Climate and Energy Program

July 2010

Policy Brief
Law and Disorder: Will the Issue of Legal Character Make or Break a Global Deal on Climate?
by Jacob Werksman
“We need to better understand this mantra of ‘internationally legally-binding agreement,’ which some developed countries keep chanting.” Remarks of Jairam Ramesh, Indian Minister of State for Environment and Forests, 6th Meeting of the Major Economies Forum, Washington, DC, 18 April 2010 “Developing countries strongly support international legally binding agreements, as the lack of such agreements hurts developing countries more than developed countries.” Joint Statement issued at the conclusion of the Third Meeting of BASIC Ministers Cape Town, 25 April 2010 These two statements, made a week apart, reveal much about the complexity of the debate over the legally binding character of a new global deal on climate change: • Most countries argue that a Legally Binding Agreement (LBA) is essential to success of a global deal. Some countries, particularly developing countries, insist on legal differentiation that would only require developed country parties to be legally bound by new commitments. Some countries, particularly developed countries, insist that the LBA will be acceptable only if it applies with “legal symmetry” to all parties. when they call for the agreement to be binding as applied to others, and what is it that they are seeking to avoid as applied to themselves? Can these views be reconciled in such a way that allows a global deal to be struck? Does the Copenhagen Accord — the nonbinding agreement that was the main result of the most recent UN climate summit, in December 2009 — provide any guidance on a way forward? To tackle these questions, it is first necessary to set out the essential qualities of a legally binding agreement. On the basis of practice within the climate change regime, as well as experience in other international environmental agreements, the concept of legal character can be distilled into four constituent components:

Summary: Disagreement over the nature of a legally binding treaty on climate change threatens more than two decades of diplomacy, but there may be ways of breaking the stalemate. Most countries agree that a legally binding agreement is essential to tackle climate change. But developed and developing countries differ over how such an agreement would apply to them. The former generally insist on symmetry (legally binding commitments for all), whereas the latter demand differentiation (legally binding commitments only for developed countries). There are at least two possible ways to move beyond the stalemate. Countries could abandon the goal of an internationally legally binding instrument and pursue methods of internationalizing the pledge and review of national policies outside the official UN process. Alternatively, countries could choose to strengthen relevant aspects of the already legally binding UN Framework Convention on Climate Change, which can provide a forum to strengthen and expand institutions and procedures to ensure quality of data, coordinate carbon markets, and otherwise support a robust climate regime.

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What is it that countries mean when they insist on or resist the adoption of a LBA? What is it that they are valuing

Climate and Energy Program

Policy Brief
1. the legal form of the agreement; 2. the legal form of the commitments within the agreement; 3. the specific and prescriptive nature of these commitments; and 4. the institutions and procedures designed to hold parties accountable for these commitments. Countries calling for a legally binding outcome seem to want an agreement that would reflect high standards on each of these four aspects of legal character to drive the changes in policy and practice necessary to avoid the worst consequences of climate change. Taking a careful look at each of these four components of legal character may reveal a way to reconcile the distinctions between symmetry and differentiation. What Are Legally Binding Agreements and Why Do They Matter? The 1992 UN Framework Convention on Climate Change (UNFCCC) and its 1997 Kyoto Protocol are both agreements that are binding on those countries that have chosen to ratify them. A legally binding agreement is the highest expression of the will of its parties to comply with internationally agreed commitments. The breach of such an agreement gives rise to a secondary international legal obligation to make good on the consequences of that breach. For many countries, entering into a legally binding agreement requires parliamentary ratification and thus becomes binding and enforceable domestically through implementing legislation. A legally binding agreement often provides the legal and political basis for the creation of institutions, such as secretariats, financial mechanisms, compliance procedures and the raising of funds from parties to support its operations. These agreements tend to attract higher-level diplomatic, political, civil society, media, and public attention. But legally binding agreements can also present barriers to effective implementation. Because they enter into force for parties only following a process of ratification, they can become caught up in the domestic political processes of one or more countries and fail to become fully operational. The Devil is in the Details In practice, countries regularly enter into agreements that take a legally binding form but that contain “commitments” that are softly worded or highly contingent. For example, a legally binding instrument could 1) for some or all parties, contain discretionary pledges of actions that are not expressed in legally binding language; 2) for developing country parties, make the performance contingent on developed countries meeting their obligations to provide financial support; and/or 3) limit some or all parties’ commitments to performance in conformity with domestic law and allow those parties to change domestic law without incurring international legal consequences. Countries may also agree to commitments that take a legally binding form but are so vague or devoid of prescriptive content that it is not possible to ascertain with any objective certainty whether a country has complied. Hard bargaining has produced many international agreements whose “constructive ambiguity” is designed to create the impression of a legally binding nature, without holding countries to any specific change in behavior. Finally, legal character depends on the institutions and procedures established to promote implementation by monitoring, reviewing, and encouraging compliance with countries’ commitments. Many contemporary LBAs require parties to report on their progress and establish a process to review these reports. Some LBAs have established multilateral procedures and institutions that promote compliance with their terms by offering financial and technical assistance to countries struggling to comply. This assistance is typically limited to eligible developing country parties or parties with economies in transition to market economies. A few of these procedures are authorized to reach conclusions as to whether a party is in noncompliance and to recommend the suspension of rights and privileges under the LBA. Some LBAs also require, authorize, or provide a basis for justifying the use of unilateral trade measures by one party against another party for failure to comply with their terms. What’s at Stake? Countries that are calling in good faith for current negotiations to deliver a legally binding agreement seek the benefits

