uploads/2015/04/AdditionalityPaper_Part-1ver3FINAL.pdf> accessed 20 January 2017; Michael W. Wara and David G. Victor, ‘A Realistic Policy on International Carbon Offsets’ (April 2008) Stanford University, Program on Energy and Sustainable Development, Working Paper #74 <http://pesd.fsi.stanford.edu/sites/default/files/WP74_final_final.pdf> accessed 20 January 2017; and World Bank, 10 Years of Experience in Carbon Finance: Insights from working with the Kyoto mechanisms (Washington, D.C.: World Bank, 2009).

166  See FCCC, Clean Development Mechanism, ‘Methodological tool: Combined tool to identify the baseline scenario and demonstrate additionality, Version 06.0’ (24 July 2015) <https://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-02-v6.0.pdf> accessed 20 January 2017; and ‘Clean Development Mechanism, Methodological tool: tool for the demonstration and assessment of additionality, Version 07.0.0’ (23 November 2012) <https://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-01-v7.0.0.pdf> accessed 20 January 2017.

167  See eg Lambert Schneider, ‘Assessing the Additionality of CDM Projects: Practical Experiences and Lessons Learned’, Climate Policy, 9/3 (2009): 242; and Axel Michaelowa, ‘Strengths and Weaknesses of the CDM in Comparison with New and Emerging Market Mechanisms’ (Paper No. 2 for the CDM Policy Dialogue, June 2012) <http://www.cdmpolicydialogue.org/research/1030_strengths.pdf> accessed 20 January 2017.

169  See n 167 above.

170  See eg Christiana Figueres, ‘Sectoral CDM: Opening the CDM to the Yet Unrealized Goal of Sustainable Development’, McGill International Journal of Sustainable Development Law and Policy, 2/1 (2006): 5.

171  Kyoto Protocol, Art 12.2.

172  Decision 17/CP.7 (n 161) preambular recital 4.

173  Ibid, Annex, para 40(a).

174  Johannes Alexeewet al., ‘An Analysis of the Relationship between the Additionality of CDM projects and their Contribution to Sustainable Development’, International Environmental Agreements, 10/3 (2010): 233. For a review of earlier literature, see Karen Holm Olsen, ‘The Clean Development Mechanism’s Contribution to Sustainable Development - A Review of the Literature’, Climate Change, 84/1 (2007): 59.

175  Anne Olhoffet al., CDM Sustainable Development Impacts (Roskilde: UNEP Risoe Centre, 2004) 49–51.

176  Brazil identifies nuclear energy, large hydro, unsustainable biomass energy, among others, as ineligible under the CDM. Brazil, Ministry of Environment, Eligibility Criteria and Sustainability Indicators to Assess Projects that Contribute to the Mitigation of Climate Change and to Promoting Sustainable Development (2002), 42.

177  China identifies renewable energy, methane recovery, and energy efficiency as priority areas, and encourages transfer of environmentally sound technology to China. See Department of Climate Change, National Development and Reform Commission, Clean Development Mechanism, ‘Measures for Operation and Management of Clean Development Mechanism Projects in China’ (21 November 2005) <http://cdm-en.ccchina.gov.cn/Detail.aspx?newsId=5628&TId=37> accessed 20 January 2017, Arts 4, 6, and 10.

178  National CDM Authority, Ministry of Environment and Forests (Climate Change Division), Order (16 April 2004) <http://ncdmaindia.gov.in/ViewPDF.aspx?pub=notification.pdf> accessed 20 January 2017.

179  Christina Voigt, ‘Climate Law Reporter: Is the Clean Development Mechanism Sustainable? Some Critical Aspects’, Sustainable Development Law and Policy, 8/2 (2008): 15, 18; and Bharathi Pillai, ‘Moving Forward to 2012: An Evaluation of the Clean Development Mechanism’, New York University Environmental Law Journal, 18/2 (2010): 357.

