By Anxhela (Angela) Mile[*]
“Climate change is the defining challenge of our age.” Ban Ki-moon
The Kyoto Protocol is often seen as one of the most respected agreements within the current climate regime under the United Nations Framework Convention on Climate Change (“UNFCCC”). Aligning with the UNFCCC’s ultimate objective, the Kyoto Protocol set internationally binding emission reduction targets for developed countries to stabilize greenhouse gases (“GHGs”). However, one of the reasons behind Kyoto’s success is the collapse of the Soviet bloc, which caused emissions to drastically drop. This blog post looks at the historical event, assesses the weaknesses in the Kyoto Protocol’s Joint Implementation (“JI”) mechanism, and provides an update on the next steps for the international community under the Paris Agreement.
Under the Kyoto Protocol, Annex I Parties (industrialized countries) had legally binding commitments to reduce collective GHGs 5% below 1990 levels. The signatory Parties also had to account for at least 55% of total carbon dioxide emissions at the 1990 level. In addition to implementing domestic policies to reduce GHGs, Annex I countries had other obligations, such as providing financial resources to developing countries and conducting research on climate change.
In the early 1990s, the Soviet Union dissolved and independent countries formed as Armenia, Belarus, Estonia, Latvia, Ukraine, and several others. With the fall of the Soviet bloc, Russia’s GHG emissions fell by nearly 40%. When the U.S. refused to sign Kyoto as it excluded binding commitments from developing countries, Russia needed to account for the emission reductions as an Annex I Party. However, because of “industrial meltdown” from the fall of communism, Russia did not have to change its standard behavior to comply with Kyoto’s targets as the targets were based on 1990 emissions levels.
Under the JI mechanism of Kyoto (Article 6), countries with emission reduction commitments could generate Emission Reduction Units (“ERUs”) from reduction projects and then transfer them to other countries. Because Russia’s emissions drastically decreased, Russia legally traded credits from its ‘emissions reductions’ to various markets without implementing any reduction projects. Russia also over credited its reduction units and financially gained from this mechanism as companies bought Russia’s ‘hot air’ emissions.
Overall, the JI mechanism is said to have “enabled global GHG emissions to be about 600 million tonnes of carbon dioxide equivalent higher than they would have been if countries had met their emission targets domestically.” In response to the faulty trading scheme of Kyoto, the Stockholm Environmental Institute made several recommendations to the international community: (1) “[c]rediting mechanisms should adopt project cycle procedures which ensure full transparency and make all documentation publicly available; (2) auditors should be fully accountable for all their activities to the authority regulating the mechanism; (3) retroactive crediting should not be allowed; and (4) only internationally accepted methodologies should be eligible for use.”
The Stockholm Environment Institute report was also critical of the nationally determined contributions (“NDCs”) mechanism under the Paris Agreement. With NDCs, State parties “will not have incentives to ensure environmental integrity of units transferred internationally.” Since minimal oversight over Russia’s trade of its ERUs led to an increase in GHGs, the report warned against the “absence of international accounting rules” as countries could sell credits without implementing mitigation efforts.
Under the Paris Agreement, Parties agreed to create a new market mechanism that would build upon lessons from Kyoto’s trading mechanism. In Article 6(3), the Agreement states that “[t]he use of internationally transferred mitigation outcomes to achieve nationally determined contributions under this Agreement shall be voluntary and authorized by participating Parties.” Moving forward, working groups will need to determine how the intricacies of the new market mechanism will function.
Moreover, according to a recent report released on November 26, 2019 by the UN Environment Programme, the international community found that “even if all unconditional Nationally Determined Contributions (NDCs) under the Paris Agreement are implemented, [the world is] still on course for a 3.2°C temperature rise.”  The report further stated that “to get in line with the Paris Agreement, emissions must drop 7.6 per cent per year from 2020 to 2030 for the 1.5°C goal and 2.7 per cent per year for the 2°C goal.” Overall, these findings are bleak as “countries collectively failed to stop the growth in global GHG emissions, meaning that deeper and faster cuts are now required.”
In light of the fact that countries have a short period to limit global warming to 1.5ºC, it is more important than ever for the international community to learn from the cap-and-trade scheme of the Kyoto Protocol. This will ensure that future treaties do not inadvertently result in an increase of GHG emissions, which ultimately defeats the purpose of a climate agreement.
