1.4.1 UNFCCC and its Kyoto Protocol

• Equity, which is expressed as “common but differentiated responsibilities” that assigns the lead in mitigation to developed countries (Article 3.1) and that takes the needs and special circumstances of developing countries into account (Article 3.2).
• A precautionary principle, which says that “where there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing such measures, taking into account that policies and measures to deal with climate change should be cost-effective so as to ensure global benefits at the lowest possible cost” (Article 3.3).
• A right to and an obligation to promote sustainable development (Article 3.4).
• An obligation to cooperate in sharing information about climate change, technologies through technology transfers, and the coordination of national actions (Article 3.7)

Based on the principle of common but differentiated responsibilities, Annex I countries are committed to adopt policies and measures aimed at returning – individually or jointly – their GHG emissions to earlier levels by the year 2000 (Article 4.2). Following the decision of the first Conference of the Parties^[17] (COP1) in Berlin in 1995 that these commitments were inadequate, the Kyoto Protocol was negotiated and adopted by consensus at COP3, in Kyoto in 1997, and entered into force on 16 February 2005. This was preceded by the detailed negotiation of the implementing rules and agreements for the Protocol – the Marrakech Accords – that were concluded at COP7 in Marrakech and adopted in Montreal at CMP1^[18]. As of December 2006, the Protocol has been ratified by 165 countries. While Australia and the United States, both parties to UNFCCC, signed the protocol, both have stated an intention not to ratify.

Several key features of the Protocol are relevant to the issues raised later in this report:

• Each Party listed in Annex B of the Protocol is assigned a legally binding quantified GHG emission limitation and/or reduction measured in CO₂ equivalents for the first commitment period 2008–2012. In aggregate, these Parties are expected to reduce their overall GHG emissions by “at least 5 per cent below 1990 levels in the commitment period 2008 to 2012” (Article 3.1). Some flexibility is shown towards economies in transition who may nominate a base year or period other than 1990 (Article 3.5, 3.7).
• Six classes of gases are listed in Annex A of the Protocol: CO₂, CH₄, N₂O, HFCs, PFCs and SF₆. Emissions from international aviation and maritime transport are not included.
• The so-called Kyoto flexibility mechanisms allow Annex B Parties to obtain emission allowances achieved outside their national borders but supplemental to domestic action, which is expected to be a “significant element of the effort” (Article 6.1 (d), Article17, CMP1^[19]). These mechanisms are: an international emission trading system, Joint Implementation (JI) projects in Economies in Transition, projects undertaken as of year 2000 in developing (non-Annex I) countries under the Clean Development Mechanism (CDM) and carbon sink projects in Annex B countries.
• A set of procedures for emission monitoring, reporting, verification and compliance has been adopted at CMP1 under Articles 5, 7, 8 and 18.

In accordance with Article 3.9, the Parties to the Protocol at CMP1 began the process of negotiating commitments for the Annex B Parties for the second commitment period, creating – the ‘Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol’ (AWG), with the requirement that negotiations be completed so that that the first and second commitment periods are contiguous. Work continued at CMP2 in Nairobi and in 2007 the AWG will work on, amongst other thing, ranges of emission reduction objectives of Annex I Parties with due attention to the conditions mentioned in Article 2 of the Convention (see 1.2.1). The task is to consider that “according to the scenarios of the TAR, global emissions of carbon dioxide have to be reduced to very low levels, well below half of levels in 2000, in order to stabilize their concentrations in the atmosphere” (see Chapters 3 and 13).

In addition, CMP2 started preparations for the second review of the Protocol under Article 9, which in principle covers all aspects of the Protocol, and set 2008 as the date for this review.

Under the UNFCCC, a Dialogue on Long-Term Cooperation Action to Address Climate Change by Enhancing Implementation of the Convention (the Dialogue) was established at COP11 in 2005, met during 2006 and is to conclude at COP13 in 2007. The Dialogue is “without prejudice to any future negotiations, commitments, process, framework or mandate under the Convention, to exchange experiences and analyse strategic approaches for long-term cooperative action to address climate change”.