Creating a legal framework

PARIS CLIMATE CONFERENCE

The Paris Summit pursues an ambitious agenda to manage climate change by attempting to create a legal framework which binds the 196 member states and make them accountable for their carbon emissions. Clearly, the UN Framework Convention on Climate Change (UNFCCC) that has held 20 conferences and protocols has failed to make countries adopt innovative measures to curb carbon emissions.

The UNFCCC which was signed in 1992 at Rio de Janeiro, Brazil, acknowledged the social, political and economic ramifications of climate change on planet earth. The 18th Conference of Parties (COP) held at Doha in December 2012 fixed a three year deadline which is 2015 for a universal climate change treaty. Today, the US has evolved a proactive policy towards climate change following the Democrats’ assumption of power under President Barack Obama.

This has helped bridge the gap between Western industrial nations and the Afro-Asian Latin American countries. Fortunately, China, which has displaced the US as the world’s highest polluter, is now more inclined to cooperate with the developed countries owing to multiple instances of climate induced environmental disasters.

Today, all member states have an obligation to preserve planet earth and each nation does so in tune with their resources. The Paris Summit therefore aims to bring all these member states on the same page through climate finance and technology transfer for which the UNFCCC has created an annual $100 billion corpus. The 2015 Summit therefore aims to transcend the existing commitments to combat climate change.

One of the main challenges at present is that if the existing carbon trading system is removed, it would destroy all the progress which has been made so far. The conference will only be effective if it is able to reduce the earth’s temperature from 2 degrees to 1.5 degrees since emissions have grown over the last 20 years.

The Paris Summit proposes to implement a policy of “intended nationally determined targets” over carbon emissions in lieu of mandatory targets for member countries. The argument is that it would be easier for developing countries to adapt to a new growth path other than the one followed by developed countries in the past since their economy has not been ‘locked-in’ into a traditional industrial economy.

It can be less energy intensive, less polluting and more resource-efficient. The new policy is voluntary in nature, but ambiguous in terms of quantitative output and therefore lacks an element of compliance. Moreover, the new policy demands participation from developing countries to manage carbon outputs and therefore constrains their economic activity. In this scenario, the developing countries would have to put a cap on their carbon emissions.

The 1997 Kyoto Protocol evolved a practical solution to the problem of climate change through creation of mechanisms for carbon trading. This exercise was taken forward in 2009 at the Copenhagen Conference to promote the Protocol mechanisms which formally launched the Clean Development Mechanism (CDM). 

The CDM is a carbon trading mechanism articulated under Article 12 of the Kyoto Protocol wherein the developed countries with binding carbon targets evolved a mechanism to meet their commitments through purchase of carbon credits from developing countries.  In a sense, it was a well thought out free market-oriented mechanism to counter carbon emissions. The CDM enabled western industrial democracies to collaborate, fund and increase industrial production and successfully manage their carbon footprint and therefore remains relevant for effective environment management. 

The dominant view among climate policy makers namely scientists, bureaucrats, environmentalists, activists, lawyers and political leaders today is that carbon taxes are a viable alternative to the carbon trading mechanism. If implemented, taxes will replace CDM. If a tax is imposed on every extra unit of carbon emitted into the atmosphere, the rate of tax would be calculated based on the marginal external social cost caused by the last unit of pollution at the optimum allocation of resources. 

Social costs

But for this, the social costs must be measured exactly and the resource allocation of diverse industrial units must be calculated perfectly. These decisions are difficult for governments to make and are best left to a carbon trading system. It would be more efficient to supplement carbon taxes with a carbon trading mechanism.

The Paris Summit may witness the rejection of the CDM in favour of direct climate finance in the form of climate funds. As a result, all the earlier efforts invested by the 200 member-states in terms of negotiations, expenditure and expertise gained in carbon output management is lost in the process.

Financing climate change costs is a long and taxing endeavour which will face a serious financial crunch in the future if it relies solely on climate funds. The CDM could be used to supplement climate funds since the carbon trading mechanism has great utilitarian value after being in force for over a decade.

As far as technology transfer is concerned, CDM is the most viable mechanism. Vertical technology transfer bet-ween developed and developing coun-tries, over the past 20 years is negligible. It points to the deep mistrust of the former and is bound to be continued in the climate finance oriented system as well.

The Paris Summit must strive to implement certain measures to incorporate climatic justice principles. This should be applicable not only at the national level but also across international bord-ers. It must be understood in the context of the unequal positions of various countries and the vulnerable population which live within them. If the Summit is successful in doing so, it will achieve what it had been trying for the past 20 years.

(The writer is Assistant Professor, School of Law, Christ University, Bengaluru)