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Overview

GCI has drawn up these proposals for a Protocol in response to events at the second Conference of the Parties of the Framework Convention on Climate Change which was held in Geneva in July 1996. While we received remarkably wide-ranging support for our proposals for Contraction and Convergence, the US stated that all protocols currently on the table were "unrealistic and unachievable". The US comment effectively sunk the AOSIS protocol proposed by the states most vulnerable to climate change. Some of these states considered that our "Global Commons Initiative" for contraction and convergence forms the most plausible basis for a comprehensive long-term protocol. This document develops that initiative to provide a framework for constructing such a protocol. We therefore invite far-sighted governments to consider incorporating all or part of these proposals into their submissions to the Secretariat by 15th October 1996 for discussion at the next AGBM meeting in Geneva this December as the basis for a draft protocol by March 1997 in time for consideration at CoP III in Kyoto.

Part one presents core tasks for a comprehensive protocol. The first proposal develops the well-established concept of national security interest to include dangerous climate change as a global security interest. The emphasises the urgency of this issue and has practical implications for the decision-making process and technology development and transfer. The next five proposals spell out practical steps from agreement of danger indicators through to an annual allocation of national CO2 emissions quotas according to a scientific assessment, a contraction formula and a convergence formula.

The second part of this document sets out a number of interlinked proposals for consideration.
The first set concern emissions trading, air/shipping bunker fuels, other greenhouse gases and measures to deter non-compliance.
The next set of proposals deal with the assessment of and compensation for climate damages, past, present and future.
The next four proposals outline measures to aid implementation, including funding and technology transfer.
The final three proposals are concerned with education and research.

These proposals are contingent upon "Contraction and Convergence". Our acceptance of trading, for example, is entirely dependent on a finite budget of quotas allocated by convergence towards per capita equity.

Please recognise that this is a draft document. We greatly welcome your opinion and expertise in turning these proposals into a viable protocol.

Core tasks for achieving "Contraction and Convergence"

1.1: Recognise the prevention of dangerous climate change as an essential global security interest.

Rationale and policy implications

1.2: Agree danger indicators

CoP shall commission detailed recommendations for suitable indicators and their appropriate values. The following suggestions are put forward as a starting point:

• a) relative sea level rise to a threatening level at any location;
• b) increased coastal erosion that forces evacuation of inhabited land or loss of wetlands;
• c) global mean surface temperature rise or significant regional temperature changes over a given time period;
• d) an annual increase in the number of tornadoes or tropical cyclones in any region beyond current natural variability;
• e) a significant reduction in permafrost area, resulting in release of natural methane;
• f) significant changes in regional or sub-regional precipitation resulting in prolonged droughts or frequent flooding;
• g) an increase in bush and forest fires above natural variability;
• h) loss of marine and terrestrial ecosystems and species;
• i) substantial prolonged reduction in marine primary production (plankton, algae);
• j) a significant contraction of either polar ice cap and / or glaciers;
• k) a major prolonged change in ocean circulation, such as the North Atlantic current or El Nino / Southern Oscillation;
• l) a spread attributable to climate change of any human, animal or plant disease;
• m) direct impact of climate change on human health;
• n) economic damages attributable to climate change.

These danger indicators should be reviewed on a regular basis by IPCC as new scientific evidence becomes available and revised by the CoP when prudent to do so.

Rationale and policy implications

Each indicator should reflect a distinct impact resulting from climate change and should be defined in quantifiable terms on a global, regional and subregional scale. Where possible they should indicate both the danger threshold and potentially dangerous rates of change. The choice of indicators should take into account the considerable time lag between greenhouse gas emissions and subsequent climatic response.

The prospect of breaching any one of the indicators should be sufficient to require preventative action, on the grounds of the precautionary principle, even though it may only affect one area of the world directly. On the basis of equity, damages must be avoided on a local scale since many of the most vulnerable countries are neither responsible for global warming nor in a position to adapt to the harmful effects. Local climate-change-induced damages may not be traded off against the pursuit of "global economic growth", because it is impossible to sensibly create a consensus around the quantification of such damages in terms of rising risks of ecological and political instability (see also section 2.5) .

1.3 Decide CO2 concentration target and timetable

Rationale and policy implications

When reviewing this target, IPCC should take into account predicted changes in the concentration of other greenhouse gases (considered further in section 9).

