Implementing the Paris Agreement: Achievements and Constraints

China International Studies (English) - - Contents - Wang Ruibin

The Paris Agreement reflects a basic international consensus on climate change. Its implementation will reform international climate cooperation in a profound way, and also provide an important window for China to showcase its global governance concepts.

The Paris Climate Change Conference at the end of 2015 witnessed the adoption of the historic Paris Agreement, in which the parties aim to hold the increase in the global average temperature to well below 2 above pre-industrial levels by 2100.1 As the Agreement entered into force on November 4, 2016, a new era of implementation and action has been ushered in.2 Looking back on the breakthroughs in the climate change field, and the challenges facing the international community over the past year since the Paris Agreement was adopted, is therefore of practical significance for objectively evaluating where the Agreement stands in global climate governance and how that governance is likely to develop in the future.

An Era of Implementation

The major parties of the Paris Agreement, through continuous actions, have facilitated the signing, ratification and entry into force of the Agreement in less than one year. Far beyond expectations, the achievement is a manifestation of the international community’s strong will to combat climate change and promote early implementation of the Agreement.3

Accelerating the process of signing and ratification

As respectively the largest and the second largest economies in the world, the United States and China have collective greenhouse gas (GHG) emissions that account for 40% of the global total. The two countries have played a leading role in securing the Paris Agreement. In the third Chinaus Joint Presidential Statement on Climate Change in March 2016, China and the United States announced that they would “sign the Paris Agreement … and take their respective domestic steps in order to join the Agreement as early as possible,” “encourage other Parties to the United Nations Framework Convention on Climate Change to do the same, with a view to bringing the Paris Agreement into force as early as possible,” and “express their commitment to work together and with others to promote the full implementation of the Paris Agreement to win the fight against the climate threat.”4 The proactive attitude of the two countries has encouraged other parties to take concrete actions. On April 22, 2016, the Agreement was opened for signatures at UN Headquarters, and the first day witnessed the signatures of 175 nations, setting a new record for the number of countries signing an agreement on the opening day. On September 3, 2016, both China and the United States, on the eve of the G20 Hangzhou Summit, announced the ratification of the Paris Agreement and submitted formal agreement documents to the UN Secretarygeneral, which effectively pushed forward the process of ratification by other parties. On September 21, an additional major step was made toward entry into force as 31 nations including Brazil, Argentina and Mexico joined the Agreement. With India, the third largest carbon emitter in the world, ratifying the Agreement on October 2, the parties that ratified the Paris Agreement account for almost 52% of the global total, which strengthened the momentum for it taking early effect. When the European Union submitted its instrument of ratification to the United Nations on October 5, the threshold

of 55 countries representing at least 55% of global emissions formally joining the Agreement was finally achieved. As of mid-february 2017, 131 parties have ratified the Paris Agreement.

Adjusting climate policy to meet the Paris Agreement’s target

Meeting the sustainable development target of the Agreement is based on the parties’ Intended Nationally Determined Contributions (INDC). Major parties including China, the United States and the European Union have integrated their respective climate, energy and environment policies to fulfill the emissions reduction promises in their plans.

China published its GHG control work plan for the 13th Five-year Plan (2016-20) in November 2016, setting the target to reduce carbon intensity by 18% compared to 2015 level and peak CO2 emissions around 2030, with

the intention to try to peak early.5 China launched the cooperative project of “10-100-100” to combat climate change with other developing countries, namely 10 low-carbon pilot zones, 100 projects on mitigating and adapting to climate change, and 1,000 quotas for climate change training. China is also considering integrating South-south cooperation on combating climate change into the Belt and Road Initiative. In addition, China is now basically ready to roll out a national carbon market, which is expected to start in 2017.

For the United States, while it was difficult for President Barack Obama to make new accomplishments on climate change and energy in the last year of his administration, he spared no efforts to rescue the Clean Power Plan that had been suspended by the Supreme Court in early 2016. The Clean Power Act sets flexible and achievable standards to reduce CO2 emissions by 32% from 2005 levels by 2030.6 In December the same year, President Obama signed an executive order that permanently banned oil and gas exploitation activities in the Arctic and Atlantic waters claimed by the United States.

