The EU Governance Regulation as a foundation for the Paris Rulebook.
This text in Swedish.
The Katowice climate change conference has entered its second week. Now it is time for the world to act on what we agreed on in Paris three years ago. That conference delivered the goals – now it is time to produce the plan for how to achieve them.
The aim of Katowice is to negotiate the Paris Agreement’s ”rulebook”, the guidelines that are to govern the implementation of the agreement. In that sense, it is very similar to a law recently adopted by the EU, “the Regulation on the Governance of the Energy Union and Climate Action” (GR). The purpose of that regulation is to serve as the EU roadmap for achieving the Union’s 2030 energy and climate targets, and in a longer perspective, to contribute to the achievement of the Paris Agreement. These similiarities offer us an opportunity to draw inspiration from the GR in designing the Paris Rulebook. In this text, I will examine the most critical issues during COP24 and discuss the GR’s solutions to similar issues.
The Paris Agreement
Firstly, some background. During the Paris climate summit in 2015, the world agreed on a global temperature target for the first time. In the agreement it is stated that “the increase in the global average temperature [should be kept] well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C” (PA Art. 2.1a). The agreement also describes how this goal should be achieved. One of the most significant tools are the Nationally Determined Contributions (NDC, Art. 4). These NDCs should outline how a country plans to do its part in reducing global emissions. The agreement also establishes the responsibility of richer countries to support developing countries in their climate action, and institutes funding instruments such as the Green Climate Fund (Art. 9, 10 and 11).
The negotiations in Paris produced an agreement that clearly states the targets we are reaching for. However, the discussions on how we are supposed to get there were postponed to a later date. This is what COP24 is about, and what the negotiators in Katowice have to achieve.
The EU Governance Regulation: a possible foundation for the Paris Rulebook
The rulebook will describe how the articles of the Paris Agreement should be interpreted and implemented. Similarly to the Governance Regulation, it can be likened to a roadmap for the Paris Agreement, describing what the world’s countries are expected to do in order to fulfil their part of the agreement. There are many similarities between the rulebook and the GR, and the latter’s solutions can in many ways be used to address the problems facing the design of the rulebook.
So, what issues are the most critical during COP24, and what solutions does the GR provide for these? Three areas are among the most significant: 1) guidelines for the design of NDCs; 2) guidelines for reporting and review; and 3) the global stocktake. Let us discuss them in turn.
1. Guidelines for the design of NDCs
The first proper national climate plans will be presented in 2020. It is not yet clear what should be included in these plans, whether all countries should follow the same timeframe or not, and if all countries should plan for actions at the same level of detail. The GR provides some guidance on this matter.
The regulation has its own equivalent to NDCs, so-called ”National Energy and Climate Plans” (GR Art. 3). These point to what should be the basis of the NDC guidelines: rules that ensure consistency, clarity and transparency.
The GR’s national plans are designed according to a common binding template. All plans must therefore, for example, include a chapter on the current political situation, with sub-headings on currently implemented measures in the energy and climate areas etc. Additional chapters address national objectives in areas such as energy efficiency and renewable energy, as well as descriptions of planned measures and impact assessments of these (GR Art. 3-14; Annex I). These common, detailed requirements for designing the plans increase the likelihood that they will actually be implemented and deliver results. When large, abstract climate targets are broken down into sector-specific sub-goals, they become manageable.
Consistency, clarity and transparency
Equally detailed rules for NDCs are not possible, but the GR points to the importance of a consistent, common framework for countries to work with in addressing climate change. With consistent plans, it is much easier to compare the commitments of different countries, which in turn gives us a clearer picture of where we are heading. Something that, in turn, is a prerequisite for us being able to raise climate ambition when necessary. It will also be easier to assess the fairness of individual climate plans with a higher degree of consistency among NDCs – determining whether one country does enough in comparison to another.
In view of this, some important points to include in a common NDC framework could be: sector-specific sub-goals, requirements on determining how much of a country’s total emissions to NDC covers, descriptions of planned instruments and methods for monitoring the NDC’s implementation. In addition, each party should clearly state on what grounds it considers its NDC to be fair and ambitious in light of its national circumstances. The parties should agree on variables to include in determining these circumstances, where relative cost of efforts, historical emissions, potential for increasing the capacity of renewables, climate change vulnerability and human development could be a few factors to include.
