Bali climate talks focus on Kyoto offsets

By Gerard Wynn

NUSA DUA, Indonesia (Reuters) - Rich nations have less than a month to go before they must start meeting emissions caps under the Kyoto Protocol that aims to fight global warming.

Yet 16 of the 36 industrialized nations bound by Kyoto limits are over their targets set for 2008-2012 and may have to buy carbon offsets to meet these, drawing criticism at a U.N. meeting in Bali.

"There's this quite strong feeling (among poorer countries) that a number of commitments in those areas, commitments from the past, have not been met and will be conveniently forgotten when we switch to a new agenda item called the future," said Yvo de Boer, the U.N.'s head of climate change.

About 190 nations are meeting in Bali to try to initiate two years of talks that will lead to a successor pact from 2013. The goal is to agree on a broader climate pact bringing together rich and poor countries because targets under the existing Kyoto Protocol have been deemed too weak for the longer term.

Kyoto obliges rich nations to cut greenhouse gas emissions by an average of 5 percent by 2008-12 from 1990 levels, but allows them to pay developing countries to cut emissions on their behalf through a trade in carbon offsets.

Although Kyoto came into force in 2005, its commitment period only begins from Jan 1, 2008 till 2012.

Some developing countries, including Brazil, think rich nations should make painful emissions cuts at home, curbing their use of fossil fuels, before devising new ways to fund cheap cuts overseas such as reducing deforestation. Clearing tropical rainforests is a big contributor to climate change.

To focus on local action, the European Union has proposed a 10 percent limit on offsetting when meeting its goal to curb emissions by a fifth by 2020, de Boer told Reuters.

The EU is due to detail that measure next month and on Wednesday declined to comment on a 10 percent cap.

RISING

The United States did not ratify the Kyoto Protocol, saying in 2001 it was unfair to exempt developing countries from targets, and this week said that offsetting had allowed EU emissions to rise in spite of Kyoto caps.

Emissions of six of the 15 older members of the EU rose in 2005, putting the EU-15 about 2 percent below 1990 levels versus a Kyoto target of 8 percent.

"Emissions are rising, within that context (Kyoto) is not doing its job," said Harlan Watson, the head of the U.S. delegation in Bali. "I fully expect the EU will meet its targets through the (carbon offset) mechanisms."

The carbon offsetting scheme under Kyoto, called the Clean Development Mechanism, suits rich and many poorer countries by making it cheaper for rich countries to meet their targets and helping developing nations to curb emissions.

The U.N. body supervising the scheme said on Wednesday the current pipeline of offset projects could deliver up to 500 million tons of emissions cuts per year from 2008-12, equivalent to the annual emissions of Australia.

But many less developed countries including Kenya, Tanzania, Ethiopia, Vietnam, Bangladesh and Indonesia told the conference they were missing out on the benefits.

That's partly because carbon offsetting pays companies to cut emissions, and doesn't favor African countries which have few emissions to start with. The U.N. panel proposed on Wednesday to waive fees for project developers in such states.

Outside the main Bali conference centre, three environmental activists wearing hard hats waved a placard reading -- "Youth wants hard emissions caps for industrialized countries."

"We want a 30 percent cut in domestic emissions (by 2020)," said Stephan Singer, policy officer at WWF, referring to rich countries. "We need offsetting on top of that cap. We need the money going into the South."

-- For Reuters latest environment blogs click on: http://blogs.reuters.com/environment/

(Additional reporting by Alister Doyle, Editing by David Fogarty)