Despite the recent horrific acts in Paris, next week world leaders will converge on the city for the 2015 United Nations Climate Change Conference — otherwise known as the Conference of the Parties (COP) 21 — to achieve what many hope will be the first legally binding and universal agreement on climate change.
The business community will be watching the proceedings with keen interest. A strong international climate treaty could unlock untold opportunities for sustainable business. But the success of the impending talks is not guaranteed — far from it.
Since the 1997 COP3 in Kyoto failed to effectively operationalize the UN Framework Convention on Climate Change (UNFCCC) and meaningfully limit global greenhouse gas emissions (GHGs), world leaders have struggled to reach a consensus during several COP meetings. Four core issues dominated many of these climate talks, which will need to be resolved this December if a decisive agreement is to be reached: equity issues surrounding the responsibilities of developed and developing regions; the scope and scale of GHG reductions; enforcement mechanisms; and whether to pursue top-down or bottom-up solutions.
Whose Responsibility is it to Act on Climate Change?
Culpability for past and future GHGs and present responsibility for mitigating it has long been one of the largest elephants in the room at the COP meetings, which centers on the concept of equity in climate action. Looking at total GHGs from a historical viewpoint, developed areas such as the United States and Western Europe have emitted the vast majority — nearly 60 percent. Conversely, developing regions like China and India have contributed only 10 percent of emissions.
With this in mind, and recognizing that developing countries have a “right” to continue to develop, the Kyoto Protocol set legally-binding emissions targets for developed countries only. However, the fact that developing countries’ emissions are on the upswing even as those developed regions were decreasing was one of the primary reasons the United States refused to ratify the Accords, which contributed significantly to its failure.
In 2007, COP13 in Bali shifted the conversation about the responsibilities of developing regions with the creation of the Bali Roadmap, a compromise where developing countries agreed for the first time to consider taking “measurable, reportable and verifiable” mitigation actions, which would be supported by technology and finance from developed countries. In turn, developed countries agreed to consider taking “commitments or actions” such as emission targets. However, these were unbinding and left ambiguous the form and level of future commitments.
The U.S. also continued to stand apart from the rest of the world with its lack of willingness to make any firm commitments. Following Bali, the Copenhagen Accord and Cancún Agreements operationalized the principles of equity and “common but differentiated responsibilities and respective capabilities” through differentiated provisions on mitigation, finance and measurement, reporting, and verification.
At Copenhagen, developed countries pledged to mobilize $100 billion per year of new aid by 2020 — although funding at this scale is proving to be difficult. This is another area of opportunity for businesses, as private investment could help fill this gap.
One option for resolving the issue of equity at COP21 is to respect parties’ varied starting points, commit all parties to put forward their best efforts, which will be strengthened over time. This will require fostering feelings of trust among developed and developing countries — primarily the U.S., and China and India. China already has generated goodwill through its recent climate action commitments, which could strengthen U.S. resolve to commit to a strong agreement by undermining the argument of those currently politically opposed to the idea.
A second option is strengthening support for developing countries and global investment in mitigation and adaptation. India, for example, has made its GHG goals contingent on receiving financial assistance from more developed countries. Inroads already are being made on this front with the Green Climate Fund, which will help finance mitigation and adaptation projects in the developing world. Through this compromise, rich and poor countries can balance reducing global GHGs while minimizing economic harm to developing regions.
How Much GHGs Should Be Cut And By When?
The anticipated scale of effort and the nature of the actions to counter climate change was another major issue at COP13 in Bali. The European Union initially called for global emissions to peak in 10 to 15 years and decline well below half of 2000 levels by 2050, and for developed country emissions to be 25 to 40 percent below 1990 levels by 2020, which the U.S. opposed. The final compromise lacked specific emissions targets and a timeframe, calling only for “deep cuts in global emissions” and referencing the IPCC’s Fourth Assessment Report’s reduction scenarios.
In Paris, one option for addressing emissions targets and timelines is starting at the overall goal of limiting global average temperature increase to below 2 °C, and acknowledging that this requires the progressive decarbonization of the global economy to the point of carbon neutrality. A science-based approach grounded in realities on the ground in each country will allow countries to balance what is necessary with what is actually possible.
A second option is to create more flexibility in how net emissions reductions are calculated. Deforestation, for example is a leading driver of climate change, but stopping it does not count as emissions reductions under the current plans. Taking a more holistic view of what constitutes “climate action” could empower countries to pursue more innovative reductions strategies.
How Do We Enforce Climate Action Agreements?
Throughout the various COP agreements, a lack of an enforcement mechanism has been one of the largest inhibitors to meaningful climate change action. The Bali Action Plan, for example, “left open the legal character of its work product.” Two years later, the 2009 Copenhagen Accord was adopted as a political agreement rather than a legal tool, and the eventual outcomes of the Bali Action Plan were adopted in Cancún, Durban, and Doha as COP decisions. This means that the targets submitted pursuant to the Cancún Agreements are not legal obligations because they are not contained in a legally-binding instrument.
In 2011, at COP17 in Durban, world leaders decided to hit the “reset button” on climate negotiations, which set the stage for the new agreement in Paris at COP21. The parties realized that unbinding agreements were not working, and that a solid legal framework would be needed for an effective climate agreement to be realized. They agreed to “launch a process to develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all parties.” Notably, the parties also accepted that whatever legal framework was developed would be applicable to all parties, including those from the developing world.
To create a legally-binding agreement at COP21 that incentivizes compliance, one option is to create economic penalties in a similar fashion to the Montreal Protocol. Countries that fail to comply would face economic sanctions, which would put political pressure on governments to fall back in line. Similarly, creating economic rewards for meeting emissions reduction goals is another option that incentivize states to follow through on the agreement. In a world made up of nation-states, money is the only truly transcendent force.
Should We Approach from Top or Bottom?
The UNFCCC contains both bottom-up and top-down components, but parties initially chose to pursue a more top-down approach. Although the Kyoto Protocol gives countries freedom in how they implement their commitments, it does not give them similar flexibility in defining the form and nature of their commitments. There was a flip to a more bottom-up approach with the 2009 Copenhagen Accord and 2010 Cancún Agreements, which established a bottom-up process that allowed each developed country party to define its own emissions target, including the target’s stringency, base year, and accounting rules. Developing countries were given even greater freedom to determine national mitigation targets. In 2011, COP17 established that COP21 agreements would not exclusively be a top down arrangement — individual countries could provide their own mitigation goals.
In Paris, world leaders must tread carefully with this hybrid of top-down and bottom-up policy approaches. Giving countries the flexibility to establish their own goals based on their own national context may bring more to the table, but it also could lead to some taking less dramatic actions than the climate change crisis demands. One option to ensure these method is effective is to establish science-based metrics for what is possible and what is necessary when it comes to each state’s emission reductions goals.
If it's clear that a particular state’s goals are unambitious, then an effort should be made to engage them to be more audacious. Another option is to create economic incentives for states who reach certain thresholds — particularly for developing countries. Mitigation and adaptation funding could be tied to developing countries’ achievement of emissions reduction goals.