1.3 Decide CO2 concentration target and timetable

Rationale and policy implications

1.4 Set annual global CO2 emissions budgets according to a "contraction" formula

Rationale and policy implications

The formula will need to be reviewed annually to take account of changes both to the concentration target and of actual sinks and sources of CO2. However, in order to reduce uncertainty for both planning and trading purposes each annual review will adjust the budgets five years in advance.

Implementation will require setting up a Scientific Panel drawn from the SBSTA and approved by the CoP to agree the formula and recommend annual CO2 budgets.

The target date of 2045 is suggested because it lies within the window for realistic contraction and coincides with the centenary of the United Nations.

1.5 Calculate relative national shares of the global budget according to a "convergence" formula.

Rationale and policy implications

Calculation with the convergence formula will use the UN median population estimates. These population statistics may be reviewed if necessary at the request of a majority of the CoP. However, after a fixed year (e.g. the convergence date) population figures could be frozen.

The relative national shares are independent of the annual scientific reviews, although the actual allocations of emissions (allocated in section 6) will of course vary according to the global budget agreed. Annual shares would be calculated for all countries, whether or not they are Parties to the Protocol, and shall be set out in an Annex to the protocol as tables.

The establishment of fixed national emissions budgets will encourage investment in appropriate technology and allow for the possibility of orderly emissions trading, but this depends crucially on having finite net CO2 budgets calculated according to a formula that produces a predictable level of permissible emissions from the present to the stabilisation date, to achieve the concentration target set in Section 1.3 above.

1.6 Allocate national CO2 emissions quotas.

Rationale and policy implications

1.7 Establish criteria and mechanisms for quota management

Establish a mechanism for the international management of quota allocation, accounting and verification based on criteria consistent with these proposals. The quotas shall cover "net anthropogenic emissions" resulting from human activities, including reduction of natural sinks minus deliberate natural sinks enhancement.

Rationale and policy implications

The proposed mechanisms would also arbitrate in case of dispute over budgeting anthropogenic sources and sinks.

It is not necessary to allow for crediting of sink enhancement or emissions reduction within other countries, known as Joint Implementation, since this can effectively be achieved through the emissions quotas trading system (section 2.1).

This proposal completes the essential procedures for applying "contraction and convergence".

Part 2: Additional proposals

Proposals regarding greenhouse gas emissions quotas

2.1 Set up a system for emissions trading

Rationale and policy implications

A trading regime would initially be developed under the SBI which would continue to supervise the process for CoP. However, once agreed, emissions trading would require a set of robust institutions capable of acting on behalf and under the supervision of CoP. Trading must be open, transparent, efficient and well regulated. The regulatory bodies must also ensure that TEPs are not bought or sold under coercion of any kind.

Emissions trading would also address the issue of "carbon leakage" to countries with relatively lower emissions. This would particularly be the case if purchasing rights of permits were extended to TNCs.

As the mechanism comes into effect, Joint Implementation will no longer become an issue as the trade will help to redress emission imbalances, while the incentive to invest in climate friendly technology remains by releasing quotas for trade.

The mechanism must also ensure that trading is developed primarily as an efficient means of reducing emissions and must not compromise future generations on the principles of inter-generational equity. The implications of this international trade on intra-national equity will also need to be examined and addressed. The increased value of emission quotas from international trade must not detrimentally affect the disadvantaged in national societies. 'Contraction and convergence' applies within countries as will as between them.

Given the historic link between growth of monetary GDP and CO2 emissions, there is a danger that trade in CO2 quotas and any other increase in financial activity as a result of this Protocol will simply increase global purchasing power leading to an increase in CO2 emissions. This would be contradictory to the purpose of the Convention. Another danger is that trade in Emissions Quotas increases international financial liquidity to produce inflation or other instability, as occurred following the OPEC oil price rises. These dangers might be addressed by the creation of a carbon-free "green currency". A study of the potential of carbon-free currency should be commissioned for consideration by CoP in future.

2.2 Require International Airline and Shipping companies to purchase CO2 emission quotas.

CO2 emitted by all aircraft or shipping must be accounted for within the global emissions budget by requiring international transport companies to purchase emissions permits.

