Climate policy

Climate policy assumptions and international talks, summits, negotiations and undertakings were preceded by a number of scientific results and explorations. First in 1896, Arrhenius Svante put up that there is a close correlation between atmospheric carbon dioxide concentration and the average temperature of the Earth. In 1938, based on meteorological observations between 1900 and 1935 Callendar indicated a close correlation between CO2 emission from fossil fuel use and atmospheric carbon dioxide concentration. In 1957 Revelle pointed out that increasing atmospheric carbon dioxide concentration may even have a global effect, thus systematic and thorough global observations are needed. Systematic measurements started in the sixties in the USA ( NOAA, Mauna Loa)

These observations highlighted the global problems and more and more scientists and politicians started to deal with giving answers to the questions affecting all inhabitants of the Earth.

1962 Carson: Silent Spring
1968 Dubos- Ward: Only One Earth (global environmental problems)
1970 Club of Rome
1970 Earth Day movement

Until the seventies, world wars and the cold war made international cooperation impossible. In the period of easing, the recognition of expanded environmental problems, the development of international observations, establishment of research networks and initiation of joint policy approaches, agreement have been started. After going beyond the initial problems and the easier and wider availability of environmental information, numerous measures mitigating the harmful impacts of climate change have been made.

1985 Vienna Convention for the Protection of the stratospheric ozone layer. This is going to be the framework for protocols against ozone depleting materials. Cooperation and regulatory actions among countries.
1985 Helsinki Protocol: reduction of sulphur emissions: 70% reduction until 2003 (SO₂ is not a greenhouse gas, but causes acid rains)
1987 Montréal: gradual reduction of CFC-s
1988 Sophia Protocol: Reduction of the emissions of NO_x. Information and technology exchange. Until 1994, emissions cannot exceed the 1987 level. This is a real greenhouse gas (320 units of CO₂ equivalence)
1989 Helsinki: gradual ban on the use of CFC-s
1997 The European Union bans the production and trade of CFC-s
1992 Rio de Janeiro United Nations Framework Convention on Climate Change, UNFCCC,: The amount of greenhouse gases must be stabilized on a non-dangerous level. Representatives and signing persons acknowledge that greenhouse gases disrupt the ecosystem of the Earth. Among the objectives, the stabilization of the atmospheric concentration of these gases and to minimize of formation of further emergency situations have been set. Parties undertake the compulsory information of the public, research and systematic observations. The Conference of the Parties has been established with the objective of solving the problems of global warming.

Main international agreements and statements on environment

Brundtland report

In the first part of the 1980’s, international organisations, including primarily the United Nations, recognized the following tendencies:

• Protection of the environment tends to be more global.
• Thinking and acting must be made on a long term horizon.
• Environmental and economic policies must be linked together.

New ideas, new ways of approach, new ways of thinking and new strategic assumptions are necessary. To reach these goals, the World Commission on Environment and Development has been formed.

The Report of the Brundtland Commission, Our Common Future, was published by Oxford University Press in 1987.

The document was the culmination of a “900 day” international-exercise which catalogued, analysed, and synthesised: written submissions and expert testimony from “senior government representatives, scientists and experts, research institutes, industrialists, representatives of non-governmental organizations, and the general public” held at public hearings throughout the world.

The Brundtland Commission's mandate was to: “[1] re-examine the critical issues of environment and development and to formulate innovative, concrete, and realistic action proposals to deal with them; [2] strengthen international cooperation on environment and development and assess and propose new forms of cooperation that can break out of existing patterns and influence policies and events in the direction of needed change; and [3] raise the level of understanding and commitment to action on the part of individuals, voluntary organizations, businesses, institutes, and governments” (1987: 347). “The Commission focused its attention on the areas of population, food security, the loss of species and genetic resources, energy, industry, and human settlements - realizing that all of these are connected and cannot be treated in isolation one from another” (1987: 27).

