COMPLIANCE WITH THE KYOTO PROTOCOL

KYOTO PROTOCOL COMPLIANCE MECHANISM

The Kyoto Protocol compliance mechanism is designed to strengthen
the Protocols environmental integrity, support the carbon markets
credibility and ensure transparency of accounting by Parties. Its objective is
to facilitate, promote and enforce compliance with the commitments under
the Protocol. It is among the most comprehensive and rigorous systems of
compliance for a multilateral environmental agreement. A strong and
effective compliance mechanism is key to the success of the implementation
of the Protocol.
The Compliance Committee is made up of two branches: a facilitative
branch and an enforcement branch. As their names suggest, the facilitative
branch aims to provide advice and assistance to Parties in order to promote
compliance, whereas the enforcement branch has the responsibility to
determine consequences for Parties not meeting their commitments. Both
branches are composed of 10 members, including one representative from
each of the five official UN regions (Africa, Asia, Latin America and the
Caribbean, Central and Eastern Europe, and Western Europe and Others),
one from the small island developing States, and two each from Annex I and
non-Annex I Parties. The Committee also meets in a plenary composed of
members of both branches, and a bureau, made up of the chairperson and
vice-chairperson of each branch, supports its work. Decisions of the plenary
and the facilitative branch may be taken by a three-quarters majority, while
decisions of the enforcement branch require, in addition, a double majority of
both Annex I and non-Annex I Parties.
The enforcement branch is responsible for determining whether a Party
included in Annex I (Annex I Party) is not in compliance with its emissions
targets, the methodological and reporting requirements for greenhouse gas
inventories, and the eligibility requirements under the mechanisms. In case
of disagreements between a Party and an expert review team, the
enforcement branch shall determine whether to apply adjustments to
greenhouse gas inventories or to correct the compilation and accounting
database for the accounting of assigned amounts.
The mandate of the facilitative branch is to provide advice and
facilitation to Parties in implementing the Protocol, and to promote
compliance by Parties with their Kyoto commitments. It is responsible for

addressing questions of implementation by Annex I Parties of response

measures aimed at mitigating climate change in a way that minimizes their
adverse impacts on developing countries and the use by Annex I Parties of
the mechanisms as supplemental to domestic action. Furthermore, the
facilitative branch may provide early warning of potential non-compliance
with emissions targets, methodological and reporting commitments relating
to greenhouse gas inventories, and commitments on reporting
supplementary information in a Partys annual inventory.
In the case of the enforcement branch, each type of non-compliance
requires a specific course of action. For instance, where the enforcement
branch has determined that the emissions of a Party have exceeded its
assigned amount, it must declare that that Party is in non-compliance and
require the Party to make up the difference between its emissions and its
assigned amount during the second commitment period, plus an additional
deduction of 30%. In addition, it shall require the Party to submit a
compliance action plan and suspend the eligibility of the Party to make
transfers under emissions trading until the Party is reinstated.

FLEXIBILITY MECHANISMS

Under the Protocol, countries must meet their targets primarily through
national measures. However, it also provides a range of flexibility
mechanisms that Annex I Parties can employ to meet their commitment
targets. Among these are Clean Development Mechanism (CDM), Joint
Implementation (JI), and International Emissions Trading (IET). The economic
basis for providing these is that the marginal cost of reducing or abating
emissions differs among countries. At the time of the original Kyoto targets,
studies suggested that the flexibility mechanisms could reduce the overall
cost of meeting the targets.
1. Clean Development Mechanism
The Clean Development Mechanism (CDM), defined in Article 12
of the Protocol, allows a country with an emission-reduction or
emission-limitation commitment under the Kyoto Protocol (Annex B
Party) to implement an emission-reduction project in developing
countries. It is the first global, environmental investment and credit

scheme of its kind, providing a standardized emissions offset

instrument, CERs.
A CDM project activity might involve, for example, a rural
electrification project using solar panels or the installation of more
energy-efficient boilers. The mechanism stimulates sustainable
development and emission reductions, while giving industrialized
countries some flexibility in how they meet their emission reduction or
limitation targets.
Under the Protocol, only the Annex I Parties have committed
themselves to national or joint reduction targets (formally called
"quantified emission limitation and reduction objectives" (QELRO).
Parties to the Kyoto Protocol not listed in Annex I of the Convention
(the non-Annex I Parties) are mostly low-income developing
countries, and may participate in the Kyoto Protocol through the Clean
Development Mechanism.

2. Joint Implementation
The mechanism known as joint implementation, defined in
Article 6 of the Kyoto Protocol, allows a country with an emission
reduction or limitation commitment under the Kyoto Protocol (Annex B
Party) to earn emission reduction units (ERUs) from an emissionreduction or emission removal project in another Annex B Party, each
equivalent to one tonne of CO2, which can be counted towards
meeting its Kyoto target.
Joint implementation offers Parties a flexible and cost-efficient
means of fulfilling a part of their Kyoto commitments, while the host
Party benefits from foreign investment and technology transfer.
A JI project must provide a reduction in emissions by sources, or
an enhancement of removals by sinks, that is additional to what would
otherwise have occurred. Projects must have approval of the host

Party and participants have to be authorized to participate by a Party

involved in the project.

