Why hot air is stopping the world doing a deal on global warming

SUCH WAS the euphoria a year ago when the world community agreed at Kyoto on a specific plan to tackle global warming, that it appeared the hard part was over. The past week in Buenos Aires, where 4,000 officials and ministers have been meeting to try to take the treaty forward, has shown that it has only just begun.

Yes, there is a plan: the rich countries agreed that they would make big cuts, legally binding ones too, in their emissions of the industrial gases such as carbon dioxide from cars and power stations, which are causing the atmosphere to overheat. They fervently hoped that the poor nations would follow suit, in due course, naturally.

Simple enough? Not quite. America, the country whose emissions dwarf all others, (25 per cent of the world's total from 4 per cent of the world's population), exacted a very high price for its agreement in the last frenzied 24 hours of negotiating in the ancient Japanese city.

It sought and won three special ways by which countries (read: the US) could help to implement their emissions reductions.

Some think of these merely as loopholes in the Kyoto pact, and indeed they are, but they are officially referred to, in the eye-glazingly abstract jargon of the climate-change "police", as flexible mechanisms.

There are three: emissions trading, joint implementation and the clean development mechanism (CDM).

They all have this in common: they enable the US to buy purely notional, on-paper reductions in its CO2 emissions from other countries (carbon credits) without actually doing anything to effect that amount of cuts in reality at home.

With emissions trading, which will eventually be the most important one, the Americans will be able to buy up these theoretical "pollution surplus" owned by countries such as Russia and Ukraine, whose smokestack economies have collapsed in the 90s, leaving them with levels of CO2 emissions already way below the reduction targets that they were generously given at Kyoto. This pollution surplus is familiarly known as hot air.

With joint implementation, an industrialised country can receive credit for the emissions cuts secured by an energy-saving project it finances in another industrial country (a high-tech power station replacing a low- tech one, say, or the planting of a forest that soaks up CO2). Under the CDM, an industrialised nation can receive the carbon credit for financing such a project in a developing country.

Over the year since Kyoto, culminating this week in Buenos Aires, diplomats, civil servants and ministers from around the world have been striving to agree the operating rules for the flexible mechanisms, which the chief American negotiator, Stuart Eizenstat, referred to as the Kyoto treaty's plumbing and wiring.

They are more than mere technicalities. Without them, the Americans will not ratify the Kyoto pact, and the world will have no working plan to counter climate change in this hottest year of the millennium, which has seen record forest fires, record floods, and record storms, culminating in Hurricane Mitch, which tore the heart out of central America.

The reason for the Americans' insistence is the sheer awesome size of the greenhouse gas reduction target they agreed to, which, it is now accepted by all except the most entrenched green fundamentalists, they cannot possibly meet without on-paper reductions as well as real ones.

They agreed to cut back their emissions of CO2 and five other greenhouse gases to 7 per cent below their 1990 levels by 2010.

But this represents a cut from where the US economy will have grown to by the latter date of between 20 and 30 per cent - from about 7.2 billion tonnes of gases emitted annually to 5.4 billion tonnes.

Unless the spiritual home of the automobile suddenly transforms itself into a giant Holland - with every motorist swapping the car for a bike, and replacing air conditioning and central heating with seasonally adjusted clothing - this is not deliverable, certainly by domestic action alone.

Robert Reinstein, the former US diplomat who negotiated the original climate change treaty in 1992 (to which the Kyoto pact is a protocol), told journalists in Buenos Aires this week he did not think it deliverable in any circumstances, even if the US buys up all the hot air and carbon credits available in the world.

The target was simply too big, he said, and in the end the Kyoto treaty will fail and the international negotiating process will be discredited.

The White House of Bill Clinton and Al Gore (the real driver of US climate change policy) vehemently disagrees, but they do need their flexible mechanisms and their emissions credits. The problem is, how much should they be allowed?

Surely they should not attempt to meet their entire target by buying up hot air, with no real energy efficiency action at home? The rest of the world, with Europe in the lead, does not think so, and wants a concrete ceiling on America's buying credits, insisting it must be "supplemental" to action taken at home.

The Americans insist they will make real cuts, but they are strongly opposed to a formal ceiling.

This issue - stand by for some great jargon - is called "supplementarity", and it looks likely to be a big sticking point this week at Buenos Aires.

But phoney emissions reductions are not the only thing America needs to make the Kyoto treaty work. To get it ratified by the US Senate they need something that seems even further off at the moment: active involvement by the Third World.

There are no greenhouse gas reduction targets yet for China, India and the rest of the developing nations, even though the Chinese will eventually overtake the US as the world's biggest single CO2 emitters, and the developing countries with their soaring populations will become the largest greenhouse gas source.

They want their own deal. And the deal they want is for their emissions to be calculated not on a gross basis, but on a per capita one. When China overtakes the US, its emissions per person will still be only a quarter that of each American.

But that deal is still a long way off, and in the meantime the US Senate, some of whose members think the climate treaty is merely a plot to harm American competitiveness, has formally resolved that it will not ratify Kyoto until there is "meaningful participation" by developing countries.

So at Buenos Aires all this week, the Americans - led by the thin-lipped, cerebral and formidable Mr Eizenstat - have been actively courting developing nations to declare their own, purely voluntary targets for reducing their greenhouse gases.

They had a big success when their host, the Argentine President Carlos Menem, declared his country would set one next year. Argentina's lead was followed by Kazakhstan, a former Soviet republic with some potentially juicy hot air to sell.

The Americans were jubilant - here was something to show the Senate - but the Chinese and the Indians were angry, feeling their position was being undermined, and forced the issue off the conference agenda where the Argentines had attempted to place it. Here was yet another sticking point.

Then negotiators saw there was a way to start bridging the gap between the American need to buy carbon credits and the developing countries' sense of being badly done to: the Clean Development Mechanism.

If an American electricity company builds a clean-coal power station in India with a dollop of US government money, under the CDM everybody is happy: the Indians have got a better power station; the Americans have got a big fat emissions credit; and the world has got less CO2 being put into the atmosphere.

Prompted by the European Union, with Britain's Deputy Prime Minister, John Prescott, to the fore, the developing countries started to see that the CDM was as much a new sort of clean-energy aid programme as a First World wheeze for buying up carbon emissions, and their enthusiasm for it was kindled.

It is likely to go ahead on a fast track now, even before its rules and the rules of the other flexible mechanisms are formally agreed. These have been put off, with other difficult issues such as supplementarity, to later conferences, although a formal work plan with tight deadlines has been put forward.

The Third World is slowly coming on board. The Americans are slowly seeing their necessary conditions fulfilled. By such complex, jargon-filled procedures does the world's effort to contain global warming go forward.