Order Code RL30692
Report for Congress
Received through the CRS Web
Global Climate Change: The Kyoto Protocol
Updated January 15, 2003
Susan R. Fletcher
Senior Analyst in International Environmental Policy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

Global Climate Change: The Kyoto Protocol
Summary
Negotiations on the Kyoto Protocol to the United Nations Framework
Convention on Climate Change (UNFCCC) were completed December 11, 1997,
committing the industrialized nations to specified, legally binding reductions in
emissions of six “greenhouse gases.” The United States signed the Protocol on
November 12, 1998.
This treaty would commit the United States to a target of reducing greenhouse
gases by 7% below 1990 levels during a “commitment period” between 2008-2012.
Because of the fact that “sinks,” which remove and store carbon from the
atmosphere, are counted and because of other provisions discussed in this report, the
actual reduction of emissions within the United States required to meet the target is
estimated to be lower than 7%. The Clinton Administration did not submit the
protocol to the Senate for advice and consent, acknowledging that one condition
outlined by S.Res. 98, passed in mid-1997–meaningful participation by developing
countries in binding commitments limiting greenhouse gases–had not been met.
Major decisions on finalizing the operational rules of the Kyoto Protocol were
expected at the sixth Conference of the Parties (COP-6) in The Hague, Netherlands,
November 13-24, 2000. When COP-6 began, little progress had been made on the
more difficult political issues, such as how much of a nation’s commitment could be
met through emissions trading systems, consequences for non-compliance, and the
extent to which nations could take credit for carbon absorbed in “sinks” such as
forests and soils. The COP-6 negotiations collapsed November 25, when the United
States and the European Union failed to reach agreement on these key issues, with
particular controversy centering on how much credit a nation could be allowed for
carbon uptake – sequestration– by forests. Talks were suspended until a resumed
COP-6 meeting termed “COP-6 bis,” in Bonn, Germany, the last two weeks of July
2001.
However, in late March, the Bush Administration indicated its rejection of the
Kyoto Protocol and announced a cabinet-level review of climate policy. This
initiated a high-level but unsuccessful effort by the European nations to re-engage
the United States in the Kyoto process. When the COP-6 meeting resumed in July
2001, the United States remained on the sidelines, following the Bush
Administration’s decision not to engage in negotiations on the Kyoto Protocol. To
the surprise of many, negotiators at this meeting reached agreement on most of the
outstanding political issues, with compromises allowing significant credit for carbon
sinks, and at the following COP-7 meeting in Marrakech, Morocco, in October-
November, 2001, most remaining operational decisions were completed.
As of January 3, 2003, the UNFCCC Secretariat reported that 102 nations have
ratified the Kyoto Protocol, representing 43.9% of the emissions of developed
countries with obligations outlined in the Protocol. In order to enter into force, the
Protocol must be ratified by nations representing 55% of these emissions. In
February, 2002, President Bush announced a U.S. policy for climate change that will
rely on domestic, voluntary actions to reduce the “greenhouse gas intensity” (ratio of
emissions to economic output) of the U.S. economy by 18% over the next 10 years.


Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Major Provisions of the Kyoto Protocol . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Emissions Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Developing Country Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Emissions Trading and Joint Implementation . . . . . . . . . . . . . . . . . . . . 4
Buenos Aires Action Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
COP-6 Negotiations, The Hague . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Bush Administration Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
COP-6 Resumed, Bonn, Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
COP-7 Marrakech, Morocco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Current U.S. Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Issues for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Ratification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Global Climate Change: The Kyoto Protocol
Background
Responding to concerns that human activities are increasing concentrations of
“greenhouse gases” (such as carbon dioxide and methane) in the atmosphere, most
nations of the world joined together in 1992 to sign the United Nations Framework
Convention on Climate Change (UNFCCC). The United States was one of the first
nations to ratify this treaty. It included a legally non-binding, voluntary pledge that
the major industrialized/developed nations would reduce their greenhouse gas
emissions to 1990 levels by the year 2000, and that all nations would undertake
voluntary actions to measure, report, and limit greenhouse gas emissions.
However, as scientific consensus grew that human activities are having a
discernible impact on global climate systems, possibly causing a warming of the
Earth that could result in significant impacts such as sea level rise, changes in
weather patterns and health effects—and as it became apparent that major nations
such as the United States and Japan would not meet the voluntary stabilization target
by 2000—Parties to the treaty decided in 1995, at the first conference of the parties
(COP-1) in Berlin, Germany, to enter into negotiations on a protocol to establish
legally binding limitations or reductions in greenhouse gas emissions. It was decided
by the Parties that this round of negotiations would establish limitations only for the
developed countries (the 38 nations listed in Annex I to the UNFCCC, including the
former Communist countries, and referred to as “Annex I countries.” Developing
countries are referred to as “non-Annex I countries”).1 This was referred to as the
“Berlin Mandate,” which reflected the acceptance in the UNFCCC that parties bore
“common but differentiated responsibilities” in dealing with climate change issues,
and that first steps in reducing greenhouse gas emissions should be taken by the
Annex I countries.
During negotiations that preceded the December 1-11, 1997, meeting in Kyoto,
Japan (COP-3), little progress was made, and the most difficult issues were not
resolved until the final days—and hours—of the Conference. There was wide
disparity among key players especially on three items: (1) the amount of binding
reductions in greenhouse gases to be required, and the gases to be included in these
requirements; (2) whether developing countries should be part of the requirements
for greenhouse gas limitations; and (3) whether to include emissions trading and joint
implementation, (which allow credit to be given for emissions reductions to a country
that provides funding or investments in other countries that bring about the actual
reductions in those other countries or locations where they may be cheaper to attain).

