AGREEMENT KYOTO AGREEMENT HISTORIC KYOTO THE HISTORIC THE GLOBAL ADDRESS GLOBAL TO ADDRESS EFFORT GLOBAL A IN A GLOBAL EFFORT TO FIRST STEP CRITICAL FIRST A CRITICAL A STEP IN WARMING WARMING December 11 December 11 1997 1997 the The Kyoto agreement represents an historic and and unprecedented unprecedented step step to to reduce reduce the threat of global warming in an environmentally strong and economically sound sound of specific importance of way It involves 160 nations and recognizes the crucial crucial importance specific Vice steps to address climate change The leadership offered by the President and and Vice the now the from now - and generations from President allowed this agreement to be completed — agreement will be remembered as establishing the the core core elements elements of of aa strong strong framework bindinQ leQ'allv and realistic realistic and leealiv binding framework___________________________________ • reducing target of binding target to aa binding United States Tar2et Target and Timetable The The United States agreed agreed to of reducing by 2008levels by based on baseline based below aa baseline percent below to 77 percent greenhouse greenhouse gas gas emissions emissions to on 1990 1990 levels 2008the 77 that so -system accounting different somewhat a on based is agreement The 2012 2012 The agreement is based on a somewhat different accounting system - so that the proposal initial President's initial proposal the President’s to the close to fairly close is fairly reduction is percent reduction percent • Market-Based The agreement reflects reflects an an historic historic emphasis emphasis on on market-based market-based mechanisms mechanisms problem to to address address an an environmental environmental problem trading Emissions trading Emissions trading The The agreement agreement includes includes aa framework framework for for emissions emissions trading reducing emissions means of best means the best among among industrialized industrialized countries countries to ensure ensure the of reducing emissions Mechanism Development Mechanism includes aa Clean Joint Implementation The agreement agreement includes Clean Development developing in projects joint do to able be will under which U S businesses will be able to do joint projects in developing developing to developing technology to needed technology transfers needed that transfers win-win that is aa win-win This is countries This reducing countries countries while while allowing allowing our our companies companies to to earn earn credits credits for for reducing greenhouse greenhouse enuss10ns gas gas emissions • pushed for A2reement The United States successfully pushed Comprehensive Agreement for coverage coverage of of all all six greenhouse gases which most other major economies opposed as well as coverage of of six all and sinks of inclusion The carbon absorb which forests as such so-called sinks “sinks” absorb carbon The inclusion of sinks and all six environment the environment protection of gases is a major U S victory ensuring comprehensive protection of the • Developing Country Participation Global warming is a global problem requiring a global solution We have therefore adopted adopted aa two-step two-step process process to to address address this this problem problem makes and This agreement locks in hard commitments by the developed countries countries and makes aa down down the Clean payment on on developing developing country country commitments commitments through through the the the Clean Development Development Mechanism But the President has made very clear that the United States would not take on legally binding targets until there is meaningful participation by developing developing countries countries We will be working hard over the coming months and years to secure that participation CHANGE CLIMATE CHANGE ON CLIMATE PRESIDENT'S THREE-STAGE PLAN ON THE PRESmENT’S stages three stages in three proceed in will proceed plan will President's plan To achieve reductions in greenhouse gases the President’s • Early for Early Incentives for R D Tax Incentives Incentives Stage 1 Priming the Pump Through R« D the of the stage of first stage Action Federal Leadership and Industry Consultations The first incentives tax in billion $5 including -plan President's package includes a 9-point action President’s in tax incentives energy Federal energy of Federal and spending for energy efficiency incentives for early action a set set of to how to on ideas best their explore industry-by-industry consultations to initiatives and industry-by-industry their best ideas on how for reduce emissions in a cost-effective manner including market-oriented standards for Stage of energy efficiency The first economic review would occur near the end of Stage 1 1 • 2004 around 2004 Stage 2 Review and Evaluation The second stage which would begin around progress our of review a including by 1 Stage in adopted will build upon the programs of our progress system trading system and an evaluation of next steps as we move toward a market-based permit trading be would system permit the of for carbon emissions During this second stage the details be that refined and perhaps tested Such a permit system is similar in concept to the one that than larger significantly dramatically cut acid rain emissions -- although the scale would be larger than 2 Stage 2 of Stage that program The second economic review would occur near the end of • Emissions Stage 3 Meeting Binding Targets Through Domestic and International Emissions levels 1990 Trading Program In the third stage we would reduce emissions to below 1990 levels trading by 2008-2012 through a market-based domestic and international emissions trading system Before beginning this third stage the second economic update and review would allow Congress and the President to evaluate how the economy had responded to a President's plan The President decade’s decade's worth of experience in the first two stages of the President’s that we give proper assistance insure to Congress is committed to working with labor and to any workers dislocated by the changes in energy use from fi'om any climate change plan This three-stage program recognizes the long-term nature of the effort in three ways • By adopting a graduated approach to emissions reductions it allows us to exploit the tremendous opportunities for win-win reductions first • By adopting a system of regular scientific and economic updates and reviews it allows us to monitor our progress and re-assess our success in reducing emissions the state of scientific knowledge and how the economy is responding to our efforts Only after we have accumulated ten years of experience with the first two stages of the program