Why Kyoto Used 1990 as a Base Year
I have made this point several times, but the 1990 reference date for Kyoto was not just picked randomly. In fact, on its face, it was a bit odd for a treaty negotiated in 1997 to use a 1990 base year. But 1990 allowed signatory countries to claim credit for alot of improvements in CO2 output that had nothing to do with the treaty. For example, in Germany, 1990 was after unification but before wildly inefficient east German factories had been shut down. In England, 1990 was just before a concerted effort to substitute North Sea oil and nuclear to shut down Midlands coal use. In France and Japan, 1990 was the beginning of a period of slow economic growth (and, as an added special bonus, punished the US because it was the beginning of strong economic growth here).
In an odd twist on market economics, Europe's ex-communist states are starting to exploit a new market. Thanks to the Kyoto climate-change agreement, they can, in effect, now make money off the pollution their onetime central planners were willing to tolerate as the price for rapid industrialization and universal employment.
Ukraine, Hungary, the Czech Republic and other countries of the region not exactly renowned for clean air have made or are close to signing deals to sell the rights to emit greenhouse gases, and their main customer is environmentally friendly Japan.
This carbon windfall dropped into Central and East Europe's lap because the Kyoto Protocol sets 1990 as the reference year for future reductions in greenhouse gas emissions. The socialist states at that time were producing gargantuan amounts of CO2 and other gases implicated in global warming from unfiltered coal-fired power plants and factories; when those unprofitable industries withered, countless thousands of workers went on the dole — but the air got cleaner. In the coming years, in line with European Union mandates, would-be members gradually adopted better environmental policies. It's the difference between the often unspeakably bad air of 1990 and the comparatively clean air of today that allows them to sell "carbon credits" potentially worth billions of euros.
In effect, signatory countries are still making their Kyoto goals with actions that had nothing to do with Kyoto, in this case the modernization and/or shut down of communist-era industry. This continues the charade that a) Europe is actually making real progress on CO2 emissions, which it is not and b) emissions reductions are cheap.
Update: Before the treaty, but for which the treaty supporters claim credit by selecting 1990 as the base year, signatory countries had large CO2 reductions due to the forces at work detailed above:
CO2 Emissions Changes, 1990-1995
EU -2.2% Former Communist -26.1% Germany -10.7% UK -6.9% Japan 7.2% US 6.4%
Since the treaty was actually signed, from 1997 to 2005, countries that ratified the treaty had emissions rise 21%. When the treaty was signed in 1997, they signatories knew they had this pool of 1990-1995 emissions reductions to draw on to claim victory. To this day, this is the only improvement they can show, improvement that occured before the treaty and through steps unrelated, in the main, to CO2 abatement.