1 For additional information on the negotiations in Kyoto and related background, see CRS
Report 97-1000, Global Climate Change Treaty: Negotiations and Related Issues; and CRS
Issue Brief IB89005, Global Climate Change.

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Following completion of the Protocol in December of 1997, decisions and
details regarding a number of the more difficult issues remained to be negotiated and
resolved (see below). At the fourth Conference of the Parties (COP-4) held
November 2-13, 1998, in Buenos Aires, Argentina, it was apparent that these issues
could not be resolved at this meeting as had been expected. Instead, parties
established a two-year “Buenos Aires Plan of Action” (BAPA) to deal with these
issues, with a deadline for completion at the COP-6 meeting in The Hague,
Netherlands, November 13-24, 2000.
The difficulty in resolving these issues was underlined by the collapse of
discussions at COP-6 in The Hague, without agreement. As discussed below, COP-6
resumed in the latter half of July 2001, following U.S. President Bush’s
announcement that the United States would not continue participating in negotiations
on the Kyoto Protocol, and would develop an alternative approach. The U.S.
delegation remained on the sidelines, declining to negotiate the key remaining issues
related to the Protocol. During the July meeting, the other parties reached final
agreement on most outstanding issues, with additional agreements reached on some
details at the next meeting, COP-7, in Marrakech, Morocco, October 29-November
9, 2001. (See discussion below)
Major Provisions of the Kyoto Protocol
The Kyoto Protocol was opened for signature March 16, 1998, and would
enter into force–become legally binding for countries that have ratified–when 55
nations have ratified it, provided that these ratifications include Annex I Parties that
account for at least 55% of total Annex I carbon dioxide emissions in 1990. On
November 12, 1998, the United States signed the Protocol, in part because the
Clinton Administration wanted to revitalize what was seen as some loss of
momentum during COP-4. However, the treaty was not submitted to the Senate for
approval in recognition of S.Res. 98, the 1997 resolution indicating disapproval of
any treaty that did not include legally binding commitments for developing
countries.
As of January 3, 2003, 102 countries had ratified the Kyoto Protocol, including
the European Union and most of its members, Canada, and Japan, plus a large
number of developing countries. Some 43.9% of Annex I country emissions are
represented by the countries that have ratified. Nations are not subject to its
commitments unless they have ratified it and it enters into force.
The major commitments in the treaty on the most controversial issues are as
follows:
Emissions Reductions. The United States would be obligated under the
Protocol to a cumulative reduction in its greenhouse gas emissions of 7% below
1990 levels for three major greenhouse gases, including carbon dioxide, (and below
1995 levels for the three other, man-made gases), averaged over the commitment
period 2008 to 2012. The Protocol states that Annex I Parties are
committed—individually or jointly—to ensuring that their aggregate anthropogenic
carbon dioxide equivalent emissions of greenhouse gases do not exceed amounts
assigned to each country in Annex B to the Protocol, “with a view to reducing their
overall emissions of such gases by at least 5% below 1990 levels in the commitment

