Paris Agreement (2015)

On 12 December 2015, after 13 days of intense negotiations, the world’s leaders emerged from the depths of Paris’s basement meeting rooms to triumphantly declare that they had done it.  They had signed “a deal to save the world”!  Francois Hollande puffed out his chest and proclaimed that, “history is here”, while Barack Obama stressed the importance of securing agreement on such an “urgent and potentially irreversible” issue.

But behind all the hyperbole and media fawning, what has the UN Framework Convention on Climate Change actually agreed in the newly adopted Paris Agreement and how effective could it be at curbing climate change?

Well, to properly judge the Paris Agreement, I think we have to start by revisiting its grandfather: the Kyoto Protocol.

Background

(Disclaimer: this is based on my research on climate change negotiations since 2009)  

The Kyoto Protocol was signed in 1997 to limit global greenhouse gas concentrations to a level “that would prevent dangerous anthropogenic interference with the climate system”.  Posturing aside, this meant that the 83 signatories were committing to prevent the world’s atmospheric concentration of greenhouse gases from exceeding 450 parts per million (ppm).  In turn, this boiled down to a commitment by the developed countries to reduce their greenhouse gas emissions by 8% by 2012 and 20% by 2020 (all the figures were calculated using 1990 as the base level).  However, research indicated that 450 ppm would still represent up to a 78% risk of exceeding a 2°C rise in global temperatures – the threshold at which there was a scientific consensus that things would get pretty bad.

Consequently, Kyoto was roundly denounced as a watered-down version of what would be needed to genuinely address the wider threats posed by climate change.  The failure to get the US, China and India to bind themselves to any legally required emissions reduction targets greatly diminished its efficacy.  Infamously, the U.S. and Australia signed Kyoto but never ratified it (meaning, it never became domestic law so the countries’ citizens couldn’t force their governments to keep their international promises).  

Nevertheless, Kyoto must be viewed historically as an essential first step that endorsed the scientific consensus and solidified the sense of collective responsibility that surrounded climate change (lest we forget how large and vocal the climate change sceptics and deniers were).

The reason the history books will record Kyoto as a failure is primarily due to external influences, as the first commitment period, 2008-2012, was derailed by the global financial crisis.  A clear focus on economic recovery led to an almost ubiquitous failure to meet national emissions reduction targets that then dampened the enthusiasm of subsequent efforts and talks.

 

In 2009, the Copenhagen climate summit ended in a deadlock.  In 2010, the Cancun summit could only secure a collection of voluntary pledges.  As the world’s economy was crashing, so were countries’ desires to curtail their emissions (especially if they could gain short-term profit from emissions intensive industries).  In 2011, Canada withdrew its agreement to Kyoto as reports found greenhouse gas emissions were 20% above the 1990 baseline.  Canada’s economy was flagging and the tar sands, an extremely emissions intensive form of energy, represented a tremendously plentiful natural resource that the nation could call upon to boost their economy.  Promises regarding the environment be damned.

Public confidence and commitment to Kyoto took a further nosedive in 2012.  By May 2012, Japan, Russia, Canada and the US had all stated that they did not plan to sign up to the second commitment period (2013-2020).  Attempts were made to resuscitate Kyoto by extending the first commitment period through 2015, and though the move was successful, momentum had seriously waned and a new agreement, reflecting the reality of a greatly changed global economy, was badly needed.

So, what were the issues holding things up?

Originally, the most contentious points had always been around “burden sharing”.  Addressing climate change is primarily about investing in renewable energy and energy efficiency.  But that doesn’t come cheap.  Developed countries had to face two stark realities.  Firstly, developed countries have been responsible for almost all of the greenhouse gas emissions to date.  Secondly, developed countries have a greater ability to pay for climate change mitigation and adaptation efforts.  Consequently, it has consistently been argued by the developing countries that the EU and US should shoulder the vast majority of the financial burden (this became known as the doctrine of “common but differentiated responsibility”). 

