could be brokered on moderating the cap.Then there was the time factor. If agreement were not reached before the end ofApril 2004, at which point the Parliament would dissolve for elections and summerhiatus, that would mean waiting until late 2004 or perhaps even till 2005 before anyfurther progress could be made. A little push for speed in the negotiations couldsave six months or more. With the New Year, the Irish, who had just taken overthe Presidency, promised to ‘aim to secure agreement with the Parliament at ﬁrstreading’.127 And throughout the negotiations, the Presidency took care sure to remindthe parties of their ‘extremely tight timetable’.128Both the time pressure and de Roo’s proposal seemed to work. The proposeddeal was reﬂected in the draft report from the EP Environment Committee in lateJanuary 2004,129 and was further discussed at meetings of the Working Party onthe Environment.130 And, reported in the Council Minutes, during the spring therewere several informal contacts between the Presidency and the rapporteur.131 On 16March the EP Environment Committee tabled a position containing 18 amendmentsto the Commission’s original proposal. It suggested that the issue of a cap shouldbe left to the member-states to decide, and also argued that credits should beavailable from 2005, instead of 2008, which would be good news for Europeanindustry. Campaigners saw the committee’s vote as a ‘pre-concession’ prior to thenegotiations:132 the interests of the member-states and industry had already beentaken into account. Rapporteur de Roo, however, having underlined the need for127 Point Carbon (7 January 2004), ‘EU Institutions Hope to Clinch Linking Deal byMay’.128 See for instance Council (4 March 2004), Note 6490/04 regarding: Proposal for aDirective of the European Parliament and of the Council Amending the Directive Establishinga Scheme for Greenhouse Gas Emission Allowance Trading within the Community, in Respectof the Kyoto Protocol’s Project Mechanisms – Revised Presidency Compromise Proposal.(Brussels: Council of the European Union, General Secretariat).129 European Parliament (27 January 2004), Draft report from the Committee on theEnvironment, Public Health and Consumer Policy.130 See, for instance, Council (6 February 2004), Note 5975/04 regarding: Proposal for aDirective of the European Parliament and of the Council Amending the Directive Establishinga Scheme for Greenhouse Gas Emission Allowance Trading within the Community, in Respectof the Kyoto Protocol’s Project Mechanisms. (Brussels, Council of the European Union,General Secretariat).131 See Council (22 March 2004), Note 7652/04 regarding: Proposal for a Directive ofthe European Parliament and of the Council Amending the Directive Establishing a Scheme forGreenhouse Gas Emission Allowance Trading within the Community, in Respect of the KyotoProtocol’s Project Mechanisms – Examination of EP ENVI Committee Amendments with aView to a Possible First Reading Agreement with the EP (Brussels: Council of the EuropeanUnion, General Secretariat); and Council (26 March 2004), Working Document 7844/04regarding: Proposal for a Directive of the European Parliament and of the Council Amendingthe Directive Establishing a Scheme for Greenhouse Gas Emission Allowance Trading withinthe Community, in Respect of the Kyoto Protocol’s Project Mechanisms – Revised PresidencyCompromise Proposal (Brussels: Council of the European Union, General Secretariat).132 ENDS Daily (16 March 2004), ‘MEPs Yield to EU States in Kyoto Linking Cap’.
