3 Post-2020 climate change regime building
Introduction
The inherent complexity of the UN-led climate change regime is often compounded by the diverse interests and values of its Parties. Since the inception of the UNFCCC, the intergovernmental process has wrestled with the issue of equity in sharing the burden of emissions among developed and developing Parties. The current international efforts to address the climate challenge are guided by the principles of common but differentiated responsibility and historical responsibility, whereby Parties are divided into Annex-I and Non-Annex-I. However, the changes in the economic landscape and the rapid increase in GHG emissions by advanced developing countries—notably China and India—during the last twenty years or so poses a challenge to the current scheme. This has been a polarizing issue with some arguing that advanced developing countries should take on legally binding emissions reductions akin to those of Annex-I countries, whereas developing Parties have consistently showed reluctance for internationally negotiated emissions targets as they interpret it as constricting economic growth.
However, in December 2011, countries decided to initiate a new process to agree on the post-2020 climate change regime by 2015. It is particularly noteworthy that countries decided to find a way of agreeing on a protocol, a legal instrument, or an agreed outcome with a legal force which will be applicable to “all parties.” A cross-cutting challenge for the effective conclusion of a post-2020 climate change architecture then is how to achieve progress in efforts to address climate change while simultaneously promoting the respective development goals of major developing Parties.
This paper begins by analyzing from various aspects the limitations of the existing top-down approach taken in negotiations in encouraging more participation particularly from developing countries. In order to ensure the effective conclusion of post-2020 climate change regime building, it may require innovative approaches in order to reflect more balanced efforts between developed and developing countries. This paper explores the concept of low-carbon development strategy as a viable policy option to overcome the constraints imposed by the top-down approach by promoting both emissions reduction and sustainable development.
Failure of the post-2012 climate change regime building: the challenges of the top-down approach
The initial design of the UNFCCC regime gives more emphasis on the top-down approach, i.e., relying on the implementation of legally binding obligations to reduced GHG emissions. Developed countries bear legally binding obligations to reduce GHG emission during the first commitment period which ends in 2012. In 2007, countries started to initiate new negotiations to agree on the post-2012 climate change architecture, but have made little progress due to the various challenges of the top-down approach under the UNFCCC regime.
Burden sharing
When countries negotiated on introducing a new treaty regime to address climate change in 1992, there were heated debates on how to share the burden of reducing greenhouse gas emissions. The Intergovernmental Negotiating Committee for Framework Convention on Climate Change was established in December 1990 to negotiate on introducing a new global treaty-based framework to deal with climate change. While countries agreed upon the necessity of introducing a comprehensive and flexible mechanism, they were divided in regard to the issue of how to reduce greenhouse gas (GHG) emissions. In particular, developing countries emphasized the principle of common but differentiated responsibility based on which they argued that special circumstances of developing countries should be taken into consideration. They further claimed that industrialized countries needed to reduce GHG emissions to the level of 1990 by the year 2000 or 2005.
One of the negotiation documents which resulted from the process of preparing for the UNFCCC demonstrates the countries’ concerns over the issue of the principles of burden sharing. While there was much disagreement over the details of the guiding principles, many countries at that stage agreed to share the burden based on their respective capabilities and historical contribution to the climate change.1 In order to reflect the different capabilities and contributions of countries to climate change, several options were considered. They include the following:
…countries in accordance with their common but differentiated responsibility and capabilities [and different time frames be set out for implementation with a view to achieving a common per capita emission level noting that the largest part of the current emission of greenhouse gases originated in developed countries and those countries [have the main responsibility for]/[should take the lead in] combating climate change and [the adverse effects thereof]/[such pollution]] …
Another option considered also deserves attention:
[There is a [global obligation]/[need] to protect the climate for the benefit of present and future generations based on principles of equity and common but differentiated responsibilities of countries. [In this context, the efforts already undertaken by a number of countries to meet this goal are acknowledged.]]
Despite some differences on the details of the principle, a common but differentiated responsibilities principle was agreed upon and included in the UNFCCC text as follows:
1. The Parties should protect the climate system for the benefits of present and future generations of humankind, on the basis of equity and in accordance with their common but differentiated responsibilities and respective capabilities. Accordingly, the developed country Parties should take the lead in combating climate change and the adverse effects thereof.
2. The specific needs and special circumstances of developing country Parties, especially those that are particularly vulnerable to the adverse effects of climate change, and of those Parties, especially developing country Parties, that would have to bear a disproportionate or abnormal burden under the Convention, should be given full consideration.
