Russia's ratification of the UN Framework Convention on Climate Change (UNFCCC) last month made it the 129th country to join the Kyoto Protocol. The treaty will now come into force on 16 February, 2005, seven years after it was first proposed in the Japanese city whose name it carries.
The Kyoto treaty has been called the biggest step forward in international environmental politics and laws that the world has ever seen. Global climate change is an environmental challenge like no other and threatens to disrupt the very basis on which life on earth is sustained, the climate. By 2100, average world temperatures could go up by 5.8oC. Besides the increase in frequency of extreme weather events and expected rise of sea level up to a metre, forestry, biodiversity, agriculture, rainfall and human health and wellbeing will all be strongly affected.
Now that Kyoto is going to be a reality, what are the implications for Nepal? First, Nepal has yet to ratify Kyoto. It hasn't done so in the past because of a mix of indecisiveness and more recently, lack of parliamentary mandate. However, it is urgent that Nepal ratify before the upcoming Conference of Parties (COP-10) in Buenos Aires on 6-17 December. Nepal has strong reasons to support the Kyoto Protocol. It is the first international agreement that sets binding targets on developed countries to reduce greenhouse gas emissions, but none on developing countries like Nepal. When Kyoto comes into force it means an effective carbon tax will be placed on fuel use, penalising and making more expensive those fuels with high greenhouse gas emissions. This surcharge will benefit Nepal as it will make our own energy sources more competitive.
Fossil fuels are under-priced today because their users do not have to pay the cost of the environmental damage they create. Nepal had good reasons to be the first country in South Asia to ratify Kyoto. Instead, together with Pakistan, we will be the last. Maldives and Bangladesh, with the most to lose from predicted sea level rise, were the first to ratify followed by India, Sri Lanka and Bhutan.
Ratification of Kyoto will qualify Nepal to participate in the Clean Development Mechanism (CDM), one of the Kyoto provisions to allow complying developed countries flexibility in meeting their emission obligations. These countries can meet a portion of their obligations by purchasing carbon credits from countries like Nepal that reduce emissions over the business-as-usual baseline. Nepal has a large potential to develop CDM projects, any sector where use of unsustainable firewood or fossil fuels can be replaced with clean energy will qualify.
The most advanced of Nepal's CDM projects is the Nepal Biogas Support Program, which has already received a Letter of Intent from the Community Development Carbon Fund (CDCF) of the World Bank's Carbon Finance unit for the purchase of 1 million tons of carbon dioxide for around $4.5 million. Trading Nepal's saved carbon is pending ratification of the Kyoto Protocol by Nepal.
It is estimated that the household biogas sector alone can generate up to $200 million in the next 20 years. Other areas with potential are transportation, industry and the domestic sector where competitively priced electricity can replace diesel, kerosene, furnace oil, and LPG. There are likely to be opportunities for CDM projects in forestry and agriculture as well. Nepal's ability to access other funds specifically targeted at countries most vulnerable to climate change impact will also be greatly enhanced with the ratification of Kyoto.
The most obvious and visible impact of climate change in the Himalaya is the accelerated melting of glaciers, increasing the size of glacial lakes and the danger of devastating outburst floods (GLOFs). Less understood is the impact of climate change on the country's monsoon rains where change could drastically affect agriculture.
Ratification of Kyoto by Nepal will not make any difference to the Protocol itself as the required 55 countries have already ratified. However, ratification by Nepal in time for the upcoming COP-10 in Argentina will register Nepal's commitment at this historic moment to accept the challenge posed by climate change and to take immediate steps to address it. At home, ratification will provide momentum to CDM project developers and will open up the way for support to institutions which must prepare for a warmer planet.
Bikash Pandey is an energy specialist and Nepal representative of Winrock International.
