The Environmental Global Agenda

Hady Putranto
Haliamah Tusya Diah
Hestriyana Putri
Main Topic

Kyoto Protocol

Carbon Trading

Equator Principle
Kyoto Protocol

• Is an inernational agreement linked to the United

nations framework convetion on climate change,
which commits its parties by setting internationally
binding emission reduction targets.
• This treaties was signed in Kyoto, Japan, on 11
December 1997
• Hence the mission was name “ Kyoto Protocol”
Why did they make the kyoto Protocol?

• The main goal, among others, of the Kyoto Protocol

was to create a legally binding document that would
commit industrialized countries to lowering carbon
emissions by 5.2% below 1990 levels
Chronology

• 1992 The UN Conference on the Environment and

Development is held in Rio de Janeiro. It results in the
Framework Convention on Climate Change ("FCCC" or
"UNFCCC") among other agreements.
• 1995 Parties to the UNFCCC meet in Berlin (the 1st
Conference of Parties (COP) to the UNFCCC) to outline
specific targets on emissions.
• 1997 In December the parties conclude the Kyoto
Protocol in Kyoto, Japan, in which they agree to the broad
outlines of emissions targets.
• 2002 Russia and Canada ratify the Kyoto Protocol to the
UNFCCC bringing the treaty into effect on 16 February
2005.
• 2011 Canada became the first signatory to announce its
withdrawal from the Kyoto Protocol.[15]
• 2012 The US, which never ratified the treaty, became the
first country to meet its assigned reduction goal with a
5.2% reduction in CO2 emissions due to a switch from
coal to natural gas for power generation.[16][17]
• 2012 On 31 December 2012, the first commitment period
under the Protocol expired.
example
Chart Title

192 Countries
6%
8%

7% 7%
Europian Union Japan US Canada
Mechanism Under Kyoto Protokol

Flexible mechanisms, also sometimes knows as Flexibility

Mechanisms or Kyoto Mechanisms, refers to Emissions
Trading, the Clean Development Mechanism and Joint
Implementation.
The Emissions Trading-mechanism allows parties to the Kyoto-
protocol to buy greenhouse gas emission permits from other
countries to help meet their domestic emission reduction targets.
Through the Joint Implementation, industrialised countries with a
greenhouse gas reduction commitment of Annex 1 countries may
fund emission reducing projects in other industrialised countries as
an alternative to emission reductions in their own countries.
The Clean Development Mechanism (CDM) is an
arrangement under the Kyoto Protocol allowing
industrialised countries with a greenhouse gas reduction
commitment of Annex 1 countries to invest in projects that
reduce emissions in developing countries.
The CDM allows net global greenhouse gas emissions to
be reduced at a much lower global cost by financing
emissions reduction projects in developing countries where
costs are lower than in industrialised countries.
Financial commitments

The principle that developed countries have to pay billions

of dollars, and supply technology to other countries for
climate-related studies and projects. The principle was
originally agreed in UNFCCC. One such project is The
“Adaptation Fund"
that has been established by the Parties to the Kyoto
Protocol of the UN Framework Convention on Climate
Change to finance concrete adaptation projects and
programmes in developing countries that are Parties to the
Kyoto Protocol.
“Adaptation Fund"

The Adaptation Fund is an international fund that

finances projects and programs aimed at helping
developing countries to adapt to the harmful effects of
climate change.
Point of Controvery

• Penalties for Non-Compliance/Withdraw

• What Constitute an “Emission Reduction”?
What is a 'Carbon Trade'

A carbon trade is an exchange of credits between nations

designed to reduce emissions of carbon dioxide. The
carbon trade allows countries that have higher carbon
emissions to purchase the right to release more carbon
dioxide into the atmosphere from countries that have lower
carbon emissions. The carbon trade originated with the
1997 Kyoto Protocol and is intended to reduce overall
carbon dioxide emissions to 5% below 1990 levels between
2008 and 2012.
Cont

The carbon trade also refers to the ability of individual

companies to trade polluting rights through a regulatory
system known as cap and trade. Companies that pollute
less can sell their unused pollution rights to companies that
pollute more. The goal is to ensure that companies in the
aggregate do not exceed a baseline level of pollution and to
provide a financial incentive for companies to pollute less.
Equator Principle

is a credit risk management framework for determining,

assessing and managing environmental and social risk in
Project Finance transactions.

Project Finance is often used to fund the development and

construction of major infrastructure and industrial projects.

Equator bank recognize that environmental and social

controversies over a project can impact the bottom line.
Cont

By establishing environmental and social standards in the

finance industry, Equator bank have the impressive ability to
positively affect sustainable development and human rights
principles at the international, national or local levels.

The EPs are adopted by financial institutions and are

applied where total project capital costs exceed US$10
million.
Equator Principles Financial Institutions (EPFIs) commit to
not providing loans to projects where the borrower will not
or is unable to comply with their respective social and
environmental policies and procedures.

The goal of this principle is to create a process for equator

banks to scrutinize potential projects before agreeing to
finance them.
As at 4 June 2013, 79 adopting financial institutions in 35
countries have officially adopted the Equator Principles,
covering over 70 percent of international Project Finance
debt in emerging markets.

The standards have subsequently been periodically

updated into what is commonly known as the International
Finance Corporation Performance Standards on social and
environmental sustainability and on the World Bank
Group Environmental, Health, and Safety Guidelines.
The Equator Principles

The Equator Principles have recently been revised and

the third iteration of the Equator Principles was launched on
4 June 2013.
The Equator Principles apply globally, to all industry sectors
and to four financial products
1) Project Finance Advisory Services
2) Project Finance
3) Project-Related Corporate Loans and
4) Bridge Loans.
As of January 2016, 82 financial institutions[3] in 35 countries have
officially adopted the Equator Principles, covering over 70 percent of
international Project Finance debt in emerging markets.
Equator Principles , include :
a.Preamble
A statement of commitment from financiers to address
environmental and social policy issues in project financing
b.A statement of the Principles
A set of concreate steps for the equator banks to classify projects
into high, medium, and low risk categories.
Principle 1: Review and Categorisation
Principle 2: Environmental and Social Assessment
Principle 3: Applicable Environmental and Social Standards
Principle 4: Environmental and Social Management System and Equator
Principles Action Plan
Principle 5: Stakeholder Engagement
Principle 6: Grievance Mechanism
Principle 7: Independent Review
Principle 8: Covenants
Principle 9: Independent Monitoring and Reporting
Principle 10: Reporting and Transparency
There are thee categories : next Page
There are thee categories :
The categories are:
Category A – Projects with potential significant adverse
environmental and social risks and/or impacts that are diverse,
irreversible or unprecedented;
Category B – Projects with potential limited adverse environmental
and social risks and/or impacts that are few in number, generally
site-specific, largely reversible and readily addressed through
mitigation measures; and
Category C – Projects with minimal or no adverse environmental
and social risks and/or impacts.