The European Union presented its “Clean Energy for All Europeans” proposals in December 2016. This new energy development plan aims to accelerate the European Union’s transition to clean energy, with three targets: first, putting energy efficiency first, and reducing total energy consumption by 30% by 2030; second, achieving global leadership in renewable energies, and elevating the share of renewable energy consumed in the European Union to 27% and the share of power supply from renewable energy to 50% by 2030; third, providing a fair deal for consumers.7

In India, a draft of the National Electricity Plan for the next ten years was released in December 2016. The draft plan halts the construction of new coal-fired power plants, and sets the target that the share of power supply from non-fossil energy reach 57% by 2027,8 a 42% increase and three years earlier

compared to the claim in its Intended Nationally Determined Contribution.

Initiating international negotiations for implementation

The Bonn Climate Change Conference in May 2016 negotiated the implementation of the Paris Agreement and embarked on designing the rule book for tackling climate change in the future, to ensure a fair, transparent and balanced implementation of the Agreement. The central issue of the Marrakech Climate Change Conference held in November 2016, the first since the Paris Agreement came into effect, was thus to establish an effective mechanism to implement the Agreement. The Marrakech Action Proclamation was passed at the conference, underscoring the irreversibility of the momentum on climate change action worldwide, it called for further climate action and support well in advance of 2020, and affirmed political commitment for its full implementation. The parties agreed to complete the operating rule book for the Paris Agreement by 2018.9 The G20, APEC and other platforms outside the UN framework have also listed the implementation of the Agreement as an issue to discuss.

Constraints of Implementing the Agreement

The Paris Agreement’s entry into force is only the starting point for renewed global climate cooperation. Implementation of the Agreement will be a core issue for the parties in the future. Whether the constraints, both internal and external, can be overcome will directly impinge on the prospects of global climate governance.

Weak binding force

The stability of international climate cooperation is directly affected by whether the parties respect and are committed to maintaining the legal status of the Agreement. According to Article 26 of the Vienna Convention on the

Law of Treaties, “Every treaty in force is binding upon the Parties to it and must be performed by them in good faith.”10 As a formal international treaty signed under the UN framework, the Paris Agreement should generally have strong binding force and should be fully complied with by the signatories. Looking at the provisions of the Paris Agreement, however, some legal responsibilities of the parties remain to be clarified, and implementation mechanisms are inadequate even when the obligations are explicitly stipulated.

First, the Paris Agreement weakens the legal responsibilities of the signatories. Take the target of emissions reduction for example. The Paris Agreement abandons the practice of the Kyoto Protocol to set specific emission reduction goals for Annex I Parties; instead, targeting the control of temperature rise, the Agreement presents a generalized roadmap for the signatories, which says “holding the increase in the global average temperature to well below 2 above pre-industrial levels, and pursuing efforts to limit the temperature increase to 1.5 °C above pre-industrial levels.” To meet the target, the legal responsibility of the parties is reduced to “reaching global peaking of greenhouse gas emissions as soon as possible.”11

Second, the Paris Agreement highlights the collective responsibility of the parties. On one hand, it says “reflecting equity and the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances;” on the other, it states that “developed country Parties should continue taking the lead by undertaking economywide absolute emission reduction targets,” and that “developing country Parties should continue enhancing their mitigation efforts encouraged to move over time towards economy-wide emission reduction or limitation targets in the light of different national circumstances.”12 While the principle of common but differentiated responsibilities is retained, the practice in the Kyoto Protocol to assign specific reduction goals to developed countries has been abandoned,

requiring developing countries to share the burden.

Third, the Paris Agreement emphasizes the moral obligation of the parties. The Agreement provides that “Parties shall take into consideration in the implementation of this Agreement the concerns of Parties with economies most affected by the impacts of response measures, particularly developing country Parties,”13 which only urges the developed countries to consider the concerns of developing countries. In particular, regarding the financial and technical assistance the developed countries provide developing nations, the Agreement stipulates that “developed country Parties shall provide financial resources to assist developing country Parties with respect to both mitigation and adaptation in continuation of their existing obligations under the Convention,”14 which only reiterates the developed countries’ moral obligation without making any substantial breakthrough in the critical issue of climate funds.

