Paris climate deal nears ratification threshold, other meetings ahead

28 September 2016

The new Paris Agreement on climate change – secured last December in the French capital after which it is named – has been ratified by 61 nations, crossing the first of two thresholds required for it to come into effect. The news has raised expectations that the landmark accord could come online in the next few months.

“I am confident that, by the time I leave office, the Paris Agreement will have entered into force. This will be a major achievement for multilateralism,” said UN Secretary-General Ban Ki-moon following a high-level event on the Paris Agreement held on Wednesday 21 September at UN headquarters in New York. Ban’s term as UN Secretary General will end on 31 December this year. 

Last week’s dedicated New York meeting saw 31 countries simultaneously deposit their instruments for ratification for the deal. The Paris Agreement requires ratification by 55 countries accounting for 55 percent of global greenhouse gas emissions. At press time, emissions covered by the current ratifications stand at 47.9 percent.

Other major emitters have also signalled plans to ratify soon. Indian Prime Minister Narendra Modi said on Sunday that the country would approve the deal on 2 October. The country accounts for just under seven percent of global emissions, according to the World Resources Institute (WRI).

Leaders from the EU’s member states indicated earlier this month their own plans to fast-track ratification of the global climate accord. The UK – which did not participate in the informal summit geared towards the further development of the EU once the island nation has left – has also confirmed plans to ratify this year. (See Bridges Weekly, 22 September 2016) [Editor’s note: Bridges Weekly is ICTSD’s flagship publication on trade and sustainable development news]

EU environment ministers are due to agree on the bloc’s conclusion of the Paris Agreement on Friday, a step that would enable the EU Council to adopt a ratification decision, in consent with the European Parliament. Insiders hope that this process will be concluded by early October.

In theory, this would mean that the EU as a whole – which accounts for around 10 percent of global emissions – would join the deal, although formal ratification by individual member states would also be required. This is due to the division of collective and individual responsibilities for the Paris Agreement’s implementation. Austria, France, Germany, Hungary, and Slovakia have already completed these domestic processes.

Reports surfaced this week, however, that Poland was conditioning its support for the EU process on other member states taking into account its coal-reliant energy system. This could come into play as the EU identifies how to share out its emissions-reduction commitments for sectors not covered by its carbon market. (See Bridges Weekly, 28 July 2016)

An estimated 79 countries are likely to have ratified the deal by the end of the year, accounting for around 62 percent of global emissions, according to a monitoring effort by non-profit group Climate Analytics of expressed public intentions.

Towards implementation

The Paris Agreement under the UN Framework Convention on Climate Change (UNFCCC) requires individual parties to submit nationally determined climate action plans. While there is an obligation to have a climate plan, the deal is not overly prescriptive about what these should entail, nor the level of such commitments.

The structure, hailed as an innovative step forward after previous failed attempts to clinch a global climate pact, has been criticised by some as having the potential to be ineffective for the scale of the challenge faced. Several other experts, however, say that how effective the Paris deal is in practice will depend largely on its implementation.

“If enough countries start implementing the Paris agreement, historians will see this as a watershed moment,” Erik Solheim, Executive Director the United Nations Environment Programme (UNEP), told the New York Times. “But if we don’t implement it, this will just be bringing a bunch of politicians together around a piece of paper.”

Work on operationalising the Paris Agreement – including hammering out key details around accounting deadlines and transparency arrangements – will continue at the UNFCCC’s Twenty-second Conference of the Parties (COP22). This year’s meeting will be held in Marrakesh, Morocco, from 7-18 November.

Other major climate results ahead

Several other major climate-related meetings featuring on the agenda ahead of COP22 are expected to yield outcomes with significant economic ramifications.

The International Civil Aviation Organization (ICAO) kicked off its 10-day General Assembly proceedings in Montreal, Canada, on Tuesday, with the hope of securing agreement on a global market based measure (MBM) to reduce carbon emissions from international air travel.

As of Tuesday, 59 states representing more than 81 percent of international aviation activity had agreed to participate in the pilot voluntary phase of a proposed MBM, due to run from 2021-2023. The proposed MBM, envisaged as a carbon offsetting and reduction scheme, is outlined in a working paper released by the ICAO Council in early September.

