Duke @ COP21: Day 1

Duke is in Paris! After 30-hour non-sleep air & ground travel and some 5-hour sleep, we arrived at COP 21 this morning and were excited about our journey at the COP during the next two weeks.  8am to 8 pm – it turned out to be a long but wonderful day!

In the morning we sat with other observers in the overflow room to watch the world leaders delivering opening statements on combating climate change. Thanks to our Dr. Brian Murray, we were fortunate enough to get the opportunity to enter the plenary room in the afternoon to watch the speeches in real time. It was exciting to see more developed countries are determined to take on more responsibility (such as Australia). Getting ready for Day 2. Stay tuned!

Jess: The climate generations area (CGA) was closed today in order to tighten security measures around the COP venue so I had the chance to be a super tourist around Paris. I walked under the eiffel tower and saw a grand view of the city from the arc de triumphe. The CGA area opens tomorrow and the theme is forests and agriculture. I’m looking forward to some interesting side events!

Will: Day 1 was a rewarding whirlwind. On the bus ride to the conference we spoke with a delegate from Malawi, and during the conference we met people from around the world. The hot ticket today was the the opening addresses by heads of state. Virtually no one stuck to the 3-minute limit, but it was amazing to be at the largest gathering of heads of state in history, with 150 leaders present.

Theo: Will and I met with our client, IUCN, today and had a great conversation with the head of its Ecosystem-based Adaptation program manager, Ali. IUCN will be holding some events throughout the week highlighting the importance of nature-based solutions to a lot of the adaptation and mitigation problems facing the climate negotiation process. We’re just hoping we can smoothly pick up where Talia and Tommy left off in their hard work with IUCN at Bonn!

Kait: Today was the opening day of COP21 and consisted mostly of speeches by world leaders. I was a little confusion in the morning about which events we would be and would not be allowed into, but once that was cleared up everything went great! Most of the speeches by heads of state were what you would expect. I did happen to have a restricted access badge and was there when Australia announced it would ratify Kyoto commitment period 2, which was cool! My favorite part of the day was probably casually walking past Angela Merkel in the hall!!

 

 

 

Expected Business Community Positions at COP 21

Happy afternoon in Paris on the first day of COP 21! So proud to know a few great Duke Nicholas/Sanford students in attendance this year, and I’m very excited to follow your news over the next two weeks.

I’ll be tracking the business community’s response to the negotiations. To kick off my series of upcoming posts, I’ve outlined a few things I think we can expect from the private sector.

  • Call for clear signals to the private sector on the future of climate policy. The International Chamber of Commerce has strongly urged the UNFCCC to make unambiguous statements on climate action goals in order to send a clear signal to businesses about the scale of investment required in upcoming years. Greater certainty will enable companies to pursue strategies and business opportunities in the context of carbon goals and, eventually, a price on carbon. Without that certainty, companies fear volatile regulatory environments and are less likely to make meaningful investments in less carbon intensive practices and clean technology.
  • Promotion of party consultation with the private sector on INDCs. The ability of individual nations to achieve their mitigation goals will depend in large part on industry ability and willingness to actively pursue lower carbon practices. There is also a need to ensure that INDCs accurately capture the activities of the private sector to prevent either inaccurate claims or additionally issues of ‘double counting’ the contributions of non-state actors towards climate goals. There may be calls for incorporation of language to that end in the preamble, Article 3 (Mitigation – role of the private sector), Article 9 (Transparency – clarity on private sector role in national action), and the description of INDCs under the Draft Decision.
  • Strong advocacy around enabling environments for private investment – especially IP protection. The transition to less carbon-intensive economy requires huge investment to transform current industry practices. Even greater private sector investment is required to delink the burning of fossil fuels and economic growth. The business community position is often framed as the protection of ‘competitiveness,’ a stand-in description for pro-business policies including intellectual property protection, good governance (low corruption), and low entry barriers in new markets. These issues, especially the question of IP protection, are central to the negotiations over technology transfer and, to some extent, climate finance.

Avoiding the “zombie” deal at Paris

The media hype surrounding the upcoming Paris meeting is at risk of positioning COP21 as the “be-all and end-all” of climate agreements. In a recent report, environmental think tank E3G addresses the danger with this line of thinking. The Paris agreement, they suggest, should not be treated as a one-off event, but instead should be viewed as an important political opportunity in the broader context of global climate change objectives.

