Starting this week, France will host a major international negotiation that aims to clinch a universal climate agreement set to come into force at the end of the decade, replacing current multilateral emissions-cutting arrangements. Delegates from over 200 nations carry a hefty weight of global expectations to streamline a complex 54-page bracketed draft document into a coherent climate regime, with the current mood recollective of the forceful words of the late sustainable development visionary Maurice Strong (1929-2015), a pioneer behind today’s intergovernmental environment processes.

The Twenty-first Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC COP21), as these talks are formally known, will be buoyed at the outset by the presence in Paris of more than 130 heads of state providing “political impetus” for the negotiations. Regular business will then continue in several formal negotiating tracks including the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) – the body charged with developing the new deal – and technical, ongoing work under other UNFCCC bodies.

According to a provisional agenda, work under the Subsidiary Body for Scientific and Technological Advice (SBSTA) and the Subsidiary Body for Implementation (SBI) should conclude by Friday 4 December, and the ADP should wrap up the following day with a revised version of the draft regime to present to the COP plenary. Heads of delegation will then resolve any outstanding issues before all negotiations close on Wednesday 9 December to allow time for the UN formalities of adopting a new agreement.

For seasoned climate talks watchers, the schedule is very tight, with many expecting difficult negotiations. Several stakeholders nevertheless remain optimistic an outcome will be reached, despite the spectre of a failed attempt to clinch a global climate deal in 2009 in Copenhagen, Denmark. Some observers question, however, whether the eventual pact will be effective, substantive, and workable.

The Paris effort will be closely followed by the wider international community not only given the existential threat posed by climate change, but also in light of the outcome’s potential systemic importance for many other policy areas from development to global economic governance. The global economy is hard-wired to fossil fuels, which make up 80 percent of the world’s energy mix, driving planetary warming greenhouse gas emissions. A shift towards a low carbon future will affect current ways of production and consumption. It will also substantively redefine the shape of trade and investment flows and the frameworks that serve as a key linchpin of the global economy.

Operationalising a new approach

In Durban, South Africa four years ago, UNFCCC parties agreed to forge by 2015 a new international deal to mitigate climate change with legal force applicable to all. The decision implied a break from the current Kyoto Protocol that mandates emissions cuts from so-called Annex I developed countries only as identified by the 1992 Convention.

Since then, countries have been grappling with the implications of this shift for international climate cooperation, as well as the new governance provisions it requires. In a move broadly welcomed by climate watchers, at press time over 180 nations responsible for around 96 percent of global emissions have outlined an “intended nationally determined contribution” (INDC), representing the individual self-defined domestic climate action plans that will serve as the building blocks of the new regime.

For some in the climate community the INDC approach represents a master stroke to usher in a new deal with expansive coverage – formerly unimaginable in UNFCCC corridors, given that the Kyoto Protocol covers just 14 percent of aggregate emissions and zero percent of emissions growth – and allows economies to focus climate obligations on areas where they are most willing to act.

Other stakeholders, however, have questioned the deal’s long-term effectiveness and say that a review process will be critical. A UNFCCC secretariat synthesis assessment of the INDCs – which mostly target the 2020-2030 period and in some areas are conditional on international support – finds that if implemented properly these measures will help slow emissions growth. They do not, however, do enough to keep the world below a two degrees Celsius warming from pre-industrial levels.

For many negotiating parties the new approach has also spawned tensions. For example, working out how to apply the principle of “common but differentiated responsibilities and respective capabilities” (CBDR-RC) – which acknowledges the different responsibility and capacity countries have for climate action – across the new regime has been slated as a key area to navigate in Paris, with implications for mitigation, review, climate finance, and technology transfer, among many other areas.

Draft text

The draft document outlined by parties for the ADP talks in Paris – the result of over 18 months of refining – contains both a draft agreement and implementing decisions, including scaling up action before the end of the decade. The draft document covers all manner of potential details relevant to the functioning of the new regime, including its purpose, long-term goal, management of individual climate mitigation efforts, adaptation and loss and damage, climate finance, climate technologies, and other supportive arrangements.

However, numerous proposals and options are suggested for each area, pointing to some key divisions parties must bridge in Paris. For example, on the ever-difficult issue of financing to enable both emissions mitigation as well as adaptation to climate change some parties support language that would see all nations in a position to do so mobilise funds, but others expect commitments from just developed nations. While developed countries have pledged to scale up climate finance to US$100 billion a year by 2020, the G77 and China have warned that an effective climate deal hinges on increased finance arrangements beyond the end of the decade.

