Research Handbook on Climate Change Mitigation Law 183910158X, 9781839101588

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RESEARCH HANDBOOK ON CLIMATE CHANGE MITIGATION LAW

RESEARCH HANDBOOKS IN CLIMATE LAW Series Editor: Jonathan Verschuuren, Tilburg University, the Netherlands This important and timely series brings together critical and thought-provoking contributions on the most pressing topics and issues within the field of climate law. The volumes in this significant series cover a wide array of the effects of climate change on such diverse fields as trade, human rights, energy, disasters, finance, and migration. Each Research Handbook comprises specially commissioned chapters from leading academics, and practitioners, as well as those with an emerging reputation and is written with a global readership in mind. Equally useful as reference tools or high-level introductions to specific topics, issues and debates, these Research Handbooks will be used by academic researchers, postgraduate students, practising lawyers and lawyers in policy circles. Titles in this series include: Research Handbook on Climate Change and Agricultural Law Edited by Mary Jane Angelo and Anél Du Plessis Research Handbook on Climate Change, Migration and the Law Edited by Benoît Mayer and François Crépeau Research Handbook on Climate Disaster Law Barriers and Opportunities Edited by Rosemary Lyster and Robert Verchick Research Handbook on Global Climate Constitutionalism Edited by Jordi Jaria-Manzano and Susana Borràs Research Handbook on Climate Change, Oceans and Coasts Edited by Jan McDonald, Jeffrey McGee and Richard Barnes Research Handbook on Climate Change Law and Loss & Damage Edited by Meinhard Doelle and Sara L. Seck Research Handbook on Climate Change Adaptation Law Edited by Jonathan Verschuuren Research Handbook on Climate Change Mitigation Law Second Edition Edited by Leonie Reins and Jonathan Verschuuren

Research Handbook on Climate Change Mitigation Law SECOND EDITION

Edited by

Leonie Reins Erasmus Law School, Erasmus University Rotterdam, the Netherlands

Jonathan Verschuuren Tilburg Law School, the Netherlands

RESEARCH HANDBOOKS IN CLIMATE LAW

Cheltenham, UK • Northampton, MA, USA

© Editors and Contributors Severally 2022

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher. Published by Edward Elgar Publishing Limited The Lypiatts 15 Lansdown Road Cheltenham Glos GL50 2JA UK Edward Elgar Publishing, Inc. William Pratt House 9 Dewey Court Northampton Massachusetts 01060 USA A catalogue record for this book is available from the British Library Library of Congress Control Number: 2022941080 This book is available electronically in the Law subject collection http://dx.doi.org/10.4337/9781839101595

ISBN 978 1 83910 158 8 (cased) ISBN 978 1 83910 159 5 (eBook)

EEP BoX

Contents

List of contributorsvii PART I

CLIMATE CHANGE MITIGATION LAW – ARCHITECTURE AND GOVERNANCE

1

Climate change mitigation and the role of law Leonie Reins and Jonathan Verschuuren

2

The evolving architecture of global climate law Harro van Asselt, Michael Mehling and Kati Kulovesi

17

3

Climate change mitigation and the precautionary principle Nicolas de Sadeleer

43

PART II

2

CLIMATE CHANGE MITIGATION LAW AND POLICY IN THE REGIONS

4

The European Union and its rule-creating force on the European continent for moving to climate neutrality by 2050 at the latest Marjan Peeters and Delphine Misonne

5

Climate change mitigation law and policy in the United States and Canada Katrina Fischer Kuh and Michael Charles Leach

103

6

Climate change mitigation law and policy in Central and South America Juliana Zuluaga Madrid

138

7

Climate change mitigation law and policy in the Asia-Pacific Alexander Zahar

156

8

Climate change mitigation law and policy in the Middle East Mehdi Piri

179

9

Climate change mitigation law and policy in the BRICS Rafael Leal-Arcas, Mariam Al Zarkani, Lina Jbara, Ruqaya Mohamed Mubwana, Marianna Margaritidou and Angela van der Berg

196

10

Climate change mitigation law and policy in Africa Olivia Rumble and Andrew Gilder

240

v

59

vi  Research handbook on climate change mitigation law PART III OVERARCHING LEGAL TOOLS FOR CLIMATE CHANGE MITIGATION 11

Climate finance after Paris David Driesen and Cinnamon Carlarne

12

Incentivizing carbon transition – a comparison of carbon trading in the EU and China Stefan E. Weishaar, Kateryna Holzer and Bingyu Liu

13

Climate litigation in the context of mitigation: an evolving jurisprudence Patrick Parenteau

263

283 307

PART IV SECTORS 14

Regulatory and policy instruments to promote decarbonization in the energy sector Sirja-Leena Penttinen

15

Transportation’s trinity and climate change mitigation Tanveer Ahmad, Paul Fitzgerald and Jeffrey J. Smith

16

Cities and climate change mitigation law from a polycentric and comparative perspective Cathrin Zengerling, Debora Sotto and Oliver Fuo

17

Agriculture, forestry and other land use (AFOLU) Jonathan Verschuuren

18

Carbon majors, social choice, and anticommons: addressing climate change mitigation policy formation in the industrial sector Roy Andrew Partain

19

Waste management Geert Van Calster and Luna Aristei

482

20

Greenhouse gas removal Tracy Hester and Kirsten Williams

502

338 363

398 433

457

Index527

Contributors

Tanveer Ahmad is an Associate Member and former Executive Director of the Centre for Research in Air and Space Law at McGill University. He has lectured in Canada, China and Bangladesh, and has published extensively in the areas of aviation law and environmental law. Mariam Al Zarkani is an Outreach Programme Specialist at the Environment Agency Abu Dhabi and works to raise environmental awareness among the general public and the different organizations in Abu Dhabi. Mariam earned a Master’s degree in Environmental Sustainability Law and Policy from Sorbonne University and a Bachelor’s degree in Environmental Science from Abu Dhabi University. Luna Aristei holds a PhD in environmental law from Luiss University in Rome, Italy. She is a teaching assistant in environmental law, administrative law and public economic law courses at Luiss University. She has written several papers on environmental law and energy law. Cinnamon Carlarne is the Associate Dean for Faculty & Intellectual Life and the Robert J. Lynn Chair in Law at the Ohio State University, where she teaches domestic and international environmental law and climate change law. She has published numerous books and articles exploring the evolution of systems of environmental and climate change law. She is a member of the editorial board of Transnational Environmental Law (Cambridge), and the academic advisory board for Climate Law (Brill). Nicolas de Sadeleer is a professor at Saint-Louis University. He is a specialist in EU law (institutions, internal market), environmental law (international and domestic) and comparative law. He is an active commentator on EU legal and political issues in the areas of trade, investment, and sustainable development. In addition to holding guest academic positions at over 40 universities around the world, he has been the recipient of five international university chairs. In addition, he has worked as a lawyer and consultant with national and international authorities on a wide range of environmental issues. His research has been published with leading scholarly publishing houses and journals around the globe. David Driesen is a University Professor at Syracuse University, where he teaches an interdisciplinary climate change course and environmental law. He has published numerous books and articles on the law and economics of environmental and climate change law. He is a member of the editorial boards of Carbon and Climate Law Review and Environmental Law (Oxford). Katrina Fischer Kuh is the Haub Distinguished Professor of Environmental Law at the Elisabeth Haub School of Law at Pace University and co-editor of Climate Change Law: An Introduction and The Law of Adaptation to Climate Change: United States and International Aspects. She is also a member of the Environmental Law Collaborative and serves on the board of Green Amendments for the Generations and on the law committee of the Municipal Arts Society.

vii

viii  Research handbook on climate change mitigation law Paul Fitzgerald is a former Member (Judge) of the Canadian Transportation Agency whose decisions have been favourably reviewed by Canada’s Federal Court of Appeal and the Supreme Court of Canada. He is an adjunct professor at the Institute of Air & Space Law (IASL), McGill University. He has been the driving force behind Canada’s Open Skies agreements with Iceland, New Zealand, Barbados, the Dominican Republic, South Korea and the European Union and has successfully fought against regulatory initiatives that would have harmed the airline industry. He has lectured in law at the IASL, DePaul Law School in Chicago, the University of Mississippi and Gujarat National Law University in Gandhinagar, India. He has been published multiple times in seven different air law journals, in book chapters, as an author, and as part of airline industry conference proceedings in nine countries in all parts of the world. Oliver Fuo is an associate professor in the Faculty of Law, North-West University (NWU), South Africa. He is a is a recipient of several fellowships including: the TWAS-DFG Cooperation Visits Programme for Scientists from Sub-Saharan Africa; the Humboldt Talent Travel Award; and a DAAD Scholarship, which enabled him to visit the Faculty of Law, Freie Universitat zu Berlin (FU), Germany, on several occasions and the Justus-Liebig University, Giessen in 2013. Oliver Fuo has presented papers in national and international conferences and has published numerous articles in established national and international journals. His research primarily focuses on the role of local government in advancing the constitutional mandate of social justice in South Africa. Andrew Gilder is South Africa’s leading private sector environmental, climate change and carbon markets lawyer – he is a director of Climate Legal, with more than 19 years’ legal practice experience specialising in climate change (mitigation and adaptation), climate finance and development, carbon markets, carbon tax, environmental and energy law, policy and governance. Andrew is admitted as an attorney of the High Court of South Africa (Gauteng and Western Cape) and holds a BA LLB (University of Natal – now KwaZulu-Natal) and LLM (Marine and Environmental Law, University of Cape Town). Tracy Hester is Instructional Associate Professor of Law at the University of Houston Law Center. His research focuses on the innovative application of environmental laws to emerging technologies and unanticipated risks, including climate engineering, deep decarbonisation (particularly in energy production), nanotechnologies, artificial intelligence, genetic modification, and advanced wind, solar, and other renewable power systems. Prior to joining the University of Houston Law Center, Prof. Hester served as a partner in Bracewell LLP for 16 years and led that firm’s Houston office’s environmental group. Kateryna Holzer is a senior researcher at the University of Eastern Finland and an international consultant on environmental, energy and climate change issues in trade law and policy. Her research covers border carbon adjustments, legal issues of mitigation of short-lived climate pollutants, environmental initiatives under preferential trade agreements, technical barriers to trade, and alternative methods of trade dispute resolution. She holds a PhD in Law from the University of Bern, Switzerland, and a PhD in Economics from Ukraine. Lina Jbara is a senior specialist at Khalifa University in Abu Dhabi (the UAE). She has a Bachelor’s degree in Environmental Health and a Master’s degree in Public Health from the American University of Beirut. Most recently, she earned a second Master’s degree in the field

Contributors  ix of Environment Sustainability Law & Policies from the University of Paris. Lina has several publications in the field of environmental and public health and uses her combined education and research experience to advocate the promotion of a safe and healthy environment for future generations. Kati Kulovesi is Professor of International Law and Director with the Centre for Climate Change, Energy and Environmental Law at the University of Eastern Finland Law School. She is also Docent of International Law with the Erik Castrén Institute of Human Rights and International Law at the University of Helsinki and Senior Associate Researcher with the Brussels School of Governance, VUB. Michael Charles Leach is a postdoctoral researcher at Tilburg Law School, Tilburg University. His current research contributes to two research projects, namely the Netherlands Research Council (NWO)-funded ‘Reducing Greenhouse Gas Emissions from Agriculture: The Role of Emissions Trading (ETSA)’ project, and the Ministry of Education, Culture and Science-funded Social Sciences and Humanities Sectorplan ‘Constitutionalizing in the Anthropocene’ project. Rafael Leal-Arcas is Professor of Law at Alfaisal University (Riyadh, Kingdom of Saudi Arabia). He is also the inaugural Lee Kong Chian International Visiting Professor, Singapore Management University School of Law (Singapore), and was previously Jean Monnet Chaired Professor of EU International Economic Law and Professor of Law, Queen Mary University of London (UK). He also serves as an expert for the UK’s Department for International Trade’s (DIT) Sustainability Thematic Working Group. This group provides expert advice and supports the UK Government with its trade and environment objectives through new trade agreements and as a fully independent member in the World Trade Organisation. Rafael is on the roster of arbitrators and/or trade and sustainable development (TSD) experts in bilateral disputes under the European Union’s trade agreements with third countries, selected by Directorate General for Trade, European Commission. He is also on the roster of experts for legal services of the Energy Community Secretariat. Bingyu Liu is an associate professor at the School of International Law at China University of Political Science and Law (CUPL). Her research covers legal issues of sustainable investment of multinationals and financial institutions overseas, corporate social responsibility and accountability, green finance and climate change. She gained professional experience at several environmental organizations and government institutions, such as UN Environment, the Ministry of Foreign Affairs of China, and the Research Center of The Hague Academy of International Law. She holds a PhD degree in Law from Peter A. Allard School of Law, University of British Columbia (UBC). Marianna Margaritidou is currently training to qualify as an England and Wales solicitor. She has a Bachelor’s degree in Law from the University of Paris Descartes and a Master’s degree in Environmental Sustainability Law & Policies from the University of Paris in addition to completing her Graduate Diploma in Law and Legal Practice Course with the University of Law. Michael Mehling is the Deputy Director of the Center for Energy and Environmental Policy Research (CEEPR) at the Massachusetts Institute of Technology (MIT) in Cambridge, Mass., and a professor at the University of Strathclyde School of Law in Glasgow. He is also the

x  Research handbook on climate change mitigation law founding editor of the Carbon & Climate Law Review (CCLR), the first academic journal focused on climate law and regulation. Delphine Misonne is Professor of Environmental Law at Université Saint-Louis – Bruxelles, FNRS (Belgian Fund for Scientific Research) Research Associate and head of CEDRE (Environmental Law Centre, Université Saint-Louis – Bruxelles). Her research focuses on the legal determinants conditioning the choice of a level of environmental protection. She explores the main new challenges EU environmental law faces today, in a context of multiple crises (including climate change), at the interface of legal orders. She is also a specialist in transversal policies, such as ambient air quality and climate change governance. She holds a chair in Law, Governance and Sustainable Development. Ruqaya Mohamed Mubwana is Manager Air Quality, Noise and Climate Change Section Environment Agency Abu Dhabi. Patrick Parenteau is Professor of Law Emeritus and Senior Fellow for Climate Policy at Vermont Law School. He is the former director of the Environmental Law Center at VLS. His career in environmental law spans five decades and includes senior positions with federal and state government and in the private sector. He is a fellow in the American College of Environmental Lawyers and a Fulbright Scholar. Roy Andrew Partain is the Chair in Mathematical Structures in Law in the School of Law at the University of Aberdeen. His research examines how mathematical patterns exist and operate within legal rules and legal institutions. His research finds new ways to apply mathematical methodologies, social science models, or techniques from computing science to illuminate legal research. Professor Partain’s research has been financially supported by the Japan Society for the Promotion of Science (JSPS), the Korea Legislation Research Institute (KLRI), the Korean Ministry of Environment, and the Korean Ministry of Trade, Industry and Energy, and by the University of Aberdeen. Marjan Peeters is Professor of Environmental Policy and Law at Maastricht University, the Netherlands. She has been specialising in environmental law since 1987, thereby examining how a high level of environmental protection can be effectively and efficiently reached based on the rule of law and in the context of sustainable development. Her research concentrates on regulatory instruments, environmental procedural rights, and uncertain risks, with a focus on climate law and EU environmental law. Her latest co-edited book is the Research Handbook on EU Environmental Law, Edward Elgar Publishing, 2020. Marjan spends one day a week at the Maastricht Sustainability Institute, teaching a law course in the Master’s in Sustainability Science, Policy and Society. Sirja-Leena Penttinen currently serves as Assistant Director of the Center for Energy Law and as an adjunct professor at Tulane University Law School (New Orleans, US). She is also a senior lecturer at UEF Law School, University of Eastern Finland. She has published widely on different aspects of international and European energy law; her recent research and consultancy activities have focused especially on the implications of the sustainable energy transition to markets and investments. Mehdi Piri is Assistant Professor of International Energy and Environmental Law at University of Tehran, Iran. He is also experienced legal advisor, attorney at law and arbitrator