The conditions for establishing common and consistent guidelines are wholly different at a global level, compared to an EU one. While the GR is largely designed in a ”top-down” perspective – being a binding law applicable to all EU Member States – the Paris Agreement and its NDCs are based on a “bottom-up” model, based in national capacities. Therefore, the guidelines of the rulebook require as much clarity as possible. Otherwise, the risk of countries trying to avoid actual commitments increases, as it is difficult to compare and assess the efforts of different countries.
Clarity also contributes to transparency, which is a prerequisite for maintaining trust in the NDCs. It supplies some certainty of the fact that other countries are also doing their part. That in itself is also a prerequisite for maintaining trust between the parties of the Paris Agreement, and in turn to the agreement as such. When President Trump stated that the US would pull out of the Paris Agreement, he named its “unfairness” as one of the primary reasons. Such a statement points to where deteriorating trust might lead us. Without sufficient trust between parties and towards the agreement as such, the entire global climate framework is likely to collapse.
2. Guidelines for reporting and review
This point is in many ways connected to the previous one. Here, the discussions will focus on “the enhanced transparency framework” (ETF), that governs how the implementation of the Paris Agreement is to be reviewed and evaluated. The principle that ought to pervade the framework is greatest possible transparency, as the Paris Agreement’s bottom-up design requires a system that ensures the credibility of reported measures and emission reductions.
The ETF consists of two pillars, reporting and evaluation. They have two underlying purposes. Firstly, to provide a structure for reporting on how national efforts to reduce emissions is progressing, and secondly, to provide greater clarity about climate funding.
National greenhouse gas (GHG) inventories
The Paris Agreement compels the parties to ”regularly” provide inventories of national greenhouse gas emissions and to report on their progress in implementing their NDCs (PA Art. 13.7). The most critical issue regarding emission inventories is how often these should be published, annually or biennially, and if all parties will be subject to the same requirements content-wise. Negotiators must agree on similar time requirements for reports on NDC progress, but also on more detailed guidelines for the reports’ contents along with the methods used to calculate progress.
The GR commits Member States to, by 31 July 2021 and every year thereafter, publish reports on their greenhouse gas emissions (GR Article 26.2). The contents of these inventories is thoroughly detailed in the GR, from which specific gases should be included in the calculations, to specific headings on emissions from specific sectors such as papermaking (GR Annex V).
In addition, the Commission has been tasked with establishing a ”Union inventory system” acting as a quality assurance mechanism, auditing the reports of Member States. In 2027 and 2032, the Commission will also carry out a comprehensive review of previously submitted inventory data (GR Article 38). Through these provisions, the GR ensures the reliability of the GHG inventories and controls whether emissions are actually decreasing at the rate previously reported.
Here too, it is possible to identify the key concepts of consistency, clarity and transparency. Common rules that provide the conditions for effective comparison and accountability. These aspects should lie at the heart of the ETF guidelines.
All parties to the Paris Agreement should compile inventories each year. It is necessary if we are to reliably assess whether we are on track to meet our climate goals. As regards the scope and detail of the inventory, there is greater room for flexibility. We cannot deny the fact that different countries have different capacities to collect and compile data on national emissions. We have to respect these differences, while ensuring the highest possible consistency.
A system of different ”tiers” for the level of reporting requirements could be a solution to this issue, where countries with different capacities are placed in different such tiers. The UN’s Intergovernmental Panel on Climate Change (IPCC) has established such a system, where tiers 1, 2 and 3 all set different levels of reporting requirements. Transferring this system to the rulebook and the ETF could provide a solution, while allowing countries to raise the level of ambition in their reporting – i.e. moving to a higher tier – whenever possible.
Reporting on NDC progress
The GR has sound rules for reporting. By 15 March 2023, EU countries will each submit a comprehensive progress report to the Commission (GR Article 17). The report will describe how far an individual Member State has come in achieving the country’s national energy and climate plan, while describing value and shortcomings of implemented measures. The report will detail development in six areas, including renewable energy and energy efficiency. After 2023, Member States will produce updated reports every two years.
The parties to COP24 should be inspired by this structure. In particular, transparency is essential if trust between parties is to be maintained. Countries should therefore be required to describe the methods used to assess progress in their respective reports. In the GR, the provisions for reporting are bounded in law, an option closed to the parties of the Paris Agreement. Consequently, clear rules and requirements on e.g. reporting on the methodology used represent a kind of middle ground.