Although countries had come to an agreement upon recognizing the common but differentiated responsibility principle, however, another critical issue remained to be discussed. The greater task was how to group country Parties according to the common but differentiated responsibility principle. Some countries such as Italy proposed a multi-country grouping as follows:
a Least developed countries (LDCs)
b Small island states
c Developing countries with a substantial industrial sector
d Oil-producing developing countries
e Newly industrialized countries (NIC)
f Countries with economies in transition (e.g., Eastern Europe and USSR)
g OECD-countries2
On the other hand, some of the newly industrialized countries such as the Republic of Korea emphasized that dividing countries into the two simplistic categories of developed or developing countries can overlook the unique situation of countries that are in various stages of development. The argument of the newly industrialized countries called for special consideration for some developing countries as they continued to expand their energy consumption to achieve economic growth.3 Despite the various proposals for country grouping by diverse countries, due to the difficulty in negotiating and setting a common standard for grouping countries in several categories to reflect their multifarious circumstances, the UNFCCC finally divided country Parties into two: developed country Parties and other Parties included in Annex-I (hereinafter Annex-I countries) and developing countries (hereinafter Non-Annex-I countries).
Based on the common but differentiated responsibility principle, the UNFCCC delineates some details on the commitment of developed country Parties. Annex-I Parties bear the obligation to adopt national policies and take corresponding measures on the mitigation of climate change by limiting their GHG emissions.4 On the other hand, Non-Annex-I Parties bear some general obligations as well but without any legally binding obligation in terms of quantified GHG emissions reduction.
After the adoption of the text of the UNFCCC in the 1992 Rio Conference, country Parties discussed to provide further details on the obligations of the Parties under the UNFCCC. The ad hoc Group on the Berlin Mandate discussed how to set forth details on the obligations under Article 4 Para 2 (a) and (b) of the UNFCCC. Finally, country Parties agreed to Article 3 paragraph 1 of the Kyoto Protocol as follows:
The Parties included in Annex-I shall, individually or jointly, ensure that their aggregate anthropogenic carbon dioxide equivalent emissions of the greenhouse gases listed in Annex A do not exceed their assigned amounts, calculated pursuant to their quantified emission limitation and reduction commitments inscribed in Annex B and in accordance with the provisions of this Article, with a view to reducing their overall emissions of such gases by at least 5 per cent below 1990 levels in the commitment period 2008 to 2012.
As a matter of flexibility, the Kyoto Protocol also introduced the so-called Kyoto Mechanisms which refer to Emissions Trading, the Clean Development Mechanism and Joint Implementation. While these mechanisms may stimulate sustainable development through technology transfer and investment toward the developing countries, these mechanisms may also assist Annex-I Parties in achieving their targets. Introduction of such mechanisms was the first attempt of the UNFCCC regime to address the climate change by depending on the market principle instead of command-control policy of imposing legally binding obligation to the Annex-I countries. However, the market approach only remains complementary to the overarching top-down approach of the Kyoto Protocol.
In 2005, country Parties established the Ad Hoc Working Group on Further Commitments for Annex-I Parties under the Kyoto Protocol (AWG-KP) to discuss the legal obligations of Annex-I countries after 2012; the year the first commitment period ends. In 2007, Parties also adopted the Bali Road Map. The Bali Road Map includes the Bali Action Plan which has served as the basis for negotiating the post-2012 climate change regime. Based on this action plan, the Ad Hoc Working Group on Long-Term Cooperative Action (AWG-LCA) was established in order to conduct a comprehensive process to enable the full, effective, and sustained implementation of the UNFCCC beyond 2012.
However, this two-track approach which was initially established to build the post-2012 climate change regime on the contrary became a barrier to reaching an agreement on any effective results among the Parties. While AWG-KP specifically focused on the quantified emission reduction of Annex-I countries, the Bali Action Plan addressed the reduction of the GHGs of both Annex-I and Non-Annex-I in different terms as follows:
1. (b) Enhanced national/international action on mitigation of climate change, including, inter alia, consideration of:
| (i) | Measurable, reportable and verifiable nationally appropriate mitigation commitments or actions, including quantified emission limitation and reduction objectives, by all developed country Parties, while ensuring the comparability of efforts among them, taking into account differences in their national circumstances; |
| (ii) | Nationally appropriate mitigation actions by developing country Parties in the context of sustainable development, supported and enabled by technology, financing and capacity-building, in a measurable, reportable and verifiable manner;5 |
Although the Bali Action Plan called for developing country Parties to take national appropriate mitigation actions, developed countries have argued that advanced developing countries should take more proactive actions to reduce GHG emissions in recognition of the present situation where some developing countries such as China now emit more GHGs than some developed Parties. Developed countries further argued that those advanced developing countries should take legally binding obligations comparable with developed countries. This position has been particularly taken by the US whose congress requires the US delegation to find a solution to impose obligations on China to reduce GHGs. On the other hand, advanced developing countries have resisted against taking legally binding obligations. In particular, China and India along with other advanced developing countries have not shown any likelihood of taking legally binding obligations in any sense.