“Paris is the agreement but importantly it is also the political moment. Paris should be empowering, it should open up the political space in the future.” –E3G

To emphasize the position of COP21 as a political moment, instead of an isolated agreement, E3G developed a list of three possible political scenarios that could be created by the agreement. These scenarios illustrate the precarious position of the negotiations as a tipping point for climate action. The value of this analysis is that it does not outline specific policy outcomes, but rather addresses the shape of potential outcomes, in an effort to identify political areas where ambition can be increased. To this end, the report includes a “checklist” of potential textual indicators that position the agreement within the different scenarios.

Political scenarios

“Le Zombie”

In this scenario, the least ambitious of the three, the Paris agreement takes on the form of a tactical deal, decided at the negotiator level. The deal is limited to countries that have already submitted INDCs, lacks precision, is unstable and at risk of future collapse. Textual indicators of this scenario include vague language anchoring INDCs in the text, with no indication that they will be implemented. The mitigation goal is limited to a “low carbon transformation” with an imprecise “end of century” timeline. Further, there is no link between adaptation and mitigation efforts or the ambition mechanism, and loss and damage is not addressed.

“Comme ci, Comme ça”

This middle-of-the-road scenario provides some guarantees on financial and adaptation support, and the agreement arises from collaboration between parties. However, the outcome will not garner enough momentum to survive on its own, and therefore will need continual support going forward. Indicators of this scenario in the text include intent to implement INDCs, an ambition mechanism that references but does not directly involve finance and adaptation, and the development of an adaptation cycle to assess progress every five years.

“Va Va Voom”

The most ambitious political scenario, the “va va voom” deal is driven by leaders across developing and developed nations. In this agreement, all major components of the deal are addressed and enough detail is included to maintain 2oC as a realistic goal. The agreement provides clear guidance for both current and post 2020 action, ensuring an enduring regime. Indicators of this scenario in the text include clear and specific language anchoring INDCs in the text, and an ambition mechanism that is linked to finance and adaptation. Further, this scenario sees loss and damage addressed in the core agreement.

Potential for an enduring agreement

These three scenarios are described in an effort to bring attention to the political “space” that remains open within the agreement – space that can ultimately be used to maximize ambition and secure an enduring agreement. Fortunately, there is potential for Paris to capitalize on this space, due to the presence of multiple opportunities that make the global political environment conducive to an ambitious agreement.

E3G suggests that COP21 should take advantage of existing political and economic “tailwinds”, such as political momentum to address climate change driven by NGOs and the public, as well as momentum on divestment and the unstable nature of oil and gas prices. Parties should also aim to inscribe the voluntary emissions reductions set out in the INDCs into the Paris text, in order to keep the reductions ambitious but honest. Current INDC positions get close to the 2oC goal, but do not quite close the mitigation gap, so ensuring that countries take immediate and long-term action to see these goals through, as well as voluntarily increase ambition, is essential.

The Paris agreement has the potential to rebalance mitigation and adaptation, which is essential given that the current emissions path will not reach the 2oC goal. In fact, even if this goal is met, the impacts of climate change will still be felt worldwide. Therefore, the agreement must equally address the necessity of mitigating emissions, as well as dealing with inevitable climate impacts both currently, and looking into the future.

Finally, the Paris agreement comes at a time of strong multilateral politics worldwide, which provides an opportunity to capitalize on collaboration. The fact that there are large emitters working together, as illustrated by the US-China bilateral agreement, illustrates that there is a global interest in securing an agreement. This environment provides a unique opportunity for the Paris agreement to set out a collaborative, ambitious, and enduring climate deal.

 

LOCAL GOVERNMENTS, CLIMATE ACTION AND PARIS: PART I

Local governments continue to be on the sidelines of the UNFCCC process, but are gaining visibility for their action to adapt to and mitigate climate change.

More and more sub-national governments are joining the Covenant of Mayors and the C40 to combat climate change through local action. Local and Municipal Government Authorities (LGMAs) have participated in climate action even before the first Conference of Parties (CoP) under the UNFCCC process.

Cities and local governments- leaders of climate action?

70% of the world’s population will live in cities by 2030 and up to 80% of adaptation and mitigation action will occur at the subnational level, per a United Nations Development Program (UNDP) report. Any action taken by a local government can be evaluated and easily scaled up if successful. Thus, LGMAs have been arguing for active engagement, and have urged fellow sub-national governments to take the lead in climate action during the World Mayors Summit, 2013.

LEAD THE WAY! World Mayors Summit Calls on LGMAs to be climate leaders.

Read more

The UNFCCC and Climate Change Mitigation

Article 2 of the UNFCCC Framework text lays out the ultimate objective of the Convention as achieving a “stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system (1).”  In other words the ultimate objection of the UNFCCC is to mitigate climate change! Mitigation is generally defined as a reduction in the emission of Greenhouse Gases (GHGs) by sources or a removal by sinks (2).  Knowing this you might be asking yourself, if we’ve been working on climate change mitigation since the Convention was adopted in 1992, what have we achieved so far?