Several proposals are included for reviewing and monitoring the INDCs, along with provisions on transparency, global stocktaking, and facilitating implementation and compliance. Some parties also support adopting various long-term goals such as a peaking of emissions, or an overall decarbonisation of the economy by the end of the century. Consensus around many of these areas is, however, not a done deal heading into the talks.

An informal ministerial held in Paris from 8-10 November garnered wide-ranging support – according to an “aide-mémoire” prepared by the French COP21 presidency – for a “single system, with flexibilities depending on capabilities,” referring to the new regime. Developed countries will likely continue leading on mitigation, through absolute economy-wide targets via the INDCs, although all nations should regularly present mitigation commitments with no backtracking over time.

Among other things, ministers converged on the need to regularly review mitigation efforts in five-yearly cycles, in a way that is facilitative and non-punitive. Ministers also confirmed that the Paris deal should provide economic signals to shift investment flows at large, whether through green bonds, fiscal incentives, or carbon pricing. The extent to which this informal political progress will shape details emerging from the technical negotiations, however, remains to be seen.

Questions around the final deal’s legal nature were voiced ahead of Paris, as US Secretary of State John Kerry insisted that the outcome will not be a “treaty,” while others argued that this is required by the Durban mandate. According to The Financial Times, France has now bowed to the US on the broad outcome, but has signalled that some of the clauses will be legally binding.

Trade issues to look out for

Under one option in the draft agreement’s finance section, parties would abide by principles of fiscal sovereignty and avoid disguised distortions to trade in mobilising climate funds. The mitigation section in the draft agreement also suggests that countries would not resort to any “unilateral measures” against goods and services from developing countries on the grounds of climate change. The same section alludes to the importance of giving full consideration to the specific needs and concerns of developing countries resulting from the implementation of “response measures,” in other words, mitigation actions.

Some parties support establishing an instrument to enhance action in this area, elaborated in the draft decision under an option for a cooperative mechanism on response measures, set up at some future date and building on existing work. The mechanism would recommend specific tools, actions, and programmes to address response measures' impacts and implementation gaps in order to minimise adverse effects on developing countries. The approach has drawn strong resistance by others. The decision paragraph adds that any measures should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction to international trade.

Specific questions surrounding work on minimising adverse economic, social, and environmental impacts from the implementation of response measures and addressing the needs of developing countries have proved complex in the UNFCCC context over the years. The topic is not linked exclusively to trade, although parties have pledged to promote an open international economic system supportive of sustainable growth all the while responding to climate change.

Under the SBI and SBSTA tracks, parties have repeatedly clashed over how to take forward the work of a forum on response measures whose two-year mandate expired in 2013, but recently agreed in June to forward a bracketed draft decision on a forum and work programme for consideration in Paris. How this relates to the discussions under the ADP needs to be clarified.  

Multilateral arrangements on carbon markets are among the other areas relevant to trade policy and are also subject to political ping-pong between the ADP and technical tracks. Long-running talks under SBSTA on a framework for various approaches (FVA) – a way of coordinating market and non-market based mitigation actions that relate to commitments under the UNFCCC – a new market based mechanism (NMM), complemented by non-market based approaches (NMA) saw some exchange in June on accounting frameworks, among other areas, but failed to secure draft conclusions.

In theory, these talks could set common rules for climate mitigation efforts with international scope, such as international emissions trading. However, parties continue to disagree on the mandate for the talks, the relationship between this SBSTA work and proposals on markets that have been suggested for the Paris deal, and ideological resistance by some to the use of market-based mechanisms for climate action.

In the Paris draft agreement and decisions, some parties have submitted options relating to international emissions trading, including avoiding double counting, ensuring that any abatement outcomes are “real, permanent, additional, and verified,” and as part of a “mechanism to support sustainable development” in various incarnations. The agreement’s preamble, meanwhile, could acknowledge that carbon pricing is an important approach for cost-effective emissions cuts. Mark Carney, Governor of the Bank of England and Chairman of the G20's Financial Stability Board, has suggested such language in the Paris deal might prompt governments to provide further guidance to markets on possible carbon pricing efforts.

After being dropped from earlier versions of the document, the draft agreement’s mitigation section now includes a reference to reducing emissions from international aviation and shipping, through the respective UN agencies responsible for these sectors.

Boosting the global deployment of climate technologies for mitigation and adaptation will also be a critical part of addressing the climate challenge. The draft agreement contains an article, supported by corresponding decision elements, on technology development and transfer including a possible UNFCCC global goal in this area, enhanced communication on implementing commitments, a new technology framework, and strengthening the existing Technology Mechanism.