Global Climate Change
In March 2001, the Bush administration announced that it found the Kyoto Protocol fatally flawed with respect to American interests and, consequently, the U.S. would no longer participate in the implementation negotiations. Reaction both domestically and internationally was swift and forceful. Even members of the President's political party expressed opposition to the decision to withdraw from the negotiations. More recently, members of Congress have introduced, or plan to introduce, a variety of bills addressing climate change. These bills include proposals to regulate emissions of carbon dioxide (a key greenhouse gas) from utilities and from cars and trucks as well as proposals offering incentives for voluntary emission reductions. Concurrently, the Bush administration continues to communicate that its climate change policy is in development.
On the international front, Conference of the Parties (COP) to the UN Framework Convention on Climate Change reconvened in November 2001 in Marrakesh, Morocco, to hold its seventh meeting—COP 7. The participants agreed on a number of rules necessary to implement the Kyoto Protocol. Key decisions included the following:
- Allowing emissions credits generated under the Clean DevelopmentMechanism (CDM), Joint Implementation, and trades among Annex I(developed) countries to be treated equally.
- Creating the Removal Unit to represent credits generated in Annex Icountries via sinks
- Establishing guidelines for banking unused emissions credits
- Allowing non-Annex I countries to unilaterally undertake a CDM projectand market the resulting emissions credits
- Giving Russia an increase in the ceiling for forest management credits
- Requiring Annex I countries to report on efforts to protect biodiversity inthe context of sink activities
With the concessions made to Russia and other nations during COP-7, the Kyoto Protocol will likely meet the minimum criteria for implementation, which consists in ratification by nations representing at least 55 percent of greenhouse gas emissions from Annex I countries. Many multi-nationalcompanies are concerned about the prospect of having to comply with the Kyoto Protocol in some countries and with some other type of program in the U.S. However, the development of a uniform plan seems unlikely.