Kicking Kyoto David Steven

July 8, 2008 | More on Climate and resource scarcity, Europe and Central Asia, North America | One comment

Like Alex, I spoke at the United Nations University symposium on climate change and innovation on Friday – and one notable theme was the ferocious kicking that Kyoto received from some of the speakers.

Leading the onslaught were Ted Nordhaus, author of The Death of Environmentalism, and Gwyn Prins, who runs the LSE Mackinder Centre for the Study of Long Wave Events.

Nordhaus, writing with Michael Shellenberger, has called for Kyoto to be scrapped in the current issue of Democracy. “Kyoto is dead,” they write, “and that’s a good thing. In its place, we need massive global investment in new clean energy technology.”

Gwyn Prins takes a similar line, an argument he set out in a pamphlet written with Steve Rayner, and subsequent op-ed for Nature (which he says received a bigger response than anything the journal has previously published).

On Friday, both attempted to bang a few nails into Kyoto’s coffin. Gwyn, in particular, was adamant that the protocol had long been dead. Only a few diehards – emotionally incapable of accepting they are wrong – had failed to admit its passing:

We have to find a way, diplomatically, for the Europeans to join in [to a new approach to climate control] without losing face. You don’t get progress if you tell people that they must admit they made a mistake. Most of us don’t like to admit that we have made mistakes.

Prins and Nordhaus agree on a great deal. On Kyoto, they argue that:

• Its targets have had no impact on those countries that adopted them – not even slowing the rate of increase in their emissions.
• In Europe, any emissions reductions that have occurred are due to factors that precede the implementation of the Kyoto protocol.
• European emissions are rising faster than American ones (a ‘hard fact’ that embarrasses European politicians who relish looking down on ‘ugly Americans’ as Gwyn put it).

On a future climate regime, they contend that:

• Kyoto’s failure means that the Copenhagen agreement should exclude binding targets.
• Instead, a ‘bottom-up’ approach should be adopted, with investment in technology at its heart. This will reduce emissions more effectively than binding targets.
• Leadership on climate is shifting away from Europe and towards the United States.

I am going to leave future frameworks to another post. In this one – and below the jump – I look at Kyoto’s impact on Europe. There’s a lot of detail in the main post, so here are the key conclusions:

• It’s too early to say whether Kyoto has worked as advertised in Europe – but the evidence suggests that Europe as a whole will meet, or even exceed its targets.
• Later reductions in emissions seem likely to be due to policy responses to Kyoto. Governments are reacting to the pressure that a binding target applies.
• It’s likely that Europe would be emitting more if Kyoto had never been ratified – and it’s a real stretch to argue that the US is doing better than the EU on emissions.

So first, will the EU meet its Kyoto target?

At present, there is only one definitive answer to this question: we don’t and can’t know until 2012.

Under Kyoto, countries will be judged on the average of their emissions over the 5-year period 2008-2012. This is judged against a 1990 baseline for most greenhouse gases (the baseline date is later for some gases).

Before 2012, any assertion of European success or failure must be based on projections. These are vulnerable to government exaggeration and a host of external factors (weather patterns, economic growth, the price of energy, etc.).

So we should treat with extreme caution Gwyn’s contention that “the Kyoto method has failed to achieve even reductions in the rate of increase” in emissions. Ditto, his argument that Europe has not done “anything” to meet its targets – apart from buy carbon credits from developing countries (which he claims are themselves either “dubious” or “downright corrupt”).

Similarly, care is needed when Nordhaus argues that:

Many Kyoto signers will, by 2012, meet their emissions reduction targets…on paper. But most will do so not through reducing their own carbon emissions, but rather by buying emissions reductions from poorer, developing nations through Kyoto’s Clean Development Mechanism.

So what does the available evidence tell us?

Europe’s newer members are, without much doubt, on the right track. Most are well below their Kyoto targets. And we can say with a high degree of confidence that all those who have targets (Cyprus and Malta don’t) will meet them. Slovenia is the possible exception.

Most eyes, however, are focused on the older member states – those that were already in Europe when Kyoto was negotiated. This group – the EU-15 – has a collective target to reduce emissions by 8% by 2012 from the benchmark year.

In 2006, the latest year for which we have figures:

• Some countries have made cuts in emissions: Belgium, France, Germany, the Netherlands, Sweden, and the UK.
• Others have seen rises: Austria, Denmark, Finland, Greece, Ireland, Italy, Luxembourg, Portugal, and Spain.
• Overall, there has been a modest reduction. 2006 emissions levels are just 2.7% below the benchmark.

Europe’s own analysis agrees that, based on past trends, the EU-15 is not on track to meet its targets. In a 2007 report, the EU Environment Agency looked at each country’s target (these vary from -28% for Luxembourg to +27% for Portugal, but aggregate to -8% overall):

• Five countries are on track to meet their targets in 2010 (e.g. half way through the commitment period): Sweden, the UK, Germany, Finland, France, and Belgium.
• Three countries could meet their targets by taking carbon sinks into account or by buying carbon credits from developing countries (both permitted under the treaty): Luxembourg, the Netherlands, and Belgium
• Seven countries are off track based on past performance, even when sinks and carbon credits are taken into account: Spain, Austria, Italy, Ireland, Portugal, Greece, and Denmark.

So that means Kyoto hasn’t worked in Europe?