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period 2008 to 2012.” Annex A lists the 6 major greenhouse gases covered by the
treaty2.
Annex B to the Kyoto Protocol lists 39 nations, including the United States, the
European Union plus the individual EU nations, Japan, and many of the former
Communist nations (the same countries as Annex I to the UNFCCC). The amounts
for each country are listed as percentages of the base year, 1990 (except for some
former Communist countries), and range from 92% (a reduction of 8%) for most
European countries—to 110% (an increase of 10%) for Iceland. The United States
agreed to a commitment on this list to 93%, or a reduction of 7%below 1990 levels,
to be achieved as an average over the 5 year commitment period, 2008-2012.
Based on projections of the growth of emissions using current technologies and
processes, the reduction in greenhouse gas emissions required of the United States
would likely be between 20% and 30% below where it would be otherwise by the
2008-2012 budget period.3 However, inclusion of greenhouse gas sinks4 — which
the Protocol adopted as urged by the United States — and emissions trading, means
that the domestic U.S. emission reductions from fossil fuels needed to meet a 7%
target would be substantially less. However, two of the most difficult issues
unresolved at Kyoto, and responsible in large part for the breakdown of the COP-6
negotiations in November 2000, are related to (1) emissions trading–specifically,
how much of a country’s obligation to reduce emissions can be met through
purchasing credits from outside, vs. taking domestic action; and (2) the extent to
which carbon sequestration by forests, soils and agricultural practices can be
counted toward a country’s emission reductions.
Developing Country Responsibilities. The United States had
consistently taken a firm position that “meaningful participation” of developing
countries in commitments made in the Protocol is critical both to achieving the goals
of the treaty and to its approval by the U.S. Senate. This reflects the requirement
articulated in S.Res. 98, passed in mid-1997, that the United States should not
become a party to the Kyoto Protocol until developing countries are subject to
binding emissions targets. The U.S. government also argued that success in dealing
with the issue of climate change and global warming would require such
participation. The developing country bloc argued that the Berlin Mandate—the
terms of reference of the Kyoto negotiations established at COP-1 in 1995—clearly
excluded them from new commitments in this Protocol, and they continued to
oppose emissions limitation commitments by non-Annex I countries.
The Kyoto Protocol was concluded without such commitments, and the Clinton
Administration indicated that it would not submit the Protocol for Senate
consideration until meaningful commitments were made by developing countries.
At COP-4 in Buenos Aires, Argentina–host country of the meeting–became the first
2 The six gases covered by the Protocol are carbon dioxide (CO ), methane (CH ), nitrous
2
4
oxide (N O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur
2
hexafluoride (SF ). The most prominent of these, and the most pervasive in human
6
economic activity is carbon dioxide, produced when wood or fossil fuels such as oil, coal,
and gas are burned.
3 See CRS Report 98-235 ENR, Reducing Greenhouse Gases: How Much from What
Baseline?

4 Greenhouse gases, especially CO , are absorbed by a number of processes in forests, soils,
2
and other ecosystems. These are called "sinks."

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nation to indicate that it will make a commitment to take on a binding emissions
target for the period 2008-2012. Kazakhstan also announced its intention to take
similar action. At this meeting, the United States announced it would sign the
Kyoto Protocol, which it did on November 12, 1998. To date, none of the largest
developing countries, such as China, India or Brazil, have shown a willingness to
make commitments to reducing greenhouse gas emissions.
The Protocol does call on all Parties—developed and developing—to take a
number of steps to formulate national and regional programs to improve “local
emission factors,” activity data, models, and national inventories of greenhouse gas
emissions and sinks that remove these gases from the atmosphere. All Parties are
also committed to formulate, publish, and update climate change mitigation and
adaptation measures, and to cooperate in promotion and transfer of environmentally
sound technologies and in scientific and technical research on the climate system.
Emissions Trading and Joint Implementation. Emissions trading, in
which a Party included in Annex I “may transfer to, or acquire from, any other such
Party emission reduction units resulting from projects aimed at reducing
anthropogenic emissions by sources or enhancing anthropogenic removals by sinks
of greenhouse gases” for the purpose of meeting its commitments under the treaty,
is allowed and outlined in Article 6, with several provisos. Among the provisos is
the requirement that such trading “shall be supplemental to domestic actions.” The
purpose of this proviso is to make it clear that a nation cannot entirely fulfill its
responsibility to reduce domestic emissions by relying primarily on emissions
trading or joint implementation to meet its targets. Joint implementation is project-
based activity in which one country can receive emission reduction credits when it
funds a project in another country where the emissions are actually reduced.
One of the more contentious issues in the negotiations concerning how the
Kyoto Protocol would work has been this issue of “supplementarity”–finding
agreement on what proportion of a nation’s obligations could be met through these
mechanisms versus domestic actions to reduce emissions within a nation’s own
borders. At the negotiations in Bonn, Germany, in mid-2001 (COP-6 “bis”
discussed below), this issue was resolved with language that indicated there would
be no quantitative limit on the credit a country could claim from use of these
mechanisms, but that domestic action must constitute a significant element of the
efforts of each Annex B country to meet their targets.
A number of specific issues related to the rules on how joint implementation
and emissions trading would work were left at Kyoto to be negotiated and resolved
in subsequent meetings; in the years since the Protocol was completed, it became
increasingly clear that this is an extremely complex issue, and an emissions trading
system is not likely to be designed and implemented quickly.
Another major “mechanism” for meeting obligations in the Protocol is
provided by the establishment of a “clean development mechanism” (CDM),
through which a modified form of joint implementation between developed and
developing countries would occur. The United States had pushed hard for joint
implementation, and early proposals were formulated with the expectation that “JI”
projects would be primarily bilateral. Instead, negotiations resulted in agreement
to establish the clean development mechanism to which developed Annex I
countries could contribute financially, and developing/non-Annex I countries could
benefit from financing for approved project activities; Annex I countries could then

