Parties to the U.N. Framework Convention on Climate Change who are not Parties to the Kyoto Protocol? A.13 We know of no circumstance consistent with the terms of the Kyoto Protocol whereby an amendment to the Protocol could be made to apply to Parties to the Convention which are not Parties to the Protocol. An amendment must be handled in accordance with Article 20 of the Protocol. Article 17 Provision for the Conference of the Parties to Define the Principles, Modalities, Rules and Guidelines for Emissions Trading Q14. As noted in Question 13 above, "The Conference of the Parties serving as the meeting of the Parties to this Protocol" is to develop most the most Protocol's rules, guidelines, procedures, modalities, etc., for joint implementation, sinks, clean development mechanism, and other measures. However, Article 17 provides that the Conference of the Parties, not the Parties to the Protocol, must "define the relevant principles, modalities, rules and guidelines, in particular for verification, reporting and accountability for emissions trading." Q14.1 Why did you agree to this different approach for emissions trading? A14.1 The penultimate draft of the Kyoto Protocol included text that spelled out some rules under which emissions trading would operate. However, in the press of the negotiations, the text was dropped - notwithstanding the fact that most countries supported many of the concepts embedded in that text. In order to allow rapid progress on resolving the emissions trading issues, and to express its view that the rules should be completed expeditiously (even prior to entry into force of the Protocol), it was decided to allow the Conference of the Parties (COP) rather than the COP/mop (Conference of the Parties/Meeting of the Parties) to develop any such rules. Q14.2 Is it your understanding that the Bonn meeting and COP-4 will try to adopt by decision all these types of rules by consensus, and if not, what is your understanding of the plan? A14.2 Currently, rules of procedure for the FCCC have not been adopted. In their absence, all decisions of the COP are being taken by consensus. Decisions on emissions trading at Bonn were taken by consensus, and we anticipate this to be true also for Buenos Aires and COP-4. Q14.3 Will all such rules, etc., including those on emissions trading also be subject A14.3 Emissions trading rules under Article 17 are to be decided by the Conference of the Parties, rather than the Conference of the Parties serving as the meeting of the Parties to the Protocol (COP/moP). As to other sets of rules, these could theoretically be subject to change prior to adoption by the COP/moP; however, this is unlikely, given that the States represented in the COP/moP will be a subset of those represented in the COP. Q14.4 Are all such decisions subject to the provisions of either Articles 19 or 20 of the Protocol? A14.4 No. (It is assumed that the question intended to refer to Articles 20 and 21.) Article 17 and the Possible Role of the United Nations Relative to U.S. Economic Growth and Foreign Policy Q15. Representative Rivers raised the issue of the possible role of the United Nations relative to U.S. economic growth and foreign policy, and you said that “We determine the rules for trading.” That seems inconsistent with my understanding of Article 17 which, as noted above in Question 14, provides that "The Conference of the Parties shall define the relevant principles, modalities, rules, and guidelines, in particular for verification, reporting and accountability for emissions trading." That mandate appears to authorize and direct the Conference of the Parties to perform that function and could include the involvement of the Secretariat or another international body. Do you agree, and if not, please explain why? A15. As stated in Article 17 of the Protocol: "The Conference of the Parties shall define relevant principles, modalities, rules and guidelines, in particular for verification, reporting and accountability for emissions trading." The Parties, not the United Nations, thus have authority to determine the rules for trading. Article 17 Requirement That Emissions Trading Be Supplemental to Domestic Actions Q16. Article 17 also provides that "Any such [emissions] trading shall be supplemental to domestic actions for the purpose of meeting quantified emission limitation and reduction commitments under that Article (i.e., Article 3].” On Thursday, December 11, 1997, Agence France-Presse, in an article entitled, "Germany sets conditions for signing Kyoto climate accord,” reported the following: “Germany Environment Minister Angela Merkel said in a ""It is not acceptable that industrialized countries meet their pledges “She said ‘at least 50 percent of pledges must be met by national 966 And the Tuesday, March 24, 1998, edition of the BNA Daily Report for Executives, in an article entitled "European Ministers to Press U.S. On Domestic Greenhouse Reductions" on page 26, stated the following: "European ministers agreed March 23 to a tentative text that would "The ministers also agreed that ‘in this context a concrete ceiling on "European Commissioner Ritt Bjerregaard stated that the EU 'fears ""As it is the leading emitter of greenhouse gases, the United States We