INTRODUCTION

UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE

(UNFCCC)
The UNFCCC is an intergovernmental treaty developed to address the
problem of climate change through efforts of stabilizing greenhouse gas
concentrations that lead to global warming. Negotiations on what became
the convention were launched in December 1990 by the UN General
Assembly. An Intergovernmental Negotiating Committee (INC) was convened
to conduct these negotiations, which were concluded in just 15 months. The
Convention was adopted on 9 May 1992, and opened for signature on June
1992 at the UN Conference on Environment and Development in Rio de
Janeiro, Brazil. It entered into force on 21 March 1994, after receiving the
requisite 50 ratifications.
OBJECTIVE
The ultimate objective of this Convention and any related legal
instruments that the Conference of the Parties may adopt is to achieve, in
accordance with the relevant provisions of the Convention, stabilization of
greenhouse gas concentrations in the atmosphere at a level that would
prevent dangerous anthropogenic interference with the climate system. Such
a level should be achieved within a time frame sufficient to allow ecosystems
to adapt naturally to climate change, to ensure that food production is not
threatened and to enable economic development to proceed in a sustainable
manner.
DEFINITIONS
For the purposes of this Convention:
1. Adverse effects of climate change means changes in the physical
environment or biota resulting from climate change which have significant
deleterious effects on the composition, resilience or productivity of natural
and managed ecosystems or on the operation of socio-economic systems or
on human health and welfare.
2. Climate change means a change of climate which is attributed directly
or indirectly to human activity that alters the composition of the global

atmosphere and which is in addition to natural climate variability observed

over comparable time periods.
3. Climate system means the totality of the atmosphere, hydrosphere,
biosphere and geosphere and their interactions.
4. Emissions means the release of greenhouse gases and/or their
precursors into the atmosphere over a specified area and period of time.
5. Greenhouse gases means those gaseous constituents of the
atmosphere, both natural and anthropogenic, that absorbs and re-emits
infrared radiation.
6. Regional economic integration organization means an organization
constituted by sovereign States of a given region which has competence in
respect of matters governed by this Convention or its protocols and has been
duly authorized, in accordance with its internal procedures, to sign, ratify,
accept, approve or accede to the instruments concerned.
7. Reservoir means a component or components of the climate system
where a greenhouse gas or a precursor of a greenhouse gas is stored.
8. Sink means any process, activity or mechanism which removes a
greenhouse gas, an aerosol or a precursor of a greenhouse gas from the
atmosphere. 9. Source means any process or activity which releases a
greenhouse gas, an aerosol or a precursor of a greenhouse gas into the
atmosphere.
GREENHOUSE GASES COVERED
The GHG data reported by Parties contain estimates for direct greenhouse
gases, such as:
CO2 - Carbon dioxide
CH4 - Methane
N2O - Nitrous oxide
PFCs - Perfluorocarbons
HFCs - Hydrofluorocarbons
SF6 - Sulphur hexafluoride as well as for the indirect greenhouse gases such
as SO2, NOx, CO and NMVOC.
CONFERENCE OF PARTIES
Parties to the UNFCCC continue to adopt decisions, review progress
and consider further action through regular meetings of the Conference of

the Parties (COP). The Conference of Parties is the highest-decision making

body of the Convention, and usually meets annually. The Conference of
Parties and the Convention goals are supported by various bodies and
organizations. This includes a Permanent Secretariat with various duties set
out under Article 8 of the UNFCCC. A number of subsidiary bodies also advise
the COP. The Subsidiary Body on Scientific and Technical Advice (SBSTA) links
scientific, technical and technological assessments, the information provided
by competent international bodies, and the policy-oriented needs of the COP.
The Subsidiary Body for Implementation (SBI) was created to develop
recommendations to assist the COP in reviewing and assessing
implementation of the Convention and in preparing and implementing its
decisions. The SBSTA and SBI usually meet twice each year, at the same time
and venue. One of these two yearly meetings generally takes place in
parallel with the COP.
KYOTO PROTOCOL
In December 1997, delegates at COP 3 in Kyoto, Japan, agreed to a Protocol
to the UNFCCC that commits developed countries and countries in transition
to a market economy to achieve quantified emission reduction targets. These
countries, known under the UNFCCC as Annex I parties, agreed to reduce
their overall emissions of six greenhouse gases by an average of 5% below
1990 levels between 2008-2012 (the first commitment period), with specific
targets varying from country to country. The Kyoto Protocol is the world's
only international agreement with binding targets to reduce greenhouse gas
emissions. As such, it is the primary tool governments of the world have to
address climate change. The Protocol finally entered into force as a legallybinding document on 16 February 2005.
KYOTO PROTOCOL MECHANISMS
The Protocol also established three flexible mechanisms to assist
Annex I parties in meeting their national targets cost-effectively: an
emissions trading system; joint implementation (JI) of emission reduction
projects between Annex I parties; and the Clean Development Mechanism
(CDM), which allows for emission reduction projects to be implemented in
non-Annex I parties (developing countries). Emissions Trading, as set out in
Article 17 of the Kyoto Protocol, allows countries that have emission units to
spare - emissions permitted them but not "used" - to sell this excess capacity
to countries that are over their targets. A Clean Development Mechanism