Contributors  xi with a demonstrated history of working in international agreements negotiations and management. He graduated with a Doctor of Philosophy (PhD) focused on international energy and environmental law from Maastricht University (2015). His research is mainly focuses on various legal aspects of energy law and its relation to environmental law. Leonie Reins holds the Chair in Public Law and Sustainability at the Erasmus School of Law, Erasmus University Rotterdam. Prior to that she was an assistant professor at the Tilburg Institute for Law, Technology and Society (TILT), Tilburg Law School. She worked as a PhD candidate and then as a postdoctoral researcher at KU Leuven (Belgium). In addition Leonie worked as a legal advisor at a Brussels-based environmental law and policy consultancy, where she was involved in projects relating to environmental, energy and climate change law and policy. Leonie holds an LLM in International, European and Comparative Energy and Environmental Law. Olivia Rumble is a director of Climate Legal and an adjunct senior lecturer in environmental law at the University of Cape Town (UCT), and a visiting law lecturer at UCT’s African Climate and Development Initiative. She is admitted as an attorney of the High Court of South Africa and holds a degree in Politics, Philosophy and Economics (PPE) (University of Stellenbosch), as well as an LLB and LLM in Environmental Law (with distinction) from UCT. Jeffrey J. Smith is a lecturer in law at the Norman Paterson School of International Affairs, Ottawa. Previously counsel to the United Nations in East Timor (Timor-Leste) during that country’s transition to independence, he has written extensively about marine environmental protection, shipping regulation and application of the law of the sea to sustainability governance. A fellow of the Canadian Institute of Marine Engineering, he holds graduate law degrees from the Fletcher School of Law & Diplomacy and McGill University. Debora Sotto holds a Bachelor of Law degree from the University of São Paulo (1998), a Master’s in International and Comparative Environmental Law from the University of Limoges, France (2011) and a PhD in Urban Law from the Pontifical Catholic University of São Paulo, Brazil (2015). From 2017 to 2018, she developed a research project on urban planning, sustainable urban development, and local climate action at the School of Public Health of the University of São Paulo. Currently, she is developing a second postdoctorate at the Global Cities Program of the Institute of Advanced Studies of the University of São Paulo, focused on urban resilience and sustainable urban development. Dr Sotto also works as a legal consultant at the Municipality of São Paulo. Harro van Asselt is Professor of Climate Law and Policy with the Centre for Climate Change, Energy and Environmental Law at the University of Eastern Finland Law School, a visiting researcher with the Copernicus Institute of Sustainable Development at Utrecht University, and an affiliated researcher with the Stockholm Environment Institute. He is also the Editor of the Review of European, Comparative & International Environmental Law (RECIEL). Geert Van Calster is full Professor at the University of Leuven and a practising member of the Belgian Bar. He is the author of EU Waste Law (Oxford University Press) and co-author with Leonie Reins of EU Environmental Law (Edward Elgar Publishing).

xii  Research handbook on climate change mitigation law Angela van der Berg is Acting Director at the Global Environmental Law Centre (GELC) at the University of Western Cape, as well as Senior Lecturer at the Department of Public Law and Jurisprudence, University of Western Cape. Angela obtained her joint PhD in Law and Development from Tilburg University, Netherlands in 2019 and from the North-West University, South Africa in May 2020. The PhD focussed on the role of urban planning and environmental law and policy for promoting sustainable cities. From this research, Angela published several accredited peer reviewed articles and book chapters on the role of environmental- and planning law for sustainable urban development as articulated in Sustainable Development Goal 11 (Sustainable Cities). Angela’s current research relates to climate change and how government authorities (national, federal and local) can pursue more environmentally sustainable and climate resilient futures by rethinking and re-purposing existing approaches to law and governance. Jonathan Verschuuren is a professor of International and European Environmental Law at Tilburg University, the Netherlands. He holds a doctorate degree cum laude (1993, Tilburg). In 2016–2017 he was a Marie Sklodowska Curie fellow at the University of Sydney, and he has an extraordinary professorship at North-West University, and at the University of the Western Cape, South Africa. In 2017, Jonathan was awarded the IUCN Academy of Environmental Law Senior Scholarship Prize. His research mainly focuses on various legal aspects of climate change, including coastal adaptation and climate smart agriculture, as well as on the foundations of environmental law, such as the role of principles. Verschuuren has written more than 200 publications in the field of environmental law, including several books, and many articles in outstanding refereed journals throughout the world. He is the editor of the Research Handbooks in Climate Law series. Stefan E. Weishaar is Professor of Law and Economics at Groningen University. Stefan is a research affiliate at MIT Center for Energy and Environmental Policy Research in Boston (USA) and Adjunct Professor at the School of Law and Economics at China University of Political Science and Law. He is also a member of the UN Subcommittee on Environmental Taxation. Stefan has a keen interest in the working of markets and regulatory instruments. His work covers several Law and Economics domains in the areas of Climate & Energy law, Competition law, Procurement law and Market integration. Kirsten Williams is a Juris Doctor Candidate at the University of Houston Law Center and Chief Articles Editor of the Houston Law Review. After graduation in May 2022, Kirsten will clerk for Judge Andrew Edison in the Southern District of Texas for the 2022–2023 term. Alexander Zahar is Professor of International Law at Southwest University of Political Science and Law, in Chongqing, China. His research interests are in international climate change law, as well as climate change law in China. He is the founder and editor of the journal Climate Law (Brill). His most recent books are two edited volumes: Climate Change Law in China in Global Context (Routledge, 2020; with Hao Zhang and He Xiangbai), and Debating Climate Law (Cambridge University Press, 2021; with Benoit Mayer). Cathrin Zengerling is an associate professor at the Faculty of Environment and Natural Resources at the Albert-Ludwigs-University of Freiburg and works primarily in the areas of (international) environmental, energy and planning law as well as sustainable urban development. She holds a PhD in International Environmental Law from the University of Hamburg

Contributors  xiii and a Master’s of Laws from the University of Michigan. She heads the research group ‘Urban Footprints – Towards Greater Accountability in the Governance of Cities’ Carbon and Material Flows’, funded by a Freigeist-Fellowship of the Volkswagen Foundation. Her current research focuses on the role of cities in combating climate change and resource depletion, legal steering of the energy transition in a multilevel governance system, climate litigation, and climate change and trade. Juliana Zuluaga Madrid is a lawyer and researcher, with a focus on environmental and energy law. In 2008 she obtained a Bachelor of Law degree (Universidad Católica de Oriente) and in 2011 the degree of Master of Laws in Energy and Environmental Law (KU Leuven). In September 2020 she obtained the degree of Doctor of Philosophy in Law from KU Leuven (Belgium). Since October 2019 she has been Senior Lawyer at Gran Tierra Energy, an oil and gas company with operations in Colombia and Ecuador and has been an academic advisor in mining and environmental law at Universidad del Rosario (Bogotá, Colombia).

PART I CLIMATE CHANGE MITIGATION LAW – ARCHITECTURE AND GOVERNANCE

1. Climate change mitigation and the role of law Leonie Reins and Jonathan Verschuuren

1

WHAT IS CLIMATE CHANGE MITIGATION?

The IPCC defines mitigation simply as ‘a human intervention to reduce the sources or enhance the sinks of greenhouse gasses’.1 Sources of greenhouse gas (GHG) emissions are not only large CO2-emitting installations like coal-fired power plants, industrial plants or fossil fuel-powered engines in cars, ships and aircraft. Powerful GHGs like methane (CH4) and nitrous oxide (N2O) are emitted in agriculture (mostly by livestock, but also through the use of synthetic fertilisers) and in waste management, whereas hydrofluorocarbons are used in appliances for air conditioning and refrigerating. Sinks of greenhouse gases take up CO2 from the atmosphere. These are not just forests, but also all other types of vegetation as well as soils. Enhancement of sinks, therefore, are measures such as afforestation or reforestation, (re)introducing natural vegetation and soil management. Although mitigation policies across the globe have matured since the first edition of this Research Handbook was published, the results of these policies are still largely insufficient. In its Fifth Assessment Report (AR5), the IPCC concluded that ‘the current trajectory of global annual and cumulative emissions of GHGs is inconsistent’ with the goal of limiting global warming to between 1.5 to 2 degrees Celsius above the pre-industrial level.2 One year later, in 2015, the Paris Agreement had codified this goal.3 In 2021, the IPCC, in its Sixth Assessment Report (AR6), reached a similar conclusion, as emissions have continued to rise.4 In 2021, the International Energy Agency concluded that ‘commitments made to date fall far short of what is required by’ a global pathway to net‐zero emissions by 2050.5 This means that further human interventions to reduce the sources and enhance the sinks of greenhouse gases are still very much needed.

For example, R. van Diemen (ed.), ‘Annex I: Glossary’ in P. R. Shukla et al. (eds), ‘Climate Change and Land: An IPCC special report on climate change, desertification, land degradation, sustainable land management, food security, and greenhouse gas fluxes in terrestrial ecosystems’ (IPCC 2019) 819. 2 D. G. Victor et al., ‘Introductory Chapter’ in O. Edenhofer et al. (eds), Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2014) 113. 3 Paris Agreement (13 December 2015), (2016) 55 ILM 740, entered into force 4 November 2016. 4 Richard P. Allan et al., ‘Summary for Policymakers’ in V. Masson-Delmotte et al. (eds), Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2021). 5 International Energy Agency, ‘Net Zero by 2050. A Roadmap for the Global Energy Sector’ (IEA 2021) 13. 1

2

Climate change mitigation and the role of law  3

2

THE HISTORY OF CLIMATE CHANGE MITIGATION LAW6

Although climate change has been discussed by a few as an environmental problem from as early as the late 19th century, and by many more since the late 1950s,7 early international environmental law did not focus on it. In 1979, a panel of experts convened by the US National Academy of Sciences concluded that a doubling of the CO2 level compared to pre-industrial levels would probably lead to a warming of about 3 °C (plus or minus 50 per cent) in the 21st century.8 In 1985, climate experts from 29 countries called upon the international community to draft an international agreement to limit greenhouse gas emissions in a meeting that was sponsored by the United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO).9 Three years later, both international organisations managed to get enough support for the endorsement of the creation of the Intergovernmental Panel on Climate Change (IPCC) by the United Nations’ General Assembly.10 In this Resolution, the General Assembly ‘urges upon governments, intergovernmental and non-governmental organizations … to treat climate change as a priority issue’.11 The global framework was created four years later, with the adoption of the United Nations Framework Convention on Climate Change (UNFCCC) at the UN Conference on Environment and Development in Rio de Janeiro in 1992.12 The UNFCCC required all states to implement a mitigation policy, without, however setting a target.13 It was only with the adoption of the Kyoto Protocol in 1997 that legally binding mitigation targets were imposed, if only for a limited number of developed countries.14 The main legacy of the Kyoto Protocol may very well be the fact that it proposed the use of a range of flexible mitigation instruments,15 some of which were aimed at using the global market mechanism, such as the Emissions Trading System,16 Joint Implementation,17 and the Clean Development Mechanism.18 These instruments still play an important role in mitigation policies across the world.

