Options for a Compliance Mechanism in a 2015 Climate Agreement

Transcription

1 brill.com/clla Options for a Compliance Mechanism in a 2015 Climate Agreement Sebastian Oberthür Vrije Universiteit Brussel, Institute for European Studies Sebastian.Oberthuer@vub.ac.be Abstract As parties to the un Framework Convention on Climate Change move towards developing a Protocol, another legal instrument or an agreed outcome with legal force in Paris in 2015, they are also addressing the question whether and in what form to include a compliance mechanism in the Paris agreement. This article explores options for incorporating a compliance mechanism into a 2015 climate agreement. Keywords compliance system enforcement facilitation international consultation and analysis international assessment and review Kyoto Protocol multilateral consultative process unfccc 1 Introduction1 As parties to the un Framework Convention on Climate Change move towards developing a Protocol, another legal instrument or an agreed outcome with legal force in Paris in 2015, they are also addressing the question whether and in what form to include a compliance mechanism in the Paris 1 This article is based on a paper for the project Agreement on Climate Transformation 2015 ( supported by the European Commission. I would like to thank the members of the project team as well as Daniel Bodansky, Meinhard Doelle, and Alexander Zahar for helpful comments. Any remaining shortcomings are the responsibility of the author only. koninklijke brill nv, leiden, 2014 doi /

2 Compliance in a 2015 Climate Agreement 31 agreement.2 This question may be all the more relevant as increasing attention is paid to a durable agreement that establishes appropriate structures for international climate governance over the long term. This article explores options for incorporating a compliance mechanism into a 2015 climate agreement. To this end, section 2 provides some general background on mea compliance mechanisms. Section 3 identifies selected core issues regarding the design of compliance mechanisms in general. In section 4, the article briefly assesses relevant processes under the Convention and the Kyoto Protocol (kp) with an emphasis on these core issues. Section 5 distills from this discussion five general options for how to take the compliance issue forward in the context of the 2015 agreement. 2 Background Compliance mechanisms are a core element of the bindingness and legal nature of international agreements. Bindingness can be understood as the combination of the legal status of the agreement ( obligation ), the precision of the commitments or provisions in question ( precision ), and the delegation of oversight over implementation to a separate body ( delegation ). Compliance mechanisms relate to the delegation aspect and thus constitute a key factor strengthening the bindingness and effective implementation of international agreements.3 This article thus addresses an important part of the debate on the legal nature and form of a 2015 climate agreement. Compliance mechanisms fulfill similar functions as, but are clearly distinct from, traditional dispute settlement. Like traditional dispute settlement, compliance mechanisms address implementation problems. However, they are multilateral rather than bilateral in character and thus better suited to the structure of global environmental problems. Here, the effects of non-compliance and implementation deficits are usually dispersed, providing insufficient incentives for states to trigger bilateral dispute settlement. Multilateral compliance mechanisms seem better suited to promote compliance with meas.4 2 unfccc, adp informalnote, Reflections on progress made at the fourth part of the second session of the Ad Hoc Working Group on the Durban Platform for Enhanced Action: Note by the co-chairs, (2014), at Robert Q. Keohane, Andrew Moravcsik, and Anne-Marie Slaughter, Legalized Dispute Resolution: Interstate and Transnational, 54(3) International Organization (2000), ; Kenneth W. Abbott and Duncan Snidal, Hard and Soft Law in International Governance, 54(3) International Organization (2000), Daniel Bodansky, The Art and Craft of International Environmental Law (Cambridge, MA: Harvard University Press, 2010), at ; Jane Bulmer, Compliance Regimes in Multilateral

3 32 Oberthür Compliance mechanisms are also closely linked to a system of measurement, reporting, and verification (mrv). The promotion of effective implementation by means of a compliance mechanism builds on an agreement s system for generating and reviewing or verifying information. Accurate information is essential for an assessment of the status of implementation and compliance. At the same time, the verification aspect of mrv, especially, may overlap conceptually with compliance. For example, as further discussed below, International Assessment and Review (iar) and International Consultation and Analysis (ica), which form part of the evolving post-cancun mrv system under the Convention, include a multilateral process for the appraisal of reports and their review. This multilateral process does not only go beyond the mrv system under Articles 5, 7, and 8 of the kp,5 but it may also be considered to move into the field of an assessment of compliance and a response to implementation issues. Why have parties to meas in general and the climate regime in particular developed compliance mechanisms at all? The answer is linked to the fact that the implementation of obligations under an mea cannot be taken for granted. Implementation failure and incomplete or delayed implementation is a widespread phenomenon that could, if not addressed properly, undermine the agreement as a whole. Targeted efforts at promoting effective implementation and addressing issues of potential non-compliance under meas through the establishment of concrete compliance mechanisms, with a compliance or implementation committee at the core, promise added value.6 But what prevents or hinders effective implementation of meas and hence should be addressed through compliance mechanisms? The literature has distinguished two different schools of thought in this respect. First, the management school of compliance has stressed the goodwill of parties to comply with their commitments. It has emphasized factors that may lead to involuntary non-compliance such as lack of knowledge and capacity as well as Environmental Agreements, in Promoting Compliance in an Evolving Climate Regime, edited by Jutta Brunnée, Meinhard Doelle, and Lavanya Rajamani (Cambridge: Cambridge University Press, 2012), Anke Herold, Experiences with Articles 5, 7, and 8 Defining the Monitoring, Reporting and Verification System under the Kyoto Protocol, in Promoting Compliance in an Evolving Climate Regime, edited by Jutta Brunnée, Meinhard Doelle, and Lavanya Rajamani (Cambridge: Cambridge University Press, 2012), David G. Victor, Kal Raustiala, and Eugene B. Skolnikoff, The Implementation and Effectiveness of International Environmental Commitments (Cambridge MA, London: MIT Press, 1998); Bodansky, supra note 4, at