The CDM and JI are called "project-based mechanisms," in that they

generate emission reductions from projects. The difference between
IET and the project-based mechanisms is that IET is based on the
setting of a quantitative restriction of emissions, while the CDM and JI
are based on the idea of "production" of emission reductions. The CDM
is designed to encourage production of emission reductions in nonAnnex I Parties, while JI encourages production of emission reductions
in Annex I Parties.
The production of emission reductions generated by the CDM and JI
can be used by Annex I Parties in meeting their emission limitation
commitments. The emission reductions produced by the CDM and JI
are both measured against a hypothetical baseline of emissions that
would have occurred in the absence of a particular emission reduction
project. The emission reductions produced by the CDM are
called Certified Emission Reductions (CERs); reductions produced by JI
are called Emission Reduction Units(ERUs). The reductions are called
"credits" because they are emission reductions credited against a
hypothetical baseline of emissions.
Each Annex I country is required to submit an annual report of
inventories of all anthropogenic greenhouse gas emissions from
sources and removals from sinks under UNFCCC and the Kyoto
Protocol. These countries nominate a person (called a "designated
national authority") to create and manage its greenhouse gas
inventory. Virtually all of the non-Annex I countries have also
established a designated national authority to manage their Kyoto
obligations, specifically the "CDM process". This determines which
GHG projects they wish to propose for accreditation by the CDM
Executive Board.
3. International Emissions Trading
Emissions trading, as set out in Article 17 of the Kyoto Protocol,
allows countries that have emission units to spare - emissions
permitted them but not "used" - to sell this excess capacity to
countries that are over their targets.
Thus, a new commodity was created in the form of emission
reductions or removals. Since carbon dioxide is the principal
greenhouse gas, people speak simply of trading in carbon. Carbon is

now tracked and traded like any other commodity. This is known as
the "carbon market."
The Green Investment Scheme (GIS), a mechanism in the
framework of International Emissions Trading (IET), is designed to
achieve greater flexibility in reaching the targets of the Kyoto Protocol
while preserving environmental integrity of IET. However, using the
GIS is not required under the Kyoto Protocol, and there is no official
definition of the term.
Under the GIS a Party to the Protocol expecting that the
development of its economy will not exhaust its Kyoto quota, can sell
the excess of its Kyoto quota units (AAUs) to another Party. The
proceeds from the AAU sales should be "greened", i.e. channeled to
the development and implementation of the projects either acquiring
the greenhouse gases emission reductions (hard greening) or building
up the necessary framework for this process (soft greening).
Latvia was one of the front-runners of GISs. World Bank (2011)
reported that Latvia has stopped offering AAU sales because of low
AAU prices. In 2010, Estonia was the preferred source for AAU buyers,
followed by the Czech Republic and Poland. Japan's national policy to
meet their Kyoto target includes the purchase of AAUs sold under
GISs. In 2010, Japan and Japanese firms were the main buyers of
AAUs. In terms of the international carbon market, trade in AAUs are a
small proportion of overall market value.

LULUCF
Kyoto Parties can use land use, land use change, and forestry
(LULUCF) in meeting their targets. LULUCF activities are also called
"sink" activities. Changes in sinks and land use can have an effect on
the climate, and indeed the Intergovernmental Panel on Climate
Change's Special Report on Land Use, Land-Use Change and Forestry
estimates that since 1750 a third of global warming has been caused
by land use change. Particular criteria apply to the definition of
forestry under the Kyoto Protocol.
Forest management, cropland management, grazing land
management, and revegetation are all eligible LULUCF activities under
the Protocol.Annex I Parties use of forest management in meeting
their targets is capped.

MONITORING EMISSION TARGETS

Under the Protocol, countries' actual emissions have to be monitored

and precise records have to be kept of the trades carried out.
Registry systems track and record transactions by Parties under the
mechanisms. The UN Climate Change Secretariat, based in Bonn, Germany,
keeps an international transaction log to verify that transactions are
consistent with the rules of the Protocol. Reporting is done by Parties by
submitting annual emission inventories and national reports under the
Protocol at regular intervals. A compliance system ensures that Parties are
meeting their commitments and helps them to meet their commitments if
they have problems doing so.
Adaptation
The Kyoto Protocol, like the Convention, is also designed to assist
countries in adapting to the adverse effects of climate change. It facilitates
the development and deployment of technologies that can help increase
resilience to the impacts of climate change.
The Adaptation Fund was established to finance adaptation projects
and programmes in developing countries that are Parties to the Kyoto
Protocol. In the first commitment period, the Fund was financed mainly with
a share of proceeds from CDM project activities.
KYOTO PROTOCOL IN THE PHILIPPINES
On November 20, 2003, the Kyoto Protocol was ratified by the
Philippines. In pursuance thereof, The Medium Term Philippine Development
Plan of 2004-2010 (MTDP) at the national level was set which underscored
the need to manage the environment more effectively. Included in the Plan
are targets for the development of renewable energy, expanding the use of
natural gas and accelerate the development of alternative fuels such as
coconut biodiesel and exhaust.
To comply with the agreements provided by the Kyoto Protocol, the
Philippines passed national legislations such as the Clean Air Act of 1999
and Solid Waste Management Act of 2000 which were enacted to improve
the effectiveness of the air quality management program. These ensures
the Philippines faithful compliance to the mandates and principles
contained in the UNFCCC and the Kyoto Protocol and sees to it that
adequate public awareness campaign and initiatives are held to bring the
issue to all the sectors of the country.