The problem of grouping countries
Country grouping was under consideration since the inception of the UNFCCC in the early 1990s, and has been one of the most difficult topics. There have been various approaches to grouping countries using different standards. To make the differentiation between countries, indicators such as emissions per capita and GDP per capita are used which could result in two to seven categories for differentiating commitments/actions for both developed and developing countries.6
In fact, the classification under the UNFCCC does not provide any standard to obligate a country Party to take responsibilities in reducing GHG that is comparable to any country which may emit equal amount of greenhouse gas emissions. Some Non-Annex-I countries such as China have increased its GHG emissions rapidly after its ratification of the UNFCCC thereby surpassing some of the Annex-I Parties in its emissions. But due to the lack of any standard to reclassify country Parties, China still remains in the same group with small and least developed countries which do not bear any legally binding obligations to reduce GHG emissions.
As a matter of fact, there are now serious gaps between the arguments of these advanced developing countries and the reality of their current global economic activities. Their arguments against taking legally binding commitments are based on the possibility of being burdened with inappropriate costs in implementing the commitments. Furthermore, these advanced developing countries have enjoyed political leadership within the G-77 group. Once they acknowledge the differentiation of responsibility from the less advanced developing countries, they will be pressured to take legally binding commitments.
Recently, there have been some attempts to reclassify countries to reflect their changed influences over the global economy. For example, the OECD suggested several new categories for country grouping to mirror the changing landscape.7 The categories are as the following:
• Adjusted UNFCCC: This category consists of OECD countries including Mexico and Korea;
• Adjusted Kyoto Protocol: This would include the same countries as the above “adjusted UNFCCC” with the exception of Turkey and Belarus;
• High human development: UNDP uses the indicator of level of human development based on the Human Development Index. In 2007, seventy-one countries were listed as having high human development.
• High income economies: The World Bank classifies countries into four main categories based on Gross National Income per capita: high-income, upper-middle-income, lower-middle-income, and low-income. A fifth category of LDCs may be added.
• High income developing countries: UNCTAD’s classification include three main groups such as developed, Southeast Europe and Commonwealth of Independent States (CIS) and developing countries. And there are three groups within developing countries: high-income, middle-income and low-income.
MRV and support
According to the Bali Action Plan, country Parties have been negotiating the developing country’s nationally appropriate mitigation actions (NAMAs) undertaken “in a measurable, reportable and verifiable manner (MRV).” Based on this, countries have further negotiated more details; the plans to limit the growth of emissions which will be carried out with appropriate and adequate support from developed countries in the form of technology cooperation, finance, and assistance in capacity-building (i.e., supported NAMAs). Such efforts may be recorded in a registry to match NAMAs with the support from developed countries. And these supported actions could be “internationally” measured, reported, and verified. This type of mitigation actions will be undertaken by most of the developing countries which are in need of support to implement those actions.
On the other hand, for the advanced developing countries, which are capable of supporting those nationally appropriate mitigation actions domestically (i.e., unilateral NAMAs) may not need any international support. Unilateral NAMAs will be also implemented in a measurable, reportable, and verifiable manner but “domestically.” The actions will be reported on a regular basis but in a different manner compared to those of the developing countries, which are subject to more stringent standards. As for the advanced countries’ unilateral NAMAs, they may not be reported and assessed under sufficiently stringent standards as those countries are unlikely to welcome any third party’s involvement in any form in the process of implementation of their nationally appropriate mitigation actions. This has also posed difficulties for the UNFCCC as a whole in developing more effective standards to ensure greater commitment from the advanced developing countries in mitigation of GHG emissions.
Legal framework
One of the focuses of the negotiation on post-2012 climate change regime has been about the form of legal framework. The image on the legal form has stirred great interest among countries. There were several options to the legal form of the post-2012 climate change regime. Considering the current two-track framework, the first option for consideration was the adoption of a protocol that reflects the results of the negotiations within the AWG-LCA along with the extension of the present Kyoto Protocol. This option would have extended the same level of commitment of Annex-I country Parties under the Kyoto Protocol. On the other hand, a new protocol may impose new legally binding commitments to advanced developing country Parties.
However, China and India along with some other advanced developing countries have strongly resisted against this idea, noting the importance of abiding by the principle of common but differentiated responsibility. Although small and least developed countries have forcefully argued the necessity of introducing a legally binding treaty, strong influence of those advanced countries within the G-77 Group seems to make this option unrealistic at least for now.