The financing issue is one of the most critical during the negotiations in Katowice. By 2020, USD 100 billion will be paid annually to developing countries, aiding them in implementing climate measures. A large number of these countries assert that the flow of climate financing is increasing too slowly, making it difficult for them to start implementing measures. They also believe that clearer rules are needed for reporting on planned payments to developing countries – which is necessary for them to be able to plan for costly efforts in a longer perspective. Well-designed guidelines for the ETF can solve these problems.
Under the Paris Agreement, parties that provide other parties with support in the form of funding, technology transfer and capacity building support, are required to disclose this support (PA Article 13.9). Similarly, parties on the receiving end are required to disclose how support much they have received while also presenting their needs (PA Article 13.10). For both these reporting obligations, clear, common rules are arguably required. The countries on the giving end should have to account for the reasons behind providing a given state support, in addition to which actions and objectives the support is expected to achieve. Any notion that support is given arbitrarily, for example to a country’s political allies must be fought against, as it would be detrimental to the trust between parties and the agreement as such.
Similarly, beneficiary countries should clearly state what support they received during a given period of time, and to which ends it was used. They should also be required to describe their needs, preferably based in documents such as their NDCs – what capacities is the country lacking in order to meet its targets? Something that can then be used as a basis for donor countries’ assessments and justifications regarding specific support efforts.
The GR does not establish new funding instruments, but opens up the possibility for Member States to take part in the Union’s established support systems (GR Art. 20). In addition, the Commission and the European Environment Agency have the opportunity to support the capacity development of EU countries and provide technical support for countries reporting obligations, etc. (GR Art. 41 and 42).
In conclusion a solid, transparent ETF framework that is, to the greatest extent possible, consistent for all countries is a prerequisite for the world’s continued respect for the Paris Agreement. During the negotiations in Katowice, the parties will also decide on when the ETF will take effect, and when the parties will submit their first reports. There is a sound basis for this to happen by 2022, mainly due to our next and last point.
3. The global stocktake
Under article 14 of the Paris Agreement, the parties shall, in 2023 and every five years thereafter, conduct a global stocktake of how the world’s climate action is progressing. Based on the stocktake, the parties will then decide whether to raise their level of ambition if the 1.5-degree target begins to slide out of reach. While the ETF deals with the evaluation of national commitments, the global stocktake is the tool for aggregating these, giving a complete picture of the situation.
To reach the Paris Agreement’s temperature target, increased levels of ambition over time will be a necessity. The global stocktake is the most important tool for facilitating this increase. It is therefore essential that the parties agree on the scope and content of the stocktake.
Our most powerful instrument: carbon budgets
The GR introduces a measure that could make the review a powerful tool – carbon budgets. Global warming is closely linked to the amount of greenhouse gases released into the atmosphere. Thus, we can set a ”budget” for how much emissions we can have over the coming decades if we want to limit global warming to, for example, two degrees. According to the IPCC, we have about 675 gigatonnes of carbon dioxide left to emit into the atmosphere before missing that target. The Paris Agreement thus already implicitly incorporates a carbon budget in its framework, through its temperature targets – formalising this would make the global stocktake even more powerful.
The Greens fought to introduce this concept into the GR, but more effort is needed at EU-level to formally establish such a tool. The EU should adopt its own, fully calculated carbon budget for managing its climate action. Ideally, all the world’s countries would do the same. Establishing a global carbon budget, which the global stocktake is measured against, would constitute an essential first step towards this. The global budget could then be broken down to country, regional and city level, which would make it very clear if we are on track to miss the temperature target. If regional carbon budgets were to be established, it would also be clear where we are lagging behind the most, and where powerful measures are the most needed.
And this is where the issues reviewed in this text are brought together. With a solid framework for NDCs and the ETF, we will 1) be able to rely on the data on which reports and evaluations of the current situation are based, which in turn means that 2) the results of the global stocktake – the status check on how the world’s climate action is actually progressing – becomes more reliable, which means that 3) we can answer the questions ”what do we need to do?” and ”how fast?” more clearly and with more certainty.
The Governance Regulation could be likened to an EU roadmap for achieving the Paris Agreement. The Paris Rulebook is being drafted under wholly different conditions, but in essence has the same purpose: to operationalise the Paris Agreement and give us the tools to reach it. They constitute two roadmaps for achieving the same Paris Agreement.
As the parties attending COP24 are concluding their negotiations on the rulebook, I can only hope that they are inspired by the Governance Regulation and its solutions to similar issues. The EU should take the lead in advocating rules based on the greatest possible consistency, clarity and transparency. It is time to transform promises into action. The climate can not wait.