The Brundtland Commission Report recognised that human resource development in the form of poverty reduction, gender equity, and wealth redistribution was crucial to formulating strategies for environmental conservation, and it also recognised that environmental-limits to economic growth in industrialised and industrialising societies existed. As such, the Report offered “[the] analysis, the broad remedies, and the recommendations for a sustainable course of development” within such societies (1987: 16). However, the Report was unable to identify the mode(s) of production that are responsible for degradation of the environment, and in the absence of analysing the principles governing market-led economic growth, the Report postulated that such growth could be reformed (and expanded); this lack of analysis resulted in an obfuscated-introduction of the term sustainable development.

The report deals with sustainable development and the change of politics needed for achieving it. The definition of this term in the report is quite well known and often cited:

"Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs". It contains two key concepts:

· the concept of "needs", in particular the essential needs of the world's poor, to which overriding priority should be given; and

· the idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs."

Brundtland Commission

After the 1972 Stockholm Conference on the Human Environment and the 1980 World Conservation Strategy of the International Union for the Conservation of Nature, the leaders of our world realized that we needed to create an organization whose sole purpose was to raise awareness of the need for sustainable development. During this time period, people in developed countries were starting to become more aware about environmental issues stemming from industrialization and growth. Developed countries wanted to reduce the environmental impact of their growth. On the other hand, developing countries were becoming discouraged because they were not at and could not reach the higher levels of economic growth that industrialized countries had. Because of this need for growth, developing countries were desperate to use cheap methods with high environmental impact and unethical labour practices in their push to industrialize. The United Nations saw a growing need for an organization to address these environmental challenges which were intertwined with economic and social conditions as well.

In December 1983, the Secretary General of the United Nations, Javier Pérez de Cuéllar, asked the Prime Minister of Norway, Gro Harlem Brundtland, to create an organization independent of the UN to focus on environmental and developmental problems and solutions after an affirmation by the General Assembly resolution in the fall of 1984. This new organization was the Brundtland Commission, or more formally, the World Commission on Environment and Development (WCED). The Brundtland Commission was first headed by Gro Harlem Brundtland as Chairman and Mansour Khalid as Vice-Chairman.

The organization aimed to create a united international community with shared sustainability goals by identifying sustainability problems worldwide, raising awareness about them, and suggesting the implementation of solutions. In 1987, the Brundtland Commission published the first volume of “Our Common Future,” the organization’s main report. “Our Common Future” strongly influenced the Earth Summit in Rio de Janeiro, Brazil in 1992 and the third UN Conference on Environment and Development in Johannesburg, South Africa in 2002. Also, it is credited with crafting the most prevalent definition of sustainability,

The financial funding required to the work of the Commission was provided by the governments of Canada, Denmark, Finland, Japan, The Netherlands, Norway, Sweden and Switzerland. Later, many other governments joined and contributed to the fund – even Hungary. Significant contributions arrived from several international funds as well. Expenses of the Commission, the Secretary and the experts facilitating the compilation of the report „Our Common Future” amounted to 9 million dollars. The Commission set the 8 key questions to be analyzed, as follows:

• Perspectives of population growth, environment protection and sustainable development.
• Energy and protection of environment.
• Industry: protection of environment and development.
• Food safety, agriculture, forestry: protection of environment and development.
• Human settlements: protection of environment and development.
• International trade relations: protection of environment and development.
• Decision systems supporting environmental economics.
• International cooperation.
• The list does not include education and environmental awareness, therefore the Commission and its work received a lot of criticism..

Rio de Janeiro: UN Conference on Environment and Development

The United Nations Conference on Environment and Development (UNCED), also known as the Earth Summit, took place in Rio de Janeiro, Brazil, from June 2-14, 1992. It was held twenty years after the United Nations Conference on the Human Environment (UNCHE) took place in Stockholm, Sweden. Government officials from 178 countries and between 20,000 and 30,000 individuals from governments, non-governmental organizations, and the media participated in this event to discuss solutions for global problems such as poverty, war, and the growing gap between industrialized and developing countries. The central focus was the question of how to relieve the global environmental system through the introduction to the paradigm of sustainable development. This concept emphasizes that economic and social progress depend critically on the preservation of the natural resource base with effective measures to prevent environmental degradation.