If a set of non-legally binding decisions are to contain the results of negotiations under the AWG-LCA, this second option would have given more flexibility to the advanced developing countries. However, a non-legally binding framework might not drive sufficient emissions reduction efforts by those advanced developing countries. Furthermore, some of the countries such as the US strongly urge China to take the same level of legally binding obligations to reduce GHG emissions. Most recently, the European Union has joined small developing countries to pressure China and India to accept legally binding commitments.
The third option was to give up the Kyoto Protocol and to introduce a single Protocol. This new protocol would have given more clarity to country classification as the changed level of GHG emissions will be reflected. This would have also diluted the current division of developed and developing countries either by imposing universal standards on reducing GHGs or by grouping Non-Annex-I or developing countries into several groups for different levels of legal commitment. However, this would have been the least acceptable option for the advanced developing countries. Their unrelenting emphasis on the principles of common but differentiated responsibility and historical responsibility proves it will not be an easy task to place them in a position of taking same level of legally binding commitment as the developed countries.
In fact, what is more important in designing a legal framework is not the formality but its effectiveness. If Parties can only agree on a legally binding but shallow treaty, it will be unlikely to lead to effective results in curbing GHG emissions. In other words, in order to ensure effective regime building, it is necessary to have not only legally binding rules but also precise and highly elaborate rule and delegation to a third party. In this sense, simple disagreement on the form of the legal framework on the post-2012 climate change regime may not result in any productive result. However, the very image of taking legally binding obligations has prevented the advanced developing countries from engaging in more productive negotiations with developed countries. In a situation where the first commitment period ends in 2012, country Parties of UNFCCC had to seek more productive and effective solutions on designing the post-2012 framework.
Although the importance of advanced developing countries has been underlined as their economies rapidly become larger, the division of developed and developing countries under the UNFCCC in taking legal commitment to reduce GHGs may not be easily altered. First, the common but differentiated responsibility principle along with historical responsibility still remains as an important guiding principle in the UNFCCC regime. However, the simple country grouping of Annex-I vs. Non Annex-I has not adequately reflected the principle of common but differentiated responsibility. Second, UNFCCC failed in providing any provision which will serve as a basis for transferring the status of some Non-Annex-I countries to that of Annex-I. Third, negotiations on the legal framework for the post-2012 climate change regime have revealed that advanced developing countries are not willing to take any legally binding treaty-based obligation in regard to their GHG emission reduction. Finally, advanced developing countries are not subject to nationally appropriate mitigation action in an “internationally” measurable, reportable, and verifiable manner. They are also not willing to be subject to the process of international consultation and analysis on the biennial update reports which was agreed upon at COP 16. All these demonstrate the difficulty and the limits of designing a legally binding treaty regime for the post-2012 period relying on the top-down approach.
Low-carbon development strategy as a viable option for post-2020 climate change regime building
The Durban platform
While it was increasing unlikely for countries to be able to agree on a post-2012 climate change regime before 2012, countries decided to initiate a new process to agree on a new framework on climate change which will be applicable after 2020. As previous negotiations on the post-2012 regime faced constant obstacles in making an agreement due to the issues associated with the top-down approach, serious efforts were made to overcome the limitations of two track approach. According to the decision adopted in the Durban Conference of Parties meeting, country Parties agreed as follows:
2. Also decides to launch a process to develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties, through a subsidiary body under the Convention hereby established and to be known as the Ad Hoc Working Group on the Durban Platform for Enhanced Action;8
As countries need to agree on a protocol, another legal instrument, or an agreed outcome with legal force, which will be applicable to “all Parties,” it seems countries may have a better chance to agree on a regime without being constrained by the division between the countries. However, it is still noteworthy that any form of legal framework will be still guided by the UNFCCC which stipulates the principle of common but differentiated responsibility. Here, possible options including a bottom-up approach need to be aggressively sought to enable countries to agree on a more effective climate change regime.
The need for a bottom-up approach
Most developing countries are reluctant to rely on top-down approaches with regard to mitigation of GHG emissions. In particular, advanced developing countries such as China, India, Brazil, South Africa, and Korea have increasingly expressed concerns about the possibility of taking a legally binding commitment in reducing their GHG emissions based on the common but differentiated responsibility. At this juncture where meeting the mitigation recommendations of the IPCC is ever more crucial while the traditional top-down approach is facing challenges, an alternative approach called low-carbon development strategy (LCDS) has gained attention. LCDS is an approach that ensures greater participation of developing countries in reducing global GHG emissions. In addition, LCDS takes note of the importance of development as the priority of developing countries. Instead of setting explicit reduction targets at the international level, the low-carbon development strategy starts by establishing national development plans and identifies a low-carbon development path.