180  See ‘Gold Standard’ <http://www.goldstandard.org/> accessed 20 January 2017.

181  Ibid. See for a contrasting view, Sam Headon, ‘Whose Sustainable Development? Sustainable Development under the Kyoto Protocol, the “Coldplay Effect” and the CDM Gold Standard’, Colorado Journal of International Environmental Law and Policy, 20/2 (2009): 127, 128 (arguing that proposals for furthering sustainable development should not focus on mandatory universal standards but on building capacity in developing countries to have and maintain rigorous standards).

182  The issue was raised and discussed at the Thirteenth Session of the Subsidiary Bodies, held in Lyon, from 11 to 15 September 2000.

183  See Preparations for the First Session of the Conference of the Parties Serving as the Meeting of the Parties to the Kyoto Protocol (Decision 8/CP.4), Work Programme on Mechanisms (Decision 7/CP.4 and 14/CP.5), Article 12 of the Kyoto Protocol, Note by the President (24 November 2000) FCCC/CP/2000/CRP.2, para 8.

185  Emily Boyd, Esteve Corbera, and Manuel Estrada, ‘UNFCCC Negotiations (Pre-Kyoto to COP-9): What the Process Says about the Politics of CDM-Sinks’, International Environmental Agreements: Politics, Law and Economics, 8/2 (2008): 95, 101.

186  See generally IPCC, IPCC Special Report on Land Use, Land-Use Change and Forestry, Summary for Policymakers (Cambridge University Press, 2000) 10, para 40.

187  Decision 17/CP.7 (n 161) para 7(a). To address the issue of avoided deforestation, Papua New Guinea and Costa Rica, on behalf of a Coalition for Rainforest Nations, launched the RED initiative (standing for Reductions in Emissions from Deforestation) at COP11 in 2006. The following year, RED become REDD+, with the addition of forest degradation within its ambit, and it featured in the Bali Action Plan as one of five ‘building blocks’. See generally Christina Voight (ed), Research Handbook on REDD+ and International Law (Cheltenham, UK: Edward Elgar, 2016).

188  FCCC, ‘CDM Methodologies’ <http://cdm.unfccc.int/methodologies/index.html> accessed 20 January 2017.

189  Decision 16/CMP.1 (n 102) Annex, para 14.

190  Decision 5/CMP.1, ‘Modalities and procedures for afforestation and reforestation project activities under the clean development mechanism in the first commitment period of the Kyoto Protocol’ (30 March 2006) FCCC/KP/CMP/2005/8/Add.1, 61, Annex, para 1.

191  Decision 17/CP.7 (n 161) preambular recital 5. A similar restriction also applies to JI, Decision 16/CP.7, ‘Guidelines for the implementation of Article 6 of the Kyoto Protocol’ (21 January 2002) FCCC/CP/2001/13/Add.2, 5, preambular recital 4.

192  The EU bans the use of credits from nuclear energy projects, sinks projects, and projects involving the destruction of industrial gases (HFC-23 and N2O). It accepts credits from large hydro projects only if certain conditions are fulfilled. European Commission, Climate Action, ‘Use of International Credits’ <http://ec.europa.eu/clima/policies/ets/credits_en> accessed 20 January 2017.

193  See eg ‘Directive for the Austrian JI/CDM Programme’ <https://ji.unfccc.int/UserManagement/FileStorage/UM5XOG3J6Y69SN5F24RT8W4SC7WJJ3> accessed 20 January 2017.

194  The CDM Executive Board’s Project Design Document Template envisages such unilateral CDM projects. See FCCC, ‘Forms’ <https://cdm.unfccc.int/Reference/PDDs_Forms/index.html> accessed 20 January 2017.

195  Axel Michaelowaet al., ‘Unilateral CDM: Chances and Pitfalls’ (Eschborn: Deutsche Gesellschaft für Technische Zusammenarbeit, November 2003); UNEP, Legal Issues Guidebook to the Clean Development Mechanism (The UNEP Project CD4CDM) (Roskilde: UNEP Risoe Centre, June 2004) 48–9.

196  FCCC, ‘Distribution of Registered Projects by Other Party’ <http://cdm.unfccc.int/Statistics/Public/files/201607/proj_reg_byOther.pdf> accessed 20 January 2017 (unilateral projects are captured under the category ‘none’ in relation to any other (than the host) party listed).