Fourth, the Paris Agreement does not have a compliance mechanism. Consensus was not reached at the Paris Conference on establishing an effective Measurement, Reporting and Verification (MRV) system. The Agreement provides that “a mechanism to facilitate implementation of and promote compliance with the provisions of this Agreement is hereby established,” and “the mechanism … shall consist of a committee that shall be expert-based and facilitative in nature and function in a manner that is transparent, nonadversarial and non-punitive. The committee shall pay particular attention to the respective national capabilities and circumstances of Parties.”15 These provisions have determined that the mechanism will play no more than a consulting role, and it will be particularly limited in supervisory and disciplinary functions.

Therefore, besides the “procedural” legal responsibilities of the parties, such as updating their respective Intended Nationally Determined Contributions, exchanging information on the progress they make in reducing

their emissions, and adopting a generally accepted calculating standard, the Paris Agreement does not have adequate binding force on the parties’ future relevant policies and actions. Whether the promises will be fulfilled mostly depends on the parties’ political and moral considerations on matters such as their international image.

Complicated global economic and political situations

First, the weak recovery of the global economy has delayed the process of low-carbon transition. Since the 2008 global financial crisis, the recovery of the global economy has been sluggish, with developed industrialized nations losing recovery momentum and emerging countries remaining vulnerable to systematic risks. The World Bank’s Global Economic Prospects report projected a 2.4% expansion of the world economy in 2016.16 Relative to its 2012 forecasts, the International Monetary Fund (IMF) has reduced its forecasts for the United States’ GDP in 2020 by 6%, for Europe by 3%, for China by 14%, for emerging markets by 10% and for the world as a whole by 6%.17 Since the beginning of 2016, the economies of the United States, the United Kingdom, Japan and the eurozone have performed well, but there are still signs of long-term weakness. Generally, the growth of developed economies could at least be approaching the global trend, but other major economies have missed the target, with China’s current growth rate lower, and Brazil, Russia and the Latin American region caught in severe economic downturn. The Organization for Economic Cooperation and Development (OECD) pointed out that the global economy for the last five years has been in a low-growth trap, with growth disappointingly low and stuck at around 3%.18

Added to the world economic complexity are the fatigued global trade, the rise of protectionism, the underperformance of the bulk commodities market and the volatility of the financial market. The risk of a second downturn is on the rise, and thus the commitment of the parties to implementing the Paris Agreement is restrained.

Second, the rise of anti-globalization sentiment may dilute the parties’ motivation to implement the Agreement. Climate change is a global issue that needs a solution through multi-level coordination among governments, enterprises and non-governmental organizations. However, from the perspective of global trade, the process of globalization has been stagnant, if not regressing, since the financial crisis. On the contrary, the anti-globalization movement has become more evident, impacting the global order both politically and economically. The year 2016 witnessed the UK’S referendum result in favor of it leaving the European Union, Donald Trump’s victory in the US presidential election, Republican control of both chambers of the US Congress, the Trans-pacific Partnership and the Transatlantic Trade and Investment Partnership encountering roadblocks, and the rise of European populist forces. All these indicate a growing inclination to protectionism and isolationism. Additionally, the enduring geo-political conflicts in Central and Eastern Europe, the Middle East and the Asia-pacific, and the “three forces” of terrorism, extremism and separatism are posing threats to globalization that was characterized by the facilitation of transnational trade cooperation.

While the process of globalization will not be easily reversed, the current situation is not a conducive environment for the implementation of the Paris Agreement. It is urgently necessary that the parties coordinate their policies and attach importance to the roles of the UN, the G20 and other multilateral governance frameworks, to avoid the negative influences of protectionism and isolationism on their climate, energy and environmental policies and push for fulfillment of the promises enshrined in their Intended Nationally Determined Contributions.

