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Rose, Gregory --- "A Compliance System for the Kyoto Protocol" [2001] UNSWLawJl 43; (2001) 24(2) UNSW Law Journal 588
A Compliance System For The Kyoto
Protocol
I INTRODUCTION
[1] Compliance with the
Kyoto Protocol to the United Nations Framework
Convention on Climate Change (‘
Kyoto
Protocol’)
[1] is a challenge
that some countries, including Australia, seem likely to
fail.
[2] The reasons for this include
the sheer immensity of the task of mitigating greenhouse gas emissions in energy
intensive societies,
the complexity of the associated multi-sectoral management
needs, and the high dependency of successful implementation on private
sector
initiative and cooperation. In any case, compliance with the
Kyoto
Protocol will be ‘too little, too late’ to be effective in
mitigating climate change. However, its effectiveness in environmental
terms
must be distinguished from its implementation in legal terms. If it comes into
force, it may well
be legally
implemented.
[2] The effects of anticipated non-compliance with the
Kyoto Protocol, in comparison with other non-economic treaties, will be
highly quantifiable in domestic economies. These include competitive effects
in
the global market, such as distortions of countries’ relative productivity
in greenhouse gas-related goods and services,
and the altering of their
attractiveness as investment destinations. This makes non-compliance by some
countries an unusually direct
disadvantage for those others that are compliant.
Many will therefore consider it in their interests to establish a compliance
regime
to ensure that each nation implements measures to meet the obligations it
has undertaken under the Kyoto Protocol. The compliance regime currently
emerging could mark a watershed in international environmental law.
II COMPLIANCE SYSTEM NEGOTIATIONS
[3] Parties to the
United Nations Framework Convention on Climate
Change
(‘
UNFCCC’)
[3] and
the
Kyoto Protocol have taken steps to develop a robust compliance
regime. They have sought to create a system that will collect, integrate,
consider
and respond to compliance information. The information gathering system
draws together methodological issues in assessing greenhouse
gas emissions,
national communication of information to the Secretariat and international
review of that information by expert review
teams. The information will then be
considered to determine whether there is actual non-compliance. However, an
agreed method of
response to identified cases of non-compliance is yet to be
formulated.
[4] Under the Buenos Aires Plan of Action
(‘BAPA’),[4]
adopted in November 1998 at the Fourth Conference of the Parties to the
UNFCCC (‘COP 4’), Parties agreed on steps to prepare for the
coming into force of the Kyoto Protocol, including development of a
compliance system.[5] To implement the
parts of the BAPA dealing with Kyoto Protocol compliance, a Joint
Working Group (‘JWG’) on compliance was established in June 1999 by
both UNFCCC Subsidiary Bodies – ie, the Subsidiary Body for
Implementation (‘SBI’) and the Subsidiary Body for Scientific and
Technological Advice (‘SBSTA’). The JWG held two productive
workshops – in Vienna in October
1999,[6] and in Bonn in March
2000[7] – which developed
thinking on the topic. Actual negotiations between UNFCCC Parties on
elements of a Kyoto Protocol compliance system took place through
informal consultations at Montreux in February 2000, and formally during the
subsequent Subsidiary
Bodies’ sessions – the 12th session
in Bonn in June 2000; and 13th session in
Lyon[8] and in The
Hague[9] in September and November
2000 – as well as within the Fifth Conference of the Parties to the
UNFCCC (‘COP 5’) in Bonn in October 1999 and the Sixth
Conference of the Parties to the UNFCCC (‘COP 6’) in The
Hague in November 2000.[10] Progress
has been slow and tentative.
[5] It should be noted that art 13 of the
UNFCCC itself provides a more timid approach to establishing a compliance
system. Article 13 states that:
The Conference of the Parties shall, at its first session, consider the
establishment of a multilateral consultative process, available
to Parties on
their request, for the resolution of questions regarding the implementation of
the Convention.
