Evaluation of Greenhouse Gas Emission Reduction Requirements in China Under Annex 1 Scenario for Second Commitment Period of Kyoto Protocol

by Mark Ellis

At the UNFCCC’s 15th Conference of Parties in Copenhagen this December member nations will seek to assess Kyoto Protocol targets for the first commitment period (2008-2012) and establish a new set of agreements for the second commitment period (2013-2017). On the agenda will be a focused discussion on regulating greenhouse gas (GHG) emissions in developing, non-Annex 1 nations, where GHG emissions growth is expected to be most rapid. China sits atop the list of non-Annex 1 Parties currently exempt from binding emissions goals in the first commitment period, recently having superseded even the United States in annual GHG emissions. Given the push to regulate emissions in developing countries, paralleled by China’s economic growth, this report investigates the significance of choosing the base year should from which China would be required to reduce its GHG emissions should it become an Annex 1 Party.

Introduction

As nations reconvene this December at the 15th Conference of Parties in Copenhagen to craft a new post-Kyoto accord, a lingering issue will be how to deal with regulating the greenhouse gas (GHG) emissions from non-Annex 1 Parties beyond the initial commitment period. Exempt from the binding GHG reduction targets of Annex 1 Parties for the initial commitment period (2008-2012), rapid population and economic growth in developing, non-Annex 1 countries such as Brazil, India, and China have led to increasing concern that failure to regulate and significantly reduce emissions in these locations in the second commitment period could have adverse effects on global warming and offset gains made elsewhere. Due to these concerns, world leaders are considering a goal to establish some form of GHG emission reduction requirement for developing nations is a top priority (iSciences, 2009). Of particular concern among non-Annex 1 Parties is China.

China recently surpassed the United States as the world’s single largest annual emitter of GHGs and shows little signs of slowing its economic and industrial growth (MNP, 2007). China’s economy has grown at an average of 9.8% annually between 1979 and 2007, leading some to argue it is no longer a developing country (Leggett, J., et al., 2008). The implication is that China should no longer be exempt from the targets applied to Annex 1 Parties. Given this possibility, assuming China entered as an Annex 1 Party for the second commitment period (2013-2017), the purpose of this investigation is to determine the impact of the chosen base year from which reduction targets would be set. More specifically, if China entered as an Annex I Party but adopted a 2000 base year instead of 1990 (that for existing Annex 1 Parties), what difference would that make in their required emissions reductions?

Background

The Kyoto Protocol officially became active 90 days after Russia ratified the agreement in 2004, when ratified countries comprised at least 55% of 1990 global carbon dioxide emissions (Wikipedia, 2005). It was within this time period that numerous country or region specific emissions goals were established for 37 developed nations—primarily from North America and the European Union. Annex 1 countries were to collectively reduce their GHG emissions by 5.2% below 1990 levels. Accountable GHGs include: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. Individual countries had specific reduction targets that deviated from this average (e.g., EU 8% , U.S. 7%, and Japan 6%) based on each country’s proportion of total GHG emissions for the base year of 1990 (UNFCCC, 2008).

While the primary intent is for countries to reduce emissions through internal, nationally-driven measures, Annex 1 Parties could work toward targets through Joint Implementation (JI) projects per Article 6, Clean Development Mechanisms (CDMs) per Article 12, emission permit trading per Article 17, or through land use, land use change, and forestry (LULUCF) management per Articles 3.3 and 3.4) (UNFCCC, 2008). Non-Annex 1 Parties included in the Protocol are exempt from the 2012 target for the first commitment period. However non-Annex 1 Parties could enter into CDM agreements with Annex 1 Parties, wherein Annex 1 countries could help achieve their emissions goals by sponsoring GHG reduction initiatives abroad. From a Kyoto perspective, CDMs functioned as a significant means through which non-Annex 1 countries could effectively reduce GHG emissions through an influx of foreign financial or technological capital.