Rationale and policy implications

Currently, aircraft on international flights, or shipping in international waters, can purchase untaxed fossil fuel which is not included in any national carbon account. Air transport in particular is one of the fastest growing sector of global CO2 emissions, and must be constrained in a similar manner to other carbon intensive economic activities. Fiscal measures which might achieve this, such as an international tax on bunker fuels, would require a global authority to predict and control demand. On the other hand, if airline or shipping companies have to purchase emissions permits the market will ensure a "level playing field" with land-based transport.

This measure will also ensure that all emissions are constrained within the contraction / convergence global budget (sections 1.4,1.5,1.6), whilst the price of the quotas is passed on to the consumer of the transport, rather than becoming the responsibility of governments.

It may be possible to extend this option to purchase emissions quotas to other Trans National Corporations (TNCs). This would have the advantage of discouraging "leakage" or carbon-intensive production to countries where emissions are cheaper, since the TNCs could purchase emissions quotas from countries with a surplus, without needing to relocate.

2.3 Consider national targets for anthropogenic emissions of other greenhouse gases

Draw up a timetable for agreeing constraints on concentrations of greenhouse gases other than CO2, with specific targets for each gas, as scientific knowledge of their biogeochemical cycles becomes sufficiently reliable. The allocation of budgets should be based on the same task of equity as used above for CO2, whilst giving special consideration to each country's need to exploit its natural resources and agriculture.

Rationale and policy implications

Greenhouse gases other than CO2 fall into two main categories:

For wholly man-made gases such as most CFCs, HCFCs and SF6, an early agreement could be reached. Production of some of these gases is already constrained under the Montreal Protocol for protection of stratospheric ozone. Their major sources and sinks are already sufficiently quantifiable.

National budgets for these gases should be allocated using the same principles of "contraction and convergence", allowing for trading if necessary, as outlined for CO2 in sections 1.4 to 2.1 above.

Some of these gases have long lifetimes, and therefore their Global Warming Potential relative to each other is effectively independent of the time horizon used. These gases could be substituted within national budgets. However, on the basis of inter-generational equity and long-term sustainability, production of the very long-lived gases should be tightly constrained and phased out as soon as possible.

If a time horizon were agreed, the global emissions budget for the shorter-lived of these gases could be linked to that for CO2 by means of their Global Warming Potential (defined by IPCC).

Methane (CH4) and Nitrous Oxide (N2O) are significant greenhouse gases produced by a mixture of anthropogenic and natural sources. The sources and sinks are still poorly defined.

Methane emissions are rapidly increasing both as a result of changing agricultural practice (cattle, irrigation) and leakage from natural gas installations. However, Methane has a short atmospheric lifetime and therefore it is not helpful to define a Global Warming Potential relative to CO2. To account for the greater potency of Methane as a greenhouse gas, international standards of best practice should be agreed for industry and agriculture. Financial penalties collected when these standards are breached, could be used to fund the development and transfer of improved technology to reduce Methane emissions.

Nitrous Oxide has a longer lifetime than Methane but makes a smaller contribution to current global warming, and is less well understood. More research is urgently needed on the cycles of both of these gases.

2.4 Devise potential sanctions, penalties, and compensation

Request the Secretariat to draw up options for a system of proportional progressive sanctions and penalties for non-compliance with the protocol, taking account of experience of international, regional and national legal instruments and the review of selected non-compliance, dispute resolution and implementation review procedures (FCCC/CP/1995/Misc.2) prepared by the interim secretariat.

Income raised from penalties could contribute to measures to aid implementation and relieve damages, as listed in Section 2.8 below.

Rationale and policy implications

The virtue of a tough system of penalties is that it will encourage compliance and reduce the likelihood of it being used.

Proposals on climate damages

2.5 Monitor climate damages

Rationale and policy implications

Research on climate-related damages should be funded by an international programme whose emphasis should be on impacts to developing countries.

Data on damages should be presented in their original units rather than using monetised values. Such values based on the method of "willingness to pay" imply rights by income which is fundamentally inequitable. International aggregation of damage data for the purpose of a global cost-benefit analysis is not appropriate, since the majority of damages will be inflicted on developing countries whereas most of the CO2 emissions, and hence mitigation costs, are currently the responsibility of the industrialised countries.

2.6 Plan for emergencies

Rationale and policy implications

Contingency plans should be also prepared for the potential relocation of entire populations from small island states and low-lying regions to the territory of Annex 1 countries.

2.7 Consider options for damage compensation and historic debt

Rationale and policy implications

Annex 1 Parties should be required to make provision for these damages in their national budgets and planning mechanism.

