3. The International Climate Regime

3.1. The Collective Action Problem

Climate change is a classic collective action problem as the atmosphere is open to carbon wastes from all humanity, and therefore it can only be addressed by an international legal regime binding on roughly 200 countries.^[1] In the absence of such a regime, individual countries will have an incentive to increase their emissions and ‘free ride’ on the efforts of others.

The need for a collective and coordinated action through binding international law is a major but not insurmountable challenge. There are previous and existing examples of such successful coordination in relation to other global environmental issues, most notably ozone depletion from the emission of ozone-depleting substances to the atmosphere.

Climate change is also caused by the emission of atmospheric pollutants, but it is a more difficult problem to address because of the range of human activities that generate greenhouse gases. From the use of fossil fuels to generate energy, to land use changes (e.g. deforestation) and food production, GHG emissions are a ubiquitous part of many aspects of human life. While there are cost-effective options to reduce emissions, and alternative approaches that generate lower emissions or no emissions, in the absence of rules that incentivise or mandate their use it is difficult to change human behaviour at the necessary scale and pace. This is where the law comes in, as it can be an instrument for effective regulation under the right conditions.

3.2. The UN Framework Convention on Climate Change

The origins of international climate law lie in a 1988 UN General Assembly Resolution which recognised climate change as the ‘common concern of humankind’,^[2] and the creation of the Intergovernmental Panel on Climate Change (IPCC) in the same year.^[3] Shortly afterwards negotiations began on the UNFCCC, which was adopted at the Rio Earth Summit in 1992. Unlike the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer^[4] (‘Montreal Protocol’), the UNFCCC did not include targets and timetables for reducing emissions. Instead, it sets out an overarching framework for more specific implementing agreements to follow later. It is a very widely adopted agreement, with 198 states parties.

The central objective of the UNFCCC is found in Article 2: the ‘stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system’. It goes on to provide that this level should be achieved within a timeframe that will permit ecosystems to adapt naturally, prevent threats to food production and ensure that economic development can proceed sustainably. In pursuing this objective, the parties are to be guided by several fundamental principles. First, the climate system is to be protected for the benefit of present and future generations, on the basis of equity and according to common but differentiated responsibilities and respective capabilities (Article 3(1)). This means that developed countries must take the lead in reducing emissions. Second, special attention must be paid to the needs and special circumstances of developing countries, especially those states vulnerable to climate change, such as small island states (Article 3(2)). Third, the UNFCCC incorporates the precautionary principle, which provides that full scientific certainty should not be used as an excuse for failing to take measures to anticipate, prevent or minimise the causes of climate change (Article 3(3)).

A core feature of the UNFCCC is its division of countries into two categories: Annex I (industrialised) and non-Annex I (non-industrialised) states. The UNFCCC imposes some obligations on all parties, including to report their GHG emissions and develop programs to reduce emissions, but it is the industrialised countries that have special duties, on the basis of equity, to take the lead in combating climate change and its adverse effects.

3.3. The Kyoto Protocol

The distinction between industrialised and non-industrialised states was carried into the 1997 Kyoto Protocol to the UNFCCC.^[5] The Kyoto Protocol was modelled on the ozone regime, set out emissions reduction targets for industrialised states and required these countries to provide technical and other assistance to developing countries. It was anticipated that there would be successive ‘commitment periods’ — that is, five-year periods under which the parties progressively adopted stricter targets.

The fundamental objective of the Kyoto Protocol was set out in Article 3, and provided that industrialised states must individually or jointly ensure that their total GHG emissions do not exceed their assigned amounts. To achieve its objectives the Kyoto Protocol also created market-based mechanisms, including emissions trading that allows states to exchange carbon reduction units. The theory behind this is that it allows emissions to be reduced at the lowest cost. Another innovative feature of the Kyoto Protocol was its compliance procedure, which was designed to ensure that states accurately reported their emissions and met their reduction targets.

The Kyoto Protocol turned out to be a very modest addition to the climate regime. It was only able to deliver a small decrease in global GHG emissions. One of the reasons for this is that it did not apply binding emissions targets to emerging economies, including China, which became the world’s largest emitter in 2006. The United States also never became a party to the agreement. It became clear that a more comprehensive response was needed. Discussion on a successor to the Kyoto Protocol came to a head at the UNFCCC Conference of the Parties in Denmark in 2009 (called COP15) where a political declaration known as the Copenhagen Accord was agreed following difficult negotiations.^[6]

Although it was not a treaty, the Copenhagen Accord was significant in several respects. For the first time it included specific temperature goals (staying below 1.5/2.0 °C above pre-industrial temperatures) and it required developed country parties to submit economy-wide emissions targets to the UNFCCC Secretariat. Moreover, the Copenhagen Accord was more inclusive than the Kyoto Protocol in bringing together developed and developing states in emissions mitigation commitments.

3.4. The Paris Agreement on Climate Change

As a non-binding instrument the Copenhagen Accord was not able to provide a clear legal basis for responding to the climate crisis, and the international climate regime remained in a hiatus until December 2015 when the Paris Agreement was adopted.

