COP 24 negotiations culminated in the 2018 “Paris Rulebook” (“Rulebook”) but fell short of resolving all issues implementing the 2015 Paris Agreement (“Agreement”). In 2019 and subsequent years, we expect dynamic debates between negotiators on at least five key issues:
- How to implement voluntary market mechanisms under Article 6 of the Agreement,
- How to increase collective ambition through each country’s voluntary pledges,
- How to recognize the IPCC 1.5◦C Report’s scientific findings,
- Setting a new climate financing goal for developed nations to meet, and
- Continuing discussions on “loss and damage” issues for vulnerable nations.
This is the second of a two-part series discussing the results of the COP 24 summit. In Part One, we described how Katowice negotiators found commPreview (opens in a new window)on ground on transparency and reporting provisions in the Rulebook, but could not reach agreement on the more ambitious voluntary market mechanisms.
First, at COP 25—which will be held in Chile in November 2019—negotiators will continue to work through technical details to implement Article 6 of the Agreement. As discussed in Part One, Article 6 allows for “internationally transferred mitigation outcomes” (“ITMOs”), including creative market-based mechanisms like global carbon-trading systems and emission credit systems, which could result in deeper reductions in global carbon emissions. However, Katowice negotiators reached an impasse when several countries led by Brazil opposed strict accounting principles intended to avoid “double counting” of emission reductions, which may limit Brazil’s plans to rely on forest management practices to meet its INDC in the near-term. Any future consensus on ITMO accounting rules is likely to require Brazil’s cooperation—and that of its incoming administration.
Second, post-Katowice negotiations will predominantly focus on how to increase collective ambition through each country’s Intended Nationally Determined Contributions (“INDCs”), a process that was recently formalized under the 2018 Talanoa Dialogue. The Rulebook’s treatment of the Dialogue is ambivalent—it only “[t]akes note” of the Dialogue and “[i]nvites” countries to “consider” more ambitious INDC targets. However, this ambivalence is unlikely to last long. The Rulebook confirms that a second stocktake of “pre-2020” actions (including “Cancun Pledges” and ratification status of the Doha Amendment) will occur in 2019. This pre-2020 stocktake will accelerate ambition levels for both 2020—when the Agreement enters into force and parties are expected to submit new or updated pledges, and 2023—when the parties will engage in the first comprehensive Article 14 global stocktake. From there, countries party to the Agreement will be expected to “ratchet” up their ambition levels at five-year intervals. At each of these stages, nations will be under pressure to increase their pledges.
Third, echoing a similar conflict at the national level, parties may continue to dispute how climate science should inform policymaking. To the surprise of many, participating countries in COP 24 could not agree on how to recognize the IPCC 1.5◦C Report’s scientific findings. The final text of the Rulebook merely “welcomes the timely completion” of the Report and “invites Parties to make use of [its] information.” Whether a subsequent COP will fully adopt the climate science outlined in the Report may depend on the prevailing political positions of key countries like the United States. Indeed, one of the critical opportunities to continue this conversation will be at the 2019 U.N. Climate Summit, which will be held in New York City in September 2019.
Fourth, starting in COP 26 (November 2020), parties will discuss setting a new collective climate financing goal for developed countries to meet that exceeds the former collective 2020 target of 100 billion U.S. dollars per year. However, as explained in Part One, the leniency of the Rulebook’s climate financing reporting rules may dilute the practical impact of any new goal.
Fifth, the coming years may bring more attention to the controversial issue of “loss and damage,” which was historically proposed by the Alliance of Small Island States as a way to compensate nations vulnerable to sea level rise and climate change through an international “insurance pool” funded by developed countries. Currently, under Article 8 of the Agreement, parties merely “recognize” the importance of these issues and agree to cooperate on some discrete areas, including “[r]isk insurance facilities, climate risk pooling and other insurance solutions.” Indeed, the decision adopting the Paris Agreement was quick to clarify that Article 8 “does not involve or provide a basis for any liability or compensation.” Following COP 24, the Rulebook allows countries to report on loss and damage in their transparency reports and forecasts further action on how to “[a]vert, minimize, and address” loss and damage issues at the 2023 global stocktake.
 ITMOs are not defined in the Agreement and can include a wide range of mechanisms that would, in theory, negotiate the transfer of some portion of one country’s voluntary pledges to another country. Ensuring that ITMOs represent measurable and—more importantly—additional emission reductions implicates numerous design questions, including how ITMOs should be subject to international oversight.