Working Group III: Mitigation

Other reports in this collection Compliance

The bulk of environmental agreements cannot operate the financial “carrots” and/or trade restriction “sticks” illustrated by the ozone regime (Wiser, 1999a). The key question therefore becomes: how can compliance by all Parties be secured, given the consensual basis of international law and the reluctance of Parties to endow international bodies with legal authority to enforce the international commitments Parties have (freely) undertaken against them? The UNFCCC has near universal participation based on the traditional consensual approach buttressed by provisions that aim to facilitate developing country participation through the provision of financial and technological resources. The general nature of the commitments contained in the Convention would, in any case, prove difficult to enforce. These factors explain why Parties have not endowed the supreme body of the Convention, the CoP, with the authority to impose legally binding consequences on a Party in the event of non-compliance. Thus at present, no legal body exists to enforce compliance in the climate change context.

The quantified, legally binding commitments of the Kyoto Protocol pose a different challenge (Werksman, 1998). In the period after Kyoto, the majority of Parties signalled a clear desire to move towards a compliance system based on legally binding consequences, even though the compliance provisions of the Kyoto Protocol provide that legally binding consequences can only be adopted by means of a formal amendment to the Protocol. Be that as it may, UNFCCC negotiations on the institutions and procedures of a compliance system for the Protocol are well advanced.

Various suggestions have been put forward in the literature and by Parties for the kind of legally binding consequences deemed appropriate in the climate regime (Corfee Morlot, 1998; Wiser and Goldberg, 2000). These include the following (Grubb et al., 1998; UNFCCC, 2000):

  • allowing a “true-up” or grace period with opportunity to buy quotas;
  • payment into a national or international compliance fund that would invest in quotas;
  • issuing cautions and/or reports to motivate public pressure;
  • suspending treaty privileges (such as voting or the right to nominate members for office);
  • exclusion from access to the Kyoto mechanisms; and
  • financial penalties and implementing trade sanctions.

As a result of the difficulties in agreeing any of these consequences, and their future enforceability, more attention has been paid to policy tools that prevent non-compliance. Again, suggestions in the literature and from the Parties focused on ensuring that emissions trading must be transparent at both the Party and entity level78, and that emissions data, such as inventories, are publicly available. The idea being that Parties and/or firms may fear the reputation consequences of being identified as polluters. Furthermore, trading could be authorized only for eligible Parties or entities, namely those meeting some minimum standards on monitoring and reporting. Non-eligible Parties and/or entities could be suspended from the trading system.

Parties also could require that insurance be obtained for traded tonnes of emissions reductions. An extra quota reserve held for the premium payer could then be claimed if the traded tonnes fail to be verified as emission reductions. A similar proposal is to establish a “true-up” period or grace period (of some several months or years) after 2012; a party that is able to come into compliance at the end of this true-up period would be deemed to have complied with the agreement. Several other possibilities have been mentioned to enforce compliance with the Kyoto targets in a situation with IET.

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