The Paris Agreement has since become one of the most widely ratified treaties in history, with 195 states parties. Building on aspects of the Copenhagen Accord, and abandoning the targets and timetables of the Kyoto Protocol, the Paris Agreement seeks to address climate change by a ‘bottom up’ approach. Moreover, all states, both developed and developing, are legally bound to take ambitious steps to address climate change. The key elements of the Paris Agreement include:

• the goal of limiting global temperature increase to well below 2 °C, and pursuing efforts to limit the increase to 1.5 °C;
• the goal of peaking GHG emissions as soon as possible, and reaching net zero by the second half of this century;
• binding obligations on all parties to submit nationally determined contributions (NDCs) every five years on their emissions pledges and the steps taken to achieve them;
• a global stocktake to occur every five years, based on the best available science, to assess collective progress towards achieving the goals of the Paris Agreement;
• a global goal of enhancing the capacity of states to adapt to climate change, especially developing countries;
• reaffirming the obligations of developing states to provide developing countries with financial and other support to reduce emissions and adapt to climate change; and
• a transparency and accounting system to monitor compliance with the Paris Agreement.

Unlike the Kyoto Protocol, which prescribed quantified emissions targets for industrialised countries, the Paris Agreement takes a pledge-and-review approach. Rajamani and Werksman note that in this way the Paris Agreement ‘rel[ies] less on its legal character than on its collective goals, reporting and review mechanisms, and regular stock-takes to shape state behaviour and public attitudes’.^[7]

The NDC process is arguably the most important feature of the Paris Agreement. Parties are required to prepare successive NDCs every five years showing the steps they are taking to address climate change.^[8] Each new NDC is to ‘represent a progression beyond’ the party’s then current NDC and ‘reflect its highest possible ambition’.^[9] Developed countries must take the lead and pledge absolute and economy-wide reduction targets, while developing countries are encouraged to move towards these depending on their national circumstances. NDCs are to be aimed at achieving the temperature goals of the Paris Agreement.^[10] NDCs are also to be informed by the global stocktake on collective progress, the first of which was completed in 2023.^[11]

Some 180 of the 195 parties to the Paris Agreement have submitted NDCs, covering around 95 per cent of global GHG emissions.^[12] Despite widespread support for and participation in the NDC process, questions surround the capacity of NDCs to prevent dangerous climate change. The adequacy of NDCs, both individually and collectively, has been the subject of a growing body of analysis. In addition to scrutiny of NDC texts, there has also been considerable discussion as to whether the NDC ‘show and tell’ or ‘ambition cycle’^[13] system itself can deliver the Paris Agreement objectives.^[14]

The NDC system was expressly designed to be an open and flexible mechanism to encourage all parties to take steps to reduce emissions and adapt to climate change. However, as there is no prescribed content for NDCs they vary significantly and address a wide range of commitments and policies. One apparent flaw in this approach is that it has encouraged some governments to overstate the significance of their pledges and the efficacy of their policies, leading to the criticism that NDCs can involve a type of ‘greenwashing’. Without detailed knowledge of country context and the nature of the pledge or promise, these documents may appear more impressive at face value than they are in reality.^[15] Central to improving this aspect of the NDC system will be the ‘enhanced transparency framework’ that is being developed under Article 13 of the Paris Agreement. Through this process parties will need to submit biennial transparency reports on progress towards NDCs, which are subject to a technical review and a peer review by other parties.

Some of the concerns relating to the NDC system are borne out in the outcomes of the first global stocktake in 2023, which reached very sobering conclusions.^[16] It noted that progress has been made towards the Paris Agreement temperature goals, from a likely increase of 4 °C prior to the adoption of the treaty, to an increase of between 2.1 °C and 2.8 °C if NDCs are fully implemented.^[17] Almost 90 per cent of the global economy is now covered by targets for climate neutrality, and this keeps open the possibility of maintaining temperature increases below 2 °C if these targets are met. However, the global stocktake found that implementing current NDCs would only reduce global emissions by 2 per cent by 2030 compared with 2019 levels,^[18] and that there is a major ‘implementation gap’ between what is promised in NDCs and what is actually being delivered.^[19] This means that ‘deep, rapid and sustained reductions’ of 43 per cent by 2030, 60 per cent by 2035 and net zero by 2050 are needed to limit global warming to 1.5 °C.^[20]

In its decision on the global stocktake at the UNFCCC Conference of the Parties in Dubai in 2023 (COP28), the conference called on parties to implement specific policies to achieve the necessary reductions in greenhouse gases. This included not only increased deployment of renewable energy but also the phase-out of coal power.^[21] The call to transition away from fossil fuels was heralded as signalling ‘the beginning of the end’ for the fossil fuel era.^[22]

Among several elements of the Paris Agreement still under development is the ‘loss and damage’ mechanism, which seeks to provide financial support for countries that suffer impacts from climate change that cannot be averted either by reducing emissions or by adaptation policies.