EEA_Q_and_A_Kyoto.pdf

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QuestionsandanswersonkeyfactsaboutKyototargets

* * * Achieving Kyoto targets in 10 key points * * *

1. Under the Kyoto Protocol, 25 EU Member States have individual targets while Malta andCyprus have no Kyoto targets. The EU-15 (i.e. the pre-2004 EU) has a single commontarget to be achieved by its Member States. The burden-sharing agreement sets thecontribution of each individual Member State towards reaching this common target. The

EU-27 has no common target under the Kyoto Protocol.

2. A Kyoto target, expressed as a percentage, corresponds in practise to an emission budget,i.e. a quantity of emissions that a country is allowed to emit during a certain period.Current Kyoto targets and corresponding emission budgets concern the 5-year period20082012, which is the first commitment period of the Kyoto Protocol. An emission

budget is constituted of Kyoto units, where one Kyoto unit corresponds to one tonne ofpermissible greenhouse gas emissions. The initial emission budget corresponding to a

Kyoto target is defined as follows:

Initial Kyoto emission budget for 20082012 =

[base-year emissions] x [percentage] x 5 (years of the commitment period).

3. To achieve its Kyoto target, a country should reduce or limit its emissions during thecommitment period so that they do not exceed its emission budget. A country can alsoadjust its emission budget by adding or subtracting Kyoto units, through the use of the

Kyoto Protocol flexible mechanisms. Kyoto units may come from other countries' emission

budgets (AAUs), be generated from carbon sink activities (RMUs) or from emission-reducing projects in other countries (CERs, ERUs).

4. The use of Kyoto flexible mechanisms must remain supplemental to domestic efforts.Countries are also limited in the amount of Kyoto units they can transfer out of their

overall emission budget.

5. Surplus Kyoto units stemming from the over-delivery of a Kyoto target can be transferredor sold to other countries, cancelled or banked for a subsequent commitment period (ifdecided upon by Parties to the UNFCCC).

6. The EU emission trading scheme (EU ETS) is influencing the way European countries willachieve their Kyoto targets. Under this 'cap-and-trade' system, large industrialinstallations must meet a certain emission budget by reducing their emissions and/or byadjusting their budget through the trading of EU carbon allowances. The trading of EU ETS

allowances is mirrored by an equivalent transfer of Kyoto units. Therefore when MemberStates set national emission caps (and thereby emission budgets) for the period 2008

2012, Member States allocated de facto part of their Kyoto emission budget to the EU ETS

sectors. In so doing, they fixed the overall contribution of the EU ETS towards reachingKyoto targets at national level.

7. To ensure compliance with their Kyoto targets, Member States also need to addressemissions in the sectors not covered by the EU ETS (for example the transport, residentialand agriculture sectors).

8. Success in reducing emissions from sectors not covered by the EU ETS will determine theextent to which governments will need to use the Kyoto flexible mechanisms, if at all, toachieve their targets.

9. To assess a country's situation with regards to its Kyoto target, one must account for theeffect of the EU ETS on the overall emission budget: the balance "emissions againstemission budget" to be checked is:

[total emissions EU ETS emissions] vs.

[Kyoto emission budget national EU ETS cap for 20082012 (allocated allowances)]

10.In order for the EU-15 to achieve its Kyoto target for 20082012, all EU-15 MemberStates must achieve individually their own burden-sharing target (assuming no use ofsurplus Kyoto units within the EU-15).


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1.WhatKyototargetsdoestheEUhave?UndertheKyotoProtocol,thepre2004EU15groupofMemberStateshastakenona

commoncommitmenttoreducingemissionsby8%onaveragebetween2008and2012,

comparedto

formally

agreed

base

year

emissions.

Within

this

overall

target,

differentiated

emissionlimitationorreductiontargetshavebeenagreedforeachofthe15pre2004

MemberStatesunderanEUaccordknownasthe burdensharingagreement.Tenofthe

newerEU12MemberStates(allexceptCyprusandMalta)alsohaveindividualtargets

undertheKyotoProtocol.Bulgaria,theCzechRepublic,Estonia,Latvia,Lithuania,Romania,

theSlovakRepublicandSloveniahavereductiontargetsof8%fromthebaseyear,while

HungaryandPolandhavereductiontargetsof6%.TheEU27doesnothaveaKyototarget.