This section uses a small part of Jonathan Verschuuren, ‘Climate Change’ in Duncan French and Louis Kotzé (eds), Research Handbook on Law, Governance and Planetary Boundaries (Edward Elgar Publishing 2021) 246–260. This issue is further discussed in Chapter 2. 7 For a good account of the history of climate science, see Spencer R. Weart, The Discovery of Global Warming. Revised and Expanded Edition (2nd edn, Harvard University Press 2008). 8 Ibid. at 100. 9 UNEP, ‘Annual Report of the Executive Director’ (1985), IV, paras 138–140. 10 UN General Assembly Resolution 43/53, ‘Protection of Global Climate for Present and Future Generations of Mankind’ of 6 December 1988. 11 Ibid. at para. 6. 12 United Nations Framework Convention on Climate Change (9 May 1992), (1992) 31 ILM 849, entered into force 21 March 1994. 13 Article 4(1) UNFCCC. 14 Kyoto Protocol to the United Nations Framework Convention on Climate Change (11 December 1997), (1998) 37 ILM 22, entered into force 16 February 2005. 15 Javier de Cendra de Larragán, ‘The Kyoto Protocol with a Special Focus on the Flexible Mechanism’ in Daniel A. Farber and Marjan Peeters (eds), Climate Change Law (Edward Elgar Publishing 2016) 227–238. 16 Article 17 Kyoto Protocol. 17 Article 6 Kyoto Protocol. 18 Article 12 Kyoto Protocol. 6

4  Research handbook on climate change mitigation law One of several severe shortcomings of the Kyoto Protocol is the absence of an overarching end goal at which states should focus their long-term mitigation policies. It was the European Council, the EU institution of Ministers of the Environment of the EU Member States, which, in 1996, decided that global average temperatures should not exceed 2 degrees above pre-industrial levels and that concentration levels lower than 550 ppm CO2 should guide global limitation and reduction efforts.19 In its decision, the Council referred to the IPCC’s report, without indicating how and why this aim was chosen. This decision did not gain wide international support, but did seem to prepare policymakers for adopting an overall climate change target.20 It was not until the 2009 Copenhagen COP that this target was adopted under the UNFCCC, paving the way for a ‘bottom-up’ approach for parties setting their own mitigation objectives, and not until the 2015 Paris Agreement (PA) before it made its way into a legally binding treaty text.21 The Paris Agreement requires all contracting states to hold the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels.22 Hence, mitigation is central to the Paris Agreement (see further Chapter 2). According to Article 4 of the Paris Agreement, all states have to submit their own nationally determined contributions (NDCs) so as to collectively achieve the global target, and are ‘to reach global peaking of greenhouse gas emissions as soon as possible’ and ‘to undertake rapid reductions thereafter in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century’.23 Article 4 is complemented by Article 5 on the conservation and enhancement of sinks, reservoirs of GHGs and forests and Article 6 on the international transfer of mitigation outcomes. In order to reach the mitigation target of well below 2 °C and hence implement Article 4 of the PA in practice, several other Articles of the PA provide the necessary framework. Article 9 on finance, Article 10 on technology development and transfer, Article 11 on capacity-building, Article 13 on transparency, Article 14’s global stocktake and Article 15 establishing the Agreement’s compliance mechanism ‘all aim at monitoring and promoting effective … mitigation action’.24 As a consequence of this approach, since 2015, all states are required to develop and implement strict mitigation policies aimed at achieving this collective goal. Law plays an important role in these policies, even though the Paris Agreement itself, respecting the principle of sovereignty of states, does not prescribe any concrete methods.

19 1939th Council Meeting – Environment, Brussels, 25–26 June 1996, Community Strategy on Climate Change, para. 6, available at https://​ec​.europa​.eu/​commission/​presscorner/​detail/​en/​PRES​_96​ _188 accessed 4 June 2021. 20 See extensively Yun Gaoa, Xiang Gaob, Xiaohua Zhang, ‘The 2 °C Global Temperature Target and the Evolution of the Long-Term Goal of Addressing Climate Change—From the United Nations Framework Convention on Climate Change to the Paris Agreement’ (2017) 3 Engineering 272–278. 21 Judith Blau, ‘The Long, Long Road to Paris’ in J. Blau, The Paris Agreement (Palgrave Macmillan 2017) 23–31. 22 Art. 2(1)(a) Paris Agreement. See further Halldór Thorgeirsson, ‘Objective (Article 2.1)’ in Daniel Klein, Maria Pia Carazo, Meinhard Doelle, Jane Bulmer and Andrew Higham (eds), The Paris Agreement on Climate Change. Analysis and Commentary (Oxford University Press 2017) 123–130. 23 Article 4(2) Paris Agreement. 24 Benoit Mayer, ‘Article 2 – Aims, Objectives and Principles’ in Geert van Calster and Leonie Reins (eds), The Paris Agreement on Climate Change – A Commentary (Edward Elgar Publishing 2021) 4.01.

Climate change mitigation and the role of law  5

3

CLIMATE CHANGE MITIGATION AND THE ROLE OF LAW

In its AR5, the IPCC concluded that ‘deep cuts in emissions will require a diverse portfolio of policies, institutions, and technologies as well as changes in human behaviour and consumption patterns’.25 Although the word ‘law’ is absent, it is obvious that law plays a key role in the diverse portfolio that the IPCC mentions here. Current mitigation laws around the world provide for carbon pricing mechanisms, such as carbon taxes or emissions trading systems, subsidies and feed-in tariffs on renewable energy, zoning decisions for wind farms and solar fields, energy efficiency standards for cars and buildings, rules on waste management and landfills, rules on farming practices such as rotational grazing or shallow tillage, meat taxes and rules on the protection and management of trees and forests. So far, most attention has been focused on the energy sector. This was to be expected since the energy sector is responsible for around three‐quarters of greenhouse gas emissions.26 Over the past 20 years or so, this focus on energy has already led to the development and implementation of many laws aimed at discouraging the use of fossil energy and at promoting the generation and use of renewable energy. Yet, the International Energy Agency recently noted that an immediate and massive deployment of all available clean and efficient energy technologies is required between 2021 and 2030 if we are to get on track towards achieving the Paris Agreement goals.27 This means that existing laws will have to be tightened and new legal instruments need to be developed. With the energy transition underway, the other sectors are now under increased scrutiny. GHG emissions from sectors that until now were hardly touched by legally binding mitigation laws, such as the aviation and shipping sectors and the agricultural sector, will have to be regulated as well in order to achieve the Paris Agreement goals. Regulating GHG emissions from these sectors comes with many legal challenges, for example because of the transboundary nature of aviation and shipping, and because of the enormous number of very different farms around the world. Although the dominant role of law in climate change mitigation is to provide instruments for change, law also has a protective role. Human rights of individual people need to be protected against the impacts of climate change, but also against adverse side effects of mitigation measures (such as the construction of a large wind turbine close to someone’s home). Such side effects can also affect other vulnerable interests such as biodiversity and landscapes. Law also provides protection for businesses against unfair competition or other trade distortions caused either by climate change itself or by climate change mitigation policies adopted by governments. Law also shapes institutions and decision-making processes that are needed to help the world transition to a modus operandi that remains within the planetary boundary of a safe climate.

Victor et al., above note 2 at 114. IEA, above note 5 at 13. 27 Ibid. at 14. 25 26

6  Research handbook on climate change mitigation law

4

LINKS BETWEEN MITIGATION AND ADAPTATION

Mitigation cannot be regarded in isolation from adaptation.28 In the past, mitigation has had a stronger standing in international (and often also national) law;29 however, during the last two decades, it has emerged that mitigation as the only strategy is not enough; the world also has to adapt to the impact of climate change.30 In the Paris Agreement, this is, for example, reflected by the fact that, besides mitigation, adaptation is also addressed in a stand-alone Article.31 The current approach is that not only are they both important elements of any climate change policy, they are also positively and negatively interlinked. First, mitigation measures in the land and land use sector may equally serve adaptation goals. Afforestation, reforestation, and preserving and restoring mangroves, with the goal of sequestering carbon, can also be part of an adaptation strategy aimed at protecting the land against flooding, against landslides following intense rainfall, or against the negative impact of storms. The same goes for many mitigation measures in agriculture: increased carbon sequestration through planting and protecting natural vegetation on farmland, rotational grazing, agroforestry and soil carbon sequestration not only reduce emissions, but also create resilient and more healthy agricultural soils that are more resistant to droughts. Green buildings and green roofs reduce energy consumption and carbon uptake, while at the same time providing protection against the negative impact of heat waves. The second link between adaptation and mitigation is a negative one. Adaptation measures can be harmful to mitigation goals in the sense that they may lead to (a) more greenhouse gas emissions; or (b) a reduction of carbon uptake. The examples are obvious. Installing air conditioners to combat the heat leads to more energy consumption and thus, if the energy comes from a coal-fuelled energy installation, to higher emissions. Replacing a natural coastal habitat with a large sea wall to combat sea level rise and storm surges leads to a loss of natural carbon uptake. Mitigation measures, on the other hand, can be harmful for adaptation as well. Afforestation in arid and semi-arid regions strongly reduces water yields and thus has a negative impact on local agriculture and biodiversity. Switching to hydropower may reduce irrigation options for farmers and thus deprive them of adaptation opportunities.

The IPCC defines adaptation as ‘In human systems, the process of adjustment to actual or expected climate and its effects, in order to moderate harm or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate and its effects; human intervention may facilitate adjustment to expected climate and its effects.’ It differentiates between ‘incremental adaptation’, namely ‘Adaptation that maintains the essence and integrity of a system or process at a given scale. In some cases, incremental adaptation can accrue to result in transformational adaptation (Termeer et al., 2017; Tàbara et al., 2018)’ and ‘transformational adaptation’, namely ‘Adaptation that changes the fundamental attributes of a socio-ecological system in anticipation of climate change and its impacts’; https://​www​ .ipcc​.ch/​sr15/​chapter/​glossary/​. 29 Navraj Singh Ghaleigh, ‘Article 2 – Aims, Objectives and Principles’ in Geert Van Calster and Leonie Reins (eds), The Paris Agreement on Climate Change – A Commentary (Edward Elgar Publishing 2021) 2.19. 30 IPPC, Fourth Assessment Report (2007), 101: ‘mitigation will always be required to avoid “dangerous” and irreversible changes to the climate system. Irrespective of the scale of mitigation measures that are implemented in the next 10–20 years, adaptation measures will still be required due to inertia in the climate system.’ 31 Article 7 PA. 28

Climate change mitigation and the role of law  7 It is clear that adaptation and mitigation policies have to be developed together, so that they are mutually beneficial.32 In this regard, the IPCC states that ‘Many adaptation and mitigation options can help address climate change, but no single option is sufficient by itself. Effective implementation depends on policies and cooperation at all scales and can be enhanced through integrated responses that link mitigation and adaptation with other societal objectives.’33 Therefore, although this book focuses on mitigation law, the authors sometimes discuss the relationship with adaptation law. For a more detailed discussion of climate change adaptation law, we refer to the Research Handbook on Climate Change Adaptation Law.34

5

THE FOCUS OF THIS BOOK

What is the status of current climate change mitigation law around the world? How have emissions from the relevant GHG emitting sectors been addressed? What are the remaining legal challenges and barriers to climate change mitigation and how can they be overcome? These are the main questions that we address in this book. The book answers these questions from a primarily legal perspective. We do, however, take a broad view on law. In the field of climate change mitigation law, law and policy are intimately connected, as law is primarily (but not only) used as an instrument to curb GHG emissions. Furthermore, since market-based instruments play a pivotal role in mitigation policies, and since these policies also target consumer behaviour, there is no sharp boundary between law and socio-economic disciplines. Therefore, many chapters also discuss wider issues that are not strictly legal. The set-up of the book is as follows. The book has been divided into four parts. Part I deals with the architecture and governance of mitigation law with a focus on the international law framework. Chapter 2 takes stock of the evolving architecture of what can be described as ‘global climate law’. Complementing a traditional account of the history of the international legal regime for climate change, the chapter identifies seven overarching trends that have come to characterise the changing architecture of global climate law, namely: (i) the growing number of international forums addressing climate change; (ii) the softening of commitments; (iii) the changing nature of differentiation; (iv) the use of market-based instruments; (v) the rise of national climate change legislation; (vi) increasing climate-related litigation; and (vii) the growing importance of non-state actors. The chapter concludes by indicating that a diversity of governance approaches to climate change is to be expected to the extent that global aspirations to avoid dangerous climate change remain unachieved. Chapter 3 then deals with the role of the precautionary principle and scientific uncertainty in climate change mitigation. It analyses the implications of the precautionary principle on mitigation measures and highlights the specific features of climate change risks and interlinked See Chapter 18 of the IPCC’s Working Group II AR4: R. J. T. Klein et al., ‘Inter-Relations between Adaptation and Mitigation’ in M. L. Parry et al. (eds), Climate Change 2007: Impacts, Adaptation and Vulnerability: Contribution of Working Group II to the Fourth Assessment Report of the Inter-governmental Panel on Climate Change (Cambridge University Press 2007) 745–777. 33 R. K. Pachauri et al., Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2015) 26. 34 Jonathan Verschuuren (ed.), Research Handbook on Climate Change Adaptation Law (2nd edn, Edward Elgar Publishing 2022). 32

8  Research handbook on climate change mitigation law uncertainties. It explores how the decision-making process could better integrate these uncertainties. It argues that the decision to enact mitigation measures must be a political decision, as opposed to a purely legal one. Part II reviews domestic and regional mitigation laws and policies around the world: Europe, North America, Central and South America, Asia-Pacific, Middle East, and Africa. A separate chapter has been dedicated to the emerging economics of the BRICS (Brazil, Russia, India, China, South Africa). These chapters discuss the specific problems that the individual regions face in regard to climate change mitigation, and provide an overview of the international law context that is specific for the region, with a focus on the Paris Agreement and the respective NDCs in particular. Then for most of the regions, a comparative approach comparing the climate change mitigation approaches, including the relevant laws and policies, is adopted, with a focus on at least two jurisdictions per region. More precisely, Chapter 4 focuses on some core developments in EU climate legislation and policy. It examines the European climate law with the aim of achieving climate neutrality at the latest by 2050 and the establishment of financial approaches, such as the Taxonomy Regulation, as well as climate litigation at the European level. Moreover, the chapter examines the relationship of Union law and the Paris Agreement and its consequences for adjudication in the EU and national orders, such as the interpretation of what is to be understood by the ‘highest possible ambition’. Chapter 5 turns to the examination of the law and policy framework for climate change mitigation in the United States and Canada. As developed countries and large historical and current contributors of greenhouse gas emissions, these jurisdictions bear considerable responsibility to take strong action to mitigate climate change. As the chapter concludes, national mitigation policies in both countries, however, fall far short of this. The chapter describes and evaluates the respective national climate change mitigation policies with a view to explaining what political, structural, legal and economic factors cause them to take such different forms in the two neighbours. The chapter concludes that in both countries national mitigation policies are generally haphazard, fractious, and insufficient to satisfy their global responsibilities, and that robust policy action has been stymied over the past three decades in large measure because of political concerns about the economic costs of adopting mitigation measures and the outsized influence of fossil fuel interests. However, distinct legal, political and economic dynamics in the United States and Canada frustrate the development of effective national climate change mitigation policies for quite different reasons, meaning that one should expect their respective policy solutions to continue to be idiosyncratic into the future, even in moments of ideological alignment between their governments. Chapter 6 on climate change mitigation law and policy in Central and South America focuses on the issues that the region (in particular Brazil, Colombia and Mexico) faces in the process of implementing each country’s policies and regulations to mitigate climate change and comply with their nationally determined contributions. The main aspects relate to the crucial importance of international cooperation to achieve significant reductions in greenhouse gas emissions, an overview of the economic and political challenges and the opportunities to channel efforts for mitigation in the land use sector to promote sustainable GHG reductions, improve the living conditions of the population in rural areas and strengthen adaptation capacities across the region. Chapter 7 scrutinises 15 large or highly industrialised countries in the Asia-Pacific region, beginning with their recent greenhouse gas emissions and mitigation targets under the Paris

