Towards agreement in Paris 2015: Why domestic issues matter more than international law

In the wake of the annual climate change negotiations at the 20^th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change in Lima, Peru, the question of whether the new climate agreement being negotiated should be ‘internationally legally binding’ remains an unresolved point of controversy.

Professor Lord Nicholas Stern, Chair of the Grantham Research Institute on Climate Change and the Environment, attended the negotiations in Lima and argued that it is not necessary for a new climate agreement to be internationally legally binding. Many civil society groups, and some governments, on the other hand, continue to press for any deal to be legally binding. They typically argue that an internationally voluntary agreement would be ineffective and would leave states unaccountable for achieving their commitments.

So who is right? Answering this question was one of the aims of my recent Grantham Research Institute policy paper, published to coincide with the negotiations in Lima.

The short answer is that Lord Stern is right: for an international climate agreement to be effective it is neither necessary nor sufficient for the agreement to be internationally legally binding.

The issue of whether an agreement should be legally binding or not is often conflated with a number of distinct but related issues, including: the extent to which provisions of the agreement impose mandatory, specific and/or quantifiable obligations; whether sanctions apply when an obligation is not met; what any sanctions entail; and whether the agreement confers powers on international organisations to enforce those sanctions.

I take it that most advocates of a legally binding treaty have in mind that the treaty would entail specific and mandatory obligations, with sanctions and centralised institutions to enforce them.

In the paper, I consider the effect that such a strongly binding legal architecture would have on both the credibility and the ambition of countries’ commitments. I find that a strongly binding agreement increases the credibility of countries’ commitments because it indicates a more serious commitment to comply with the substance of an agreement, and implies greater costs for non-compliance. Moreover, in many countries, international legal commitments trigger domestic institutional and legal processes that make compliance more likely.

However, these effects on the credibility of commitments are arguably modest. The weakness of sanctions and enforcement institutions at the international level (at least those that are politically feasible in the foreseeable future) means that the material costs of non-compliance are likely to be low  — certainly far too low to ‘guarantee’ or ‘enforce’ compliance, as the case of Canada’s withdrawal from the Kyoto Protocol illustrated starkly.

In assessing the net impact of a strongly binding legal architecture on the agreement’s effectiveness, it is important also to consider its effect on countries’ ambition:

• Theoretically, a strongly binding international agreement could generate more ambitious commitments from countries if they are primarily concerned about the non-compliance of others. This logic applies to the European Union in climate negotiations.
• However, many countries are likely to be less ambitious in their commitments where an agreement is (or is anticipated to be) strongly legally binding. For instance, if countries are more concerned about their own non-compliance, or if their political cultures are hostile to international legal entanglements. In the climate negotiations, this logic arguably applies to China, India, and other major emerging economies that are responsible for a large and growing share of global greenhouse gas emissions.
• If the new climate agreement were to be strongly legally binding, it would be effectively impossible for the United States to participate, since US ratification of a treaty requires the consent of two-thirds of the US Senate, which is politically infeasible for the foreseeable future.
• Given the systemic importance of the US, China, India and other emerging economies to the total ambition embodied in any international climate agreement, it seems on balance that a strongly legally binding agreement would greatly depress ambition and participation overall. That is arguably much too high a price to pay for any modest increase in the credibility of commitments resulting from them being internationally legally binding.

The upshot of this analysis is that states and civil society observers should be focusing their attention on the domestic factors affecting the ambition and credibility of countries’ climate commitments.

We can now be confident (thanks to the work of the New Climate Economy project and others) that well-designed domestic climate policy that induces a structural shift toward a low- or zero-carbon economy can boost growth and improve living standards in the medium term. As such, countries have strong reasons for pursuing a low- or zero-carbon pathway on their own, without the need to be forced by international institutions and sanctions even if these could be made credible. (Though there are plenty of good reasons for cooperating internationally on climate change, as I explain in the paper.)

Domestic policies, laws and institutions are much stronger determinants of the credibility of a country’s emissions reduction commitment. A greater understanding of the diverse domestic means through which countries pursue emissions reductions would do much more to build mutual confidence between countries than relying simply on international law as a supposed guarantor that commitments will be achieved.

Focusing on making a new climate agreement internationally legally binding risks distracting attention away from the question that really matters when it comes to reducing emissions: how can international cooperation improve the ambition and credibility of countries’ commitments?

– ‘“This time is different”: The prospects for an effective climate agreement in Paris 2015’