The Paris Agreement at COP21 falls well short of the effort required to meet the long-term goal, but it does establish a framework to ratchet up mitigation ambition over time.
After nearly two weeks of negotiation, an historic agreement to combat climate change and unleash actions and investment towards a low carbon, resilient and sustainable future was agreed by 195 nations in Paris late on the evening of Saturday 12 December 2015.
The agreement's main aim is to keep global temperature rise this century well below 2 degrees Celsius and to drive efforts to limit the temperature increase even further to 1.5 degrees Celsius above pre-industrial levels.
Although the decision of the COP acknowledges with concern that the estimated levels of GHGs based on the INDCs submitted by countries to date do not limit emissions sufficiently to achieve that target, the framework of the Agreement provides optimism that the path to achieving it has now been established.
Unlike its predecessor agreement, the Kyoto Protocol, the Paris Agreement applies to all nations, and is enduring in that it sets a long-term objective and then creates mechanisms to help achieve it over time. The agreement imposes legal obligations on signatories to have national determined contributions (NDCs) to the mitigation effort, and to review those NDCs every five years. The agreement has no end date.
Not failure, but low aim the crime: the Coalition of High Ambition
The 1.5 degree Celsius limit had emerged as a key issue shortly prior to the commencement of the conference, and resulted in the establishment of a new grouping of about 80 countries, the Coalition of High Ambition. Comprising primarily developed countries and countries exposed to significant climate change impacts such as small island states, the Coalition was prepared to walk away from the conference rather than support a minimalist or unambitious agreement.
Overview of the Paris Agreement and decision
The decision of the COP which adopts the Paris Agreement under the UNFCCC contains detailed mechanisms for implementation of the Agreement. The Paris Agreement itself is only 12 pages, considerably down from the 50 or so page text at the start of the conference.
- All countries to have an NDC, to be reviewed every five years, which identifies emissions mitigation targets, and the specific process and policies that will be implemented domestically to implement them. NDCs are to reflect a country's highest possible ambition, having regard to that country's circumstances.
- INDCs already submitted in the lead-up to COP21 are taken to be the first NDC, although countries may review and update them provided that it does not result in any weakening of the contribution. Australia proposes to review its post-2020 target in 2017.
- Each new NDC must build on the efforts of the previous one (ie. no backsliding), and is to demonstrate how it is a fair contribution to achieve the Agreement's objective, having regard to that country's circumstances. Some latitude is provided to least developed countries and small island states who can submit NDCs on a discretionary basis.
- The Ad Hoc Working Group on the Paris Agreement (APA) established by the COP, is to develop guidance on common methods and processes for preparing NDCs to ensure transparency and clarity. NDCs and the information contained in them are to be prepared consistent with any approved guidance.
- All NDCs must be submitted in advance for review. This will assist in clarifying methods being used by a country to calculate emissions reductions. Further, under the decision, a facilitative dialogue among parties will be convened in 2018 in the lead-up to the commencement of the Agreement to take stock of collective efforts in the progress to achieving the long-term goal and to inform the preparation of NDCs.
- The Agreement includes a global stocktake starting in 2023 to assess the collective progress towards the goals of the Agreement. The stocktake will be done every five years and the outcome is to inform each party when updating its NDC.
- The Agreement aims to strengthen the ability to deal with the impacts of climate change by requiring all parties to undertake adaptation planning and implement those plans.
- All countries will submit adaptation communications, in which they may detail their adaptation priorities and support needs. These are to be submitted and updated periodically, in conjunction with or as part of an NDC.
- Developing countries will receive increased support for adaptation actions and the adequacy of this support will be regularly assessed.
Loss and damage
- The existing Warsaw International Mechanism on Loss and Damage will be strengthened. The decision formally adopting the Paris Agreement contains an express statement that the provisions of the Agreement dealing with loss and damage do not involve or provide a basis for liability or compensation. Rather, the mechanism's aim is to provide support to those countries that suffer loss and damage from the effects of climate change.
- Action and support can relate to early warning systems, emergency preparedness, risk assessments and development of risk insurance facilities.
- The Agreement includes a robust transparency framework for both action and support. This was of critical importance to developed countries in the EU and the Umbrella Group. The framework will provide clarity on countries' mitigation and adaptation actions, to track progress made in implementing NDCs, as well as the provision of support.
