An In-Depth Examination of the Kyoto Protocol and Viable Next-Steps for Global Climate Change Agreements

litbonanza.jpgThe Kyoto Protocol has been accused of possessing “giddy ambition,” as climate scientist David Victor states, for countries to reduce GHG emissions.[1] The most industrialized nations, all of which have ratified Kyoto except the USA, are legally obligated to reduce emissions collectively, on average, by 5% below 1990 levels.[2] The lynchpin of this framework is the “cap and trade” system, in which states that succeed in lowering emissions beyond Kyoto’s goals are permitted to sell carbon permits to states that fail to meet the Protocol’s targets. It has been more than ten years since the treaty was first signed and 2008 is the first year when countries need to begin reducing emissions to the levels outlined in Kyoto. Hence, it is now time to analyze this international agreement in an effort to examine where the treaty excels and where it falters. This evaluative exercise is important as it should enable the global community to construct more effective climate change accords.

Throughout the course of this analysis it will become clear that that the Kyoto Protocol has failed to meet its stated objectives— it accomplishes little and the crux of climate change mitigation agreements needs to be re-examined. The foremost reason why this is treaty is unsuccessful is that countries are not meeting expectations. Countries are not complying for several reasons: The USA failed to ratify the treaty, because of China and India’s absence, two heavy emitters, and additionally, the treaty is littered with deficiencies. It neglects to discuss how countries will be monitored, and how the market-based mechanism will work. It assigns emission caps unfairly, includes unnecessary parties to the treaty, and groups together several greenhouse gases (GHG’s)—all of which need to be approached independently. Finally, subsequent to presenting this argument, I will address appropriate next-steps for climate change international agreements.

The Protocol focuses on industrialized countries that have historically contributed the most to GHG emissions. One of the key problems is that the majority of these industrialized countries are not on pace to meet the Protocol’s objectives. Australia is projected to be emitting 109 percent of 1990 levels in 2008, while Canada in 2005 was 33 percent above 1990 levels. In 2006, Japan’s emission levels of GHG rose 6 percent above 1990 levels.[3] U.S emissions, although not bound by the treaty, are rising annually.[4] The primary measuring stick of international treaties is obedience, and parties to Kyoto are not compliant. Although there are penalties for failing to meet the outlined objectives, a state can defect from the treaty without any serious ramifications

This is not the only loophole in the agreement; the emission quotas provided to Russia and several other Eastern European countries, are init of themselves problematic. The emission limits are too modest, because even lacking the existence of mitigation policy it is unlikely these countries will exceed their cap.[5] This is because of extreme economic stagnation, which resulted from the collapse of the Soviet Union. As a result of this phenomenon, known as “hot-air” trading, it is estimated that Russia and other Eastern European countries will remain about 6.3 billion tonnes of carbon dioxide below their emission cap.[6] Other major emitters will exceed their caps by at least that much, if not more so. Under the market scheme used in Kyoto, 6.3 billion tonnes of carbon dioxide can garner about $20- $170 billion by selling the extra carbon permits to nations that overshoot their cap.[7] Russia and Eastern European countries insisted on unattainable caps as a pre-requisite in order for them to ratify the protocol. This arrangement undermines the treaty’s goal, because an excess of credits are available to heavy polluters. This, in turn, encourages the heavy polluters to strive for merely modest emission cuts, because they will take comfort in the fact that a greater amount of carbon permits will be available to purchase at a reasonable rate on the open-market.

This generous head-room was afforded to these countries so that their economies could attempt to fully recover from the end of the Cold- War. However, this logic is inherently flawed, because “it is impossible to predict accurately a nation’s economic state and emission levels one decade into the future.”[8] When negotiators begin to predict the future for one country, they set a gratuitous precedent; if Russia and Eastern European countries receive special economic treatment, then other countries will come to expect similar treatment, otherwise they may choose to defect from the treaty.

