Crunch Issues in Paris

[Dan Bodansky is the Foundation Professor of Law and Faculty Co-Director of the Center for Law and Global Affairs at the Sandra Day O’Connor College of Law at Arizona State University. He is in Paris for the climate change negotiations. This is the third in a series of updates both from the U.S. and from Paris. Professor Bodansky has consulted for the government of Switzerland and the Center for Climate and Energy Solutions (C2ES) in relation to the Paris Summit. However, he is writing in his personal capacity and the views expressed do not necessarily represent those of the Swiss government or C2ES.]

In an earlier post, I expressed cautious optimism that the Paris conference will succeed in adopting a legal agreement that requires countries to formulate and submit emission reduction plans, provides for international transparency and review, and establishes a process for countries to periodically ratchet up their efforts. But although the broad outlines of the agreement have been apparent for several years, a number of important issues remain to be resolved, on which the conference could still founder.

Here’s a brief summary of the “crunch” issues:

• How to reflect the principle of common but differentiated responsibilities and respective capabilities (CBDR-RC)?

The issue of differentiation has been one of the most controversial since the inception of the UN climate change regime, and plays out across all of the different elements of the Paris agreement: mitigation, adaptation, finance, and transparency. It’s clear that the Paris agreement will move away from the rigid differentiation between Annex I and non-Annex I countries found in the Kyoto Protocol, towards a more global approach. But will any vestige of the Annex I/non-Annex I dichotomy remain?

Developed countries mostly argue that the concept of nationally determined contributions (NDCs) implies self-differentiation and that this self-differentiation is sufficient. But many developing countries would like some continuation of the categorical, annex-based approach found in the UNFCCC and the Kyoto Protocol. The 2014 US-China joint announcement added the phrase “in light of different national circumstances” to the principle of CBDR-RC, apparently to give it a more dynamic quality. This formulation was included in the Lima Call for Action (.pdf), and will almost certainly find its way into the Paris Agreement. But a general reference to CBDR-RC will likely not be enough to satisfy developing countries, so expect to see some additional language on differentiation in particular articles, for example, those on mitigation and transparency.

I don’t see the US and other developed countries accepting a reference in the Paris agreement to the UNFCCC annexes, which they view as outmoded, but my guess is that negotiators will find some language to bridge the gap – for example, in the context of mitigation, a principle of progression, which provides that countries that have previously pledged absolute economy-wide targets should continue to do so and that all countries should aim to do so over time. This formulation, in effect, differentiates between Annex I countries (which all pledged absolute, economy wide emissions targets in Copenhagen) and non-Annex I countries, without any explicit reference to the annexes, and thus might be acceptable to both sides.

• Whether to include a long-term decarbonization goal?

In Copenhagen, states agreed to a goal of limiting climate change to no more than 2° C. There is considerable – but not universal – support for supplementing this goal with a long-term decarbonization goal, like that included in the G-8 Leaders Statement last June, to provide a signal to business and investors. Many countries would like to include a decarbonization goal in the Paris agreement itself, but if consensus cannot be reached to do so, a possible fallback would be to include the goal in the Conference of the Parties (COP) decision that adopts the Paris agreement, which would give the goal a slightly lesser political status.

• Whether to include a commitment that parties implement their nationally determined contributions (NDCs)?

A central issue in the negotiations has been what commitments to include with respect to NDCs. There is broad agreement to include procedural commitments – for example, to formulate, submit, and periodically update NDCs. And even countries that seek to make NDCs legally binding seem to accept that the agreement will not commit countries to achieve their NDCs (thus distinguishing the Paris agreement from the Kyoto Protocol). But the European Union and some developing countries wish to include a commitment relating to implementation of NDCs.

A duty to implement, as compared to a duty to achieve, is an obligation of conduct rather than result. But if the Paris agreement contained a straightforward obligation on parties to implement their NDCs, then the difference between the two approaches appears small, since, arguably, the test of whether a state has implemented its NDC is whether it has achieved its NDC. This has led to a search for softer formulations of the commitment to implement: for example, a commitment to adopt measures “aimed” or “intended” to implement a country’s NDC, or a commitment to adopt implementing measures “related to” a country’s NDC. The trick is to find some formulation that allows EU countries to claim that NDCs are not merely voluntary, and the US to say that they are not legally binding. Although, publicly, the EU continues to press its case, in my view there is no way that the EU would be willing to bring down the Paris conference over this issue, so the United States is likely to prevail (unless, of course, some other countries, who are less wedded to success in Paris than the EU, insist on language on implementation that is unacceptable to the US).

• Whether to house NDCs in an annex that is part of the agreement or in a registry to be maintained by the Secretariat?