China ratified the Kyoto Protocol as a non-Annex 1 Party in 2002, and as of January 2008, had entered into 126 CDM agreements (Econsense, 2008a). If China were to enter as an Annex 1 Party for the second commitment period, not only would it be required to reduce its emissions to an established target, but also the mechanisms through which it could achieve those reductions would change. While new opportunities to enter into JI agreements or trade permits with other Annex 1 Parties would be created, China could no longer be on the receiving end of CDM funding. Like other Annex 1 Parties, China would also be required to estimate and report their GHG emissions for the chosen base year. Historically, difficulty in getting accurate reporting of national GHG emissions from the Chinese government could be a significant point of contention on this issue. The potential extent of China’s required emissions reductions follows.

Results

Emission reductions from 1990 and 2000 base years were evaluated for two different scenarios: (1) 5.2% reduction and (2) 7% reduction. The first scenario is used as a baseline deliberately set equal to the cumulative target emissions reductions for Annex 1 Parties during the first commitment period. The second scenario is used to measure what China’s reductions would be should it adhere to the reduction target assigned to (but not ratified) by the United States, its closest peer regarding annual GHG emissions. This logic is consistent with that used to determine the initial Annex 1 reduction targets in the first commitment period based on relative 1990 base year emissions (UNFCCC, 2008).
Recent estimates of China’s emissions in 1990 and 2000 are 1,027 million metric tons of carbon equivalent (MMTCE) and 1,333 MMTCE, respectively (Parker, L. and Blodgett, J., 2008). Annual emissions in metric tons CO2 equivalent were measured at 7,527 metric tons in 2005 by the International Energy Agency (IEA), which translates to approximately 2,053 MMTCE (Leggett, J., et al., 2008). These totals exclude land use, land use change, and forestry (LULUCF). Results for each scenario are as follows (total reduction and percent reduction from 2005 emissions in parentheses):

• 1990 (5.2% below base): 974 MMTCE (1,079 MMTCE; 52.5%)
• 1990 (7% below base) 955 MMTCE (1,098 MMTCE; 53.4%)
• 2000 (5.2% below base): 1,264 MMTCE (789 MMTCE; 38.4%)
• 2000 (7% below base): 1,240 MMTCE (813 MMTCE; 39.6%)

Discussion and Conclusion

Within each of the base years, the reduction requirements differ by a relatively small amount. However major differences arise from the base year selection. Required emissions reductions from a base year of 2000 versus those from 1990 results in additional reductions of 290 MMTCE and 285 MMTCE. In either case reductions from present emissions versus those of 2005 is likely considerably greater given China’s rapid economic growth, cited as the primary driver of Chinese GHG increases (Raupach, M., et al., 2007). Between 2006-2007, the 8% growth in China’s GHG emissions represented two-thirds that of global increases in GHG emissions over the same time period (Parker, L. and Blodgett, J., 2008). China’s internal estimates of GHG emissions are often lower, and have been a source of controversy. In comparison to the 2005 IEA data used for this analysis, China’s reports indicated total 2004 GHG emissions at approximately 1,581 MMTCE. While some of this is due to economic growth between the two years, China’s estimates did not include sulfur hexafluoride, perfluorocarbons, and hydrofluorocarbons, explaining in part the lower reported figure (Leggett, J., et al., 2008).

From a reduction requirement, China would clearly prefer 2000 as the base year if it signed on as an Annex 1 Party for the second commitment period. Emissions reduction requirements for either the 5.2% or 7% cut would be more than 25% less than those using 1990 as the base year. Based on the numbers above this would have a more significant effect on its required emission target than a change in the percent reduction below the base level in either case. Despite not having a formal target, China has recently instituted a number of measures and goals to reduce its GHG emissions, including: 16% total primary energy supply from renewables by 2020, renewable energy feed in tariffs, 20% reduction in energy consumption per unit by 2010, mandatory vehicle fuel efficiency standards, and a tax of $0.03/liter of gasoline (Econsense, 2008b).

