(BN) China Says Kyoto Pact Debate Threatens Climate Talks (Update1)


China Says Kyoto Pact Debate Threatens Climate Talks (Update1)
2010-12-02 06:29:23.535 GMT

(Updates with carbon credit prices in tenth paragraph.)

By Alex Morales and Kim Chipman
Dec. 2 (Bloomberg) -- China and Brazil led developing
nations in saying Japan's refusal to help extend the Kyoto
Protocol to curb greenhouse gas emissions may halt work on a
global accord to combat global warming.
A total of 37 developed countries, including Japan,
ratified the Kyoto Protocol in 1997, agreeing to set limits
on fossil fuel emissions. The Kyoto accord expires in
December 2012 and with no other agreement to replace it,
delegates at the United Nation climate talks in Cancun,
Mexico, say extending the protocol is crucial.
"The Kyoto Protocol is the very basis of the framework
to address climate change through international
cooperation," China's envoy, Su Wei told reporters in Cancun.
"If the pillar is collapsed, you can guess the
Failure to reach an agreement on extending Kyoto's
mandate threatens the future of the UN-brokered Clean
Development Mechanism, the world's second-biggest market for
emissions credits, worth $2.7 billion last year.
"Kyoto has to continue, otherwise the whole negotiation
would fall apart," Luiz Alberto Figueiredo Machado, Brazil's
lead negotiator in Cancun said in an interview last night.


Japanese negotiator Kunihiko Shimada said in an interview
on Nov. 30 that the protocol is "outdated" because it only
covers 27 percent of global emissions and that his country
won't accept a second commitment period once the current
targets expire.
"It's certainly troubling," Lou Leonard, managing
director of the climate change program at WWF in Washington,
said in an interview. "It's not the end of the story. There
is growing support among Kyoto Protocol countries for moving
forward in some form. We will have to wait and see how that
Japan's position is important because the talks require
a consensus and Japan is the world's fourth-biggest polluter
behind China, the U.S. and Russia. The issue raises the
prospect this year's discussions will fail to reach any
agreement on combating climate change, ending in discord like
the meeting in Copenhagen in 2009.

Widening Spread

UN credits for 2012 traded at 4.19 euros ($5.49) less
than those in the European Union's cap-and-trade program
yesterday. That compares with a 2.39 euro discount at the
start of the year. UN credits for 2010 gained 0.7 percent
yesterday to 11.84 euros a metric ton. EU permits rose 0.5
percent to 14.82 euros.
The dispute also may hamper progress in other areas of
the discussions, which aim to protect forests, channel up to
$100 billion to poor nations and set up a system to verify
the emissions reductions countries say they're making.
"We cannot see how we can continue with the carbon
markets without the Kyoto Protocol," Gambian envoy Pa Ousman
Jarju said in an interview. "If we don't have positive
signals for the continuation of the Kyoto Protocol in a
second commitment period, we are not going to give in on any
other issues."

U.S. Position

U.S. envoy Jonathan Pershing sidestepped the controversy
in a briefing with reporters yesterday, noting the U.S.
didn't ratify Kyoto and isn't party to the discussions about
what to do with the accord.
"The U.S. is not and has not been a party to the Kyoto
Protocol," Pershing said. "We're not taking part. I don't
have any real comment. Japan has been quite clear. It's any
country's right about how to move forward."
The gap makes it difficult to reach the "ultimate
goal" of protecting the planet from climate change, he said
at a briefing last night.
The talks have two tracks. One would set new greenhouse
gas cuts for nations bound by Kyoto. The other would make
targets for the U.S., the only developed nation not to ratify
Kyoto, and spell out actions to be taken by developing
nations including China.

Japan's Request

     Japan favors a single legally-binding instrument that
includes all major emitters. It doesn't want to extend the
exemption from making emission cuts granted to developing
nations including China under Kyoto.
"The clouds which are hovering over the Kyoto Protocol
are what have seized us," Indian negotiator Vijai Sharma
told delegates in Cancun. "If there are doubts about the
Kyoto Protocol's survival and continuance, that has to be
While the outcome of discussions on the Kyoto track
would be legally binding, delegates have yet to decide
whether the results of the discussion about U.S. and
developing country actions also will be binding. That issue
caused a day-long suspension of talks at the Copenhagen
climate summit last December and wasn't resolved.
"Here we are at another Conference of the Parties, and
we still haven't concluded that we should have a legally-
binding agreement," Tuvaluan envoy Ian Fry, who triggered
the suspension of talks in the Danish capital last year, told
Mexican Foreign Minister Patricia Espinosa, president of
this year's conference, yesterday decided to set up a forum
that will examine the legal form of the outcome, fending off
opposition to such discussions from India, China and Saudi
Arabia. A final decision won't be made in Cancun, she said.

'Blame Game'

Figueiredo of Brazil said that in Cancun, as in last
year's meeting in Copenhagen, some countries are playing a
"certain game of 'I don't do it until you do it,' followed
very, very, very swiftly by a certain blame game."
     Saudi Arabian lead negotiator Mohammad al-Sabban said
there's no point in discussing the legal form of the second
track of discussions while nations were flouting their
obligations under the existing Kyoto Protocol.
"The most important question now is how we maintain the
status of the Kyoto Protocol before we discuss a legally
binding new agreement," al-Sabban said. "We should have the
second commitment period, otherwise there is no need or
meaning to adopt decisions that we know can be flouted by
countries whenever they feel like it."

For Related News and Information:
Top environment and renewable energy stories: GREEN <GO>
Stories about the climate talks: NSE CLIMATE CANCUN <GO>
Locations of global energy facilities: BMAP <GO>

--With assistance by Stuart Biggs in Tokyo. Editors: Reed
Landberg, Aaron Sheldrick, Peter Langan

To contact the reporters on this story:
Alex Morales in Cancun, Mexico, at +44-20-7330-7718 or
amorales2@bloomberg.net; or
Kim Chipman in Cancun, Mexico, at +1-202-624-1927 or

To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or