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‘robust’ restrictions, was happy the Committee had managed to reject the efforts bycentre-right MEPs to allow sink credits, and said the EU was now ‘99.9 per centcertain’ to ﬁnalize the directive by April.133De Roo’s timing predictions proved correct. On April 5 the parties reached aninformal agreement, trading off the demands of the Council (on timing and the cap)against the demands of the Parliament (on qualitative provisions).134 On 20 Aprilthe deal was made ofﬁcial, when the Parliament, perhaps reﬂecting its eagernessto get the directive adopted before the summer deadline, approved the compromisepackage and thereby avoided time-consuming conciliation135 – even if this left theﬁnal directive at quite a distance from what the Parliament had originally wanted.136There would be no common cap,137 and CDM credits could be used from January2005.The Parliament’s demands for solid qualitative restrictions were met only inpart: whereas nuclear activities were excluded indeﬁnitely in the original proposal,they were now explicitly excluded only till 2012 (due to pressure from France, asnoted earlier). Sinks were also excluded only temporarily – possible inclusion forthe ﬁrst Kyoto commitment period would be reconsidered in 2006. Only with regardto hydro-projects was there a clearer regulation than in the original proposal: hydroprojects with capacity over 20MW would have to comply with the rules set by theWorld Commission on Dams.In sum, although the Parliament and rapporteur De Roo stand out as skilfulplayers taking on a responsible and more comprehensive EU perspective in anatmosphere of urgency, the Parliament paid a high price in terms of concessions.Only in the case of big hydro-projects did it manage to nudge the proposal in amore restrictive direction. Furthermore, since the Commission’s initial proposal waschanged substantially, the Commission must be said to be less successful than in thecase of the EU ET Directive. This may be traced back to the fact that the Commissionwas more split on this issue. In addition, there seems to have been a closer matchbetween the position of a majority of the member-states and industry in the linkingcase, as compared to the foregoing EU ETS process. With the time factor, the EUinstitutions had to give in and accept linking with few restrictions.ConclusionIn Chapter 2, we proposed that the ﬁnal ETS would reﬂect the positions of theCommission and the Parliament, according to the EU institutional perspective.As a ﬁrst observation in relation to this proposition, we may conclude that keyelements of the Commission’s proposal for an ET directive managed to survive the133 Ibid.134 Lefevere 2006, 127; ENDS Daily (14 September 2004), ‘Ministers Adopt EU KyotoLinking Law’.135 Only a few MEPs from the UK Independent Party voted against it.136 European Parliament (20 April 2004), Position of the European Parliament.137 It was, however, warned that the Commission could make proposals following itsmid-2006 review to harmonize the member-states’ caps.
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numerous twists and turns of the decision-making process. The overall approachon harmonization and centralized control leant towards the decentralized side, withno harmonization and centrally set caps on the quantities of allowances issued.Furthermore, the system laid out in the ET directive was a mandatory system. Theinitial system would target only CO2; sectoral coverage, in terms of activities listedin the directive, was identical to the Commission’s proposal. Allocation free ofcharge was the dominant allocation method in the pilot phase 2005–07. The penaltylevel for non-compliance in the directive was roughly similar in the pilot phase (€40instead of the proposed €50), and identical in the Kyoto commitment period (€100).The main design of the links between the EU ETS and Kyoto Protocol’s ﬂexiblemechanisms would be settled in a subsequent, separate directive.Hence, it is tempting to jump to the conclusion that the Commission, throughits proposal, essentially determined the ﬁnal EU ETS design. As pointed out in thesection on member-state positions, however, the actual and anticipated diversity inthe interests of the majority of the member-states was to a signiﬁcant extent taken intoaccount in the Commission proposal. Moreover, some changes were actually madeby the member-states in the course of the decision-making process. Nevertheless, theCommission continued to play an important role in the decision-making phase: byarguing against many of the EP proposals, by providing information, and generallyon the basis of its formal position in the co-decision procedure.The Parliament has more formal power in the decision-making process than theCommission, but not necessarily more actual