4 Compliance in a 2015 Climate Agreement 33 the ambiguity of agreed norms and rules.7 This school emphasizes the value of facilitative compliance mechanisms that attempt to promote compliance primarily through means such as recommendations, assistance, and clarification of rules. Second, the enforcement school has focused on possible reasons why countries would deliberately neglect inconvenient international obligations, most importantly the desire to circumvent economically or otherwise costly implementation. In this perspective, ensuring compliance would require a compliance mechanism that can impose negative incentives or sanctions so as to incite actors to refrain from free riding.8 Both schools are frequently contrasted and juxtaposed with each other. In practice, however, they are not mutually exclusive, since both kinds of motivations and reasons for non-compliance may co-exist, mix, and reinforce each other in particular cases. For example, states may be tempted to neglect obligations because they are inconvenient and costly to implement while also facing capacity constraints and ambiguity of rules. Under these circumstances, ambiguity of rules and lack of capacity may reinforce the reluctance to effectively implement commitments. Consequently, several existing compliance mechanisms include and mix elements of both facilitation and enforcement,9 and it has been found that compliance is most effectively promoted by a combination of management and enforcement.10 Overall, compliance mechanisms fulfill important functions. In particular, they stabilize cooperation and enhance effective implementation by helping to build and maintain trust, address capacity problems, clarify rule ambiguities, and protect against free riding. As such, they constitute an essential component of any future climate agreement. 7 Abram Chayes and Antonia Handler Chayes, The New Sovereignty: Compliance with International Regulatory Agreements, (Cambridge, MA: Harvard University Press, 1995). 8 George W. Downs, David M. Rocke, and Peter N. Barsoom, Is the Good News about Compliance Good News about Cooperation?, 50(3) International Organization (1996), E.g., unep, Compliance Mechanisms under Selected Multilateral Environmental Agreements (Nairobi: United Nations Environment Programme, 2007), at 55 73; Bulmer, supra note 4, at David G. Victor, The Operation and Effectiveness of the Montreal Protocol s Non- Compliance Procedure, in The Implementation and Effectiveness of International Environmental Commitments: Theory and Practice, edited by David G. Victor, Kal Raustiala, and Eugene B. Skolnikoff (Cambridge MA, London: MIT Press, 1998), ; Jonas Tallberg, Paths to Compliance: Enforcement, Management, and the European Union, 56(3) International Organization (2002), at

5 34 Oberthür The politics of compliance mechanisms also involves two considerations that require balancing. On the one hand, any kind of compliance mechanism will imply some level of multilateral supervision of national implementation and thus limit national choices ( sovereignty costs ).11 As such, there may be a trade-off between (the stringency of) any compliance mechanism and the willingness of countries to participate in an international agreement and to commit to ambitious action. On the other hand, as mentioned above, compliance mechanisms can make a significant contribution to building trust and confidence and ensuring effective implementation of commitments (while non-compliance, if not properly addressed, may undermine the agreement as a whole).12 Given the high economic stakes involved in climate policy, a lack of assurance that others will be held accountable may also reduce the willingness of countries to commit to and implement ambitious action. 3 Core Issues in Designing a Compliance Mechanism The analysis in this article focuses on three broad core aspects of the design of compliance mechanisms: (1) the balance between facilitation and enforcement (response measures), (2) the scope or coverage of the mechanism, and (3) its institutional anchoring and capacity (including its triggering provisions). Compliance mechanisms in meas regularly encompass further elements (e.g. due process rights for the party concerned, timelines, etc.). However, the identified areas arguably cover some of the politically most contentious and substantively most important issues. The analysis draws on existing precedents and experience with compliance mechanisms in meas.13 Core Issue I: The Balance between Facilitation and Enforcement The most prominent issue in the design of a compliance mechanism concerns the balance between facilitation and enforcement. As mentioned above, a facilitative approach would go along with softer response measures, such as 11 Abbott and Snidal, supra note 3, at Ibid., at E.g. unep, supra note 9; Tullio Treves, Laura Pineschi, Attila Tanzi, Cesare Pitea, Chiara Ragni, Francesca R. Jacur, Non-Compliance Procedures and Mechanisms and the Effectiveness of International Environmental Agreements (The Hague: T.M.C. Asser Press, 2009); Ulrich Beyerlin, Peter-Tobias Stoll, and Rüdiger Wolfrum, Ensuring Compliance with Multilateral Environmental Agreements (Leiden: Martinus Nijhoff, 2006); Bulmer, supra note 4;