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Policy Brief
associated with each of these aspects of legal character and see them as shaping the future performance of parties. The current negotiating stalemate on legal character is due to the tension between an insistence by developed countries on “legal symmetry” and an equally strong demand by developing countries for legal differentiation. For example, a number of developing countries want developed countries who are parties to the Kyoto Protocol to move ahead with a second commitment period adopted through a legally binding amendment to the Kyoto Protocol — the first set of commitments under the Protocol expire in 2012. In other words, they want to preserve the Kyoto Protocol’s high standard commitments, institutions, and procedures for developed country parties, and low standard commitments, institutions, and procedures for developing country parties. Under this approach developed countries that are Benefits and Risks of Legal Character
Legal Form of the Agreement Standards Binding Nonbinding Legal Character of the Commitments
(legal form of the commitment, as well as clarity, specificity, ambition)

not party to the Kyoto Protocol, notably the United States, would adopt their commitments through a new Protocol to the UNFCCC. Under this proposal developing country commitments would remain “voluntary.” While this would achieve symmetry with regard to the form of the agreement, it would lead to a high level of differentiation with regard to form and nature of the commitments within the agreement. A stalemate on the legal form of the agreement has the potential to further delay negotiations and to undermine public confidence in the UNFCCC and the Kyoto Protocol, which represent more than two decades of diplomatic and political investment. The apparent irreconcilable differences on legal form of the agreement distracts countries from a deeper and essential conversation on specificity and ambition of commitments of such an agreement, and on the need to strengthen the vague outlines of a process to arrive

Institutions and Procedures
(transparency, accountability, compliance, enforcement)

High

Low

High

Low

Incorporation in domestic law Greater financial Wider support to parties participation and institutions Higher expressed Media and public ambition awareness Confidence of carbon markets Lack of media and public awareness and support Inefficient or inoperable carbon markets Retreat from multilateralism and rule of law

Greater transparency predictability and accountability Clearer market signals Harmonization/ mutual recognition of domestic legislation Lower common denominator commitments Nonparticipation Nonratification Wide-spread noncompliance

Benefits

Wider participation Wider ratification

Greater transparency predictability and accountability Clearer market signals Higher rates of domestic implementation

Wider participation Wider ratification

Risks

Lower common denominator commitments Nonparticipation Nonratification

Nonparticipation Lack of media and public awareness and support Nonratification Withdrawal of noncompliant parties Wide-spread noncompliance

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Climate and Energy Program

Policy Brief
at rules to ensure transparency and accountability through monitoring, reporting, and verification of commitments. Moving Beyond the Stalemate There are at least two possible ways forward. The first is that countries that have long championed the need for an international legally binding instrument explicitly or implicitly abandon this goal and begin to pursue methods of internationalizing the pledge and review of national policies through soft law approaches outside the UNFCCC process. The Copenhagen Accord, which as yet has no formal status under the UNFCCC is an example of this approach. While the Accord represents a significant political step forward, as long as it remains a free-standing document, it has none of the institutional and procedural support necessary to promote greater ambition and performance. The “soft law” approach represented by the Accord could undermine, over the long-term, the international community’s perception of the necessity and the utility of international law as a response to global environmental challenges. Alternatively, the UNFCCC parties could choose to reinvest in strengthening those aspects of the legal character of the climate change regime that are already within the UNFCCC’s mandate. The UNFCCC is, itself, a legally binding agreement with nearly universal membership. While the Conference of the Parties to the UNFCCC cannot, by decision alone, adopt new targets and actions that are binding on UNFCCC parties, it has provided (and can continue to provide) a forum for its parties to report on their efforts to reduce emissions, such as those in the Copenhagen Accord’s appendices. More importantly, it can strengthen and expand the institutions and procedures designed to ensure quality of data, harmonize standards and policies, coordinate carbon markets, and review parties’ performance. The insistence that there can be no progress without one or more new legally binding instruments could block movement forward within the UNFCCC and, ironically, permanently undermine the credibility of the Convention — which remains the only legally binding instrument of near universal membership.
Jacob Werksman
Jacob Werksman is an international lawyer, specializing in international environmental law and international economic law. He directs the Institutions and Governance Program at the World Resources Institute. During his career, he has also worked for the Foundation for International Environmental Law and Development (FIELD), the Global Inclusion Program of the Rockefeller Foundation, and the United Nations Development Programme. He is currently an Adjunct Professor of law at New York University, and at Georgetown University, and an active Member of the State Bar of California. He has published numerous articles on climate change and carbon markets, compliance with international environmental law, and trade and sustainable development. He holds degrees from Columbia University (A.B. 1986, English Literature); the University of Michigan (Juris Doctor, cum laude, 1990); and the University of London (LLM, Public International Law, with merit, 1993).

About GMF
The German Marshall Fund of the United States (GMF) is a nonpartisan American public policy and grantmaking institution dedicated to promoting greater cooperation and understanding between North America and Europe. GMF does this by supporting individuals and institutions working on transatlantic issues, by convening leaders to discuss the most pressing transatlantic themes, and by examining ways in which transatlantic cooperation can address a variety of global policy challenges. In addition, GMF supports a number of initiatives to strengthen democracies. Founded in 1972 through a gift from Germany on the 25th anniversary of the Marshall Plan as a permanent memorial to Marshall Plan assistance, GMF maintains a strong presence on both sides of the Atlantic. In addition to its headquarters in Washington, DC, GMF has seven offices in Europe: Berlin, Bratislava, Paris, Brussels, Belgrade, Ankara, and Bucharest.

About the Transatlantic Climate Bridge
This paper would not have been possible without funding from the “Transatlantic Climate Bridge,” an initiative jointly launched by the German Federal Foreign Office and the German Federal Environment Ministry to connect and support those working to address the challenges of climate change, energy security, and economic growth at the local, the state, and the federal level in the United States and Germany.

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