The Paris climate deal in the making

The Paris agreement will not be sufficient to halt global warming. But it might be a start.

A myriad of diplomats and politicians, businesses and NGOs will in early December be gathered in Paris to hammer out a new global climate agreement. The climate talks have progressed at snail’s pace over the recent years, and a few months ahead of the Paris summit the negotiation text has ballooned into more and more complex documents.

However, unlike the run-up to the climate summit in Copenhagen, the most spectacular failure of international climate diplomacy so far, the underlying trust and legitimacy in the process is far better this time around. It thus seems very likely that an agreement will be signed in Paris, and peering through the political fog it is actually possible to see the contours of the climate deal in the making.

Here is our best guess for the Paris agreement.

Burning the climate budget by 2040

The sum of national reduction targets, or the so-called Intended Nationally Determined Contributions (INDCs), will essentially determine the environmental ambition level of the new agreement. Countries have committed to submit their INDCs “well in advance of” COP21 in Paris, and around 60 countries, representing around 60 percent of global emissions, have so far submitted their post-2020 targets.

Looking at some of the largest emitters, China’s INDC indicates that the country could continue to increase its emissions towards 2030. Russia has also submitted an INDC that allows for an increase in emissions over the next 15 years. India has not yet submitted its INDC, but we do not expect the country to indicate a definite year for when it wants to peak the national emissions in the INDC.

The current INDCs are final offers in terms of how countries will limit their emissions in the period up to 2025 or 2030

Substantial decreases in the EU and the US will not be sufficient to offset increases in the emerging economies, and our assessment is that with the current pledges the world’s carbon budget, i.e. the cumulative global emissions consistent with a 2°C target, is likely to run out around 2040. Our estimate is in line with other assessments indicating the reduction targets currently on the table will set the world on a path towards a global warming of at least three degrees.

So if everyone agrees that the national pledges not will be sufficient to keep global warming at safe levels, why won’t there be actual negotiations to increase the environmental ambition already in Paris?

This is simply because the INDCs are the result of hard-won national compromises, balancing social, economic and environmental interests. In some cases, with the EU as the most obvious example, the reduction target is adopted through a complex internal negotiation process. Changing EU’s current reduction target of reducing emissions by 40 percent by 2030 compared to 1990 requires unanimous agreement among 28 member states. Such an agreement will obviously not be possible to achieve during the two-week negotiation session in Paris. This illustrates how the current INDCs are final offers in terms of how countries will limit their emissions in the period up to 2025 or 2030 – not the starting point for the negotiations taking place in Paris.

In this table we take stock of a handful of INDCs submitted by some of the largest emitters.

When size matters

2030 target in INDCComment
Canada30% emission reduction by 2030 compared to 2005, open for use of international credits.Includes forestry, which can make the target much easier to reach. If forestry is utilised to its full potential this might imply only a marginal decrease in emissions from 1990 levels.
ChinaPeak emissions around 2030, increase the share of non-fossil primary energy consumption to 20%.The contribution from China is primarily a confirmation that they intend to contribute to emission reductions. The word "around" opens for emissions to increase to 2030.
EU40% emission reduction by 2030 compared to 1990, now includes land-use sector Slight increase in ambition compared to 2020 target, but the inclusion of land-use makes the picture more opaque.
Japan26% below 2013 emission levels by 2030Japan has abandoned the 1990 base year it used during the first Kyoto period after emissions increased post-Fukushima, attributed to an increased reliance on fossil fuels for energy generation. The target would translate to -18% compared to 1990 levels. It plans to cut 50-100 Mt CO₂e/year through the Japanese Crediting Mechanism.
Mexico25% reduction of its GHG and black carbon compared to BAU for 2030Includes black carbon, a short lived climate pollutant that makes the GHG target slightly less ambitious. Net emissions to peak in 2026.
Russian Federation25-30% emission reduction by 2030 compared to 1990, including maximum possible use of forestryEmissions fell sharply after 1990 and could allow Russia to increase emissions as much as 50% from 2012 levels. Russia has vast potential to increase reliance on forests as carbon sinks.
South Korea37% below BAU in 2030, use international credits to reach targetThe business as usual reference point still allows South Korea to increase emissions significantly from 1990 levels.
USA26-28% emission reduction by 2025 compared to 2005It is unclear whether existing measures will be sufficient to meet the target.

Building a global agreement with legal force

Since 2011 the main aim of the climate negotiations has been to create a legal framework that embeds or links the national reduction targets to the other elements that will constitute the Paris agreement. These negotiations are taking place within the UNFCCC body called the Ad hoc group on the Durban Mandate (ADP). The mandate the climate negotiators have given themselves is to “develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties”.

This mandate has essentially defined two main principles on which the new agreement should be built. The first speaks to the form of the agreement – it should have “legal force”. The second concerns the wider content of the agreement. The outcome should be “applicable to all”, i.e. the coverage should be wider than the two preceding commitment periods under the Kyoto Protocol which only imposed reduction targets on a relatively small group of industrialised countries.