Held to mark the twentieth anniversary of the Stockholm Conference, the Rio Earth Summit became everything that an earlier ‘Stockholm plus ten’ conference, held in Nairobi, Kenya in 1982, could not. Indeed, it became more than even its proponents had hoped for. Instead of being the ‘second’ United Nations Conference on the Human Environment, Rio was the United Nations Conference on Environment and Development; putting those two terms together, which had been so much at odds at Stockholm, might itself have been Rio’s most important achievement. In particular, it broadened the scope of global environmental diplomacy by adopting the notion of sustainable development, which had been advocated 5 years earlier in by the World Commission on Environment and Development as one of its key policy frameworks.

The world at Rio was, of course, very different from the world at Stockholm. In the intervening two decades, the Cold War (the defining political framework at UNCHE) had disappeared, the level of public interest in the environment was greatly increased, environmental issues such as stratospheric ozone depletion and global climate change were now squarely on the global policy map, and energy had become a major concern for economic security in the aftermath of the oil price shocks of 1973–74 and 1980–81.

Results

The results of the UNCED included the Rio Declaration enunciating 27 principles of environment and development, Agenda 21, and a Statement of principles for the Sustainable Management of Forests, which were all adopted by consensus (without vote) by the conference. The institutional innovation resulting from the conference included an agreement on the operating rules for the Global Environmental Facility (GEF), United Nations Convention on Biological Diversity, and the establishment of the United Nations Commission on Sustainable Development (CSD) on the basis of an Agenda 21 recommendation. The United Nations Framework Convention on Climate Change (UNFCCC) and United Nations Convention on Biological Diversity were products of independent, but concurrent, negotiating processes that were opened for signatures at UNCED.

Rio Declaration on Environment and Development

The Rio Declaration on Environment and Development is a set of 27 legally non-binding principles designed to commit governments to ensure environmental protection and responsible development and intended to be an Environmental Bill of Rights, defining the rights of people to development, and their responsibilities to safeguard the common environment. It established the "Precautionary principle" and the principle of "common but differentiated responsibilities". The Declaration recognizes that the only way to have long-term social and economic progress is to link it with environmental protection and to establish equitable global partnerships between governments and key actors of civil society and the business sector.

The Declaration includes many progressive approaches such as the polluter pays principle (the polluter bears the costs of pollution) and the precautionary principle (carry out environmental assessments to identify adverse impacts and eliminate any potential harms from a project before it is started). It advocates that today's development shall not undermine the resource base of future generations and that developed countries bear a special responsibility due to the pressure their societies place on the global environment and the technologies and financial resources they command. Strong environmental policies are inevitable but should not be used as an unjustifiable means of restricting international trade and shutting off the Northern markets for Southern countries. However, nations shall eradicate unsustainable patterns of production and consumption.

The earlier title "Earth Charter" was later appropriately downgraded as its contents were watered down and negotiated away. Effectively, its 27 principles are almost all weaker than the equivalent document signed in Stockholm 20 years earlier. The original idea of establishing an Earth Charter has not been forgotten but taken forward by the independent NGO body, the Earth Charter Initiative.

Agenda 21

Agenda 21, the international plan of action to sustainable development, outlines key policies for achieving sustainable development that meets the needs of the poor and recognizes the limits of development to meet global needs. Agenda 21 has become the blueprint for sustainability and forms the basis for sustainable development strategies. It attempts to define a balance between production, consumption, population, development, and the Earth's life-supporting capacity. It addresses poverty, excessive consumption, health and education, cities and agriculture; food and natural resource management and several more subjects.

Its 40 chapters are broken up into four sections:

· Social and economic dimensions: developing countries; poverty; consumption patterns; population; health; human settlements; integrating environment and development.

· Conservation and management of resources: atmosphere; land; forests; deserts; mountains; agriculture; biodiversity; biotechnology; oceans; fresh water; toxic chemicals; hazardous, radioactive and solid waste and sewage.

· Strengthening the role of major groups: women; children and youth; indigenous peoples; non-governmental organizations; local authorities; workers; business and industry; farmers; scientists and technologists.

· Means of implementation: finance; technology transfer; science; education; capacity-building; international institutions; legal measures; information.

