Little compelling evidence, but some hope for progress

The December 12 Paris Agreement committed practically every country to a continuing process of making undertakings to reduce greenhouse gas (GHG) emissions. However, this outcome did not result in any new, legally binding obligations on any country to meet a particular GHG emissions target - and will not therefore directly dictate any particular emission reduction obligations for businesses. Indeed, the 35 pages that constitute the agreement and supporting decisions (collectively 'the Agreement') include few legally binding obligations of any kind.

Nevertheless, the Paris Agreement could have far-reaching implications. It establishes a more robust and durable architecture for international co-operation on climate change. It contemplates a framework under which countries come forward with emission reduction commitments on an ongoing basis. The framework will also subject those commitments to public review and assessment. The goal is to foster ambition and mobilise resources. As a result, the Paris Agreement and the processes that follow are likely to shape future development of US climate and energy policy, as well as the expectations of global financial markets.

A legacy from the 2009 Copenhagen conference (COP15) was that although widely regarded as a failure it did represent the first effort to move toward a new structure based on bottom-up, non-binding commitments from all major emitting countries. As a result, before the first meeting of COP21 was even brought to order, 185 governments had already submitted voluntary pledges of action, referred to as "Intended Nationally Determined Commitments" (INDCs). In the Agreement these have become NDCs.

Elements of the Agreement

The Paris Agreement "welcomes" the INDCs, but does not make them legally binding. This non-binding,bottom-upapproachlikelymade it possible for the United States, China, and other major emitters to make commitments tailored to their own circumstances - and for nations to make more ambitious commitments. In addition, it is noteworthy that practically all 195 parties put forward INDCs. Scattered throughout the Agreement are clauses recognising the differing circumstances of developing countries, but the Agreement eliminates the strictly binary distinctions; each country is obligated to submit an NDC.

Though the content of commitments is voluntary, the Agreement underpins the NDCs with binding procedures to promote transparency, including rules for submitting information on how a commitment was formulated, and for the monitoring, review, and verification (MRV) of performance. These MRV rules apply with equal force to developed and developing countries.

The Paris Agreement includes overall goals in two forms: a temperature goal and an emissions goal. Article 2 states that the parties aim to hold the increase in global temperatures to "well below" 2°C above pre-industrial levels, and to "pursue efforts" to limit the increase to 1.5°. The parties also agreed on a goal to ensure that global emissions peak "as soon as possible."

Shortfalls

The text of the Agreement itself acknowledges that the NDCs submitted to date will not be sufficient to meet the temperature or emission goals. For this reason, perhaps the most important part of the Agreement is an obligation that parties continue to ratchet up the ambition of their NDCs. Article 4 provides that each party "shall prepare, communicate and maintain successive nationally determined contributions that it intends to achieve."Article3stipulatesthatthe"efforts of all Parties will represent a progression over time." The Agreement "urges" parties to submit new NDCs by 2020, and to revise these NDCs every 5 years thereafter. The new NDCs will be informed by five-yearly reviews of the extent to which actions by the parties are making progress toward achievement of the goals; the first 'stocktake' will be in 2018.

The Agreement also calls on the Parties to develop information to avoid or minimise "loss and damage" resulting from climate change. However, US negotiators were successful in ensuring that references to the "loss and damage" concept also make clear that it "does not involve or provide a basis for liability or compensation."

Influence of COP21

In the long-term, the influence of the Paris Agreement may depend less on its actual terms than on the weight given to it by political forces and markets. Various cities, states, companies and investors announced initiatives around the Paris talks. For example, a group of 20 governments (including the United States) launched an initiative, called Mission Innovation, in which they committed to double public investment in clean energy research and development over the next five years. The question is whether these and other initiatives reflect a new and sustainable momentum that will result in further long- term changes in policies and markets.

The Paris Agreement compels very little, but it establishes a process and a set of institutions that could mobilise more ambitious and comprehensive global action.

Extracts from the Van Ness Feldman commentary written by analyst Kyle Danish.

(Originally published in MPS January 2016)