United States: U.S. Businesses Evaluate Paris Agreement That Creates Framework For Global Greenhouse Gas Emissions

As reported elsewhere in this edition of The Climate Report, on December 12, 2015, 195 countries, including the U.S., adopted the "Paris Agreement," which creates a framework for reducing global greenhouse gas emissions in an effort to address climate change. Among the Agreement's primary goals is to limit the increase of the global average temperature to below 2ºC over pre-industrial levels. Paris Agreement Preamble, December 12, 2015, art. 2. The Parties also agreed to "pursue efforts" to limit the increase to only 1.5ºC above pre-industrial levels. Id. To accomplish these goals, each country will submit an Intended Nationally Determined Contribution ("INDC"), or emissions pledge, it intends to achieve. Id. art. 4.

Developed countries will strive toward absolute emissions reductions targets, while developing countries are encouraged to move to absolute targets over time. Id. Currently, 180 countries have already submitted INDCs. Since the current plans are not sufficient to keep the global temperature increase below the stated goal of 2ºC, the Agreement contains a ratcheting mechanism under which each country must review its INDC every five years, beginning in 2020, to determine if it can achieve more stringent reductions. Id.

The Agreement also calls for a transparency system. The system requires countries to supply, every two years, a national inventory of emissions and other information necessary to track progress in achieving their INDC. Id. art. 13. The specific reporting and monitoring measures have not yet been determined, but the mechanism provides for an independent and a public review of countries' reports.

Status of the Agreement and Issues Moving Forward. Among the Agreement's more notable features, particularly in the U.S., is that it contains mechanisms to help assess and monitor the emissions reductions of developing countries such as China and India, which are among the world's largest sources of greenhouse gas emissions.

First, the ratcheting mechanism requires each country to review its INDC every five years to determine if it can achieve more stringent emissions reductions. The ratcheting mechanism was a point of contention because large developing countries did not want to be pressured into establishing more stringent emissions reductions. The U.S. supported the mechanism, and it was ultimately included in the final Agreement.

Second, the Agreement creates a transparency system under which countries' progress toward achieving emissions reductions can be monitored. Again, large developing countries like China and India opposed this provision, but it was ultimately included in the final Agreement.

The ratcheting mechanism and the transparency system thus help to alleviate, at least in theory, the concern that large developing countries will not do their fair share to achieve emissions reductions.

The Agreement leaves many questions regarding implementation, particularly in the U.S. For example, the U.S. submitted a target of reducing emissions by 26 to 28 percent below 2005 levels by 2025. Whether the U.S. can accomplish this will largely depend on the fate of the recently enacted Clean Power Plan ("CPP"). The CPP, which is aimed at reducing emissions from existing coal-fired power plants, is facing numerous legal challenges in the U.S. It is unclear how the U.S. will achieve its target emissions reductions if all or part of the CPP is struck down or modified. Further, there is widespread concern over the economic and technical feasibility of the measures that will be required for the U.S. to meet its target emissions rate.

On a more global scale, as mentioned above, the current INDCs are insufficient to meet the Agreement's goal of a 2ºC limit on temperature increase, meaning further commitments will need to be made. The Agreement also does not make it clear from where the funding required to support target emissions reductions, particularly in developing countries, will come.

Finally, because the Obama administration took the position that the Agreement is not a treaty, it has not been approved by the U.S. Senate. Progress toward target emissions reductions will therefore depend on measures taken during the remainder of the administration's term. The next administration may decide to withdraw from, or simply not implement, the Agreement.

From a business perspective, in addition to the Paris Agreement, U.S. business interests are also watching a number of potential developments insofar as they relate to U.S. disclosure obligations. Recent regulatory and legislative developments are indicators of increased public interest in climate disclosures after the New York Attorney General's recent investigations into company statements regarding climate change and the newly penned Paris Agreement.

During a January 28, 2016 conference at the Northwestern University Law School conference in Coronado, CA, Securities and Exchange Commission ("SEC") Chairman Mary Jo White stated that the SEC is considering requirements that would increase the frequency of public company disclosures about climate change. According to a January 28, 2016 subscription service report by Bloomberg BNA, the change in climate change disclosure requirements is a part of a larger effort by SEC to evaluate the state of disclosures. Furthermore, the Government Accountability Office released a report that reviewed "(1) the types of climate-related supply chain risks companies are disclosing in their SEC filings and other channels through which companies may disclose climate-related supply chain risks; (2) how SEC considers climate-related supply chain risks when monitoring and enforcing compliance with disclosure requirements; and (3) what actions, if any, SEC has taken to identify climate-related supply chain risk information that investors may need." On Capitol Hill, Jack Reed (D-R.I.) introduced an amendment (S. Amdt. 2990 to S. Amdt. 2953) to a larger energy package, known as the Energy Policy Modernization Act (S. 2012), aimed at requiring SEC to update oil and gas industry guides and consider disclosure recommendations of the World Resources Institute. In the private sector, investor groups are asking public energy companies to disclose statements regarding climate change and activities to affect climate policy. Each of these developments marks efforts to increase the amount and substance of climate change disclosures for public companies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Jennifer M. Hayes
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions