The Kyoto Protocol is an international treaty proposing binding targets for the reduction of greenhouse gas emissions, which are generally believed to aggravate global warming. It was negotiated in Kyoto, Japan, opened for signature on March 16, 1998, and closed on March 15, 1999. The treaty is expected to come into force when it is ratified by Russia.
It is a protocol to the United Nations Framework Convention on Climate Change (UNFCCC), which was adopted in Rio de Janeiro in 1992). This means that only parties to the UNFCCC can sign or ratify the Kyoto Protocol. The Kyoto Protocol was adopted at the third session of the Conference of Parties (COP) to the UNFCCC in 1997 in Kyoto, Japan.
Signatories to the Kyoto Protocol are split into two groups: Annex I countries (industrialised countries) and Annex II countries (developing countries). Annex I countries agree to reduce their emissions (particularly carbon dioxide) to target levels below their 1990 emissions levels. If they cannot do so, they must buy emission credits or invest in conservation.
Annex II countries have no immediate restrictions under the protocol. This serves two purposes. This is because pollution is strongly linked to industrial growth, and developing economies can potentially grow very fast. Secondly, it means that they cannot sell emissions credits to industrialised nations to permit those nations to over-pollute. Annex II countries will become Annex I countries when they are sufficiently developed.
Some opponents of the protocol argue that the split between Annex I and Annex II countries is unfair, and that both developing countries and developed countries need to reduce their emissions. This was one of the reasons given by George W. Bush of the United States for not ratifiying the treaty.
The protocol operates in an interesting fashion. Each Annex I country has agreed to limit emissions to the levels described in the protocol, but many countries have limits that are set above their current production. These "extra amounts" can be purchased by other countries on the open market. So, for instance, Russia currently easily meets its targets, and can sell off its credits for millions of dollars to countries that don't yet meet their targets, Canada for instance. This rewards countries that meet their targets, and provides financial incentives to others to do so as soon as possible.
In turn, the money to pay for these credits is assumed to come from corporate taxes, providing an incentive to companies to upgrade to cleaner equipment. This is generally believed to result in lowered operating costs for the companies involved (energy costs money), but the cost/benefit ratio of many of these technologies has not yet made such upgrades worthwhile. However it is believed that the addition of taxes related to emissions should make the cost/benefit ratio change enough that many companies will elect to install such equipment, rather than pay ongoing taxes.
Countries also receive credits through various shared "clean energy" programs and "carbon sinks" in the form of forests and other systems that remove carbon from the atmosphere.
Washington D.C.-based NGO, in their report "Getting It Right: Emerging Markets for Storing Carbon in Forests", assumes values of $30-40/ton in the US and $70-80/ton in Europe. On April 18, 2001, The Netherlands purchased credits for 4 megatons of carbon dioxide emissions from Poland, Romania, and the Czech Republic.
As of February 2002, the agreement has been ratified by 104 countries, representing 43.9% of emissions  (http://unfccc.int/resource/kpstats.pdf). Countries do not need to sign the treaty in order to ratify it - signing is a symbolic act only. 19 countries have signed the protocol but not ratified it. 58 parties to the UNFCCC have neither signed nor ratified the protocol.
According to the terms of the protocol, it enters into force "on the ninetieth day after the date on which not less than 55 Parties to the Convention, incorporating Parties included in Annex I which accounted in total for at least 55 per cent of the total carbon dioxide emissions for 1990 of the Parties included in Annex I, have deposited their instruments of ratification, acceptance, approval or accession."
The protocol left several issues open, to be decided later by the COP[?]. COP6[?] attempted to resolve these issues at its meeting in the Hague in late 2000, but was unable to reach an agreement due to disputes between the European Union on the one hand (which favoured a tougher agreement) and the United States, Canada, Japan and Australia on the other (which wanted the agreement to be less demanding and more flexible).
In 2001, a continuation of the previous meeting (COP6bis) was held in Bonn where the required decisions were adopted. After some concessions, the supporters of the protocol (led by the European Union) managed to get Japan and Russia in as well by allowing more use of carbon dioxide sinks.
19 countries have signed the protocol but not ratified it. Of those eight are Annex I countries:
The eleven Annex II countries that have signed but not yet ratified are:Egypt, Indonesia, Israel, Kazakhstan, Marshall Islands, Niger, Philippines, Saint Lucia, Saint Vincent and the Grenadines, and the Solomon Islands.
On May 31, 2002, all fifteen members of the European union deposited the relevant ratification paperwork at the UN. The EU produces around 21% of global greenhouse gas emissions, and has agreed to a cut, on average, to 8% of 1990 emission levels. The EU has consistently been one of the major supporters of the Kyoto Protocol, negotiating hard to get wavering countries on board.