project activity might involve, for example, a rural electrification project

using solar panels or the installation of more energy-efficient boilers. The
mechanism stimulates sustainable development and emission reductions,
while giving industrialized countries some flexibility in how they meet their
emission reduction or limitation targets. Joint implementation offers Parties a
flexible and cost-efficient means of fulfilling a part of their Kyoto
commitments, while the host Party benefits from foreign investment and
technology transfer. The Kyoto mechanisms functions are: a) to stimulate
sustainable development through technology transfer and investment; b) to
help countries with Kyoto commitments to meet their targets by reducing
emissions or removing carbon from the atmosphere in other countries in a
cost-effective way; and, c) to encourage the private sector and developing
countries to contribute to emission reduction efforts.
MONITORING EMISSIONS TARGET
Under the Protocol, countries' actual emissions have to be monitored
and precise records have to be kept of the trades carried out. Registry
systems track and record transactions by Parties under the mechanisms. The
UN Climate Change Secretariat, based in Bonn, Germany, keeps
an international transaction log to verify that transactions are consistent with
the rules of the Protocol.
Reporting is done by Parties by submitting annual emission inventories
and national reports under the Protocol at regular intervals.
A compliance system ensures that Parties are meeting their commitments
and helps them to meet their commitments if they have problems doing so.
Adaptation
The Kyoto Protocol, like the Convention, is also designed to assist
countries in adapting to the adverse effects of climate change. It facilitates
the development and deployment of technologies that can help increase
resilience to the impacts of climate change.
The Adaptation Fund was established to finance adaptation projects
and programmes in developing countries that are Parties to the Kyoto
Protocol. In the first commitment period, the Fund was financed mainly with
a share of proceeds from CDM project activities. In Doha, in 2012, it was
decided that for the second commitment period, international emissions
trading and joint implementation would also provide the Adaptation Fund
with a 2 percent share of proceeds.

COMMITMENTS

Under the UNFCCC and Kyoto Protocol, the parties are divided into
different groups according to their commitments.
Annex I Parties include the industrialized countries that were members
of the OECD (Organization for Economic Co-operation and Development) in
1992, plus countries with economies in transition (the EIT Parties), including
the Russian Federation, the Baltic States, and several Central and Eastern
European States. These Parties are classified as industrialized (developed)
countries and "economies in transition" (EITs). The 14 EITs are the former
centrally-planned (Soviet) economies of Russia and Eastern Europe.
Annex II Parties consist of the OECD members of Annex I, but not the
EIT Parties. They are required to provide financial resources to enable
developing countries to undertake emissions reduction activities under the
Convention and to help them adapt to adverse effects of climate change. In
addition, they have to "take all practicable steps" to promote the
development and transfer of environmentally friendly technologies to EIT
Parties and developing countries. Funding provided by Annex II Parties is
channeled mostly through the Conventions financial mechanism.
Annex B parties listed in Annex B of the Kyoto Protocol are Annex I
Parties with first- or second-round Kyoto greenhouse gas emissions. The firstround targets apply over the years 20082012. As part of the 2012 Doha
climate change talks, an amendment to Annex B was agreed upon containing
with a list of Annex I Parties who have second-round Kyoto targets, which
apply from 20132020.
Non-Annex I Parties are mostly developing countries. Certain groups of
developing countries are recognized by the Convention as being especially
vulnerable to the adverse impacts of climate change, including countries
with low-lying coastal areas and those prone to desertification and drought.
Others (such as countries that rely heavily on income from fossil fuel
production and commerce) feel more vulnerable to the potential economic
impacts of climate change response measures. The Convention emphasizes