6 Compliance in a 2015 Climate Agreement 35 assistance and clarification of rules. Enforcement measures would instead stress sanctions and generally measures that entail some kind of cost for the party found in non-compliance. Most compliance mechanisms of meas put the emphasis on facilitation rather than enforcement, but exploit a certain bandwidth of measures. The compliance mechanisms of meas usually put emphasis on promoting and facilitating compliance. The measures available to them include recommendations and assistance. In addition to such soft measures, several compliance mechanisms have somewhat stronger measures available, including a finding and declaration of non-compliance14 and a request to develop a compliance action plan. Such measures are not costless to the party concerned. The Montreal Protocol s compliance mechanism has made continued financial assistance to developing-country parties that are not in compliance dependent on progress towards compliance. It furthermore has the possibility to ban or restrict trade in controlled substances.15 At the end of the spectrum, the kp compliance mechanism is widely considered exceptional because its objective includes enforcement and it has relatively strong measures available.16 However, the spectrum illustrated above indicates that there is a broad bandwidth on the continuum from very soft to very strong measures. As mentioned, compliance may be most effectively promoted by a combination of management and enforcement. In this respect, what kind of measures are available to mea compliance mechanisms follows not least from the design of the primary rule system. The tools available are rooted in the treaty itself, whereas new measures can hardly be invented later. Thus, the Montreal Protocol s compliance system has trade measures available because the Protocol bans trade in controlled substances with non-parties in the first place. The scope for strong measures is therefore co-determined by the overall design of the treaty Findings may in some sense be considered to precede measures taken in response to non-compliance. From another perspective, they may themselves be considered a measure or tool to address non-compliance. For the purposes of this article, measures generally comprise both findings and other response measures available to the compliance committee. 15 Victor, supra note E.g., Jutta Brunnée, The Kyoto Protocol: Testing Ground for Compliance Theories?, 63(2) ZaöRV (2003), at ; see also below. 17 Sebastian Oberthür, Die Wirksamkeit von Verrechtlichung: Die Compliance- Mechanismen internationaler Umweltregime, in Politik und Umwelt, edited by Klaus Jacob, Frank Biermann, Per-Olof Busch, and Peter H. Feindt (Politische Vierteljahresschrift, Sonderheft, 39/2007),

7 36 Oberthür Core Issue II: Scope or Coverage The scope or coverage of a compliance mechanism concerns the question of what exactly it is mandated to assess. We can distinguish three dimensions in this respect: substantive scope; geographic or territorial scope; and temporal scope. The issue of substantive scope concerns the scope of commitments that the compliance mechanism is mandated to consider and assess compliance with. For example, it may assess compliance with commitments on mitigation, finance, adaptation, reporting, or methodologies. Under most meas, the substantive mandate of the compliance mechanism is rather broad, covering all commitments. The kp compliance mechanism, however, limits enforcement to certain central commitments related to mitigation (including relevant reporting requirements; see below). With respect to the geographical/territorial scope or coverage, most compliance mechanisms of meas apply to all parties. Any differentiation between parties is primarily a function of the design of the overall mea. The Montreal Protocol, for example, recognizes in its Article 5.5 that developing countries compliance with their substantive obligations depends on the effective provision of financial resources and technology by developed countries, which has repercussions for the compliance proceedings. Also, enforcement proceedings under the kp compliance mechanism are de facto limited to Annex B parties (i.e. developed Kyoto parties). The temporal scope concerns the issue of when a compliance mechanism can be activated. A full compliance assessment may only be possible after the deadline for achieving it has passed (ex post). However, where the deadline for achieving compliance is still in the future, assessing progress towards compliance ex ante in line with the forward-looking character of compliance mechanisms18 is possible and adds value. For example, the Kyoto compliance mechanism includes an early-warning function (see below). Overall, a broad scope of a compliance mechanism can be considered most effective. Excluding certain commitments or parties a priori may not serve the effective implementation of an mea. Any differentiation that may be politically warranted may best be determined in the design of the primary commitments so that the compliance mechanism can operate accordingly. Options for differentiation are further addressed at the end of section 5. A broad scope also entails that an effective compliance mechanism should be able to address compliance issues early on, if possible before non-compliance becomes manifest. 18 Bodansky, supra note 4, at 248.