Statement of principles for the Sustainable Management of Forests

The Statement of Forest Principles was the first global agreement concerning sustainability of forest management. Although it was not a legally binding contract, all signatories are expected to practice reforestation and forest conservation; they were also to develop programs to find economic and social substitutions for forestry.

United Nations Convention on Biological Diversity

The United Nations Convention on Biological Diversity was signed by 154 member countries. The main objectives of the convention were to conserve biological species, genetic resources, habitats, and ecosystems; to ensure the sustainable use of biological materials; and to guarantee the fair and equitable sharing of benefits derived from genetic resources. It was conceived as a practical tool for translating the principles of Agenda 21 into reality.

United Nations Framework Convention on Climate Change

The United Nations Framework Convention on Climate Change (UNFCCC) aims to "achieve … stabilisation of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous interference with the climate system." It was signed by more than 180 governments and promotes the principles of common but differentiated responsibility and precautionary action.

The Convention divides countries into two groups: those who are listed in Annex 1 of the Convention and those who are not (known as 'non-Annex 1 Parties'). Annex 1 Parties are the industrialized countries, who have historically contributed the most to climate change. For example, North America and the European Union are jointly responsible for 85 percent of the human-made carbon dioxide in the atmosphere today. The UNFCCC established leading roles for industrialized countries in curbing global warming and required them assist developing countries to avoid the negative effects of climate change and to allow adaptation. UNFCCC called on Annex-1 Parties to stabilise their greenhouse gas emissions at 1990 levels by the year 2000.

United Nations Commission on Sustainable Development

The United Nations Commission on Sustainable Development (CSD) was established by the UN General Assembly in December 1992 to ensure effective follow-up of UNCED. It is responsible for reviewing progress in the implementation of Agenda 21 and the Rio Declaration on Environment and Development, as well as providing policy guidance to follow up the Johannesburg Plan of Implementation (JPOI) at the local, national, regional and international levels. The JPOI reaffirmed that the CSD is the high-level forum for sustainable development within the United Nations system.

The Kyoto Protocol

The Kyoto Protocol is an international agreement linked to the United Nations Framework Convention on Climate Change, which commits its Parties by setting internationally binding emission reduction targets.

Recognizing that developed countries are principally responsible for the current high levels of GHG emissions in the atmosphere as a result of more than 150 years of industrial activity, the Protocol places a heavier burden on developed nations under the principle of "common but differentiated responsibilities."

The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force on 16 February 2005. The detailed rules for the implementation of the Protocol were adopted at COP 7 in Marrakesh, Morocco, in 2001, and are referred to as the "Marrakesh Accords." Its first commitment period started in 2008 and ended in 2012.

Doha Amendment

In Doha, Qatar, on 8 December 2012, the "Doha Amendment to the Kyoto Protocol" was adopted. The amendment includes:

· New commitments for Annex I Parties to the Kyoto Protocol who agreed to take on commitments in a second commitment period from 1 January 2013 to 31 December 2020;

· A revised list of greenhouse gases (GHG) to be reported on by Parties in the second commitment period; and

· Amendments to several articles of the Kyoto Protocol which specifically referenced issues pertaining to the first commitment period and which needed to be updated for the second commitment period.

On 21 December 2012, the amendment was circulated by the Secretary-General of the United Nations, acting in his capacity as Depositary, to all Parties to the Kyoto Protocol in accordance with Articles 20 and 21 of the Protocol.

During the first commitment period, 37 industrialized countries and the European Community committed to reduce GHG emissions to an average of five percent against 1990 levels. During the second commitment period, Parties committed to reduce GHG emissions by at least 18 percent below 1990 levels in the eight-year period from 2013 to 2020; however, the composition of Parties in the second commitment period is different from the first.

The Kyoto mechanisms

Under the Protocol, countries must meet their targets primarily through national measures. However, the Protocol also offers them an additional means to meet their targets by way of three market-based mechanisms.

The Kyoto mechanisms are:

• International Emissions Trading
• Clean Development Mechanism (CDM)
• Joint implementation (JI)

The mechanisms help to stimulate green investment and help Parties meet their emission targets in a cost-effective way.