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4 June 2010 3

OftheadditionalEEAmembercountries,NorwayandIcelandareallowedtoincrease

emissionsundertheKyotoProtocolby1%and10%,respectively,fromtheirbaseyear

emissions.SwitzerlandandLiechtensteinhavereductiontargetsof8%.Turkeyhasnotarget

undertheKyotoProtocol.Croatia,whichisanEEAcooperatingcountryandstarted

accessionnegotiationswiththeEUin2005,hasareductiontargetof5%.

UndertheKyotoProtocol,25EUMemberStateshaveindividualtargetswhileMaltaand

Cyprushavenotargets.TheEU15(i.e.thepre2004EU)hasasingletargettobeachieved

incommonbyitsMemberStates.Theburdensharingagreementsetsthecontributionof

eachindividualMemberStatetowardsreachingthiscommontarget.TheEU27hasno

commontargetundertheKyotoProtocol.

2.WhatisaKyototarget?AKyototargetisoftenexpressedasapercentageoftheemissionsofacountryduringaspecificallyagreedbaseyear.Thispercentagecancorrespondtoadecreaseoranincreaseof

emissionscomparedtothebaseyearemissions;itisinscribedinAnnexBoftheKyoto

Protocol.Inmostcases,emissionsforthebaseyeararecloseorequalto1990emissions.

Inpractice,aKyototargetcorrespondstoacertainquantityofgreenhousegasesthata

country(orgroupofcountries,inthecaseoftheEuropeanUnion)isallowedtoemitduring

acertainperiod.Thisquantityisformallycalledtheassignedamount,whichcanbe

representedasanemissionbudget.SuchKyotoemissionbudgetsrepresentacertain

quantityofunitsofpermissiblegreenhousegasemissionscalledassignedamountunits,

whicharegenericallycalledKyotounits.EachKyotounitcorrespondstoonetonneof

permissibleemissionsofgreenhousegases.Theperiodtowhichthebudgetcorrespondsis

calledacommitmentperiod.ThefirstcommitmentperiodoftheKyotoProtocolisthefive

yearperiod20082012.

TheinitialemissionbudgetcorrespondingtoaKyototargetfor20082012isdefinedas

follows:

InitialKyotoemissionbudgetfor20082012=

[baseyearemissions]x[percentage]x5(yearsofthecommitmentperiod).

AKyototarget,expressedasapercentage,correspondsinpractisetoanemissionbudget,i.e.aquantityofemissionsthatacountryisallowedtoemitduringacertainperiod.

CurrentKyototargetsandcorrespondingemissionbudgetsconcernthe5yearperiod

20082012,whichisthefirstcommitmentperiodoftheKyotoProtocol.Anemission

budgetisconstitutedofKyotounits,whereoneKyotounitcorrespondstoonetonneof

permissiblegreenhousegasemissions.

Forexample,theEU15Kyototargetcorrespondstoan8%decreasecomparedtobaseyear

emissions.Itsemissionbudgetistherefore:

[EU15emissionbudget]20082012=[Baseyearemissions]EU15x100

92x5

TheEU15emissionbudgetis19.621billiontonnesCO2equivalentfor20082012.


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3.Howcanacountryachieveitstarget?ToachieveitsKyototarget,acountrymustkeepthesumofitsgreenhousegasemissions

duringthecommitmentperiod20082012belowitsemissionbudgetforthatperiod.Thiscan

beaccomplishedthroughtwocomplementarymethods:

1. managingitsemissions;and/or2. managingitsemissionbudget.

ReducingorlimitingitsownemissionsisonewayforacountrytoachieveaKyototarget.

Theobjectiveisthentobringemissionsduringtheperiod20082012toalevelsothatthey

remainbelowthecorrespondingemissionbudget.Thiscanbeachievedbyimplementing

adequatepoliciesandmeasuresaddressingthemainsourcesofgreenhousegasesinthat

country(e.g.promotingenergyefficiencyandrenewableenergysources,improvingvehicle

efficiency,improvingwastemanagementpractices,etc.).