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use certified emission reductions from such projects to contribute to their
compliance with part of their emission limitation commitment. Emissions
reductions achieved through this mechanism could begin in the year 2000 to count
toward compliance in the first commitment period (2008-2012). Like emissions
trading, making the CDM operational appears likely to be a difficult and complex
process.
Buenos Aires Action Plan
Although it had been expected just after the 1997 Kyoto conference that the
November, 1998, COP-4 meeting in Buenos Aires, Argentina, would resolve some
of the more difficult issues left unresolved in Kyoto, it became clear during the year
leading up to COP-4 that parties were far from agreement on all of these issues.
Additional time for parties to analyze, negotiate, and work on these issues would
be required. Therefore, the parties arrived in Buenos Aires with an agenda focused
on formulating an “action plan” that would allow for the needed additional work to
be done. It was decided that the work plan should be completed by the end of 2000,
and should focus on the key issues, including the following:
--
Rules and guidelines for the “market-based mechanisms” that allow
flexibility to parties in meeting their obligations. These include emissions
trading, joint implementation, and the Clean Development Mechanism
(CDM). The list of critical issues to be considered include whether there
should be quantified limits on how much of a country’s emission
reduction requirement could be met through these mechanisms, as argued
by the European Union, or no quantified limit, as argued by the United
States; “transparency” in making it possible to effectively track emission
units; allocating risk in emissions trades--including the question of
assigning liability, or responsibility, when emissions trading involves
“false” credits; and key measurement, reporting and verification issues.
--
Rules and procedures that would govern compliance, including provisions
covering non-compliance with the treaty’s commitments. This issue was
left entirely open at Kyoto and remained one of the major challenges
facing negotiators.
--
Issues concerning development and transfer of cleaner, lower-emitting
technologies, particularly to developing countries.
--
Consideration of the adverse impacts of climate change and also the
impacts of measures taken to respond to it, an issue of particular
importance to developing countries, who argue the need for financial
assistance in order to help them cope with these impacts.
Carbon sinks. Another issue under active negotiation and consideration by the
parties, but outside the action plan itself, is defining application of the concept of
carbon sinks, including how to measure and verify the categories of carbon sinks.
The scientific panel that provides analysis to the parties, the Intergovernmental
Panel on Climate Change (IPCC), conducted a comprehensive study on land use,
land-use change, and forestry activities to identify their roles as carbon sinks and
deal with the measurement and verification issues related to them.