The notion of setting undue precedents exists elsewhere in the treaty—developing countries, like China and India, were excused from Kyoto commitments; however, this was a mistake. Historically, the 38 advanced industrialized countries were responsible for most of the GHG emissions, and per-capita emissions in China are only one-tenth those of the United States. However, it is predicted that by 2020 developing countries will account for half of world emissions.[9] Moreover, China and India are the world’s two fastest growing economies, and it is widely understood that curbing their GHG production would slow their economic progress. This notion is extraordinarily problematic. Excluding China and India from negotiations discourages other nations from participating. And, in fact, this is precisely the United State’s mantra; in 1997, the U.S. Senate passed a resolution, 95-0, nullifying any climate change agreement that does not include “specific scheduled commitments” for developing countries. The U.S. emits 25 percent of the world’s GHGs, and thus, their absence, severely undermines the treaty.[11] It should have been a priority of negotiators to meet U.S. demands, because their obedience to the treaty is vital to its success. By failing to gain the requisite agreement from the world’s largest GHG producers – the US, China and India—the treaty loses essentially all of its meaning. [12]

Another major reason why all large emitters must participate in this treaty is that abstaining countries will be afforded a comparative advantage in carbon-intensive industries. For instance, if policy in Canada requires industry to cut emissions drastically, a firm might escape the policy by simply relocating to a developing country, like China.[13] This movement of capital has led economists to predict “emissions in developing countries might increase by a quarter ton for every ton of cuts in carbon emissions from the industrialized countries.”[14] This kind of consequence is precisely the reason why international relations scholar, Scott Barrett, asserts that “an effective international agreement must not only tell countries what to do; it must create incentives for countries to do what the treaty says must be done.”[15] Kyoto is effective at merely informing countries what to do, but does not provide incentives for countries to act in accordance with the accord. In fact, because of all its shortcomings, it induces countries to ignore their commitments to the treaty.

Furthermore, the problem resulting from the lack of incentives is intensified because of the lack of enforcement mechanisms. Without enforcement measures or incentives (a positive-enforcement tool), it is unlikely states will abide by treaty regulations. Examining another international ordinance illustrates how enforcement mechanisms can be effective. If the Kyoto agreements serve as a case study for how treaties can fail without oversight, the steel trade case under the WTO shows the difference these mechanisms can make.

In 2002 the U.S. imposed 30 percent steel tariffs on exports, such as Harley Davidson motorcycles. The EU complained to the World Trade Organization (WTO) that these tariffs were illegal, and the WTO agreed, authorizing Europe to impose trade restrictions against the US for illegal steel tariffs. The Bush administration could have ignored the ruling and maintained the tariff, but in doing so, would have exposed the U.S. to the possibility of the EU retaliating with trade sanctions. Bush later removed the tariffs to avoid the repercussions for not complying with the WTO’s ruling, and thereby illustrating how enforcement mechanisms can be effective.[16] This dynamic exemplifies one kind of tool that ensures international commitments are met. The foundational basis of the Kyoto Protocol, the cap and trade system, lacks both incentives and enforcement provisions.

Also, the treaty fails to address how this system of trading will operate. Victor interestingly brings attention to the fact the countries “achieved agreement by setting emission targets that are politically impossible to implement without an emission trading system; yet they deferred discussion of all the details about how the system will operate.”[17] At this time, the beginning of the commitment period, there is still no outline how this system will operate. And there are no rules that govern this system of trading. Kyoto fails to provide guidelines to the parties of the agreement how the system of trading—the core of the treaty, will operate. A treaty cannot be effective unless states have clearly defined rules to fall back on.

At first glance, it might seem that the sheer number of signatories, 170 countries, would render Kyoto effective. This is emblematic of the notion that climate change requires a universal response; however, this perception is misguided. Many of those signatories require little action, are permitted to increase emissions, or are afforded an unrealistically high cap on emissions, which leads to hot-air trading. Fewer than 20 countries are responsible for about 80% of the world’s emissions.[18] Hence, GHG emission might be a global problem in scope, but does not require a worldwide solution.