Emissionswillvaryduringthecommitmentperiodandsometimesmayevenbehigherthan

anaverageannualemissionbudget:whatmattersisthatthebalancebetweenemissionsand

emissionbudgetwillonlybecheckedattheendofthecommitmentperiodtodetermineifa

countryhascompliedwithits(legallybinding)commitment.

ActingonitsemissionbudgetisanotheroptionforacountrytoachieveitsKyototarget.In

particular,acountrycanincreaseitsemissionbudgetsothatitbecomeslargeenoughbythe

endofthecommitmentperiodtocoverthesumoftheemissions.Anemissionbudgetcan

alsobereducedthroughsellingifacountryforeseesthatitsemissionswillremainwell

belowtheirtarget.Modifyingacarbonbudgetisdonebytransferringinoroutacertain

numberofKyotounits.

Kyotounitscantakedifferentformsbutallunitscorrespondtoonepermissibletonneof

CO2equivalent.Suchunitsmaybe:

- assignedamountunits(AAUs),whichconstituteeverypartysinitialemissionbudget.Theseunitscan,toacertainextent,betradedbetweencountriesunderoneof

thethreeKyotoflexiblemechanismscalled internationalemissiontrading;

- certifiedemissionreductions(CERs),issuedforemissionreductionsfromcertainemissionreducingprojectsindevelopingcountries(whichhavethemselvesnotarget

undertheKyotoProtocol).TheseunitscorrespondtooneofthethreeKyotoflexible

mechanismscalled cleandevelopmentmechanism;

- emissionreductionunits(ERUs),issuedforadditionalemissionreductionsoremissionremovalsfromcertainemissionreducingprojectsinotherindustrialised

countries(whichhavethemselvesatargetundertheKyotoProtocol).Theseunitsare

issuedbyconvertinganequivalentquantityofexistingKyotounitsoftheprojects

hostcountry.TheycorrespondtooneofthethreeKyotoflexiblemechanismscalled

jointimplementation;

- removalunits(RMUs),issuedwhenspecificactivities(relatedtolanduseandforestryandoftenreferredtoascarbonsinkactivities)contributetoremoving

carbondioxide(CO2)fromtheatmosphere.


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ToachieveitsKyototarget,acountryshouldreduceorlimititsemissionssothattheydo

notexceeditsemissionbudget.Acountrycanalsoadjustitsemissionbudgetbyaddingor

subtractingKyotounits,throughtheuseoftheKyotoProtocolflexiblemechanisms.Kyoto

unitsmaycomefromothercountriesemissionbudgets(AAUs),begeneratedfromcarbon

sinkactivities(RMUs)orfromemissionreducingprojectsinothercountries(CERS,ERUs).

4.HowmanyadditionalKyotounitscanacountryusetomeetitsKyototarget?

ThereareprincipallimitstohowmanyKyotounitscanbetransferredtooroutofan

emissionbudget.TheKyotoProtocolstatesthattheuseofflexiblemechanismstoachievea

targetmustbesupplementaltodomesticeffort(althoughnoquantifieddefinitionis

provided).

Inaddition,eachcountrymustmaintainitsemissionbudgettoaminimumlevelofKyoto

unitsatalltimes.ThisminimumquantityofKyotounitsiscalledthecommitmentperiod

reserve;itisintendedtopreventcountriesfromovertransferringunitsandthusjeopardize

theirabilitytoreachtheiremissiontarget.

TheuseofKyotoflexiblemechanismsmustremainsupplementaltodomesticefforts.

CountriesarealsolimitedintheamountofKyotounitstheycantransferoutoftheiroverall

emissionbudget.

5.Whathappensifacountry overdelivers onitstarget?Ifbytheendofthecommitmentperiodacountryhasreduceditsemissionstoalevellower

thanitsemissionbudget,itwilldisposeofasurplusofKyotounits.TheKyotoProtocol

currentlyallowsthatcountryto:

- selltheseunitstoanothercountry(providedthatthecommitmentperiodreserveisnotaffected);

- canceltheseunits;- carryover theseunitstoasubsequentcommitmentperiod(subjecttoapplicable

rulesifsuchperiodisdecided).

