Transcript After the UNFCCC - Edinburgh Research Explorer

International Climate Change
Law After the UNFCCC:
Preparing for Failure
Navraj Singh Ghaleigh
Senior Lecturer in Climate Law
Edinburgh University
[email protected]
Thanks to:
Professor Boute
Chinese University of Hong Kong
The Climate Problem
Massive global carbon reductions required
(i.e. 80-95% reductions by 2050)
Temperature rises 5C; Sea level rises > 80cm;
> Extreme weather events
Impacts on fresh water, agricultural patterns,
rainfall, airborne diseases, animal migration etc
Major resource conflicts and security implication
International Climate Change Law After the UNFCCC:
Preparing for Failure
SUMMARY
UNFCCC Ineffectiveness – Data and Principles
Markets and IEL
(Has PIL ‘run out of rope’? AEB/NSG 2015)
Regime Simplicity – A Convention on Coal
UNFCCC – Effective?
Politics of Negotiation, and Consensus
Differentiation
Kyoto Commitments
Article 2:
The ultimate objective of this Convention…stabilization of
greenhouse gas concentrations at a level that would prevent
dangerous anthropogenic interference with the climate system.
(PPM p.a.)
Flexibility Mechanisms
Markets & International Env. Law
Economics has created global carbon market
via IEL
Economic analysis of law influential in other
fields of law, no impression on IEL
Externalities and Climate Change
The Ineffectiveness of
Emissions Trading
Externalities
Social cost > private cost
Steel mill and laundry
Operator views damage as external to their
cost calculation
Leads to overproduction
Externalities – Pigou
Pigovian solution (1920) – ‘tax’ equal to
marginal damage
state intervention, internalise externality
mill operator should compensate laundry, via
legal rights
i.e. liability rule (tort, state respon., PPP) or
penalty (fine, tax)
Coasean Response
Assuming zero transaction costs, distribution
of legal rights (ie law) is irrelevant!
The higher valuing party could always
purchase the right from the lower valuing
user (if the latter is the right holder)
“Negotiations between the interacting parties
will result in an efficient mix of outputs”
Coasean Response
Coase argues therefore that private ordering
(i.e. negotiation) not public (i.e. taxes) will
provide the optimal solution
initial distribution of legal rights does not
matter (assuming no TCs)
Coase and Emissions Trading
ETS based on Coasean trading logic
Rather than state determining where
abatement occurs, private parties trade until
they reach a cost-effective allocation
Price not set by state but the market
(NB state does set Qs)
Coase and Emissions Trading
Purpose of ETS?
Putting a price on Carbon
Eg power plant (full chain)
Instead of unlimited venting, Cp incentivises
low C investment, energy efficiency,
innovation etc
Higher the Cp, the better
Problem of ETS
Despite proliferation…
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•
•
•
EU ETS (world largest) Cp €6
UNFCCC CDM Cp €0.5
Californiap €7
South Korea €6
NB. Necessary level, circa Cp €50-75
Why the failure?
The Coasean Proviso - TCs
“In order to carry out a market transaction it is
necessary to discover who it is that one wishes
to deal with, to inform people that one wishes to
deal and on what terms, to conduct negotiations
leading up to a bargain, to draw up a contract, to
undertake the inspection needed to make sure
that the terms of the contract are being
observed, and so on. These operations are
extremely costly, sufficiently costly at any rate
to prevent many transactions that would be
carried out in a world in which the pricing
system worked without cost.”
The Ubiquity of Transaction Costs
search and information costs;
bargaining and decision-making costs;
monitoring and enforcement costs;
policy and governance costs (‘running the
system’)
i.e. CDM EB
EU ETS aviation, fraud, allocation litigation et seq
Consequences of Transaction Costs
“If the transaction costs of private bargaining
swamp available gains to trade then private
bargaining will not maximise social welfare.”
i.e. the market cannot take the place of the
state
Centrality of ETS in Climate Regime
Kyoto Protocol Second Commitment Period
New Market Mechanisms
ETS as key to many INDCs (key to Paris deal)
Yet unlikely to succeed
Regime Complexity:
Beyond the UNFCCC
Extra-UNFCCC Regimes and Tools
International human rights
Environmental impact assessments
Law of the Sea Convention
Trade law
ICJ Advisory Opinions
UNSC
(non-exhaustive)
UNCLOS and Litigation
UNCLOS litigation (1)
UNCLOS - comprehensive regime for the protection and
preservation of the marine environment and the
prevention/control of marine pollution damage to other States
i.e. Article 192 “States have the obligation to protect and preserve
the marine environment” [inc marine ecosystems]
Article 194 requires States to take measures necessary to prevent
marine pollution ‘from any source’
atmospheric deposition of CO2 form of pollution – 194(3) / 1(1)(4)
[introduction of substances or energy resulting in harm to the
marine environment]
Impacts: acidification and temperature rises. Oceans as buffers.
