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Framework Convention on Climate Change

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Framework Convention on Climate Change . Basis for all negotiations since 1992 Ratified by 186 Countries Ratified by United States Commits all Parties (developed and developing) to reduce emissions Recognizes notion of common but differentiated responsibilities

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Framework Convention on Climate Change

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  1. Framework Convention on Climate Change • Basis for all negotiations since 1992 • Ratified by 186 Countries • Ratified by United States • Commits all Parties (developed and developing) to reduce emissions • Recognizes notion of common but differentiated responsibilities • “Stabilization of atmospheric GHG concentrations at a level that would prevent dangerous anthropogenic interference with the climate system” • No binding commitments for specific reductions ICCP 2001

  2. Views on Scientific Status • IPCC Assessment Reports - meet minimum credibility to drive policy process • Recognize general consensus on potential temperature increase and sea level rise • Other Effects - Speculative, likely to be unresolved before policy implementation • Current concern more properly focused on rate of change • Returning atmosphere in 200 year period to CO2 concentrations not seen in 50 million years ICCP 2001

  3. U.S. Policy Framework Pre - Kyoto • Binding targets and timetables • Single basket of gases • Flexible market mechanisms • No international harmonized policies and measures • Developing country role • Long term objective ICCP 2001

  4. Kyoto Protocol • Binding targets and timetables • Single basket of gases • Flexible market mechanisms (placeholder) • No common policies and measures • Developing country rule - unresolved • Long-term objective - unidentified ICCP 2001

  5. Industry Views On Kyoto • No organized opposition outside U.S. • Wait and see attitude on completion of market mechanisms • Little strong support for protocol • Primary U.S. opposition focused in energy industry ICCP 2001

  6. Basis For Opposition To Kyoto • Purely political • Emissions Cap • Stringency of target and timetable • Lack of developing country role • All of above ICCP 2001

  7. Basis for International Views of U.S. Position - Perception • U.S. highest per capita emissions • Appearance of lack of domestic policy • Fear of market mechanisms as U.S. advantage • Dominance over developing countries ICCP 2001

  8. Basis for International Views of U.S. Position - Reality • Emissions declined vs. economic growth • Domestic expenditures on climate change greater than any other country • Domestic U.S. action likely with market mechanisms • Developing country opportunities very great ICCP 2001

  9. Current Industry Concerns • Agnostic on carbon cap in KP; but supportive of effective market mechanisms • Skeptical that policy process will proceed without some carbon constraint • U.S. credibility key to effective completion of market mechanisms • U.S. posturing threatens private sector opportunities overseas ICCP 2001

  10. Path To Completion • Modification of first budget period • Definition of developing country role • Identification of long-term objective • Satisfactory completion of flexible mechanisms, including sinks ICCP 2001

  11. Possible Path Forward • Focus discussion on long-term objective • Initiate technology project challenge • power production, transportation • Provide domestic stimulus to industry • Action: Tax policy Credit for early action Other ICCP 2001

  12. Possible Path Forward • Change metric for success • Penalty system / Incentive system • Eliminate regulatory barriers • Champion American ingenuity • Address concern for Japanese honor ICCP 2001

  13. Target and Timetable • First budget period too tight, too slow • Few Parties can comply • Propose averaging with future periods • Relax compliance issues in near-term ICCP 2001

  14. Developing Countries • No International treaties impose identical conditions on developing countries as developed • Establish process for negotiation • Identify metrics for participation • Consider financial assistance ICCP 2001

  15. Market Mechanisms • Rational discussion on sinks • Identify support among EU and Umbrella Group countries • Avoid technology listing • Ensure full fungibility ICCP 2001

  16. Summary • U.S. and world industry willing to “manage” balanced global effort • Process must be credible and have understandable long-term objective • If policy makers are to address greenhouse gas emissions, it should be done on a global basis, not on a domestic unilateral front • To succeed must include developing countries, but not under same conditions as developed • Market mechanisms approach may be the best of a bad choice of alternatives ICCP 2001

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