Parties prepare for Paris Agreement

Steven McNab, partner and head of the environment and climate change practice at Simmons & Simmons in London, looks ahead to the twenty-second session of the Conference of the Parties (COP 22) to the United Nations Framework Convention on Climate Change (UNFCCC), with additional comment from Greg Harris, an associate with the firm in Beijing.

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What is the purpose of the Conference of the Parties (COP), and what is likely to be on the agenda at COP 22?

Steven McNab (SM): The COP is the supreme decision-making body for the UNFCCC. The UNFCCC is an international treaty that was negotiated at the ‘Earth Summit’ in Rio in 1992. It provides the framework for international cooperation to tackle the issue of climate change through reduction in manmade greenhouse gas emissions. The countries that have ratified the UNFCCC are called Parties to the Convention and they are part of the COP.

The twenty-second annual Conference of the Parties (COP 22) will take place in Marrakech, Morocco from 7–18 November 2016. The focus of COP 22 will be to kick-start the development of the so-called ‘rule book’ of the Paris Agreement—that is the rules, methodologies, mechanisms and guidance regarding how the agreement will operate. The provisional agenda for COP 22 can be found here.

What preparations have been made for the entry into force of the Paris Agreement, which was agreed at COP 21?

SM: The Paris Agreement will enter into force on 4 November 2016 and there will be some celebrations about this in Marrakesh. The speed at which the Paris Agreement will have come into force is unprecedented and because of this, the vital ‘rule book’ of the Paris Agreement does not yet exist.

This rule book needs to be approved at the first meeting of the parties to the Paris Agreement that is to take place during COP 22, though it remains to be negotiated. The subsidiary bodies of the UNFCCC have started their work so that negotiations on the rule book can start but ultimately it will be for the parties at the COP 22 to start creating it. Parties will have already been discussing this among other things—for example during the informal consultations which took place in Skhirat, Morocco from 8–9 September 2016. The focus of these informal consultations has been to advance discussions on the expected outcomes for COP 22; the Green Climate Fund (a fund dedicated to helping developing countries transition towards low carbon emissions); engaging in technical expertise in implementation, technology and capacity building; the Nationally Determined Contributions (NDCs) under the Paris Agreement, the efforts surrounding vulnerable states and territories and the Warsaw International Mechanism for Loss and Damage.

The Pre-COP Ministerial Meeting was also held in Marrakech between 18–19 October 2016 and saw ministers and representatives from 70 countries come together to finish the preparations for COP 22. These preparations included organising the early entry into force of the Paris Agreement and the holding of the first meeting of the parties to the Paris Agreement.

However, Christoph Schwarte, executive director of the Legal Response Initiative (a climate change charity operating out of the Simmons & Simmons London office), says that when looking at the substance of what is required for the operation of the agreement, very limited preparations at the international level have taken place and with regard to preparations at the national level and implementation of NDCs, this probably varies significantly.

How does COP 22 compare with COP 21? What similarities and differences will there be with regards to expected outcomes?

SM: COP 21 focused on the adoption of a new legal instrument—the Paris Agreement. COP 22 will focus on parties negotiating on, and deciding on, the future implementation of this agreement as well as in other areas of the work of the UNFCCC.

A glimpse of what can be expected at COP 22 can be heard in the rhetoric of senior officials. COP 22 President Salaheddine Mezouar has highlighted that the $100bn dollar per year climate finance roadmap is of significant importance and a call for COP 22 to be a ‘moment of action’ with particular attention on Africa and the most vulnerable countries to climate change.

One of the underpinning tenets of the UNFCCC process is interregional equity. NDC targets will help distribute wealth from the ‘North’ to the ‘South’ as less economically developed countries need more help to achieve their targets, and have played less of a part in contributing to climate change to date. This will be a key consideration as current NDC targets will achieve a reduction to 2.7°C if fully implemented (an increase on previous IPCC targets). COP 22 will debate the ‘how’ as well as the detailed mechanisms regarding ratcheting up the targets to achieve 2°C.

What is the significance of the Global Climate Action Roadmap (GCAR), and what is needed to implement it?

SM: The GCAR was set up by two ‘high level champions’ appointed to act on behalf of the President of the COP to enhance action on climate change prior to entry into force of the Paris Agreement, which was originally expected to be in 2020. As a result, parties acknowledged that more action was needed in the lead up to 2020 in order to ensure the highest possible mitigation efforts, in particular to address the gap between current mitigation commitments and the 2°C goal.