The actual text of the Framework Convention is a little vague and does not specify exactly what our mitigation goals were in the early 90s. To find that we must look to the Kyoto Protocol.  Article 3 of the Protocol states that Annex 1 parties shall reduce their overall emissions by at least 5% below 1990 levels during the commitment period 2008 to 2012 (3).  Most people know that the Kyoto Protocol had some problems, namely the USA refusing to ratify it and Canada withdrawing, so you would be right to wonder if we actually met those goals.

You may not expect it (I know I didn’t), but the answer is yes.  By 2012 Annex 1 countries had reduced emissions 24% below 1990 levels!  However, 18.5% of those emissions were “hot air” or reductions that had occurred in the EITs (economies in transition) before 1997 (4).  In the figure below you can see country by country reduction targets and end results in relation to those targets.

Screen Shot 2015-11-23 at 2.59.05 PM

After Kyoto commitment period 1 ended in 2012, 52 parties decided to undertake a second Kyoto commitment period by ratifying the Doha Amendment to the Kyoto Protocol.  Annex 1 parties agreed to reduce their emissions by 18% below 1990 levels between 2013 and 2020.  While this goal may seem great, very few Annex 1 countries signed on for this second commitment period so the impact of their reductions will likely be small.

After the Kyoto Protocol, one of the most important events to happen in terms of climate change mitigation was the development of the long term temperature goal as a result of the Copenhagen Accord in 2009.  Paragraph 1 states that parties recognize “the scientific view that the increase in global temperature should be below 2 degrees celsius,” but the final paragraph of the accord includes a consideration to strengthen this goal to 1.5°C(5).  There are reasons why each goal is important.  1.5 degrees celsius is critical for Least Developed Countries (LDCs) and Small Island Developing States (SIDS), as they are and will continue to feel the effects of climate change before other nations.  However, the IPCC tells us that in order to stay below 1.5°C of temperature increase immediate mitigation action needs to occur with a “rapid upscaling of the full portfolio of mitigation techniques” (6).  Recent INDC publications as well as IPCC analysis casts serious doubt on whether this goal is feasible.  

Parties that submitted INDCs before October 1, 2015 were included in a synthesis report that was published by the UNFCCC in the beginning of November. According to the report, INDCs will result in aggregate global emission levels of 55.2 GT CO2 eq in 2025 and 56.7 GT CO2 eq in 2030.  These values are 2.8 and 3.6 GT CO2 eq lower than pre-INDC trajectories, illustrating that INDCs have prompted parties to partake in further emission reductions.  However, the aggregate effect of the INDCs does not result in enough emission reductions compared with the least cost 2°C scenarios; emissions are still 8.7 GT CO2 eq higher in 2025 and 15.1 GT CO2 eq higher in 2030 (7).

Screen Shot 2015-11-19 at 6.10.26 PM

Parties will need to decide in Paris what their goals are and further actions they need to take in order to reach those goals.  Mitigation actions are diverse and can be simple such as improving insulation in buildings, but can also be extremely difficult such as developing and using carbon capture and storage (CCS) technologies.  All of these steps come with different costs and other associated challenges.  One thing that is certain though: the longer we delay taking major steps to reduce our GHG emissions the more expensive and more difficult it will become.


References:

1) “United Nations Framework Convention on Climate Change” (United Nations, 1992).

2)“Fact Sheet: The Need for Mitigation” (UNFCCC, November 2009).

3)“Kyoto Protocol to the United Nations Framework Convention on Climate Change” (United Nations, 1998).

4)Romain Morel and Igor Shishlov, “Ex-Post Evaluation of the Kyoto Protocol: Four Key LEssons for the 2015 Paris Agreement” (CDC Climat Research, May 2014).

5) UNFCCC, “Report of the Conference of the Parties on Its Fifteeth Session, Held in Copenhagen from 7 to 19 December 2009,” March 30, 2010.

6) “IPCC, 2014: Summary for Policymakers. In Climate Change 2014: Mitigation of Climate Change [Edenhofer, O., R. Pcihs-Maduga, Y. Sokona, E. Farahani, S. Kadner, K. Seyboth, A.Adler I. Baum, S. Brunner, P. Eickemeier, B. Kriemann, J. Savolainen, S. Schlomer, C. von Stechow, T. Zxickel and J.C. Minx (eds.)].” (Cambridge, United Kingdom and New York, NY, USA: Cambridge University Press, n.d.)