8 Compliance in a 2015 Climate Agreement 37 Core Issue III: Institutional Anchoring and Capacity Institutional anchoring and capacity are crucial for the ability of the compliance mechanism to identify and address compliance issues effectively. The focus here is on three central elements: the establishment of a committee (including its composition), its independence and decision-making authority, and the triggering of specific cases. The establishment of a dedicated committee is fundamental to any effective compliance mechanism. It provides for the institutional capacity to address individual cases of potential or alleged non-compliance in depth, and with the necessary expertise and independence. Compliance committees of meas usually feature between members.19 The composition of the committees is often one of the most contentious issues. Since assessing whether a party has complied with its obligations is a sensitive matter, the independence of the compliance assessment from direct political interference is usually important. A key element of this independence is the establishment of a dedicated committee with a clear mandate to conduct the compliance assessment, as just mentioned. In addition, the members of some compliance committees act in their personal or individual capacity (while in others they are party representatives). In many cases, the mea compliance committees develop recommendations or present draft decisions to the cop. The Kyoto Compliance Committee, however, has itself the authority to adopt decisions.20 Finally, the triggering provisions of the compliance mechanism are of crucial importance because they determine the mechanism s capacity to address cases of potential non-compliance. Since states have been found to be reluctant to point the finger at each other (or at themselves), it is important that actors other than governments can trigger proceedings.21 Under the kp compliance mechanism it can be done by the teams of experts that review national reports under the kp (see below). Under other meas, proceedings can be triggered by the secretariat or even non-governmental organizations.22 Experience shows that going beyond the parties is important for getting relevant cases to the compliance committee. 19 unep, supra note 9; Treves et al., supra note In some other cases, the compliance committees can at least take the softer measures themselves; see Bulmer, supra note 4, at Keohane et al., supra note Francesca R. Jacur, Triggering Non-Compliance Procedures, in Non-Compliance Procedures and Mechanisms and the Effectiveness of International Environmental Agreements, edited by Tullio Treves, Laura Pineschi, Attila Tanzi, Cesare Pitea, Chiara Ragni, and Francesca R. Jacur (The Hague: T.M.C. Asser Press, 2009),

9 38 Oberthür 4 Compliance under the Current Climate Change Regime This section provides a very brief review of processes under the Convention and its Kyoto Protocol related to compliance, focused on the core issues identified above. These processes may provide platforms for a compliance mechanism under a 2015 climate agreement (see section 5). The processes covered include: the multilateral consultative process (mcp) under the Convention; the kp compliance mechanism; and International Assessment and Review and International Consultation and Analysis under the Convention (Cancun Agreements and follow-up). 4.1 The Multilateral Consultative Process Article 13 of the Convention tasked the first cop to consider the establishment of a multilateral consultative process for the resolution of questions regarding the implementation of the Convention. The ensuing negotiations on the mcp produced a draft text on related procedures that foresaw the establishment of a committee. While most of the draft text was agreed, the fully elaborated procedures were never adopted, mainly due to a lack of agreement on the composition of the committee.23 As a result, there is no experience with the operation of the mcp. While it has formally remained available, parties have so far not attempted to activate it. The following analysis focuses on the agreed elements of the (unadopted) procedure for the reason that the parties could decide to activate the mcp as a compliance mechanism for the 2015 agreement (see more about this in section 5). The draft mcp is clearly facilitative in nature. Its objective is to resolve questions regarding the implementation of the Convention by providing advice on assistance, promoting understanding of the Convention, and preventing disputes from arising.24 The process is to be conducted in a facilitative, cooperative, non-confrontational, transparent and timely manner, and be non-judicial.25 The outcome of the proceedings as envisaged in the draft text remains very limited. It would consist in conclusions that may include recommendations 23 Farhana Yamin and Joanna Depledge, The International Climate Change Regime: A Guide to Rules, Institutions and Procedures (Cambridge: Cambridge University Press, 2004), at ; unfccc, Decision 10/CP.4, Multilateral Consultative Process, in United Nations Framework Convention on Climate Change, Report of the Conference of the Parties on Its Fourth Session, FCCC/CP/1998/16/Add.1 (1999), at unfccc, supra note 23, Annex, at para Ibid., at para. 3.

10 Compliance in a 2015 Climate Agreement 39 regarding cooperation between the party or parties concerned and other parties to further the objective of the Convention and measures that the Committee deems suitable to be taken by the party or parties concerned for the effective implementation of the Convention. The outcome is to be sent to the party or parties concerned for consideration.26 The scope of the mandate of the draft mcp is broad. The Committee would consider questions regarding the implementation of the Convention. It could thus address any question brought forward, be it related to past or future compliance. Reinforcing the facilitative nature of the draft mcp, the mandate further specifies that the process should be conducted in consultation with the Party or Parties concerned and provide the appropriate assistance in relation to difficulties encountered in the course of implementation, by: (a) Clarifying and resolving questions; (b) Providing advice and recommendations on the procurement of technical and financial resources for the resolution of these difficulties; (c) Providing advice on the compilation and communication of information.27 The Committee s independence in the draft scheme is ambiguous. On the one hand, members of the Committee would not formally serve in their individual capacity but be representatives of parties. On the other hand, the (rather soft) conclusions and recommendations of the Committee would not require confirmation by the cop, which would be only informed of them.28 The triggering provisions remain limited to parties and, interestingly, groups of parties (including the cop).29 The possibility for groups of parties to raise questions regarding the implementation of the Convention may make it easier to raise such questions since it allows sharing the blame for such a step. At the same time, it could also entail a risk of politicization along group divisions and may not ensure that major questions of implementation find their way into the procedure. 4.2 Compliance Mechanism under the Kyoto Protocol The kp compliance mechanism was established by Decision 27/cmp.1 in accordance with Article 18 of the Protocol in late It creates a Compliance Committee with 20 members and 20 alternate members.30 The Enforcement 26 Ibid., at para Ibid., at para Ibid., at paras. 8, 9, Ibid., at para For a more detailed analysis see Sebastian Oberthür and René Lefeber, Holding Countries to Account: The Kyoto Protocol s Compliance System Revisited after Four Years of