In fact, obtaining 170 signatories likely hinders the negotiation process; the lowest common denominator (LCD) phenomenon, an occurrence within large negotiation processes, will minimize the effectiveness of Kyoto. The LCD phenomenon assumes that the more parties to a negotiation, the greater the need to please each individual actor, all of whom possess individual stakes and agendas. This usually results in a consensus that inadequately addresses the issue at-hand; however, often, the only alternative is no agreement at all.[19] To that end, political scientist, Aynsley Kellow, compares negotiation processes, specifically Kyoto, “to a convoy of ships, which can only move at the speed of the slowest boat.”[20] This inter-play between diverging interests and large bargaining assemblies is epitomized in the Kyoto negotiations.

Another pitfall in the Protocol is combining all greenhouse gases into a single group. Victor asserts that the Protocol treats all the gases “as freely interchangeable commodities.”[21] This is detrimental because all the gases have different effects and lifetimes, and thus, require different measures to combat them. At one extreme of this group of gases are sulphur hexafluoride and perfluorocarbons, which are much stronger than carbon dioxide and linger in the atmosphere for thousands of years.[22] The long-term hazardous effects of these gases necessitate separate, more drastic measures. At the other end of the spectrum is methane. Methane is not as strong as carbon dioxide and only remains in the atmosphere for ten years, while carbon dioxide can stay in the atmosphere for several hundred years.[23] Implementing methane controls is seen a ploy to take action against climate changes only in the short-term, but for long-term results, the international community must treat GHG’s independently. Kyoto mainly addresses carbon dioxide, and thus, ignoring stronger gases like PFC’s, or equating methane to carbon dioxide, undercuts the entire process and could even be harmful as we focus on relatively innocuous chemicals while ignoring the more seriously harmful varieties.

And, the final setback of the Protocol is the public uncertainty that still infects climate change discourse. States will avoid expending scarce resources, like time and money, if the reward won’t be seen within that government’s term in office. And, the benefits of mitigating climate change today will not be noticed for many years. Although the scientific evidence is unequivocal, some legislators maintain scepticism whether action is necessary or sufficient at this time. Public uncertainty coupled with the deferred reward discourages governments from taking action.[24] The Kyoto agreement is insufficient in counter-balancing government inertia. Politicians will not take action unless it is demanded by the electorate, as politicians aim to satisfy the majority in order to get re-elected.

Hence, my first recommendation is to reach out to the public and inform them of the severity of climate change. This is currently being done, through worldwide concerts like Live Eight, but continual and enhanced efforts are necessary. If the public believes mitigation policies are needed, then politicians at all levels will participate in and comply with international agreements.

I propose a treaty that will be merely geared to the twenty largest emitters, as the majority of the 170 Kyoto signatories are not heavy emitters. The countries that are currently skewing the carbon trading system will be eliminated from the equation; however, countries that are projected in the long-term to be heavy emitters should be retained in a new treaty. This will prevent the LCD phenomenon from playing a part in the next round of negotiations.[25] To focus on gaining widespread participation, emission caps need to be set justly, but not too aggressively—a fine balance must be reached.

When governments set very rigid emission caps, as they did in Kyoto, they commit themselves to potentially undertaking “enormous economic costs” to meet the targets, and thus, rational governments acting in their best interests will be more conservative when negotiating.[26] Heavy emitters will refrain from seriously agreeing to, and complying with, emission limits that are drastically below “business-as-usual” targets, because that would hinder economic growth.[27] Seeing as this is an unavoidable consequence of climate change agreements, it is one of the main arguments against international agreements, which implement a cap and trade tool for mitigation.