Extending the work already achieved as part of the voluntary initiatives of the Lima-Paris Action Agenda, the GCAR works towards reaching consensus on:

• NDCs
• tracking the implementation of existing initiatives to demonstrate credibility, promote best practices and enhance delivery
• providing guidance to the technical expert meetings

Stakeholders have been able to take part in a consultation on the GCAR, on how to accelerate the global climate action agenda. A joint report on climate action and on the implementation of the GCAR will be presented at the COP 22 by the two high level champions.

With regard to what is needed to implement the GCAR, it will certainly need stakeholder buy-in, as well as resources to organise the annual GCAR event showcasing climate action and sustained media interest, states LRI’s Christoph Schwarte. However, he also points out the fact that the early entry into force of the Paris Agreement is likely to shift the focus of the international community towards developing the rule book and putting the Paris Agreement into operation as soon as possible. The future of the GCAR is therefore at a crossroads: it could very well be used by the parties and future presidencies to make some noise, encourage action and raise awareness; but it may also fizzle out quite quickly if there is good progress in implementing the Paris Agreement.

How can resources of implementation (finance, capacity building, and technology) be made available to effectively support the implementation of the Paris Agreement?

SM: Developed country parties should deliver on their financial promises as highlighted in the preamble of the Paris Agreement, avoid ‘greenwash’—ie re-labelling existing development aid commitments to qualify as climate finance and avoid double counting of emissions reduction. In addition, access to financial support (eg for capacity building, technology development and transfer) to developing country parties should be as easy and straightforward as possible. The Green Climate Fund and other international finance institutions have an important role to play in providing this financial support, as well as the markets potentially, as envisaged under art 6 of the Paris Agreement.

In relation to capacity building and technology, the Technology Executive Committee (TEC) together with the Advisory Board of the Climate Technology Centre and Network (CTCN) and the Paris Committee on Capacity-Building are two key measures to implement the Paris Agreement. Both the TEC and the CTCN have agreed their joint report to COP 22 which will set out how best to implement technology in order to support the Paris Agreement. The report will be presented at COP 22 sourcing the opinion of the Global Environment Facility, the Green Climate Fund and expertise from the Technology Mechanism and the Financial Mechanism.

What impact will Brexit have on COP 21, the Paris Agreement and the UK’s input to COP 22?

SM: Not a great deal.

The UK has traditionally been a strong voice in favour of strong collective action to tackle climate change and a strong participant in negotiations. While it has adopted that stance as part of the EU bloc, and been more influential because of that, it has also, independently, gone further than most other governments in its long-term commitments on carbon reduction in the Climate Change Act 2008 (CCA 2008). CCA 2008 is not dependent on any overarching EU legislation. The EU ratified Paris as a bloc in October (as it did all the other material relevant treaties), and the current UK PM May has committed that the UK will also do that as a separate nation before the end of the year. Consequently, the national macro drivers should be unaffected by Brexit. Certainly, the number of major population centres at risk of projected sea level rise remains staunchly indifferent to the referendum results.

In September Mrs May indicated that the UK would ratify the Paris Agreement on its own account before the end of 2016. Then in October, the European Parliament ratified the agreement, leading some to speculate on how the burden of reducing carbon emissions will be shared post-Brexit. The UK may be minded to reduce its commitment putting more pressure on the other 27 EU Member States. On the other hand, it could commit to carry on its current arrangement with the EU (as a Member State) by agreeing a joint ‘nationally determined contribution’—Iceland adopted this approach following its ratification of the second commitment period of the Kyoto Protocol.

The Minister for Brexit has recently made clear that the ‘Great Repeal Act’ will convert existing EU law into domestic law ‘wherever practical’. We can expect policy changes to follow, but perhaps not as a priority. Tony Barber of the Financial Times has suggested the Post-Brexit landscape will look considerably similar to what we have now, with the UK having tentatively indicated that it will adhere to existing EU commitments regarding greenhouse gas emissions and the low-carbon future (see his article ‘Brexit Briefing: Climate Change’ 5 October 2016). That said, there is likely to be some pressure to tweak some of the detail in our climate mitigation plan depending on the perceived economic impact of particular measures on particular interest groups.

