DEVELOPING A FUTURE REGIME BEYOND THE KYOTO PROTOCOL A BOTTOM UP APPROACH

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DEVELOPING A FUTURE REGIME BEYONDTHE KYOTO
PROTOCOL-A BOTTOM UP APPROACH-

• Soichiro Seki
• 
  IEW June 24, 2004

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The Kyoto Protocol as the First Step

• 1.The Kyoto Protocol is an important first step
  towards long- term efforts to address the climate
  change. However,
• - The United States, the worlds largest
  greenhouse gas
• emitter, has announced its intention not to
  ratify the Kyoto
• Protocol.
• - The Kyoto Protocol does not require
  developing countries to
• cut emissions although their emissions are
  predicted to exceed
• those of developed countries.
• 2.The Kyoto Protocol mandates commencement of
  discussion
• about the next commitment period by the end of
  2005. It is not
• too early to now start consideration on the
  future framework
• beyond 2012.

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NATURE OF THE PROBLEM
Climate Change
is
An Environmental Issue
An Energy/Economic Issue
Climate Change Prevention
needs

• Agenda Setting
• Waking up the People
• Moral Advocacy

-Reality Check -Road Map based on Energy Demand
Supply Analysis -Technological Breakthrough
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REFLECTIONS ON THE CLIMATE CHANGE REGIME
Effectiveness -Global Participation (US,
Developing Countries)
-Sensible Target -Government Reach
Fairness/Equity -Rationale for the
Targets -Global Participation (US, Developing
Countries) -Base Year Issue -EU Bubble Issue
Reality Check -Desire for Growth/
Development -Cost Analysis based on Current
Technology -Analysis of Energy Demand Supply
SUSTAINABLE FRAMEWORK
-Bottom Up Approach -Major Emitters Initiative
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TOP DOWN APPROACH
BOTTOM UP APPROACH
-International Scheme of Coordination /
Commitment -Long-term Scenario of GHG
Emission -RD Target / Activities
-Long-term Scenario of the Global Warming
-Tolerable Level of the Total Emission -Burden
Sharing of the Emission Reduction
-Analysis of Technological Potential -Focus on
the Sectoral Aspects -Benchmark of Energy
Efficiency -Policies needed to Facilitate
Technology Development Market Driven
Dissemination of Technologies (Standards,
etc.)
National Cap
Breakdown of the Cap
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Global Participation
- Kyoto Protocol does not cover the majority
of the world - Currently dealing with
approximately One-Third of the World's
Greenhouse Gas Emissions - The top five
countries account for about half of the world's
total emissions
Figure The Worlds Energy-Related CO2
Emissions in 2000
Figure Prospects for World CO2 Emissions
(Source) OECD/IEA CO2 Emissions from Fuel
Combustion
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Global Climate Public Goods ? Everybody can
benefit from efforts by the insiders. ? Need to
address the Free Rider Problem

• ltMeasures against Non-Compliance under the KPgt
• -Penalties for the insiders, nothing for
  the outsiders
• - The Kyoto Protocol is severe for the
  insiders and tolerant for
• the outsiders.
• The Kyoto Protocol applies a severe scheme
  to the countries that commit the reduction
  targets thereof, while it has no measures against
  countries that are not the Parties to the Kyoto
  Protocol.

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Government Reach
Given the market economy, there is a limit in the
governments ability to keep the total
amount of emissions within a certain range
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Rationale for the Targets Differences in Relative
Difficulty of Accomplishing Reduction Targets
Figure Energy Efficiency Indicators in Major
Developed Countries in 2000

(Source) OECD/IEA, Energy Balances of OECD
Countries
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Base Year Issue -A hurdle race. The same distance
but very different hurdles among runners.
- The year 1990 has a special
characteristics. Russia economic
transition process Germany
unification of east and west Germany,
shift from coal to gas, etc.
UK shift from coal to gas, etc.
Figure Carbon dioxide emissions in Russia,
Germany and UK
(Source) IEA, CO2 Emissions from Fuel Combustion
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Analysis of the World Energy Demand and Supply
Structure