activities that promise to answer the special needs and concerns of these
vulnerable countries, such as investment, insurance and technology transfer.
The 49 Parties classified as least developed countries (LDCs) by the
United Nations are given special consideration under the Convention on
account of their limited capacity to respond to climate change and adapt to
its adverse effects. Parties are urged to take full account of the special
situation of LDCs when considering funding and technology-transfer
activities.
Substantially, it is the ineffectiveness of the signing of the UNFCCC
took place at the Rio Earth summit that led to the need of amendments. The
ineffectiveness was due to the fact that no legally binding targets were
agreed among the UNFCCC committed signatories. The legally binding
emission targets however were not agreed until 1997 in Kyoto through a
protocol that we know as Kyoto protocol.
The Protocol's major feature is that it has mandatory targets on
greenhouse-gas emissions for the world's leading economies which have
accepted it. These targets range from -8 per cent to +10 per cent of the
countries' individual 1990 emissions levels "with a view to reducing their
overall emissions of such gases by at least 5 per cent below existing 1990
levels in the commitment period 2008 to 2012." In almost all cases -- even
those set at +10 per cent of 1990 levels -- the limits call for significant
reductions in currently projected emissions. Future mandatory targets are
expected to be established for "commitment periods" after 2012. These are
to be negotiated well in advance of the periods concerned.
Commitments under the Protocol vary from nation to nation. The
overall 5 per cent target for developed countries is to be met through cuts
(from 1990 levels) of 8 per cent in the European Union (EU[15]), Switzerland,
and most Central and East European states; 6 per cent in Canada; 7 per cent
in the United States (although the US has since withdrawn its support for the
Protocol); and 6 per cent in Hungary, Japan, and Poland. New Zealand,
Russia, and Ukraine are to stabilize their emissions, while Norway may
increase emissions by up to 1 per cent, Australia by up to 8 per cent
(subsequently withdrew its support for the Protocol), and Iceland by 10 per
cent. The EU has made its own internal agrement to meet its 8 per cent
target by distributing different rates to its member states. These targets
range from a 28 per cent reduction by Luxembourg and 21 per cent cuts by

Denmark and Germany to a 25 per cent increase by Greece and a 27 per

cent increase by Portugal.
To compensate for the sting of "binding targets," as they are called, the
agreement offers flexibility in how countries may meet their targets. For
example, they may partially compensate for their emissions by increasing
"sinks" -- forests, which remove carbon dioxide from the atmosphere. That
may be accomplished either on their own territories or in other countries. Or
they may pay for foreign projects that result in greenhouse-gas cuts. Several
mechanisms have been set up for this purpose. (See the sub-chapters on
"emissions trading," the "clean development mechanism," and "joint
implementation.")
Some mechanisms of the Protocol had enough support that they were set up
in advance of the Protocol's entry into force. The Clean Development
Mechanism, for example -- through which industrialized countries can partly
meet their binding emissions targets through "credits" earned by sponsoring
greenhouse-gas-reducing projects in developing countries -- already had an
executive board before the Kyoto Protocol entered into force on 16 February
2005.

COMPLIANCE
KYOTO PROTOCOL COMPLIANCE MECHANISM
The Kyoto Protocol compliance mechanism is designed to strengthen
the Protocols environmental integrity, support the carbon markets
credibility and ensure transparency of accounting by Parties. Its objective is
to facilitate, promote and enforce compliance with the commitments under
the Protocol. It is among the most comprehensive and rigorous systems of
compliance for a multilateral environmental agreement. A strong and
effective compliance mechanism is key to the success of the implementation
of the Protocol.

The Compliance Committee is made up of two branches: a facilitative

branch and an enforcement branch. As their names suggest, the facilitative
branch aims to provide advice and assistance to Parties in order to promote
compliance, whereas the enforcement branch has the responsibility to
determine consequences for Parties not meeting their commitments. Both
branches are composed of 10 members, including one representative from
each of the five official UN regions (Africa, Asia, Latin America and the
Caribbean, Central and Eastern Europe, and Western Europe and Others),
one from the small island developing States, and two each from Annex I and
non-Annex I Parties. The Committee also meets in a plenary composed of
members of both branches, and a bureau, made up of the chairperson and
vice-chairperson of each branch, supports its work. Decisions of the plenary
and the facilitative branch may be taken by a three-quarters majority, while
decisions of the enforcement branch require, in addition, a double majority of
both Annex I and non-Annex I Parties.
The enforcement branch is responsible for determining whether a Party
included in Annex I (Annex I Party) is not in compliance with its emissions
targets, the methodological and reporting requirements for greenhouse gas
inventories, and the eligibility requirements under the mechanisms. In case
of disagreements between a Party and an expert review team, the
enforcement branch shall determine whether to apply adjustments to
greenhouse gas inventories or to correct the compilation and accounting
database for the accounting of assigned amounts.
The mandate of the facilitative branch is to provide advice and
facilitation to Parties in implementing the Protocol, and to promote
compliance by Parties with their Kyoto commitments. It is responsible for
addressing questions of implementation by Annex I Parties of response
measures aimed at mitigating climate change in a way that minimizes their
adverse impacts on developing countries and the use by Annex I Parties of
the mechanisms as supplemental to domestic action. Furthermore, the
facilitative branch may provide early warning of potential non-compliance
with emissions targets, methodological and reporting commitments relating
to greenhouse gas inventories, and commitments on reporting
supplementary information in a Partys annual inventory.
In the case of the enforcement branch, each type of non-compliance
requires a specific course of action. For instance, where the enforcement
branch has determined that the emissions of a Party have exceeded its

