The Kyoto Protocol, which runs out in 2012, focussed on achieving specific reductions in the quantity of CO2 emitted by the world's wealthiest nations. It has only been modestly successful with many of the biggest emitters either not complying with it, such as the USA, or not being covered by it, such as China and India.
Many of those countries which have pledged to enforce it are unlikely to meet their targets. These problems suggest that the successor to Kyoto, running from 2012 onwards, cannot simply by the old Kyoto with newer targets.
The first issue that must be considered is the overall cut in world CO2 output which is required while still being socially acceptable. Immediate drastic cuts are likely to be extremely costly, and have undesirable economic and political consequences. The cuts will have to be phased in over time, allowing the introduction of newer, more efficient technology, which will be able to make cuts in CO2 at a fraction of the current economic cost.
The second issue which must be considered is how these CO2 reduction targets are distributed between different nations. There are questions of natural justice and political acceptability which must be addressed if an agreement is to be achieved.
They Kyoto approach was to ask for absolute reductions, of 5%, from the emission rates of a baseline date, with the year 1990 being used. This approach assumes that everyone can make cuts at the same rates, but this penalises those nations which have had historically low CO2 emission rates. These low emitters will find it more difficult to find more CO2 reductions than heavy polluters will.
An approach which would address this issue is to take into account each nation's historical contribution to the greenhouse effect, and penalise the worst offenders. This would mean industrialised nations which have been emitting higher CO2 levels since the Industrial Revolution would have to cut the most, an outcome which many say is unacceptable as it would give a cost advantage to newly developing nations in economic competition.
Another approach which faces the same counter-argument, is that targets should depend on CO2 per person within that nation. Heavily industrialised countries generally emit more CO2 for each of its inhabitants. Developing nations, such as China and India, although big emitters in an absolute sense, are relatively clean when the size of the population is taken into account.
The other topic which needs to be considered is the mechanism by which cuts in CO2 will be achieved. Kyoto set quantity limits for each nation to achieve. It also created market based trading mechanisms by which heavily polluters could buy permits from low emitters to meet their targets. This scheme focuses on how much CO2 will be emitted but pays little attention to the economic cost of achieving this. There are also the previously mentioned distribution issues which make it difficult to get an agreement on how much each nation should be expected to cut.
An alternative approach would be to use an international carbon tax, where each tonne of CO2 emitted will cost polluters a certain amount. This higher cost of emission will encourage reductions in greenhouse gases, and would be fairly transparent and easy to implement. There would, however, be difficulties in setting the rate of tax and questions over whether each nation should set the tax at the same rate due to the distributional issues mentioned above.
Inevitable any agreement which will be reached will be the one that is politically acceptable to all parties, and not that which is necessarily the best overall. Nevertheless this is better than no agreement at all, so it is imperative that all nations are committed to finding some form of solution.