The Kyoto Conference

Leading up to the Conference, the Europeans met frequently to coordinate their position. The fact that they were exceeding their reduction targets inspired them to press for a higher target of 15%. Of course, the reason was not due to their own efforts, but a combination of the British dash for gas from the North Sea, the closing of obsolete and dirty factories in the former East Germany, and the widespread economic recession that kept down energy usage. The offer of 15% was also conditioned on the U.S. and Japan following suit. In March the EU environmental ministers roughed out a deal for different quotas for each member state. This would be placing a bubble over the entire Continent. Reductions would be as high as 30% for Luxembourg. Germany, Britain, Austria, Belgium, Italy, Denmark, and the Netherlands would also be required to reduce their emissions. France and Finland would freeze emissions. Sweden, Ireland, Spain and Greece could increase their emissions. Finally, Portugal would have the biggest increase: 40%. The figures reflected the member states' success in reducing carbon, as well as their needs for economic development. The allotments became known as burden sharing.

Six weeks before the conference, the EU sent a delegation of top officials to Washington to persuade Clinton that the American proposal to cut emissions to 1990 levels within fifteen years was inadequate. Furthermore, the officials hoped to counter U.S. demands that China and the developing countries be included. When experts and mid-level diplomats from 131 countries met in Bonn to try to reach detailed agreement in anticipation of the Kyoto Conference, the negotiations stalled.

Once the parties arrived in Kyoto, it was apparent that their differences were extreme. The Europeans began with the position that they would not accept higher cuts than other industrial nations, but this gave way to the practicalities of reaching an agreement. They also backed off their pledge of 15% cuts when it became obvious that the U.S. and Japan would not do the same. They began by opposing loopholes, primarily the American proposal for carbon sinks (forests) or for flexibility mechanisms of emission trading, Joint Implementation and Clean Development Mechanisms. By the end of the acrimonious eleven days, the Europeans had conceded these points. The EU's efforts to coordinate on a daily basis were exhausting. The fifteen member countries met up to three times a day, sometimes for a total of six hours, lasting until 3:00 am.

The final target for the European Union was an 8% reduction, 7% for the U.S. and 6% for Japan. The EU later negotiated final numbers for the bubble among its members, resulting in a different level for each one, that is burden sharing. Among the big countries, Germany and Denmark cut the most, 21%, and Britain cut 12%. Portugal got the biggest increase, 27%, Greece got 25%, Italy got 15%, and Ireland got 13%. The Netherlands, usually regarded as an environmental leader, was required to cut only 6% [2]. This was a concession to its oil and chemical industries. In tonnage rather than percentages, the German reduction would be 260 million tons, and the British would be almost 100 million tons. With its small base, Portugal would add only 20 million tons.

After Kyoto the EU moved forward to promote the Protocol and have it ratified both by the Union collectively and by the (then) fifteen member states. Through its Commission Directorate General, periodic meetings of the member environmental ministers, and the semi-annual meetings of the European Council (Summit), the EU managed to present a fairly unified position toward the non-European parties to the Kyoto Protocol, although often arrived at after difficult internal bargaining. Ratification by the Union and its members took longer than expected. The EU did not ratify the Protocol until 2002. During the same period, it found itself drifting away from the U.S. At first, the division was mild while Clinton remained president, but after George W. Bush became president, the chasm widened.

Besides checking with its member governments, the EU took into account the opinions of interest groups. The Climate Action Network maintains a European office in Brussels, with a staff of six, where it monitors the EU Climate Change Programme, burden sharing among its members, emissions trading, renewables, efficiency, and other programs. The Network also has its own representatives in most countries. Its eighty-three European affiliates include international ones like the World Wildlife Federation and Friends of the Earth, as well as those unique to a country like the Danish Naturfredningsforening and the Portuguese Association for Nature Conservation.

The EU also considered the goals of business. The Round Table of Industrialists laid out several. It sought a stable, predictable and flexible investment environment and a target setting which would reflect the particular characteristics of individual industries. It wanted voluntary action, which would pay attention to cost effectiveness and utilize cost benefit analysis when evaluating any recommendations [3]. The Union of Industrial and Employers' Confederations of Europe (UNICE) follows EU developments in detail. Within the Commission, business finds a sympathetic ear in the Directorate General for Enterprises and the Directorate General for Energy and Transport.

Although an overwhelming number of industries are unsympathetic toward regulations limiting carbon dioxide emissions, a few see its benefits. The European Business Council for a Sustainable Energy Future, based in Brussels, has about forty members who would benefit from the Kyoto Protocol. These range from railways and natural gas companies to engineering and financial consultants. The World Alliance for Decentralized Energy, based in Edinburgh, has about twenty members, ranging from national organizations to individual companies manufacturing co-generation equipment.

