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Carbon Trading
Its Impact on Global Climate Change
and the Philippines
BY JAN ERL ANGELO B. ROSAL
ABSTRACT
Life depends on the warmth of the sun being trapped by layers of gases that
surround the Earth. We now produce so much of these heat-trapping gases that the layer is
getting thicker, heating the world, changing the climate and threatening our way of life. As
the world gets hotter, some of the extreme effects we are experiencing now will become
more frequent, making our planet a more hostile place to live. If we won’t act now, it may
be too late.
environmentalists start to give predictions and world leaders are put upon the pressure of
handling the situation. Increased levels of emissions from harmful gases like methane and
carbon dioxide from countries around the world have been pointed out as the main culprit
for the abrupt change in the climate system, and so in 1997, world leaders met at Kyoto,
Japan to formulate a solution to the threatening problem. That gave birth to the Kyoto
Protocol.
This paper has basically five purposes, (1) to understand the Kyoto Protocol,
relating it to the present situation of the global climate, (2) to clarify the methodologies and
policies being implemented under the protocol, (3) what risks did the United States foresee
that made them back out from the ratification of the agreement, and locally (4) the impact
of Kyoto Protocol in the Philippines in general, and (5) its impact on the Filipinos,
especially the small-scale tree farmers. And with the paper would be our answer to the
question, if this Kyoto Protocol would be the Superman of our generation, or would it
Kyoto Protocol 9
a. Definition 9
c. Objectives 10
d. Concepts 10
e. Emissions/Carbon Trading 11
1. Definition 16
Conclusions/Recommendations 20
Bibliography 21
DEFINITION
HISTORICAL IMPACTS
c. Societal Collapse
Climate change has been associated with the historical collapse of civi
civilizations, cities
and dynasties. Notable examples of this include the Anasazi, Classic Maya, the Harappa, the
Hittites and Ancient Egypt.. Other, smal
smaller
communities such as the Viking settlement
of Greenland have also suffered collapse with
climate change being a suggested contributory
factor.
Figure 2. TRACE BACK THROUGH ICE. GISP2 ice core at 1837 meters depth with clearly visible annual layers.
e. Dendochronology
Dendochronology is the analysis of tree ring growth patterns to determine the age of a
tree. From a climate change viewpoint, however, Dendochronology ccan
an also indicate the
climatic conditions for a given number of years. Wide and thick rings indicate a fertile, well
well-
watered growing period, whilst thin, narrow rings indicate a time of lower rainfall and less
less-
than-ideal growing conditions.
Environmental Impacts
• The average temperature of Metro Manila
has increased by approx. 0.5 °C in just 30 years.
• Several landslides and floods have been
Figure 3. MOTHER NATURE STRIKES BACK. A man reported for this present decade, with alerting
struggles for shelter from a chest-high
high flood during
the ravage of Bagyong Ondoy in the suburbs of numbers of casualties.
Metro Manila.
Figure 4. GOING UP. Scientists believe that if we do not act now, the The Earth’s temperature has
temperature will keep rising until it becomes "unstoppable".
already risen by 1°C. If it continues
by up to 2°C, the Earth will start to heat up all by itself, and thus resulting to runaway
global warming. Some scientists speculate that if the current situation of the environment
continues, in a period of 4 to 10 years, we will gain another degree centigrade and reach
this tipping point. So the people need to take action to change the state of nature before
that 4-10 year period. It is said that it would take barely half a century or so before the
climate system would go back to its original state.
DEFINITION
The Kyoto Protocol establishes legally binding commitment for the reduction of four
greenhouse gases (carbon dioxide, methane, nitrous oxide, sulfur hexafluoride), and two
groups of gases (hydrofluorocarbons and perfluorocarbons) produced by "Annex I"
(industrialized) nations, as well as general commitments for all member countries. Under
the Kyoto Protocol, industrialized countries agreed to reduce their collective greenhouse
gas (GHG) emissions by 5.2% from the level in 1990.
The objective of the Kyoto climate change conference was to establish a legally
binding international agreement, whereby all the participating nations commit themselves
to tackling the issue of global warming and greenhouse gas emissions. The target agreed
upon was an average reduction of 5.2% from 1990 levels by the year 2012. The
Intergovernmental Panel on Climate Change (IPCC) has predicted an average global rise in
temperature of 1.4°C (2.5°F) to 5.8°C (10.4°F) between 1990 and 2100.
Kyoto Protocol is a first step as requirements to meet the UNFCCC will be modified
until the objective is met, as required by UNFCCC Article 4.2(d).
CONCEPTS
• commitments to reduce greenhouse gases that are legally binding for Annex I
countries, as well as general commitments for all member countries;
• implementation to meet the Protocol objectives, to prepare policies and measures
which reduce greenhouse gases; increasing absorption of these gases and use all
mechanisms available, such as joint implementation, clean development mechanism
and emissions trading; being rewarded with credits which allow more greenhouse
gas emissions at home;
• minimizing impacts on developing countries by establishing an adaptation fund for
climate change;
• accounting, reporting and review to ensure the integrity of the Protocol;
• compliance by establishing a compliance committee to enforce commitment to the
Protocol.
Advantages
The overall goal of an emissions trading plan is to reduce emissions. The cap is
usually lowered over time - aiming towards a national emissions reduction target. In other
systems a portion of all traded credits must be retired, causing a net reduction in emissions
each time a trade occurs. In many cap and trade systems, organizations which do not
pollute may also participate, thus environmental groups can purchase and retire
allowances or credits and hence drive up the price of the remainder according to the law of
demand. Corporations can also prematurely retire allowances by donating them to a
nonprofit entity and then be eligible for a tax deduction.