(1) Trend of GHG Emissions in Developed
Countries - Common Challenge Increase in
Energy Consumption in Transportation and
Residential Sectors (2) Trend of Energy-derived
CO2 Emissions in Developing Countries -
Increase of energy demand in all sectors -
Carbon intensive energy supply structure
(Fossil fuel will replace non-commercial energy
of biomass, and coal production and
consumption are estimated to increase.)
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- Economic Development and Energy Consumption
1st step(low GDP per capita) improvement
of energy efficiency 2nd step(middle GDP per
capita)deterioration of energy efficiency 3rd
step(high GDP per capita) improvement of
energy efficiency
Figure GDP per capita and energy consumption per
GDP (Developed countries 1960-2000 Developing
countries 1971-2000)
(Source) OECD/IEA, Energy Balances of OECD
countries, Energy Balances of Non-OECD countries
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Four Basic Concepts for a Sustainable Framework
(1) Focus on the technological solution from a
long-term perspective, A long-term
perspective will also enable us to - change
our life-style - build energy
infrastructure (2) Simultaneous
achievement of 3Es (effectiveness,
efficiencies and equity), - Cover most of
the global greenhouse gas emissions -
Pursue cost-effectiveness - Have rational
and logical explanation on each countrys
commitment on the basis of the bottom-up type
analysis and discussions.
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Four Basic Concepts for a Sustainable Framework
(cont.)
(3) Contribution both to economy and environment,
- Large costs to promote technological
development and dissemination can be born
only through economic development. (4)
Multi-stakeholder participation. -
Involvement of not only nation-states but also
the entities of broader scope and levels
including regions, sectors, industries,
and individuals. - Commitments on
qualitative aspects such as technological
standards, RD, etc. as well as the quantitative
aspect. - Search for various options
suitable to each entity based on its
capacity and responsibility.
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Actions toward Constructing a Sustainable Future
Framework
(1) Multi-Facet Approach (Bottom Up Approach)
- Not only Governments but also industries,
NGOs, and individuals respectively can
build their own feasible international
agreements and commitments. - Sectoral
approach for each of sectors including industry,
transport, and residential would lead to
more practical solutions with more
extensive equity. - Not only the total
amount of emissions but also various aspects
such as technological standards, RD policy
should be discussed as other alternative
forms of commitment. - Not only
environmental ministers but also economy and
energy ministers of each country
should be involved in active
discussion
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5. Actions toward Constructing a Sustainable
Future Framework (cont.)
(2) Major Emitters Initiative -
Discussions among major emitting countries would
pave the way for a truly feasible
and effective framework.
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The full text of The Interim Report bythe
Global Environmental Subcommittee,the Industrial
Structure Council can be downloaded from METI
web site. http//www.meti.go.jp/english/report/dow
nloadfiles/gClimateChange0307e.pdf
Perspectives and Actions to Construct a Future
Sustainable Framework on Climate Change July
2003
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REEXAMINATION of CLIMATE CHANGEedited
byAkihiro Sawa Soichiro Seki
A New Japanese Book casting doubt on the Kyoto
approachand suggesting alternatives for 2013-

• Other Authors include
• METI officials, a leading climate scientist,
  professors of international relations, energy
  economics researchers

A unique composition of authors compared with
other books available on the Kyoto Protocol or
on Climate Change
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Main Messages of the Book
Climate diplomacy is not free from
Realpolitik. The Kyoto Protocol and the future
regime are subject to battles over National
Interest.
Ignoring this reality will lead to
miscalculation, disillusionment, and an
ineffective regime.
Breakthrough of the current impasse will be
brought about by a Realistic Approach, not by
Moral Advocacy.

• Realistic Approach will look at
• -the reality of reduction potential and reduction
  cost given the current technology level
• -the seriousness of Equity Issue for the
  negotiating countries
• -the long term nature of the climate change
  problem
• -the pressing need of economic growth/development
  prioritized by most countries
• -the facilitative approach of International
  commitment based on mutual trust of sovereign
  states, industries, and other players,
• rather than a strictly binding approach
  backed by sanctions

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Contents of the Book
Realistic game of Climate Change Negotiations
-A review of scientific findings on climate
change -The history of international negotiation
and a critical review on the Kyoto Protocol
-Energy demand and supply structure in major
emitting countries -Domestic politics in
ratification of the Kyoto Protocol and policy
making on emission reduction measures
Economic impact by the Kyoto Protocol -An
economic model analysis -A future emission
scenario described by analysis on energy demand
and supply -A case study on innovation strategy
of private companies (Toyota Hybrid-Car)
Future Framework beyond the Kyoto Protocol
-Suggestions by professors and METI officials
such as a combination of principle driven
diplomacy and realistic diplomacy, bottom up
approach, GATT type approach (request-offer
approach), and menu approach (menu of
commitments/menu of indicators)
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Reception of the Book in Japan
Many book reviews in newspapers, magazines,
internet-sites
Positive views -A new type of analysis casting
light on the reality of the international
environmental regime -Brave advocacy describing
Realpolitik played in the international
negotiation on environment -A valuable book
which reminds us of the necessity of changing
tracks -Describes real image of the Kyoto
Protocol which is very different from the past
image created by media -Suggests a creative
approach which should be taken into account in
the future negotiation
Negative reaction -No to Kyoto campaign as
this does not lead to a meaningful evolution
-Lacking respect to the history of climate change
negotiation -Reassessment on real effect brought
by the Kyoto Protocol is insufficient. (The
Kyoto Protocol is not effective in preventing
climate change.)