Interestingly, LULUCF does not feature a prominent role in these national policies. Moreover, biomass to biofuels is specifically excluded from the feed in tariff subsidies available for wind and other renewable energy sources. The primary driver for GHG emissions reduction appears to be focused on increased energy efficiency. Yet China has made progress regarding bio-based carbon mitigation. Between 1990 and 2005, biofuel production in China increased from zero to 1,200 million liters (Econsense, 2008b). Moreover, according to China’s National Climate Change Program, “from 1980 to 2005, a total of 3.06 billion tons of CO2 were absorbed by afforestation, a total of 1.62 million tons of CO2 were absorbed by forest management, and 430 million tons of CO2 from deforestation were saved” (Leggett, J., et al., 2008).

China has long advocated for developed countries to take the lead with regard to climate change policy. Countries like the U.S. have historically been the largest abusers of GHG emissions and reaped the economic rewards. China also often cites lower domestic GHG emissions and energy use per capita and intensity vis-à-vis the United States to defend its stance. Statistics confirm this assertion. GHG emissions per capita in China in 2005 were one-quarter those in the United States, and energy consumption per capita about one-sixth (Leggett, J., et al., 2008). Nonetheless, from a climate change perspective, it is equally undeniable that some form of emissions reduction target must be established for rapidly growing non-Annex 1 Parties such as China. Should China ratify as an Annex 1 Party, it will merit further investigation of the policies they adopt to do so, particularly with regard to LULUCF activities, which until now have remained secondary to energy efficiency but hold great potential for emissions reduction. Post 2012 mitigation options could include a broader set of qualifying LULUCF activities, further increasing GHG mitigation potential (Robledo, C. and Blaser, J., 2008).

References

Econsense. 2008a. Fact sheet: climate policy. Forum for Sustainable Development of German Business.

Econsense, 2008b. Fact sheet: china. Forum for Sustainable Development of German Business.

iSciences, LLC. 2009. Kyoto and beyond: evolution of multilateral agreements on climate change (presentation). January 2009.

Leggett, J., et al. China’s greenhouse gas emissions and mitigation policies. Congressional Research Service Report to Congress. September 2008. Order Code RL34659.

Netherlands Environmental Assessment Agency (MNP). 2007. “China now no. 1 in co2 emissions; u.s.a. second position”: http://www.pbl.nl/en/dossiers/Climatechange/moreinfo/Chinanowno1inCO2emissionsUSAinsecondposition.html (last accessed March 6, 2009).

Parker, L. and Blodgett, J. 2008. Greenhouse gas emissions: perspectives on the top 20 emitters and developed versus developing nations. Congressional Research Service Report to Congress. November 2008. Order Code RL32721.

Raupach, M., et al. Global and regional drivers of acceleration co2 emissions. Proceedings of the National Academy of Science, 104:24 (10288-10293). June 12, 2007. National Academy of Science.

Robledo, C. and Blaser, J. 2008. Key issues on land use, land use change, and forestry (lulucf) with an emphasis on developing country perspectives. United Nations Development Programme – Environment & Energy Group.

United Nations Framework Convention on Climate Change (UNFCCC). 2008. Kyoto protocol reference manual on accounting of emissions and assigned amount. November 2008.

Wikipedia. 2005. “Kyoto protocol.”:
http://en.wikipedia.org/wiki/Kyoto_Protocol (last accessed March 5, 2009).

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1 Response so far »

  1. 1

    Craig Cammarata said,

    Having written on this same subject, I was aware of a lot of this information. However, I did not know that China has entered into 126 CDM agreements. I’d be very curious to know which countries are making these agreements with China and what type of reduction activities are included in these activities.

    Also, having done the same calculations, I actually had significantly different results. According to the UN’s Millennium Development Goals Indicators, China’s emissions equaled 2,400,407,230 MTCE in 1990 and 3,339,359,820 MTCE in 2000. According to those estimates, a 7% reduction would result in an allowable emissions level of about 2,232 MMTCE from a base year of 1990 and about 3,105 MMTCE from a base year of 2000. I’d be curious to know the reason for this discrepancy. It could be a discrepancy in China’s self reporting.


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