CO2 has a long lifetime in the atmosphere, and historic data shows that a constant fraction of emissions has remained airborne, although there is no guarantee for this fraction to remain constant in the future. Therefore, to a first approximation, a country's responsibility for global warming depends on its cumulative emissions integrated over time. Industrialised countries have thus accumulated an historic debt compared to developing countries. Applying the principle of per-capita equity to historic data, it is possible to create a formula for calculating cumulative debits or credits, which might be used for allocating damage liability.

For the purpose of such calculations, estimates of cumulative emissions of CO2 should include historic deforestation and other land use changes. Some countries have preserved much of their natural forest resources, whereas others have exploited them and consequently have more land on which to replant new forests. For consistency in accounting, it is necessary to include this form of historic debt if national emission entitlements are to be based on net anthropogenic emissions (i.e. including changes in natural sources and sinks).

An international panel should be set up by SBSTA to resolve disputes over damage claims; this should include advice from both climate scientists and insurance experts.

Proposals on Policies and Measures to aid implementation

2.8 Establish financial mechanisms to aid implementation

Funding is required for the following:

• Climate Research (see section 2.14)
• Education, training and awareness (see section 2.13)
• Monitoring climate damage (see section 2.5)
• Local government forum (see section 2.12)
• Technology Transfer (see section 2.9).
• Activities currently funded by the GEF
• Administration of the CoP and the Secretariat
• Administration of emissions trading (see section 2.1)
• Emergency Relief and Damage Compensation (see section 2.5)

Funding sources may include:

• A tax on trading of emissions entitlements (section 2.1)
• Penalties for non-compliance (as in section 2.4)
• According to cumulative historic debt (as in section 2.7)

Rationale and policy implications

Binding mechanisms must be set up to enable money to flow directly from the cause of the climate change problem (i.e. greenhouse gas emissions) towards funding its solution. This would encourage a reduction in CO2 emissions, although the main mechanism for achieving this should remain the allocation of emission entitlements according to Contraction and Convergence (sections 1.4 to 1.6).

Liability to pay compensation for damages should be linked directly to cumulative historic debt as outlined in section 2.7

2.9 Establish mechanism for development and transfer of sustainable technologies

The transfer of outdated or second-hand, carbon-inefficient technology should be controlled and preferably prohibited.

Rationale and policy implications

• (a) be carbon efficient or based on renewable energy sources
• (b) be an appropriate scale for the local community which it serves
• (c) be independent of expensive supplies or repairs from distant companies.
• (d) not damage the local environment (as do, for example, large hydropower schemes)
• (e)not entail unacceptable risk (as do nuclear power stations)

Measures to stimulate the development and diffusion of climate-friendly technology would include

• (a) establish a technology transfer fund (paid for according to section 2.8)
• (b) fund research, development and diffusion of sustainable technologies, particularly in developing countries
• (c)create an international inventory of climate-friendly technology
• (d) promote best practice and sharing expertise between countries
• (e) identify gaps and opportunities in national and multilateral technology programmes
• (f) limit the period for which patents on relevant technologies may be held without being exploited for the benefit of humanity

2.10 Phase out fossil fuel subsidies

Rational and policy implications

2.11 Require consistency in international policy-making

Rationale and policy implications

2.12 Establish a forum for local governments

Recognising the important contribution local governments make in implementing climate friendly policies and technologies at a local level, an international forum on climate change for local governments should be established with rights of representation as an observer to the CoP under Art. 7 (6). The role of this forum would be to allow sharing of experiences and making relevant policy recommendations to national governments and CoP. This body could also discuss issues of intra-national equity arising from the restraint of carbon emissions.

Rationale and policy implications

The forum would also be the ideal organ to voice any problems of intra-national inequities arising from national and international implementation of the protocol and specifically the trade mechanism.

Proposals on research and education

2.13 Enhance education, training and awareness

Commission a feasibility study to establish options for an international system of greenhouse gas labelling to provide immediate public awareness of the extent to which a particular product or service contributes to emissions of CO2 or other greenhouse gases and to create incentives to reduce carbon consumption.

Require parties to report annually to the CoP on the following matters:

• (a) the extent and nature of education, training and public awareness undertaken;
• (b) organisation, finance and target audience thereof;
• (c) independent evaluation of the effectiveness of such education and training;
• (d) results of an independent poll of public awareness of climate change, its effects and measures needed to reduce emissions to a sustainable level;
• (e) progress on greenhouse gas labelling
• (f) actions to curb promotion of carbon consumption.