Therefore,anysurplusunitheldbyaMemberStatewillnotbeautomaticallytransferredto

othercountrieswhichmightneedit,ortoacommonEUpot.Somecountrieshaveeven

alreadydecidedtoforbidsuchoptions,inordertopreventthesesurplusunitstooffset

emissionsinothercountries.Inparticular,theUnitedKingdomwhichplanstohave

reducedemissionwellbeyonditsKyototargetbytheendofthecommitmentperiodhas

passedlegislation(theCarbonAccountingRegulations)thatensuresthatanycarbonunitsin

excessofthebudgetarecancelledandthereforenotusedtooffsetgreenhousegasemissions

intheUnitedKingdomorelsewhereduringtheperiod20082012.


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GHG emissions

20082012

Assigned amount by the

end of 20082012

Unused units

(surplus)

Units to be used

for compliance

under Kyoto

Total emissions

at the end of the

commitment period

'Over-delivery'

SurplusKyotounitsstemmingfromtheoverdeliveryofaKyototargetcanbetransferredor

soldtoothercountries,cancelledorbankedforasubsequentcommitmentperiod(ifdecided).

6.HowdoestheEUemissiontradingscheme(EUETS)helpMemberStatesinreachingtheirKyototarget?

TheEUemissiontradingscheme(EUETS)isamajorEUclimatepolicyaimedtohelp

MemberStatesachievingtheirgreenhousegastargets.Itisa capandtrade systemcovering

around11000industrialinstallations,whichrepresentabout43%ofEUtotalemissionsin

2008.TheprincipleoftheEUETSissimilartotheprincipleofKyotocompliance:large

industrialinstallationshavebeenallocatedacertainemissionbudget(acertainamountof

emissionallowances)bytheirgovernmentfortheperiod20082012,whichtheyhavetomeet

byeitherreducingemissionsand/orbyadjustingtheirbudgetthroughtheacquisitionof

emissionallowancesonthecarbonmarket.Operatorsarealsofreetosellunusedallowances.

AnytransferofEUETSallowancesismirroredbythetransferofanequivalentnumberof

AAUs.Therefore,byestablishinganationalallocationplanfortheperiod20082012(which

definesanemissionbudgetforthesectorscoveredbytheEUETS),eachMemberStatehas

allocatedacertainportionofitsKyotoemissionbudgettooperatorscoveredbytheEUETS,

withthelegalobligationforthemtogiveback(surrender)asmanyallowancesastheywill

haveemittedgreenhousegasesduringtheperiod20082012.Insodoing,theyfixedthe

overallcontributionoftheEUETStowardsreachingKyototargetsatnationallevel:atEU

level,theEUETSprovidescertaintythataround40%ofEUtotalemissionswillbematched

byanequivalentnumberofKyotounits.


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Emissions c overed by t he EU ETS Surrendered allowanc es or CDM/JI units by ETS operators

Emissions not covered by the EU ETS Init ial Kyoto unit s minus allocated allowances

Carbon sink removals Use of flexible mechanisms at government level

Govern

ment-level

a

ction

ETS

emissions

(> cap)

Emissions

not

coveredby EU ETS

Initial

assigned

amount

ETS cap

Emissions

not

coveredby EU ETS

Initial

assigned

amount

ETS cap

EUETS

compliance

ETS capETS cap

+

purchased

allowances

ETS cap

sold

allowances

ETS

emissions

(= cap)

ETS

emissions

(< cap)

Emissions

not

coveredby EU ETS

Initial

assigned

amount

ETS cap

TheEUemissiontradingscheme(EUETS)isinfluencingthewayEuropeancountrieswill

achievetheirKyototargets.Underthis capandtradesystem,industrialinstallationsmust

meetacertainemissionbudgetbyreducingtheiremissionsand/orbyadjustingtheirbudget

throughthetradingofEUcarbonallowances.ThetradingofEUETSallowancesismirrored

byanequivalenttransferofKyotounits.