7)“Synthesis Report on the Aggregate Effect of the Intended Nationally Determined Contributions” (UNFCCC, October 30, 2015).

 

 

  

           

 

 

 

 

Carbon-related Border Tax Adjustments and GATT Article XX Chapeau (Part II)

This picture shows a huge protect in Seattle against the World Trade Organization in 1999. It comes from http://mic.com/articles/76829/how-a-college-crush-made-me-an-activist-against-prison-profiteering#.RUfoByVKH.
This picture shows a huge protect in Seattle against the World Trade Organization in 1999. It comes from http://mic.com/articles/76829/how-a-college-crush-made-me-an-activist-against-prison-profiteering#.RUfoByVKH.

Even if the carbon-related border tax adjustment (CBTA) satisfies all three elements of GATT Article XX (g), the CBTA measure still needs to meet the conditions under the chapeau of GATT Article XX. This introductory phrase requires the measures not to be applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade. The chapeau acts as a safeguard to prevent abuse of Article XX. Past cases of the GATT and WTO have shown that the tough task of invoking Article XX is always to prove that the measure meets the chapeau’s requirements. In the WTO period, there are only two cases having survived scrutiny under the chapeau: the EC-Asbestos and U.S.-Shrimp II.

To prevent the adjustment from being applied in a manner which would constitute a means of “arbitrary or unjustifiable discrimination” between countries where the same conditions prevail or a “disguised restriction on international trade”, the country imposing the adjustment should follow four key elements summarized from WTO precedents.

Flexibility: To reserve sufficient flexibility in the application of the measure in question so as to avoid arbitrary or unjustifiable discrimination, a country should take full account of different conditions of other WTO members and refrain from requiring other member states to take measures that are “essentially the same” to its domestic ones. Yet, a state can still require other countries to adopt programs that are “comparable in effectiveness” to its domestic one. This element will oblige the carbon-restricting country to consider whether another WTO member has already addressed greenhouse gas emissions through domestic measures, and then whether lower or no trade restrictive carbon-related border tax should be applied to imported products from countries that have their own valid carbon-reduction schemes at home. For example, the EC has had a mandatory emission trading system in place since 2005. China has seven localized pilot carbon emission trading programs since October 2011 and is going to have a national carbon emission trade market in 2017.

Another form of flexibility would be granting a transition period or preferential treatment, especially in tariffs, to developing states depending on their level of development. The 1979 Enabling Clause permits developed countries to provide preferential treatments to developing countries in a general, non-reciprocal and non-discriminatory manner. Generalized System of Preference programs enable a developed country to grant differential treatment to developing countries, as long as an identical treatment is available to all similarly-situated countries. “Availability” means that the carbon-restrictive developed country must have an open application process with objective criteria to determine which developing countries are similarly-situated in the program and to modify the qualified country list. Therefore, when applying a CBTA measure, a country can make a distinction between developing countries based on, for instance, whether they would have ratified the forthcoming legal instrument at Paris, or whether they have submitted a credible INDC, or whether they have participated in international carbon trading, or whether they are least developed countries deserving extra preferential treatment.

Good-faith Effort in Negotiation: Before imposing unilateral trade-restrictive measures, a country should engage in “serious, across-the-board negotiations with the objective of concluding bilateral or multilateral agreements” to address the pursued interest. This obligation does not require the actual conclusion of agreements, but rather the good-faith efforts by the respondent state. Furthermore, the state should grant non-discriminatory opportunities of equal negotiation to all affected member states, whose degree of effort would be used by WTO adjudicators as a “benchmark” negotiation in evaluating whether the respondent state has fulfilled its obligation of good-faith equal negotiation with all relevant states. In the context of climate change, a state should demonstrate its good faith efforts in bringing in all affected countries to join an international collective action to combat global warming before making recourse to unilateral border adjustment measures. There will be a problem if the country imposing CBTA only engages in negotiation with some exporting countries but refuses to talk with the others.

Fairness and Due Process: To not constitute an “arbitrary discrimination”, the publicity of such a measure and the protection of due process rights of affected stakeholders are required. The U.S. failed the chapeau test in U.S.-Shrimp I due to the lack of transparency in the Turtle Exclude Device certification process, including the non-appealable feature of the application and the lack of explanation to a rejection of application. Therefore, the design and administrative of a CBTA measure should be transparent, with explained decisions and appeal procedures.