What is low-carbon development strategy?
Also often referred to as low-emission development strategy (LEDS), LCDS generally refers to a forward-looking national economic development plans or strategies that encompass low-carbon (emission) and/or climate-resilient economic growth.9 While it can serve various objectives, its primary focus lies in helping to advance national climate change and development policies in a more coordinated, coherent, and strategic manner. LCDS can be a pledge-based approach to stimulate more participation from developing countries in mitigating climate change. Therefore, LCDS does not presume a quantified emissions target; rather the emission reduction would be the co-benefit of the implementation of these policies along with facilitating economic development.
As LCDS are domestically created national low-carbon development plans, it is likely that different paths will be taken by countries according to their varied circumstances. By pursuing low-carbon development pathway by means of LCDS, GHG emissions will be lower in comparison with what would have been emitted of GHGs if a traditional economic development path was taken. In other words, when a country seeks a low-carbon development path by preparing and implementing a LCDS, it may be able to avoid beforehand possible future mitigation burdens that may be extremely costly to the country.
As an integrated strategy of development and mitigation and adaptation actions, LCDS can be additional to existing climate change policies and measures or newly created ones to address climate change. By definition, policies and measures include various legislative acts, regulations, and negotiated agreements. Fiscal policies such as taxes and subsidies, and regulatory policies including emission standards and industrial reforms, are also possible policies and measures. LCDS can be established to include any of those various policies and measures according to the domestic circumstances but more feasible than existing ones as LCDS will be prepared taking a bottom-up approach at the domestic level rather than a top-down approach at the international level. Furthermore, the various measures of the LCDS will help to advance mitigation of GHG emissions which signals that LCDS will be well-fitted to the international dialogue of the UNFCCC regime.
Legal basis
The terminology of the LCDS and LEDS have already been discussed and introduced in the texts of UNFCCC negotiations. These texts provide the legal basis for preparing and for implementing LCDS as an alternative and viable method to engage the participation of advanced developing countries as well as other developing countries. Some of the legal basis on the viability of a LCDS can be found in the provisions of UNFCCC as follows:
taking into account that policies and measures to deal with climate change should be cost-effective so as to ensure global benefits at the lowest possible cost10
The Parties have a right to, and should, promote sustainable development. Policies and measures to protect the climate system against human-induced change should be appropriate for the specific conditions of each Party and should be integrated with national development programmes, taking into account that economic development is essential for adopting measures to address climate change11
Formulate, implement, publish and regularly update national and where appropriate regional programs containing measures to mitigate climate change by addressing anthropogenic emissions by sources and removals by sinks of all greenhouse gases … and measures to facilitate adequate adaptation to climate change;12
The Bali Action Plan also states that “various approaches including opportunities for using markets to enhance the cost-effectiveness of, and to promote mitigation actions, which bear in mind different circumstances of developed and developing countries” need to be addressed.13
In the Copenhagen meeting, Parties discussed the necessity of preparing low-emission plans by developing countries and included a text in paragraph 2 of the Accord that stated “low-emission development strategy is indispensable to sustainable development.”
The Cancun Agreement furthered on the issues of LCDS. Its paragraph 65 states: “Encourages developing countries to develop low-carbon development strategies or plans in the context of sustainable development.”
The most recent decision on the Establishment of an Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) does not contain any specific provision regarding the LCDS. However, there are several provisions that may become the basis for LCDS under the decision of the ADP including the following [Decision 1/CP 17 Paragraphs 6 and 7]:
6. Further decides that the process shall raise the level of ambition and shall be informed, inter alia, by the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, the outcomes of the 2013–2015 review and the work of the subsidiary bodies;
7. Decides to launch a workplan on enhancing mitigation ambition to identify and to explore options for a range of actions that can close the ambition gap with a view to ensuring the highest possible mitigation efforts by all Parties;
Despite the already existing various legal grounds for advancing the details on the LCDS, actual negotiations have not yet sufficiently focused on it. However, in a situation where the top-down approach faces difficulties in having advanced developing countries to take legally binding commitments in reducing GHG emission, LCDS could be a viable policy option which could bring a win–win situation for both developed and developing countries for achieving the goal of agreeing on a post-2020 climate change framework.