Thereforewhentheysetnationalemissioncaps(andtherebyemissionbudgets)forthe

period20082012forthesectorscoveredbytheEUETS,MemberStatesallocateddefacto

partoftheirKyotoemissionbudgettotheEUETSsectors.Insodoing,theyfixedtheoverallcontributionoftheEUETStowardsreachingKyototargetsatnationallevel.

7.WhatshouldgovernmentsfocusontoreachtheirKyotoorburdensharingtargets?

ThelinkbetweenKyotounitsandEUETSallowancesandtheimpliedtransferofKyoto

unitstoEUETSoperatorsthroughtheallocationprocesshavefurtherimplicationsas

regardsthe

achievement

of

compliance

under

the

Kyoto

Protocol.

In

particular,

emission

reductionsintheEUETSbeyondthelimitssetundertheEUETSwillnothelpfurther

governmentsinreachingtheirKyototarget,sinceoperatorsdonothavetogivebacktheir

surplusallowances.

Consequently,MemberStatesneedtoaddressemissionsinthesectorsnotcoveredbytheEU

ETS(forexamplethetransport,residentialandagriculturesectors)inordertoensure

compliancewiththeirKyotoorburdensharingtargets.

ToensurecompliancewiththeirKyotoorburdensharingtargets,MemberStatesneedto

reduceemissionsinthesectorsnotcoveredbytheEUETS(forexamplethetransport,

residentialandagriculturesectors).


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4 June 2010 8

8.WhatwilldetermineacountrysneedtousetheKyotoflexiblemechanisms?

MemberStatesneedtoaddressemissionsinthesectorsnotcoveredbytheEUETS.Success

herewill

determine

the

extent

to

which

governments

will

need

to

increase

their

emission

budgetthroughtheuseoftheKyotoflexiblemechanisms(acquisitionofKyotounitsfrom

otherpartiestotheKyotoProtocolorthroughsupporttoprojectbasedcredits),ifatall,to

achievetargets.

SuccessinmanagingemissionsinthenonETSsectorswilldeterminetheextenttowhich

governmentswillneedtousetheKyotoflexiblemechanisms,ifatall,toachievetheir

targets.

9.To

see

if

my

country

is

on

track

,can

Isimply

compare

its

emissionsreductionswithitsKyototarget?

No,forthereasonsexplainedinthepreviousparagraph:onemusttakeintoaccounttherole

oftheEUETSandinparticularitseffectonthenumberofKyotounitsavailabletocountries

attheendofthecommitmentperiod.Thestatusofacountrycanbecheckedbycomparing

emissionsinnonETSsectorswiththenonETSemissionbudget:

[Totalemissions][EUETSemissions]

vs.[Kyotoemissionbudget][nationalEUETScapfor20082012(allowancesallocated)]

Toassess

acountry

ssituation

with

regards

to

its

Kyoto

target,

one

must

take

into

account

fortheeffectoftheEUETSontheoverallemissionbudget.

10. IstheEU15situationthesumofeachindividualMemberStatessituation?

TheEU15emissiontargetundertheKyotoProtocolreflectstheindividualobjectivesthat

the15MemberStatesagreedunderthe burdensharingagreement.However,when

assessingthesituationoftheEU15,itisnotpossibletoaddallEU15MemberStates

emissionsandcomparethemwiththesumofthesecountries emissionbudgets.Thisis

becausesomeoftheKyotounitsmaybesurplusunits,whichgovernmentshavethe

possibilitytodisposeatwill.Inparticular,suchsurplusunitsmightnotbeavailabletoother

countriesortotheEU15forcompliancesincethereisnoguaranteed permeabilitybetween

theemissionbudgetsofdifferentMemberStates.AnyassessmentoftheEUsituationmust

thereforetakeintoaccounttheuncertaintyaffectingtheuseofpotentialsurplusKyotounits

bygovernments.OneshouldthereforenotmakeassumptionsontheuseofsurplusKyoto

unitswithintheEU15.Asresult,inorderfortheEU15toachieveitstarget,emissions

shouldnotexceedemissionbudgetsinallEU15MemberStates.

InordertoachievetheEU15Kyototargetfor20082012,allEU15MemberStatesmustachieveindividuallytheirownburdensharingtarget.

EEA_Q_and_A_Kyoto.pdf

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