The Design of Measure: The WTO Panel in EC-Asbestos interpreted “a disguised restriction on international trade” as “a disguise to conceal the pursuit of trade-restrictive objectives.” This element requires the design of a specific CBTA measure not to be applied in a protective manner. The protective application of a measure can be assessed from the design, architecture and revealing structure of the measure at issue. In U.S.-Shrimp II, the revised U.S. measure was found not to constitute a disguised restriction on international trade because it allowed exporting countries to apply programs not based on the mandatory use of TEDs and offered technical assistance to develop the use of TEDs in Caribbean countries. The U.S. example seems to suggest that a CBTA that allows exporting countries to apply their own programs to meet the policy objective and offers technical or financial assistance to less developed countries in emission reduction would survive this test.

Given its rigorous test and the big number of cases failing to pass it, recourse to GATT Article XX has been criticized as passable in theory, but fatal in practice. The U.S. failure at the compliance panel in U.S.-Shrimp I triggered environmentalists’ fierce attack at the WTO’s lack of concern about non-trade values. Nonetheless, the other way of interpretation is that environmental objectives do not trump all: WTO members are free to tackle climate change problems and to determine the level of protection they deem necessary, as long as they do it within the margins of WTO law. After all, there is no international court of environment or climate change and the coming Paris conference is unlikely to adopt a decision to establish one. The WTO is limited by its own institutional constraints, while a global network consisting of international, regional and domestic carbon reduction schemes is indispensable and cost-efficient to effectively combat global warming. Despite many remaining uncertainties, the WTO jurisprudence provides a blueprint for domestic legislative and executive branches in designing and applying CBDA measures. Paying attention to them would not only contribute to a better coordinated and more productive international carbon emission network, but also reduce the possibilities of potential disputes between states in the future.

 


References:

  1. Joost Pauwelyn, “Carbon Leakage Measures and Border Tax Adjustments under WTO Law,” Geert Van Calster and Denise Prévost (eds.), Research Handbook on Environment, Health and the WTO (Edward Elgar, 2013), at 448-506.
  2. Christine Kaufmann and Rolf H. Weber, “Carbon-related Border Tax Adjustment: Mitigating Climate Change or Restricting International Trade,” 10 World Trade Review (2011), at 497-525.
  3. WTO Appellate Body Reports of US-Gasoline, EC-Asbestos, Brazil-Retreaded Tyres, U.S.-Shrimp I and U.S.-Shrimp II, EC-Conditions for the Granting of Tariff Preferences to Developing Countries.

Carbon-related Border Tax Adjustments and GATT Article XX (b) and (g) (Part I)

This picture comes from instigatornews.com
This picture comes from instigatornews.com

Carbon-related border tax adjustments (“CBTA”) are adjustments of the taxes imposed domestically when the foreign goods are imported. It is considered as a cost-effective way to create incentives for countries to mitigate greenhouse gases. Without a global carbon market, carbon-related border measures are implemented on a national level. As of 2015, the WTO has 161 members in total, which are all under an obligation to ensure their domestic trade-related policies are consistent with WTO agreements. This fact gives rise to discussions on the compatibility of CBTA measures with the WTO regime.

If the CBTA measure in question is essentially an import duty, its application must comply with the requirement of GATT Article I:1, the principle of Most Favorite Nation (MFN); if the measure in question is actually a tax, GATT Article III:2, the principle of National Treatment (NT), applies. The MFN principle prohibits discriminating treatment between products imported from certain countries and like products from the rest WTO members. The NT principle prevents a member state from favoring national products over imported like products regarding internal taxes or other internal measures.

To prevent double taxation, one country may decide to apply a CBTA measure only to imports from countries that do not have an established emission mechanism, for example, a national carbon market or an internal carbon tax. Such a measure would mostly likely violate the MFN principle because it treats like products differently based on their origin. But assuming that a country’s adjustment applies to all imports, imports from countries that have been taxed once in their home country would be taxed again when passing the border. Although this measure is less likely to violate the MFN, it obliges countries already having an emission cut mechanism to offset the second tax or costs levied on their exported products upon exportation, and if they fail to do so, products coming from countries that do not have an emission cut mechanism would be put in an advantageous position. Apparently, such a measure will diminish, instead of encourage, a country’s enthusiasm towards CBTA and therefore not help to encourage world-wide emission reduction. Under the NF principle, the legality of CBTA hinges on the definition of “like products”. However, as the current WTO jurisprudence does not permit for production-and-process-method assessment in the determination of “like” products, a CBTA measure, such as a carbon regulation imposing requirements on the importation of goods with carbon-intensive production method, would likely be determined as discriminatory. Although under both principles, countries can still prove the legality of CBTA measure through demonstrating that differential treatment relates to concerns other than the origin of the product, alternatively, they can invoke GATT Article XX under which any GATT violation may get justified.