assigned amount, it must declare that that Party is in non-compliance and

require the Party to make up the difference between its emissions and its
assigned amount during the second commitment period, plus an additional
deduction of 30%. In addition, it shall require the Party to submit a
compliance action plan and suspend the eligibility of the Party to make
transfers under emissions trading until the Party is reinstated.

FLEXIBILITY MECHANISMS
Under the Protocol, countries must meet their targets primarily through
national measures. However, it also provides a range of flexibility
mechanisms that Annex I Parties can employ to meet their commitment
targets. Among these are Clean Development Mechanism (CDM), Joint
Implementation (JI), and International Emissions Trading (IET). The economic
basis for providing these is that the marginal cost of reducing or abating
emissions differs among countries. At the time of the original Kyoto targets,
studies suggested that the flexibility mechanisms could reduce the overall
cost of meeting the targets.
1. Clean Development Mechanism
The Clean Development Mechanism (CDM), defined in Article 12 of the
Protocol, allows a country with an emission-reduction or emission-limitation
commitment under the Kyoto Protocol (Annex B Party) to implement an
emission-reduction project in developing countries. It is the first global,
environmental investment and credit scheme of its kind, providing a
standardized emissions offset instrument, CERs.
A CDM project activity might involve, for example, a rural electrification
project using solar panels or the installation of more energy-efficient boilers.
The mechanism stimulates sustainable development and emission
reductions, while giving industrialized countries some flexibility in how they
meet their emission reduction or limitation targets.
Under the Protocol, only the Annex I Parties have committed
themselves to national or joint reduction targets (formally called "quantified
emission limitation and reduction objectives" (QELRO). Parties to the Kyoto
Protocol not listed in Annex I of the Convention (the non-Annex I Parties) are

mostly low-income developing countries, and may participate in the Kyoto

Protocol through the Clean Development Mechanism.

2. Joint Implementation
The mechanism known as joint implementation, defined in Article 6
of the Kyoto Protocol, allows a country with an emission reduction or
limitation commitment under the Kyoto Protocol (Annex B Party) to earn
emission reduction units (ERUs) from an emission-reduction or emission
removal project in another Annex B Party, each equivalent to one tonne of
CO2, which can be counted towards meeting its Kyoto target.
Joint implementation offers Parties a flexible and cost-efficient means
of fulfilling a part of their Kyoto commitments, while the host Party benefits
from foreign investment and technology transfer.
A JI project must provide a reduction in emissions by sources, or an
enhancement of removals by sinks, that is additional to what would
otherwise have occurred. Projects must have approval of the host Party and
participants have to be authorized to participate by a Party involved in the
project.

The CDM and JI are called "project-based mechanisms," in that they generate
emission reductions from projects. The difference between IET and the
project-based mechanisms is that IET is based on the setting of a
quantitative restriction of emissions, while the CDM and JI are based on the
idea of "production" of emission reductions. The CDM is designed to
encourage production of emission reductions in non-Annex I Parties, while JI
encourages production of emission reductions in Annex I Parties.
The production of emission reductions generated by the CDM and JI can be
used by Annex I Parties in meeting their emission limitation commitments.
The emission reductions produced by the CDM and JI are both measured
against a hypothetical baseline of emissions that would have occurred in the
absence of a particular emission reduction project. The emission reductions
produced by the CDM are called Certified Emission Reductions (CERs);
reductions produced by JI are called Emission Reduction Units(ERUs). The

reductions are called "credits" because they are emission reductions credited
against a hypothetical baseline of emissions.
Each Annex I country is required to submit an annual report of inventories of
all anthropogenic greenhouse gas emissions from sources and removals from
sinks under UNFCCC and the Kyoto Protocol. These countries nominate a
person (called a "designated national authority") to create and manage
its greenhouse gas inventory. Virtually all of the non-Annex I countries have
also established a designated national authority to manage their Kyoto
obligations, specifically the "CDM process". This determines which GHG
projects they wish to propose for accreditation by the CDM Executive Board.

