Battle over ‘flexible mechanisms’ takes centre stage in greenhouse gas debate

Date: 02/11/00

By Renée Cordes

THREE years ago, signatories to the Kyoto Protocol agreed to legally- binding targets for reducing greenhouse gas emissions, with a world-wide goal of cutting them to 5% below 1990 levels by 2012.

Individual targets ranged from an 8% reduction for the EU (with different ceilings for different member states under a scheme known as the 'bubble') to a 10% increase for Iceland.

Ever since the signing ceremony, the difficult question for the international community has not been whether they should live up to these promises, but how.

The accord established a series of innovative tools, commonly known as 'flexible mechanisms', designed to help industrialised countries meet their emissions targets by achieving or acquiring reductions more cheaply abroad - often in developing countries. These policy options are based on the premise that since global warming is an international problem, it does not matter where emissions reductions are made so long as the overall goal is achieved.

They include emissions trading, in which countries with low greenhouse gas levels sell the right to pollute to those having trouble meeting their targets; the clean development mechanism (CDM), in which industrialised countries finance green projects in developing nations; and joint implementation, in which polluting nations fund projects in other developed countries.

At the next round of international climate change talks (COP-6) due to kick off in The Hague later this month, top environmental officials from around the world will have the unenviable task of establishing how these measures should work in practice. But deep divisions remain between the tough-talking EU on one side and several large industrialised countries led by the US on the other, and the entire strategy for fighting global warming is at risk.

The European Commission is steeling itself to play the big bully. "We are not convinced that emissions trading will do the job," Jos Delbecke, head of its climate change unit, told European Voice, repeating the Union executive's insistence that countries must meet at least 50% of their climate change commitments through action at home rather than flexible mechanisms.

Delbecke says the entire success of the talks hinges on whether the parties can devise a system for ensuring international compliance with the Kyoto Protocol. Under one scenario, countries which missed their targets would have to pay a fine based on tonnes of carbon dioxide emitted over the required ceiling. These fees could then be put into a fund used to finance clean energy projects.

The Commission also wants to restrict the types of projects which can qualify for CDM credits to those that actually promote sustainable development. It has, for example, refused to allow nuclear power to be included on a proposed list of CDM-eligible technology since its use is being phased out in the EU due to environmental concerns.

The Commission also remains adamantly opposed to granting too much leeway in the use of 'sinks', which allow countries to offset emission reduction targets with forestry and agricultural activities that absorb carbon naturally from the atmosphere. It is feared that these projects provide too much of a loophole through which some countries could avoid implementing real changes at home.

"The (flexible) mechanisms should function to the benefit of the environment," said Delbecke, adding that a strong compliance system would pave the way for the EU to ratify the Kyoto Protocol by 2002.

But action speaks louder than words, and Union negotiators can expect a rough ride in The Hague.

First of all, the Commission represents just one negotiating party and does not speak on behalf of the 15 EU member states, some of which are still pressing for sinks and nuclear power to be included in the CDM. The Union needs to solidify its position after the confusion at September's round of talks in Lyon, where some countries only supported a list of

CDM-eligible projects half-heartedly.

The Commission also faces an uphill struggle to win over the US and other countries, which are unlikely to budge from their stance that sinks and nuclear power should be included within the scope of the CDM.

From the very start of the process, any talk of a strong compliance regime has made Washington nervous. The EU and US will also come under pressure from developing countries to provide fresh capital on a regular basis to fund their own clean technology projects.