Existing LCDS of advanced developing countries
In fact, there are already many good examples of LCDS. In the case of China, the China National Climate Change Plan has been developed and implemented. During the time frame of 2007 to 2010, the Plan addressed various sectors such as energy production and transformation, energy efficiency improvement, energy conservation, industrial processes, agriculture, forestry, and municipal wastes. China has put a lot of emphasis on developing renewable energy technologies which will represent approximately 10 percent of the total energy resources by 2010 and 16 percent by 2020.
Brazil also developed its National Plan on Climate Change in 2008. As it has large forest areas, its LCDS has adopted various policy measures to address the issues of biofuels, reducing deforestation rate, and increasing forest coverage. Brazil also introduced policy measures to promote energy efficiency and uses of renewable electricity.
India, which is expected to become a larger GHG emitter than China by 2030, has been also keen on the LCDS. Based on India National Action Plan on Climate Change, India has addressed issues on energy efficiency and solar energy. Its National Plan has also developed polices measures on sustainable habitat and establishing green India. Other advanced developing countries such as Chile, Indonesia, Mexico, and South Africa have been also identified as countries which have developed LCDS.
Korea’s low carbon green growth policy
In the case of the Republic of Korea, it has also been very active in developing its low-carbon green growth policy.14 As the world’s seventh largest GHG emitter, Korea introduced the low-carbon green growth policy in 2008 and has become one of the pioneers in the area of diffusing LCDS. Based on its Basic Framework Act on Low Carbon Green Growth, Korea has announced its plan on reducing GHG emission reduction by 30 percent relative to level of Business as Usual by 2020. The aim of Low Carbon Green Growth policy is to ensure sustainable economic growth by emphasizing green technologies and industries as new engines of growth while reducing GHG emissions. Thanks to this Low Carbon Green Growth Policy, Korea has achieved a positive growth in the first quarter of 2009 and recorded the highest growth rate in the second quarter of 2009 among the OECD countries. In order to ensure the effective implementation of the policy, Korea has introduced a Target Management System which sets and implements a target for GHGs emission reduction, energy conservation, and energy efficiency for 366 large businesses and was put into practice from January 2012. Furthermore, the Korean government, as the first Non-Annex-I country, passed a bill on Emissions Trading System which will go into effect in year 2015.
The need to build an international institutional framework for the low-carbon development strategy
In the process of developing LCDS, countries can better identify priority areas in domestic mitigation actions which will also contribute to the global effort of tackling climate change. So, once a country has prepared and initiated LCDS, it may take the necessary steps to pledge the strategy as nationally appropriate mitigation actions (NAMAs). From the developing country’s point of view, NAMAs through LCDS will provide a good basis to negotiate with developed countries on how to share the burden in reducing GHG emissions. This in turn signals the need to build an international institutional framework which will embody LCDS.
Under the negotiations on the post-2020 climate change regime building, there may be three options through which LCDS could be incorporated into the international framework:
• LCDS to generate credits,
• LCDS encouraged by external support (supported LCDS), and
• LCDS recognized by the international community without external support (unilateral LCDS).
The first option is to design an institutional framework where LCDS could generate credits. There may be several different types of credits that may be considered, including NAMA credits. This approach will facilitate quantifying the benefits of LCDS so that countries could receive credits for their efforts. However, it has proven to be difficult to calculate and to generate credits when a particular strategy may be linked to other factors that affect a country’s emissions, or when there are multiple policies that are aimed at achieving the same goal. Furthermore, constant efforts should be undertaken to avoid the double counting of the efforts of a country which may want to receive more credits. Despite the challenges inherent in generating credits from quantified emissions commitments of LCDS, such a possibility may also attract less developed countries which do not consider taking legally binding commitments at all.
Supported LCDS, the second option, may be more favored by developing countries as they do not require quantifying GHGs emission reductions made through implementation of LCDS. At the international level, a LCDS serves as information provider through which the international community can better assess mitigation actions taken by developing countries. LCDS can also help to identify priority areas for funding to the developing countries. In this context, even if LCDS cannot generate credits, this option could still benefit countries as their actions would be recognized by the international community. By taking this option, actions of developing countries would be formally recognized by the UNFCCC regime, thereby encouraging all the country Parties to participate in the UNFCCC framework by taking domestic measures. In this sense, a registry will play an important role in formally recognizing developing countries’ actions as it will be discussed later.
For the advanced developing countries, the third option of pursuing unilateral LCDS will be more important as they are much less likely to rely on external support to develop their LCDS. Unilateral LCDS recognized by the international community will give more flexibility to the country in taking a low-carbon development path tailored to its specific situations. In order to encourage those advanced developing countries which may have sufficient capacity to develop its own LCDS, it is pivotal that current negotiations on the registry allow a type of registry which may recognize unilateral LCDS.