This doctrine was largely reflected in Kyoto.  The EU and US accepted their increased responsibility and paid disproportionately more than the likes of China and India. 

However, small movements in proportional responsibility caused disproportionate tension due to the stagnation of the global economy (rather than any vehement ideological disagreement, as had sometimes been reported in the media).  A percentage point here or there meant millions, if not billions, in spending increases, imports or exports.  Given the contractionary fiscal policy that almost every government in the world implemented in 2008, the benevolence required to fix a global problem in a competitive world became alarmingly (but understandably) sparse.

The tide began to turn in 2014 when both developed and developing countries were coming out of economic hibernation. The unlikely allies of the US and China set the stage for more fruitful talks when Presidents Obama and Xi Jinping signed a joint pledge.  The pledge stated that the US would cut greenhouse gas emissions by 26-28% below 2005 levels by 2025, and China would increase its non-fossil fuel share of all energy to around 20% by 2030.  Given that these heavyweights had shaken hands before getting in the ring, the Paris talks appeared much more optimistic.

Consequently, when talks began in Paris on 30 November 2015, debate had moved away from the issue of who should pay and onto the issues of how to pay and how to verify that countries were using the funds properly.

Momentum had well and truly shifted once the “High Ambition Coalition” was formed.  Consisting of the EU, the US, Canada, Brazil and the vast majority of island nations (who stand to suffer the worst effects of climate change), the High Ambition Coalition pushed for reform on four key issues.  They wanted the Paris Agreement to:

1.     be legally binding,

2.     set a clear, long-term goal on climate change that is in line with scientific advice,

3.     introduce a mechanism for reviewing countries’ emissions commitments every five years, and

4.     create a unified system for tracking countries’ progress on meeting their carbon goals.

Nonetheless, India and China still represented formidable opposition as they, justifiably, banded together to resist any overly burdensome restraints on the economic expansion of developing countries.

The Paris Agreement

So with that bit of rough and ready context, I want to take a look at some of the more important articles in the Agreement to consider where the balance was struck and whether we’re approaching a fair, effective and enforceable global plan that can combat climate change.

Article 2 – The Overall Target

Article 2 reflects the entire Agreement in a microcosm.  Article 2 is a marked improvement in ambition and understanding, as compared to its Kyoto predecessor, but is also a sad indictment of how progress has floundered in the last decade. 

The new wording states that the Agreement aims to strengthen the global response to the threat of climate change by:

“holding the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels…in a manner that does not threaten food production”.

Firstly, we can immediately see that there is a clear emphasis on the temperature here, where the Kyoto wording used a more vague reference to “dangerous anthropogenic interference with the climate system” and concentrations of greenhouse gases in the atmosphere.  Limiting the atmospheric concentrations of greenhouse gases does address the problem, but it is a prescriptive method to drafting (theoretically, the atmospheric concentration of greenhouse gases could be very high and the temperature needn’t rise, e.g. spraying the atmosphere with sulphur could reflect the sun’s heat and cool the planet).   However, by referencing temperature, the drafting links more directly to the desired outcome.  Consequently, the Agreement is clearer, the application is wider and its message is much more resonant and easy to communicate.

Secondly, the pursuit of 1.5°C is a drafting achievement to be celebrated.  Few spectators thought such an ambitious target would be included.  Its inclusion reflects a global consensus about the severity of the problem and a foothold for future talks. 

However, you don’t need to be a legal scholar to see that it is the 2°C target that will be legally enforceable, while the 1.5°C target is merely aspirational and therefore holds no real value beyond window-dressing and political point-scoring. 

Consequently, we’ve moved from a “2°C” benchmark to a “well below 2°C” benchmark.  Another step in the right direction, but such ambiguous language provides next to no ability to enforce the increased ambition.  The world is already 1°C warmer than pre-Industrial levels and limiting climate change to “well below” 2°C will require that global carbon-dioxide emissions peak well before 2030.  That would represent a rate of “decarbonisation” (a word not found in the Agreement, thanks to the sensitivities of Saudi Arabia) far greater than the world has yet seen. 2°C remains the high water mark that signals catastrophic consequences: billions in mitigation and millions in refugees.