GATT Article XX was adopted as the “general exception clause” to balance the relationship between trade freedom and public moral, human life and health, environmental protection, labor protection, and customer interests, through offering justifications for measures aiming to protect non-trade-liberalization interests yet failing to comply with substantive provisions of the WTO agreements. The jurisprudence of the WTO Appellate Body has established a two-tiered test under Article XX: first, the measure at issue must fall under at least one exception listed in paragraphs (a) to (j); second, the measure must comply with chapeau of Article XX, which requires the measure’s manner of application would not constitute “a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail” and is not “a disguised restriction on international trade.”

Carbon mitigation measures are most likely to fall under Article XX (b) and Article XX (g). To get the measure justified under Article XX (b), a state must prove two elements: 1) The pursued policy objective must fall within the range of policies designed to protect human, animal or plant life or health. 2) The inconsistent measures for which the exception is invoked are necessary to fulfill the policy objectives. The WTO jurisprudence breaks the two elements into four questions: 1) whether the state has established the existence of risks imposed by the measure not just to “the environment” generally, but specifically to human, animal or plant life or health; 2) whether there is any direct causal link between the discriminated products and risks to human, animal or plant life or health; 3) whether trade-restrictiveness of the measure is proportionate to the importance of the interests protected and the contribution of the measure to the realization of the policy objectives; and 4) whether there are any less trade-restrictive measures that are reasonable available to the country and can achieve the same goal at the chosen level of protection by the state.

A state may argue that a CBTA measure is necessary to protect its nationals, animals and plants from specific negative consequences of climate changes, for example, flooding, sea-level rise, erosion, increasing wildfire, further lack of bio-diversity, insect outbreaks, wide-spread tree-diseases and die-off, and species endangerment and extinction. The more difficult task would be to provide sufficient evidence to prove a direct causal link between a carbon-intensive product and the identified specific risks, such as sea-level rise. Unlike the link between the accumulation of waste tyres and mosquito-borne disease and toxic emissions from tyre fires in the Brazil-Retreaded Tyre case, given the chronic and sophisticated nature of global warming and climate change, the results of carbon-reduction measures can only be evaluated with the benefit of time. Although the importance of tackling climate change is indisputable, the contribution of a CBTA to the ultimate realization of controlling global warming is not easily measurable in either quantitative or qualitative means of evaluation. Since climate change is a universal problem calling for global effort and international cooperation, with emission leakage and migration into consideration, to what extent would the contribution of a carbon-related border adjustment imposed by one country within its own territory be considered as effective is another unsolved issue. The current rigorous jurisprudence of the WTO under Article XX (b) renders it practically difficult to get a CBTA justified under this seemingly pertinent paragraph.

Alternatively, states may use Article XX (g), arguing that the measure in question is related to the conservation of the plant’s climate, arable land, livable oceans, the protection of certain plant and animal species that may die out as a result of global warming. Three conditions must be satisfied under this paragraph: 1) the measure must involve the conservation of “exhaustible natural resources; 2) the measure must “relate to” the conservation of exhaustible natural resources; and 3) it must be made “effective in conjunction with” the restrictions on domestic production or consumption. WTO precedents find clean air and endangered sea turtles, as well as non-endangering species, such as herring, salmon and dolphin, to be exhaustible natural resources. Renowned WTO Law Professor Joost Pauwelyn states that “considering the international importance given today to the problem of climate change – and the catastrophic consequences that are linked to it for all forms of life on earth – it would be surprising if the WTO would not accept that the plant’s atmosphere (that is, the layer of gases around the earth that regulates the plant’s climate) is an ‘exhaustible natural resource’.” The genuine issue here is how to establish “a sufficient nexus” between carbon emissions in one country and the consequences of climate change that such carbon emission would have for the country imposing CBTAs. In U.S.-Shrimp, the U.S. was permitted to protect turtles not within its territorial jurisdiction mainly because the turtle are highly migratory animals that are known to go across U.S. waters. For the earth’s atmosphere is an endangered global exhaustible natural resource whose damage have negative consequences on all countries and carbon emission requires collective action by all states, a country should be allowed to address foreign carbon emission. The “relate to” element requires “a close and real relationship” of means and end between the measure and the conservation of the plant’s atmosphere and related climate, which examines whether the domestic legislature is primarily designed to aim at carbon reduction. WTO/GATT precedents suggest that this test is easy to pass unless there are “blatant inconsistencies or protectionist features” in the domestic legislature. As with the third element, the Appellate Body in the U.S.-Gasoline case interpreted it as requiring “even-handed” treatment on domestic products, although the restrictions regarding the exhaustible natural resource do not need to treat domestic and imported products equally. Therefore, as long as the measure as a whole also imposes any degree of restrictions on domestic products, the third element of Article XX (g) should not be difficult to meet. To sum up, GATT-inconsistent carbon-related border tax adjustments are more likely to get justified under Article XX (g).