In order to promote LCDS under the UNFCCC regime, it is important to develop a system of recognition or credit. In this sense, a registry will be an important policy vehicle. The registry, as a system of addressing qualitative aspect of the LCDS, would be a database that may contain information on NAMAs undertaken through the implementation of LCDS pledged by governments, as opposed to LCDS implemented in order to fulfill legally binding obligations.
The roles of the registry will be several. First, the registry would be a tool for exchanging information among not only the governments and but also industries, who may want to actively participate in the implementation of LCDS based on public–private partnership. The registry will provide greater certainty to the private sector and facilitate investment.
Second, information available to the public through the registry would enhance public awareness on the level of implementation of LCDS and its contributions to the UNFCCC objectives of reducing GHG emissions. By this scheme, Parties, including advanced developing countries, will meet the obligation under the Article 6 of the UNFCCC which calls on Parties to promote and facilitate public access to climate change-related information.
Third, for the credit-generating LCDS, the registry will provide the basis for generation of credits as a result of the implementation of the LCDS. For the supported LCDS, the registry will also function as a match board between the external (financial, technology, and other) support and the progress to be made through LCDS. In regard to the unilateral LCDS, the registry will be a basis for the international recognition of unilateral implementation of LCDS.
Financing
External support is necessary for some developing countries to develop their national LCDS. Countries in need of support can be provided with funding from domestic sources or they may receive funding through external sources. External funding sources include debt, equity, or financial assistance through available channels.
According to the analysis of Project Catalyst, it was estimated that public finance of US$21–54 billion would be needed in developing countries excluding some of the advanced developed countries such as China and Korea during the years from 2010 to 2012. According to the Copenhagen Accord and the Cancun Agreements, the Fast Start Fund would be available up to 2012 with the amount of US$10 billion annually to support both adaption and mitigation actions of developing countries. And there remains further opportunity for jointly mobilizing US$100 billion annually which developed countries have promised to make available to meet the needs of developing countries. In this context, the Green Climate Fund as a financial mechanism to address climate change within the UNFCCC regime will become important to channel financial resources to support implementing LCDS both at national and international levels.
There will be other sources of financing available as well for the implementation of LCDS. They include the following international sources:15
• public funds including ODA and multilateral funds,
• private funds including green equity finance, private investment funds, foundations, NGOs, global philanthropic foundations, and corporate social responsibility,
• market-based mechanisms including tradable renewable energy certificates, carbon cap-and-trade mechanism, green insurance contracts, and programmatic approaches such as NAMA, and
• innovative instruments including transaction taxes, international climate-change finance initiative, air travel levy, global carbon tax, debt-for-efficiency swaps, international carbon auction funds, international non-compliance fees, and efficiency penny.
In order to have LCDS appropriately developed and implemented by developing countries, an adequate mechanism that promotes and recognizes LCDS and channels necessary funding for its implementation should be developed and incorporated into the post-2020 UNFCCC regime.
Assessment
Among the various policies and measures that will be included in a country’s LCDS, assessment will be especially important for the mitigation actions undertaken that are quantifiable. To build an adequate framework for LCDS, both the aforementioned registry and an assessment system must be established as they respectively address the qualitative aspect and quantitative aspect of LCDS. An assessment system will ensure that the pledged and implemented LCDS will contribute to actual reduction of the GHG emissions. And in order for the assessment system to perform such a function, appropriate reporting and review mechanisms are critical.
Reporting is a central part of the assessment system. While a reporting system for LCDS will require the submission of both national policies and measures and GHG inventories, it should focus on the former and less on the latter. Past experiences of the implementation of the obligation of national communications demonstrate that there are many Parties that have submitted national communications only once or twice. There are even Parties who have never submitted their national communications to the UNFCCC. There are several reasons for this low rate of reporting under the current UNFCCC including the technical difficulties and expensive costs of producing national GHG inventories. Therefore, more efforts will need to be taken in developing modalities on reporting policies and measures, which will include the implementation of LCDS.
Based on the reporting results, appropriate review processes may be required. Currently, the UNFCCC has developed an in-depth review of the national communications of Annex-I Parties. Although a review process of the LCDS may utilize the existing review mechanism, this should be avoided if it discourages developing countries from the implementation of LCDS. In particular, it will be important to develop a review process which will differentiate the reporting on unilateral LCDS from the reporting on supported LCDS. Guidelines on the review mechanism should be developed which are not punitive but facilitative in nature. And the review mechanism should be managed by a body designated by the UNFCCC. It could be an already existing body of the UNFCCC, a newly created body within the UNFCCC, or an external body.
