Editor’s Note: This is the last post in a series (see Part I and Part II) featuring Professor Jorge Viñuales’ analysis of the landmark December 2015 Paris Agreement. Professor Viñuales is the Harold Samuel Professor of Law and Environmental Policy at the University of Cambridge Faculty of Law and the Director of the Cambridge Centre for Environment, Energy, and Natural Resource Governance (C-EENRG).
The main innovation of the Paris Agreement lies in its implementation techniques and, particularly, the ‘enhanced transparency framework for action and support’ established by Article 13. This mechanism, the first of its kind in global environmental governance, is the embodiment of the approach, followed since the launching of the ADP in 2011, according to which emission targets would be set domestically and measuring, reporting and verification (MRV) would be organised at the international level. It is, of course, not the only technique, as the Agreement also contemplates many others. For analytical purposes, I will make a distinction between information-based techniques, facilitative techniques and the management of non-compliance.
The Paris Agreement provides for three techniques that can be understood as information-based in that they not only rely on information but their very purpose is to provide informational clarity in the short or the long term. Aside from the important emphasis – already present in the UNFCCC – placed on education (Article 12), the Paris Agreement introduces two novelties, which are interconnected. The first, provided for in Article 13, relies on public pressure (perhaps a form of ‘naming and shaming’) to nudge States into taking action not only in connection with mitigation and adaptation but also with respect to assistance. The second, contemplated in Article 14, takes the form of a global stocktake, which is less geared towards compliance and more towards the overall effectiveness of the climate change regime.
Enhanced transparency framework for action and support – Article 13 establishes an international mechanism of measuring, reporting and verification of the action/support of individual States. This mechanism can be characterised by reference to its nature, purpose, the information it is expected to gather, and the way in which it will process it.
The perceived intrusiveness of an international MRV mechanism led to strong resistance, particularly from China and India, who have resisted such an approach since the negotiations that fail to reach a Copenhagen Protocol. Unsurprisingly, in Paris, this question remained open until the very end. The working draft of the agreement circulated on the last Friday of COP-21 still contained, in its corresponding provision (Article 9), three options for paragraph 1. The underpinning tension related to the extent of differentiation in connection with transparency. The final wording is a compromise among these options. Reference to the ‘robust’ and ‘unified’ character of the mechanism, as well as rigid differentiation between developed and developing countries were left out. The agreed paragraph 1 applies to all countries but it stresses its inherently flexible nature and the need to account for Parties’ different capacities. The nature of the mechanism is further characterised in paragraphs 2 and 3, which refers to the needs of developing countries (Decision, para. 90) and less developed countries, and stresses the fact that the mechanism is to be implemented in a ‘facilitative, non-intrusive, non-punitive manner, respectful of national sovereignty, and avoid placing undue burden on Parties’ (para 3 in fine).
The purposes of the mechanism are aligned with their focus on ‘action’ and ‘support’. On action, the mechanism aims at tracking progress on a Party’s ‘individual’ progress in achieving their NDCs (under Article 4) and on Parties’ (no reference to ‘individual’) progress on adaptation (under Article 7, hence excluding actions under Article 8). On support, the mechanism aims to provide clarity as to the support ‘provided’ and ‘received’ by ‘individual’ Parties under a range of headings, namely mitigation (Article 4), adaptation (Article 7), finance (Article 9), technology transfer (Article 10) and capacity-building (Article 11). The absence of loss and damage (Article 8) in this enumeration is conspicuous. Transparency on both action and support is to feed the global stocktake contemplated in Article 14 of the Agreement.
As a rule, communications by Parties must be made ‘no less frequently than on a biennial basis’ (Decision, para. 91.) The information to be communicated is organised according to the type of Party. Importantly, all Parties are to provide information on mitigation (they ‘shall’ do so under Article 7(7)) and adaption actions (they ‘should’ do so under Article 7(8)). In addition, developed country parties ‘shall’ (and other parties that provide support – e.g. China – ‘should’) report on financial, technology transfer and capacity-building assistance (Articles 9, 10 and 11) given to developing country parties (Article 7(9)). The latter ‘should’ provide information on the support received under these headings (Article 7(10)). Again, the headings are defined by reference to their specific provisions, hence excluding loss and damage in Article 8 from the picture.
Part of the information thus reported (that under Article 7 paragraph (7) and (9) but not that under paragraph (8)) is to be subject to a ‘Technical expert review’ characterised in the Decision. This is another area where there was disagreement until the very end. Two options remained open. One option envisioned a more comprehensive review leading to the publication of a report highlighting areas for improvement and even compliance, and to be discussed by the CMP. The other option introduced a rigid distinction between the review of information from developed countries (‘robust technical review process’ with conclusions on compliance) and from developing countries (a more diluted review process taking into account the level of support received by the relevant developing country). Article 13, paragraphs (11) and (12), provides for a middle ground where ‘implementation and achievement’ are indeed assessed but in the light of the flexibility and differentiation built-in in Article 13. Further modalities and procedures are to be developed by the APA under certain specified parameters (Decision, paras. 92-98.).