Monitoring emission targets

Under the Protocol, countries' actual emissions have to be monitored and precise records have to be kept of the trades carried out.

Registry systems track and record transactions by Parties under the mechanisms. The UN Climate Change Secretariat, based in Bonn, Germany, keeps an international transaction log to verify that transactions are consistent with the rules of the Protocol.

Reporting is done by Parties by submitting annual emission inventories and national reports under the Protocol at regular intervals.

A compliance system ensures that Parties are meeting their commitments and helps them to meet their commitments if they have problems doing so.

Adaptation

The Kyoto Protocol, like the Convention, is also designed to assist countries in adapting to the adverse effects of climate change. It facilitates the development and deployment of technologies that can help increase resilience to the impacts of climate change.

The Adaptation Fund was established to finance adaptation projects and programmes in developing countries that are Parties to the Kyoto Protocol. In the first commitment period, the Fund was financed mainly with a share of proceeds from CDM project activities. In Doha, in 2012, it was decided that for the second commitment period, international emissions trading and joint implementation would also provide the Adaptation Fund with a 2 percent share of proceeds.

The road ahead

The Kyoto Protocol is seen as an important first step towards a truly global emission reduction regime that will stabilize GHG emissions, and can provide the architecture for the future international agreement on climate change.

In Durban, the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) was established to develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention, applicable to all Parties. The ADP is to complete its work as early as possible, but no later than 2015, in order to adopt this protocol, legal instrument or agreed outcome with legal force at the twenty-first session of the Conference of the Parties and for it to come into effect and be implemented from 2020.

Internal Emissions Trading

Parties with commitments under the Kyoto Protocol (Annex B Parties) have accepted targets for limiting or reducing emissions. These targets are expressed as levels of allowed emissions, or “assigned amounts,” over the 2008-2012 commitment period. The allowed emissions are divided into “assigned amount units” (AAUs).

Emissions trading, as set out in Article 17 of the Kyoto Protocol, allows countries that have emission units to spare - emissions permitted them but not "used" - to sell this excess capacity to countries that are over their targets.

Thus, a new commodity was created in the form of emission reductions or removals. Since carbon dioxide is the principal greenhouse gas, people speak simply of trading in carbon. Carbon is now tracked and traded like any other commodity. This is known as the "carbon market."

Other trading units in the carbon market

More than actual emissions units can be traded and sold under the Kyoto Protocol’s emissions trading scheme.

The other units which may be transferred under the scheme, each equal to one tonne of CO2, may be in the form of:

· A removal unit (RMU) on the basis of land use, land-use change and forestry (LULUCF) activities such as reforestation

· An emission reduction unit (ERU) generated by a joint implementation project

· A certified emission reduction (CER) generated from a clean development mechanism project activity

Transfers and acquisitions of these units are tracked and recorded through the registry systems under the Kyoto Protocol.

An international transaction log ensures secure transfer of emission reduction units between countries.

The commitment period reserve

In order to address the concern that Parties could "oversell" units, and subsequently be unable to meet their own emissions targets, each Party is required to maintain a reserve of ERUs, CERs, AAUs and/or RMUs in its national registry. This reserve, known as the "commitment period reserve", should not drop below 90 per cent of the Party's assigned amount or 100 per cent of five times its most recently reviewed inventory, whichever is lowest

Relationship to domestic and regional emissions trading schemes

Emissions trading schemes may be established as climate policy instruments at the national level and the regional level. Under such schemes, governments set emissions obligations to be reached by the participating entities. The European Union emissions trading scheme is the largest in operation.

The EU Emissions Trading System (EU ETS)

The EU emissions trading system (EU ETS) is a cornerstone of the European Union's policy to combat climate change and its key tool for reducing industrial greenhouse gas emissions cost-effectively. The first - and still by far the biggest - international system for trading greenhouse gas emission allowances, the EU ETS covers more than 11,000 power stations and industrial plants in 31 countries, as well as airlines.

