International Climate Change Law After the UNFCCC Preparing

International Climate Change Law After the UNFCCC: Preparing for Failure Navraj Singh Ghaleigh Senior Lecturer in Climate Law Edinburgh University n. ghaleigh@ed. ac. uk

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 5 C; Sea level rises > 80 cm; > 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… • • 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 CO 2 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 CO 2 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 CP 1, 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 R 2 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. 4 Gt. CO 2 1990, 1. 6 Gt. CO 2 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 x 2 the emissions of natural gas/k. Wh Non CC impacts: air pollution, lung/respiratory, water pollution, agriculture etc Annual deaths > Fukushima (by order of magnitude) Largest global power fuel, 2 nd 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: G 20, 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 G 20 Coal Convention offers 80/20 solution