December 11, 2015

COP21 Update #3

Stephen Eule

Here we are near the end of COP-21, and there are still lots of issues outstanding in the most recent iteration of the text of the agreement released Thursday night.  If you’ve been following these reports, you can probably guess what they are. But at the risk of sounding like a broken record, they’re:

  • Differentiation—how high the wall between developed and developing countries will remain;
  • Finance—who pays to support climate change programs in poor countries, and how much;
  • Transparency—what kind of reporting requirements should be placed on developing countries; and
  • Loss and Damage—whether and how much developed countries should pay to compensate developing countries for damage from severe weather. (It bears repeating that while this may start out as government-to-government compensation, it can very easily turn into something that would attach liability to businesses, something that will bear watching.)

Not that there hasn’t been any agreement. Well, maybe not agreement exactly, but something close enough for (multi) government work.

  • Mitigation: There has been some clarity surrounding a long term goal, with the Parties likely to settle on a global average temperature target of “well below 2°C above pre-industrial levels and  to pursue efforts to limit the temperature increase to 1.5°.” People are finally beginning to catch on, however, that without a negotiated global emissions pathway (e.g., a 40% to 70% reduction in global emissions by 2050), these sorts of lofty goals ring rather hollow. We’ve noted before how completely unrealistic these types of goals are and that large emerging economies will never agree to them. That won’t change in Paris.

It’s also worthwhile noting that, unlike in earlier top-down treaties, national mitigation actions are not being negotiated. Rather, they are being compiled from voluntary pledges submitted by the Parties.

  • Intellectual Property Rights: The business community is pleased that direct references to IPR have been banished from the text. But that pleasure is tempered by the language that found its way into the text: “Accelerating, encouraging and enabling innovation is critical for an effective, long-term global response to climate change and promoting economic growth and sustainable development. Such effort shall be, as appropriate, supported, including through financial means by the Technology Mechanism and the Financial Mechanism of the Convention, for collaborative approaches to research and development, and facilitating access to technology, in particular for early stages of the technology cycle, to developing countries.”

Translation: We would like for developed countries to set up a fund to buy down IPR and, who knows, maybe even provide compulsory licensing.  In time, I trust the negotiations will be able to drive a stake into the heart of this phony issue (i.e., IPR create barriers to technology transfer), but in the meantime, we’ll maintain our vigilance.

  • Legal Form/Compliance: The legal form of the treaty that’s emerging is one based on a pledge and review, with Parties obligated to submit pledges and report their progress in meeting, but with no obligations to actually meet the goals in their mitigation “contributions.” 

Although there are some legally binding aspects of the treaty, these tend to revolve around narrow points about reporting methodology, frequency, and the like. My guess is that the U.S. negotiators will limit, to the extent they can, binding provisions to these types of items because it inoculates them from Senate advice and consent. That’s because in the underlying treaty, which as a ratified treaty is legally binding on the United States, there are provisions stating plainly that the Conference of the Parties—that is , COPs—will be responsible for fleshing out certain procedures, which once agreed to by the COP, become legally binding.

Two other issues that aren’t quite near the finish line yet, but closing in.

The first is carbon markets, something the European business community especially is looking to see recognized in the text. But so antagonistic are certain countries—Venezuela and Bolivia come to mind—to markets of any way, shape, or form that this discussion is now hiding in plain sight under the rubric of “cooperative approaches.” As the text reads now, it would allow nations that employ carbon markets voluntarily to use internationally transferred emissions reductions and require methodologies to ensure there’s no double counting. There is also orphan language recognizing “carbon pricing” (i.e., a carbon tax) in the section on finance. It’s clear that many countries see a carbon tax as less than and mitigation toll and more as a money-raiser.

The other is issue where some progress of a sort has been made is recognizing the importance of business participation. Needless to say, the same countries that object to markets also object to business, so instead of a clear endorsement of the role business can play, we have this: “Affirming the importance of education, training, public awareness, public participation and public access to information and cooperation at all levels on the matters addressed in this Agreement, and recognizing the importance of engagements of all levels of government and various actors, in accordance with respective national legislations of Parties, in addressing climate change.” That’s right, business in lumped in amongst the “various actors.” Hardly a ringing endorsement, but despite the best efforts of the business community, that may be all we’ll get.

Finally, the next iteration of the agreement text is scheduled for tomorrow, (Saturday) at around 9:00 a.m. Paris time, and then they’ll head for the final push. The French would like to finish up Saturday because they have an election on Sunday. Whenever it ends, it probably won’t amount to much.