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Following the release of this report, which indicated that a large amount of
carbon could be stored in a variety of carbon sinks, including not only forests, but
in soils, vegetation, grazing lands, etc., the United States made a comprehensive
proposal for the COP-6 negotiations to broaden the scope of acceptable carbon
sinks. The Kyoto Protocol accepts in principle that a nation’s forests–management
practices, reforestation or afforestation–may be included in the accounting of net
greenhouse gas emissions and their reduction. This would be important to the
United States, as its large land area and extensive potential for greater absorption of
carbon due to land management changes could greatly reduce the amount of
emissions reductions needed from energy production. In a submission to the
Secretariat of the UNFCCC, the United States proposed in late summer 2000 that
elaboration at COP-6 of land use changes acceptable under the Protocol should also
include soil carbon sequestration and vegetation.
Few decisions were reached, nor were they expected, on the more difficult
issues outlined in the Buenos Aires Plan of Action at the COP-5 meeting in Bonn,
Germany, held October 25-November 24, 1999.
COP-6 Negotiations, The Hague
There were two intersessional negotiation sessions of the UNFCCC Subsidiary
Bodies (the key mechanisms for considering Kyoto issues between COP meetings)
in 2000, June 12-16 and September 11-15, dealing with the issues of the Buenos
Aires workplan and attempting to fashion a negotiating text for final consideration
at the November 13-24 COP-6 meeting. At the conclusion of the meeting in Lyon,
it was reported that language on aspects of some issues had been agreed upon, but
that the negotiating text had been expanded to some 200 pages, much of it
“bracketed.” [Brackets indicate that no agreement has been found on the language
in brackets, and often several alternative possibilities are reflected within brackets.]
Thus, though there was negotiating text on most issues, disagreements remained on
most key issues. Observers reported that political positions remained entrenched and
little movement toward compromise appeared evident in Lyon. The end result was
that many participants felt doubtful that many of the key issues could be completely
resolved in November, 2000, at COP-6.
As talks began at COP-6 in The Hague, Netherlands, on November 13, they
centered initially on the "Buenos Aires Plan of Action" (BAPA), but evolved into
a high-level negotiation over the major political issues. These included major
controversy over the United States' proposal to allow credit for carbon "sinks" in
forests and agricultural lands, satisfying a major proportion of the U.S. emissions
reductions in this way (between half and one-quarter, according to various versions
of the U.S. proposal); disagreements over consequences for non-compliance by
countries that did not meet their emission reduction targets; and difficulties in
resolving how developing countries could obtain financial assistance to deal with
adverse effects of climate change and meet their obligations to plan for measuring
and possibly reducing greenhouse gas emissions.
In the final hours of COP-6, despite some compromises agreed between the
United States and some EU countries, the EU countries as a whole, reportedly led
by Denmark and Germany, rejected the compromise positions, and the talks in The
Hague collapsed. Jan Pronk, the President of the COP, suspended COP-6 without
agreement. Discussions between the EU and the “Umbrella group” that includes the
United States, Canada, Japan and Australia, were held in Ottawa, Canada, during

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the week of December 4, 2000, in order to try and salvage some of the agreement
reached at the end of the talks in The Hague. However, the U.S. negotiators
reported that these talks were “inconclusive” and the differences were still in place,
or even exacerbated, after this meeting.
At the end of 2000, based on discussions at The Hague and in Ottawa, the
issues particularly in contention were as follows:
Mechanisms, especially emissions trading: The main issue here was
“supplementarity”-- the position of the United States was that there should not
be quantitative limits to the amount of emissions reductions that are allowed
toward a country’s obligations through emissions trading or joint
implementation. The EU and others argue there should be such limitations, in
order to force nations to take more extensive domestic action to reduce
emissions. This issue is related to the commitment outlined in the Kyoto
Protocol that emissions trading should be “supplemental” to domestic action.
The United States was supported by the “umbrella group” in which it is joined
by New Zealand, Japan, Canada, Australia, Russia, Ukraine, Norway and
Iceland. Another related issue was whether carbon sinks can be included in the
Clean Development Mechanism (CDM) in which a contributing developed
country can claim credit for actions to reduce emissions in developing
countries. There were significant divisions on this issue not among developed
countries, but among developing countries, as well.
Compliance issues: Decisions on how non-compliance with Protocol (and
UNFCCC) obligations should be handled was a very controversial issue. The
United States position was that there should be binding consequences, but
these should be in the form of additional obligations in subsequent
commitment periods, and not in the form of financial penalties. There was
considerable disagreement at The Hague over whether financial penalties
should be allowed. Agreement on binding consequences would probably
require an amendment to the Protocol, which would be separately agreed to,
and separately ratified. Opponents to binding consequences include Japan,
Russia, and Australia, who were concerned, among other things, about opening
the Protocol to an amendment process. On the structure of a compliance
regime, there was substantial agreement on a likely outcome: a single
compliance body with two functions or branches–(1) to facilitate and assist
compliance (mainly for developing countries), and (2) an enforcement function
where decisions would be made on whether compliance violations have
occurred and what consequences should be applied. Consequences under
consideration, in addition to financial penalties, included losing access to
mechanisms like emissions trading and/or subtracting from future allocations
of allowable carbon emissions.
Land use and land use change and forestry (LULUCF): As noted above, the
Kyoto Protocol accepts in principle that a nation’s forests–management
practices, reforestation or afforestation–may be included in the accounting of
net greenhouse gas emissions and their reduction. The United States proposed
at COP-6 that land use changes acceptable under the Protocol should also
include soil carbon sequestration and vegetation. Major issues were how to
attain precision in measuring absorption and release of carbon from land-based
sources, how permanent such land use mechanisms would be, and the extent
to which land use absorption counted by a nation is “additional” to business as
usual.