If indeed this is true, then I counteract the effects of lackadaisical emission caps with a coordinated carbon tax system; I propose a hybrid tax and trade system, whereby every country will have both a tax and cap on emissions. This two-tiered system should assist negotiators in achieving that balance. Firstly, quota systems will be used to encourage developing countries to participate, because their quotas will have significant head-room for growth, and more aggressive long-term quotas will only take effect when a specific per-capita income threshold is met.[28] In the short-term, developing countries will be able to continue with business-as-usual, while in the long term more aggressive caps and stronger taxes will be implemented. Also, trading of carbon permits from developing to developed countries will offset the cost of the tax on the developing countries.[29] Implementing a tax system is beneficial to developed countries, because it allows developed countries to institute more modest caps on emissions, by diffusing the requirements on countries through two programs.

Because the cost of controlling emissions to countries is variable and spread over many years, carbon taxes are advantageous. Victor believes that taxes are “more efficient” and more “economically intelligent” than emission caps, because they substantially reduce the need for firms to make upfront capital investments, and instead, encourage them to invest in sustainable technology.[30] Carbon taxes, harmonized globally at a common rate, will breed the greatest success and reduce emissions faster than strict caps. The monies from the taxes will be revenue-neutral; they will be re-distributed back to parties of the agreement to develop new sustainable technology, or be used to fund climate change research.

Even if international measures have broad participation from all developed and developing countries, employing state and local-level programs will expedite the process of GHG emission mitigation. Victor states that a “global federalism of climate policy” is needed for mitigation policies to be optimally effective. [31] A prime example of the pervasive benefits of local programs is in California. The state legislature recently passed a law that requires all automakers selling cars in the state to cut carbon dioxide emissions by 29 percent by 2015. Seeing as 10 percent of all cars sold in the U.S. are sold in California, it is likely more efficient for auto-makers to adapt their entire fleet to California’s efficiency standards.[32] With that in mind, local governments should not rely on national level governments to combat climate change. Although national-level governments did not play a part in this policy, the scope of the legislation is nation-wide.

An international oversight body should be created for monitoring and regulation purposes. This organization will regulate the treaty, encouraging government transparency. And it will prevent the cost of compliance from sky-rocketing, because it will earmark a set quantity of emission permits at fixed prices, to act as a “safety-valve” to the international trading scheme. [33] This will encourage participation, by ensuring that states cannot benefit from gauging prices of permits.

Nonetheless, I believe that the most-effective way to achieve full compliance is, not through strict unenforceable punishment, but to promote friendly competition among states with a significant reward for the best results. Hence, in addition to monies for research and development, I propose that a portion of the monies earned from carbon taxes be given back to the top five performing countries as a reward for success (ie. The countries with the five greatest percent reductions below their cap). Hopefully this will induce countries to strive for greater results. And, interestingly, this concept is not original. Robert Rotberg, a conflict resolution scholar at Harvard, created a governance index to rank the quality of African leaders. Through a private philanthropist organization, Africa—a region of the world beleaguered with corrupt leaders, is using this index to reward good governance. The five million dollar prize awarded to the best African leader should provoke a dialogue about the possibilities of using rewards to motivate changes in climate change policy.[34]

Climate change agreements can be productive if structured properly. Kyoto was unsuccessful because of its weak architecture, and as a result, parties to the agreement are not on track to meet Kyoto’s targets. Developing countries, like China and India, who are projected to be heavy emitters in the near future, were left out of the agreement. This provided the U.S, who emits 25 percent of the world’s emission, with a reason to back out of the agreement. Hot-air trading greatly undermines the purpose of a climate change agreement. Although states are legally bound to the treaty, there are no enforcement mechanisms in place, or institutions to monitor government reporting of emissions. Finally, the Protocol does not acknowledge how the carbon market will operate, and places all GHGs in one basket, when they should be addressed separately.

The international community needs to learn from the mistakes of Kyoto and negotiators need to begin developing productive next-steps. Because of the trade benefits inherent in a market system, it should be included in the next agreement with fewer light emitters. States like China and India should be included too, because of their long-term emission prospects. A hybrid tax and trade system should be implemented to off-set the effects of conservative emission caps, and act as revenue to be used to fund climate change research and as an incentive to reward the top five performing states. This, in turn, will hopefully induce greater participation.