would we enter the internationally binding period • By insisting that the United States will not adopt binding obligations without key developing country participation and by emphasizing the importance of an international trading system and joint implementation we take advantage of low-cost reduction -- either here or abroad possibilities wherever they occur - t 1lajor Major Provisions of the Kyoto Protocol On December 11 I1997 997 the Third Conference of the Parties reached agreement on a significant first step The Kyoto Protocol contains the core elements of a strong realistic framework to protect both the environment and the global economy Together industrialized nations agreed to significant reductions of their greenhouse gas emissions In addition to these cuts the most important elements of this agreement are the coverage of all six greenhouse gases and the flexible market mechanisms that the US U S pioneered in designing These elements are signal achievements and mark an historic breakthrough of the world's world’s industrialized nations for establishing a global and flexible framework for tackling this issue These elements will significantly lower the cost of addressing climate change and will be the main engines to channeling investment and technology to the developing developing world world Kyoto is only the first step in a long process however as we have to complete the task of integrating developing nations into this framework This was the most disappointing aspect of Kyoto While the United States saw some signs of progress on this front we have us have considerable considerable work work ahead ahead of of us Binding targets The The treaty treaty includes includes aa target target for for all all industrialized industrialized countries countries taken taken of 5 6% below 1990 levels during the 2008 to 2012 timeframe together together of 5 6% below 1990 levels during the 2008 to 2012 timeframe • •• • Proposed national emission targets The The EU committed committed to to aa 8% 8% reduction reduction the the U S to 7% and Japan to 6% U S to 7% and Japan to 6% Later Nations agreed Later start start date date Nations agreed to to begin begin reductions reductions at at aa later later starting starting date date allowing allowing more time to replace capital intensive investments in their energy sector more time to replace capital intensive investments in their energy sector Five year budget periods The Kyoto Protocol adopted the idea of allowing nations to set their target for the average of emissions over a five year emissions budget period aa U S -proposed budget period U S -proposed innovation innovation Allowing Allowing nations nations to to reach reach their their emissions emissions budget over over aa multi-year multi-year period gives gives them them flexibility flexibility in in meeting meeting their their target target and and in in responding to fluctuations in energy usage from economic performance new investment investment in in energy-efficient energy-efficient equipment equipment and and weather weather variation variation All All Greenhouse Greenhouse Gases Gases The The agreement agreement covered covered all all six six major major greenhouse greenhouse gases gases including use is including three three synthetic synthetic gases gases whose whose use is growing growing at at aa rapid rapid rate rate and and whose whose impact impact on on the environment is longer lasting The U S urged this approach as a more comprehensive comprehensive approach approach to to addressing addressing the the issue issue Carbon sinks The agreement includes accounting for so-called carbon sinks such as forests which absorb carbon By giving nations credit for protecting and promoting forests the Protocol will encourage sustainable land management and provide costeffective means of achieving emission reductions lnternational International market mechanisms mechanisms The agreement establishes market mechanisms such as international emissions trading trading International trading is designed to achieve the greatest cost Nations that effectively greatest reductions reductions in in emissions emissions at at the the lowest lowest possible cost reduce their emissions can sell excess reductions to other less successful successful nations nations Similar reduce their emissions can sell excess reductions to other less Similar measures have helped to dramatically cut the costs of stopping acid rain and phasing out measures have helped to dramatically cut the costs of stopping acid rain and phasing out leaded will work work are are to to be be established established over over the the leaded gasoline gasoline The The rules rules for for how how this this system system will next years after which time nations may submit the protocol for ratification next years after which time nations may submit the protocol for ratification Developing to bring bring industrialized industrialized nations nations into into this this Developing Nations Nations Much Much work work remains remains to framework this remains the principal task ahead of us for the coming years Nevertheless Nevertheless the the protocol protocol contains contains several several elements elements that encourage developing nations to reduce their emissions and prepare them to steps as as they they develop develop to to become become full full reduce their emissions and prepare them to take take steps members members of of aa global global framework framework •• Clean by Brazil Brazil this this mechanism mechanism will will allow allow Clean Development Development Mechanism Mechanism As As designed designed by developed target through through emission reductions in in developed countries countries to to contribute contribute to to their their target emission reductions developing developing countries countries providing providing incentives incentives for private investment in new energyenergy­ saving technologies in developing countries It also will help to direct resources to saving technologies in developing countries It also will help to direct resources to developing to the the adverse adverse effects effects of of climate climate change change developing countries countries particularly particularly vulnerable vulnerable to National nations agreed agreed that that this this treaty treaty should should not not National Security Security Provision Provision Industrialized Industrialized nations impede impede national national security security considerations considerations Emissions Emissions resulting from multilateral military operations were exempted from the agreement as were were bunker bunker fuels fuels stored stored in in overseas overseas operations were exempted from the agreement as bases bases