Climate change mitigation and the role of law  9 Agreement. The chapter then reviews the countries’ mitigation laws and policies and examines their mitigation ambition in comparative perspective. Several grounds of concern about the mitigation of greenhouse gas emissions in the Asia-Pacific emerge from this analysis. In brief, the developed countries in the region have little leftover capacity to reduce their emissions, whereas most of the Asia-Pacific’s developing countries appear intent on increasing their emissions through to 2030 – with some planning to continue emissions growth through to 2050. Of most immediate concern is that almost all developing countries in the region (Korea and Singapore being the exceptions) struggle to report their emissions fully and accurately. Therefore, they are not presently in a position to track their mitigation targets. Chapter 8 focuses on the Middle East. The region is of special interest, as it has heavily been affected by negative climate change impacts and on the other hand, it mainly relies on the exploitation of its natural resources such as oil and gas, which are sources of GHG emissions. Therefore, it is faced with a dilemma in addressing climate change issues. The NDCs and mitigation law and policies of the Islamic Republic of Iran and the State of Qatar will be analysed in detail, with the conclusion that both countries need technological assistance in order to achieve their respective climate targets. It is further concluded that the potential of achieving Iran’s targeted mitigation as indicated in its INDC and its national law and policies is not high, mainly because of international and unilateral sanctions which are imposed on the country and restrain transfer of technology and financial support. Chapter 9 turns to the analysis of climate change mitigation law and policy in Brazil, Russia, India, China and South Africa (i.e., the BRICS). It concludes that while all five countries are aiming high to decarbonise their economies, this happens largely at their own pace based on their national economic circumstances. In particular, China and India are expected to pay specific attention to climate change mitigation in the coming years. Chapter 10 discusses the law and policy documents in Africa. To date, countries in Africa have understandably focused on adaptation priorities, mindful of the high levels of vulnerability on the continent and its relatively low emissions profile. That notwithstanding, regional and national policies are increasingly emphasising the value and need for low carbon development, and the importance of international financial and technical support to do so. Legislative developments have also proliferated. There are now a number of sector-specific laws across multiple countries, including dedicated statutes and regulations on energy efficiency; energy generation and renewable energy; carbon pricing; forestry; and laws establishing dedicated climate change funds within Africa. A handful of countries have also either developed a framework climate change law or are in the process of developing one. This chapter explores the sectoral and framework laws that have been passed to date, focusing on the Kenyan Climate Change Act and the Ugandan Climate Change Bill, as well as the wider implications for regional climate change legal developments. Part III zooms in to cross-cutting issues and at the same time important legal tools that are applied with the aim of reducing GHG emissions, namely carbon trading and climate finance and climate litigation. Climate finance and carbon trading are both under pressure in the current times of crisis and government austerity, but at the same time receiving increased (legal and political) attention in several jurisdictions. Lawsuits are an inevitable part of any legal system and that is no different with climate change, which has become a central challenge of our time. Climate litigation is certainly on the rise all over the world and is gaining increasing relevance and importance as a mitigation tool. As in Part II, the chapters in Part III

10  Research handbook on climate change mitigation law also illustrate the international legal framework for these tools and several chapters then also compare at least two jurisdictions where these tools are of special importance. More precisely, Chapter 11 on climate finance examines the role of public and private finance in facilitating greenhouse gas abatement and climate mitigation, with a focus on the Green Climate Fund. Further, public funding instruments of transportation, utility financing of energy efficiency, the use of revenues from pollution taxes and allowance trading programmes, as well as the use of COVID recovery funds to aid carbon abatement, are elaborated on. Special attention is paid to green bonds, a newly emerging private financing mechanism. The chapter concludes that, while progress on climate finance has been made, the achievement of the mitigation (and adaptation) goals set out by the Paris Agreement requires a major increase in climate finance. Chapter 12 presents the international legal framework on carbon trading and tracks the development of prominent Emissions Trading Systems (ETS) at regional (EU) and at national level (China), and critically assesses their ability to incentivise transitions. The chapter pays particular attention to price support schemes, offset rules and leakage measures. With increasingly ambitious climate targets, it is expected that carbon leakage safeguards (conventionally free allocation to exposed sectors) will have to change in order to incentivise the transition towards a low carbon economy of energy-intensive and trade-exposed industry. In the alternative, border carbon adjustments are required. This chapter therefore also discusses border carbon adjustment measures under WTO rules. It concludes that the European rules were effective in protecting industry but not in incentivising a carbon transition of the economy and that many critical design elements of China’s national ETS are still unknown. Chapter 13 delves into the issue of climate litigation and its potential for mitigation. Climate litigation is exploding across the globe with over 1600 cases pending in various courts in over 30 countries. The claims are based on statutory and administrative law, constitutional law, common law, and international law. There has been a marked increase in ‘rights-based’ claims in the past few years. The results so far are mixed but there have been significant victories that have spurred stronger government measures to reduce greenhouse gas emissions, forced more robust assessment and disclosure of climate risks, slowed the pace of fossil fuel development, pressured banks and financial institutions to rethink investments in new fossil fuel infrastructure, and protected the natural systems serving as carbon sinks. It is concluded that litigation activities will rise further and future cases will expand the human rights basis for climate litigation, keep the pressure on governments or government agencies to increase their ambitions, pressure financial institutions to shift investment to cleaner forms of energy and transportation, and seek to hold the fossil fuel industry accountable for climate damage and abatement. Finally, Part IV discusses the sectors that are primarily targeted in climate change mitigation policies, as these sectors contribute significantly to GHG emissions: energy, transport, cities, industry, agriculture, forestry and other land uses, and waste management.35 This part also has a chapter on carbon dioxide removal, attributed to the fact that it has been argued that both the ‘Article 2(1)(a) [of the Paris Agreement] mitigation objective and its explanation in Article 4(1) have been read as an implicit recognition of the need for negative emissions technologies This largely reflects the sectoral approach taken by the IPCC that discusses the six sectors of energy supply; transport; buildings; industry; agriculture, forestry and other land use (AFOLU); and human settlements and infrastructure in its assessment reports. 35

Climate change mitigation and the role of law  11 (NETs) such as bioenergy with carbon capture and storage (BECCS)’.36 Individually the chapters offer thoughtful discussions of these sectors. Collectively they illustrate the wide range of strategies that could be adopted to meet the challenge of mitigating climate change on a sector-by-sector basis. Thereto, in its Fifth Assessment Report, the IPCC noted that ‘Mitigation options are available in every major sector. Mitigation can be more cost-effective if using an integrated approach that combines measures to reduce energy use and the greenhouse gas intensity of end-use sectors, decarbonize energy supply, reduce net emissions and enhance carbon sinks in land-based sectors.’37 Chapter 14 reviews the regulatory and policy instruments to promote decarbonisation in the energy sector. The chapter provides an overview on the policy, legislative and regulatory frameworks put in place to promote decarbonisation in the energy sector, with examples from the EU and the United States. In particular, it focuses on the promotion of renewable energy and energy efficiency. Chapter 15 reviews the mitigation activities in the transportation sector, consisting of aviation, terrestrial and marine shipping modes. It scrutinises the measures adopted on the international level for these sectors and provides an analysis of the mitigation-related law and policy framework of the three transportation modes. On aviation, the ‘basket of measures’ approach adopted in recent years by the International Civil Aviation Organization is canvassed. Terrestrial transportation, with little international regulation towards mitigating GHG emissions, whether under the UNFCCC framework or a single transnational organisation, is considered in its technical and social dimensions within states in an effort to reveal possibilities for the other two modes. Global ocean-going or international shipping is then assessed, including evaluation of the addition of climate change measures to a comprehensive air pollution control regime. The conclusion addresses prospective problems in shaping and applying the law to address greenhouse gas emissions across the sector as a whole. Chapter 16 plays tribute to the fact that cities are an increasingly visible actor in global climate governance with a significant potential to significantly contribute to climate change mitigation efforts. The comparative analysis of urban climate governance in São Paulo, Hamburg and Cape Town and its embeddedness in national legal frameworks shows that cities have a meaningful scope of action and instrumental ‘tool box’ to address climate change in the different jurisdictions. The case studies highlight a broad range of mitigation efforts but also several challenges. It is argued that future development of climate change mitigation law and policy at all levels should strengthen cities’ efforts in the low carbon transformation in line with the goals of the Paris Agreement. Chapter 17 turns to mitigation law and policy in the agriculture, forestry and other land use (AFOLU) sector. Although emissions from AFOLU are a large contributor to climate change, and although this sector has the potential to sequester large quantities of atmospheric CO2, there are few legal and policy instruments in place that specifically target these emissions and this sequestration potential. At the international level, the most relevant instrument is REDD+, which, however, is still being developed and for which large-scale implementation is still

Charlotte Streck, Paul Keenlyside and Moritz von Unger, ‘The Paris Agreement: A New Beginning’ (2016) 13 Journal for European Environmental & Planning Law 3, 10–11 as cited in Benoit Mayer, ‘Article 2 – Aims, Objectives and Principles’ in Geert van Calster and Leonie Reins (eds), The Paris Agreement on Climate Change – A Commentary (Edward Elgar Publishing 2021) 4.06. 37 Pachauri et al., above note 33 at 28. 36

12  Research handbook on climate change mitigation law lacking. At the regional level, the EU’s LULUCF Regulation and its Common Agricultural Policy offer some first legal measures aimed at reducing AFOLU emissions. The EU has embarked on an ambitious legislative process which will have a big impact on the AFOLU sector post 2030. Law seems especially relevant to safeguarding food security under climate change mitigation policies, to advancing climate-smart agriculture and agroforestry, to steering consumers’ dietary choices and to increasing the role of forests. Chapter 18 explores climate change mitigation options in the industrial sector. While many legal rules and paradigms work from the assumption that since the corporation is a legal person, it must have a ‘singular mind’, this chapter explores the alternative concept, that the corporation is still composed of many people and that corporate decisions are subject to the studies of voting theory, social choice theory, and anticommons decision structures. This chapter explores what that might mean for industry and corporate actors who are attempting to achieve carbon reduction strategies to enable climate change mitigation. Chapter 19 on waste management analyses the international and European Union waste management regime as it applies in the specific context of climate mitigation, as well as the implications for waste recovery operations and carbon capture and storage. At the international level, no common legal framework exists that manages waste comprehensively, as the focus is on end-of-pipe waste disposal issues. On the other hand, the EU aims to convert waste management policies to pursue the circular economy. Since CO2 will continue to act as a climate forcer for centuries, we cannot just focus on reducing new emissions. It is inevitable that we also must remove CO2 from the atmosphere. Chapter 20 outlines the scope of this challenge and its legal consequences. It outlines the need for GHG removal from the ambient atmosphere, overviews the strictures of international law that will shape the pace and scale of GHG removal at the transnational and domestic levels, and compares the approaches of two leading jurisdictions to implement effective GHG removal policies. As illustrated above, Parts III and IV do not focus on a specific domestic or regional legal system. Instead, we take a transnational, multilevel governance view, focusing on the international, the regional, and the domestic level, using examples from around the world. While Part II discusses the way in which domestic laws deal with mitigation, Parts III and IV transcend national legal specifics and thus offer a better view of the main issues to be addressed as well as potential solutions at a more generic level. Although this is the second edition of this Research Handbook, we would like to stress that we made a fresh start to it. New topics were added, new authors were approached and most chapters are new chapters or have been completely rewritten so as to have a fully up-to-date book.

6 CONCLUSIONS On an international level, the original treaty architecture for climate change mitigation has been supplemented, or even replaced by a ‘more complex, less clear-cut governance architecture’38 with ‘voluntary pledges, non-state actors and flexible policy instruments.39 It is, See Chapter 2. Ibid.

38 39

Climate change mitigation and the role of law  13 however, also argued that ‘this approach is needed in light of the urgency of the climate challenge, [where] arriving at practical solutions should arguably take precedence over formal preoccupations’.40 Looking at the practical implementation of international law, whereas most jurisdictions examined in this Handbook have adopted NDCs under the Paris Agreement, it also became apparent that most jurisdictions are far away from actually reaching their contributions, even though climate change mitigation-specific legislation has been adopted in almost all of the discussed jurisdictions. In the European Union, the ‘ambition of the European Green Deal – complement[s] and widen[s] the EU climate law acquis enormously’, even though it is hugely complex and presents challenges for implementation at Member State level.41 In the United States and Canada, ‘concerns about the economic costs of adopting mitigation policy measures and the outsized influence of fossil fuel interests have effectively stunted the development of robust climate change mitigation policy’.42 Achieving the climate goals in the Latin American region is conditioned on receiving appropriate financial assistance from developed countries and ‘emissions come with a high opportunity cost’.43 In the Asia-Pacific region, it emerges that whereas the developed countries in the region have little leftover capacity to reduce their emissions, the developing countries are ‘intent on increasing their emissions through to 2030—with some planning to continue emission growth through to 2050. Of most immediate concern is that almost all developing countries in the region (Korea and Singapore being the exception) struggle to report their emissions fully and accurately.’44 In the Middle East, whereas Iran and Qatar have submitted NDCs, the underlying mitigation plans are conditional upon lifting the economic sanctions (in the case of Iran) and on international support in the case of Qatar. Whereas Iran has submitted specific mitigation targets as part of its mitigation plan, Qatar ‘does not specify any target in its mitigation plan [but is] committed to present a national program to mitigate GHG emissions, taking into account their domestic capabilities’. A similar picture emerges for the BRICS countries. All five countries are ‘aiming high to decarbonize their economies at their own pace based on their national economic circumstances’.45 In order to realise the mitigation objectives of the different regions under the Paris Agreement, overarching tools such as climate finance, carbon trading and climate change litigation are crucial. These tools are discussed in Part II of the book. Climate finance is and has been ‘central to international efforts to limit and respond to climate change’.46 Even though private finance is growing and green financial markets are flourishing, the COVID-19 crises and the fact that key actors are not collaborating on global public finance still result in the scenario that only 20 per cent of the required financial assistance is available.47 On the other hand, it can be argued that the ‘recovery from the pandemic provides fresh opportunities to enhance both the fairness and the scale of climate finance’.48 Emissions trading instruments and carbon border adjustments are seen as another tool to mitigate emissions from covered Ibid. Chapter 4. 42 Chapter 5. 43 Chapter 6. 44 Chapter 7. 45 Chapter 9. 46 Chapter 11. 47 Chapter 11. 48 Chapter 11. 40 41

