But perhaps the decisive factor contributing to Bonn's success was
President Bush's own actions. Before the meeting, most observers had
expected that his rejection of Kyoto would deflate the process,
depriving it of the momentum necessary for success. But Bush's
decision had the opposite effect: It united countries around the
Kyoto Protocol and galvanized them into action. The peremptory way in
which the administration acted--repudiating years of multilateral
work in response to domestic special interests, without consulting
other countries or undertaking a serious policy review--combined with
his failure to offer a credible alternative, stuck in other
countries' craws. When the spokesman for the developing countries
declared at the end of the meeting that the Bonn agreement
represented the triumph of multilateralism over unilateralism, he
received a rousing ovation. The Bush Administration compounded its
mistakes by taunting the Europeans for not having ratified Kyoto,
implying that they were hypocrites. Thus, the European Union came to
Bonn determined to make whatever compromises were necessary to reach
agreement and so prove Bush wrong.

American disengagement from the Bonn negotiations also made agreement
easier from a substantive standpoint. In The Hague, the Clinton
Administration felt it had to win on virtually every issue to have
even a prayer of overcoming Senate opposition to Kyoto. By contrast,
other countries had fewer walk-away issues and thus could agree more
easily on a compromise package in Bonn. In particular, the U.S.
absence made one of the most contentious issues easier to resolve:
how much credit to give for the carbon sucked out of the atmosphere
by carbon "sinks." With the United States out, the Europeans had
plenty of room to accommodate the demands for sink credits by Japan
and Canada, since they no longer had to satisfy the much larger
demands of the United States.

Four Lessons of the Kyoto Process

Despite the Bonn agreement, Kyoto has a long way to go before we can
assess its effectiveness in combating climate change. In the
meantime, the Bonn agreement now makes it more likely that the United
States will go its separate way, at least in the near term, rather
than re-engage directly in the ongoing global negotiations. In
charting a future course, what lessons can we learn from the Kyoto
process? At the root of Kyoto's troubles has been the failure to
observe four basic precepts of sound treaty-making.

Lesson 1: Walk Before You Run

Benjamin Franklin once remarked that the most exquisite folly is
reason spun too fine. If Kyoto ultimately fails, this could be its
epitaph. Rather than starting simply, with an agreement that is easy
to implement and fulfill, it takes a grandiose approach, establishing
ambitious emission reduction targets and an elaborate architecture
whose success will depend on an extraordinary degree of international
cooperation and good faith--commodities in short supply in the
climate change regime. For example:

*Kyoto controls not only carbon dioxide, the principal greenhouse
gas, but also five other gases, including methane and nitrous oxide,
that are difficult to monitor reliably.

*Kyoto contemplates the first full-blown system of international
emissions trading. Although emissions trading has been used
successfully in the United States to combat acid rain, implementing
such a system internationally will involve a host of difficult issues
relating to eligibility, liability and compliance.

*As a result of the Bonn agreement, countries can receive credit for
carbon removed from the atmosphere by carbon "sinks"--for example,
forests and farmlands. But carbon sinks are natural phenomenon that
increase and decrease for a variety of reasons, not just as a result
of human activities. Determining the degree to which countries should
receive credit (or debits) for such changes raises extraordinarily
difficult conceptual and scientific issues, which are generally
glossed over in the Bonn agreement.

*Kyoto creates a Clean Development Mechanism that will allow
industrialized countries to receive credit for emission reduction
projects in developing countries. But implementing this mechanism
will require the creation of an elaborate institutional structure to
oversee the process.

