Fri, Feb 18, 2005 - Page 9 News List

How to ensure Kyoto's ideals continue after the treaty expires

By Ian Johnson

The Kyoto Protocol treaty has now entered into force for the nations who have joined it so far. Now is the time to start thinking about how to engage all nations, including large emitters, in conversations about what to do after the treaty's expiration in 2012. This is exactly what the European Commission did recently by providing its first strategy for a post-Kyoto era, which will be discussed by the European Council next March.

While the protocol represents only a modest reduction of carbon emissions in industrialized countries -- 5.2 percent between 2008 to 2012 relative to 1990 levels, with varying targets for individual countries -- real progress can be made in sustaining development efforts and preserving our planet.

But first, all countries must integrate climate concerns into policy planning, and improve their governance in key sectors such as energy, infrastructure and transport. We must act in accordance with the recognition that climate change and its effects on people in both rich and poor countries remains a threat to global security.

At the end of the day, the long-term approach is likely to include a rules-based system, an incentives system and investments in technology change. Increasingly, adaptation at the national level will be recognized as a major issue that will require appropriate funding. Dealing with the impacts of climate change and with emission reductions should not be mutually exclusive, but complementary.

Looking ahead to the post-Kyoto world offers us the chance to start a new dialogue and to look at new options on climate change. Nations could set the more ambitious goal of limiting the long-term change in the earth's temperature, and then assign emissions rights among countries in such a way that will eventually limit temperature increases to an acceptable level. This would require increasing investments in energy research and development for new and improved technologies -- a process that needs to be supported by stronger public-private partnerships.

Up to now, with only 15 percent of the world's population, rich countries have been responsible for more than 75 percent of global carbon dioxide emissions, and thus most of the environmental damage. However, it is the developing countries -- and thus the world's poor -- who are most vulnerable. It is unrealistic to ask poor countries, where more than 1.6 billion people do not have access to clean energy and technologies, to bear the costs associated with the much needed technological change.

Working with partners, the World Bank is supporting strategies to assist developing countries in meeting the costs caused by climate change. To date, over US$1 billion dollars in Global Environment Facility (GEF) grants, together with about US$8 billion in co-financing, have been committed to programs related to climate change.

While the regulatory mechanisms of both Kyoto and the European Trading Scheme have contributed to the establishment of an emerging market for carbon trading, interested parties are now concerned about the immediate future. Without a regulatory framework beyond 2012, the window of opportunity for initiating project-based transactions will close by next year or 2007.

Given the long lead time between project preparation and the first benefits of emissions reductions, project developers have only a few years to act before carbon payments cease to make a meaningful contribution to project finance in the current context. Developing infrastructure projects is a long process that requires three to seven years from identification, through licensing, financing and construction and finally to the first certification of carbon emission reductions.

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