Rationale and policy implications

There is much public confusion over the science and impacts of climate change. This should be tackled both as a core part of school curricula, and as specifically tailored training programmes for employees, stressing measures for alleviating impacts of their field of work on global climate change, and vice versa.

2.14 Strengthen climate research, particularly into feedback processes

Increase research into physical, biogeochemical, social and economic climatic feedback processes. Such research requires international consistency to ensure that the different processes can be combined in integrated models, whilst also encouraging researchers to investigate new processes. This should be co-ordinated principally through the International Geosphere Biosphere Programme (IGBP) and World Climate Research Programme (WCRP). IPCC and SBSTA (when calculating the emissions ceiling according to section 3) should attempt to take account of the cumulative risk from low-probability positive feedbacks.

When IPCC presents predictions or scenarios of global climate changes, there should also be less emphasis on global average temperature trends, and more on regional differences, particularly regarding the sulphate aerosol effect.

Rationale and policy implications

Some known examples of such natural climatic feedback processes are listed below:

• a) Clouds: Different levels of clouds can have opposite effects on climate, since they both trap terrestrial radiation and reflect solar radiation. Clouds and water vapour also transport much latent heat. Thus it is difficult to resolve the feedbacks. Clouds may also be seeded by sulphate aerosols, both natural and anthropogenic.
  
• b) Ice sheets: Polar warming may increase ice melt, but also increase snowfall. This affects:
  • Global albedo (proportion of sunlight reflected to space)
  • Sea level
  • Local ocean salinity and albedo and hence circulation and ecology
  
  
• c) Ocean circulation:
  • Arctic warming or increased freshwater input to the North Atlantic (ice melt, rainfall) could halt deep water formation, weaken the North Atlantic Current, and thus make NW Europe much colder.
  • Increased frequency of El Nino circulation in the Pacific affects climate world-wide.
  
  
• d) Ocean ecology: Changes in phytoplankton ecology might be caused by:
  • increased stratification of the water column, due to surface warming. could reduce nutrient (Nitrate, Phosphate, Iron) supply from bottom waters.
  • increased nutrient runoff from rivers due to changing land-use.
  • increased UV-B flux due to stratospheric ozone loss.
  
  The effect of this might be to change:
  • the export of Carbon from surface water to deep water by the "biological pump".
  • the alkalinity of surface water due to calcifying algae. Calcification puts CO2 back into the atmosphere.
  • the production of greenhouse gases (N2O, CH4, other hydrocarbons)
  • the production of Dimethyl Sulphide which (as sulphate aerosols) seeds clouds over the ocean and thus significantly influences global albedo
  • ocean fish stocks
  
  
• e) Terrestrial ecology: warming and drying in high latitudes may cause:
  • release of greenhouse gases CH4 and N2O from melting permafrost
  • release of CO2 from peat bogs, if drying allows aeration.
  • increased forest fires and subsequent CO2 release
  • reduced snow cover, particularly if forest replaces tundra, with consequent change in albedo.
  
  The "CO2 fertilisation effect" may cause:
  • increased CO2 uptake by terrestrial vegetation
  • changes in evapotranspiration and hence local rainfall and groundwater.
  
  Vegetation changes will affect albedo and also surface roughness which affects wind.
  
• f) Flooding of coastal wetlands by rising sea level, particularly in the tropics, may cause substantial release of CH4 and N2O.

There is presently much confusion among policymakers about the cooling effect of sulphate aerosols produced by fossil fuel combustion. It should be stressed that the aerosol effect is short-lived and local, whereas the arming by CO2 is long-lived and global. Such differences are obscured by an emphasis on global average temperature trends, which should be remedied within IPCC.

2.15 Study the responsibilities of trans-national corporations and finance

• (a) the extent to which their activities contribute to or abate global warming
• (b) differential responsibilities between corporate sectors
• (c) examples or models of good practice in regulation, incentives, statutory or voluntary codes, reporting requirements or other measures for encouraging corporations and investment fund managers to cut CO2 emissions
• (d) the contribution or otherwise of small and medium businesses to global warming
• (e) recommendations for specific measures to enhance the contribution of investment finance and transnational corporations to stabilising CO2 emissions

Rationale and policy implications

We welcome your comments!

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