11 40 Oberthür Branch of the committee has relatively strong measures ( consequences ) at its disposal. These measures include the suspension of the party concerned from participation in the kp international carbon-market mechanisms and, in the case of non-compliance with the emission targets, the deduction of 1.3 times the excess emissions from the amount of emissions allocated for the next commitment period. The Facilitative Branch has a set of very soft measures at its disposal. These measures are permutations on the provision of advice and the facilitation of assistance, including as the strongest measure the formulation of recommendations. As regards its scope, the kp compliance mechanism in principle covers all commitments under the Protocol, although in a differentiated manner (substantive scope). The Enforcement Branch addresses cases related to emission-limitation or reduction commitments under Article 3.1 of the Protocol (emission targets), the key methodological and reporting requirements, and the eligibility requirements for participation in the carbon-market mechanisms. It also has the authority to decide on disagreements regarding inventory data estimates ( adjustments ). The Facilitative Branch addresses all other questions of implementation. In addition, it has an early-warning function with respect to emission targets and methodological and reporting requirements, prior to the point when these become binding requirements and fall under the mandate of the Enforcement Branch. Since this early-warning function has remained largely unused (not least due to a lack of an effective trigger),31 the compliance mechanism s temporal focus is ex post. The inability and failure to address cases of potential non-compliance early on has contributed to one of the strongest criticisms of the mechanism. The major case in point concerned the potential non-compliance by Canada.32 Experience, 1(1) Climate Law, (2010), ; René Lefeber and Sebastian Oberthür, Key Features of the Kyoto Protocol s Compliance System, in Promoting Compliance in an Evolving Climate Regime, edited by Jutta Brunnée, Meinhard Doelle, and Lavanya Rajamani (Cambridge: Cambridge University Press, 2012), ; Meinhard Doelle, Experience with the Facilitative and Enforcement Branches of the Kyoto Compliance System, in Promoting Compliance in an Evolving Climate Regime, edited by Jutta Brunnée, Meinhard Doelle, and Lavanya Rajamani (Cambridge: Cambridge University Press, 2012), Meinhard Doelle, Jutta Brunnée, and Lavanya Rajamani, Conclusion: Promoting Compliance in an Evolving Climate Regime, in Promoting Compliance in an Evolving Climate Regime, edited by Jutta Brunnée, Meinhard Doelle, and Lavanya Rajamani (Cambridge: Cambridge University Press, 2012), at E.g., Peter J. Murtha, Effective International Compliance Is Needed to Avoid Dangerous Anthropogenic Interference, in inece Special Report on Climate Compliance: United Nations Climate Change Conference in Copenhagen cop15 (December 2009), at 8 9.

12 Compliance in a 2015 Climate Agreement 41 As early as 2007, the Canadian government had publicly declared that it did not plan to (try to) meet its emission target, calling it unrealistic and unachievable.33 Although emission data subsequently confirmed Canada s potential non-compliance (which could, however, in theory have been offset by international emission credits), the kp Compliance Committee could not address the issue effectively and Canada eventually withdrew from the kp in December 2011 (becoming effective in December 2012). The kp compliance mechanism effectively only addresses developed countries. The obligations falling under the authority of the Enforcement Branch only concern developed countries. Given the Kyoto Protocol s focus, the Facilitative Branch is also unlikely to address developing countries (even thought its mandate does not exclude it). The Compliance Committee is characterized by a comparatively high degree of independence. Members serve in their individual capacity and decisions of the branches do not require confirmation by the cop/mop, which has no power to overrule them. The triggering provisions do provide the opportunity to raise questions of implementation through another channel than the parties themselves. As mentioned above, the so-called expert review teams (erts), tasked to review national reports under the kp (annual inventory submissions and less frequent periodic national communications), are mandated to indicate any question of implementation in their review reports. These trigger the proceedings of the Compliance Committee. Confirming the experience of other compliance mechanisms, all the questions of implementation that the Enforcement Branch of the committee has addressed in substance since 2008 (as of mid 2014) have been raised in ert reports.34 While the kp Compliance Committee has proven its ability to operate effectively and to successfully address cases of possible non-compliance, there also remains some scope for further improvement. Between 2008 and 2013, the committee successfully dealt with cases that concerned methodological and reporting requirements and disagreements over inventory data with respect to eight developed countries. Its ability to address cases concerning compliance with emission targets has remained unproven. While it is thus uncertain 33 See also René Lefeber, An Inconvenient Responsibility (Utrecht: Eleven, 2009), at Maria S. Manguiat and Dan Bondi Ogolla, The Compliance Committee of the Kyoto Protocol: Towards a Robust Assessment of Compliance with Targets for the First Commitment Period, in Compliance Strategies to Deliver Climate Benefits, edited by Jo Gerardu, Meredith Koparova, Ken Markowitz, Elise Stull, and Durwood Zaelke (Washington, DC: Institute for Governance & Sustainable Development, 2013), at