Global stocktake – As noted above, the idea of a global stocktake has less to do with compliance and more with effectiveness. At COP-21 States (and, frankly, everyone) were very concerned by the fact that INDCs so far announced, although they cover most the greenhouse gas emissions and emitters, still fall short of the 2 °C. Paragraph 17 of the Decision ‘noted with concern’ that:
‘[T]he estimated aggregate greenhouse gas emission levels in 2025 and 2030 resulting from the intended nationally determined contributions do not fall within least-cost 2 ˚C scenarios but rather lead to a projected level of 55 gigatonnes in 2030, and also notes that much greater emission reduction efforts will be required than those associated with the intended nationally determined contributions in order to hold the increase in the global average temperature to below 2 ˚C above pre-industrial levels by reducing emissions to 40 gigatonnes or to 1.5 ˚C above pre-industrial levels by reducing to a level to be identified in the special report referred to in paragraph 21 below’
For the climate change regime to be effective overall, a focus on the ‘trees’ (through the transparency mechanism) should not displace the more important overall view of the ‘forest’ (the overall stock of greenhouse gases in the troposphere as well as the ability of States to cope with the impact of climate change). The global stocktake envisioned in Article 14 addresses this question. This global stocktake is to take place periodically (every 5 years, starting in 2023) under modalities still to be defined by the APA (Decision, para. 102). The APA has also been entrusted with the task of identifying the relevant sources of information to generate this global stocktake. Paragraph 100 of the Decision mentions some of them, including communications from the Parties and the work of the Intergovernmental Panel on Climate Change (‘IPCC’), but the list is non-exhaustive. This raises a quality control question, which has already been faced by the IPCC in the context of bitter accusations of bias or unreliability. Article 14 provides for what can be called an ‘information loop’ in that, as I mentioned earlier, the communications from the Parties inform the global stocktake and, in turn, the latter is to inform the level of ambition to be displayed in future NDCs by Parties (Article 14(3)). The system highlights not only the importance of the science and policy interface, most notably between the IPCC and the UNFCCC/Paris Agreement, but also the need for environmental agreements to have internal scientific bodies capable of processing scientific information in a way that meets the needs of the policy instrument (Decision, para. 102).
Compliance through assistance – A key debate during the negotiations was the one relating to financial assistance. I have already noted that assistance is identified as one of the three goals of the Paris Agreement (Article 2(1)(c)) and that obligations of assistance are subject to a sophisticated transparency mechanism established under Article 13. But who should pay, the nature of the funds (public or private, and among the latter those specifically leveraged through public intervention), their specific allocation of such funds and, of course, the amounts to be mobilised were also extremely important issues.
Starting with the latter, Article 9 does not refer to any specific figure, but paragraph 54 of the Decision introduces two clarifications, namely that a new collective quantified goal will be set by the CMP prior to 2025 and that the ‘floor’ will be the figure, already present in previous negotiations, of US$ 100 billion per year. Moving to who should pay, the Agreement clearly bestows the obligation on developed country Parties (Article 9(1)), noting that other Parties (e.g. China) are ‘encouraged’ to provide such assistance (Article 9(2)). Funds may – and will – come from both public and private sources, but Article 9 paragraphs (3) and (7) emphasise public funds and private funds mobilised (leveraged) through public intervention. The allocation of funds is to follow three parameters, namely a balance between mitigation and adaptation (Article 9(4)), special consideration for more vulnerable States, including by the operating entities of the Financial Mechanism, such as the World Bank and regional development banks (Article 9(4) and (9)), and use by receivers in both mitigation and adaptation (not just the latter, which may be favoured by a developing country) (Decision, para. 58).
Compliance through efficiency – Articles 4, 5 and 6 of the Agreement provide for a number of cooperative mechanisms aimed at facilitating compliance with the Parties’ mitigation obligations by rendering such compliance more efficient or less costly. Some of these mechanisms are already familiar. For instance, Article 4 paragraphs (16)-(18) set up a mechanism similar to the so-called ‘European bubble’ under the Kyoto Protocol (Kyoto Protocol Art. 4), whereby a group of countries may agree to comply with their obligations jointly by setting a common target (NDC) in addition to their own country target. In a context where there is no top-down quantified allowance, as in the Kyoto Protocol, such a mechanism seems less pressing, as each country can decide its own level of ambition reflected in its NDC. But it may be useful nevertheless because of the non-regression principle. Thus, if a country is likely to fall short of its own NDC, it may join with a country that has ample room for manoeuvre (which may be the case for a variety of reasons, including an economic slowdown) to jointly comply with the common NDC.
Similar considerations apply to the mechanism established under Article 6(4)-(7) ‘to contribute to the mitigation of greenhouse gas emissions and support sustainable development’. This sustainable development mechanism (‘SDM’) will share features of both the joint implementation and clean development mechanisms under Articles 6 and 12 of the Kyoto Protocol. As there is no longer a Chinese wall between Annex I and non-Annex I country (a key feature distinguishing the JI from the CDM), projects under the SDM may operate in any State Party with the only – obvious – caveat that reductions counting for the NDC of one country to the transaction cannot be counted again for compliance with the NDC of the other country. In this regard, the SDM operates as the JI under Kyoto, but its administration is likely to rely on former CDM institutions.