inﬂuence. The EP’s inﬂuence on theﬁnal directive was moderate. The main changes to the proposed ET directive thatcan be attributed the Parliament include prevention of opt-out of sectors; explicitmention of the chemicals, aluminium and transport sectors for future inclusion; anda limited opening up for allocation by auctioning. In addition, with regard to theLinking Directive, the EP obtained an inclusion of reference to rules set by the WorldCommission on Dams concerning hydropower projects.As discussed earlier, the moderate impact was due to resistance from theCommission; furthermore, on major issues the Parliament was up against an‘alliance’ between the Commission, a majority of member-states and industry; andthere were too many proposals and hence a lack of focal points. The Commissionand the BEST group continued to play a vital and active role in the process, bygiving formal comments along the way, and providing more informal support inconnection with the process of hammering out the Council’s common position. Inaddition, the second reading shows that the time factor became important. In theﬁnal spurt the Parliament was very reluctant to end up as the one left holding the bag,the one who wrecked the ambitious timetable and delayed the start-up of the scheme.Let us now see how the international climate regime contributed to make the timefactor so (increasingly) important in the decision-making process.The International Climate Regime ContextTo what extent and how did the international climate regime affect the EU ETSdecision-making process? More speciﬁcally, how did the climate regime affect
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the adoption and design of the EU ETS? In Chapter 2, we argued that politicalattention in the decision-making phase is likely to be directed internally, towardsEU institutions and actors with a formal role to play in the decision-making process.However, signiﬁcant changes in the institutional context may penetrate and affectinternal decision-making process under certain conditions like ‘shocks’ and ‘crisis’.Under such conditions, we surmised, the EU ETS might be affected by developmentswithin the climate regime. As we shall see below, the US withdrawal from the KyotoProtocol and subsequent uncertainty about ratiﬁcation of the Protocol signiﬁcantlyaffected the EU ETS decision-making process.US Exit from KyotoSomething had changed, from the March 2000 Green Paper to the consultationprocess with member-states in September 2001. In 2000, the member-states disagreedon most aspects related to the design and harmonization of emission trading. Andyet, in 2001, a majority of the member-states agreed on the basic design. Likewise,the consultation processes with industry and ENGOs showed an ‘overwhelmingmajority’ in favour of proceeding with emissions trading, sooner rather than later.The most important change to take place in this period was the decision by PresidentGeorge W. Bush to withdraw the USA from the Kyoto Protocol. This decision madeentry into force of the Kyoto Protocol uncertain, as the Protocol requires ratiﬁcationby 55 Parties accounting for at least 55 per cent of 1990 CO2 emissions from thatgroup. The US alone accounted for 34 per cent of Annex 1 1990 emissions. As weshall see below, the US withdrawal from the Kyoto Protocol served to make the EUETS into an instrument that could rescue the Protocol.The ﬁrst indication that the Bush administration was reconsidering its positionon the Kyoto Protocol came at the time the Commission started drafting the ETdirective, shortly after the inauguration of the new US administration in January2001. After the failure to ﬁnalize the rules of the Kyoto Protocol at CoP-6 in TheHague in November 2000, a new global effort was scheduled for Bonn in May 2001.The new US government wanted to postpone the conference until July. The ofﬁcialreason given was that that new administration needed time to review its globalclimate policy.138 The EU reluctantly acceded to the US demand.In March 2001, Bush announced his opposition to the Kyoto Protocol, arguingthat it exempted developing countries, would cause serious harm to the US economyand was based on incomplete scientiﬁc knowledge. These statements were followedup by the head of the US Environmental Protection Agency (EPA) and substantiatedby a decision not to limit power-station CO2 emissions as promised during theelection campaign.139 The US decision to withdraw from the Kyoto Protocol mighthave been foreseen even though President Clinton had signed the Kyoto agreementin 1998. Prior to the Kyoto negotiations, the US Senate had delivered a clear message138 ENDS Daily (25 January 2001), ‘USA Demands Further Delay in Climate Talks’,Issue 917.139 ENDS Daily (14 March 2001), ‘EU Spooked by Bush U-turn on CO2 Limits’, Issue951.