A "cap and trade" system

The EU ETS works on the 'cap and trade' principle. A 'cap', or limit, is set on the total amount of certain greenhouse gases that can be emitted by the factories, power plants and other installations in the system. The cap is reduced over time so that total emissions fall. In 2020, emissions from sectors covered by the EU ETS will be 21% lower than in 2005.

Within the cap, companies receive or buy emission allowances which they can trade with one another as needed. They can also buy limited amounts of international credits from emission-saving projects around the world. The limit on the total number of allowances available ensures that they have a value.

After each year a company must surrender enough allowances to cover all its emissions, otherwise heavy fines are imposed. If a company reduces its emissions, it can keep the spare allowances to cover its future needs or else sell them to another company that is short of allowances. The flexibility that trading brings ensures that emissions are cut where it costs least to do so.

By putting a price on carbon and thereby giving a financial value to each tonne of emissions saved, the EU ETS has placed climate change on the agenda of company boards and their financial departments across Europe. A sufficiently high carbon price also promotes investment in clean, low-carbon technologies.

In allowing companies to buy international credits, the EU ETS also acts as a major driver of investment in clean technologies and low-carbon solutions, particularly in developing countries.

Third phase brings significant changes

Launched in 2005, the EU ETS is now in its third phase, running from 2013 to 2020. A major revision approved in 2009 in order to strengthen the system means the third phase is significantly different from phases one and two and is based on rules which are far more harmonised than before. The main changes are:

· A single, EU-wide cap on emissions applies in place of the previous system of national caps;

· Auctioning, not free allocation, is now the default method for allocating allowances. In 2013 more than 40% of allowances will be auctioned, and this share will rise progressively each year;

· For those allowances still given away for free, harmonised allocation rules apply which are based on ambitious EU-wide benchmarks of emissions performance;

• Some more sectors and gases are included.

Almost half of EU emissions covered

While emissions trading has the potential to cover many economic sectors and greenhouse gases, the focus of the EU ETS is on emissions which can be measured, reported and verified with a high level of accuracy.

The system covers emissions of carbon dioxide (CO2) from power plants, a wide range of energy-intensive industry sectors and commercial airlines. Nitrous oxide emissions from the production of certain acids and emissions of perfluorocarbons from aluminium production are also included (see box).

Participation in the EU ETS is mandatory for companies operating in these sectors, but in some sectors only plants above a certain size are included. Governments can exclude certain small installations from the system if fiscal or other measures are in place that will cut their emissions by an equivalent amount.

For commercial airlines, the system covers CO2 emissions from flights within and between countries participating in the EU ETS (except Croatia, until 2014). International flights to and from non-ETS countries are also covered, but as a goodwill gesture the European Commission has proposed deferring the scheme's application to these for 2012 to allow time for agreement on a global framework for tackling aviation missions to be reached in autumn 2013.

Altogether the EU ETS covers around 45% of total greenhouse gas emissions from the 28 EU countries.

Objectives of the climate policy of the European Union

By 2020, the EU has committed itself to:

· reducing its greenhouse-gas emissions by 20% (or even 30% in case an international agreement is reached that commits other countries in a similar way);

· increasing the share of renewable energies to 20% of total EU energy consumption;

• increasing the share of renewable energies in transport to 10%;
• improving energy efficiency by 20%.

Achieving these goals will require major breakthroughs in the research and development of new technologies. The European Strategic Energy Technology Plan (SET-Plan) - the technology pillar of the European energy and climate policy - outlines long-term energy research priorities for the horizon of 2020 to 2050. It lays the foundations for a European policy for energy technology and establishes a framework that brings together the diverse activities in the field of energy research.

References

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Faragó Tibor, Láng István (2012: A karbon kór folytatódik , Népszabadság, 2012. november 26. „Fórum” 12. o.

Faragó Tibor (2012): Világtalálkozók mérlege: SÚLYOS KÉRDÉSEK, KITÉRŐ VÁLASZOK. Fenntartható fejlődés, HVG Kiadványok, 2012. november.

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Zsarnóczai Sándor (2010): Gazdaság és klímapolitika. Szent István Egyetem, Gödöllő.