Applicable to all?

Starting with the principle that the agreement should be applicable to all, this has in practice been difficult to combine with another key principle in the climate talks – the “common but differentiated responsibilities and respective capabilities”. This essentially concerns the question of “fairness” along different axes. Who has the largest responsibility for the global warming? Who should contribute most to the needed emission reductions? And, not least: Who should pay for it?

Countries have been very reluctant to criticise the targets of others

However, with the concept of the INDCs a new understanding that countries will be allowed to self-differentiate based on national circumstances has gradually emerged. The target-setting ahead of Paris has been a bottom-up process where countries contribute to the international potluck as they see fit. And importantly, countries have been very reluctant to criticise the targets of others. Even the Russian INDC, which obviously is far weaker than what reasonably could be expected, was welcomed without any criticism neither by the EU nor by Christiana Figueres, the executive secretary of the UNFCCC.

The inherited problem with the voluntary approach is that it will not give a strong push towards keeping global warming below the two degrees threshold. But on the positive side it will likely be possible to get all major emitters to take on some kind of emission reduction target, implying that the new agreement will be applicable to all (or most) countries even in terms of reduction commitments. The strength of the Paris deal will therefore to a large extent hinge on mechanisms to spiral up the reduction targets over time. While there seems to be an emerging consensus around 5-year review cycles, the strength of such a mechanism will depend on how strong the inherent push towards higher ambition will be.

An agreement with legal force?

The legal structure of the Paris agreement has been – and to a certain degree still is – the elephant in the room. The issue of legal structure has not really been addressed in any detail so far, even if many countries have made their positions quite clear. The EU and many others want a legally-binding agreement, which ideally should include both reduction targets and financial commitments, but due to the US position it is already clear that this will not be possible.

There are essentially three ways the US can enter into international legal agreements; 1) by two-thirds approval of the Senate, 2) by approval from both houses of Congress or 3) by presidential action alone, without express approval of either Senate or Congress. As the two first options likely can be ruled out almost regardless of the content of a new climate agreement, the key question is essentially which deal the US president could sign without approval from Senate or Congress. Although the juridical record is slim, it seems likely that an agreement with legally binding reduction targets and/or financial obligations would require approval from Senate or both houses of Congress. These core elements would therefore have to be added in non-binding decisions, while the president likely would be able to sign an agreement that includes legally binding commitments on procedural matters, for example in terms of obligations to report on progress towards emission targets and financial pledges.

Thus, the Paris agreement will most likely be a hybrid framework. The core agreement which essentially will include procedural elements will be legally binding, while hard issues like reduction targets and financial obligations are wrapped up in softer COP decisions. Although such a hybrid agreement would likely be seen as too weak by many countries and observers, the alternative – to have an agreement that would be dead on arrival in the US – is worse. We therefore expect the US negotiators to be allowed to hold the pen when the final compromise on legal form will be written in Paris.

A small step for climate, a substantial leap for climate politics?

In spite of slow progress in the recent round of the formal negotiations, the contour of the Paris agreement is starting to emerge. Still, there will be plenty of things to talk about in Paris. The sheer complexity of the talks, with numerous options still being discussed on all key issues, could potentially lead to a bureaucratic meltdown of the process. In addition, finance is still a painful issue that could hamper progress on other areas of the negotiations. Rich countries are far away from meeting their pledge from 2009 to deliver $100 billion per year of climate funding to poor countries. A long-awaited plan on how to deliver the promised finance might emerge before Paris, with the annual meeting of the World Bank and the International Monetary Fund, taking place in Lima on 9 October, as one of the opportunities for progress.

We find it very likely that a new climate agreement will be adopted in Paris

A more credible plan on finance, including actual money on the table, will likely open up for real progress on other elements of the negotiations like use of market mechanisms, adaptation, loss and damage and issues related to transparency and review mechanisms. And oppositely, without progress on finance it will likely be difficult to get good deals on other issues as well.

Overall, we find it very likely that a new climate agreement will be adopted in Paris. This outlook is mainly based on the fact that all parties seem to accept a bottom-up target-setting process. The countries have so far been careful not to criticise each other’s INDCs, and in some cases the major emitters have even developed their pledges in cooperation with one another – with the US-China agreement announced last year as the most prominent example. This gives a degree of legitimacy to the process that is very different from the run-up to the climate summit in Copenhagen.

Supported by a number of bilateral talks, high-level meetings in the G7 and G20 and increasing public support (epitomised by the papal encyclical), we expect the momentum to be sufficiently strong to get a deal that will be good enough to claim a political success in Paris. But only the iterative process to increase the targets that will happen after Paris will determine whether it ever will be possible to get an environmental ambition closer to the scientific recommendations consistent with the 2°C limit.