Post-Paris transparency under the United Nations Framework Convention on Climate Change

The following article appeared in the July 2016 issue of the American Bar Association International Environmental and Resources Law Committee Newsletter.

By Jennifer Huang, International Fellow, Center for Climate and Energy Solutions (C2ES)

Introduction

Parties to the United Nations Framework Convention on Climate Change (UNFCCC, or Convention) reached a landmark agreement on December 12, 2015 in Paris, charting a fundamentally new course in the global climate effort.  A central issue in the negotiations was strengthening transparency requirements to better hold countries accountable for their commitments.  Moving beyond the strict differentiation between developed and developing countries that characterized earlier efforts under the Convention, the Paris Agreement establishes an enhanced transparency framework with “built-in flexibility” to accommodate varying national capacities.  For the first time, all parties must report regularly on their emissions and implementation efforts, and undergo international review.  These transparency mechanisms will provide information necessary to track parties’ progress in implementing their nationally determined contributions to the new treaty, and will help strengthen parties’ capacities to measure and understand their own efforts.  By building mutual trust, they also can help strengthen the overall climate effort.

The Paris Agreement promises support to help developing countries meet the new requirements and allows them flexibility in the scope, frequency, and detail of their reporting, and in the extent of review of their communications.  Deciding the nature of that flexibility will be a primary focus of continuing negotiations on the detailed rules for implementing the agreement.

Existing UNFCCC transparency framework

Existing transparency requirements under the UNFCCC differ for developed and developing countries.  Parties to the Convention must submit national communications (NCs) on their mitigation and adaptation actions every four years, though the required content differs for developed and developing countries. United Nations Framework Convention on Climate Change [hereinafter UNFCCC] art. 12, May 9, 1992, S. Treaty Doc No. 102-38, 1771 U.N.T.S. 107 (entered into force Mar. 21, 1994).  To enhance reporting on national greenhouse gas (GHG) inventories and efforts to implement the requirements of the Convention, agreements reached in 2010 at Cancun established two parallel processes: one for developed countries, and a less stringent one for developing countries. UNFCCC, Conference of the Parties, Seventeenth Session, Durban, S. Afr., Nov. 28 – Dec. 11, 2011, Decision 2/CP.17: Outcome of the Work of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention, U.N. Doc. FCCC/CP/2011/9/Add.1 (Mar. 15, 2012). 

Under International Assessment and Review (IAR), developed country parties enhance the reporting in their NCs through the submission of biennial reports (BRs), which outline their progress in achieving emission reductions and the provision of financial, technological, and capacity-building support to developing country parties. Developed countries undergo a technical review of their national reports, in which technical experts review the annual GHG inventories, examine the technical information on emissions and removals, and verify the methodologies used to provide those measurements.  The technical review is followed by a “multilateral assessment,” which is essentially a Q&A between the party being assessed and other parties on the basis of all submitted national reports.  To date, all developed countries have gone through one full round of IAR.

Under International Consultation and Analysis (ICA), developing country parties enhance the information in their NCs through the submission of biennial update reports (BURs), which include a national inventory report and information on their mitigation actions, needs, and support received.  Unlike developed countries, developing countries are not required to report the progress made in implementing and achieving emission reductions.  The BUR then undergoes a technical analysis by a team of technical experts under a less rigorous standard of review than for IAR, resulting in a summary report that includes the capacity-building needs to facilitate reporting in subsequent BURs.  The technical analysis is followed by a “facilitative sharing of views,” which is another peer review forum where parties are free to ask questions of a party on its BUR.

Although the current ICA process for developing countries is only halfway through its first round, both the UNFCCC secretariat and parties have learned some important lessons.  There has been significant improvement of the technical basis for reporting, such as greater consistency in the use of reporting methodologies and an increase in the requests for technical review of NCs.  There is more coherency and coordination at the institutional level, domestically and internationally, although room for improvement remains.  Finally, for developed and developing countries alike, simply going through the process and engaging with the secretariat improved the quality of reporting and increased familiarity with the process.

Negotiating the Paris Agreement – moving beyond bifurcation

The Paris Agreement, adopted at the Conference of the Parties (COP) 21, calls for an enhanced transparency framework requiring all countries to work toward the same standards of transparency and accountability. UNFCCC, Conference of the Parties, Twenty-first Session, Paris, France, Nov. 30-Dec. 13, 2015, Decision 1/CP.21: Adoption of the Paris Agreement, U.N. Doc. FCCC/ CP/2015/10/Add.1 (Jan. 29, 2016).  The new framework will build on parties’ experiences with the existing system but without its strict bifurcation between developed and developing countries. All countries will be required to report on their GHG emissions and implementation efforts at least every two years and undergo both expert review, or technical analysis of the information in their reports, and peer review, in which parties can engage reviewed parties on their reports.  Id. at ¶¶ 90-91; Annex, art. 13(3, 4, 11).