14  Research handbook on climate change mitigation law sectors. Several jurisdictions have implemented emission trading schemes (ETS) and carbon pricing instruments, even if they are different in design. For all of them it has turned out that ‘setting the right incentives is critical to foster economic transition’,49 as well as establishing how to deal with carbon leakage. Hence, ‘border carbon adjustments will be critical in a world where some jurisdictions have stronger climate ambitions than others’.50 Regarding the role of climate litigation, it can be concluded that litigation in itself is not going to lead to any considerable emissions reductions but plays an important role in ‘holding the government and private sector accountable for [their (in)] actions’.51 The sheer number of litigation cases around the world pay tribute to the fact that over the last decade, climate litigation has developed into an important tool in order to ‘force’ countries to implement climate mitigation law and policies. Looking at the individual sectors, it has been concluded that there is ‘no doubt’ that the impacts on the climate and its changes are linked to the ‘growth in human activities in the aftermath of the industrial revolution’.52 However, the long-term impacts are still uncertain, ‘partly resulting from a lack of knowledge of the climate systems and the limitations of scientific research’.53 The energy sector is one of the sectors with the biggest mitigation potential and under the umbrella of the ‘energy transition’, renewable energy projects and energy efficiency measures have been introduced around the world. Increasingly, however, the ‘cost-efficiency and the question of who is ultimately responsible for the costs involved in utilizing these sources’54 are being discussed alongside questions of equity. Further, regarding energy efficiency, it can be concluded that, whereas in the past the potential of efficiency measures was only poorly realised, in recent years ‘energy efficiency is not seen anymore only as a separate area of action, but instead it is resonating to other policy areas as well with a view to harnessing synergies between various policy measures’.55 The emission reduction attempts in the transportation sector are characterised by the fact that successful emission reductions taking place in the three modes of transportation – aviation, terrestrial and shipping – are ‘at risk of being outpaced by the overall increase’56 in the transportation sector’s activity. It is therefore concluded that the law ‘must be directed to the underlying factors, while pursuing incremental improvements in every aspect of transportation: mass movement in preference to individual, relentless effort to achieve efficiency, the modifying of user expectations and uses, and the exceptional problem of moving away from fossil fuel energy sources’.57 The role of cities in the architecture of inter- and transnational climate mitigation governance is increasingly important, even though the NDCs do not directly require municipalities to realise mitigation targets.58 However, further accessible funding mechanisms at state, national, supra- and international scales, ideally combined with the requirement of reaching GHG emis-

51 52 53 54 55 56 57 58 49 50

Chapter 12. Chapter 12. Chapter 13. Chapter 3. Chapter 3. Chapter 14. Chapter 14. Chapter 15. Chapter 15. Chapter 16.

Climate change mitigation and the role of law  15 sion reduction targets in line with the Paris Agreement, are needed in order to strengthen and realise the mitigation potential of cities. Regarding the AFOLU sector, it is surprising how ‘few legal and policy instruments [are] in place that specifically target these emissions and this sequestration potential’.59 At the international level, the REDD+ programme is still under development but seems already to be ‘rather far removed from large scale, global implementation’.60 The European Union is one of the jurisdictions that have developed an ambitious policy framework, but there also the concrete legal instruments still need to be developed. Although ‘industry’ is often thought to be a uniform sector that operates in a clear, rather hierarchical setting, it in fact is not. Corporations are very diverse and the outcome of decision-making processes on climate change mitigation strategies in individual corporations can be inefficient or errant.61 This implies that ‘stronger regulatory approaches that set more clear menus are recommended if policymakers seek to effectively change industrial behavior on climate change mitigation’.62 Regarding the waste sector, even if a common approach at the international level is missing and addressing climate mitigation is ‘not the main target of waste management laws’,63 the waste management legislation at international level includes ‘several specific anchors … with an important impact on climate change mitigation.’64 The reasons for the ‘(lack of) progress … lie elsewhere: in resources management; waste prevention; internalisation of environmental costs in all sources of energy and transport; etc.’65 The removal of surplus CO2 already present in the atmosphere is an emerging policy goal, and it is likely that this policy goal will remain with us for generations to come. There is a need for clear, consistent, and productive legal policy on greenhouse gas removals which will only grow in urgency if current efforts continue to produce inadequate emission reductions to prevent catastrophic climate damage to vulnerable populations and nations.66 One of the issues that deserves the attention of policymakers is the avoidance of unanticipated or undesired effects on social justice and sustainability.67 All in all, it can be concluded that, compared to the state of the art discussed in the first edition of this book, all actors, such as the international community and individual jurisdictions, but also the specific ‘high mitigation potential’ sectors, have stepped up their game, at least on paper. The Paris Agreement has given a much-needed push for the global community to formulate national mitigation targets and also strengthen the overarching instruments such as climate finance and carbon trading and pricing. More and more climate laws, policies and strategies emerge in the global arena. However, what is still lacking is actual implementation of the climate targets, pledges and strategies. The overall conclusion of this book is hence that we will most likely not be able to achieve the Paris Agreement goals without the individual

61 62 63 64 65 66 67 59 60

Chapter 17. Chapter 17. Chapter 18. Chapter 18. Chapter 19. Chapter 19. Chapter 19. Chapter 20. Chapter 20.

16  Research handbook on climate change mitigation law jurisdictions substantially stepping up their efforts in order to reach their NDCs and reducing emissions from all sectors.

2. The evolving architecture of global climate law Harro van Asselt, Michael Mehling and Kati Kulovesi

INTRODUCTION More than 30 years of international cooperation to tackle climate change have not yet produced the desired results in terms of climate stabilisation. Even though there is a solid scientific basis for international action to mitigate the causes and impacts of climate change, and progress has been made in cutting emissions, there is still a gap between pledged emission reductions and the goal included in the Paris Agreement of keeping global average temperature increases well below 2 °C relative to pre-industrial times while pursuing efforts to stay below 1.5 °C.1 The Intergovernmental Panel on Climate Change (IPCC) suggests that to keep global warming below 1.5 °C, carbon dioxide (CO2) emissions need to fall 45 per cent between 2010 and 2030, and reach ‘net zero’ by the middle of this century. To achieve 2 °C, emissions need to go down by 25 per cent by 2030, and ‘net zero’ should be reached by 2070.2 The required transformations across all major sectors of the economy (energy, land use, transport, buildings, and industry) will be ‘unprecedented in terms of scale’ and require ‘deep emissions reductions in all sectors, a wide portfolio of mitigation options and a significant upscaling of investments in those options’.3 Law and legal frameworks play a critical role in enabling or hindering the achievement of these ambitious goals. At the international level, the regime established by the 1992 United Nations Framework Convention on Climate Change (UNFCCC) has offered the foundation for further international cooperation. Climate diplomacy has been strengthened by the 2015 Paris Agreement, which plays a crucial role in the overall legal architecture by establishing the global goals and providing a legal framework for regularly updated national mitigation targets. Achieving these targets often requires new domestic legislation, including national climate laws establishing legally binding national mitigation goals. While climate-specific legal frameworks have thus emerged, it is increasingly clear that the relevant law on climate change not only spans multiple levels and a wide range of countries, but also cuts across different issue areas and involves a diverse set of actors, all contributing to a multipolar but densely connected legal space with planetary scope. Paris Agreement (adopted 12 December 2015; entered into force 4 November 2016) 55 ILM 740, Art. 2(1)(a). On the ‘emissions gap’, see United Nations Environment Programme (UNEP), Emissions Gap Report 2021 (UNEP 2021); and Niklas Höhne and others, ‘Emissions: World Has Four Times the Work or One-Third of the Time’ (2020) 579 Nature 25. The gap may be closing following the return of the United States to the Paris Agreement, with the Climate Action Tracker estimating that warming could be kept to 2.4 °C. Importantly, this estimate is based on commitments rather than actions. See Climate Action Tracker, ‘Warming Projections Global Update’ (May 2021) https://​climateactiontracker​.org/​ documents/​853/​CAT​_2021​-05​-04​_Briefing​_Global​-Update​_Climate​-Summit​-Momentum​.pdf. 2 IPCC, ‘Summary for Policymakers’ in Valérie Masson-Delmotte and others (eds), Global Warming of 1.5 °C (IPCC 2018) 1, 12. 3 Ibid. 15. 1

17

18  Research handbook on climate change mitigation law Against this background, this chapter examines the evolving architecture of what some have termed ‘global climate law’.4 Biermann and colleagues define ‘architecture’ as ‘the overarching system of public and private institutions that are valid or active in a given issue area of world politics. This system comprises organisations, regimes, and other forms of principles, norms, regulations, and decision-making procedures.’5 As explained in Section 1, we use the term ‘global climate law’ in a descriptive – rather than analytical or normative – fashion so as to cover an emerging body of law that dynamically blends national and international law, public and private law, hard and soft law, and state and non-state law. To examine these shifts in the architecture of global climate law, the chapter first puts forward several defining features of global climate law (Section 1). It then offers a short history of the international legal regime for climate change (Section 2). It complements this more traditional account by analysing seven cross-cutting trends that characterise the changing architecture of global climate law: (i) the growing number of international forums addressing climate change; (ii) the softening of commitments; (iii) the changing nature of differentiation; (iv) the use of market-based instruments; (v) the rise of national climate change legislation; (vi) increasing climate-related litigation; and (vii) the growing importance of non-state actors (Section 3).

1

WHAT IS GLOBAL CLIMATE LAW?

Any attempt to define ‘global climate law’ has to contend with the multiple layers of meaning embedded in each of its constituent elements. First, it requires an understanding of the relatively novel and, to some extent, contested idea of ‘global law’ before that can then be further traced to its intersection with climate change. Born out of scholarly engagement with the accelerating forces of globalisation,6 the notion of global law emerged as an effort to accommodate the legal ramifications of growing political, economic, and cultural interconnectedness in contemporary global affairs.7 More than merely adjusting for the physical and socio-economic realities of globalisation, however, global law describes a conception of law that is itself evolving in response. Definitions of global law vary and have elicited criticism

Daniel A. Farber and Marjan Peeters, ‘The Emergence of Global Climate Law’ in Daniel A. Farber and Marjan Peeters (eds), Climate Change Law (Edward Elgar Publishing 2016) 687. The notion of global climate law can be connected to that of ‘global environmental law’, which has been defined as ‘an evolving set of substantive principles, tools, and concepts derived from elements of national and international environmental law’. See Tseming Yang and Robert V. Percival, ‘The Emergence of Global Environmental Law’ (2009) 36 Ecology Law Quarterly 615, 664. For further discussion of global law and global climate law, see Section 1. 5 Frank Biermann and others, ‘The Fragmentation of Global Governance Architectures: A Framework for Analysis’ (2009) 9 Global Environmental Politics 14, 15. 6 See, e.g. William L. Twining, Globalisation and Legal Theory (Northwestern University Press 2000). 7 Neil C. Walker, The Intimations of Global Law (Cambridge University Press 2015); see also Giuliana Z. Capaldo, The Pillars of Global Law (Ashgate 2008); Rafael Domingo, The New Global Law (Cambridge University Press 2010); Shavana Musa and Eefje J. A. de Volder (eds), Reflections on Global Law (Brill 2013). 4

The evolving architecture of global climate law  19 for their inconsistency and fluid boundaries,8 yet they generally share an acknowledgment of weakening divides between traditionally disparate categories of domestic and international law, public and private norms, and state and non-state actors.9 Many of the same dynamics are evident in the legal response to climate change. Climate change is the quintessential ‘global’ challenge, its causes and effects ubiquitous, with little regard for conventional distinctions between different planes of governance or public and private agency. In consequence, the body of norms related to climate change traverses national and international law, recruits public and private actors, and draws on traditional regulation as well as flexible market incentives. While that makes global law a uniquely suited analytical framework for this chapter, it should not be understood as a discrete system of norms or legal practice.10 Accordingly, the ‘global’ in ‘global climate law’ serves as a purely descriptive term to capture the ‘plurality of legal mechanisms relying on a plurality of legal orders’11 which, collectively, define the disruptive intersection of law and climate change.12 If the ‘global’ in ‘global climate law’ alludes to its diversity of sources, actors, and instruments, the ‘climate law’ in ‘global climate law’ is hardly more tangible or determinate. Indeed, the existence of climate law as a distinct field of law has itself been the subject of debate. Acknowledging an autonomous body of law has consequences that extend beyond mere academic interest,13 making this a question with practical relevance; still, for climate law the verdict on this question still seems to be out. While some commentators have argued in favour of a new legal discipline,14 others see it as ‘nothing more or less than the application of national

Straddling related concepts such as transnational law, polycentrism, and legal pluralism, global law has been criticised for being used ‘without adequate conceptual work on what the term covers’; see Gregory C. Shaffer, ‘Transnational Legal Ordering and State Change’ in Gregory C. Shaffer (ed.), Transnational Legal Ordering and State Change (Cambridge University Press 2012) 1, 11; even a leading proponent concedes that ‘there has been little serious discussion – and little agreement where there has been discussion – on what is meant by “global law”’; Walker (n. 7) 1. 9 In one definition, for instance, global law is ‘distinguished from classic national law in that it is not limited by national boundaries and by the lack of territorial bases, oftentimes by networks of invisible actors, such as markets, professional communities, or social networks’; Marcelo D. Varella, Internationalization of Law: Globalization, International Law and Complexity (Springer 2014) 318. 10 Describing it as an ‘empirical mapping of scholarly trends’; Richard Collins, ‘The Slipperiness of “Global Law”’ (2017) 37 Oxford Journal of Legal Studies 714, 719; note, however, the claim that the ‘emerging global … law is a legal order in its own right’; Gunther Teubner, ‘Global Bukowina: Legal Pluralism in the World Society’ in Gunther Teubner (ed.), Global Law without a State (Aldershot 1997) 3, 4. 11 Elisa Morgera, ‘Bilateralism at the Service of Community Interests? Non-Judicial Enforcement of Global Public Goods in the Context of Global Environmental Law’ (2012) 23 European Journal of International Law 743, 746. 12 Elizabeth Fisher, Eloise Scotford and Emily Barritt, ‘The Legally Disruptive Nature of Climate Change’ (2017) 80 Modern Law Review 173. 13 For instance, it can send a political signal and legitimise a topic, facilitate analysis and communication of the law, and render its application more efficient than a disjointed patchwork of unrelated rules and doctrines; see J. B. Ruhl and James E. Salzman, ‘Climate Change Meets the Law of the Horse’ (2013) 62 Duke Law Journal 975, 985. 14 See, thus, Jacqueline Peel, ‘Climate Change Law: The Emergence of a New Legal Discipline’ (2008) 32 Melbourne University Law Review 922, 923 (‘a distinctive body of legal principles and rules identified as “climate change law”’); similarly John C. Dernbach and Seema Kakade, ‘Climate Change Law: An Introduction’ (2008) 29 Energy Law Journal 1, 1 (‘Climate change law is a new and rapidly developing area of law’). 8

