Australia: COP21 – The Paris Agreement

A historic deal

The "Paris Agreement" is being widely proclaimed as a historic deal and one that will inevitably lead to decarbonisation. It seems clear that the Agreement could herald a significant shift to a low carbon future over the coming decades, including in respect of energy, transport and the built environment.

The Agreement was adopted at 19.27pm on 12 December 2015

Laurent Fabius, President of the COP 21 UN Climate change conference and French foreign minister, declared that:

"The Paris Agreement allows each delegation and group of countries to go back home with their heads held high. Our collective effort is worth more than the sum of our individual effort. Our responsibility to history is immense." .

French President Francois Hollande told the assembled delegates:

"You've done it, reached an ambitious agreement, a binding agreement, a universal agreement. Never will I be able to express more gratitude to a conference. You can be proud to stand before your children and grandchildren."

UN Secretary General Ban Ki-moon said:

"We have entered a new era of global cooperation on one of the most complex issues ever to confront humanity. For the first time, every country in the world has pledged to curb emissions, strengthen resilience and join in common cause to take common climate action. This is a resounding success for multilateralism."

Christiana Figueres, Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC), said:

"One planet, one chance to get it right and we did it in Paris. We have made history together. It is an agreement of conviction. It is an agreement of solidarity with the most vulnerable. It is an agreement of long-term vision, for we have to turn this agreement into an engine of safe growth."

What are the main pillars of the Agreement?

  • Holding increases in temperature to well below 2 degrees Celsius and pursuing efforts to limit temperature increases to 1.5 degrees Celsius above pre-industrial levels
  • Increasing countries' ability to adapt to the effects of climate change and foster climate resilience and low greenhouse gas emissions development
  • Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate resilient development

Will it limit global warming to 1.5 degrees Celsius?

Not yet. Parties to the Agreement are required to prepare and communicate successive nationally determined contributions (NDCs) and pursue domestic mitigation measures with the aim of achieving such contributions. The current commitments, which were tabled by countries in the lead up to COP21, would result in a temperature increase of 2.7 degrees by the end of the century. However, it is intended that the mechanism for ratcheting efforts which has been enshrined within the Agreement (see below) will get us on a 1.5 degree pathway (or closer to it) over time. It is recognised that Parties' efforts will represent a progression over time, and that subsequent NDCs will reflect a country's highest possible ambition.

Have we moved away from the principle of common but differentiated responsibilities?

This principle, enshrined in the UNFCCC, has been a key feature of the climate negotiations for many years. It has allowed many developing countries to continue to argue that their lack of historical responsibility for climate change and the fact that they are still developing their economies means that they should have different obligations with respect to responding to climate change than those of developed countries. This principle remains fully enshrined within the Paris Agreement, a major victory for developing countries.

In particular, one of the key provisions, Article 4.4, almost undid adoption of the Agreement at the 11th hour. This article requires developed countries to undertake economy-wide absolute emission reduction targets (developing countries are only required to continue to enhance their mitigation efforts and are encouraged to move to such targets over time). In the draft that was presented for adoption there were two critical words - "shall" and "should". The expression "shall" applied to the developed countries' obligation and the word "should" applied to the developing countries' obligation. It had apparently been intended that both types of countries should have the same type of obligation, namely "should". This was of particular importance to the US which would have had difficulty signing up to a legally binding obligation to implement its reduction target. At the (very!) last minute, it was agreed that there had been a typographical error (albeit an incredibly important one) which was put down to the sleep deprived negotiating team doing the drafting, and it was agreed that the amendment to change "shall" to "should" could be dealt with as a technical error.

Nationally determined contributions

Parties are required to prepare, communicate and maintain successive NDCs that they intend to achieve. Parties must pursue domestic mitigation measures with the aim of achieving the objectives of such contributions. This is a long way from parties being legally bound to achieve specific emissions reduction targets (as was the case under the Kyoto Protocol). However, this compromise was necessary in order to ensure that all major emitters were comfortable entering into the Agreement. Successive NDCs, to be communicated every five years, are expected to show a progression. They will be recorded in a registry held by the Secretariat. All Parties are also encouraged to formulate and communicate long term low greenhouse gas emission development strategies.

This is a culmination of the "bottom up" approach enshrined in the Copenhagen Accord in 2009. Though many have criticized the approach as not being sufficiently legally robust, the submission of intended NDCs during 2015 has unlocked emissions pledges. Countries now know what other countries are currently prepared to do, and what more must be done in order to remain within the carbon budget available to ensure a 1.5 / 2 degrees Celsius future.

How will developing countries contribute?

Though developed country Parties should continue taking the lead by undertaking emission reduction targets, developing countries should continue enhancing their mitigation efforts, and are encouraged to move over time towards economy-wide emission reduction or limitation targets in the light of different national circumstances. Support will be provided to developing country Parties for this purpose, recognising that enhanced support for developing country Parties will allow for higher ambition in their actions.