Thirdly, the addition of the “food production” caveat is a sensible addition.  In the early 2000s the US began repurposing corn in order to produce ethanol / biofuel (which has slightly lower emissions than regular petroleum gasoline).  The problem being that producing ethanol takes disproportionately large amounts of corn and the US produces approximately 40% of the world’s corn.  Consequently, the global supply of corn as a food source (for both humans and livestock) plummeted, prices soared and the world’s poorest and hungriest people were unable to afford this very basic ingredient.  The Agreement now guards against such cannibalistic approaches.  Climate change initiatives are redundant if they lead to hunger or deprivation.

Lastly, Article 2 restates the irrefutable (but hopefully not permanent) position between developed and developing countries’ responsibilities:

“The Agreement will be implemented to reflect equity and the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.”

Article 4 – Target Setting

Article 4 contains the meat of the actual plan.  How are we to reach the Article 2 objective?

“Parties aim to reach global peaking of greenhouse gas emissions as soon as possible, recognising that peaking will take longer for developing country Parties…so as to achieve a balance between anthropogenic emissions by sources and removals by sinks…in the second half of this century.”

This is a stark contrast to Kyoto.  At first glance, I thought this article was disappointingly full of loose language and escapable commitments.  However, the more I consider it, the more I believe it to be a wise reaction to how Kyoto played out, and a continued recognition of humanitarian objectives in the developing world.

Firstly, in comparison to Kyoto, target setting has moved from being a centralised process to being decentralised.  Where Kyoto mandated static targets for each country, Paris essentially takes a very ‘hands off’ approach, in which each country sets its own targets, with almost absolute discretion, in accordance with its own unique set of circumstances.

Whether this is overly optimistic and naïve or necessarily non-prescriptive is an important question.  In my opinion, this is a necessary reaction to the global financial crisis and Kyoto fallout.  Climate change agendas cannot be imposed from the top down.  Economies and governments need flexibility.  We saw that the rigidity of the internationally set Kyoto emissions reduction targets simply meant that, whenever things got difficult, parties just jumped ship.  Consequently, what we have now is a much looser framework, but a much clearer vision.

Secondly, developing countries should be afforded greater leniency in terms of emissions.  In a perfect world we could demand that no more dirty infrastructure be built.  In developed countries we see the lack of energy infrastructure as the perfect environment for a clean energy infrastructure.  The reality is that the developing world has billions of people living in poverty.  An overly prescriptive approach would fail to respect the suffering of those in need right here, right now.  The developed world improved living standards using fossil fuels, to deny the developing world the same opportunity would be hypocritical. 

So what is it that each country must do?

Each country must:

• set national targets regarding absolute emissions reductions, financial contributions and mitigation efforts;
• monitor and report on the achievement of those targets in line with the new rules regarding transparency and accounting; and
• meet at least every five years to revise the targets upwards.

Article 9 – Finance

“Developed countries Parties shall provide financial resources to assist developing country Parties with respect to both mitigation and adaptation in continuation with their existing obligations…Other Parties are encouraged to provide or continue such support voluntarily.”

In practice, this requires $100 billion per year to flow from developed countries to developing countries by 2020, with the sum to be revisited in 2025.   This is amounts to maintenance of the status quo, which is disappointing.  However, unlike Kyoto, this is a minimum amount, building in flexibility for greater contributions as economic conditions improve.

Unfortunately there is still blind treatment of rich but still developing countries such as Bahrain, Qatar, Saudi Arabia, Singapore and South Korea, etc.  To enforce identical financial obligations on all developing economies is as patently ludicrous as saying that sub-Saharan Africa is the same as China.  I recognise that politically it was always going to be tough to get those nations to sign up to more binding financial commitments, but this represents a failure to secure commitment from some of the world’s leading emerging economies. 