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to the Clinton-Gore administration. In a unanimous 95–0 vote, the Senate stated thatit would not accept several of the conditions codiﬁed in the Kyoto Protocol. It votedagainst any treaty that would exempt developing countries from legally bindingcommitments and imply higher energy costs, particularly on petrol (the Byrd-Hagelresolution of 25 July 1997). For the Kyoto Protocol to be ratiﬁed by the US Senate,and thus become US law, it would have to receive 67 out of 100 senatorial votes.Prior to the 2000 elections, the democratic candidate, Vice-President AlGore, would probably put all his political weight into persuading the Senate toratify. However, Gore had low standing in the Senate and would in any case faceconsiderable opposition. The Republican candidate, George W. Bush, would enjoyhigher standing in the Senate, but would not push for ratiﬁcation. If the US had ratiﬁedthe Kyoto Protocol, the US target under the Protocol, of reducing its emissions by7 per cent compared to 1990 levels within the period 2008–12, would still be out ofreach.140 This would require dramatic domestic cutbacks combined with anticipatedtime-consuming legal action initiated by industry and environmental groups againstthe EPA. The perception among major US companies and other stakeholders wasthus that the Protocol was ‘dead on arrival’ (Skjærseth and Skodvin 2003). Withthe beneﬁt of hindsight, we can say that the US withdrawal should have come as nosurprise.For the EU, however, the US withdrawal from the Kyoto Protocol was unexpected,although there had always been concern about US ratiﬁcation. In February 2001, forexample, Danish environment minister Svend Auken had suggested that ideally theKyoto Protocol should be renegotiated to bridge the gap between the EU and theUSA. He sympathized with a WWF-Denmark proposal to allow the USA to stabilizeits GHG emissions at 1990 levels by 2008–12 rather than its commitment to a 7 percent cut.141 Representatives of the European Commission saw the US decision as ‘ablow’ which led to a sense of crisis.142The US decision to dump the Kyoto Protocol was taken very seriously by the topEU leaders, who responded immediately. In a letter to Bush, Romano Prodi (Presidentof the European Commission) and Swedish Prime Minister Göran Persson (actingin capacity of the Swedish EU Presidency) urged a high-level meeting to discuss thefuture of the Kyoto Protocol. The European Council followed this up in a resolutionfrom the March 2001 Stockholm summit, expressing its deep concern regarding thefate of the Protocol. And Environment Commissioner Margot Wallström led a highlevel delegation to Washington to clarify the US position. It received a clear answer:
140 Since 1990, US emissions had increased by over 14 per cent, and were expected toincrease by at least 1 per cent each year for the next decade. This meant that emissions wouldhave to be reduced by more than 30 per cent during the agreement period. The Kyoto Protocolallows for emissions trading, but many doubted the political realism of the USA becominga major buyer of quotas from Russia. Even if large-scale quota-buying could come about,powerful domestic measures would still be needed to achieve reductions in the order of 30per cent.141 ENDS Daily (26 February 2001), ‘Auken Calls for All-out Action on Climate’, Issue939.142 Interviews in Brussels, 12 January and 15 May 2006.