Will there be a role for carbon markets?

Although the inclusion of this matter was touch and go during much of the course of 2015 and in the last days of negotiation of the Agreement, a role for carbon markets has been included in the Agreement and the supporting Decision "recognizes the important role of providing incentives for emission reduction activities, including tools such as domestic policies and carbon pricing".

The private sector in particular will be gratified to see a reference to Parties being able to use, on a voluntary basis, "cooperative approaches that involve the use of internationally transferred mitigation outcomes" towards NDCs. This has to be "authorised by the Parties". In the past the EU has been the driving force behind the development of such market-based approaches. It may be that they can now be implemented into the EU's 2030 climate package which is currently under development.

A mitigation mechanism is established and will allow parties to demonstrate compliance with their NDCs. The same emissions reductions under the mechanism shall not be double counted against two parties' NDCs. As with the current Clean Development Mechanism, there will be a mechanism for a share of the proceeds from such mechanism being made available to developing countries.

What is the role of forests?

Parties are encouraged to conserve and enhance greenhouse gas sinks and reservoirs including forests. This includes results- based payments for reducing emissions from deforestation and degradation (REDD+). This, combined with the nod to carbon markets, may help to unlock a market-based approach to REDD+.

What about adaptation?

Though no adaptation mechanism is established, parities are required as appropriate to engage in adaptation planning and implementation of actions which include preparation of adaptation plans. They must submit adaptation communications. This is likely to involve significant amounts of new climate-resilient infrastructure, as well as lots of assistance in putting together adaptation plans.

What about loss and damage?

A relatively recent theme to emerge from the negotiations was an insistence, particularly by developing countries, that mechanisms needed to be put in place to help deal with impacts of climate change, including matters which could not be adapted to. It is therefore a bit of a coup for developing countries that "loss and damage" text made it in to the Agreement and the "Warsaw International Mechanism" is enshrined in the Agreement. However, the Decision text, which accompanies the Agreement, specifically provides that the loss and damage clause of the Agreement does not involve or provide a basis for any liability or compensation (which was a redline requirement for the US to accept the loss and damage provisions in the Agreement).

Who will pay?

Developed countries are required to provide financial resources to assist developing countries to mitigate and adapt to climate change. Other parties (including developing countries) are encouraged to provide or continue to provide such support voluntarily. Developed counties should continue to "take the lead" in mobilising climate finance and this should represent a progression beyond previous efforts. The "global stocktake" (see below) will also review climate finance.

No specific amount of finance has been set out in the Agreement itself. However, the accompanying Decision states that developed countries intend to continue their existing collective mobilisation goal through 2025, and that prior to 2025 the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA) shall set a new collective quantified goal from a floor of USD 100 billion per year, taking into account the needs and priorities of developing countries.

How do we know that countries will do what they say they will?

This is another issue which is not yet fully developed. The Agreement establishes a transparency framework for action and support, with the modalities, procedures and guidelines for this framework to be established at the first session of the meeting of the Parties to the Paris Agreement. The Agreement does provide, however, that each Party to the Agreement must provide a national inventory report of emissions by sources and removals and information to track progress made in implementing and achieving its NDC.

How will action be beefed up over time?

Periodic stocktaking will be implemented, with the first stocktake in 2023 and subsequent five-yearly stocktakes. Prior to the Agreement taking effect in 2020, an informal dialogue will take place in 2018 to take stock of the collective efforts of Parties in relation to progress towards the long-term goal and to inform the preparation of NDCs. It is likely that at this time, given what the intended NDCs currently provide for in terms of overall temperature increase, countries will be expected to "up the ante" on the INDCs submitted pre Paris, and come forward with more ambitious NDCs under the actual Agreement.

Will there be a compliance mechanism?

Yes (of sorts)! We were not necessarily expecting to see a compliance mechanism being implemented but the parties have agreed to a mechanism being established to facilitate the implementation of, and compliance with, the Agreement, consisting of a twelve person committee. It will be non-adversarial and non-punitive.

Ratification and entry into force

The Agreement will be open for signature from 22 April 2016 to 2 April 2017. It will enter into force on the thirtieth day after at least 55 parties accounting for 55 percent of global greenhouse gas emissions have deposited an instrument of acceptance.

What is left to do?

A huge amount of work will need to be done in implementing the Agreement in the future. This includes:

  • Preparing a further synthesis report covering all intended NDCs, which will be published by 2 May 2016
  • Preparation of a special report by the IPCC on the impacts of global warming of 1.5 degrees Celsius above pre-industrial levels by 2018
  • Preparation of the rules for the sustainable development mechanism
  • Development of modalities for accounting of the financial resources provided by developed countries
  • Undertaking a work plan around capacity building
  • Establishing a capacity building initiative for transparency
  • Development of the rules for the transparency framework for action and support

Join us to find out more about the adopted Agreement at our post-COP webinar at 9:00 am GMT on Tuesday 15 December.

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