[6] The Ad Hoc Group on Article 13
(‘AG13’) met six times between October 1995 and November 1998 to
flesh out the means
of its implementation. It agreed that the multilateral
consultative process should have the objective of resolving questions regarding
the implementation of the
UNFCCC, firstly by advising and assisting
Parties in overcoming difficulties encountered in their implementation of the
UNFCCC; secondly by promoting understanding of the
UNFCCC; and
thirdly by preventing disputes from arising. The process is to be facilitative,
cooperative, non-confrontational, transparent,
timely, and
non-judicial.
[11] The efforts of
AG13 were in effect superseded by the JWG, anticipating the
Kyoto
Protocol’s entry into force, although most Parties to the
UNFCCC are yet to ratify it.
III OVERVIEW OF COMPLIANCE ISSUES
[7] Article 18 of the Kyoto Protocol provides that
The Conference of the Parties serving as the meeting of the Parties to this
Protocol shall, at its first session, approve appropriate
and effective
procedures and mechanisms to determine and to address cases of non-compliance
with the provisions of this Protocol,
including through the development of an
indicative list of consequences, taking into account the cause, type, degree and
frequency
of non-compliance. Any procedures and mechanisms under this Article
entailing binding consequences shall be adopted by means of an
amendment to this
Protocol.
[8] Those UNFCCC Parties that become Parties
to the Kyoto Protocol will be subject to the Kyoto Protocol
compliance system. Questions then arise concerning whether the Kyoto
Protocol compliance measures should apply to both Kyoto Protocol and
UNFCCC obligations, to differentiated obligations within the Kyoto
Protocol, or even to all Kyoto Protocol Parties (as obligations are
differentiated between Parties). Further, it is not clear whether amendment to
the Kyoto Protocol is required before the compliance system can be
adopted. The following account sets out some of these issues as debated in the
JWG.
A Adoption of a Compliance Instrument
[9] The requirement for an amendment to the
Kyoto Protocol to ensure
its compliance system can entail legally binding consequences is problematic.
Not all Parties advocate legally binding
consequences. Instead, many would be
satisfied with merely adopting
a
non-binding
decision of the
UNFCCC Parties on
an interim or permanent system. For those who desire legally binding
consequences, rather than waiting for the
Kyoto Protocol to enter into
force and then amending it, a legal instrument could be adopted by the
Conference of the Parties to enter into force
at the same time as the
Kyoto
Protocol. This legal strategy can be compared to the adoption of the
Agreement relating to the Implementation of Part IX of the United Nations
Convention on the Law of the Sea of 10 December
1982,
[12] which was concluded in
1994 before the 1982
convention came into force and
implicitly amended it. As the dilatory rate of ratification of the
Kyoto
Protocol demonstrates, the usual delays in normal amendment processes would
tend to postpone establishment of a compliance system and would
also result in
it not applying between all Parties at the same time.
[10] Without a legal
instrument, it is still possible that in cases of material breach of Kyoto
Protocol obligations, suspension of a non-compliant Party’s rights in
whole or in part is an option in international law, as set out
in art 60(2) of
the Vienna Convention on the Law of
Treaties.[13] However, defining
a ‘material breach’ as a question of jurisdiction in any given case
poses difficulties and a legal
instrument would remove doubt as to the mandate
of a compliance body.
B Establishment of a Compliance Body
[11] A proposal to create one compliance body with two branches has gained
support. The first branch would facilitate compliance,
by such means as advising
Parties. The second branch would undertake enforcement action by imposing
penalties. The two branches reflect
differences in regulatory approach and it is
not yet clear how they will inter-relate. Some have argued that all enforcement
action
should be preceded by facilitation. Others have argued that the functions
are not necessarily consecutive and that a screening process
will be required to
determine which branch is appropriate in each case. In certain cases, a
consecutive approach could delay necessary
response action.
[12] A dedicated
Compliance Body staffed by independent experts has no analogue in other
environmental treaty secretariats. International
environmental treaties usually
adopt weak implementation promotion regimes and the emerging Kyoto
Protocol Compliance Body would therefore be a quantum leap
forward.