Two more innovative mechanisms are those envisioned in Articles 5 and 6(2)-(3) of the Agreement. The first has received great attention over the last years and concerns reduced emissions not from afforestation or reforestation (planting new trees) but from avoided deforestation or enhancement. The so-called REDD-plus has now received an anchor in a treaty provision. The details of its operation and, specifically, the very important question of finance are addressed in paragraph 55 of the Decision, which ‘[r]ecognizes the importance of adequate and predictable financial resources, including for results-based payments’ and ‘encourages [ … ] support from public and private, bilateral and multilateral sources, such as the Green Climate Fund, and alternative sources in accordance with relevant decisions by the Conference of the Parties’. Interestingly, the anchor provided in Article 5 goes beyond REDD-plus and could also cover an array of payments-for-ecosystem-services which, until now, had no specific anchor in a treaty provision.
The other innovative mechanism relates to the so-called ‘linking’ of domestic mitigation policies. Normally, a linking process consists of recognising the emission reduction units from a domestic/international emissions trading system in another system. The caps are thus enlarged and the efficiency gains increased. Examples include the linking between the European and Norway’s, Iceland’s and Lichtenstein’s emissions trading systems or that between the systems in California and Quebec. Article 6(2)-(3) allows for this type of linking on a voluntary basis. In other words, there is no requirement for a Party to link its system with that of another Party. In addition, Article 6(2) is formulated in a sufficiently broad manner so as to allow for linking of different types of domestic mitigation policies. Such ‘internationally transferred mitigation outcomes’ (or ‘ITMOs’) are a recognised approach to comply with NDCs if performed in accordance with guidelines still to be adopted by the CMP (Meeting of Parties to the Agreement).
Management of non-compliance
The final component to be noted concerns situations where the information available suggests that, despite the many means to facilitate compliance contemplated in the Agreement, a State Party finds itself in a situation of non-compliance.
In international environmental law, many treaties, starting with the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer, have established non-adversarial mechanisms to ‘manage’ situations of non-compliance. The Kyoto Protocol itself has one such mechanism, established under Article 18 of the Protocol, and soon to face its ultimate test in connection with compliance with States’ quantified obligations under Kyoto’s first commitment period (2008-2012). The Paris Agreement provides for the establishment of a non-compliance mechanism managed by a Committee (Article 15(2)) consisting of 12 experts elected by the CMP in accordance with some distributional parameters (Decision, para. 103).The operational rules and modalities governing the Committee’s activities will be developed by the APA and adopted by the CMP (Decision, para. 104).
Last but not least, Article 24 of the Agreement refers to the dispute settlement clause in Article 14 of the UNFCCC as applicable mutatis mutandis to the Agreement. This clause, which opens the possibility for States to accept the compulsory jurisdiction of the International Court of Justice or of an arbitration tribunal, has never been used. In addition, as already noted, paragraph 52 of the Decision excludes the use of Article 8 (loss and damage) as a basis for liability or compensation.
The components reviewed in the foregoing paragraphs are, for the most part, under construction. In some cases, no concrete steps have been taken yet to translate them into institutions. However, examining them as a set of interrelated design features sheds light on the overall architecture of the Paris Agreement, with its soft belly and sophisticated implementation approach, with its comprehensive reach and, at the same time, significant room for differentiation. Less formalistic than the Kyoto Protocol, which provided for an international cap and top-down quantified emissions reduction obligations for Annex I countries, the Paris Agreement asks from States – all States – what they can do to fight climate change, and it provides the necessary steps to make States realize what is happening at the aggregate climate level through their contributions or lack thereof. In the following paragraphs, by way of conclusion, I would like to place the Paris Agreement within its broader social function, which is not to ‘bind’ States but to ‘influence’ the levers of human behaviour.
A former professor I had as an undergraduate student used to say that one can influence behaviour through three fundamental levers of human action, namely coercion, interest and virtue.
Coercion, translated in the present context as command-and-control regulation is part of the tool-kit of any State, and it will continue to feature in climate change regulation through a variety of measures such construction and efficiency standards for mitigation or zoning requirements for adaptation. Coercion is clear, but not necessarily efficient (as efficiency gains arising from trading are not permitted) and, sometimes, not even effective (as compliance sometimes requires knowledge and resources, without which a system, however coercive, will not be effective). Interest has become a major approach in regulatory intervention. Setting rules that create the desired economic incentives in the regulated entities is a subtle and important art that has been embodied in a variety of mechanisms from emissions trading systems, to taxes internalising negative externalities (e.g. for carbon dioxide emissions), to subsidies compensating for relative positive externalities (e.g. for renewable energy). Virtue relies on education, understanding and civic commitment. An action that entails major negative consequences for the environment is expected not to be performed, however profitable, if such consequences are understood. Perhaps more realistically, virtue or education is expected to provide a more solid political basis for political movements that pay due regard to environmental protection.