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IDSA COMMENT

COP21: The Toothless Paris Agreement

December 18, 2015

After two weeks of intense negotiations in Paris, 196 nations signed what is being hailed as a ‘landmark’ deal to limit carbon emissions, restrict the rise in global temperatures to below 20C of pre-industrial levels, and make the world economy carbon neutral by the second half of the century. But how effective can an accord, which aims to assuage the concerns of diverse countries with diverse agendas, be especially when the commitments that have been made are voluntary?

Unsurprisingly, there is more scepticism than optimism that governments will do the needful to transform their fossil fuel-dependent economies to ones that use more sustainable and cleaner energy resources.

For instance, a recent New York Times article reported that Chinese state owned companies have undertaken, and have commenced, the construction of coal-fired power plants in 27 countries across the developing world with loans from the Chinese Exim Bank. The report also stated that Beijing is in fact encouraging its state-owned firms to go out and seek projects in neighbouring countries in order to offset declining profits at home due to a glut in domestic coal-fired plants, increase demand for Chinese steel and bind the Chinese economy more closely with its neighbours. In fact, coal-based plants account for 68 per cent of the generation capacity built by China in the rest of Asia, and that figure is set to increase.1

The developed countries too cannot be exempted from blame. Although West European countries are cutting down on coal consumption, their eastern counterparts, in what is being alluded to as a new “coal curtain”, are increasing both output and consumption. For example, while Poland and the Czech Republic have announced an expansion in production of their domestic coal reserves, other European nations are also investing in new coal production and generation capacity. Even Germany, which is at the forefront of steering Europe’s shift to renewable energy, seems to be caught in the horns of a dilemma between protecting some 21,000 coal sector-based jobs and cutting emissions from coal-based plants. But after pledging to close down its nuclear reactors by 2022, it may have to depend on coal, which provides more than a fourth of its electricity, for filling the gap vacated by nuclear energy.

Therefore, the biggest, and possibly the only, success of the COP21 summit is that a deal was signed at all. To elaborate, first, because of US pressure, the Intended Nationally Determined Contributions (INDCs) and emission reduction targets will now be voluntary, with each country allowed to set its own target. Accordingly, large emitters like the US have pledged to reduce emissions by 26 to 28 per cent by 2025 from 2005 levels; the European Union has committed to a 40 per cent cut in emissions from 1990 levels by 2030; and China has pledged to peak its greenhouse gas (GHG) emissions by 2030 and cut CO2 emissions by 60 to 65 per cent from 2005 levels. Given that the world will use 900 of the remaining 1000 Gigatonnes of carbon by 2030, of which half will be used by China, the US and the EU, what space does that leave for other developing countries including India?

Second, the Agreement facilitates developed countries profiting from carbon trading. Article 6, paragraphs 3 and 4, without even mentioning markets, introduced a provision called Internationally Transferred Mitigation Outcome (ITMO), which is an enhanced version of the Clean Development Mechanism (CDM) and Joint Implementation. This benefits the developed West to make profits by not only using carbon trading for profits but also endorses the inclusion of ITMOs in Nationally Determined Contributions.

The third, and perhaps the most contentious issue, is the provision regarding the financing mechanism. Article 9, paragraph 3 states that “the developed countries intend to continue their existing collective mobilisation goal through 2025” and that prior to that, the COP “shall set a new collective quantified goal from a floor of USD 100 billion per year, taking into account the needs and priorities of developing countries.” The fact that a similar commitment of providing USD 100 billion towards the Green Climate Fund was made as far back as November 2010 at COP16, a commitment which the developed countries have yet to deliver on, induces cynicism about the latter’s intention to deliver on any financial obligation.

Lastly, the fact that the developed countries succeeded in making all commitments non-binding, makes the Paris Agreement almost toothless. As charted out in Article 21, the agreement will take effect if it is ratified by more than 55 per cent of nations or nations that are responsible for 55 per cent of global emissions. However, Article 28 goes further in diluting any responsibility accruing to the developed world by stating that “At any time after three years from the date on which this Agreement has entered into force for a Party, that Party may withdraw from this Agreement by giving written notification to the Depositary.”

If India can take any comfort from the summit it is only the fact that it was successful in ensuring that it deflected pressure on setting a date for capping its emissions, thereby giving it the space to develop. India has promised to reduce its emissions by 33 to 35 per cent by 2030 from 2005 levels. It has in fact made it clear that while it was committed to hike its renewable energy portfolio seven-fold by 2022, which includes besides solar and wind portfolios, hydro and nuclear energy as well, it would not only double its coal output by 2020 but would also continue to rely on coal for decades thereafter due to its abundant reserves of the resource and because it is the cheapest source of energy. Moreover, as Piyush Goyal (in charge of the ministries of coal, power, and renewable energy) noted, India with 17 per cent of the world’s population contributed only 2.5 per cent to global GHG emissions as against the developed countries’ contribution of over a fifth of GHG emissions with just five per cent of the world’s population. More importantly, India has also successfully prevented the inclusion of developing countries from making mandatory financial contributions to the global finance pool. As a result, any financial and technical assistance that India provides to other developing countries will be voluntary.

Given all this, to put it in the words of James Hansen, the father of climate change, “It’s a fraud really, a fake. It’s just worthless words. There is no action, just promises. As long as fossil fuels appear to be the cheapest fuels out there, they will be continued to be burned.”2

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