13 42 Oberthür whether the measures available to the committee in this respect are sufficient, they are comparatively strong. At the same time, the ability to activate the facilitative side of the mechanism early on, before non-compliance becomes manifest, deserves strengthening. This does not necessarily require continuing the institutional separation of facilitation and enforcement that has so far failed to demonstrate its added value. 4.3 International Assessment and Review and International Consultation and Analysis International Assessment and Review (iar) related to the emission reduction targets of developed countries, and International Consultation and Analysis (ica) aimed at increasing the transparency of developing countries mitigation actions and their effects, emerged from the Cancun Agreements (Decision 1/CP.16). Both processes were subsequently further developed (in particular through Decisions 2/CP.17 and 20/CP.19). Their implementation started in 2014, so that no practical experience with their operation yet exists. While a parallelism between iar and ica seems obvious, it should be noted that political discussions under the cop have led to a clear differentiation (with different terminology used in each case), with ica remaining the softer of the two procedures. Both iar and ica comprise two components or phases. First, experts conduct a technical review or analysis of biennial reports by developed countries or biennial update reports by developing countries. Second, both iar and ica subsequently enter a multilateral phase in which the mentioned biennial (update) reports undergo, together with the reports resulting from the technical review or analysis, a multilateral assessment (iar) or a facilitative sharing of views (ica) (Decision 2/CP.17). Each multilateral phase is conducted with slightly different arrangements under the Subsidiary Body for Implementation. Under both iar and ica, other parties can pose questions during the multilateral phase. It is the multilateral phases of iar and ica that are of interest here because they are most closely related to the notion of compliance. They arguably form part of the grey area between review and compliance. In particular, they provide the opportunity to raise questions regarding implementation. The multilateral phases of both iar and ica are clearly facilitative. They primarily aim at enhancing transparency. Consequently, they do not foresee any concrete findings or measures. The major output of the multilateral phase of iar is a record of relevant documents and proceedings prepared by the secretariat, which forms the basis of sbi conclusions to be forwarded to relevant bodies under the Convention as appropriate (Decision 2/CP.17, Annex

14 Compliance in a 2015 Climate Agreement 43 II, para. 12). The outcome of the multilateral phase of ica is to be a record of the facilitative sharing of views (ibid., Annex IV, para. 8). Neither multilateral phase foresees findings or concrete results directed at the party in question or at others (e.g. institutions providing financial assistance). Not even facilitative measures like the facilitation of assistance and the clarification of rules are available. As regards their scope, iar and ica have a clear focus on mitigation actions and related transparency. iar is to consider the implementation of quantified economy-wide emission reduction targets of developed countries (Decision 2/CP.17, para. 23) as well as the implementation of methodological and reporting requirements (Decision 2/CP.17, Annex II, para. 2). Aiming to increase the transparency of mitigation actions and their effects, ica addresses the biennial update reports of developing countries, including national greenhouse gas inventories and other relevant information (regarding, inter alia, mitigation actions, their implementation, and relevant methodologies and assumptions) (Decision 2/CP.17, Annex IV, para. 3). Both iar and ica kick in before the actual target date(s) of the mitigation pledges under the Cancun Agreements generally They thus in principle provide the opportunity to publicly identify, discuss, and address shortcomings (as well as highlight possible success stories) relatively early on (in addition to assessing implementation ex post), thereby promoting effective implementation. The independence and institutional capacity of both the iar s multilateral assessment and the ica s facilitative sharing of views remain seriously lacking. The multilateral phases of both procedures are not conducted by a dedicated committee but in the context of the sbi, which forms part of a bigger political process. Independent decision-making on implementation issues is not foreseen (see above), but is also not possible in this set-up. The capacity to address individual parties in any detail and to follow up on identified problems remains sharply limited. In particular, the procedures do not provide for an in-depth investigation or a follow-up in cases where serious problems exist (apart from the biennial reiteration of the exercise). iar and ica are triggered automatically by the reporting of countries. As such, all countries and all problems are subject to the procedure. However, problems are not systematically identified and acted upon (lack of targeted and in-depth investigation and follow-up; see above). Furthermore, at present, only parties can pose questions during the multilateral phase (making it less likely that all problems will be brought to the fore). It is also unclear how problems could be addressed in a case where a party does not submit its biennial (update) report.

15 44 Oberthür Overall, while the implementation of iar and ica is still at an early stage, both processes overlap somewhat (in their multilateral phases) with the functions usually fulfilled by compliance mechanisms. They may thus serve to identify and open up for discussion implementation problems ex ante as well as ex post and put peer pressure on countries in this context. At the same time, from a compliance perspective, iar and ica presently come in short, in particular because they lack both the ability to address and follow up on identified problems (process and measures) and the institutional capacity to address problems in depth (committee, decision-making). 5 Options for a Compliance Mechanism for a 2015 Agreement A compliance mechanism for the 2015 Agreement could realistically best be developed after the agreement itself is adopted. The specific design of a compliance mechanism depends to a large extent on other elements of the overall system, especially the obligations or commitments to be implemented. Accordingly, most meas contain no more than a mandate for the adoption of a compliance mechanism.35 However, it may be possible to define certain parameters of, and give guidance to, a future compliance mechanism. For example, the 2013 Minamata Convention on Mercury contains certain foundations of its compliance mechanism in the treaty itself. In particular, Article 15 of the Convention determines the nature and purpose of the mechanism; establishes a compliance committee and clarifies its composition; settles the triggers available; and specifies the voting rule. As regards the 2015 Agreement, the main question may thus be whether to include a compliance mechanism and, if so, in what form (and with what guidance). Agreement on key design features of a compliance mechanism may promote credible commitments and may be required for parties to have sufficient clarity about the key components of the overall agreement. The discussion in this article allows us to identify three principal options with five sub-options in this respect. Given the range of choices available for each identified core issue, further variants are possible. Each of the five options will be assessed in what follows in terms of their effectiveness and political feasibility (see Table 1). The yardstick applied for assessing effectiveness will be the criteria derived from the analysis of the core issues in section 3 above Bulmer, supra note The analysis will assess effectiveness of the compliance mechanism as such, but will not consider broader repercussions, such as the possibility that strong compliance