197  FCCC, ‘CDM Programmes of Activities’ <https://cdm.unfccc.int/ProgrammeOfActivities/index.html> accessed 20 January 2017.

198  Decision 17/CP.7 (n 161). The term ‘modalities and procedures’ refers to the rules associated with operationalizing mechanisms such as the CDM or project activities such as afforestation and reforestation.

199  FCCC, CDM Methodologies (n 188). The term ‘methodologies’ refers to approaches to individual project activities reflecting aspects such as sector and region. There are two types of methodologies—baseline and monitoring. Baseline methodologies are a means to estimate the emissions that would have occurred in the most plausible alternative scenario to the project activity, and monitoring methodologies are the means to estimate the actual emissions reductions from the project. See ‘What is a methodology?’, in CDM Rulebook: Clean Development Mechanism Rules, Practice & Procedures <http://www.cdmrulebook.org/404.html> accessed 20 January 2017.

200  Carbon capture and storage (CCS) is defined as ‘the capture and transport of carbon dioxide from anthropogenic sources of emissions, and the injection of the captured carbon dioxide into an underground geological storage site for long-term isolation from the atmosphere’. Decision 10/CMP.7, ‘Modalities and procedures for carbon dioxide capture and storage in geological formations as clean development mechanism project activities’ (15 March 2012) FCCC/KP/CMP/2011/10/Add.2, 13, Annex, A.1. See also FCCC, CDM Methodologies (n 188).

201  See generally Katherine A. Abend, ‘Deploying Carbon Capture and Storage in Developing Countries: Risks and Opportunities’, Georgetown International Environmental Law Review, 23/3 (2011): 397; and Anatole Boute, ‘Carbon Capture and Storage under the Clean Development Mechanism – An Overview of Regulatory Challenges’, Carbon and Climate Law Review, 2/4 (2008): 339.

202  FCCC, ‘Distribution of Registered Projects by Host Party’ <http://cdm.unfccc.int/Statistics/Public/files/201607/proj_reg_byHost.pdf> accessed 20 January 2017.

203  FCCC, ‘Distribution of Registered Projects by UN Region and Sub-region’ <http://cdm.unfccc.int/Statistics/Public/files/201607/proj_reg_bySubregion.pdf> accessed 20 January 2017.

204  See eg Decision 7/CMP.1, ‘Further guidance relating to the clean development mechanism’ (30 March 2006) FCCC/KP/CMP/2005/8/Add.1, 93, para 32; and Equitable distribution of clean development mechanism project activities: Submissions from Parties (14 August 2006) FCCC/KP/CMP/2006/MISC.1. The CDM Executive Board’s analysis of submissions is in FCCC, ‘Equitable distribution of clean development mechanism project activities - analysis of submissions’ <https://cdm.unfccc.int/EB/026/eb26annagan4.pdf> accessed 20 January 2017.

205  See Decision 8/CMP.7, ‘Further guidance relating to the clean development mechanism’ (15 March 2012) FCCC/KP/CMP/2011/10/Add.2, 6, paras 30–3.

206  See for further information, European Commission, Climate Action, Use of International Credits (n 192). See generally European Commission, Climate Action, ‘The EU Emissions Trading System (EU ETS)’ <http://ec.europa.eu/clima/policies/ets_en > accessed 20 January 2017.

207  Kyoto Protocol, Art 12.8.

208  Decision 17/CP.7 (n 161) para 15; and Decision 10/CP.7 (n 17).

209  Decision 1/CMP.8 (n 114) para 21.

211  Ibid.

213  Oberthür and Ott, Kyoto Protocol (n 72) 188–9; Ott, Kyoto Protocol—Unfinished Business (n 71) 41. In response to these concerns, the Marrakesh Accords specifically include a principle stating that Kyoto has ‘not created or bestowed any right, title, or entitlement to emissions’ on Annex I parties. Decision 15/CP.7 (n 124) preambular recital 5.