- All information provided and reported under the Agreement is to undergo an independent expert review. The review will assess implementation of NDCs, adequacy of information submitted and consistency with any guideline adopted by the APA. Information by all countries except least developed countries and small island states, is to be submitted on a biennial basis.
- The APA is to develop further recommendations to facilitate improved reporting and transparency over time. A report with its recommendations is due in 2018 with procedures and guidelines established by the review to come into force at the same time as the Paris Agreement.
- Support is to be provided to developing countries to assist in building transparency-related capacity. The decision of the COP includes the establishment of a Capacity-building Initiative for Transparency in order to build institutional and technical capacity in developing countries, both pre and post 2020. A detailed work plan for building capacity is set out in the decision text.
- Developed countries are to provide financial resources to assist developing countries with mitigation and adaptation. Other countries are encouraged to provide financial support voluntarily. While this language is not as strong as some parties wanted, it does leave open the possibility that countries not classified as "developed" can still contribute finance to developing countries.
- Finance provided under the agreement is to represent a progression beyond previous efforts, which means that the existing commitment to US$100bn by 2020 is a floor to the financial commitment post-2020. The decision text includes a requirement for a meeting prior to 2025 to set a new collective quantified goal above US$100bn.
- Developed countries and other countries voluntarily providing financial assistance are to report biennially on projected levels of financial resources to be provided.
- Developed countries are to enhance support for capacity building actions in developing countries. The COP established the Paris Committee on Capacity-building to address gaps and needs, both current and emerging, in implementing capacity-building in developing countries. A detailed work plan for the committee over the period 2016-20 is set out in the decision text, including annual technical reports on its work.
The agreement reached at Paris does not take effect until 2020. However, the COP recognised the urgent need to ramp up mitigation efforts prior to 2020, including under the Kyoto Protocol. To this end, the COP urged all parties to the Kyoto Protocol to ratify and implement the Doha Amendment which would establish a second commitment period from 2013-20, and make a mitigation pledge.
More generally, the COP "urged", "requested" and "encouraged" parties to take action by engaging in a process to identify mitigation and adaptation opportunities. This includes encouraging parties to promote the voluntary cancellation of units issued under the Kyoto Protocol so that these cannot be used to meet pre-2020 targets. This will be a challenge to Australia which proposes to meet its pre-2020 target in part through the use of such credits.
Additionally, the COP decided to define a clear roadmap on ratcheting up climate finance to US$100 billion by 2020 for mitigation and adaptation by developing countries.
Implementation of the Paris Agreement
The Agreement will be open for signing for one year from 22 April 2016, and will enter into force after 55 countries that account for at least 55% of global emissions have deposited their instruments of ratification with the UNFCCC. An international signing ceremony is expected to be convened on 22 April 2016.
Parties are at liberty to voluntarily implement actions under the Agreement prior to its formal commencement.
The Agreement includes a compliance mechanism, overseen by a committee of experts that operates in a non-punitive way.
The Paris Agreement was reached against a backdrop of unprecedented climate action by cities and regions, business and civil society. The significance of this action was reflected in the decision of the COP to formally recognise in the text of its decision the role of these non-state actors, in particular the Lima-Paris Action Agenda, and to strengthen further voluntary efforts
The Lima-Paris Action Agenda has already captured climate actions and pledges covering:
- Over 7,000 cities from over 100 countries with a combined population with one and a quarter billion people and around 32% of global GDP.
- Sub-national states and regions comprising one fifth of total global land area and combined GDP of $12.5 trillion.
- Over 5,000 companies from more than 90 countries that together represent the majority of global market capitalisation and over $38 trillion in revenue.
- Nearly 500 investors with total assets under management of over $25 trillion.
In this sense, the Agreement forged at Paris is likely to provide further incentive for action already being undertaken by business and sub-national jurisdictions, and potentially make the transition to low emission economies that much faster.
The momentum leading up to and at COP21 played a crucial role in delivering an outcome which includes an enduring international agreement by which all countries, except for the most vulnerable, must contribute to the required mitigation ambition according to their circumstances.
Although the Agreement itself and the current mitigation contributions in the form of INDCs from now 188 countries falls well short of the effort required to meet the long-term goal, it does establish a framework to ratchet up mitigation ambition over time. Coupled with robust and transparent reporting obligations, capacity development in those countries that need assistance and adequate finance, there is now hope that we have an agreement which provides an opportunity to avoid dangerous and irreversible climate change.
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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.