Not so fast. These projections don’t take into account new policy measures being introduced at European or national level. The picture brightens considerably when these are taken into account:

• Three countries project that they will meet their target by 2010 whether or not they introduce new policies: the UK, Sweden, and Germany.
• Two countries believe they will meet their target by 2010 if they implement additional, but planned, polices on time: France and Sweden.
• Four countries need to implement planned policies and buy carbon credits to reach their target: Netherlands, Finland, Belgium, and Luxembourg.
• Three countries will rely on planned policies, carbon credits, and carbon sinks to reach their targets: Portugal, Ireland, and Austria.
• Which leaves Spain, Italy, and Denmark still projecting that they’ll miss their targets, though Spain and Denmark are said to be preparing new packages of policy measures.

So, in aggregate (which, for the EU-15, is what will be judged under Kyoto), this is what Europe projects will happen by the end of the first Kyoto commitment period:

• A 4% reduction in emissions due to existing policies.
• A 3.9% reduction as new policies are implemented.
• A 2.5% reduction from carbon credits purchased in developing countries and a 0.8% reduction from carbon sinks.

That adds up to a projected 11.4% reduction from the benchmark year, 3.4 percentage points in excess of the Kyoto target of 8%.

So, if you accept the EU’s own projections, it will meet its Kyoto obligations, with real emissions cuts playing a significant part (and carbon credits and sinks a lesser one). But this will only happen if countries stick to their policy promises and these policies work as expected (two big assumptions). Also, over-achievers such as Germany, France and the UK (the three largest emitters) will need to make up for under-achievers such as Spain and Italy (something they may not be prepared to do).

But would any of these emissions reductions be down to Kyoto? Or would we have seen a similar outcome if there had been no treaty?

This question is at the heart of the argument made by Prins and Nordhaus, who both assert that emissions have fallen solely due to the reunification of Germany and the ‘dash for gas’ in the UK – factors that had nothing at all to do with Kyoto or climate change.

On the face of it, the EU’s analysis supports this assertion. Germany and the UK account for nearly half of the EU-15 emissions and both have seen deep cuts:

The main reasons for the favourable trend in Germany are increasing efficiency in power and heating plants, and the economic restructuring of the five new Länder after the German reunification. The reduction of GHG emissions in the United Kingdom was primarily the result of liberalising energy markets and the subsequent fuel switches from oil and coal to gas in electricity production and N02 emission reduction measures in the adipic acid production.

But look a little deeper and the picture isn’t quite so simple. It is unsurprising that initial changes in emissions had little to do with Kyoto. The treaty was in limbo until Russia ratified the treaty in 2004. Before then, countries were in real doubt as to whether it would ever be enacted.

There is clearly also a huge amount of inertia in both political and energy systems – it takes time for policy and investment reactions to Kyoto to feed through.

The data backs this up. German and British emissions fell rapidly in the period before 2000 – Germany was down 17% on 1990 levels; the UK, just over 12%. The fall then stopped, supporting the Prins and Nordhaus position. But then, it started again, albeit it more slowly – the UK has seen a 2.69% fall between 2000 and 2006; Germany a 1.37% fall in the same period.

Furthermore, both countries predict ongoing cuts, down another 3-4 percentage points on 1990 levels by 2010. Germany, meanwhile, has attempted to quantify the impact of new policies and thinks this may lead to a further fall in emissions (the UK is also implementing new policies but hasn’t reported projections of their impact).

All in all, Europe’s largest economy hopes to force its emissions to 25% below benchmark in 2010, with 40% of that cut coming after 2000.

A similar pattern emerges when we look at aggregate emissions. For the sake of argument, accept that all of the EU’s 4% projected reduction from existing policies would have happened whether or not Kyoto was agreed.

But what about the 3.9% cut that is expected from new policies – those planned since the treaty’s ratification by Russia? These cuts may or may not be achieved, but even if they are attempted, they show that Kyoto is working as advertised with governments responding to the pressure binding targets have placed on them.

With the clock ticking, they are taking steps – faltering ones, of course (but these are governments!) – to squeeze carbon out of their systems. The treaty, it seems clear, is not simply being ignored.

Finally, is it true that the EU’s record compares poorly with America’s? Is the US really doing as well as or better than the EU – even though it has remained outside Kyoto?

To make their case, both Prins and Nordhaus have to move away from the Kyoto baseline and look at progress since 2000.

Nordhaus: “Between 2000 and 2005, European emissions grew twice as fast as America’s.” Prins: “The hard facts – are that Europe is actually increasing its emissions at a slightly faster rate than the United States.”

Again, these statements are true enough. The EU-15 saw its emissions rise in 2001, 2003 and 2004. As a result, in 2006, emissions are 0.8% above 2000 levels. US emissions, meanwhile, saw falls in 2001 and 2006, and its emissions in 2006 are only 0.3% above 2000 levels.

But things look very different if we go back to 1990. In this period, the EU has managed a 2.19% cut. The US, in contrast, has seen a 14.74% increase. As documented above, the Europeans still have a fighting chance of meeting their Kyoto target. The US would have no chance at all of making the 8% target it agreed to in negotiations but never ratified.

This picture is reinforced when we look at per capita emissions, with the average American accounting over twice the emissions of the average member of old Europe.[1] As a result, there’s lots of waste in the system, which is quickly squeezed out by higher energy prices.

It wouldn’t surprise me at all if US emissions continue to fall faster than Europe’s – they’ve got much further to go. A rough calculation suggests that, should Europe cut its emissions by 20% by 2020, US emissions would need to fall by over half to reach per capita parity.

It’s this kind of disparity between the US and even its most polluting partners that had made the US so nervous about binding targets…But we’ll return to future commitments in part 2 of this post.

Addendum: One final point is how hard it is to find good information about this subject. If anyone knows of better sources, please post them in comments. Also, factual corrections would be gratefully received, and any thoughts on the reasoning behind this post.