On the other hand, a more stringent review mechanism may be introduced in case any developing country may want to agree on it in return for receiving external support for its LCDS. However, it should still be less stringent than the review mechanism for the developed countries. It will be also necessary to develop a separate review mechanism for supported LCDS.
During the process of reviewing the results of national reports, expertise of the international organizations, individual experts, and industries may be utilized unofficially. This will generate benefits of identifying issues from diverse perspectives that may be needed to be further improved at the later stage of implementation of LCDS of developing countries.
Ultimately, a review system will help developing countries enhance their ability to differentiate between the policies and measures that were more effective from those that were less or not effective. This will facilitate better decision making by policy makers in developing countries. This review system will also increase the chances for the LCDS pledged by developing countries to be effectively implemented.
Consultative organizations: a case of global green growth institute
While the UNFCCC will need to develop a scheme to promote LCDS in its post-2020 climate change regime, there will be other players which are relevant to the implementation of LCDS. They include other intergovernmental organizations such as the World Bank, philanthropic foundations, and a variety of research and advocacy-oriented NGOs both in developing and developed countries.
One of the most prominent examples is the Global Green Growth Institute (GGGI) which was launched in June 2010 and became a treaty based organization in October 2012 as a result of the partnership between the Korean government and other international players. Based on the notion of public–private partnership, GGGI supports developing countries by providing a variety of assistance which includes helping to develop and implement LCDS. GGGI’s services to develop LCDS, or what GGGI terms as Green Growth Policies (GGPs), are tailored to meet the specific needs of its client country. Thus, for the advanced developing countries such as China, India, Indonesia, Brazil, Mexico, South Africa, and South Korea, GGGI’s future operation may include helping these countries to either further develop a country’s already existing LCDS or to develop new LCDS according to their needs. For countries that do not need to rely on external funding, GGGI may also provide assistance by means of a mutually agreed contract between GGGI and the client country. As for other developing countries that need external funding, GGGI may develop a LCDS which will help identify and stimulate investment from private sector and also provide similar services by utilizing available public funding mentioned above.
Conclusion
When designing a climate-change regime, we need to consider various issues which include: reducing scientific uncertainty, finding the appropriate goals and means to reduce GHG emissions, and considering the political dynamics of the stakeholders. The current top-down approach, in this sense, has underestimated the influences of the embedded political interests of developing countries in implementing the goals of UNFCCC regime. In other words, advanced developing countries’ interest in maintaining the current two-track approach, which ensures a better chance for them not to bear more costs in reducing GHG emissions, may surpass the necessity of sharing burdens together with developed countries. In a situation where countries initiated a new process to agree on post-2020 climate change regime by 2015, alternative options must be aggressively sought if it can better ensure the chance of achieving the goal of the Convention. And in this context, developing and implementing LCDS can provide a meaningful breakthrough in regard to both meaningful reduction of GHG emissions and ending the deadlock in the climate-change negotiations. This alternative option will also help to move away from the current top-down approach to the more flexible bottom-up approach which can open new doors in achieving the common goals of the climate-change regime. In this fragmented global society, too much emphasis on centralized regime-building efforts will likely face the same difficulties continuously without any significance progress. Thus, designing the post-2020 climate-change regime must reflect interests and concerns of major stakeholders including those of advanced developing countries.
Notes
1 Intergovernmental Negotiating Committee for a Framework Convention on Climate Change (Third Session), Working Group I Chair’s Submission, A/AC.237/WG.I/CRP.1/Rev.1 (1991): http://unfccc.int/documentation/documents/advanced_search/items/6911.php?priref=600005495.
2 Intergovernmental Negotiating Committee for a Framework Convention on Climate Change (Third Session), Working Group I Chair’s Submission, A/AC.237/Misc.7 (1991): http://unfccc.int/resource/docs/1991/a/eng/misc07.pdf, p. 10.
3 Ibid.
4 Article 4 Para 2 of UNFCCC.
5 Decision 1/CP.13 Para 1 of the Bali Action Plan.
6 Baumert et al. (2005), pp. 21–24.
7 Karousakis et al. (2008).
8 COP 17 Decision on Establishment of an Ad Hoc Working Group on the Durban Platform for Enhanced Action.
9 For more details about LEDS, see Clapp et al. (2010), p. 11.
10 UNFCCC Article 3 Paragraph 3.
11 UNFCCC Article 3 Paragraph 4.
12 UNFCCC Article 4 Paragraph 1(b).
13 Bali Action Plan 1(b)(v).
14 Note that Korea’s Low Carbon Green Growth policy focuses more on the issues related to climate change while UNESCAP’s green growth policy deals with more general issue areas related to environmental sustainability.
15 UNDP (2009).
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