215  Article 17 uses the phrase ‘Annex B party’ rather than ‘Annex I party’—the only instance in the protocol where reference is made to an Annex B Party. The two annexes are almost identical. For the protocol’s first commitment period, the protocol’s Annex B includes all of the FCCC Annex I parties as of 1997, when the protocol was adopted, with the exception of Turkey. Belarus joined the FCCC on 9 August 2000 as an Annex I party, and has proposed an amendment that would add it to Annex B, but the amendment has not yet received sufficient acceptances to enter into force. For the protocol’s second commitment period, all of of the Annex I parties that have indicated their intention to become parties to the Doha Amendment have Annex B targets, with the exception of New Zealand.

216  Kyoto Protocol, Arts 3.10 and 3.11.

217  Article 17 directs the COP (not CMP) to develop the modalities, rules, and guidelines. It thus left open the possibility for interim trading, in advance of the entry into force of the protocol. See Yamin and Depledge, International Climate Change Regime (n 23) 157.

218  Decision 11/CMP.1, ‘Modalities, rules and guidelines for emissions trading under Article 17 of the Kyoto Protocol’ (30 March 2006) FCCC/KP/CMP/2005/8/Add.2, 17.

219  In order to engage in emissions trading, a party must be an Annex I party, its assigned amount must have been duly calculated and recorded, and it must have fulfilled its commitments under Articles 5 and 7. Decision 11/CMP.1, ibid, Annex, paras 2 and 3. See generally Yamin and Depledge, International Climate Change Regime (n 23) 148–56.

220  Decision 11/CMP.1, ibid, Annex, para 6.

222  Decision 13/CMP.1 (n 94) Annex, para 38. Registries are set up under Decision 3/CMP.1 (n 158) and Decision 13/CMP.1 (n 94). See for more information FCCC, ‘International Transaction Log’ <http://unfccc.int/kyoto_protocol/registry_systems/itl/items/4065.php> accessed 20 January 2016.

223  Decision 13/CMP.1 (n 94).

224  Torbjorg Jevnaker and Jorgen Wettestad, ‘Linked Carbon Markets: Silver Bullet, or Castle in the Air?’, Climate Law, 6/1–2 (2016): 142, 144.

225  Jeff Schwartz, ‘China’s National Emissions Trading System: Implications for Carbon Markets and Trade’ (Geneva: International Centre for Trade and Sustainable Development, March 2016) <http://www.ieta.org/resources/China/Chinas_National_ETS_Implications_for_Carbon_Markets_and_Trade_ICTSD_March2016_Jeff_Swartz.pdf> accessed 20 January 2017.

227  See EU Emissions Trading System (n 206).

228  Ibid.

229  ‘Carbon Market Monitor: America to the Rescue – Review of Global Markets in 2015 and Outlook for 2016-18’ (Thomson Reuters, 11 January 2016) <http://climateobserver.org/wp-content/uploads/2016/01/Carbon-Market-Review-2016.pdf> accessed 20 January 2017.

230  See Javier de Cendra de Larragan, ‘The Kyoto Protocol, with a Special Focus on the Flexible Mechanisms’, in Daniel A. Farber and Marjan Peeters (eds), Elgar Encyclopedia of Environmental Law Series vol 1: Climate Change Law (Cheltenham: Edward Elgar Publishing, 2016) 227, 232.

231  Annual report of the Executive Board of the Clean Development Mechanism to the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol (12 November 2015) FCCC/KP/CMP/2015/5. See also World Bank Group: Climate Change, State and Trends of Carbon Pricing (Washington, D.C.: World Bank, October 2016) 36.

232  The average CER price on the secondary market was €0.17/tCO2e (US$0.19) in 2014, more than 50% lower than in 2013, and the ERU price in December 2014 was €0.03 (US$0.03). See World Bank, State and Trends of Carbon Pricing (Washington, D.C.: World Bank, 2015) 36.

233  Nicolas Kochet al., ‘Causes of the EU ETS Price Drop: Recession, CDM, Renewable Policies or a Bit of Everything? New Evidence’, Energy Policy, 73 (2014): 676. See generally European Commission, Climate Action, Use of International Credits (n 192).