 


 

References:

  1. Joost Pauwelyn, “Carbon Leakage Measures and Border Tax Adjustments under WTO Law,” Geert Van Calster and Denise Prévost (eds.), Research Handbook on Environment, Health and the WTO (Edward Elgar, 2013), at 448-506.
  2. Christine Kaufmann and Rolf H. Weber, “Carbon-related Border Tax Adjustment: Mitigating Climate Change or Restricting International Trade,” 10 World Trade Review (2011), at 497-525.
  3. WTO Appellate Body Reports of US-Gasoline, EC-Asbestos, Brazil-Retreaded Tyres, U.S.-Shrimp.

 

 

Climate Negotiation Rehearsal

ICCN Group Photo (source: https://www.facebook.com/iccnsimulation/photos/pb.167404810258280.-2207520000.1446235320./194247257574035/?type=3&theater)
ICCN Group Photo (source: https://www.facebook.com/iccnsimulation/photos/pb.167404810258280.-2207520000.1446235320./194247257574035/?type=3&theater)

Reading an unfinished UN climate agreement for the first time, the first thing you notice is all the brackets. Negotiators bracket off huge swaths of text to show parts of the agreement that still have, well, disagreement. Brackets might contain two countries’ different views of how a policy should be enacted or differing thoughts on the policy’s ambition; oftentimes brackets reflect arguments over whether a policy should or shall be enacted.

photo (3)

This October in D.C. I had the [paramount pleasure][eye-opening responsibility][unholy burden] of representing the Russian Federation at a simulated UN climate negotiation (ICCN). Russia presents an interesting challenge. Many Russians believe a warmer planet wouldn’t be the worst thing to happen. Arctic oil exploration, ice-free shipping lanes, warmer Moscow winters, and a more arable Siberia don’t strike most Russians as exactly calamitous. Coupled with the fact that some prominent Russian scientists are skeptical of anthropogenic climate change, you’ve got a recipe for an unhelpful negotiating partner.

On the other hand, Russian agriculture is uniquely vulnerable to drought and fire (both made more likely by climate change), and the defiance Russian negotiators showed at COP18 in Doha has gradually given way to a cautious cooperation.

At the October intersession meeting in Bonn, Russia opened the negotiations by stressing the need for transitioning economies like Russia’s to be allowed to grow without intrusive regulation. However, Russia also made special mention of its forests. With 20% of the world’s forests, Russia’s wilderness acts as a huge carbon sink, capturing CO2 that would otherwise contribute to the greenhouse effect.

The [back-and-forth][jockeying][posturing][evolution of Russian strategy] in climate negotiations makes for interesting sessions, so that’s exactly what I delivered in D.C. I bickered with Country A when they struck me as too pliable on financial commitments to developing countries, and I chastised Country B for demanding too much of developed countries. I berated friends and opponents alike; the negotiation was a day-long method acting course, and I went full-on De Niro.

Toward the end of the conference, the especially contentious matter of loss and damage came up (proving once again that life imitates art, loss and damage drove a wedge in last week’s intersession meeting in Bonn, too). Loss and damage refers to the effects of climate change that adaptation cannot prevent. Low-lying and small island countries would like to see financial commitments in place to help protect them from loss and damage, but developed countries are hesitant to assume responsibility. As Russia, I dutifully blocked any firm commitments to loss and damage. My colleagues were furious – not at Russia, but at me. In a turn of events obliterating the fourth wall, fellow negotiators became incensed that I would effectively damn millions of people to an uncertain, less safe future.

I decided then that the kids are alright and that their deep emotional investment in a simulation of a conference that hadn’t even begun yet actually bodes pretty well for the rest of us. They were right to be angry. Anger is an appropriate feeling when dealing with inevitable sea level rise. In Bonn, we saw a little of that anger on display. My hope moving forward is that negotiators can channel that anger into something constructive.

 

China’s changing allies in the UN Climate Change Regime (Part II): Contemporary

Source: http://rainforests.mongabay.comcarbon-emissions
Source: http://rainforests.mongabay.comcarbon-emissions

During the negotiations for the Kyoto Protocol, China again united with other developing countries and won a significant victory in resisting developed countries’ attempt to set carbon emission limits and reduce responsibilities for developing countries. However, the positions among developing states on climate change were very diverse, especially among newly-industrialized and small-island states facing the imminent threat of rising sea level. Foreseeing such critical differing opinions, given its own rapidly increasing annual emission since 2000, China opted for a climate change negotiation coalition consisting of the BASIC nations. At the first BASIC Ministerial meeting in Beijing, the four countries coordinated their positions ahead of the Copenhagen climate summit in December, 2009, which included jointly walking out of the conference if the developed states tried to force their terms on the developing states. The end of the Copenhagen summit witnessed a not-legally binding Copenhagen Accord drafted by the BASIC group and the US, which did not commit states to binding emission reduction obligations.