16 Compliance in a 2015 Climate Agreement 45 Table 1 Summary of options for a compliance mechanism under the 2015 Agreement. Option Effectiveness Feasibility Comment 1a: iar and ica Low High 1b: iar and ica plus Low-medium Medium Effectiveness depends on appropriate modifications 2a: Modified mcp Up to medium-high Medium Effectiveness depends on appropriate modifications 2b: New facilitative mechanism Up to medium-high Medium Effectiveness depends on appropriate design 3: Facilitation and enforcement High Low The section concludes with a brief discussion of options for addressing differentiation. Option 1: No Specific Compliance Mechanism Option 1a: iar and ica in their Current Form In this scenario, the multilateral phases of iar and ica would continue and be incorporated in the 2015 Agreement largely as they are. This option would fail to activate the potential of compliance mechanisms to contribute to effective implementation and stabilize international cooperation. It would also provide an unfortunate departure from the established practice of establishing compliance mechanisms for meas. Its political feasibility can be considered high because both processes already exist and have been accepted by all parties (although not necessarily for the post-2020 period). Option 1b: Strengthening iar and ica This option would see a mandate for the strengthening of the multilateral components of both iar and ica included in the 2015 Agreement to enhance their potential for promoting compliance. Such a strengthening could and should address: the establishment of a dedicated body or bodies for the multilateral phases, the inclusion of clear findings and (facilitative) measures, the possibility for actors other than states to identify questions regarding procedures may limit the willingness to accept ambitious commitments, as discussed in section 3 above.

17 46 Oberthür implementation, the possibility to explore such questions in depth, and possibly the broadening of the scope beyond mitigation commitments and related methodological and reporting requirements. The effectiveness of this option in promoting compliance will depend on the level of strengthening of the multilateral phases of iar and ica. If a farreaching strengthening can be agreed to that addresses the aforementioned points sufficiently, it may be possible to realize the potential of a facilitative compliance mechanism. The political feasibility of this option is more uncertain. On the one hand, enhancing iar and ica as existing processes may be easier than creating a new mechanism. Reviews of iar and ica are foreseen for, respectively, 2016 and 2017 (Decision 2/CP.17). On the other hand, there may be resistance to a significant strengthening of processes that are seen to form part of the mrv system rather than compliance and a corresponding reluctance to commit to such a strengthening before significant experience has been gained with the operation of iar and ica. Option 2: A Facilitative Compliance Mechanism Option 2a: Adoption of a Revised Multilateral Consultative Process Adopting an mcp that is revised for the purposes of the 2015 Agreement would be a way of activating a separate facilitative compliance mechanism. Building on the agreed parts of the draft mcp would ensure the facilitative character of the mechanism. At the same time, the draft mcp would likely need to be modified, and the Agreement could provide guidance to this end. The draft mcp itself foresees the possibility of amending its terms of reference, among other things to take account of decisions of the cop.37 In order to enhance the potential of the mcp to contribute to effective implementation, the draft mcp text should, in particular, be modified to (i) allow the procedure to be triggered through channels other than parties (e.g. through the mrv system) so as to allow the committee to clearly identify implementation problems, and (ii) provide a portfolio of response measures. The effectiveness of this option could be up to medium-high because an appropriately modified mcp could in principle activate the full potential of facilitative compliance mechanisms (while leaving the enforcement potential untapped). The political feasibility of this option may be supported by the fact that parties know the contours of the mechanism, and that it is clearly rooted in the Convention. It may be possible to address concerns regarding sovereignty that a strengthened mcp may raise by giving assurances that the adapted 37 unfccc 1998, supra note 23, Annex, at para. 14.