Third, the climate policy of the United States is likely to reverse. The United States ranks first in the world in both historically aggregate greenhouse

gas emissions and emissions per capita. According to statistics, the carbon emissions of the United States reached 5.262 billion tons in 2015, accounting for more than 16% of the global total, ranking second in the world.19 For a long time, the United States has played a critical role in UN climate negotiations. The Obama administration responded actively to the climate change issue, becoming a driving force for reaching the Agreement along with China and the European Union. However, with Donald Trump, who holds a skeptical view toward the issue, inaugurated as the new US President and the Republican Party controlling both chambers of the Congress, there is the possibility that the United States through legislation will withdraw from the Paris Agreement. In fact, the Paris Agreement does not impose any additional compulsory obligations on the United States, and a high-profile withdrawal from the Paris Agreement would damage the image of the United States and render it isolated from the international negotiating process without bringing it any substantial benefits. Therefore, the Trump administration might strategically set the Paris Agreement aside and perfunctorily deal with it. As with the Intended Nationally Determined Contributions, the reduction target set by the United States is not legally binding, and the practice of circumventing congressional procedures to set a quantitative goal for the federal government has been challenged by the legislative body. The Trump administration’s efforts to repeal the plan would be unlikely to encounter much resistance.

Political and Economic Significance of the Agreement

The Paris Agreement reflects a basic consensus of the international community on climate change, and will have profound influences on the climate, energy and environmental policies of each country. The political and economic significance of the Agreement will not be devalued despite the abovementioned constraints.

New pattern of emission reduction cooperation

The Kyoto Protocol reached in 1997 established the Kyoto Model of international cooperation on the reduction of greenhouse gas emissions. In the first commitment period from 2008 to 2012, the Annex I Parties committed themselves to mandatory reduction targets, while the developing countries are not subject to emission reduction commitments. Among others, the model is characterized by 1) a top-down approach. The Annex I Parties’ respective commitments are discussed, determined, and assigned from the top; 2) partial participation. Only some developed countries, namely the Annex I Parties, are subject to meeting specific emission reduction targets by a promised timetable; and 3) the separation of international commitments and domestic actions. Both Annex I Parties and other signatories are not obliged to link their reduction goals announced on international occasions with their domestic policies and actions to mitigate and adapt to climate change. As the Bali Road Map was passed in the Bali Climate Change Conference held in December 2007, the international climate negotiations entered the post-kyoto era, when the parties would start to discuss the targets for reducing emissions in the second commitment period (2012-2020), continue to implement the timetable and quantitative goals of Annex I Parties, and seek to integrate developing countries into the Kyoto Model.

However, the 2009 Copenhagen Climate Change Conference and the non-legally binding Copenhagen Accord reached there announced the Kyoto Model was dysfunction. The Durban Conference in 2011 extended the Kyoto Protocol for another five years, and decided to establish the Ad Hoc Working Group on the Durban Platform for Enhanced Action, whose mandate is to develop a protocol, another legal instrument or an agreed outcome with legal force and build up a post-2020 international reduction mechanism for greenhouse gas emissions. With the Paris Agreement finally adopted at the end of 2015, a new pattern of global climate cooperation is taking shape.

First, the combination of bottom-up and top-down approaches. On one hand, based on their respective domestic circumstances and socio-economic

development strategies, the parties communicate to the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat their Intended Nationally Determined Contributions in a bottom-up manner. On the other, the Paris Agreement prescribes the parties’ responsibilities and obligations in a top-down way. “As nationally determined contributions to the global response to climate change, all Parties are to undertake and communicate ambitious efforts … with the view to achieving the purpose of this Agreement as set out in Article 2. The efforts of all Parties will represent a progression over time, while recognizing the need to support developing country Parties for the effective implementation of this Agreement.”20 “Each Party shall communicate a nationally determined contribution every five years in accordance with decision 1/CP.21 and any relevant decisions of the Conference of the Parties … and be informed by the outcomes of the global stocktake referred to in Article 14.”21