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The United States made a series of controversial proposals on how to count
carbon sequestration, beginning with basically counting most of the carbon
sequestration in its extensive forest cover toward its obligations. It
subsequently revised this proposal and put forward a formula that included
three parts: a first “interval” allowing up to 20 million tons of carbon to be
counted at 100% for any country with forests absorbing that much; a second
interval of a certain amount in which credit for a certain percentage would be
allowed up to a certain threshold; then full credit for tons absorbed beyond the
threshold (which would be historically determined in relation to baseline
absorption amounts). The EU opposed the U.S. proposal, mainly on the issue
of forests, and the extent to which a country like the United States would
receive credits for a “business as usual” scenario that did not involve the harder
emissions reductions from fuel sources and technological measures. When the
United States put numbers to this proposal, the U.S. credits from carbon sinks
appeared to represent about 125 million tons of carbon, against a likely need
to reduce emissions by about 600 million tons of carbon to meet its
commitment in 2008-2012. This was strongly opposed by the EU and other
countries, and a stalemate over this issue, despite several revisions downward
of the U.S. position and tentative acceptance of a much smaller amount by the
EU, was thought to be a major factor in the collapse of the November COP-6
negotiations at The Hague.
Developing country participation: The United States had been seeking
additional commitments from developing countries in a series of informal
discussions and consultations during the period since the Kyoto Protocol was
completed in late 1997, but only Argentina and Kazakhstan have shown a
willingness to make such commitments. Little willingness to do so has been
shown by other developing countries. The possibility that it would be
discussed under an agenda item dealing with “adequacy of commitments” did
not occur at The Hague.
Bush Administration Policy. Just over 2 months after the COP-6 talks
collapsed, President George W. Bush took office and announced his Administration
would carry out a cabinet-level review of climate policy. However, the Bush
Administration announced in late March 2001 that it would not be interested in
continuing discussion on the Kyoto Protocol, which was characterized as “dead” in
terms of U.S. policy. The cabinet-level review of U.S. climate policy was on-going,
and the Administration indicated that it would be interested in pursuing alternative
approaches or cooperative efforts such as market-based incentives and voluntary
measures, to address climate change concerns.
The EU nations and others, such as Japan, expressed deep concern and dismay
at this new U.S. position, and a high-level delegation of EU officials visited the
United States to attempt to re-engage the United States in the Kyoto Protocol
process. This effort was reported as having been “rebuffed.” Some observers began
considering the implications of the new U.S. position for the Protocol, and whether
the EU and other nations would ratify the Protocol, and try to bring it into force
without the United States.
President Bush made a policy statement in mid-June, 2001, resulting from the
continuing cabinet-level review of climate change options, in which he confirmed
the U.S. approach as rejecting the Kyoto Protocol and favoring voluntary actions,
increased scientific research, and market mechanisms. President Bush also outlined