Article 14 – Stocktaking

If Paris is to be a long-term success, article 14 contains the vital mechanism to ensure collective vigilance.  Article 14 mandates that all countries must come together to perform a “global stocktake” every five years, in which, the signatories will assess the overall progress towards achieving the purpose of the Agreement and its long-term goals.  The first such global stocktake will be in 2023.

However, these stocktakes will not be merely procedural matters, India has already spoken out about its fears that the concession that developed countries will be allowed to peak their greenhouse gas emissions sooner than developing countries, implies that developed countries will be allowed to grab a disproportionate amount of the global carbon space at the first stocktake, thus inhibiting economic development via fossil fuel means.  Consequently, the process is threatening to become extremely politicised.  Rumours persist that India will make a unilateral declaration of its requirements for carbon space prior to the first meeting, threatening the legitimacy of a global carbon budget before its even begun.

Article [x] - Liability and Compensation

One thing that was explicitly excluded from the Agreement, was the issue of compensation for countries adversely effected by climate change.  The small Island Nations pushed hard but ultimately failed to include a deal in which historical emitters would be liable for future compensation claims (e.g. for destruction of property, loss of profits, etc.) where climate change could be proven to be the primary cause.

As wholesome as this would have been for the Island Nations that are rightly terrified about what climate change may do their economies and people, this was always going to be a huge stretch.  The historical emitters have already accepted the lion’s share of paying for the mitigation effort.  Setting a precedent that these countries would be liable to pay compensation claims for damage caused by climate change, would be tantamount to writing a blank cheque.  Article 9 goes some way towards covering the expenses that Island Nations will face; time will tell if that amount is sufficient, however, damages may very well equate to double compensation.  Furthermore, the Agreement contains several carve outs for the Island Nations that reduce their obligations and liabilities.

Conclusion

I think by now you’re sensing that I’ve seen a lot of good and a fair amount of bad in the Paris Agreement.  Consequently, I’ll summarise by laying it out my personal views:

Wins:

• 196 countries have agreed to this draft deal.  While the deal is not to be signed until 22 April 2016, this represents more than 100 new signatories as compared to Kyoto.  Importantly, it has re-engaged the world’s large defectors: the US, Canada, Australia, Russia, China and India.
• The drafting has improved and expresses a clearer vision of how to combat climate change and the urgency with which it must be done.
• A clear response to Kyoto’s failures.  By empowering countries to set and monitor their own targets, the Agreement is a lot more flexible, which should improve commitment.

Losses:

• With increased flexibility comes limited legal enforceability.  Consequently, the deal hinges greatly on trust between nations.
• A failure to secure financial obligations from the rich developing countries.
• Countries can still walk away if it gets too difficult, as Article 28 allows for countries to withdraw three years after signing.

I wrote my law school thesis on whether the Kyoto Protocol provided an adequate basis from which modern economies could begin to transition to a low-carbon economy.  I wasn’t satisfied then and I’m not satisfied now.  However, the Paris Agreement represents a tremendous step forward from the Kyoto Protocol.  The reality is that economic compromises must be made in order to address climate change.  In an über-competitive world that will always be an exercise in brinksmanship, pushed by those with the strongest economies, the greatest domestic political will or those in danger of suffering from the worst consequences; and dragged by those whose economies need fossil fuels or whose political climate does not afford long term planning.  Consequently, I am pleased that the Agreement reflects that the climate change agenda exists within a multifaceted political and economic world but also that we must watch each other in order to make the necessary changes.

What we’ve ended up with is an agreement that has rightly or wrongly devolved the power of the UN and trusted that, given that right economic and political conditions, every country will find it in their own self-interest to move to a low-carbon economy.  I believe that is sound reasoning.  Whether that reasoning will become reality before we hit 2°C, is a gamble the world’s leaders have just bet the house on.