Second, common participation. Even before the Paris Conference was convened, 187 countries had communicated their Intended Nationally Determined Contributions, representing 97% of the total global greenhouse gas emissions. The participation of parties in taking climate actions has reached a record high level. The 19 paragraphs in Article 4 of the Paris Agreement provide the responsibilities and obligations in implementing Intended Nationally Determined Contributions. Based on the principle of “respective capabilities,” Article 4 covers developed, developing, and least developed countries, as well as small island countries, emphasizing the principle of “common but differentiated responsibilities” set out in the UN Framework Convention on Climate Change on the premise of common participation. Particularly, Paragraph 7 of the Article says that “mitigation co-benefits resulting from Parties’ adaptation actions and/or economic diversification plans can contribute to mitigation outcomes under this Article.”22

Third, interconnectivity between international commitments and

domestic policies and actions. The Intended Nationally Determined Contributions are based on the parties’ respective energy consumption, greenhouse gas emissions and economic strategies. Though not mandatory, it has become an indispensable part of and also under the guidance of the Agreement. For example, Paragraph 11 of Article 4 provides that “a Party may at any time adjust its existing nationally determined contribution with a view to enhancing its level of ambition, in accordance with guidance adopted by the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement.” And Paragraph 14 states that “in the context of their nationally determined contributions, when recognizing and implementing mitigation actions with respect to anthropogenic emissions and removals, Parties should take into account, as appropriate, existing methods and guidance under the Convention.”23

To sum up, the Paris Agreement upholds the United Nations as the sole legitimate platform for international climate negotiations, and makes arrangements for the global response to climate change after the second commitment period of the Kyoto Protocol expires in 2020. The intention of some countries to replace the United Nations with other bilateral and regional cooperation is thus defeated. The principle of common but differentiated responsibilities established by the UN Framework Convention on Climate Change is maintained, while the principle of respective capabilities has been set up with the change in the international environment. Through the Paris Agreement, a global cooperation pattern for emission reduction has formed based on the Intended Nationally Determined Contributions communicated by the parties in a bottom-up manner.

Reshaping global economic architecture

International climate negotiations, by exercising the leverage of greenhouse gas emissions, are able to intervene in the energy consumption structure of countries and adjust the relationship among different sectors of

the national economy, which will directly determine the future competitiveness of countries. The Paris Agreement reaffirms the inherent relevance between tackling climate change and economic development, and the necessity to keep a balance between the two. Based on the Intended Nationally Determined Contributions communicated by the parties and targeting temperature rise control in the long term, the Paris Agreement encourages policymakers, enterprises and investors to adjust their flow of investment, accelerate the development of a low-carbon economy, and integrate the industrial value chain. Products, technologies and services related to clean energy and increasing energy efficiency are facing unprecedented opportunities.

The Paris Agreement draws up a timeframe and roadmap for international cooperation, and provides a relatively long-term and stable policy expectation. The Agreement, along with the decisions made at the Paris Conference, maps out a timeframe that expands over at least 30 years to the latter half of the century, and thus creates necessary conditions for sustainable capital input into the clean energy field. In order to achieve the long-term temperature goal, “Parties aim to reach global peaking of greenhouse gas emissions as soon as possible,” and “undertake rapid reductions thereafter in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century, on the basis of equity, and in the context of sustainable development and efforts to eradicate poverty.”24 That is to say, the ultimate goal of global cooperation on is zero greenhouse gas emissions. Given this, the Intended Nationally Determined Contributions shall be communicated or updated every five years, and the level of ambition gradually enhanced. The parties shall be informed “in updating and enhancing, in a nationally determined manner, their actions and support in accordance with the relevant provisions of this Agreement, as well as in enhancing international cooperation for climate action.”25 Among the 189 nations that have communicated their Intended Nationally Determined Contributions,