[13] In addition, a compliance committee under the Meeting of
Parties would be established. Such a committee – or a sub-committee
of it
– could screen and direct cases to the
appropriate branch of the compliance body. This committee
would be comprised of national representatives elected by the Meeting of
Parties on a regionally equitable basis and its evaluation
role would have a
political hue. This is similar to the establishment and role of the
Implementation Committee under the Montreal Protocol on Substances that
Deplete the Ozone Layer (‘Montreal
Protocol’).[14]
C Information System
[14] The basic framework for an information system to assess national
compliance is already established in the
Kyoto Protocol. Monitoring of
emissions, accounting for sinks and related methodologies in assessing
greenhouse gas emissions in countries listed
in Annex I of the
UNFCCC are
required under art 5. National reports of Annex I country inventory information
are required to be submitted to the Secretariat
under art 7. Final compliance
information would be available after the first commitment period (2008-12),
following a brief ‘truing
up’ period which would allow countries to
acquire emission credits to bring themselves into
compliance.
[15] International review
of national reports is then to be conducted by independent expert review teams
under art 8. Operational details
are in the process of being elaborated by the
UNFCCC Subsidiary Bodies. It is clearly the most robust compliance
information system yet established under a global environment treaty.
D Procedures
[15] The procedures for reference of possible cases to the compliance body
continue to be controversial. Possibilities include self-reference;
reference by
the Meeting of Parties; reference by another Party; or reference by the
Secretariat (eg, on advice from an expert review
team under art 8, or perhaps
also on its own assessment or on advice from non-governmental sources).
[16] Linked to the acceptability of this wide range of referencing
procedures is the introduction of a process to screen de minimus
non-compliance cases out of the system. It has been suggested that the screening
process could be undertaken by a sub-committee of
the compliance committee but
this seems likely to introduce political factors into what should be a technical
assessment of the facts
by the compliance body.
E Consequences of Non-Compliance
[17] Once a determination of non-compliance has been made, the main issues
currently confronting negotiators in addressing the consequences
are what
enforcement measures to apply and when to apply them, including whether to
differentiate between enforcement measures applicable
to
UNFCCC Annex I
and non-Annex I Parties.
[18] Article 18 requires that the compliance
procedures take into account the ‘cause, type, degree and frequency of
non-compliance’.
This is likely to involve non-compliant Parties
representing the circumstances of their particular situations and the
consequence
being negotiated with the compliance committee. Yet there is also
the possibility that some circumstances could trigger predetermined
or automatic
consequences, thereby avoiding the politics of individually considered cases.
Automation would be premised on considerations
of cause, type, degree and
frequency of non-compliance being built into the procedures, without the need
for reconsideration of those
factors. If well designed, it would enhance
efficiency, equity and transparency.
[19] Article 18 also requires that
Parties to the Kyoto Protocol approve an indicative list of
non-compliance consequences. The ‘indicative list’ approach reflects
that taken under the
Compliance Procedure of the Montreal Protocol.
There, the Parties agreed to a menu of three non-compliance responses of
escalating severity: assistance, warnings, and suspension
of rights. Possible
responses to Kyoto Protocol non-compliance range through a similar
spectrum, from facilitative to enforcement measures. The suggested facilitative
measures begin
with offering advice and finish with requiring adoption of an
action plan to remedy deficient performance. Enforcement measures that
have been
advocated range from public warnings to penalties, including: subtractions from
allowed emissions amounts in the following
commitment period; loss of
eligibility to participate in the ‘flexibility mechanisms’;
liabilities to purchase emissions
credits at penalty rates; or obligatory
payment into a compliance fund.
[20] The partial or full loss of eligibility
to participate in the flexibility mechanisms seems to have substantial support
among
negotiators, although details remain contentious. The mechanisms enable
distribution of the costs of reducing greenhouse gas emissions
across countries,
so as to enable individual Parties to meet their reduction commitments
efficiently. Use of the mechanisms might
reduce the costs of meeting commitments
by up to two thirds and, therefore, loss of access to them would be a
significant penalty
for non-compliance.
[21] The flexibility mechanisms are:
‘joint fulfilment’ of emissions reduction targets by members of a
regional economic
integration organisation (art 4); ‘Joint
Implementation’ of emissions reductions resulting in exchange of funds and
emission
reduction units between Annex I countries (art 6); investment by Annex
I countries in developing countries for certified emission
reduction units under
the ‘Clean Development Mechanism’ (art 12); and ‘emissions
trading’ between Annex I
countries in units of allowed amounts of
emissions (art 17). Loss of access could apply to some or all mechanisms and to
some or
all transactions under a particular mechanism. For example, a Party
might forfeit the right to sell emissions reduction units but
not the right to
buy.