Several big businesses have chosen the role of environmental good citizen. Under the personal leadership of Sir John Browne, BP pursued a green path. In 1998 Sir John pledged to cut its greenhouse gas emissions by 10% rather than the lower Kyoto target. In an additional step, he withdrew his American subsidiary, Amoco, from the notorious Global Climate Coalition. (The Coalition was an anti-environmental lobbying group in the U.S. in existence in the later 1990s, until it became discredited.) During the next year, BP began pollution auditing as the basis for a company wide trading system. In a symbolic gesture, the corporation changed its logo to a sunburst, and announced it visualized a future beyond petroleum.

The bi-national Royal Dutch Shell corporation was a close second to BP in its efforts to become more environmentally friendly. After a slight delay, it also withdrew its American subsidiary from the Global Climate Coalition. It invested in a plant to turn wood shavings into green fuel for automobiles and opened a hydrogen fuel station in Iceland, using geothermal power from geysers to manufacture the hydrogen. Its chairman, Sir Philip Watts, gave a speech in Texas, calling for the global warming skeptics to get off the fence and accept that action needs to be taken "before it is too late." He said "we can't wait to answer all questions beyond reasonable doubt," adding "there is compelling evidence that climate change is a threat." Sir Philip lamented the growing animosity across the Atlantic [4]. Shell also has established a fifth major business division: International Renewables. It began an internal greenhouse gas emissions trading system. The greening of the Royal Dutch Shell marked a change from the mid-1990s when it had attracted criticism for dumping an old drilling platform into the North Sea and had condoned human rights violations connected with its operations in Nigeria. Today, it joins BP to serve as a model for other businesses that want to support the environment.

Throughout Europe, business is adjusting to the demands for controlling greenhouse gas emissions with more or less grace. The Germans appear to be most accepting. Yet, virtually everywhere industrialists seem to believe that there will be no restrictions in excess of those for 2008-2012, the first commitment period. The idea of a second and a third commitment period with tighter and tighter limits seems beyond their ken. After the first period, nearly all the easy fixes will be used up. These include the dash to gas, decreases due to the collapse of East German and Eastern block economies, greater efficiency with new factories, and so forth. Even trading will lose its allure. While environmentalists and government experts foresee a second commitment period, business does not.

After the sixth Conference of the Parties at the Hague collapsed, the Europeans blamed the American demands for flexibility mechanisms (in U.S. terminology) or loopholes (in the view of the Europeans). One such mechanism was carbon sinks in the form of forests, both at home and in developing countries. Of course, Europe has little potential for adding to its forests, and therefore is unenthusiastic.

The Europeans were outraged when Bush renounced the Kyoto treaty. When Margot Wallstrom, head of the environmental Directorate General, flew to Washington to protest, she got an unsympathetic hearing. The Senate environment sub-committee chairman, Robert Smith, canceled a meeting with the delegation. The State Department arranged for the delegation to talk to only middle ranking officials. EPA Administrator Christine Todd Whitman was the only one who expressed any sympathy, and she was unable to do much. The EU officials followed up the visit to Washington with visits to Russia and Japan to encourage ratification. To do so they offered concessions and aid. They also visited China.

The following year, in preparation for the seventh Conference of the Parties in Marrakesh, Morocco, the EU persuaded nearly all countries except the U.S. to undertake reductions. Unfortunately, this involved compromises that lowered the amount of carbon dioxide reductions by the top thirty-seven industrial countries to about 2% rather than the 6% goal articulated in the Kyoto Protocol. Developing countries were to get $500 million in aid as an incentive.

With an eye on its public image, the EU was able to ratify the Protocol three months before the Earth Summit in Johannesburg in 2002, the tenth anniversary of the Rio Summit that signed the Framework Convention. At Johannesburg, the U.S. came under widespread criticism, led by the EU delegations. Along with fifteen other delegations, the Europeans issued a statement pledging to exceed the Kyoto targets. Many saw the American position on global warming as part of a pattern of unilateral and disruptive action, including the invasion of Iraq, failure to pay United Nations dues, renunciation of the Anti-Ballistic Missile Treaty, and revival of the Star Wars missile defense system.

Over the next few years, little progress was made. The basic concepts and most of the details were in place. The annual Conferences of the Parties in New Delhi, Milan and Buenos Aires involved merely tinkering with details, like how to calculate the value of afforestation. With the intransigence of the Americans, it seemed unlikely that the Protocol would ever be ratified. Some Europeans began to speculate on the possibility of an alternative treaty to replace the Kyoto Protocol. The reasoning was that under European leadership, enough countries could limit their greenhouse gas emissions to have a positive impact and reduce global warming. As it turned out, this was not necessary with the Russian ratification and the entry of the Kyoto Protocol into force. The Europeans deserve credit for enticing Russia with the promise of entry into the WTO. Yet, without the U.S., this was only a marginal improvement over a Europe led alternative. At present, the industrial countries that have ratified the Protocol account for 62% of emissions of greenhouse gases.

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Negotiating Essentials

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