This 'nutshell' summary of Kyoto2 is that used in the leaflet given out at the December 2008 UNFCCC Convention in Poznan, Poland. See the full leaflet (pdf, 2MB). See also the longer Kyoto2 summary from the book.
Kyoto2 is a global framework for a Climate Treaty to limit emissions of greenhouse gases to a
level that would prevent dangerous interference with the Earth's climate system, while generating
enormous economic, social and environmental benefits. It is thus a delivery mechanism for
the objective and principles of the Climate Convention (UNFCCC).
Greenhouse gases are global pollutants and can only be regulated under a global emissions
cap. As a genuinely global system Kyoto2 applies the cap without regard to national
boundaries, dispensing with national emissions targets, national allocations and the ‘territorial
accounting' that characterizes the Kyoto Protocol.
Permits to produce CO2 or other greenhouse gases are sold up to the cap by global auction
using a Uniform Price Sealed Bid system subject to reserve and ceiling prices. The secure
carbon price signal stimulates long term investments in a low carbon future. Any permits sold
above the cap are clawed back in subsequent years and the extra money raised is invested to
reduce future demand for fossil fuels.
Greenhouse gas emissions are regulated ‘upstream' - at or close to where fossil fuels are
produced, and at the source of other greenhouse gas emissions such as CO2 from calcinating
lime in cement kilns - because this is where emissions are most reliably and inexpensively
controlled.
The market mechanism is supplemented by direct regulation aimed at overcoming market failures,
or where a market system would create unnecessary cost. Demanding efficiency standards
are set for all energy consuming sectors, from housing to transport, industrial machinery
and domestic appliances. Most of the powerful industrial greenhouse gases or PIGGs used in
industry and refrigeration are phased out following the example of the Montreal Protocol.
The funds raised at auction - of the order of $1 trillion per year - are invested in solving the
problems of climate change, with an emphasis on the needs of poor countries, poor people
and those most adversely impacted, including to:
bring about a worldwide clean energy revolution and a prosperous low-carbon global
economy through investments in energy research and development, energy efficiency, and
the deployment of renewable energy infrastructure;
l meet developing country costs of complying with the standards and regulations set out in
[5] above via a ‘Multilateral Fund';
finance developing country adaptation to climate change, and responses to climate-related
health challenges and emergency needs;
conserve and sequester carbon within the biosphere - soils, peatlands, forests and other
ecosystems - and reduce land-based emissions of other greenhouse gases including
methane and nitrous oxide, while boosting soil fertility and water retention;
research low-cost, reversible and environmentally benign geo-engineering options that
could in extremis halt a ‘runaway greenhouse effect'.
Reducing emissions by cap and carbon price alone would require such a high carbon price
as to cause hardship and economic pain. By contrast Kyoto2 uses three mutually supportive
mechanisms: the cap-and-trade market; direct regulation; and the investment programme.
Working together these can rapidly reduce emissions of greenhouse gases without a high
carbon price - delivering ‘the gain without the pain'
