Where's the U.S. on Verification and Compliance?

“Verifiable.”  That is arguably the most important word in the Bali Action Plan, the agreement two years ago that launched the global climate negotiations about to culminate in Copenhagen.  Our future climate commitments and actions, governments agreed, must be “measurable, reportable and verifiable.”

This construct is critical because, done right, “MRV” offers the promise of a global climate agreement in which countries can confidently ascertain whether others are doing what they promised.

Yet many governments now seem decidedly uncomfortable with the concept.  Developing countries say MRV shouldn’t apply to any actions they take on their own, only those receiving international support (a point underscored last week by China when it announced its new carbon intensity target).  In the case of a country like China, that means virtually none of its actions would be subject to international verification.

The United States, for its part, has offered up an MRV proposal that avoids the term verification altogether.  This is a worrisome omission, one that underscores perhaps the most glaring weakness in the U.S. position going into Copenhagen – its absolute silence on the question of compliance.

There is much to be said for the U.S. proposal (see pages 10-11 of this draft negotiating text).  It would require that each major economy submit an annual greenhouse gas inventory, probably the most important measure of a country’s overall emissions performance.  It also would require that each report every two or three years on its implementation of the actions it’s agreed to, and the resulting impact on emissions.  Both the inventories and the implementation reports would be subject to international review.  All are important steps to ensure greater transparency.

But the proposal wouldn’t explicitly require verification – either national or international – of the information being submitted.  And the final stage of review, as proposed by the United States, would simply be an open session of all parties in which a government describes what it is doing and others get to comment and ask questions.  This so-called peer review provides some measure of international scrutiny.  But as an agreement’s only means of assessing compliance, is it enough?

We think not.  It’s all too easy to imagine this “interactive dialogue,” as the U.S. describes it, being a polite ritual in which countries tacitly agree to be nice with one another.  At best, we get an inconclusive debate: a party claims to be in full compliance with its commitments and others disagree.  As a legal matter, the question of compliance is effectively left entirely to domestic regimes.  And while the United States may have good reason to believe that its own are sound, can it trust that others’ are as rigorous?

We believe parties will have greater confidence in other parties’ performance, and in the agreement itself, if that agreement establishes a means to independently determine whether or not countries are in compliance.  That, in fact, is one of the core messages from a key group of moderate Democratic senators in a letter they sent to President Obama today affirming the need for a binding international agreement: “The agreement should include provisions to enable a clear determination of whether countries are complying with their international commitments.”

One approach, which we describe in a recent policy brief, is an implementation committee appointed by the UNFCCC Conference of the Parties and empowered to make compliance determinations.  In cases of noncompliance, we would argue for a largely “facilitative,” rather than punitive, approach – that is, one geared toward helping a party identify and overcome obstacles to implementation.  The implementation committee should, however, be able to bar a party from participating in international emissions trading or crediting if it does not have the prescribed accounting infrastructure.

International compliance is always a sensitive and somewhat murky issue.  Some agreements (including the Kyoto Protocol) go further and prescribe penalties for noncompliance.  But in the case of climate, there is zero chance that developing countries would agree to that, and a number of developed countries (the United States perhaps among them) would balk as well.  There is a strong case, in any event, that the most powerful compliance incentive often is the threat of “naming and shaming” – exposing a country to international censure, and the reputational costs that entails.

But for there to be effective shaming, there needs to be effective naming.  And that is why, at a minimum, a new climate agreement has to provide for a clear determination of (non)compliance.

The question of compliance goes beyond verification (the latter is typically a technical assessment of the accuracy of reported data, whereas the former entails a legal judgment of a party’s performance).  And there is no reference at all to compliance in the Bali Action Plan.  But other parties have raised the issue in the negotiations.  And State Department lawyers made sure in Bali that the Bali Action Plan was worded in a way that allows the introduction of issues not explicitly listed.  This would appear to be a good candidate.

Developing countries are certain to resist any form of compliance mechanism – they have not yet even consented to subject their national reports to international review.  But that should not keep the United States from pressing the issue.  As we’ve seen before, an agreement that’s negotiable isn’t necessarily one that’s ratifiable.  Calibrating the U.S. position to what China will accept may get us the first, but at the cost of the second.

The aim in Copenhagen is an interim agreement that delivers immediate pledges and action and, hopefully, lays the foundation for a final agreement next year with legally binding commitments.  Compliance is likely among the issues that will not be resolved there.  What is critical is that whatever is agreed in Copenhagen does not foreclose the possibility of a sound approach that makes countries genuinely accountable to the international community.

Elliot Diringer is Vice President for International Strategies