234  Ibid.

235  Annual report of CDM Executive Board (n 231).

236  Decision 1/CP.21, ‘Adoption of the Paris Agreement’ (29 January 2016) FCCC/CP/2015/10/Add.1, 2, para 106.

237  See Chapter 7, Section VI.

238  Paris Agreement, Art 6.7.

239  Decision 1/CP.21 (n 236) para 37(f).

240  This discussion draws on Jutta Brunnée, ‘A Fine Balance: Facilitation and Enforcement in the Design of a Compliance System for the Kyoto Protocol’, Tulane Environmental Law Journal, 13/2 (2000): 223, 239–41. See also Chapter 2, Section IV. C.

241  On the connections between the protocol’s compliance system and the Kyoto mechanisms, see below Section VI.B.

242  See Chapter 5, Section VI.B.

243  For a detailed discussion of the protocol’s MRV system, see Anke Herold, ‘Experiences with Articles 5, 7 and 8 Defining the Monitoring, Reporting and Verification System under the Kyoto Protocol’, in Jutta Brunnée, Meinhard Doelle, and Lavanya Rajamani (eds), Promoting Compliance in an Evolving Climate Change Regime (Cambridge University Press, 2012) 122.

244  See Depledge, Tracing the Origins of Kyoto Protocol (n 3) 59–61, 64–8.

245  Kyoto Protocol, Art 5.1.

246  Ibid, Arts 5.1 and 5.2. See also IPCC, Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories (Geneva: IPCC, UNEP, and WMO, 1996); and IPCC, Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories (Geneva: IPCC, UNEP, and WMO, 2000).

247  Decision 19/CMP.1, ‘Guidelines for national systems under Article 5, paragraph 1, of the Kyoto Protocol’ (30 March 2006) FCCC/KP/CMP/2005/8/Add.3, 14.

248  Kyoto Protocol, Art 7.1.

249  FCCC, Art 12.1 (outlining the requirements for ‘national communications’ to allow for the evaluation of the emissions performance of individual Annex I parties, but also imposing certain reporting obligations on all parties, Annex I and non-Annex I alike). See also Chapter 5, Section VI.B.

250  Kyoto Protocol, Arts 7.1 and 7.2.

251  Decision 15/CMP.1, ‘Guidelines for the preparation of the information required under Article 7 of the Kyoto Protocol’ (30 March 2006) FCCC/KP/CMP/2005/8/Add.2, 54; and Decision 13/CMP.1 (n 94).

252  See FCCC, ‘Review Process’ <http://unfccc.int/national_reports/annex_i_ghg_inventories/review_process/items/2762.php> accessed 20 January 2017.

253  Kyoto Protocol, Art 8.3.

254  Ibid.

255  See FCCC, ‘Roster of Experts’ <http://www4.unfccc.int/sites/roe/Pages/Home.aspx> accessed 20 January 2017. But see also Anna Huggins, ‘The Desirability of Depoliticization: Compliance in the International Climate Regime’, Transnational Environmental Law, 4/1 (2015): 101, 110 (noting a range of challenges to the intended impartiality of ERT members, including that almost all of them work in national government departments and ‘many are involved in the preparation of their own country’s emissions inventory’).

256  See Huggins, ibid, 110–14.

257  On the greater role of the ERTs, see Sebastian Oberthür, ‘Compliance under the Evolving Climate Change Regime’, in Cinnamon P. Carlane, Kevin R. Gray, and Richard Tarasofsky (eds), The Oxford Handbook of International Climate Change Law (Oxford University Press, 2016) 120, 123–4; and Huggins, ibid.

258  The following discussion draws on Jutta Brunnée, ‘Climate Change and Compliance and Enforcement Processes’, in Rosemary Rayfuse and Shirley Scott (eds), International Law in the Era of Climate Change (Cheltenham: Edward Elgar Publishing, 2012) 290.