[22] In relation to differentiating measures between Parties, some
developing countries argue that non-Annex I Parties should not
be subject to
enforcement measures. Others advocate that non-compliance response measures
should differentiate between obligations,
but not between Parties. This seems
the better approach, as art 18 requires that cases of
non-compliance be addressed taking into account the cause, type, degree and
frequency, rather than who
is non-compliant.
IV CONCLUSION
[23] The Kyoto Protocol compliance system needs the support of all
Parties to be effective. It must therefore be – and be perceived to be
– fair.
This requires transparency, simplicity and cost effectiveness in
its procedures. Its essential functions are to deter non-compliance
and to
promote compliance. Therefore facilitative measures are needed, backed up by
enforcement measures which are applicable to
all Parties and
are proportionate, equitable and firm. These
objectives require the adoption of a legally binding instrument coming into
force at the
same time as the Kyoto Protocol, and the establishment of a
compliance body appropriately staffed with technical expertise to make findings
of non-compliance. The
consequences of non-compliance need to be clearly
defined: some by predetermined formulae, others decided by a compliance
committee
under the Meeting of Parties. Should the JWG achieve these objectives,
the Kyoto Protocol compliance system will mark a long awaited new era in
robust regime design for compliance with environmental treaties.
[*] Associate Professor,
Faculty of Law, University of Wollongong,
Australia.[1] Opened
for signature 16 March 1998, 37 ILM
22.[2] Ian Lowe,
‘Its time to get our greenhouse in order’ Sydney Morning
Herald (Sydney), 29 November 2000,
16.[3] Opened for
signature 4 June 1992, 31 ILM 849 (entered into force 21 March
1994).[4] UNFCCC
Secretariat, Report of the Conference of the Parties on its fourth session,
held at Buenos Aires from 2 to 14 November 1998: Addendum, 4, UN Doc
FCCC/CP/1998/16/Add.1
(1999).[5] Ibid Annex
II.[6] International
Institute for Sustainable Development, ‘Informal Exchange of Views and
Information on Compliance under the Kyoto Protocol: 6-7 October
1999’ (1999) 12(111) Earth Negotiations Bulletin
1.[7] International
Institute for Sustainable Development, ‘Summary of the Workshop on
Compliance under the Kyoto Protocol: 1-3 March
2000’ (2000) 12(124)
Earth Negotiations Bulletin
1.[8] UNFCCC
Secretariat, Report of the Subsidiary Body for Implementation on the work of
its thirteenth session (Part One) Lyon, 11-15 September 2000, Annex III, UN
Doc FCCC/SBI/2000/10
(2000).[9] UNFCCC
Secretariat, Report of the Subsidiary Body for Implementation on the work of
its thirteenth session (Part Two) The Hague, 13-18 November 2000, Annex I,
UN Doc FCCC/SBI/2000/17
(2000).[10] UNFCCC
Secretariat, Report of the Conference of the Parties on the first part of its
sixth session, held at The Hague from 13 to 25 November 2000 –
Addendum
Part three: Texts forwarded to the resumed sixth session by the Conference of
the Parties at the first part of its sixth
session, UN Doc
FCCC/CP/2000/5/Add.3 (Vol. IV)
(2001).[11] UNFCCC
Secretariat, Report of Ad Hoc Group on Article 13 on its sixth session, Bonn,
5-11 June 1998, UN Doc FCCC/AG13/1998/2
(1998).[12] Opened
for signature 28 July 1994, 33 ILM 1309 (entered into force 16 November
1994).[13] Opened for
signature 23 May 1969, 8 ILM 169 (entered into force 27 January
1980).[14] Opened for
signature 16 September 1987, 26 ILM 1550 (entered into force 1 January
1989).[15] See, eg,
Department of Foreign Affairs and Trade, Climate Change: Options for the
Kyoto Protocol Compliance System, Discussion Paper (2000)
17.
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