Kyoto 2 was developed by the British environmental writer Oliver Tickell as a new rationale for cutting carbon emissions through an auction of extraction rights which would make it uneconomic to extract fossil fuels. This summary comes from the Kyoto 2 website:
1. “Kyoto2 is a global system to auction transferable Permits to pollute the atmosphere with industrial greenhouse gases up to a series of annual caps defined at levels that would prevent dangerous interference with the Earth's climate system.
2. Greenhouse gas emissions would be regulated 'upstream', that is, as near as possible to the point of production, and in the case of emissions from fossil fuels, as close as practical to the point of production of the fuels themselves.
3. This system would create market incentives for the wide scale and systematic reduction of greenhouse gas emissions and the development of alternatives, to be supported in turn by regulations and standards aimed at overcoming specific market failures.
4. The funds raised at auction would be invested to tackle both the causes and the consequences of climate change, with an emphasis on addressing the needs of the poor and the those most adversely impacted, including to:
- help adaptation to such climate change as is already inevitable,
- accelerate progress towards a clean, energy-efficient, low-carbon global economy,
- reform land use so as to conserve biological carbon within soils, peatlands, forests and other ecosystems, and reduce emissions from land of other greenhouse gases,
- research low cost and environmentally benign geo-engineering options that could in extremis prevent a 'runaway greenhouse effect' from taking hold.”
Kyoto 2 proposes a way of reducing emissions which, of itself, does not depend on changing consumer behaviour, which should make it easier and faster to implement. However, western governments would need to introduce tough carbon cutting measures, so a change in consumer behaviour will be required which ever international formula is applied. Kyoto 2 would require cooperation from fossil fuel companies whose businesses it will jeopardise. A new global authority to administer the auctions and distribute the funds raised would also be required and beneficiary nations would need to agree a formula for sharing the available funds. It will be an immense challenge to ensure that funds are distributed in a way that is transparently fair and free from corruption.
The idea of a system that creates incentives to reduce fossil fuel use and develop alternative sources of energy is sound, but Kyoto 2’s top-down approach would cast developing, climate vulnerable, countries as continuing beneficiaries of handouts rather than self-determining, independent nations. Fossil fuel companies would almost certainly present legal challenges to the idea of taking part in auctions to buy extraction rights they already own. Even if global agreement to introduce K2 were reached (which is dubious since national interests are mixed up with the ownership of fossil fuel companies), court battles could delay it for years.