20  Research handbook on climate change mitigation law and international law to climate problems’.15 In perhaps the most rigorous attempt to address this question, two scholars once concluded that climate change was not sufficiently transformational to warrant ‘sweeping doctrinal change’ that would accompany an entirely new field of law.16 Rather than assert the emergence of a separate system of norms, an earlier version of this chapter therefore argued for a pragmatic approach, in which ‘climate law’ was merely an articulation of the sum of legal rules, principles and instruments that pertain to climate change, both in terms of addressing its causes as well as protecting against its impacts.17 That such a body of norms with a degree of substantive coherence exists and can be usefully distinguished is attested by the emergence of a vibrant community of scholars and practitioners who identify themselves as climate lawyers.18 Preoccupation with climate change has been so prolific in legal scholarship, in fact, that it has engendered dedicated journals, monographs, and specialised institutes and course programmes at a number of law schools.19 Some observers have even criticised the ascendancy of scholarship at the intersection of law and climate change for ‘crowding out’ more traditional environmental concerns.20 Be that as it may, it introduces the third challenge in defining ‘global climate law’, and that is the transversal nature of its ‘climate’ dimension. Aside from commandeering resources and scholarly interest to the possible detriment of other areas of study, the level of attention accorded to climate change in legal scholarship, policy development and jurisprudence – which may seem justified by the broad scope and magnitude of the underlying challenge – also reflects a deeper structural predicament, namely the overlap of climate law with numerous other issue areas. Because of its transversal nature, climate change has prompted the adoption of new norms across a wide range of legal sectors, such as environmental law, energy law, financial services regulation and planning law, while also encroaching on core areas of law such as constitutional, administrative, tort and property law. Because of its historical emergence as an environmental concern, for instance, climate change has commonly been framed as a problem of environmental law, with ensuing rule-making often based on existing legislative and regu-

15 Navraj Singh Ghaleigh, ‘The What, How and Where of Climate Law’ in Raphael J. Heffron and Gavin F. M. Little (eds), Delivering Energy Law and Policy in the EU and US: A Reader (Edinburgh University Press 2016) 111; similarly Daniel Bodansky, Jutta Brunnée, and Lavanya Rajamani, International Climate Change Law (Oxford University Press 2011) 11 (‘we do not mean to suggest that it is a discrete body of law with its own sources, methods of law-making, and principles, or that it is a self-contained regime’). 16 Ruhl and Salzman (n. 13) 1013. 17 Harro van Asselt, Michael A. Mehling, and Clarisse Kehler Siebert, ‘The Changing Architecture of International Climate Change Law’ in Geert Van Calster, Wim Vandenberghe and Leonie Reins (eds), Research Handbook on Climate Change Mitigation Law (1st edn, Edward Elgar Publishing 2014) 1, 5. 18 As a matter of social fact, acknowledgment of a cohesive body of norms within the epistemic community of legal professionals can be an indicator for the emergence of a new area of law; see Todd S. Aagaard, ‘Environmental Law as a Legal Field: An Inquiry in Legal Taxonomy’ (2010) 95 Cornell Law Review 221, 242. 19 For a survey of taught programmes, see Michael A. Mehling, Harro van Asselt, Kati Kulovesi and Elisa Morgera, ‘Teaching Climate Law: Trends, Methods, and Outlook’ (2020) 32 Journal of Environmental Law, 417. 20 Discussing this critique Chris Hilson, ‘It’s All About Climate Change, Stupid! Exploring the Relationship between Environmental Law and Climate Law’ (2013) 25 Journal of Environmental Law 359, 361.

The evolving architecture of global climate law  21 latory powers for pollution control.21 Such material overlap has implications for how climate change is addressed through law, but also has repercussions for other legal regimes.22 It also gives rise to substantial methodological challenges, as a growing body of scholarly endeavour attests.23 It should perhaps come as no surprise, therefore, that a phenomenon which has been designated a ‘super-wicked problem’24 also renders it particularly demanding as an area of academic enquiry. While that suggests the utility of interdisciplinary approaches to adequately capture the full range of considerations relevant to the legal response to climate change25 – as borne out, for instance, by the rise in scholarship applying methods from the social sciences to the study of climate change and human rights26 – it also introduces a risk of introducing the value judgments, ideological orientations and ontological assumptions often underlying those other disciplines.27 Overall, thus, ‘global climate law’ defies a simple definition: each of its constituent elements is, in itself, ambiguous or contested. Unlike established areas of law, many of which have been shaped through systematic application and development over extended periods of time, the legal response to climate change has developed in a far shorter and more arbitrary manner, often triggered by emerging needs and political pressures. As a result, this body of norms neither displays the organised structure, nor the internal consistency and doctrinal strength, of more traditional areas of law. Its boundless geographic scope and virtually ubiquitous origins and impacts, coupled with an almost indefinite time horizon, render it particularly susceptible to the disruptive forces that have engendered conceptions of global law; but that, in turn, also

21 John C. Nagle, ‘Climate Exceptionalism’ (2010) 40 Environmental Law 53, 88; compelling reasons have been offered as to why this link to environmental law may be counterproductive, however, narrowing the options available to society in the struggle against a pervasive global threat: Cinnamon P. Carlarne, ‘Delinking International Environmental Law and Climate Change’ (2014) 4 Michigan Journal of Environmental and Administrative Law 1, 4. 22 Duncan French and Tawhida Ahmed, ‘Situating Climate Change in (International) Law: A Triptych of Competing Narratives’ in Stephen Farrall, Tawhida Ahmed and Duncan French (eds), Criminological and Legal Consequences of Climate Change (Hart 2012) 243. 23 See, for example, Cinnamon P. Carlarne, ‘Exploring Methodological Challenges within the Context of Climate Change Law and Policy’ (2011) 105 Proceedings of the Annual Meeting of the American Society of International Law 255; Duncan French and Lavanya Rajamani, ‘Climate Change and International Environmental Law: Musings on a Journey to Somewhere’ (2013) 25 Journal of Environmental Law 437. 24 Climate change has been designated a ‘super-wicked problem’ because it is characterised by contingent definitions and understandings of the problem, vastly asymmetrical interests and capacities in identifying solutions, a virtually open-ended time horizon, and unprecedented scale and economic cost. See Kelly Levin and others, ‘Overcoming the Tragedy of Super Wicked Problems: Constraining Our Future Selves to Ameliorate Global Climate Change’ (2012) 45 Policy Sciences 123; and Richard Lazarus, ‘Super Wicked Problems and Climate Change: Restraining the Present to Liberate the Future’ (2009) 94 Cornell Law Review 1153. 25 Carlarne (n. 23) 255. 26 See, for example, the contributions in Sébastien Duyck, Sébastien Jodoin and Alyssa Johl (eds), Routledge Handbook of Human Rights and Climate Governance (Routledge 2020). 27 For discussion, see Johannes A. M. Klabbers, ‘The Relative Autonomy of International Law or the Forgotten Politics of Interdisciplinarity’ (2005) 1 Journal of International Law and International Relations 35, 37.

22  Research handbook on climate change mitigation law exposes it to the same vulnerabilities that global law suffers from in terms of its normativity, legitimacy and accountability.28 Numerous trends described in later sections of this chapter underscore the complex challenges that climate change poses to conventional understandings of law and its function in society, from fragmentation and the erosion of formality to the ascendance of private actors and an evolving role of public authority. Each of these developments is occurring for a reason, and often reflects intractable constraints at the level of domestic and international politics. For lawyers, however, it also raises uneasy questions about the importance of law as a form of social order that is distinct from other norms. As the pressures resulting from climate change continue to intensify, it is difficult to predict how law will evolve in response. Across all layers of the legal system, the balance between its conservative dynamic – enabling and perpetuating those behaviours that have contributed to climate change – and a progressive dynamic, which compels the scale of transformation needed to address the climate challenge, will have to be fundamentally recalibrated. Many established tenets of law will strain under the weight of the unfolding climate crisis. Ironically, just when the rule of law with its material and procedural guarantees might seem to matter most, it may thus prove to be at its frailest.

2

THE INTERNATIONAL CLIMATE REGIME AFTER THREE DECADES

Negotiations for the UNFCCC started in the lead-up to the 1992 United Nations (UN) Conference on the Environment and Development in Rio de Janeiro, and the Convention entered into force in 1994. Three decades later, the UNFCCC continues to play an important role as the foundation of the UN climate regime. Typically for a framework convention,29 it sets out the regime’s general goals and obligations, creates the basic institutional structures and provides the procedures for the adoption of more detailed obligations in new protocols.30 The regime has subsequently evolved significantly through the 1997 Kyoto Protocol31 and the 2015 Paris Agreement,32 as well as through the considerable body of droit dérivé33 in the form of decisions adopted by the Conference of the Parties (COP) of the UNFCCC and the respective governing bodies of the Kyoto Protocol and Paris Agreement. The ultimate objective of the UNFCCC is to achieve the ‘stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic inter-

See Section 3.7 below, as well as the discussion in Kati Kulovesi, Michael Mehling and Elisa Morgera, ‘Global Environmental Law: Context and Theory, Challenge and Promise’ (2019) 8 Transnational Environmental Law 405, 422–9 with further references. 29 Philippe Sands and others, Principles of International Environmental Law (4th edn, Cambridge University Press 2018) 106. 30 Ibid. 31 Kyoto Protocol to the United Nations Framework Convention on Climate Change (adopted 11 December 1997; entered into force 16 February 2005) 2303 UNTS 148 (Kyoto Protocol). 32 Paris Agreement (n. 1). 33 Pierre-Marie Dupuy and Jorge E. Viñuales, International Environmental Law (2nd edn, Cambridge University Press 2018) 41–3. 28

The evolving architecture of global climate law  23 ference with the climate system’.34 In the unadopted 2009 Copenhagen Accord,35 as well as in the 2010 Cancún Agreements,36 this important but abstract objective was made more concrete through references to avoiding global average temperature increases of more than 2 °C below pre-industrial levels. They also mentioned the 1.5 °C goal, which was important for many vulnerable developing countries. As noted above, the Paris Agreement set out an even more ambitious objective of limiting temperature increase to ‘well below’ 2 °C and ‘pursuing efforts’ to limit it to 1.5 °C.37 Furthermore, it included the objectives of increasing the ability to adapt to climate change and of making global finance flows consistent with a pathway toward low greenhouse gas emissions and climate-resilient development.38 Subsequently, the 2018 IPCC Special Report on Global Warming of 1.5 °C has clearly spelled out the significant differences between the 2 and 1.5 °C goals in terms of climate impacts. As a result, many states and non-state actors have adopted the 1.5 °C goal as their objective, along with the goal of achieving carbon neutrality by 2050, as also called for by the Paris Agreement.39 As a framework convention, the UNFCCC lacks ‘bite’ in the sense of specific and time-bound emission limitation or reduction targets. The main deliverable from the first COP in 1995 was therefore a mandate to negotiate ‘a protocol or another legal instrument’ to establish time-bound, quantified emission targets for developed countries while not introducing any new commitments for developing countries.40 Building on this mandate, the 1997 Kyoto Protocol emphasised the principle of common but differentiated responsibilities and respective capabilities (CBDRRC) and established a strong legal ‘firewall’ between developed (Annex I) and developing (non-Annex I) country mitigation commitments. This strictly bifurcated approach to climate change mitigation was deeply controversial,41 not least because there was no system for a country to ‘graduate’ from the non-Annex I status even if both the greenhouse gas emissions and economies in emerging economies, such as China, were growing rapidly. The ‘firewall’ between Annex I and non-Annex I mitigation commitments was the main reason why the United States government decided in 2001 not to ratify the Kyoto Protocol. Lack of agreement on how to reform it was one of the key reasons why the high-profile 2009 UN Climate Change Conference in Copenhagen failed to adopt a new climate treaty to succeed the Kyoto Protocol, even if the Copenhagen Accord no longer used language of Annex I and

34 United Nations Framework Convention on Climate Change (adopted 9 May 1992; entered into force 21 March 1994) 1771 UNTS 163 (UNFCCC), Art. 2. 35 UNFCCC, ‘Decision 2/CP.15, Copenhagen Accord’ UN Doc. FCCC/CP/2009/11/Add.1 (30 March 2010). 36 UNFCCC, ‘Decision 1/CP.16, Outcome of the Work of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention’ UN Doc. FCCC/CP/2010/7/Add.1 (15 March 2011). 37 Paris Agreement (n. 1) Art. 2(1)(a). 38 Ibid. Art. 2(1)(b) and (c); see Halldór Thorgeirsson, ‘Objective (Article 2.1)’ in Daniel Klein and others (eds), The Paris Agreement on Climate Change: Analysis and Commentary (Oxford University Press 2017) 123, 123. 39 Paris Agreement (n. 1) Art. 4(1). On the diffusion of net zero targets, see Richard Black and others, ‘Taking Stock: A Global Assessment of Net Zero Targets’ (Energy & Climate Intelligence Unit and Oxford Net Zero 2021). 40 UNFCCC, ‘Decision 1/CP.1, The Berlin Mandate: Review of the Adequacy of Article 4, Paragraph 2(a) and (b), of the Convention, Including Proposals Related to a Protocol and Decisions on Follow-up’ UN Doc. FCCC/CP/1995/7/Add.1 (6 June 1995) preamble. 41 Lavanya Rajamani and Emmanuel Guérin, ‘Central Concepts in the Paris Agreement and How They Evolved’ in Klein and others (n. 38) 74, 82ff.