This paper sheds light on the reasons behind Kyoto’s lacklustre performance, and presents appropriate next steps; however, this paper is not inclusive—there are many formulas in which the international community can address climate change. Every blueprint should be analyzed for participation and compliance potential. Nonetheless, an international agreement cannot eliminate public uncertainty. If public unnerve exists, politicians acting in the hope of getting re-elected will be hesitant to implement genuine mitigation policies. Yet, citizens need to continue to discuss the issue, and in doing so, realize that Kyoto can be a building block to the development of an equitable agreement for all parties in the future. International agreements, like Kyoto, contain climate change discourse within the public arena, and thus, abolishing international agreements could potentially allow climate change, as a political issue, to fall by the wayside. The outright eradication of climate change from public dialogue is a very serious danger, because public interest is the major measuring stick used by politicians to formulate policies.


1. David Victor, The Collapse of the Kyoto Protocol and the Struggle to Slow Global Warming (Princeton, New Jersey: Princeton University Press, 2001), 7.

2. Aynsley Kellow, International Environmental Policy: Interests and the Failure Of The Kyoto Process (MA, USA: Edward Elgar Publishing Limited, 2002), 9.

3. Taishi Sugiyama, Governing Climate: The Struggle For a Global Framework Beyond Kyoto (Winnipeg, Manitoba: International Institution for Sustainable Development, 2005) 16.

4. Jeffrey Frankel, Brookings Institution, “Greenhouse Gas Emissions”; available here; Internet; accessed 13 February 2008.

5. Victor, The Collapse of the Kyoto Protocol, 30.

6. Ibid.

7. Ibid.

8. Frankel, “Greenhouse Gas Emissions.”

9. Ibid.

10. Victor, The Collapse of the Kyoto Protocol, 34.

11. Jeffrey Sachs, “Moving Beyond Kyoto,”; available here; Internet; accessed 22 February 2008.

12. Ibid.

13. Scott Barrett, “How Not to Repeat the Mistakes of the Kyoto Protocol,”; available here; Internet; accessed 23 February 2008.

14. Frankel, “Greenhouse Gas Emissions.”

15. Barrett, “How Not to Repeat the Mistakes of the Kyoto Protocol.”

16. Ibid.

17. Victor, The Collapse of the Kyoto Protocol, 7.

18. Steve Rayner, “Time to Ditch Kyoto,” Nature: International Weekly Journal of Science 449, no. 1038 (2007): 974.

19. Kellow, International Environmental Policy, 3.

20. Ibid.

21. Victor, The Collapse of the Kyoto Protocol, 23.

22. Gwyn Prins and Steve Rayner, “The Wrong Trousers: Radically Rethinking Climate Policy,”; available here; Internet; accessed 23 February 2008.

23. Ibid.

24. John Browne, “Beyond Kyoto,”; available here; Internet; accessed 23 February 2008.

25. Sugiyama, Governing Climate: The Struggle for a Global Framework beyond Kyoto, 110.

26. Victor, The Collapse of the Kyoto Protocol, 65.

27. Ibid.

28. Scott Barrett and Robert Stavins, “Increasing Participation In International Climate Change Agreements,” Journal of Politics, Law and Economics 3, no. 4. (2003): 360.

29. Ibid.

30. Victor, The Collapse of the Kyoto Protocol, 76.

31. Ibid.

32. Nigel Purvis, “The Kyoto Protocol: Beyond 2012. Report on the United States,”; available ; Internet; accessed 22 February 2008.

33. Henry Jacoby and Danny Ellerman, “The Safety Valve and Climate Policy,” Journal of Energy Policy 4, no. 32 (2004): 481.

34. Brookings Institution, “How To Rank Good Governance: The Mo Ibrahim Prize For Achievement In African Leadership,”; available here; Internet; accessed 29 February 2008.

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Brent is a second-year arts student, heading into political science and history. His specific interests include 20th century European history and U.S. politics. This paper was written for his second-year political science class.