The legal status of NDCs will be determined by the commitments contained in the Paris agreement, not where they are housed. But some states believe that housing the NDCs in an annex that is an integral part of the Paris agreement would give them greater political status. Conversely, others argue that including the NDCs in an annex would make them more difficult to update, and would at least create the impression that, in ratifying the agreement, states are approving each other’s NDCs. Since the value-added of housing the NDCs in an annex is slight, my guess on this issue is that they will end up being housed in a registry maintained by the secretariat.

• Whether to authorize linkages/market-based approaches?

Market mechanisms such as emissions trading were a central feature of the Kyoto Protocol architecture. Even though the Paris agreement will not establish legally binding emissions targets, it could include language that allows states to implement their NDCs cooperatively, through international transfers of “mitigation outcomes” (i.e., emission reductions). But to ensure that international transfers don’t undermine the environmental integrity of the agreement, the agreement would need to establish a credible mechanism to ensure that emissions reductions aren’t double-counted. Since many countries have included international transfers in their NDCs, I expect the agreement will include some language authorizing the use of transfers to implement NDCs.

• Whether to specify a global vision/goal for adaptation that would serve as a basis for assessing the adequacy of support?

Developing countries have long felt that adaptation has been a poor relation of mitigation in the climate change regime, and would like to include a global goal for adaptation, to parallel the goal likely to be adopted for mitigation, which could be used to assess the adequacy of support for the adaptation efforts of developing countries. Donor countries tend to be wary of such a goal, because they would like greater flexibility in their provision of support for adaptation.

• Whether and how to address the issue of loss and damage?

For some time, African countries, small island states, and other countries particularly vulnerable to the effects of climate change have been pushing the climate change regime to address the issue of “loss and damage” from extreme and slow-onset impacts of climate change. In response, the 2013 Warsaw conference established the Warsaw International Mechanism for Loss and Damage, which addresses loss and damage under rubric of the existing Cancun Adaptation Framework. The Warsaw decision called for the new mechanism to be reviewed in 2016, and developed countries thought that it thereby took the issue of loss and damage off the table for the Paris negotiations. But developing countries have pushed to include a separate article on loss and damage in the Paris agreement. The draft paragraph in the current negotiating text (.pdf) would not do very much substantively, but it would still be significant in making loss and damage a distinct element of the Paris agreement. A likely compromise is to include language on loss and damage in the Paris agreement, but in the adaptation article rather as a separate article.

• Whether to include a post-2020 finance goal that scales up from the $100 billion goal set in Copenhagen?

Together with differentiation, finance is the issue on which the Paris conference is most likely to founder, because there is a huge gap between the expectations of developing countries for significant levels of climate finance, and donor countries, who already feel maxed out.

In the Copenhagen Accord, developed countries committed to a goal of mobilizing $100 billion per year in climate finance by 2020 to address the needs of developing countries. A recent OECD report found that $62 billion in climate finance was mobilized in 2014, up from $52 billion in 2013, although these figures are disputed because of the major methodological questions about what should be counted as climate finance.

In the Paris negotiations, developing countries argue that the principle of “progression,” which many countries support in the context of mitigation, should also apply to climate finance, and that, accordingly, each successive round of climate finance should be progressively more ambitious. Donor countries are, in my view, unlikely to agree. If so, the question is whether developing countries feel that they otherwise benefit enough from the deal to make it worth supporting, even without significant additional finance, or whether they would rather have no deal in Paris and thereby keep the pressure on donor countries to do more.

• What will be the minimum transparency requirements applicable to all parties?

Developing countries have traditionally resisted strong reporting and review requirements. Until now, the climate regime has addressed their concerns through differentiation between the requirements for developed and developing countries. The 2010 Cancun Agreements (.pdf), for example, establish two systems, a system of International Assessment and Review (IAR) for developed countries, and International Consultation and Analysis (ICA) for developing countries.

But, in the Paris negotiations, developed countries have been pressing for strong transparency provisions applicable to all parties. The question is whether the maximum provisions on transparency acceptable to developing countries meet the minimum floor for developed countries, and, relatedly, how to allow for some differentiation in what is expected of different countries, while still ensuring that developing country actions are transparent?

Conclusion

Of these “crunch” issues, I think finance is the most difficult, because, unlike the other issues, it may not be possible to paper over through artful wording – although the use of terms like “should” and “strive” may provide a middle ground. In addition, the negotiating text that emerged from the ADP this weekend (.pdf) still has many other brackets and options. While these generally do not involve significant substantive differences, the procedure for resolving them remains unclear, given the reluctance of countries to engage in real negotiations, in which they seek to work through issues in order to shorten the text. The French Presidency thus has an immense task on its hands, not only to resolve the major issues between the parties, but also to produce a manageable, coherent text with only a week remaining.