24  Research handbook on climate change mitigation law non-Annex I countries. During negotiations for the Paris Agreement, however, consensus was finally found on how the interpretation of the CBDRRC principle and approach to differentiation should evolve. Thus, under the Paris Agreement all countries fall under the same mitigation regime albeit with flexibility that considers the CBDRRC while also taking into consideration countries’ national circumstances (see further Section 3.3). Other key issues shaping the UN climate regime over the past 30 years include the legal nature and ambition of countries’ mitigation commitments.42 The legal nature of mitigation commitments has been controversial from the beginning of the UN climate negotiations, and the regime’s evolution has been shaped by the competing demands for legally binding emission reduction targets and a top-down approach on the one hand, and calls for national autonomy and a bottom-up approach on the other. As discussed in detail in Section 3.2, the Paris Agreement has shifted the emphasis toward a bottom-up approach, while also including certain top-down features. In terms of ambition, discussions under the UN climate regime have gradually evolved from fierce debates during the early years on whether climate science provided a strong enough basis for action43 to the current focus on how to close the gap between the emission reductions pledged and those needed to achieve the 1.5/2 °C goal. The ‘emissions gap’ problem was acknowledged during the negotiations, and the Paris Agreement therefore includes an ambition or ratcheting mechanism designed to gradually align countries’ mitigation pledges with the long-term temperature goals. Its key elements include the regular updating of mitigation targets, contained in parties’ nationally determined contributions (NDCs), at five-year intervals and the requirements that each new target represents ‘progression’ and reflects a party’s ‘highest possible ambition’.44 Other elements of the ambition mechanism include countries’ regular reporting on emissions as well as the implementation and achievement of the NDCs; and a process known as the global stocktake to evaluate collective progress towards the Paris Agreement’s goals every five years.45 As of 2021, the first round of updates and revisions of parties’ NDCs is underway and the first global stocktake is scheduled to conclude in 2023. As this overview of key issues shaping the UN climate regime in the past 30 years shows, the emphasis has clearly been on mitigation. However, the importance of other issues has steadily increased. Notably, adaptation to the negative impacts of climate change and loss and damage caused by climate change impacts are being given more attention than a decade ago, and the Paris Agreement includes dedicated provisions on both issues.46 The relevant institutional framework has also been strengthened through the creation of the Adaptation Committee in 201047 and the Warsaw International Mechanism for Loss and Damage in 2013.48

42 Daniel Bodansky, ‘A Tale of Two Architectures: The Once and Future U.N. Climate Regime’ in Hans-Joachim Koch and others (eds), Climate Change and Environmental Hazards Related to Shipping: An International Legal Framework (Brill 2013) 35. 43 Farhana Yamin and Joanna Depledge, The International Climate Change Regime. A Guide to Rules, Institutions and Procedures (Cambridge University Press 2004) 62. 44 Paris Agreement (n. 1) Art. 4(3). See Rajamani and Guerin (n. 41) 78. 45 Paris Agreement (n. 1) Art. 14. 46 Ibid. Arts 7 and 8. The Agreement also includes two adaptation-related goals: ibid. Arts 2(1)(b) and 7(1). 47 Decision 1/CP.16 (n. 36) para. 20. 48 UNFCCC, ‘Decision 2/CP.19, The Warsaw International Mechanism for Loss and Damage Associated with Climate Change’ UN Doc. FCCC/CP/2013/10/Add.1 (31 January 2014).

The evolving architecture of global climate law  25 Climate finance49 and technology50 have been important priorities for developing countries from the beginning, and the relevant institutional structures and work streams have gradually evolved over the past three decades. Some of the key milestones include the 2009 Copenhagen Accord,51 whereby developed countries promised to mobilise US$100 billion of funding annually from 2020 onwards from a variety of sources, and which contained political agreement on the establishment of the Green Climate Fund and balanced allocation of funding for adaptation and mitigation.52 These political agreements were formally adopted through the 2010 Cancún Agreements, which also created the Standing Committee on Climate Finance tasked with assisting the COP in managing the Convention’s Financial Mechanism and improving coordination and coherence in the delivery of climate finance. The Paris Agreement is important in that it reflects a broader understanding of climate finance, not limited to public funding from developed countries53 but also as a collective global effort. The Agreement points towards the need to consider financial flows in a comprehensive manner and its general goals include making finance flows consistent with climate policy objectives.54 In addition, reporting obligations related to climate finance have been strengthened through the Paris Agreement and the ‘Paris Rulebook’.55 In the context of the adoption of the Paris Agreement, countries also agreed to negotiate a new quantified climate finance mobilisation goal prior to 2025.56 As for technology, the institutional framework has also evolved through the establishment of the Technology Mechanism consisting of the Technology Executive Board and the Climate Technology Centre and Network in 2010.57

3

TRENDS IN GLOBAL CLIMATE LAW

To explore the evolution of global climate law, this section presents an overview of seven key trends that both influence and are affected by developments in the UN climate regime. A better understanding of these trends is crucial for appreciating the shifts in the wider architecture of global climate law.

See Yulia Yamineva and Kati Kulovesi, ‘The New Framework for Climate Finance under the United Nations Framework Convention on Climate Change: A Breakthrough or Empty Promise?’ in Erkki Hollo, Kati Kulovesi and Michael Mehling (eds) Climate Change and the Law (Springer 2013) 191, 194ff. 50 Stephen Minas, ‘The Paris Agreement’s Technology Framework and the Need for Transformational Change’ (2020) 14 Carbon & Climate Law Review 241. 51 See Alexander Zahar, Climate Change Finance and International Law (Routledge 2016) 3–8. 52 Decision 1/CP.16 (n. 36) para. 102 and Appendix III. 53 Jorge Gastelumendi and Inka Gnittke, ‘Climate Finance’ in Klein and others (n. 38) 239, 239. See also Michael Mehling, ‘Article 9: Finance’ in Geert Van Calster and Leonie Reins (eds), The Paris Agreement on Climate Change: A Commentary (Edward Elgar Publishing 2021) 218. 54 Paris Agreement (n. 1) Art. 2(1)(c). 55 UNFCCC, ‘Decision 18/CMA.1, Modalities, Procedures and Guidelines for the Transparency Framework for Action and Support Referred to in Article 13 of the Paris Agreement’ UN Doc. FCCC/ PA/CMA/2018/3/Add.2 (19 March 2019) Annex. See Harro van Asselt and Kati Kulovesi, ‘Article 13: Enhanced Transparency Framework for Action and Support’ in Van Calster and Reins (n. 53) 302. 56 UNFCCC, ‘Decision 1/CP.21, Adoption of the Paris Agreement’ UN Doc. FCCC/CP/2015/10/ Add.1 (29 January 2016) para 25. 57 Decision 1/CP.16 (n. 36) para. 117. 49

26  Research handbook on climate change mitigation law 3.1 Fragmentation The drivers of climate change, as well as its impacts across the world, are intrinsically linked to nearly all sectors of society. One of the major trends in global climate law in the past decades has therefore been an increasing relevance of international institutions beyond the UNFCCC and a certain degree of fragmentation. Existing institutions have begun to acknowledge the interlinkages between their respective issue areas and the climate problem, a trend that can most clearly be observed in other areas of international environmental law. For instance, since its inception, the Montreal Protocol on ozone layer depletion has helped to mitigate climate change.58 Initially this was linked to the fact that some ozone-depleting substances are also powerful greenhouse gases. Later on, the realisation that substitutes used for ozone-depleting substances were also important climate pollutants led to growing activity by parties to the Montreal Protocol, which adopted a decision in 2007 to accelerate the phase-out of the consumption and production of one of the substitutes, hydrochlorofluorocarbons.59 This was followed by an amendment to the Protocol in 2016 to phase out another major category of greenhouse gases, hydrofluorocarbons (HFCs).60 The overall mitigation effects of these measures is potentially significant, with the HFC amendment projected to lead to 0.2–0.4 °C of avoided warming.61 Parties to the Convention on Biological Diversity62 have also become increasingly aware of the interlinkages with the climate regime, and have adopted a series of decisions tackling biodiversity-related aspects of climate change, such as addressing emissions from deforestation and geoengineering.63 Some sectoral international institutions have also pursued mitigation measures. The International Civil Aviation Organization adopted a global goal of improving annual average fuel efficiency by 2 per cent and an aspirational goal of keeping global carbon emissions from 2020 onwards at the same level (i.e. ensuring carbon-neutral growth).64 In October 2016, it further adopted a market-based mechanism – the Carbon Offsetting and Reduction Scheme for International Aviation – to offset emissions growth in the sector from 2020 onwards. Another sectoral institution, the International Maritime Organization, adopted a series of measures to 58 Protocol on Substances that Deplete the Ozone Layer (adopted 16 September 1987; entered into force 1 January 1989) 1522 UNTS 3. 59 Montreal Protocol, ‘Decision XIX/6, Adjustments to the Montreal Protocol with Regard to Annex C, Group I, Substances (Hydrochlorofluorocarbons)’ UN Doc. UNEP/OzL.Pro.19/7 (21 September 2007). 60 Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer (adopted 15 October 2016; entered into force 1 January 2019) http://​conf​.montreal​-protocol​.org/​meeting/​mop/​mop​ -28/​final​-report/​English/​Kigali​_Amendment​-English​.pdf. 61 World Meteorological Organization (WMO) and others, Scientific Assessment of Ozone Depletion: 2018 (WMO 2019) ES.22. 62 United Nations Convention on Biological Diversity (adopted 5 June 1992; entered into force 29 December 1992) 1760 UNTS 79. 63 See, for example, CBD, ‘Decision X/33, Biodiversity and Climate Change’ UN Doc. UNEP/CBD/ COP/10/27 (20 January 2011). See further Harro van Asselt, The Fragmentation of Global Climate Governance: Consequences and Management of Regime Interactions (Edward Elgar Publishing 2014) 119–57; and Sandrine Maljean-Dubois and Matthieu Wemaëre, ‘Biodiversity and Climate Change’ in Elisa Morgera and Jona Razzaque (eds), Biodiversity and Nature Protection Law (Edward Elgar Publishing 2017) 295. 64 See, for example, Beatriz Martinez Romera, Regime Interaction and Climate Change: The Case of International Aviation and Maritime Transport (Routledge 2017).

The evolving architecture of global climate law  27 address shipping emissions, including a mandatory Energy Efficiency Design Index for new ships and a Ship Energy Efficiency Management Plan for all ships. Although the organisation also agreed on a long-term strategy for reducing shipping emissions, its impact on the decarbonisation of the sector remains unclear.65 In addition to international environmental law, climate change considerations now feature in legal regimes as diverse as international trade law,66 human rights law67 and the law of the sea.68 Moreover, governments are increasingly cooperating through limited-membership initiatives and coalitions, both within and outside the context of the UNFCCC. Within the UNFCCC, the informal ‘High Ambition Coalition’ – bringing together developed and developing countries – played a crucial role in securing the adoption of the Paris Agreement.69 Outside the UNFCCC, a range of ‘climate clubs’,70 involving national and subnational governments alongside private sector and civil society organisations, have emerged on a variety of issues, such as the Climate and Clean Air Coalition, focusing on short-lived climate pollutants,71 and the Carbon Pricing Leadership Coalition, advancing the diffusion of carbon pricing.72 The resulting fragmentation of international climate law and governance raises overarching questions and challenges. First, what are the consequences of the increasingly complex mosaic of overlapping institutions? While multiple international regimes may offer opportunities for an ‘all-hands-on-deck’ approach to combating climate change, with each institution fulfilling a different task, the multitude of institutions may also lead to mixed signals to state and non-state actors, and even normative conflicts or forum shopping in the event of disputes.73 A recurring example in this regard is the adoption of trade measures informed by climate

Meinhard Doelle and Aldo Chircop, ‘Decarbonizing International Shipping: An Appraisal of the IMO’s Initial Strategy’ (2019) 28 Review of European, Comparative & International Environmental Law 268. 66 See, for example, Ludivine Tamiotti and others, Trade and Climate Change: WTO–UNEP Report (World Trade Organization and UNEP 2009); Panagiotis Delimatsis (ed.), Research Handbook on Climate Change and Trade Law (Edward Elgar Publishing 2016); Susanne Droege and others, ‘The Trade System and Climate Action: Ways Forward under the Paris Agreement’ (2017) 13 South Carolina Journal of International Law & Business 195. 67 See, for example, UNEP, Climate Change and Human Rights (UNEP 2015); Alan E. Boyle, ‘Climate Change, the Paris Agreement and Human Rights’ (2018) 67 International & Comparative Law Quarterly 759. 68 See, for example, Elise Johansen, Signe Busch and Ingvild Ulrikke Jakobsen (eds), The Law of the Sea and Climate Change: Solutions and Constraints (Cambridge University Press 2021). 69 Nick Mabey, ‘The Geopolitics of the Climate Talks’ Foreign Affairs (13 December 2015). 70 See, for example, Lutz Weischer, Jennifer Morgan and Milap Patel, ‘Climate Clubs: Can Small Groups of Countries Make a Big Difference in Addressing Climate Change?’ (2012) 21 Review of European Community & International Environmental Law 177; William Nordhaus, ‘Climate Clubs: Overcoming Free-Riding in International Climate Policy’ (2015) 104 American Economic Review 1339; Robert Falkner, ‘A Minilateral Solution for Global Climate Change? On Bargaining Efficiency, Club Benefits, and International Legitimacy’ (2016) 14 Perspectives on Politics 87; Jon Hovi and others, ‘The Club Approach: A Gateway to Effective Climate Co-operation?’ (2019) 49 British Journal of Political Science 1071 71 https://​ccacoalition​.org. 72 http://​www​.car​bonpricing​leadership​.org/​. 73 Remi Moncel and Harro van Asselt, ‘All Hands on Deck! Mobilizing Climate Change Action beyond the UNFCCC’ (2012) 21 Review of European Community & International Environmental Law 163. 65