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the USA would not ratify.143 Despite the negative signals from Washington, the EUdecided to continue with its preparations for the resumed CoP-6 in Bonn in July.The consequences of the US exit for the proposed ET directive could go intwo opposite directions. First, it could strengthen the arguments of actors scepticalor opposed to emissions trading at the European level. A regulative restriction oncarbon emissions in Europe could weaken the competitive situation for Europeancompanies in relation to the USA and the OECD. Without US ratiﬁcation, almostall other major emitters in the industrialized world (Japan, Canada) plus countrieswith economies in transition (Central/Eastern Europe and Russia) would have toratify. The Bush administration thus referred to the agreement as ‘dead’ after hisdecision to withdraw (Schreurs 2004, 208). The US exit could effectively underminethe growing support for the proposed ET directive unless enough other countriesagreed to ratify.144 Particularly Germany and German industry was not – to say theleast – particularly enthusiastic about the Commission’s plans of a cap-and-tradesystem at EU level. The dilemma for Germany was that the EU ETS became animportant part of the ‘save the Kyoto’ campaign. And some European industriesexposed to signiﬁcant international competition actually used the US exit to argueagainst the plans for a cap-and-trade system.145 Such arguments drowned, however,in the unifying effect.The second and chief effect of the US rejection of the Kyoto Protocol was thatit helped unify the actors and institutions involved in developing EU climate policy.As noted by Brussels insiders, ‘the huge impetus the Commission used was Bush’swithdrawal. It united the EU in an extraordinary way’.146 Romano Prodi and GöranPersson said in a statement that it was ‘shocking to European ears’ that the USAdid not intend to make any effort to tackle climate change unless other countrieswith fewer resources did so.147 According to Schreurs (2004, 209): ‘The Bushdecision (…) so angered the Europeans that they were able to overcome internaldisagreements and present a strong united block supporting the Kyoto Protocol …Seldom in history has the EU criticized the US as forcefully as it has over this issue’.Furthermore: ‘In the subsequent months [after the US exit] climate change and theKyoto Protocol became deﬁning issues for the European Union, and importantly,issues on which it was united, and one on which it saw itself at the forefront of theinternational efforts. Public opinion was supportive of such a stance’ (Vis 2006a, 40).This effect extended far beyond the EU, and facilitated broad international supportfor the Protocol (Yamin 2005b).More speciﬁcally, the US withdrawal uniﬁed positions and increased the supportfor the EU ETS from member-states, industry, ENGOs and probably within theCommission itself as well. Suddenly, the relationship between the EU and the USA143 ENDS Daily (4 April 2001), ‘Washington Climate Talks Leave EU Disappointed’,Issue 966.144 Strictly legally speaking, however, the proposed ET directive was deliberately notmade conditional upon the entry into force of the Kyoto Protocol.145 Interviews in Brussels, 15 May 2006.146 Interviews in Brussels, 26–27 May 2004.147 ENDS Daily (10 April 2001), ‘EU Claims Global Support for Kyoto’, Issue 970.
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over climate policy became high politics. According to the statement by the EUHeads of State at their summit in Gothenberg in June 2001, which coincided withthe EU-US summit attended by George W. Bush: ‘the Community and the Memberstates are determined to meet their commitments under the Kyoto Protocol’ andreafﬁrm their ‘commitment to deliver on the Kyoto targets’ (Slingenberg 2006, 33).The US withdrawal from the Kyoto Protocol made the Commission signiﬁcantlyadvance its agenda on the ET directive proposal. In March 2001, the EU EnvironmentCouncil singled out the work based on the Green Paper on emissions trading as ‘ofparticular importance’ for the EU’s efforts to combat climate change.148 As notedearlier, Environment Commissioner Wallström instructed the Climate Change Unitto prepare the draft directive to be adopted by the Commission before CoP-6 in Bonn,to show the outside world that the EU was still taking the Kyoto Protocol seriously.The US exit did not, however, affect the design of the planned ET scheme, as themain structure of the ET directive proposal was well advanced by March 2001.The Commission had the tools to make the ‘save Kyoto campaign’ credible toother major industrial emitters by preparing for emissions trading. According to Vis(2006a, 40): ‘Emissions trading came to be seen as the practical measure that wouldtest the credibility of the EU’s promises to act’. The Proposal for an ET directive wasdepicted as the key measure for implementing the Kyoto Protocol; a direct linkagewas made to efforts to save the Kyoto Protocol by accompanying the ET directiveproposal with a proposal for a Council Decision to ratify the Kyoto Protocol.149 Thismove increased support for the directive in the Council of Ministers, which haddeclared their determination to ratify the Protocol. In this way, EU implementationof the Kyoto commitments became deliberately linked to the ratiﬁcation of theKyoto Protocol. The US rejection thus placed the draft ET proposal in the spotlightand raised emissions trading to the top of the EU agenda. This was perceived by theClimate Change Unit in the Commission as a ‘window of opportunity’ for realizingplans for a European emissions trading system, and for the EU to show leadership inglobal climate diplomacy.150The EU’s leadership ambition expressed itself in diplomatic efforts to winthe support of other states to ratify the Kyoto Protocol. Shortly after Bush’sannouncement that the US would reject the Kyoto Protocol, the Swedish Presidentof the Environment Council declared that EU would ratify the Kyoto Protocol, withor without the USA. Ratiﬁcation by the EU was timed to occur prior to the 2002Johannesburg summit. A statement adopted unanimously by all EU environmentalministers read: ‘The Kyoto Protocol is still alive – no individual country has the rightto declare a multilateral agreement as dead’.151 This declaration was reafﬁrmed atthe Environment Council meeting in June 2001: ‘The European Union maintains the148 Council (8 March 2001), 6752/01, 2334th Council Meeting Environment. Presse 93,2001, Brussels, 5.149 A communication on implementing the European Climate Change Programme wasalso presented. Council (29 October 2001), 12994/01, 2378th Council Meeting Environment.Presse 372, 2001. Luxemburg.150 Interviews in Brussels, 12 January and 15 May 2006.151 ENDS Daily (2 April 2001), ‘EU “Will Ratify Kyoto without USA”’, Issue 964.