To achieve this outcome, negotiators had to overcome a number of concerns by developing countries.  Some were worried that the in-country expert reviews currently required of developed countries would impinge on their sovereignty if imposed.  Many already lack the funding, expertise, and data to comply with existing requirements; fulfilling enhanced requirements would require further capacity building.  Finally, most voiced some fear of the unknown.  With only 16 developing countries having submitted biennial reports by December 2015, few even had experience with ICA.

The agreement assuages some of these worries by increasing the flexibility and capacity building measures under the Convention.  To enable developing countries to comply with the new requirements, the transparency framework “shall provide flexibility in the implementation of the provisions of this Article to those developing country Parties that need it in the light of their capacities.” Id. at Annex, art. 13(2).  Moreover, it establishes an enhanced framework for capacity building to support developing countries.  The Paris outcome launched the Capacity Building Initiative for Transparency, to be funded through contributions by developed countries, to help developing countries create or enhance the domestic tools and institutions they need to meet these obligations. Id. at ¶¶ 84-86.  The Paris Committee on Capacity Building was also set up to oversee a four-year work program to boost the capacity building activities needed to implement the Paris Agreement. Id. at ¶¶ 71-73.  The work program will, for instance, identify and provide recommendations on addressing capacity gaps and needs, promote the dissemination of tools and methodologies for capacity building, and explore how developing countries can take ownership of building and maintaining capacity over time.  Id. at ¶74(b),(c),(f).

The transparency processes will feed into a global stocktake, which will assess collective progress towards meeting the Paris Agreement’s long-term goals. Id. at art. 14.  They will also link to a new committee of experts to “facilitate implementation” and “promote compliance.” Id. at art. 15(1).  In contrast to the Kyoto Protocol, which included an enforcement-based compliance system, this committee will be facilitative in nature and operate in a “non-adversarial and non-punitive” manner.    Id. at art. 15(2).

Post-Paris Implementation

Further work is needed over the next few years to establish the nuts and bolts of the new transparency regime.  Parties must overcome some key challenges.  The agreement promises to accord flexibility to developing countries, but the exact nature of that flexibility and how it will be operationalized is an important consideration as parties begin to negotiate the implementing rules.  Parties will need to determine how flexibility can be built into the modalities, procedures and guidelines for transparency of action and whether existing communication channels can be streamlined to avoid overburdening developing countries.

Flexibility can be embedded in the transparency process in many ways.  For instance, some countries might initially submit their reports less frequently.  Parties currently report on their GHG inventories via guidelines that offer several approaches, or “tiers.” Each tier represents a level of methodological complexity in categorizing emissions and activity data.  Tier 1 is the most basic method while Tiers 2 and 3 are each more demanding in terms of complexity, certainty, and data requirements.   Thus, another option would be for some developing countries to start at the lowest, least stringent, reporting tier, and comply with higher tiers as they build institutional capacity over time.

Because the transparency process links to the global stocktake and will be buttressed by an implementation and compliance mechanism, parties will need to clearly outline their relationship to one another and coordinate the complementary work on these elements.  The Global Environment Facility, which serves as a financial mechanism for the UNFCCC, will also need to make the financial arrangements necessary for the operationalization of the Capacity Building Initiative for Transparency.  Id. at ¶ 86.  This is a crucial step for developing countries to make the switch to the new transparency framework, and continue to do so over time.

The new working group for the Paris Agreement will begin to develop the modalities, procedures, and guidelines for transparency of action and support as well as for the implementation and compliance mechanism.  Id. at ¶¶ 91, 103.  It will report each year to the COP before concluding its work in 2018, at which time there will also be a facilitative dialogue to assess collective efforts.  Id. at ¶¶ 20, 96.  The recommendations on transparency of action and support will be forwarded to the first Conference of the Meeting of the Parties to the Paris Agreement (CMA 1), which will take place after the Paris Agreement has entered into force.  Id. at ¶¶ 91, 99.

Conclusion

The Paris Agreement rests heavily on transparency as a means of holding countries accountable.  Over the next few years, parties will undertake the technical work necessary to build on lessons learned and transition to a new transparency system.  Creating a flexible system that increases parties’ capacities over time is paramount in this endeavor and will send a positive political signal to developing countries.  Because countries will work towards the same standards over time, learning by doing ought to be a guiding principle, enabling countries to build on existing experience, develop trust, and identify gaps and incentivizing them to see the value of actively participating and learning from the transparency process.  The establishment of a transparency framework that applies to all while providing flexibility for developing countries with less capacity is one of the greatest achievements of the Paris outcome.