The desire of the United States to include these and many other
equally complicated elements in Kyoto was understandable. Supporters
justified each as providing the flexibility needed to meet stringent
emission reduction targets. Perhaps if the European Union had not
pushed for such ambitious targets, the United States would have
sought fewer bells and whistles but, be that as it may, the end
result was a highly complex agreement requiring much further
elaboration. Although the Bonn agreement resolved the most
contentious political issues, and adoption of the detailed rules for
emissions trading (the Clean Development Mechanism and carbon sinks)
appears within reach at a meeting this fall in Marrakesh, whether the
new rules and institutions will actually work remains uncertain. In
most cases, they involve novel mechanisms that would tax the capacity
of even established, highly-developed national institutions, much
less comparatively new international institutions that have yet to
establish their authority or to develop traditions of good faith and
cooperation.

The history of international institutions suggests that successful
institutions tend to start small and build. The GATT, for example,
began with a relatively small number of countries, addressed a few
core issues, and had a relatively simple institutional structure. The
1992 Framework Convention began down a similar path: although it
involved many more countries than the original GATT, it established
only general principles and obligations to address climate change,
together with basic institutions and procedures. Before this system
had been given a serious chance to develop, however, it was
supplanted by the Kyoto Protocol, which in essence seeks a full-blown
regime all at once. In moving forward, the better approach would be
to proceed incrementally, adding stringency and complexity over time
as states gain confidence in the regime. Thiswould avoid overtaxing
the regime before a sense of community has developed among the
parties. It would also allow states to test out ideas and learn from
experience. Such an approach would not create the illusion of quick
results, as Kyoto has. But it might build a more solid edifice
appropriate for a long-term problem such as climate change.

Lesson 2: No Representation Without Taxation

Like a contract, a treaty typically involves a mutual exchange of
promises among the parties. Under the Montreal Protocol, for example,
the United States agreed to limit its use of ozone-depleting
substances in exchange for a similar commitment from other countries.
The Kyoto Protocol, however, does not adhere to this basic tenet of
treaty practice. Though negotiated by virtually the entire world
community, it represents a promise by only a limited group of
countries to control their emissions.

Critics of Kyoto claim that it is unfair that developing countries
such as China and India have no emission reduction targets. But the
unfairness lies less in the lack of developing country targets than
in the fact that they have been allowed, nevertheless, to be
full-fledged participants in the negotiations. This has created the
odd situation that developing countries have had a significant say in
determining rules that would not apply to themselves. Indeed, over
the past several years, developing countries even threatened to block
the adoption of the Kyoto rules unless they received significant
financial assistance. In Bonn, they extracted agreement to create
three new international funds, as well as a pledge from the European
Union and other developed countries for significant climate change
funding. In effect, developing countries have successfully demanded
that developed countries pay them for the privilege of making
economic sacrifices to address climate change.

This paradoxical situation stemmed from the 1995 Berlin Mandate,
which initiated the Kyoto negotiations. Prior to the Berlin meeting,
U.S. negotiators had briefly considered undertaking the Kyoto
negotiations among a smaller group of countries that were willing to
assume emission reduction targets. Ultimately, they decided to pursue
the negotiations under the Climate Convention (which includes
virtually every country in the world), seeking a negotiating mandate
that left open the possibility of designating developing country
emission targets. When developing countries opposed this approach and
insisted that the mandate specifically rule out any new commitments
for themselves, the United States had the choice of whether to
continue under the Climate Convention or to seek a separate agreement
among fewer, more like-minded states. It opted for the former in the
hope that it could get around the Berlin Mandate and bring developing
countries on board; proceeding separately, in contrast, would have
meant giving up any pretense of obtaining developing country
participation.

In retrospect, the Berlin Mandate presented the United States and
other industrialized countries with the worst of both worlds: on the
one hand, it specifically ruled out developing country commitments,
at least for the first commitment period; on the other hand, it
allowed them to remain full-fledged participants in the negotiations.
A better approach would have been to say at the outset: only
countries willing to pay (in the coin of obligation) may play. This
would have presented developing countries with a choice: acknowledge
a willingness to accept new commitments or stay out of the
negotiations altogether. As it was, developing countries have had it
both ways: they got to negotiate the international rules without
having to acknowledge that those rules would ever apply to them.