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target of ratiﬁcation and entry into force of the Kyoto protocol by 2002, striving forthe broadest possible participation of Annex I countries, and to that end the EuropeanCommunity and its member-states have started their internal preparations’.152EU environmental leaders representing the Council and the Commissionimmediately visited Canada, Russia, Japan and other countries to garner support forthe Protocol and ensure them that the EU was determined to ratify. This responsesurprised the Bush administration, which had expected that the EU would simplyjoin the USA in abandoning the agreement (Schreurs 2004, 209). Had that happened,then the EU ETS could have been abandoned as well: if the Kyoto Protocol hadcollapsed, it would most probably have been detrimental to the outcome of the EUETS decision-making process.The fact that the US exit from the Kyoto Protocol provoked the EU and servedto strengthen its determination to push for ratiﬁcation of the Kyoto Protocol and theEU ETS should be understood in a historical context. Since 1990, the EU has aimedat leadership in global climate diplomacy. The EU adopted a stabilization target asearly as in 1990 and argued for binding reduction targets in the UNFCCC concludedat the 1992 Rio summit (see Chapter 1). The EU’s position was signiﬁcantly moreambitious than that of the USA, and reﬂected different constellations of interests,access to decision-making, principles and regulatory cultures across the Atlantic(Schreurs 2004).Although the gap narrowed somewhat during the Clinton Administration, theEU, led by Germany, was the main driving force behind the ‘Berlin Mandate’ andthe binding commitments agreed in Kyoto, even though the EU preferred moreambitious targets, more domestic efforts and less ﬂexibility. The time and energyinvested by the EU in moving international commitments toward quantiﬁed andbinding reduction objectives indicate a deﬁnite commitment to follow through.The strong EU reaction was also not so surprising in light of new and more alarmingconclusions presented by the Third Assessment Report of the IntergovernmentalPanel on Climate Change, which indicated a more rapid rise in temperatures thanpreviously feared, and with signiﬁcant impacts. Parts of this report were publishedshortly before Bush’s decision to withdraw. In a response, the EU EnvironmentCouncil concluded: ‘The Council takes seriously the emerging conclusions of theThird Assessment Report of the IPCC, which conﬁrm and reinforce that need forurgent action to tackle climate change’.153 This perception was strengthened later(in October 2002): ‘The Council REITERATES its deep concern about the robustﬁndings in the TAR [Third Assessment Report], and NOTES with deep concern theimportant message of the IPCC that human interference with the climate systemcarries a risk of triggering irreversible or abrupt changes’.154
152 Council (7 June 2001), 9116/01, 2355th Council Meeting Environment. Presse 201,2001. Brussels, 12.153 Council (8 March 2001), 6752/01, 2334th Council Meeting Environment. Presse 93,2001. Brussels, 5.154 Council (17 October 2002), 12976/02, 2457th Council Meeting Environment.Presse-320, 2002. Luxemburg, 17.
