The Kyoto Protocol to the United Nations Framework Convention on Climate Change has changed the context of global warming policies by prescribing legally binding greenhouse gas (GHG) emissions reduction targets to countries listed in its Annex B. The EU has a commitment to reduce its overall emissions by 8 per cent, but Article 4 of the Protocol (usually referred as the "EU bubble") allows the EU and its member states to fulfill their commitments jointly, through differentiated commitments for member states. At a meeting in Luxembourg, June 17, 1998, the national targets were agreed upon, and they vary widely.
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Allocation of Commitments within EU (EU Council Decision June 1998) |
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QELRC commitment |
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Austria |
-13 |
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Belgium |
-7.5 |
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Denmark |
-21 |
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Finland |
0 |
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France |
0 |
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Germany |
-21 |
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Greece |
+25 |
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Ireland |
+13 |
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Italy |
-6.5 |
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Luxembourg |
-28 |
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The Netherlands |
-6 |
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Portugal |
+27 |
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Spain |
+15 |
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Sweden |
+4 |
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United kingdom |
-12.5 |
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Total EU Commitment: 8% |
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Under the Protocol, governments are required to implement policies and measures to provide incentives for emission reductions at the least possible costs. These policy packages should consist of cost-effective, dynamic and flexible instruments, which aim to improve energy efficiency and to achieve emission reductions. Environmental fiscal instruments, such as carbon and energy taxes, are already in place in a number of countries aiming to reduce GHG emissions. One of the main open question relates to the limitation to the use of the Kyoto mechanisms ("ceilings"), i.e. industrialized Parties should fulfill the bulk of their reduction commitments by cutting domestic GHG emissions.
The EU Member States reached after long discussions an agreement on May 12, 1999 requiring that at least 50 percent of GHG emissions reductions must be achieved via domestic actions. Domestic policies will thus still have an important role to play in reaching national commitments. However, countries, such as Australia, Canada and the USA expressed a strong rejection to the proposed "ceilings" and argued that there should be no "ceilings" after establishing clear rules for adopting measures under the Kyoto Mechanisms. The proposed EU limits on the use of the Kyoto Mechanisms is as follows (Joint Implementation Quarterly June 1999, p.5):
‘In order to calculate the maximum amount of GHG emission reduction units countries could acquire or sell via the Kyoto Mechanisms, the EU Council of Ministers proposes a number of formulas. According to the proposal, Parties that wish to acquire GHG emission reduction units through Kyoto Mechanisms (the "buyers") can choose between two options. The maximum amount of GHG emission reduction to be acquired via the Kyoto Mechanisms can be the highest of the outcome of the following two formulas:
The base year in (1) is 1990 unless specified differently for Parties under the Kyoto Protocol. The "buyers" can choose either (1) or (2) but may not acquire more than the highest outcome of the two. The difference between the two formulas is that (1) is mainly based on the Kyoto Protocol QELRC; whereas (2) takes the actual emission reduction effort of Parties as its basis. With respect to "selling" Parties the EU Council proposes to use formula (1).’
Joint Implementation Quarterly. Chief Editor: Catrinus Jepma. Foundation JIN Meerkoetlaan 30a, 9765 TD Paterswolde, The Netherlands. www.northsea.nl/jiq