18 Compliance in a 2015 Climate Agreement 47 mechanism will remain clearly facilitative. However, modifying the mcp to enhance its potential may prove an uphill battle and difficult to realize. Option 2b: Elaboration of a new Facilitative Compliance Mechanism The 2015 Agreement could follow the example of other meas and include a mandate for the development of a new facilitative compliance mechanism. In doing so, it may be possible to provide further guidance on the core elements discussed here. For example, the agreement could establish the facilitative nature of the compliance mechanism, foresee the establishment of a compliance committee (and its composition and voting rule), and determine the principal ways of triggering the procedure. The effectiveness of such a mechanism could eventually be similar to that of an appropriately revised mcp. It could achieve up to a medium-high score by activating the facilitative potential of compliance mechanisms. Also, the assessment of the political feasibility should be similar. The main difference between the two sub-options is that the draft mcp already provides a certain framework, whereas a new mechanism would start from a blank sheet. Each can be seen as an advantage or a disadvantage. While the mcp gives a clearer idea of what the mechanism will look like, it was not designed for the new agreement, and modifying it appropriately may prove difficult. A new mechanism would require starting from scratch, but would also allow the mechanism to be tailored to the new agreement. Overall, the provision of clear guidance towards a facilitative design may enhance the political feasibility of this option. Option 3: Elaboration of a Compliance Mechanism Covering Facilitation and Enforcement, or Incorporation of a Modified Kyoto Compliance Mechanism The 2015 Agreement could include a mandate for the elaboration of a compliance mechanism including both facilitation and enforcement, or for the incorporation of the Kyoto compliance mechanism in revised form.38 This option would entail a further specification of the commitments to which enforcement would be applied (with the commitments and the group of committed countries likely to be different from the kp), a specification of available enforcement measures (likely different from those under the kp), and ideas for 38 While these could also have been discussed as two sub-options, they are discussed in combination here for reasons of simplicity. In principle, it would also be possible to integrate stronger, enforcement, measures into the other options considered above (e.g. the mcp). However, this is not considered here.

19 48 Oberthür the mobilization of the facilitative function, including an effective early-warning component. In the case of a revision of the kp compliance mechanism, a review of the separation of the two branches may be deemed suitable. This option would have the highest effectiveness since it could activate both the facilitative and the enforcement potential of compliance mechanisms. The political feasibility of such a strong compliance mechanism, however, has to be considered low, given the lack of acceptance by important countries. Options for Addressing Differentiation As differentiation figures particularly prominently in international discussions on climate change, parties may wish to explore options for addressing differentiation in a compliance mechanism. From an international law perspective, it might be preferable to address such differentiation in the primary rule system, i.e. through the provisions that establish obligations in the first place (e.g. conditional commitments). Nevertheless, the following general options for differentiation can be identified: Different compliance mechanisms or arrangements for different kinds of countries. This could be the result of a strengthening of the multilateral phases of iar and ica (see above) that apply to developed and developing countries, respectively. It has also been suggested that facilitation or the Facilitative Branch of the kp compliance mechanism may address compliance by developing countries, while developed countries would be subject to enforcement or the Enforcement Branch.39 A new compliance mechanism could in principle also be bifurcated. Differentiated measures for different kinds of commitments or groups of parties. Rather than differentiating the full procedure, it may be possible to differentiate in the application of response measures. Such a differentiation could occur according to different kinds of commitment (e.g. the kp compliance mechanism foresees different measures for non-compliance with reporting requirements and emission targets). This could indirectly translate into differentiated treatment of different groups of countries (if they take on different kinds of commitments). It would also be possible to directly provide for different measures for different groups of countries. 6 Conclusion There is a strong rationale for including an effective compliance mechanism in the 2015 Agreement. While considerations of national sovereignty may limit 39 See also unfccc 2014, supra note 2, at 19.

20 Compliance in a 2015 Climate Agreement 49 their political acceptability, compliance mechanisms are a standard element of meas and have proven their potential to enhance trust among parties, support effective implementation, and protect against the danger of free riding. The iar and ica procedures, the draft mcp procedure, or the kp compliance mechanism could provide platforms to promote compliance under a 2015 Agreement. Each of these existing arrangements would require modification so as to adapt to the new agreement or enhance its contribution to promoting compliance. Alternatively, parties may agree to design a new compliance mechanism from scratch. Any compliance mechanism for a 2015 Agreement is likely to require shaping after the agreement is adopted, in light of its substance. Parties may, however, wish to include in the agreement certain foundations of a mechanism that deserve attention in order to ensure its effective functioning (adapted to the choice of the above platforms, as appropriate). For example, the agreement could decide the establishment of a compliance committee of members and its composition (as well as a voting rule). It could also determine that the procedure can be initiated by parties (with respect to themselves as well as to other parties), as well as through the mrv procedures (building on the positive experience of the kp compliance system in this respect). The scope of a compliance mechanism may best be left broad. Any need for differentiation between parties and issues may best be addressed in designing the primary rules on the different substantive components of the agreement (including mitigation, adaptation, means of implementation, and mrv/transparency). Other main options for any politically desired differentiation include the establishment of separate procedures for different groups of countries or the differentiated application of measures (or varying types of commitments or groups of parties). It may only be possible to fully consider the response measures to promote compliance a central aspect of any compliance mechanism after the agreement is adopted, since the options for such measures depend on the agreement s overall design. Before that, parties could clarify the nature (non-adversarial, facilitative, etc.) and objective (e.g. to facilitate and promote compliance) of a compliance mechanism so as to provide guidance to the later specification of measures. It may also be possible to agree on specifying general kinds of measures, such as recommendations, the facilitation of assistance, and, possibly, the withdrawal of any specific privileges. Parties could furthermore agree to regularly review the mechanism so as to provide for the opportunity to strengthen it, as international cooperation advances and deepens.