At the 2014 August meeting, the BASIC group again coordinated their positions before the 2015 Paris meeting towards a global treaty. They expressed reluctance to make binding commitment to emission reduction limit until the developed countries implement their commitment towards developing countries for provision of finance, technology and capacity-building support.

It is also worth noting that at the 2014 August BASIC meeting, the Chinese delegation shared contents of bilateral discussions between it and the US with the BASIC countries. In November 2014, in the US-China Joint Announcement on Climate Change, for the first time ever, China and the US reached a consensus on the CBDR principle and the respective capabilities of different states. The conclusion of this joint announcement seems to reflect views far beyond the two countries, implying a US-BASIC prospects for a global climate agreement.

In September 2015, during President Xi’s visit to the U.S., President Obama and Xi issued a joint statement on climate change, which clearly articulates the common vision for the Paris UN Climate Change conference. In this joint statement, both sides agree to a quantified objective of the new Convention (the below 2 degree C global temperature goal), the appropriate reflection of CBDR in the Convention, the need for an enhanced transparency system through reporting and review of actions with flexibility provided to developing countries, and the importance of adaptation.

China commits to launch a national cap-and-trade system by 2017, which would be likely to remove the domestic hurdle that prevented the U.S. from signing the Kyoto Protocol. Another noticeable announcement is that China will commit $3.1 billion in climate finance for developing countries. Although this South-South Fund will not be delivered through the UNCCC bodies, for example, the Green Climate Fund, this commitment signals that China has shifted its tough stance on developed countries’ financial support responsibilities, which may ultimately help to remove the strict distinction between developing and developed states originated from the Kyoto Protocol. The U.S. reaffirmed its pledge of $3 billion to the Green Climate Fund, which is now $50 billion away from its goal of $100 billion by 2020.

Despite the positive achievements, some missing elements in the joint statement suggest unsolved issues between the two biggest economies and carbon emitters. Although both sides welcome the intended nationally determined contributions communicated by each other and by other Parties, the joint statement does not clarify whether the INDCs are binding, especially for developing countries. It seems that U.S and China failed to reach an agreement on the form of the outcome document to be produced at the Paris Conference, given that the joint statement does not specify whether it is another legal instrument or an agreed outcome with legal force. Another missing element in the joint statement is technology transfer from developed countries to developing ones, despite that both sides recognize the crucial role of major technological advancement.

 


 

References:

1.Qin Tianbao, China’s Peaceful Development and Global Climate Change: a Legal Perspective, 3(1) Law, Environment and Development Journal (2007), at 64;

2.U.S.-China Joint Announcement on Climate Change, 12 November 2014;

3.U.S.-China Joint Presidential Statement on Climate Change, 25 September 2015;

4.Enhanced Actions on Climate Change: China’s Intended Nationally Determined Contributions, 30 June 2015.

Common sense and the climate negotiations

Common sense practices employed in policy and economics are often disregarded when it comes to the issue of climate change. Adhering to the precautionary principle, for example, is an approach used in taking policy action where there is a risk of harm to the public of inaction, despite an absence of scientific consensus. A definition derived from the 1998 Wingspread Conference sums it up:

When an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically.

This approach is unfortunately not fully realized within climate change policy decision-making. Although there is consensus in the scientific community regarding the reality of climate change, uncertainty remains about the specific nature and danger associated with these changes. Nonetheless, there is no question that the risk worsens with increasing inaction. Phrases regularly batted about during climate change conversations –“tipping point”, “catastrophe”, “existential threat” – are worrying, and rightly so. Climate change, if unchecked, will wreck havoc on the natural world and its inhabitants (that includes you, humans!).

The use of precaution is a common sense approach to dealing with unknown, potentially dangerous problems.

|priˈkô sh ən|noun: “a measure taken in advance to prevent something dangerous, unpleasant, or inconvenient from happening”

In the case of climate change, precautionary approaches take the form of reducing and/or mitigating emissions of greenhouse gases, as well as adapting to current and future impacts of climate change.

On the bright side, there is a global, centralized institution in place to specifically support these activities! Unfortunately, so far this support has not resulted in very much action.

Image from Center for Environment, Development & Technology, Malaysia

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