3. International Emissions Trading

Emissions trading, as set out in Article 17 of the Kyoto Protocol, allows
countries that have emission units to spare - emissions permitted them but
not "used" - to sell this excess capacity to countries that are over their
targets.
Thus, a new commodity was created in the form of emission reductions or
removals. Since carbon dioxide is the principal greenhouse gas, people speak
simply of trading in carbon. Carbon is now tracked and traded like any other
commodity. This is known as the "carbon market."
The Green Investment Scheme (GIS), a mechanism in the framework of
International Emissions Trading (IET), is designed to achieve greater
flexibility in reaching the targets of the Kyoto Protocol while preserving
environmental integrity of IET. However, using the GIS is not required under
the Kyoto Protocol, and there is no official definition of the term.
Under the GIS a Party to the Protocol expecting that the development
of its economy will not exhaust its Kyoto quota, can sell the excess of its
Kyoto quota units (AAUs) to another Party. The proceeds from the AAU sales
should be "greened", i.e. channeled to the development and implementation
of the projects either acquiring the greenhouse gases emission reductions
(hard greening) or building up the necessary framework for this process (soft
greening).
Latvia was one of the front-runners of GISs. World Bank (2011)
reported that Latvia has stopped offering AAU sales because of low AAU
prices. In 2010, Estonia was the preferred source for AAU buyers, followed by

the Czech Republic and Poland. Japan's national policy to meet their Kyoto
target includes the purchase of AAUs sold under GISs. In 2010, Japan and
Japanese firms were the main buyers of AAUs. In terms of the international
carbon market, trade in AAUs are a small proportion of overall market value.
LULUCF
Kyoto Parties can use land use, land use change, and forestry (LULUCF)
in meeting their targets. LULUCF activities are also called "sink" activities.
Changes in sinks and land use can have an effect on the climate, and indeed
the Intergovernmental Panel on Climate Change's Special Report on Land
Use, Land-Use Change and Forestry estimates that since 1750 a third of
global warming has been caused by land use change. Particular criteria apply
to the definition of forestry under the Kyoto Protocol.
Forest
management,
cropland
management,
grazing
land
management, and revegetation are all eligible LULUCF activities under the
Protocol.Annex I Parties use of forest management in meeting their targets is
capped.
MONITORING EMISSION TARGETS
Under the Protocol, countries' actual emissions have to be monitored
and precise records have to be kept of the trades carried out.
Registry systems track and record transactions by Parties under the
mechanisms. The UN Climate Change Secretariat, based in Bonn, Germany,
keeps an international transaction log to verify that transactions are
consistent with the rules of the Protocol. Reporting is done by Parties by
submitting annual emission inventories and national reports under the
Protocol at regular intervals. A compliance system ensures that Parties are
meeting their commitments and helps them to meet their commitments if
they have problems doing so.
Adaptation
The Kyoto Protocol, like the Convention, is also designed to assist
countries in adapting to the adverse effects of climate change. It facilitates
the development and deployment of technologies that can help increase
resilience to the impacts of climate change.

The Adaptation Fund was established to finance adaptation projects

and programmes in developing countries that are Parties to the Kyoto
Protocol. In the first commitment period, the Fund was financed mainly with
a share of proceeds from CDM project activities.
KYOTO PROTOCOL IN THE PHILIPPINES
On November 20, 2003, the Kyoto Protocol was ratified by the
Philippines. In pursuance thereof, The Medium Term Philippine Development
Plan of 2004-2010 (MTDP) at the national level was set which underscored
the need to manage the environment more effectively. Included in the Plan
are targets for the development of renewable energy, expanding the use of
natural gas and accelerate the development of alternative fuels such as
coconut biodiesel and exhaust.
To comply with the agreements provided by the Kyoto Protocol, the
Philippines passed national legislations such as the Clean Air Act of 1999 and
Solid Waste Management Act of 2000 which were enacted to improve the
effectiveness of the air quality management program. These ensures the
Philippines faithful compliance to the mandates and principles contained in
the UNFCCC and the Kyoto Protocol and sees to it that adequate public
awareness campaign and initiatives are held to bring the issue to all the
sectors of the country.