Climate change: policy

The primary objective of international climate policy, as set out in the climate treaty and the Kyoto protocol, is to reduce anthropogenic influences on the climate by stabilising atmospheric concentrations of greenhouse gases.

Kyoto Protocol

The UN Climate Treaty and the Kyoto Protocol include agreements about reducing emissions of greenhouse gases. The objective is an average reduction by the industrialised countries of 5% between 2008 and 2012, as compared to 1990. This includes the countries of Eastern Europe and the former Soviet Union.
The Protocol comes into effect when at least 55 countries ratify it and the CO₂ emissions of the ratifying industrialised countries in 1990 account for at least 55% of the total CO₂ emissions of all industrialised countries (the 'Annex I' countries). On 22 July 2002, that percentage was 36%.

Kyoto Protocol Objective for the Netherlands

By ratifying the Kyoto Protocol, the Netherlands has undertaken to reduce greenhouse-gas emissions by 6% compared to 1990 in the period 2008-2012 (the 'first budget period'). In concrete terms, this means average annual emissions, during the budget period, of 199 billion kg of CO₂ equivalents.
It has been calculated that the emission of greenhouse gases in 2010 would be 239 billion kg if the Netherlands were not to implement a climate policy. That is 40 billion kg more than is permitted. The government wishes to achieve 20 billion kg of the 40 billion kg of reductions in the Netherlands. The Netherlands aims to find the other 20 billion kg abroad.
The objective relates to all greenhouse gases. The measures to achieve the objective allow countries to decide themselves which substance(s) they target.

Domestic reduction

The domestic objective for the emission of greenhouse gases is therefore an annual average of 219 billion kg CO₂ equivalents in the budget period. The government has put together a package of measures to achieve this objective. The package includes encouraging energy conservation and renewable energy and multi-year agreements with industry. This package of measures has been set out in the Uitvoeringsnota klimaatbeleid (Climate Policy Implementation Memorandum) (VROM, 2001).

International reduction

The annual 20 billion kg reduction that has to be made abroad is achieved with 'flexible mechanisms'. These mechanisms allow the Netherlands to buy 'credits' from companies that achieve greenhouse-gas reductions in other countries. 1 credit corresponds to 1 ton of greenhouse-gas reduction. The Netherlands must therefore buy 20,000,000 credits a year, each of which cost approximately EUR 4-5. During the budget period of five years, a total reduction of 100 billion kg CO₂ equivalents has to be purchased abroad and that will therefore probably cost the government 400-500 million euros.
There are two types of 'credit': credits earned through Joint Implementation and credits earned with the Clean Development Mechanism.

Joint Implementation
Credits earned by means of Joint Implementation are known as 'emission reduction units' (ERUs). In practice, companies can earn ERUs by achieving reductions in the budget period in Central and Eastern European countries. For example, if a company builds a wind turbine park in Rumania where there would otherwise have been a coal-fired power station, this company earns as many ERUs as emissions prevented because no more electricity has to be generated using coal. The company can then sell the ERUs to the government.
Clean Development Mechanism
Credits earned with the Clean Development Mechanism are known as 'CERs'. A company can earn CERs in the same way as ERUs. The difference is that companies can earn CERs by setting up emission-reduction projects in developing countries.

Emissions trading

It is of course possible that the Netherlands may, in the budget period, buy too many or too few ERUs and CERs or that it overshoots the domestic objective or fails to meet it. In that case, countries may engage in 'emissions trading' to even out deficits and surpluses.

Note on the calculation of the objective for the Netherlands

In 1990, emissions of greenhouse gases, not including the F gases (fluorine-containing gases: HFCs, PFCs, SF₆), amounted to 204 billion kg CO₂ equivalents. A 6% reduction results in 191.8 billion kg. In the reference year (1995), emissions of F gases amounted to 8 billion kg. A 6% reduction results in 7.5 billion kg. The objective for the budget period is therefore an annual average of 191.8+7.5=199 billion kg.

Note on calculation of the emissions of greenhouse gases

All the figures above relate, unless stated explicitly otherwise, to the sum of all greenhouse gas emissions, and not just to emissions of CO₂. The emissions of greenhouse gases are not just added up. The calculation takes into account differences in the greenhouse effect induced by the various substances. This greenhouse effect is expressed in Global Warming Potential (GWP) factors.
The GWP factor for CO₂ is 1. The greenhouse effect of other substances is related to this reference level (IPCC, 1996). Although the emission of an F gas in kilograms may be quite small, an F gas may nevertheless be considered to make a significant contribution to the greenhouse effect because of a high Global Warming Potential factor.

Substance	GWP factor

CO₂	1
CH₄	21
N₂O	310

F gases
HFC-23	11 700
HFC-32	650
HFC125	2 800
HFC134a	1 300
HFC143a	3 800
HFC152a	140
other HFCs	3 000
PFC14	6 500
PFC116	9 200
other PFCs, SF₆	23 900

The method for adding up the various emissions of greenhouse gases has been set out by the IPCC in a protocol (IPCC, 1966). Researchers from around the world use this protocol. It works with GWP factors that are based on a residence time for the greenhouse gases in the atmosphere of 100 years.