UNCLOS litigation (2)
Article 194(2) requires States to take measures to control and
regulate polluting ‘activities’ within their jurisdiction
makes State parties responsible for regulating and controlling the
risk of marine pollution damage to other States resulting from the
activities of the private sector
this is an obligation of due diligence – States must take the
measures necessary to prevent or minimise harmful pollution,
including environmental impact assessment, regulation and use of
best available technology, application of the precautionary
principle, and enforcement.
(Pulp Mills on the River Uruguay, 2010 ICJ Reports, paras. 197 and
223; Seabed Chamber Advisory Opinion, paras. 115-120.)
UNCLOS litigation (3)
i.e. States have an obligation to control and reduce CO2
emissions from any source likely to pollute the marine
environment and cause harm to other States
Q: what measures are required by Articles 192 and 194 ?
A: KP as the standard, i.e. UNCLOS developed State parties
must comply with their emissions reduction targets under KP
UNCLOS litigation (4)
Need to demonstrate that KP AI Parties not complied with their
QUELROs
But
all AI States will have met their emissions reduction targets for
CP1, ending in 2012: only Canada would have been in noncompliance had it remained a party
Non-AI States (inc India, China, Qatar, Saudi) have no QUELROs, tf
no breach of 192/194. Similarly USA (party to neither KP or
UNCLOS)
Although UNCLOS may be higher standard than KP, implausible to
argue that it regulates CC impacts on the oceans distinct from KP
HRs litigation
HRs litigation (1)
States clearly have responsibility to protect own citizens from
pollution which affects R2 life, private life, property etc.
But do emitting states also have a legal responsibility to
protect people in other States from the harmful impacts of
those emissions on the global climate?
States principally responsible for GHG emissions do not have
jurisdiction or control over territory or inhabitants beyond
their own borders
Who is responsible? Historic emitters, current powerhouses?
HRs litigation (2)
“human rights litigation is not well-suited to promote
precautionary measures based on risk assessments, unless
such risks pose an imminent threat to the human rights of
specific individuals. Yet, by drawing attention to the broader
human rights implications of climate change risks, the human
rights perspective, in line with the precautionary principle,
emphasizes the need to avoid unnecessary delay in taking
action to contain the threat of global warming.”
OHCHR 2009 Report, para. 91
i.e. reinforces political pressure, doesn’t supply effective
juridical remedy.
Trade and Transfer Emissions (1)
Transfer emissions – those arising from imports from
developing countries – are distortive of the climate regime.
Transfers via international trade from developing to
developed countries (0.4GtCO2 1990, 1.6GtCO2 2008) > KP ER
UNFCCC should monitor emissions transfer via trade, in
addition to territorial emission.
Also role for trade measures? CBAs?
A Convention on Coal?
Problem of Coal
(IEA Energy Balances 2014)
Coal Convention
Coal x2 the emissions of natural gas/kWh
Non CC impacts: air pollution, lung/respiratory, water
pollution, agriculture etc
Annual deaths > Fukushima (by order of magnitude)
Largest global power fuel, 2nd overall
Rising fast in Germany and Japan (post-Fukushima)
China: 77% power in 2013 to 58% by 2035
Plausibility – UK
(IEA Energy Balances 2014)
Plausibility – USA
(IEA Energy Balances 2014)
Coal Convention
Coal Convention
Substitute coal for gas?
Vast US shale gas resources; production to
increase rapidly
Significant Chinese shale gas reserves
(US+Ch = 85% total by 2035)
BP Energy Review 2015
Coal Convention
Differentiated phase out:
Established economies:
ST closure, gas replacement, EE, compulsory CCS
retrofit, commitment to R&D xp
Large Emerging Economies:
MT closure, supported CCS retrofit, EE, gas
replacement
Forum: G20, not UNFCCC
Conclusion
UNFCCC disappointments a near inevitability given
challenges, instrument choice
PIL has not ‘run out of rope’, given range of other
international regimes and tools, but:
International litigation unlikely to assist
Negotiation as crux but not restricted to the UNFCCC
G20 Coal Convention offers 80/20 solution