The biggest advantage for them is that emissions trading makes reducing emissions
cheaper, and by doing so it makes the willingness to act stronger.
Disadvantages
Fundamentally, pollution trading is wrong. It treats clean air and public health
as a private commodity to be traded, speculated against, and profited from. What once was
a wrong—i.e., polluting—is now a "right". Instead of people having the right to breathe
free, businesses have the right to pollute and make money while doing so.
Carbon Trading has not achieved CO2 emissions reductions. Most countries
participating in the Kyoto Protocol are failing to meet their target greenhouse gas
emissions reductions. Canada has consistently failed to meet its Kyoto targets and
currently exceeds greenhouse gas emission targets by about 25%. The European
Commission reported that emissions from the major industrial users throughout the
European Union actually rose by 1% to 1.5% in 2006. (see Figure 6)
Polluting fossil-fuel plant would continue to operate. A cap and trade system
would allow heavy polluters to buy credits from less polluting facilities. There would be no
incentive to close or clean up the heaviest polluting power or industrial plants in
communities where health already is compromised by their presence. Such plants are often
located in low-income communities and communities of color, who experience
disproportionate effects from power plant pollution that causes heart disease, asthma and
pre-mature death.
Time is of the essence. The climate crisis is urgent. We do not have the luxury of
waiting while the myriad details of a cap-and-trade system are resolved through lengthy
negotiations.
Figure 7. HAND-IN-HAND. Participating countries are in green, neutral states in gray, and countries that did not accept in red.
As of February 2009, 183 states and 1 union (European Union) have signed and
ratified the Kyoto Protocol to the United Nations Framework Convention on Climate
Change, making it 184.
With Russia's ratification the "55 percent of 1990 carbon dioxide emissions of the
Parties included in Annex I" clause was satisfied and the treaty brought into force, effective
16 February 2005.
The United States of America, although a signatory to the Kyoto Protocol, has
neither ratified nor withdrawn from the Protocol. The signature alone is merely symbolic,
as the Kyoto Protocol is non-binding on the United States unless ratified. (see Figure 7) The
United States was, as of at least 2005, the largest per capita emitter of carbon dioxide from
the burning of fossil fuels.
President George W. Bush, in his administration, did not submit the treaty for Senate
ratification based on the exemption granted to China (now the world's largest gross
emitter of carbon dioxide, although emission is low per capita). Bush opposed the treaty
because of the strain he believed the treaty would put on the economy; he emphasized the
uncertainties which he believed were present in the scientific evidence. Furthermore, the
U.S. was concerned with broader exemptions of the treaty. For example, the U.S. did not
support the split between Annex I countries and others. Bush said of the treaty:
“This is a challenge that requires a 100% effort; ours, and the rest of the world's. The world's
second-largest emitter of greenhouse gases is the People's Republic of China. Yet, China was
entirely exempted from the requirements of the Kyoto Protocol. India and Germany are among
the top emitters. Yet, India was also exempt from Kyoto ... America's unwillingness to embrace a
flawed treaty should not be read by our friends and allies as any abdication of responsibility. To
the contrary, my administration is committed to a leadership role on the issue of climate
change ... Our approach must be consistent with the long-term goal of stabilizing greenhouse
gas concentrations in the atmosphere.”
President Barack Obama has, as yet, taken no action with the senate that would change
the position of the United States towards this protocol. When Obama was in Turkey in April
2009, he said that "it doesn't make sense for the United States to sign the Kyoto Protocol
because it is about to end". At this time, two years and eleven months remained from the
four-year commitment period.
The Clean Development Mechanism (CDM), still under carbon trading and tthe
Kyoto, is a mechanism that gives incentives to any party for helping in the environment’s
recovery.
For example, people who grow forests or reforest damaged areas are also given
carbon credits. These carbon credits can also be sold to those countries tthat
hat have excess
carbon emissions. The mechanics are still the same; only for that carbon trading deals with
money while CDM is investing on projects that could help nature recover.
4. Natural calamities
The implementation of a clear and transparent carbon trading scheme in the
Philippines is made more complicated by the frequent calamities (particularly typhoons)
that have cost the country so much. Millions of dollars in damages to roads, bridges, and
public buildings are incurred annually. Due to the prevalence of destructive typhoons, the
Philippines National Disaster Coordinating Council must come up with a scheme to insure
smallholder tree farms.
This new method of solving the problem of the world’s climate system is a very
“innovative” yet laborious one. Who’d ever think of trading emissions? And when did one
get paid for planting trees and reforesting denuded areas? For the country, this would be
very beneficial since we are at the peak of the era of depletion wherein we are on the verge
of stepping beyond the maximum sustainable yield of our resources. Not to mention that
we have been described as one of the N-11 (Next Eleven) economies, our nation is indeed
staging a metamorphosis from a developing nation to an industrialized one in the future.
This means there would be more factories, more plants, more technology, and more
emissions in the future. And when is the better time to prepare than now? With our
participation in this Kyoto Protocol, we are hand-in-hand with those other nations who are
aiming for what they call a “green collar economy”, and with a green collar economy comes
the balance between income and environment.
Back to carbon trading for the Filipinos, it may play an important role in the future
since it has the potential of fulfilling the woes and lamentations of those humble farmers
who need their equal share of recognition. “Economic incentives for being environment-
friendly” – isn’t that nice to hear? Filipinos can earn a living from saving the planet. If only
the challenges mentioned above can be resolved, thereby providing a clear and transparent
trading mechanism for carbon, smallholders engaged in tree farming are expected to
benefit.