Economy

The Paris Agreement and Being Grateful for Small Mercies

The recently concluded agreement leaves unresolved a number of important procedural questions that have a direct bearing on the interpretation of covenant principles.

An industrial wasteland. Credit: cultr/Flickr, CC BY 2.0

An industrial wasteland. Credit: cultr/Flickr, CC BY-NC-ND 2.0

The outcome of the Paris negotiations brings a sense of relief, not elation. It is debatable whether the Paris Agreement represents real progress but, at least, it is not a giant backward step. When the Paris conference opened, there was a very real danger of major regression. Powerful developed countries, led by the United States, launched a concerted attack against the foundational principles of the UN Framework Convention on Climate Change, including the principle of ‘common but differentiated responsibilities’ (CBDR) as applied to the respective obligations of developed and developing countries. Their aim was to push through a new agreement that would not only consign the Kyoto Protocol to the dustbin of history but also put the UN Convention itself on the backburner. In short, their aim was regime change – overthrowing the current climate change legal regime and replacing it by a new regime designed to shift the major burden of mitigating climate change from their own shoulders to those of rising developing countries.

Over the past decade, the United States, followed by Canada, Australia, Japan and the European Union, have pursued a salami-slice strategy to progressively demolish the UN Convention. Slice by slice, they have pared down the principles and provisions of the Convention. The process of progressive attrition had already reached an advanced stage at the Lima conference last year. The developed countries hoped to deliver the final coup de grace at Paris. Environment Minister Prakash Javadekar and his delegation should be congratulated for their role in ensuring that this did not happen. Fending off powerful pressures and joining hands with other like-minded developing countries, they succeeded in ensuring that the CBDR principle and differentiation between developed and developing countries find a respectable place in the new agreement.

In a nutshell, the Paris Agreement is a Pledge and Review accord superimposed on the Framework Convention. All countries are required to pledge mitigation actions and to progressively enhance these actions at periodic intervals. Failure to achieve a pledged target does not invite a penalty but there is an implicit moral censure. Unlike the Kyoto Protocol, the emission reduction obligations of developed countries are not legally binding, nor do they need to reflect comparable effort on the part of these countries. They are entirely voluntary, like the pledges of developing countries. There is provision for financial support to developing countries but this support is not clearly distinguished from ordinary capital flows. The net effect is to weaken the Convention provision that developed countries ‘shall’ contribute financial resources to cover the full incremental costs of agreed measures implemented by developing countries. Mitigation costs can therefore be shifted to the shoulders of the poorer countries, which are victims of climate change and have little or no responsibility for causing it. The CBDR principle is reiterated but its link to historical emissions is glossed over, diluting its significance.

The story does not end in Paris. The recently concluded agreement leaves unresolved a number of important procedural questions that have a direct bearing on the interpretation of covenant principles and provisions. We may expect developed countries to resume their efforts to re-interpret the Convention during future negotiations on these outstanding issues.

Public memory is short. Hardly anyone recalls that in 1991, at the early stages of the negotiations leading up to the UN Convention, Japan proposed a voluntary Pledge and Review agreement. The proposal was summarily dismissed. There was a broad consensus on the gross inadequacy of an agreement which ignored the historical responsibility of developed countries and imposed no legally binding obligation on these countries. An approach that was summarily rejected as inadequate at the outset of the climate change negotiations, is being hailed today as a great advance!

How do we explain the radical shift in the position of the developed countries? Why have they forsaken the Kyoto Protocol and why did they begin to press for a drastic revision in the accepted interpretation of Convention principles and provisions? The answer lies in the realm of economics, not environment.

The UN Framework Convention on Climate Change and its Kyoto Protocol were adopted in the 1990s, when the developed or OECD countries enjoyed unchallenged supremacy in the global economic order. The collapse of the Soviet Union and COMECON had further buttressed their economic dominance. Developing countries such as China, India or Brazil were not seen as serious rivals or threats to their leadership in the economic sphere. The picture changed dramatically since the turn of the new millennium. China overtook Japan and Germany to emerge as the largest economy and exporter, second only to the United States. The period also witnessed the rapid rise of India and other big developing countries and their emergence as major economic powers. The current trend is towards a wider diffusion of global economic power, the rise of new centres of influence and, consequently, a relative decline in the position of the affluent developed countries.

Against this background, questions have been raised in developed countries about the competitiveness implications of the Convention and the Kyoto Protocol. There are claims that these agreements impose a competitiveness disadvantage on developed countries, since only they are required to bear mitigation costs to comply with their commitments, while developing countries have no such obligation. It was also argued, despite the absence of supporting empirical evidence, that carbon-intensive industries would re-locate to developing countries. (Interestingly, such demands were not raised in the EU or Japan in respect of the United States, which was not a party to the Kyoto Protocol and was not subject to the emission reduction commitments accepted by other developed countries.) Industrial interests joined hands with trade unions to demand protection against alleged threats to exports and jobs.

Others see in climate change a vast potential market for ‘environmentally friendly’ goods and services. The UN Convention provides that developed countries should facilitate technology transfers to the developing countries by meeting the incremental costs of such technologies or through other means. This means that the diffusion of green technologies should not be viewed simply as a market opportunity but as an essential part of equity- based international cooperation. The opposing view shifts the onus of technology deployment to the shoulders of the poorer countries, which are now being pressed to remove tariff and other ‘barriers’ as well as to ‘incentivise’ technology imports.

The CBDR principle calls for differentiating the mitigation and financial obligations of the developed countries from those of the developing countries. For precisely this reason, it has come to be viewed by the OECD countries as a threat to the economic interests, at a time of their relative economic decline. Hence their insistence on a new climate change regime to marginalise or reinterpret this basic principle of environmental justice. The Paris Agreement was a major step in that direction.

Chandrashekhar Dasgupta is a retired ambassador and former climate-change negotiator.