259  On key features of that procedure, see Chapter 2, Section IV.C.2.

260  See Brunnée, Fine Balance (n 240) 229.

262  On the elements of the MRV system, see Section VI.A above.

264  On the Kyoto Mechanisms, see Section V above.

265  See Decision 9/CMP.1 (n 134) paras 21–9; Decision 3/CMP.1 (n 158) paras 31–4; and Decision 11/CMP.1 (n 218) paras 2–4.

266  See Decision 27/CMP.1 (n 40) Annex.

267  See ibid, Annex, Section I (emphasis added).

268  See Chapter 2, Section IV.C.2. See also Jutta Brunnée, ‘The Kyoto Protocol: A Testing Ground for Compliance Theories?’, Zeitschrift für ausländisches öffentliches Recht und Völkerrecht (Heidelberg Journal of International Law), 63 (2003): 255; Geir Ulfstein and Jacob Werksman, ‘The Kyoto Compliance System: Towards Hard Enforcement’, in Olav Schram Stokke, Jon Hovi, and Geir Ulfstein (eds), Implementing the Climate Regime (London: Earthscan, 2005) 59; René Lefeber and Sebastian Oberthür, ‘Key Features of the Kyoto Protocol’s Compliance System’, in Brunnéeet al., Promoting Compliance in an Evolving Climate Change Regime (n 243) 77.

269  Decision 27/CMP.1 (n 40) Annex, Section VI, para 1.

271  See n 287 below and accompanying text.

273  Decision 27/CMP.1 (n 40) Annex, Section II, para 2.

274  Ibid, Section II, para 3.

275  Ibid, Section II, paras 3 and 6.

276  Ibid, Sections IV, para 1 and V, para 1.

277  Ibid, Section VII, para 1.

278  Ibid, Sections IV, para 4 and XIV.

279  Ibid, Section IV.5, para 5.

280  Ibid, Sections IV, para 6 and IX, para 12.

281  Ibid, Section XIV, paras (a)–(d).

283  Decision 27/CMP.1 (n 40) Annex, Section III, para 2(b).

285  Ibid.

286  See Meinhard Doelle, ‘Experience with the Facilitative and Enforcement Branches of the Kyoto Compliance System’, in Brunnéeet al., Promoting Compliance in an Evolving Climate Change Regime (n 243) 102, 103–4.

287  Ibid.

288  Decision 27/CMP.1 (n 40) Annex, Section V, para 4.

289  Ibid, Sections I, V, para 6 and XV.

290  Regarding the compliance tools available to the facilitative branch, see n 281 above and accompanying text.

291  Decision 27/CMP.1 (n 40) Annex, Section XV, para 1.

292  Ibid, Section XV, paras 2 and 3.

293  Ibid, Section XV, para 4.

294  Ibid, Sections XIII and XV, para 5.

295  Ibid, Section XV, paras 5(a) and (b), 6, and 7.

296  Ibid, Section XV, para 5(c).

297  On ‘borrowing’, see n 112 above and accompanying text.

298  See nn 78–9 above and accompanying text. For a discussion, see Michael Grubb, ‘Full Legal Compliance with the Kyoto Protocol’s First Commitment Period – Some Lessons’, Climate Policy, 16/6 (2016): 673.

300  Kyoto Protocol, Art 18.

301  See Oberthür, Compliance under the Evolving Climate Change Regime (n 257) 123. See also FCCC, ‘Procedural requirements and the scope and content of applicable law for the consideration of appeals under decision 27/CMP.1 and other relevant decisions of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol, as well as the approach taken by other relevant international bodies relating to denial of due process’, Technical Paper (15 September 2011) FCCC/TP/2011/6, para 43 (referring to the function of the enforcement branch as ‘quasi-judicial’).

302  See Decision 27/CMP.1 (n 40) Annex, Section IX.

303  Ibid, Section XI.

304  Ibid, Section XI, para 1.

305  The CMP cannot revisit the substance of the enforcement branch decision but can focus only on procedural considerations. See ibid, Sections XI, para 3 and XI, para 4. Furthermore, the CMP must agree by a three-fourths majority vote to override the decision of the enforcement branch and send the matter back for review. See ibid, Section XI, para 3.

306  See FCCC, ‘Compliance under the Kyoto Protocol’ <http://unfccc.int/kyoto_protocol/compliance/items/2875.php> accessed 20 January 2017. See also Doelle, Experience with the Facilitative and Enforcement Branches (n 286) 105–20 (providing a detailed review of four enforcement branch proceedings).

307  Final Decision of the Enforcement Branch of the Compliance Committee for Party Concerned: Ukraine (7 September 2016) CC-2016-1-6 /Ukraine/EB <http://unfccc.int/files/kyoto_protocol/compliance/questions_of_implementation/application/pdf/cc-2016-1-6_ukraine_eb_final_decision.pdf> accessed 20 January 2017.

308  See generally Stine Aakre, ‘The Political Feasibility of Potent Enforcement in a Post-Kyoto Climate Agreement’, International Environmental Agreements, 16/1 (2016): 145. For a discussion of the Paris Agreement’s implementation and compliance mechanism, see Chapter 7, Section X.C.

309  Kyoto Protocol, Art 13.

310  Ibid, Art 15.

311  Ibid, Art 14.

312  Ibid, Art 12.4.

313  See FCCC, Art 13. See also Decision 10/CP.4, ‘Multilateral Consultative Process’ (25 January 1999) FCCC/CP/1998/16/Add.1, 42.

314  Kyoto Protocol, Art 24. On ratification, acceptance, and approval, see also Chapter 3, Section II.C.

315  Ibid, Art 25. On entry into force, see also Chapter 3, Section II.C.

316  Ibid, Art 19.

317  Ibid, Art 26.

318  Ibid, Art 27.

319  United Nations, Kyoto Protocol to the United Nations Framework Convention on Climate Change Kyoto, 11 December 1997, ‘Canada: Withdrawal’ (16 December 2011) C.N.796.2011.TREATIES-1 (Depositary Notification) <https://unfccc.int/files/kyoto_protocol/background/application/pdf/canada.pdf.pdf> accessed 20 January 2017.

320  Kyoto Protocol, Art 20. On amendments, see also Chapter 3, Section II.D.2.

321  Ibid, Art 21.

322  See eg David G. Victor, The Collapse of the Kyoto Protocol and the Struggle to Slow Global Warming (Princeton University Press, 2001).

323  Lavanya Rajamani, ‘Addressing the Post-Kyoto Stress Disorder: Reflections on the Emerging Legal Architecture of the Climate Regime’, International and Comparative Law Quarterly, 58/4 (2009): 803.

324  Decision 1/CMP.1, ‘Consideration of Commitments for Subsequent Periods for Parties Included in Annex I to the Convention under Article 3, Paragraph 9 of the Kyoto Protocol’ (30 March 2006) FCCC/KP/CMP/2005/8/Add.1, 3.

326  See John Vidal, ‘Cancun Climate Change Summit: Japan refuses to extend Kyoto Protocol’, The Guardian (1 December 2010) <https://www.theguardian.com/environment/2010/dec/01/cancun-climate-change-summit-japan-kyoto> accessed 20 January 2017; Suzanne Goldenberg, ‘Cancun Climate Change Conference: Russia will not renew Kyoto Protocol’, The Guardian (10 December 2010) <https://www.theguardian.com/environment/2010/dec/10/cancun-climate-change-conference-kyoto> accessed 20 January 2017; and Brian Fallow, ‘NZ backs off Kyoto climate change route’, New Zealand Herald (10 November 2012) <http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10846305> accessed 20 January 2017.

327  Information documents provide information on a specific negotiating issue. They are not translated into all the UN languages. See FCCC, ‘Introductory Guide to Documents’ <http://unfccc.int/documentation/introductory_guide_to_documents/items/2644.php> accessed 20 January 2017. See Compilation of economy-wide emission reduction targets to be implemented by Parties included in Annex I to the Convention, Revised note by the Secretariat (7 June 2011) FCCC/SB/2011/INF.1. The document number listed in the Kyoto Outcome Decision in relation to mitigation targets for developed countries is identical to that in the LCA Outcome Decision. See Doha Amendment, Art 1, Section A, footnote 2; Cancun Agreements LCA, para 36; Decision 1/CMP.6, ‘The Cancun Agreements: Outcome of the work of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol at its fifteenth session’ (15 March 2011) FCCC/KP/CMP/2010/12/Add.1, para 3.

