After many marathon negotiation sessions, Canada, along with 195
other countries, signed a new climate agreement this past weekend
called the Paris Agreement. The Paris Agreement was adopted under
the United Nations Framework Convention on Climate Change.
Key Features of the Paris Agreement include:
The Paris Agreement takes a two-track approach to its legally
binding status. Countries are legally bound to report and monitor
their greenhouse gas (GHG) emissions; however, the details to
achieve this have yet to be determined. The Paris Agreement calls
for a "transparency framework" to achieve uniformity
among reporting countries. Countries are also required to meet
every five (5) years to review their individual GHG emissions
reductions progress and be prepared to amend country-specific GHG
emissions reductions targets. Not surprisingly, individual country
targets are not legally binding.
2. Aggregate Temperature Increase
The Paris Agreement includes the aspirational goal of
"holding the increase in the global average temperature to
well below 2°C above pre-industrial levels and pursuing efforts
to limit the temperature increase to 1.5°C." The GHG
emissions reductions required to achieve this goal will require
individual countries to set aggressive reductions targets.
3. Cost Sharing Among Developed Countries
The Paris Agreement preamble (which is not binding) includes a
goal of developed countries funding a $100 billion transitional
fund to help developing countries become developed without a heavy
reliance on cheap fossil fuels. Many developing countries have
stated that even if such an amount were made available, it would
not be enough to help them develop economies heavily reliant on
renewable energy sources.
4. The Role of Forests
There has been a significant amount of work done over the past
number of years on integrating deforestation and forest degradation
into a global climate change solution. The Paris Agreement is the
first international GHG emissions reductions document to explicitly
include this topic. The inclusion appears to serve as a political
signal to countries to enact policies they have already
5. New Era of International Carbon Trading
The Paris Agreement contemplates a new market-based mechanism
that is expected to go beyond traditional offsetting and aims to
deliver overall mitigation in global emissions. The mechanism rules
for the use of internationally transferred mitigation outcomes
(ITMOs), which can be used as part of a country's actions to
address climate change, need to be developed for a 2020 launch. The
mechanism is widely expected to copy best practises of the Kyoto
Protocol's Clean Development Mechanism (CDM) and Joint
Implementation (JI) trading regimes while avoiding prior
Next Steps for Canada
Canada's current GHG emissions reductions goal is 30 percent
below 2005 levels by 2030. It is a goal introduced by the
Conservative government earlier this year. The current Liberal
government has described this goal as a "floor" of what
Canada's domestic plan will aim to achieve. The Liberal
government has stated that it will develop and announce its
Canada-wide approach within 90 days of signing the Paris Agreement.
We note that the current provincial GHG emissions reductions
regimes fall well short, in aggregate, of Canada's current
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