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The new US programme on climate change strategy was not published untilFebruary 2002, and the EU Environment Council discussed the US programme inMarch 2002. While conﬁrming that the EU was willing to continue dialogue with theUSA, the Council concluded:having studied the initiative on climate change presented by President Bush on 14February 2002, [the Council] is concerned about the proposed measures, which allowan increase of greenhouse gas emissions at nearly the same rate as at present and arenot sufﬁcient effectively to ﬁght climate change…calls upon the parties to the UnitedNations Framework Convention on Climate Change, including the United States ofAmerica, the biggest emitter of greenhouse gases, to live up to their responsibility underthis Convention, which requires industrialized countries to return their greenhouse gasemissions to 1990 levels.155
Proposing the ET directive: Bonn and MarrakechThe US rejection of the Kyoto Protocol also led the EU to accept signiﬁcantmodiﬁcations during the Bonn negotiations, in order to ensure the support ofimportant states like Japan. The survival of the Protocol itself during 2001 becamecrucial for the rapid progress of the ET Directive.The purpose of CoP-6 in The Hague in November 2000 was to implement theBuenos Aires Plan of Action, paving the way for the entry into force of the KyotoProtocol. CoP-6 negotiations collapsed due to disagreement on several issues,including whether a cap should be placed on the use of ﬂexible mechanisms.156 TheEU preferred that at least 50 per cent of emissions reductions should be achievedby domestic policies and measures, whereas the USA insisted that there should beno limits on their use. However, during the negotiations there were signs that theEU was willing to relax its emphasis on quantitative caps in favour of a qualitativelimit on the use of the ﬂexible mechanisms.157 The EU argued that if there were nolimits on the use of the ﬂexible mechanisms, that would threaten the environmentalintegrity of the Protocol by allowing ‘loopholes’ regarding domestic attainment ofthe agreed targets. Delegates agreed to suspend CoP-6 and to resume their workin 2001. Against this background and the US announcement to reject the KyotoProtocol, the EU developed its position through various preparatory meetings for theresumed CoP-6 in Bonn in July.The general EU position was made clear at the June 2001 meeting of the EUEnvironment Council:The European Union is ready to negotiate in a constructive spirit with all partners on alloutstanding issue in Bonn. While we are prepared for compromises, we consider it essentialto underline the importance of the fundamental elements of the FCCC and the Kyoto155 Council (4 March 2002), 6592/02, 2413th Council Meeting Environment. Presse 47,2002. Brussels, 5.156 The other issues were ‘sinks’, funding and compliance.157 Earth Negotiations Bulletin (27 November 2000), ‘Summary of the Sixth Conferenceof the Parties to the Framework Convention on Climate Change: 13-25 November 2000’,12:163.
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Protocol, including the legally binding emission limitation and reduction commitments,in order to ensure a long-term sustainable global climate policy. The Council reiteratesthat any agreement must safeguard the environmental integrity, must lead to real reductionin greenhouse gas emissions, and be supported by a credible compliance and liabilitysystem.158
While emphasizing the environmental integrity of the Protocol, the Ministers didnot explicitly mention the previous insistence on a cap on the use of the ﬂexiblemechanisms. In Bonn, the EU and Japan became the major players, with the USAon the sidelines. The US delegation had committed not to interfere with the talks,whereas Japan’s position was crucial to fulﬁlling the conditions for the Protocol tocome into force. Moreover, Japan pledged to try – ‘to the last minute’ – to persuadeWashington to reconsider its position.159The agreement in Bonn on outstanding issues came as a surprise to most observers.But the price was high, as the EU had to yield on several issues. No quantitative capwas placed on industrialized countries regarding the use of ﬂexible mechanisms tomeet their emission targets. In line with the Kyoto Protocol, however, the