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a U.S. Climate Change Research Initiative, and the National Climate Change
technology Initiative. During his mid-June trip to Europe, President Bush discussed
climate policy with European heads of state and met strong opposition to the U.S.
position. The outcome was that Europe and the United States would “agree to
disagree” on climate. The Europeans announced they would proceed with
ratification of the Kyoto Protocol, without the United States if necessary.
President Bush indicated that the United States would continue to participate
in international meetings on climate change, but would not negotiate on Kyoto
Protocol issues. When the COP-6 meeting resumed in Bonn, Germany, in July
2001, the U.S. delegation followed this approach, declining to participate in
negotiations on most Kyoto Protocol issues, and remaining on the sidelines as
observers. The other parties reached agreement on the key political issues and
announced that the developed countries would move toward ratification of the
Kyoto Protocol without the United States.
COP-6 Resumed, Bonn, Germany
When the COP-6 negotiations resumed July 16-27, 2001, in Bonn, Germany,
little progress had been made on resolving the differences that had produced an
impasse in The Hague. However, this meeting took place after President George
Bush had rejected the Kyoto Protocol in March; as a result, the United States
delegation to this meeting declined to participate in the negotiations related to the
Protocol and chose to act as observers at that meeting. As the other parties
negotiated the key issues, agreement was reached on most of the major political
issues, to the surprise of most observers given the low level of expectations that
preceded the meeting. The agreements included:
(1) Mechanisms – the “flexibility” mechanisms which the United States had
strongly favored as the Protocol was initially put together, including emissions
trading; joint implementation; and the Clean Development Mechanism (CDM),
which provides funding from developed countries for emissions reduction
activities in developing countries, with credit for the donor countries. One of
the key elements of this agreement was that there would be no quantitative
limit on the credit a country could claim from use of these mechanisms, but
that domestic action must constitute a significant element of the efforts of each
Annex B country to meet its targets.
(2) Carbon sinks – credit was agreed to for broad activities that absorb carbon from
the atmosphere or store it, including forest and cropland management, and
revegetation, with no over-all cap on the amount of credit that a country could
claim for sinks activities. In the case of forest management, an Appendix Z
establishes country-specific caps for each Annex I country; for example, a cap
of 13 million tons could be credited to Japan (which represents about 4% of its
base-year emissions). For cropland management, countries could receive credit
only for carbon sequestration increases above 1990 levels.
(3) Compliance – final action on compliance procedures and mechanisms that
would address non-compliance with Protocol provisions was deferred to COP-
7, but included broad outlines of consequences for failing to meet emissions
targets that would include a requirement to “make up” shortfalls at 1.3 tons to
1, suspension of the right to sell credits for surplus emissions reductions; and
a required compliance action plan for those not meeting their targets.

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(4) Financing – three new funds were agreed upon to provide assistance for needs
associated with climate change; a least-developed-country fund to support
National Adaptation Programs of Action; and a Kyoto Protocol adaptation fund
supported by a CDM levy and voluntary contributions.
A number of operational details attendant upon these decisions remained to be
negotiated and agreed upon, and these were the major issues of the COP-7 meeting
that followed.
COP-7 Marrakech, Morocco
At the COP-7 meeting in Marrakech, Morocco October 29-November 10,
2001, negotiators in effect completed the work of the Buenos Aires Plan of Action,
finalizing most of the operational details and setting the stage for nations to ratify
the Protocol. The United States delegation continued to act as observers, declining
to participate in active negotiations. Other parties continued to express their hope
that the United States would re-engage in the process at some point, but indicated
their intention to seek ratification of the requisite number of countries to bring the
Protocol into force (55 countries representing 55% of developed country emissions
of carbon dioxide in 1990). A target date for bringing the Protocol into force was
put forward–the August-September 2002 World Summit on Sustainable
Development (WSSD) to be held in Johannesburg, South Africa.
The main decisions at COP-7 included: operational rules for international
emissions trading among parties to the Protocol and for the CDM and joint
implementation; a compliance regime that outlines consequences for failure to meet
emissions targets but defers to the parties to the Protocol after it is in force to decide
whether these consequences are legally binding; accounting procedures for the
flexibility mechanisms; and a decision to consider at COP-8 how to achieve to a
review of the adequacy of commitments that might move toward discussions of
future developing country commitments. Other parties reiterated their hope that the
United States would re-engage with the international cooperation efforts under the
Protocol, but also their decision to seek ratification by their governments and the
Protocol’s entry into force by the WSSD in 2002, as noted above.
Current U.S. Policy
Disengagement from the Kyoto Protocol remains U.S. policy, with an emphasis
instead on domestic action. On February 14, 2002, President Bush announced a
U.S. policy for climate change, based on voluntary domestic measures, characterized
as a "new approach for meeting the long-term challenge of climate change." The
centerpiece of this announcement was the plan to reduce greenhouse gas intensity
of the U.S. economy by 18% over the next 10 years. Greenhouse gas intensity
measures the ratio of greenhouse gas emissions to economic output and has been
declining in the United States over the past several years. The Administration stated
that the goal, to be met through voluntary action, is to achieve efficiency
improvements that would reduce the 183 metric tons of emissions per million
dollars of gross domestic product (GDP) to 151 in 2012. The plan notes that "if, in
2012, we find that we are not on track toward meeting our goal, and sound science
justifies further policy action, the United States will respond with additional
measures that may include a broad, market-based program" and other incentives and
voluntary measures to accelerate technology development.

