The Flexible Mechanisms to Combat Climate Change: A Critical View of their Legitimacy
| Autor | Rosa M. Fernández Egea |
| Cargo | Assistant Professor. Universidad Autónoma de Madrid |
| Páginas | 1-39 |
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The Kyoto Protocol makes available the use of "economic" mechanisms as a supplementary way of mitigating climate change: "emission trading", "clean development mechanism" and "joint implementation".1Although their performance should be additional to the main obligation, which is the reduction of Greenhouse gases (GHGs) emissions through national measures, in the last years many States have enthusiastically participated in those mechanisms -especially in the clean development mechanism-.
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Facing the current negotiations to shape a new and more ambitious climate change regime (CCR), it is convenient to consider if the flexible mechanisms provided by the Kyoto Protocol are suitable and effective to fight climate change in an equitable manner.2If most countries (especially developing ones) do not feel that the future clime regime is fair, they would not be willing to join the negotiations.3In fact, the future climate regime can either bring new opportunities to fight social injustice or remain as an instrument to perpetuate old injustices.4
In section 2, I will briefly go over some basic notions concerning the three Kyoto flexible mechanisms and their main rationale, namely cost-efficiency, and I will explain basic ideas on what could be the meaning of fairness and environmental integrity within the climate change regime. Sections 3 and 4 will be dedicated to the critics made against the two most important mechanisms, namely the emission trading and the clean development mechanism. I will consider the critics grouped in those regarding environmental ineffectiveness and those dealing with equity concerns for each mechanism; leaving for section 5 the explanation of some common and general critics applicable to both of them. In the last section I will draw some conclusions.
The most important among the advantages attached to the use of "economic" mechanisms in climate policy is that they provide flexibility to achieve the environmental objective, allowing the reduction of emissions at a minimum cost by
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efficiently allocating the responsibilities between agents (cost-efficiency justification).5
Therefore they are also known as "flexible mechanisms".
According to article 17 of the Kyoto Protocol, countries with reduction commitments (Annex I countries6) are allowed to sell their excess capacity of emissions entitlements to others that will exceed their targets because they could not reduce as much, or find it cheaper to buy those rights than to make direct reductions.7Therefore, this market has created a new commodity in the form of GHG emission reductions, although, being CO2 the most important GHG, one speaks of "carbon emissions" and "carbon market".
As a complement to emission trading, there are two mechanisms based on the implementation of projects: joint implementation8and clean development mechanism (CDM)9, established through articles 6 and 12 of the Kyoto Protocol. They allow countries and their public or private entities to fund projects aimed at reducing source
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emissions or at increasing the absorption of carbon sinks in other countries, obtaining in exchange carbon credits in order to comply with their commitments.10
The theoretical basis to justify that the flexible mechanisms will serve to reduce emissions at a lower cost is that the costs of emissions reduction units differ between companies, regions and, in general, between economic operators.11Indeed, it can be more expensive for a company to make its own investments to abate emissions as compared to investing in projects abroad or purchasing the necessary allowances.
Supposedly, The economic incentive also allows the promotion of new environmentally friendly technologies that reduce emissions, and the possibility to sell the surplus of emission rights. Moreover, the flexible mechanisms offer new business opportunities that have been used as a hook to attract those economies that were more reluctant to assume the costs of climate change mitigation. They also keep the high emitters in the political game, since these mechanisms provide a way to reduce emission with fewer costs (social acceptance element).12In theory, the possibility to reduce emissions cheaper strengthens the willingness to act. In fact, it is generally agreed that without them no Protocol would have ever been adopted, even though it was not followed by the ratification of some States.
However, there are some elements missing in these justifications, which are essential for an adequate climate change regime, namely the non-market goals: environmental effectiveness and the equity/justice elements. It has been affirmed that "cost is not an ethically acceptable excuse for failing to take actions to reduce harmful levels of pollution below the emitting party’s fair share of global emissions, particularly when that pollution threatens basic human rights to life, health and security".13As discussed
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below, a balance must be achieved between environmental effectiveness, equity and economic efficiency.14
Notwithstanding the positions sustained by (a few) scholars/scientists either denying the problem of climate change or claiming that is already too late to do something about it, there are good reasons to act against climate change. In the first place, it will be less costly to act now, even as a preventive action, than to do it later.15 Furthermore, not to act can be considered as unethical or unjust.
Yet, what is justice? What is to be considered as a fair climate regime? What method of allocation of GHG emissions reduction is equitable? And what time period should we take into account? Are we talking about equity between those who are now alive (inter and intra-country equity) or should we take into account future generations’ welfare (inter-generational equity)16There are no clear-cut answers that would satisfy all interests.17
However, a preliminary issue,is whether justice or equity should be addressed when designing the future climate international regime. Some authors have stressed that countries need to take into account the equity element and not only their national
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interests when forming their positions to face international negotiations,.18Not paying attention to ethical reflections leads to significant injustices. The climate change problem is a good example of that.
In fact, climate change policies could exacerbate the existing injustice in the world. On the one hand, those countries that have done least to cause the problem would probably suffer the worst consequences.19Moreover,, those most vulnerable to climate change impacts are also the least able to pay for mitigation and adaptation measures.20Even if it was not possible to eradicate all inequities within climate change policies, they should not make them any worse.21
On the other hand, developing countries (mostly emerging countries) claim their right to develop notwithstanding the climate change problem, since it was not created by them. This has full consideration in the actual climate change regime (e.g. art. 3.1 and 3.2 UNFCCC), namely only industrialized countries are committed to reduce concrete GHG emissions or provide financial and technical support, among other obligations towards developing countries (art. 11 UNFCCC).
Therefore, the future post-Kyoto regime has to comply with two indispensable criteria: environmental integrity and fairness. Otherwise it will be very difficult to rejoin all countries into feasible and appropriate international negotiations facing the design of a future climate change regime22
The environmental integrity criteria require the assurance of sufficient GHG emission reductions in order to keep below a safe temperature level. According to article 2 of the UNFCCC, the goal is to stabilize GHG concentrations in the atmosphere "at a level that would prevent dangerous anthropogenic interference with the climate system", and that "[s]uch a level should be achieved within a time frame sufficient to allow ecosystems to
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adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner". According to the IPCC...
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