A subsequent phase would run from 2024-2026, applicable to states that participated in the pilot scheme, as well as others that choose to opt-in. All states will then participate from 2027-2035, unless accorded specific any specific “exemptions.” (See BioRes, 14 September 2016)

“This will be the first global agreement of its kind for an industrial sector. We are committed to carbon neutral growth from 2020,” said Alexandre de Juniac, Director General and CEO of the International Air Transport Association (IATA) in a press release supporting the development.  

The 191-member ICAO agreed in 2013 to outline an international aviation emissions reduction platform in time for its triennial assembly this year. The Paris Agreement covers neither emissions from international aviation nor shipping, with the two sectors together accounting for an estimated four percent of global emissions. These are growing at fast pace, scientists warn.  

For its part, the International Maritime Organization’s (IMO) Marine Environment Protection Committee (MEPC) is scheduled to meet from 24-28 October, where a working group will discuss possible emissions-reduction related steps for international shipping.

Also in October, parties to the Montreal Protocol on Substances that Deplete the Ozone Layer will meet from 10-14 October in Kigali, Rwanda, with a view to addressing climate-warming hydrofluorocarbon (HFC) emissions.

Used as coolants in refrigerators and air conditioners, HFCs have a warming potential over 1000 times stronger than carbon dioxide, but were initially deployed by the countries as an alternative to ozone-depleting hydrochloroflurocarbons (HCFCs) targeted for elimination by the Montreal Protocol.

According to the US Environmental Protection Agency (EPA), should these HFC emissions continue to escalate, their effects could significantly undermine the benefits that have resulted from cutting back on ozone-depleting substances under the existing Montreal accord.

Following years of debate on whether to address HFCs under the UNFCCC or under Montreal as a consequence of the HCFC phase out, countries ultimately agreed last November to negotiate an amendment to the Montreal Protocol by 2016. Discussions this year have focused on setting the baseline levels for reduction, determining “freeze dates” for production and consumption, as well as how to navigate an eventual phase out altogether. (See BioRes, 27 July 2016)

Both the US and China have thrown their weight behind reaching an deal this year on an HFC amendment to the Montreal Protocol, while over 100 countries last week backed a statement calling for an ambitious outcome at the Kigali meet that includes an early freeze date for developed countries and an ambitious phase down schedule for all.

Carbon pricing gap

Even as good news filtered in on the Paris Agreement and other climate governance efforts, a study released this week by the Organisation for Economic Co-operation and Development (OECD) found an estimated 80.1 percent gap between existing practices and an effective price on carbon at €30 (US$33) per tonne of carbon dioxide (CO2), with the latter already considered to be at the low end of the cost of carbon. The survey covered 41 countries representing about 80 percent of global emissions.

“Current carbon prices are falling short of the levels needed to reduce greenhouse gas emissions driving climate change, but even moderate price increases could have a significant impact, according to new OECD research,” the Paris-based agency said in a press release emailed to journalists.

Many experts argue that pricing carbon into economic activity will be key part of capturing the external cost of fossil fuel use and helping the transition towards low-carbon sources. While the number of carbon pricing schemes has increasingly significantly over the past few years, concerns around competitiveness and “carbon leakage” between countries have also grown in a world characterised by global production and asymmetric climate commitments.

In other words, some stakeholders fear that only selective ambitious carbon pricing may prove ineffective if firms move production and associated emissions elsewhere. One promising option suggested by several experts would be for countries to link carbon markets, a path already pursued by some, and envisaged as an option in the Paris Agreement.

The Carbon Pricing Disclosure (CDP) project also recently released a survey which found that while 370 companies in 14 high-emitting industries were adopting internal carbon pricing strategies, another 500 had no plans to do so. The report’s findings are based on disclosures by some 5000 companies from various regions and sectors.

ICTSD reporting; “Paris Climate Deal Passes Milestone as 20 More Nations Sign On,” THE NEW YORK TIMES, 21 September 2016; “India to ratify Paris Agreement on climate change on Oct.2,” THE HINDU, 26 September 2016; “Poland raises coal needs in EU climate push,” THE FINANCIAL TIMES, 27 September 2016; “Explainer: When will the European Union ratify the Paris Agreement?” CARBON BRIEF, 23 June 2016. 

Editor's note: This article has been updated to clarify the explanation of the OECD's effective carbon rates findings. A carbon price of 30 euros per tonne of carbon emissions is considered relatively low, while attaining the temperature objectives of the Paris Agreement to keep the world below a two degree Celsius rise from pre-industrial levels would require high rates in most cases.

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