The Paris Climate Change Agreement: Overview

Introduction

The climate change agreement reached in Paris on 12 December 2015 (the “Agreement”) was a significant political and diplomatic achievement by 195 countries. The Agreement’s overall objective is (and this may become a famous if not notorious sentence) “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….”.

Of course its success or failure will determine if the Agreement is interpreted subsequently as a positive historic landmark, and thus the focus turns to implementation of the Agreement. The Agreement takes legal effect once 55 parties who collectively account for approximately 55 per cent of global greenhouse gas (“GHG”) emissions confirm their agreement by depositing their instruments of ratification, accession or acceptance with the UN Secretary General. The period during which parties may deposit their instruments of ratification lasts for one year from 22 April 2016. It is anticipated that many countries will do this at a signing ceremony in April 2016.

Below we set out a few brief comments on various aspects of the Agreement. This will be followed by more in-depth articles on the subject areas.

INDCs

The mechanism to deliver GHG emissions reductions under the Agreement is based on “intended nationally determined contributions” or “INDCs” which are to be made publically available. An INDC is akin to a pledge by a state, or a grouping of states (e.g. the European Union) to curb GHG emissions in the way outlined. For instance, see this example from the EU headline pledge. The success of the Agreement will of course be based on how ambitious those INDCs are. By the start of the twenty-first session of the Conference of the Parties (“COP21”), 160 submissions had been made to the United Nations, representing 188 countries (including the EU on behalf of its member states) .

INDCs are subject to mandatory periodic review. Every five years from 2020 the INDCs are to be reviewed and these are to “represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition” (i.e. an upwards review). The INDCs can be adjusted at any other time albeit the Agreement appears to envisage that any such adjustment must only be an enhancement of ambition and not a watering down of such ambition.

Mitigation and adaptation

Mitigation and adaptation relates to the reduction of GHG emissions and adaptation to the effects of climate change. Parties are aiming to reach global peaking of GHG emissions as soon as possible, and parties shall pursue domestic mitigation measures to ensure that the overall increase in global average temperatures stays well below 2°C above pre-industrialised levels. Developed countries are required to maintain “economy-wide absolute emissions targets” and developing countries are required to move, over time, to a similar emissions target framework. Parties are required to engage in efforts to progress adaptation initiatives sustainably. Interestingly the Agreement does not contain any sectoral references to how this may or may not be done, except that it makes express reference to the importance of food production. Adaptation and mitigation measures are not to threaten food production (and otherwise there are express reference to protection or enhancement of forests).

Loss and damage

States will cooperate to provide support (without liability to compensate) for loss and damage caused by climate change. Parties are required to enhance activity in areas of research and development on loss and damage mitigation, for instance early warning systems, emergency preparedness, risk assessment, and others.

Finance

Developed parties are to provide financial support for climate change initiatives (currently this is in the region of USD 100bn) to developing countries.

Technology development

The development and deployment of technology to address climate change and reduce GHG emissions is recognised as a key aspect in the effort to keep a rise in global temperature to below 2 degrees Celsius. Countries are also encouraged to cooperate in their efforts with technology development and transfer. The financing to be provided under the Agreement is intended to further facilitate access to technology for developing countries.

Capacity building

Countries are to drive their own capacity building agendas, however developed countries are to also “enhance support” for capacity building activities in developing country parties. Progress should be regularly communicated and made publically available.

Transparency of Action and Support

In order to build trust and confidence in the process and, to be frank, to allow country to country peer pressure to be applicable and for the compliance measures to be more effective, significant transparency measures are built into the Agreement including regular disclosures by parties. Parties are required to disclose information relating to, for instance, current national emissions, and information required to assess progress towards fulfilment of INDCs.

Global stocktake

This is another periodic review built into the Agreement. It is a periodic check on the implementation of the Agreement. The first global stocktake will take place in 2023, and every five years thereafter. Period reviews are reasonably common in recent EU energy and environment legislation, and such reviews have resulted in significant legislative changes where the original legislation was seen to be failing to meet its objective(s).

Compliance

The Agreement does not provide for a punitive based compliance regime. In real terms the Agreement would likely have floundered or at least been much less ambitious if a sanctions based regime was to be included. Instead an expert based committee is to be the mechanism by which implementation and compliance with the Agreement is to be overseen and this is to be in a facilitative, transparent, non-adversarial and non-punitive manner.

COMMENT

The world has moved from discussion about what it should agree to do, to implementation of what it has or is pledging to do. The scale of the challenge that lies ahead cannot be understated but at least now there is a global legal framework. Indeed COP21 in Paris brought about more than a legal framework. More than 4,000 companies, cities, regions and investors have made voluntary commitments to reduce emissions. The challenge to implement the Paris Agreement impacts both directly and indirectly upon all sectors to various degrees (and most significantly on the energy sector). In subsequent articles we will be visiting the implications for such sectors.