understand that in your response to a question posed by Subcommittee on Energy and Power Chairman Schaefer on prior House testimony you said that “we would not accept such a limitation. Period." Q16.1 Please explain the purpose and meaning of the reference to “domestic actions," taking into consideration the above comments. A16.1 The Administration anticipates that, in meeting the Kyoto Protocol targets, countries will rely on both domestic action and international emissions trading under the Protocol's market-based mechanisms. As the language in Article 17 referring to "domestic actions" is merely a recognition of this fact and the term "supplemental" is not quantified, it was acceptable. Q16.2 Is this phrase in Article 17 a potential “artificial restraint” on such trading?” A16.2 We do not believe that the text of Article 17 imposes constraints on emissions trading. Legal Status of Kyoto Protocol Rules, Guidelines, Procedures, Modalities, Etc., Adopted by the Conference of the Parties and/or the Parties to the Protocol Q17. Once adopted by the Conference of the Parties and/or the Parties to the Protocol, are the rules, guidelines, procedures, modalities, etc., referred to in Questions 13 and 14 above legally binding obligations of the United States, or are they first required to be submitted to the Senate for advice and consent to ratification? Q17.1 If they are not legally binding, what is their status and how can they be changed? A17.1 Such rules, guidelines, etc. would not be subject to ratification by Parties. The rules, etc. would not constitute legally binding obligations in the same sense as Article 3 (the target commitment), because there is no obligation to engage in emissions trading. At the same time, we would consider that, if a Party were to elect to engage in emissions trading, it would have implicitly agreed to abide by the rules, etc., with whatever consequences the rules spelled out for not complying with them (such as, for example, losing the ability to trade). Q17.2 How would the U.S. treat them? A17.2 See response to Q17.1. U.S. Conceptual Agreement With a Number of Countries to Pursue an Umbrella Group to Trade Emissions Permits Q18. The January 15, 1998 "Fact Sheet" on the Kyoto Protocol released by the Department of State's Bureau of Oceans and International Environmental and Scientific Affairs states that the "United States also reached a conceptual agreement with a number of countries, including Australia, Canada, Japan, New Zealand, Q18.1 When was that agreement reached and what are its details? A18.1 The agreement on the umbrella was reached in informal consultations with countries, both collectively and individually over the course of the ministerial portion of the Conference of the parties in Kyoto. At the time it was reached, the group was envisioned as a potential counterweight to the European Union, which during the Kyoto meetings was opposing free and open emissions trading. Since that time, a number of ideas have gained currency within the group as to how an emissions trading regime might be structured these were embodied in a paper circulated at the most recent session of the FCCC Subsidiary Bodies in Bonn (paper is attached). Since Bonn, the group has been working to further refine its emissions trading ideas, and has also turned its attention to the other market mechanisms (joint implementation and the Clean Development Mechanism). Q18.2 What are this "umbrella” group's relationships to the Protocol and Articles 3, 6, and 17? A18.2 As noted in the response to 18.1 above, the group has outlined its concept of its role in a paper circulated in Bonn. This Umbrella Group paper primarily focuses on Article 17, and indirectly, on Article 3. Although not the main objective of the group is currently examining aspects of both the joint implementation and Clean Development Mechanism issue. Q18.3 Did the U.S. reach any other agreements or understandings at Kyoto or thereafter with one or more countries that have not yet been reported? A18.3 No formal "agreements" or "understandings" were reached in or since Kyoto that relate to emissions trading. To date, the umbrella group has focused on developing options for operational rules and guidelines that any country might adopt and use as part of an open international trading system. Unless other countries called for limiting or restricting the right of Umbrella Group Parties to trade, we would propose to continue this open and inclusive effort. Administration Plans to Implement the Kyoto Protocol Without Senate Ratification Q19. On March 10, 1998, Patrice Hill of The Washington Times reported on a "predecisional" Environmental Protection Agency (EPA) document that "asserts that EPA could use its authority under the Clean Air Act to force power plants to curb their emissions of carbon dioxide, the principal gas said to be warming the earth's atmosphere.” In the same article, The Washington Times also reported that an administration source said that "the Department of Justice is proposing to expand the Community Right to Know law to require plants that emit carbon dioxide to notify surrounding communities of the potential environmental hazard.” The source also said that "Carbon dioxide is regarded more and more as a regular |