328  Subsidiary bodies under the FCCC serve as the subsidiary bodies under the protocol, and sessions of these bodies under the FCCC and Kyoto Protocol are held in conjunction with each other. Kyoto Protocol, Art 15, and FCCC, Arts 9 and 10.

329  Decision 1/CMP.8 (n 114) paras 4, 7, 15, and 24, Doha Amendment, Art 1, Section A, footnotes 3, 10, 11, Section B and Section C.

330  Doha Amendment, Art 1, Section G.

331  Ibid, Section J.

332  Kyoto Protocol, Arts 21 and 20.

333  Australia, Switzerland, New Zealand, Norway, Iceland, Italy, Hungary. See United Nations Treaty Collection, ‘Chapter XXVII: Environment, 7. c Doha Amendment to the Kyoto Protocol’ <https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXVII-7-c&chapter=27&clang=_en#EndDec> accessed 20 January 2017.

334  Decision 1/CMP.8 (n 114) paras 5 and 6.

335  Report on the high-level ministerial round table on increased ambition of Kyoto Protocol commitments, Note by the Secretariat (4 September 2014) FCCC/KP/CMP/2014/3.

336  The Kyoto Protocol’s second commitment period covers only 11.8% of 2012 global GHG emissions.This includes the emissions share of Australia, Belarus, EU-28, Iceland, Kazakhstan, Norway, Switzerland, Ukraine in 2010, excluding LULUCF. World Resources Institute (WRI), ‘CAIT Climate Data Explorer’ <http://cait.wri.org/> accessed 20 January 2017.

337  Vienna Convention on the Law of Treaties (adopted 23 May 1969, entered into force 27 January 1980) 1155 UNTS 331 (VCLT), Art 54.

338  Ibid, Art 59.

339  See Olivier Corten and Pierre Klein (eds), The Vienna Convention on the Law of Treaties: A Commentary, vol 1 (Oxford University Press, 2011) 1022–5.

340  Kyoto Protocol, Art 27 permits states to withdraw after three years after the protocol’s entry into force. Any such withdrawal will take effect one year after the notice of withdrawal.

341  Ibid, Art 25.

342  VCLT, Art 55 (n 337), provides that ‘a multilateral treaty does not terminate by reason only of the fact that the number of the parties falls below the number necessary for its entry into force’.

343  Ibid, Art 59(a) and (b).

344  Ibid, Art 30.4. The treaty, earlier or later, that both states are party to, will govern their mutual rights and obligations.

345  Anthony Aust, Modern Treaty Law and Practice (Cambridge University Press, 3rd edn, 2013) 306–7.

346  See eg Decision 12/CMP.11, ‘Programme budget for the biennium 2016–2017’ (29 January 2016) FCCC/KP/CMP/2015/8/Add.2, 18, for the most recent budget, and indicative scale of contributions from parties.

347  Decision 1/CP.21 (n 236) paras 60 and 61.

348  Environmental Defense Fund and International Emissions Trading Association, ‘Carbon Pricing: the Paris Agreement’s Key Ingredient’ (April 2016) <http://www.ieta.org/resources/Resources/Reports/Carbon_Pricing_The_Paris_Agreements_Key_Ingredient.pdf> accessed 20 January 2017; International Carbon Action Partnership (ICAP), ‘Emissions Trading Worldwide: International Carbon Action Partnership: Status Report 2016’ (Berlin: ICAP, 2016) (Sixty-four INDCs said they planned to use markets, and twenty-five said they were considering using markets).

349  ‘Carbon Pricing’, ibid.

350  Paris Agreement, Art 13.3 and Art 13.4.

351  See European Commission, Climate Action, ‘Emissions Monitoring and Reporting’ <http://ec.europa.eu/clima/policies/strategies/progress/monitoring/index_en.htm> accessed 20 January 2017.