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In addition, the plan directs the Secretary of Energy in consultation with other
key agencies, to "substantially improve the emission reduction registry" to upgrade
the voluntary emission reduction program under section 1605(b) of the 1992 Energy
Policy Act, to bring about enhanced measurement accuracy, reliability, and
verifiability. Other measures include providing for protected, transferable emission
reduction credits, increased funding of $700 million in total climate-related
spending, and a new management structure to coordinate climate change and
technology research. Domestic policies such as tax incentives for renewable energy
and new technology, development of fuel-efficient vehicles and cleaner fuels, and
carbon sequestration were also proposed, along with several international bilateral
initiatives and relatively modest increases in foreign assistance.
Some observers praised the plan for taking a practical, conservative approach
to government action and for relying on voluntary measures. Critics observed that
voluntary approaches by themselves have not historically often been effective and
noted that the reductions in energy intensity are very little different from current
trends and would allow for significant increases in over-all greenhouse gas
emissions rather than reductions. (For full description of this announcement, see:
[http://www.whitehouse.gov/news/releases/2002/02/climatechange.html].)
Extensive additional information and details on the decisions at the various
conferences of the parties are available from CRS and a variety of sources at the
CRS electronic briefing book website, available through the CRS home page, or at:
[http://www.congress.gov/brbk/html/ebgcc1.shtml]
Issues for Congress
Ratification. For the United States to ratify the Kyoto Protocol, the treaty
would have to be transmitted to the U.S. Senate by the President for advice and
consent. A two-thirds majority vote in the Senate is required for approval. As long
as the United States has not ratified the treaty, it is not subject to its terms and
obligations. President Clinton expressed strong support for the Kyoto Protocol,
though criticizing it for not including commitments for developing countries. The
United States signed the Protocol on November 12, 1998. The U.S. signature was
criticized by several Members of Congress who opposed the treaty on a number of
grounds, including questions about the scientific justification for it and about the
likely economic impacts that might occur if the United States were to attempt to
meet its emission reduction commitments in the treaty. In recognition of the
opposition expressed in the Senate by S.Res. 98, which passed 95-0 in the months
before the 1997 Kyoto meeting, to a Protocol that does not include requirements for
emissions limitations by developing countries, President Clinton did not submit the
treaty to the Senate for advice and consent, citing lack of meaningful developing
country participation. Given the position announced by the Bush Administration,
opposing the Kyoto Protocol, it continues to be unlikely that it will be transmitted
to the Senate.
Oversight. Both the House and Senate have sent delegations of Members to
serve as observers on the U.S. delegation to most Kyoto-related meetings.
Supporters and opponents of the Protocol have been included in these delegations.
A number of committees have held hearings on the implications of the Protocol for
the United States, its economy, energy prices, impacts on climate change, and other
related issues. While the Clinton Administration stated that it believed the treaty
could be implemented without harm to the U.S. economy, and without imposing

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additional taxes, a number of questions related to how its goals can be achieved and
at what cost, continue to be of interest to Congress. Given the position announced
by the Bush Administration, it seems likely that congressional attention will shift
somewhat, to a consideration of new approaches that may be identified by the
outcome of the announced policy review, or to steps that can be initiated through
legislation, especially regarding domestic policy.
Legislation. A number of legislative proposals have been introduced over
the years related to climate change, and in particular, U.S. domestic action on
research, science, and emissions trading or sequestration credit. (See the legislation
section of CRS Issue Brief IB89005, Global Climate Change). Recent legislation
has also included an emphasis on climate/greenhouse gas reduction benefits of
several energy proposals for increased energy efficiency and alternative energy
research, development and deployment. (See CRS Issue Brief IB10041, Renewable
Energy: Tax Credit, Budget, and Electricity Production,
CRS Issue Brief IB10020,
Energy Efficiency: Budget, Oil Conservation, and Electricity Conservation, and
CRS Report RL31044, Renewable Energy Legislation in the 107th Congress; see
also the “Legislation” Section of the CRS Global Climate Change Electronic
Briefing Book — [http://www.congress.gov/brbk/html/ebgcc1.shtml].