In December, 2002, the EU created a system of emissions trading in an effort to meet these tough targets. Quotas were introduced in six key industries: energy, steel, cement, glass, brick making, and paper/cardboard. There are also fines for member nations that fail to meet their obligations, starting at €40/ton of carbon dioxide in 2005, and rising to €100/ton in 2008. Current EU projections suggest that by 2008 the EU will be at 4.7% below 1990 levels.
Summary: The United States, although a signatory to the protocol, has neither ratified nor withdrawn from the protocol. The protocol is non-binding over the United States until such time that the United States ratifies it.
On June 25, 1997, before the Kyoto Protocol was to be negotiated, the U.S. Senate passed by a 95-0 vote the Byrd-Hagel Resolution (S. Res. 98), which stated the sense of the Senate was that the United States should not be a signatory to any protocol that that did not include binding targets and timetables for developing as well as industrialized nations or "would result in serious harm to the economy of the United States". Disregarding the Senate Resolution, on November 12, 1998, Vice President Al Gore symbolically signed the protocol. Aware of the Senate's view of the protocol, the Clinton Administration never submitted the protocol for ratification.
The current President, George W. Bush, has indicated that he does not intend to submit the treaty for ratification, not because he doesn't support the general idea, but because he is not happy with the details of the treaty. For example, he does not support the split between Annex I and Annex II countries. Bush said of the treaty:
China is an Annex II country under the protocol, and emits 2,893 million metric tons of CO2 per year (2.3 million per capita). This compares to 5,410 million from the USA (20.1 million per capita), and 3,171 million from the EU (8.5 million per capita). China has cut its CO2 emissions by 17% since the mid-1990s, has ratified the Kyoto Protocol, and is expected to become an Annex I country within the next decade.
In June 2002, the American Environmental Protection Agency (EPA) released the "Climate Action Report 2002". Some observers have interpreted this report as being supportive of the protocol, although the report itself does not explicitly endorse the protocol.
The prospect of the US staying outside the agreement influenced a number of other countries including Australia, Japan, and Canada to discuss whether they should ratify the agreement, putting themselves at a competitive disadvantage with the USA. While Japan and Canada ultimately decided to ratify the protocol, Australia's current government has said it will not ratify. This may change at the next change of government, as the major opposition parties have committed to ratification if in a position to do so.
December 17, 2002, Canada ratified the treaty. This was however opposed by groups of businesses and energy concerns, using arguments similar to those being used in the US.
However an additional twist is involved. The US is Canada's major trading partner (and vice versa), so with Canadian companies having to pay for emissions, and US companies not, the fear is that Canadian companies will not be able to compete on a fair trading ground. In one example a company can sell natural gas to the US to be burned in an electrical plant to produce electricity. That gas, burned in the US, is not subject to "Kyoto tax". However if that same plant were operated in Canada, the gas would be taxed as it was burned. That would result in the same electricity costing more if produced locally.
The result is an ongoing "war of words", primarily between the government of Alberta (a major oil and gas producer) and the federal government. It also appears that the federal government will ask for additional credits for "clean" fuels sold to the United States, most notably natural gas.
The 1997 Leipzig Declaration called the Kyoto Protocol "dangerously simplistic, quite ineffective, and economically destructive to jobs and standards-of-living". Most of the signers of the Leipzig Declaration are non-scientists or lack credentials in the specific field of climate research.
Some opponents argue that the protocol does not go far enough to curb greenhouse emissions, and the standards it sets would be totally ineffective at curbing or even slowing climate change. In addition, there have been recent scientific challenges to the idea of carbon credits, planting "Kyoto forests" or tree farms to reduce total carbon dioxide output. Recent evidence shows that this may in fact increase carbon dioxide emissions for the first 10 years, due to the growth pattern of young forests and the effect it has on soil-trapped carbon dioxide. Several industrial countries have made carbon credits an important part of their strategies for reducing their net greenhouse gas outputs, further calling into question the effectiveness of the protocols.
To evaluate the effectiveness of the Kyoto protocol, it is necessary to compare global warming with and without the agreement. Several independent authors agree that the impact of the Kyoto protocol on global warming is very small (a reduction of 0.15 Celsius degrees by 2100[?], out of a projected total change of 2 Celsius degrees). Even some defenders of the Kyoto Protocol agree that the impact of it is small, but they view it as a first step, with more political than practical importance, for future reductions, perhaps of up to 70%. At the moment, an analysis made by the IPCC is needed to clarify this issue.
The Kyoto Protocol can also be evaluated by comparing costs and gains[?]. Several economical analyses were made that show that the Kyoto Protocol is more expensive than the global warming that it avoids. Defenders of the Kyoto Protocol argue however that while the initial greenhouse gas cuts may have little effect, they set the political precedent for bigger (and more effective) cuts in the future. Also, they demonstrate commitment to the precautionary principle and a respect for life in developing nations.