[*] Anxhela (Angela) Mile is a third-year law student at the Elisabeth Haub School of Law at Pace University, studying environmental and international law. Prior to law school, Anxhela attended Boston College and studied environmental geoscience and international studies. She is a Research and Writing editor on Pace Environmental Law Review and has served as a law clerk at the Department of Justice and as a legal intern at the United Nations.
 Kyoto Protocol Reference Manual: On Accounting of Emissions and Assigned Amount, UNFCCC, https://unfccc.int/resource/docs/publications/08_unfccc_kp_ref_manual.pdf [hereinafter “Kyoto Reference Manual”].
 United Nations Framework Convention on Climate Change, May 9, 1992, S. Treaty Doc No. 102-38, 1771 U.N.T.S. 107 [hereinafter “UNFCCC”] (UNFCCC’s ultimate objective (Art 2): “Stabilization of GHG concentration in the atmosphere at a level that would prevent dangerous anthropogenic interference w/the climate system …”
 See generally Bernard et al., Russia’s Role in the Kyoto Protocol, MIT Joint Program on the Science and Policy of Global Change 1, 25 (2003), http://web.mit.edu/globalchange/www/MITJPSPGC_Rpt98.pdf.
 Kyoto Protocol to the United Nations Framework Convention on Climate Change, Dec. 10, 1997, 2303 U.N.T.S (Art. 25).
 Id. Art. 3.
 Kyoto Reference Manual, supra note 1, at 12.
 The Collapse of the Soviet Union, Britannica (Oct. 11, 2019), https://www.britannica.com/event/the-collapse-of-the-Soviet-Union/Aftermath-of-the-coup.
 Eugene Robinson, Copenhagen won’t be a zero-sum game on climate change, Washington Post (Op-Ed) (December 1, 2009), http://www.washingtonpost.com/wp-dyn/content/article/2009/11/30/AR2009113003155.html.
 Bernard, supra note 4, at 2.
 Kollmuss et al., Has Joint Implementation reduced GHG emissions? Lessons learned for the design of carbon market mechanisms, 5 Stockholm Environmental Institute Working Paper (August 2015), https://mediamanager.sei.org/documents/Publications/Climate/SEI-WP-2015-07-JI-lessons-for-carbon-mechs.pdf; Kyoto Protocol, supra note 5, Art. 6.
 Robinson, supra note 9.
 Kollmuss, supra note 12, at 5, 57.
 Id. at 5.
 Id. at 9–10.
 Id. at 11; Paris Agreement to the United Nations Framework Convention on Climate Change, Dec. 12, 2015, T.I.A.S. No. 16-1104, Art. 4(2) [hereinafter “Paris Agreement”] (NDCs require “each Party shall prepare, communicate and maintain successive nationally determined contributions that it intends to achieve. Parties shall pursue domestic mitigation measures, with the aim of achieving the objectives of such contributions.”).
 Kollmuss, supra note 12, at 11.
 UNFCCC News, What are Market and Non-Market Mechanisms?, https://unfccc.int/topics/market-and-non-market-mechanisms/the-big-picture/what-are-market-and-non-market-mechanisms (last accessed on Nov. 25, 2019).
 Paris Agreement, supra note 17, Art. 6(3).
 UN Environment Programme: Emissions Gap Report, 13, 53 (Nov. 26, 2019), https://wedocs.unep.org/bitstream/handle/20.500.11822/30797/EGR2019.pdf?sequence=1&isAllowed=y [hereinafter “UNEP Emissions Gap Report”].
 Id. at 13.
 Id. at 14, 44 (The report also recognized that Russia has “introduced new draft legislation that would establish a cap-and-trade system for major carbon emitters by 2025.”).
 INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE (“IPCC”), Summary for Policymakers of IPCC Special Report on Global Warming of 1.5°C approved by governments (Oct. 2018), https://www.ipcc.ch/2018/10/08/summary-for-policymakers-of-ipcc-special-report-on-global-warming-of-1-5c-approved-by-governments/; See generally UNEP Emissions Gap Report, supra note 22.