147 have plans to develop renewable energy, 167 have plans to enhance energy efficiency, and many are adjusting their subsidy policies for fossil energy.26 India is setting a new target to increase its share of non-fossil-based power capacity from 30% today to about 40% by 2030.27 China, the European Union and Brazil are also considering elevating the percentage to 20~33%. In recent years, the global renewable energy market has been rapidly expanding, and investment continuously increasing. According to the most recent statistics, while the global investment in fossil energy has shrunk to $150 billion, the capital input into renewable energy has reached a record high of $285.9 billion. From 2004 to 2015, the aggregate investment in this field has topped $2.3 trillion. In particular, developing countries have witnessed a surge of investment in renewable energy, which reached $156 billion in 2015 and for the first time surpassed the developed countries. Among others, China, India, South Africa and Mexico are taking the lead, with their investment in the year reaching $102.9 billion, $10.2 billion, $4.5 billion and $4 billion respectively.28 The International Energy Agency estimated, by summarizing all Intended Nationally Determined Contributions, that the full implementation of climate pledges will require the energy sector to invest $13.5 trillion in energy efficiency and low-carbon technologies from 2015 to 2030, representing almost 40% of the total energy sector investment.29 Opportunities abound in sectors such as architecture, transportation and manufacturing, where the prospects of low-carbon technologies are bright.

The Paris Agreement continues to encourage emission reductions by adopting and improving market-oriented leverages. Approximately 90 countries have indicated in their Intended Nationally Determined

Contributions the intention to establish and develop a carbon market or to levy a carbon tax, with the purpose of promoting a low-carbon economy. Over the past decade, many nations have been trying market-oriented means to reduce emissions. In 2015 before the Paris Conference, about 40 national and over 20 subnational jurisdictions, representing almost a quarter of global greenhouse gas emissions, are putting a price on carbon.30 The World Bank estimated that, as of 2015, the carbon pricing mechanisms that are underway worldwide, including the EU’S Emissions Trading System (ETS), the US and Canada’s Western Climate Initiative (WCI) and the Regional Greenhouse Gas Initiative (RGGI) in the Eastern United States, are valued at just under $50 billion.31 China’s impending national carbon market is to cover 10,000 enterprises in six major industries including electricity, chemical engineering, steel and aviation, surpassing the EU’S Emissions Trading System to be the world’s largest. Chile and South Africa are also about to implement their own carbon taxes. The carbon pricing mechanism will help enterprises identify the actual cost of energy consumption, manage their business risks, effectively allocate their resources, and eventually realize a strategic balance between business activities and tackling climate change.

Conclusion

The Paris Agreement continues the fragile pattern of international cooperation on climate change, and reserves large policy maneuvering space for the parties. However, some major issues where the parties have huge differences remain unresolved. The Agreement does not address the issues of emission reduction targets, financial support and technological transfer, where future negotiations will have to seek breakthroughs.

Currently, the United States is the biggest uncertainty facing the Agreement and international climate negotiations. The negative attitude of the

US government, though it would not reverse the validity of the Agreement, would impact to some degree on international cooperation over climate change. In addition, the United Kingdom’s plan to leave the European Union will frustrate the latter’s integration process, and challenge its common climate policy and its role in promoting relevant issues. Other “followers” which have taken a passive stance would thus be encouraged to wait and see. The political consensus of the international community that was arduously reached for the Paris Agreement needs to be carefully maintained by all parties.

In fact, regardless of the development of international climate negotiations, the tremendous opportunities inherent in the low-carbon economy will encourage countries to actively seek for coordination, optimize their energy consumption structure, accelerate their reduction of greenhouse emissions, enhance their industrial upgrading, improve competitiveness, and adapt to the trend of sustainable development.

The process of implementing the Paris Agreement will reform international climate cooperation in a profound way, and also provide an important window for China to showcase its global governance concepts. As the second largest economy in the world and a responsible participant in the international community, China considers tackling climate change and enhancing international cooperation to combat climate change as part of its efforts to build a community of shared future for mankind, and has been playing an irreplaceable constructive role. China is no longer a passive responder in climate negotiations; it has become an agenda setter and promotor, as well as a designer of future mechanisms. China will continue to overcome, along with other parties, various adverse factors to ensure the implementation of the Paris Agreement. It will not only facilitate China’s own economic and social sustainable development, but also help explore a new path for global governance, leading to a fair, reasonable and effective direction and setting an example for resolving other global issues.

Xie Zhenhua, China’s Special Representative on Climate Change Affairs, expressed China’s expectation to strengthen South-south cooperation on climate change at the China Pavilion on the sidelines of the Marrakech Conference on November 14, 2016.

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