Some commentators suggest that Theresa May’s cabinet has organised itself to (aesthetically at least) lower the priority of climate change. How significant the change proves to be from previous governments remains to be seen. The responsibilities of the Department for Energy and Climate Change have been rolled into the new Department for Business, Energy and Industrial Strategy, said to indicate the cross-cutting rather than stand-alone nature of energy and climate policy though sceptics may not be convinced by this explanation. Mrs May’s ‘what will Brexit mean’ speech at the Conservative Party conference lacked any discussion on climate change.

Some remainers speculate that, outside the EU, the UK will find it hard to maintain its position as an authoritative voice on the global stage. COP 22 might be the first opportunity to test that hypothesis.

What additional action can be taken, and by whom?

SM: We all have our part to play in all of our roles. There is much that can be done at an individual, business, government and NGO level. So while the top-level policy direction is set at the COP, it is the aggregation of all of our micro everyday decisions (from mundane food and transport decisions to the adoption of clean tech) that will determine the habitability of the planet for future generations. Improving shared understanding of the impact our daily choices have, educating the next generation and making better low carbon choices are some priorities. No amount of international politicking will deliver what our children need from this generation. Finding, supporting and sharing the exemplars in cleantech and in community energy through work with www.pureleapfrog.org is where I focus my discretionary efforts but others can contribute in different ways.

But to emphasis one important area: transparency and disclosure. Building on, inter alia, the work of Mark Campanale’s Carbon Tracker Initiative and its game changing stranded assets analysis, the Task Force on Climate-related Financial Disclosures (TFCFD) led by Michael Bloomberg and Mark Carney has proposed fossil fuel companies should stress test their business for a future in which global warming is limited to 2°C. The results of this stress test should be disclosed to investors. The TFCFD has the responsibility of deciding the way public companies report standardised information about current and potential impacts of global warming. Currently only 64% of companies in the MSCI AII Country World Index report their carbon emissions. In order to establish a complete picture, the number of companies reporting needs to drastically increase.

Another avenue for action that is receiving increased interest in legal circles, inspired by some of the work of ClientEarth, is in the form of litigation against the state, whether at national level (as argued in the case brought by Dutch citizens against the Dutch government for breaching existing human rights, environmental and tort laws by failing to introduce adequate policy to tackle climate change) or international level (eg criminal prosecution by the International Criminal Court for illegal exploitation of natural resources, land grabbing or the destruction of the environment). In addition, Olivia Tattarletti at Simmons & Simmons suggests that creative legal avenues are increasingly being found to hold companies accountable for a variety of environmental law and human rights breaches and sees the potential for climate change litigation to follow suit.

What actions has China taken in preparation for COP 22 since formally ratifying the Paris Agreement?

Greg Harris: China’s top legislative body, the Standing Committee of the National People’s Congress, formally ratified the Paris Agreement on 3 September 2016. However, since well before that date, China has been taking vigorous action to combat climate change since 2015. Many of these efforts are now coming to fruition.

In March of this year, China released its 13th Five Year Plan, which has set ambitious environmental targets, including:

• reducing total consumption of primary energy to less than 5 billion tons of standard coal by 2020
• reducing energy consumption per unit of GDP by 15% of 2015 levels by 2020
• reducing carbon dioxide emissions per unit of GDP by 40–45% of 2015 levels by 2020

As well, after 15 years studying trading systems in other jurisdictions and experimenting with pilot programs in two provinces and five cities, China is set to launch its national cap-and-trade program in 2017. The program will cover six of China’s largest carbon-emitting industrial sectors, including power generation, iron and steel, chemicals, building materials, papermaking, and nonferrous metals.

Steven McNab has 19 years of experience as an environmental and planning lawyer specialising in energy and climate change law, as well as UK, EU and international environmental law. Primarily focused on projects and advising on transactions, he also provides standalone regulatory advice. Steven is the founder and chairman of Pure Leapfrog, an award winning community energy charity. He also developed the Cleantech Curve, an online product that gives young companies in cleantech access to the legal support they need to develop firm foundations in order to take their business to the next level. Steven was one of the first lawyers to identify the importance to clients of the shift to a carbon-constrained future. He developed a climate change practice that was recognised as early as 2001 (in Legal 500) as being the joint leader in the field. Steven has lectured and written on his specialist areas quite extensively, most notably delivering a paper to UN specialised agency ICAO in Montreal on emissions trading.

Steven would like to thank Olivia Tattarletti and Baldeep Namas, trainee solicitors at Simmons & Simmons, for their input.

Interviewed by Kate Beaumont. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.