28  Research handbook on climate change mitigation law change concerns, which may lead to contradictions with world trade law.74 Second, given the inevitability of some degree of institutional fragmentation, what is the role of the UNFCCC in international climate change law? The diversity of international institutions may require coordination to avoid duplication of efforts and strengthen synergies. What remains to be determined is the extent to which the UNFCCC should be the proverbial spider in the web to achieve the Paris Agreement’s long-term goals, and what decisions it should leave to other institutions. 3.2 Deformalisation A trend towards deformalisation has been observed in international law, characterised as the rejection of formal indicators to define international rules,75 along with a growing emphasis on informal law-making.76 These trends are clearly visible also in international climate change law. For one, soft law instruments and most importantly, droit dérivé in the form of decisions adopted by the UNFCCC COP and the governing bodies of the Kyoto Protocol and the Paris Agreement play a crucial role in international climate change law. Indeed, as discussed below, many core elements of international climate change law can be found in COP decisions rather than in formal treaties. Meanwhile, a parallel trend can be observed towards the softening of obligations contained in formal treaties, especially in the Paris Agreement. COP decisions play a crucial role in the UNFCCC regime. The operationalisation of the UN climate regime is based on a continuous process of negotiations and the parties have been meeting at least twice a year since 1995, with the exception of 2020/2021 due to the COVID-19 pandemic. These negotiations have resulted in the adoption of hundreds of decisions by the governing bodies as well as the subsidiary bodies. Their substance covers a wide range of issues, including mitigation, adaptation, finance, technology, and capacity-building. Some decisions have shaped the UN climate regime in important ways. The key examples include the 2001 Marrakesh Accords and the 2018 Katowice Rulebook, which include detailed rules on how to operationalise the Kyoto Protocol and the Paris Agreement respectively. Similarly, the 2010 Cancún Agreements significantly expanded and strengthened the institutional framework of the UN climate regime by establishing several new bodies, such as the Green Climate Fund, the Standing Committee on Climate Finance, the Adaptation Committee, and the Technology Executive Committee.77 As another example, a set of COP decisions known as the Warsaw Framework form the operational basis of the mechanism known as REDD+ (Reducing Deforestation and Forest Degradation in Developing Countries).78 Overall,

Harro van Asselt, ‘The Prospects of Trade and Climate Disputes before the WTO’ in Ivano Alogna, Christine Bakker and Jean-Pierre Gauci (eds), Climate Change Litigation: Global Perspectives (Brill 2021) 433. 75 Jean d’Aspremont, ‘The Politics of Deformalisation in International Law’ (2011) 3 Goettingen Journal of International Law 503, 506. 76 Joost Pauwelyn, ‘Informal International Lawmaking: Framing the Concept and Research Questions’ in Joost Pauwelyn, Ramses Wessel and Jan Wouters (eds), Informal International Lawmaking (Oxford University Press 2012) 13. 77 Decision 1/CP.16 (n. 36). 78 See Maria Eugenia Recio, ‘The Warsaw Framework and the Future of REDD+’ (2014) 24 Yearbook of International Environmental Law 37. 74

The evolving architecture of global climate law  29 important elements of the UN climate regime are developed through instruments that are not traditionally considered as legally binding under international law.79 While certain ‘hard’ elements of the UN climate regime are based on soft legal instruments, a trend can also be observed towards the ‘softening’ of provision in international climate agreements. It is commonly accepted that international environmental agreements do not always contain clear, detailed or specific rules.80 International climate treaties are no exception. As noted by Oberthür and Bodle, the Paris Agreement ‘contains few provisions that clearly establish obligations for individual parties’.81 The softening of mitigation-related treaty obligations is particularly pronounced when comparing the Kyoto Protocol with the Paris Agreement. The contrast between the Kyoto Protocol and Paris Agreement is best understood in the light of the history of the UNFCCC regime and the contrasting political preferences shaping it. Already during the negotiations for the UNFCCC in 1990, countries held divergent views on the need for internationally negotiated and legally binding emissions targets and timetables. The target-based approach was advocated by the Western European countries, while the United States, Japan and the then-Soviet Union opposed it. The United States argued that countries should instead focus on developing national climate change mitigation programmes and policies. The UNFCCC ultimately came to reflect both the European and United States’ preferences; its Article 4(1) requires countries to develop national mitigation policies and measures, while Article 4(2) sets the objective for developed countries to return their emissions to their 1990 levels by 2000.82 As Bodansky has observed, the UN climate regime has ever since consisted of variations on these two themes.83 A more top-down approach prevailed in the Kyoto Protocol in the sense that the treaty sets legally binding, economy-wide emission limitation and reduction targets for Annex I countries relative to 1990. However, the United States’ decision to not join the Protocol fuelled the desire – particularly on the part of developed countries – to create a more inclusive mitigation framework. With the 2009 Copenhagen Accord, the emphasis started shifting towards a bottom-up approach, allowing countries to define their own mitigation goals.84 Countries could also choose the base year and other key parameters of their target, which, for developing countries, also included the economic sectors covered by the target. In contrast to the Kyoto Protocol, these national targets were simply accepted in the form they were pledged and not subjected to international negotiations with a view to increasing their ambition.85

For a discussion on the role and legal nature of COP decisions, see Sebastian Oberthür and Ralph Bodle, ‘The Legal Form and Nature of the Paris Outcome’ (2016) 6 Climate Law 40, 43–44; Jutta Brunnée, ‘COPing with Consent: Lawmaking under Multilateral Environmental Agreements’ (2002) 15 Leiden Journal of International Law 1. 80 Indeed, this is how many textbooks describe the nature of international environmental law. See, for example, Patricia Birnie, Alan Boyle and Catherine Redgwell, International Law and the Environment (3rd edn, Oxford University Press 2009) 17. 81 Oberthür and Bodle (n. 79) 49. See also Daniel Bodansky, ‘The Legal Character of the Paris Agreement’ (2016) 25 Review of European, Comparative & International Environmental Law 142. 82 Bodansky (n. 42). 83 Ibid. 84 Decision 2/CP.15 (n. 35). 85 Bodansky (n. 42). 79

30  Research handbook on climate change mitigation law The shift towards a bottom-up approach was certainly not without controversy. However, in light of experiences from the Kyoto Protocol and Copenhagen, it formed the only realistic basis for a universal climate treaty86 and therefore came to be accepted as the basis of the Paris Agreement’s mitigation regime. The Paris Agreement relies on NDCs – i.e. mitigation pledges defined by the parties in accordance with their domestic preferences. The NDCs are not formally part of the Agreement but ‘housed’87 in a registry maintained by the UNFCCC Secretariat. Countries have been free to define the initial ambition and parameters of their first NDCs, resulting in insufficient ambition with respect to the Paris Agreement’s goals and considerable diversity in how countries’ mitigation goals are calculated and expressed.88 The Paris Agreement’s mitigation regime is not purely bottom-up, but also contains some legally binding elements. More specifically, it includes several obligations of conduct89 related to NDCs. Accordingly, each party must communicate and maintain an NDC, regularly update it and increase its ambition, as well as pursue domestic mitigation measures with the aim of achieving the objectives of its NDC.90 Furthermore, the 2018 Katowice Rulebook has introduced certain requirements for countries’ subsequent NDCs with a view to making them more transparent and comparable.91 The regularly updated NDCs are also a key element of the Paris Agreement’s ambition mechanism, which seeks to gradually align mitigation ambition with the Agreement’s goals through the regular updating of NDCs, regular reporting and review, and the five-yearly global stocktake. Overall, international climate change law clearly reflects the pattern towards growing reliance on soft law instruments and informal law-making in international law – as seen above, many important elements of the UN climate regime are based on such instruments. At the same time, the Paris Agreement includes few binding obligations for individual countries and is significantly softer compared to its predecessor, the Kyoto Protocol, when it comes to the key issue of mitigation. 3.3 Differentiation The principle of CBDRRC lies at the heart of the international climate regime. The principle incorporates a compromise between developing and developed countries that allowed them to agree on the UNFCCC, but diverging interpretations of the principle have determined the course of international negotiations. Developing countries have consistently argued that developed countries are the main culprits responsible for climate change given their historical responsibility. As such, the argument goes, developing countries should be exempted from key commitments in the climate treaties, and receive technological, financial and capacity-building

Domestic politics also played a role in this respect. The starting point of the United States in the negotiations on the Paris Agreement was that its ratification had to fall within the executive powers of the President, and not require Senate approval. Hence, being legally bound to achieve its target was not possible. See Oberthür and Bodle (n. 79) 45. 87 Ibid. 46–8. 88 Pieter Pauw and others, ‘Beyond Headline Mitigation Numbers: We Need More Transparent and Comparable NDCs to Achieve the Paris Agreement on Climate Change’ (2018) 147 Climatic Change 23. 89 Oberthür and Bodle (n. 79) 52. 90 Paris Agreement (n. 1) Art. 4. 91 UNFCCC, ‘Decision 4/CMA.1, Further Guidance in Relation to the Mitigation Section of Decision 1/CP.21’ UN Doc. FCCC/PA/CMA/2018/3/Add.1 (19 March 2019). 86

The evolving architecture of global climate law  31 support. Conversely, developed countries have framed the principle by arguing that their level of economic development and capacity to address the climate problem gives them a moral responsibility to take a leadership role and aid developing countries.92 The operationalisation of the principle was most pronounced in the climate treaties’ Annex system. Both the UNFCCC and Kyoto Protocol introduce commitments that apply to all countries, but add specific commitments for Annex I countries. Notably, non-Annex I countries do not have any emission reduction commitments under the Kyoto Protocol. While the UNFCCC and Kyoto Protocol are characterised by this bifurcated approach, particularly with respect to mitigation, it is important to note that they also distinguish among countries based on other features.93 The UNFCCC, for instance, refers to the ‘special situations of the least developed countries’;94 to ‘economies that are vulnerable to the adverse effects of the implementation of measures to respond to climate change’;95 to countries ‘undergoing the process of transition to a market economy’;96 and to the special needs and circumstances of a range of different countries, including ‘small island countries’, ‘countries with low-lying coastal areas’, fossil-fuel producing countries, etc.97 Over time, national circumstances – and therefore the differences between countries – have changed significantly. In 1992, the world’s largest CO2 emitter was the United States; by 2007, it was China,98 with emissions still growing rapidly in other parts of the Global South. The situation is also no longer the same in terms of economic development. Non-Annex I countries like Singapore and South Korea have reached levels of economic development that surpass some Annex I countries like the Czech Republic,99 yet they are still in the same group of developing countries. These developments led to calls by developed countries to abandon the distinctions introduced by the Annexes of the climate treaties. Such calls met with fierce resistance from several developing countries, particularly China and India, who insisted that the ‘firewall’ of the Annexes needed to be maintained. These diverging views came sharply into focus during the negotiations on a follow-up agreement to the Kyoto Protocol. A first departure from the ‘firewall’ approach to differentiation came with the 2007 Bali Action Plan, which called for ‘nationally appropriate mitigation commitments or actions’ by ‘developed country Parties’ (rather than referring to Annex I countries) and ‘nationally appropriate mitigation actions’ for ‘developing country Parties’

92 Lavanya Rajamani, Differential Treatment in International Environmental Law (Oxford University Press 2006) 86. 93 See Joost Pauwelyn, ‘The End of Differential Treatment for Developing Countries? Lessons from the Trade and Climate Change Regimes’ (2003) 22 Review of European Community & International Environmental Law 29; and Jutta Brunnée and Charlotte Streck, ‘The UNFCCC as a Negotiating Forum: Towards Common but More Differentiated Responsibilities’ (2013) 13 Climate Policy 589. 94 UNFCCC (n. 34) Art. 4(9). 95 Ibid. Art. 4(10). 96 Ibid. Art. 4(6). 97 Ibid. Art. 4(8)(i). 98 John Vidal and David Adam, ‘China Overtakes US as World’s Biggest CO2 Emitter’ The Guardian (19 June 2007). 99 World Bank, ‘World Development Indicators’ https://​ datatopics​ .worldbank​ .org/​ world​ -development​-indicators. For instance, Singapore’s per capita gross national income in 2019 (in current US$) was US$ 65,233; that of the Republic of Korea, US$31,846; and that of the Czech Republic, US$23,495.

32  Research handbook on climate change mitigation law (rather than referring to non-Annex I countries).100 This trend continued with the agreements reached at COPs in Copenhagen, Cancún and Durban.101 The Paris Agreement continued the trend away from the bifurcated approach under the UNFCCC and Kyoto. Employing a new formulation referring to ‘common but differentiated responsibilities and respective capabilities, in the light of different national circumstances’,102 the text of the Agreement introduces a system of what some have dubbed ‘subtle differentiation’.103 Accordingly, the degree of differentiation varies for different issues, such as mitigation, adaptation, financial support, and transparency. While the Agreement’s core mitigation obligations apply to all parties, for example, in other areas new forms of differentiation are introduced. For instance, the Paris Agreement introduces a category of ‘other Parties’ – without specifying the parties being referred to – which ‘are encouraged to provide or continue to provide [financial support to developing countries] voluntarily’.104 Likewise, the contentious issue of moving towards a system of reporting and review common to all parties was resolved by providing for ‘built-in flexibility which takes into account Parties’ different capacities’.105 The Paris Rulebook laying down detailed guidance for reporting and review allows developing country parties to determine for themselves if they require this flexibility, but at the same time limits the number of instances in which such flexibility is available.106 The approach to differentiation has thus changed markedly in the past decades, with the more rigid Annex-based approach replaced by a more nuanced and diversified approach. While it may seem that some of the key contestations between developed and developing countries have been settled, it is nevertheless to be expected that differentiation – and diverging views on who needs to do what – will continue to shape the further development of international law on climate change, both within and outside the UN climate regime.107 3.4 Instrumentation ‘Instrumentation’, the title of this section, is used as a generic term for the broad diversity of tools used to progress policy objectives. In the context of climate change mitigation and adap100 UNFCCC, ‘Decision 1/CP.13, Bali Action Plan’ UN Doc. FCCC/CP/2007/6/Add.1 (14 March 2008) paras 1(b)(i) and (ii). For a critique, see Lavanya Rajamani, ‘From Berlin to Bali and Beyond: Killing Kyoto Softly?’ (2008) 57 International & Comparative Law Quarterly 909. 101 UNFCCC, ‘Decision 1/CP.17, Establishment of an Ad Hoc Working Group on the Durban Platform for Enhanced Action’ UN Doc. FCCC/CP/2011/9/Add.1 (15 March 2012) para. 2. 102 Paris Agreement (n. 1) Art. 4(3) (emphasis added). The language was lifted from the ‘U.S.–China Joint Presidential Statement on Climate Change’ (25 September 2015) https://​obamawhitehouse​.archives​ .gov/​the​-press​-office/​2015/​09/​25/​us​-china​-joint​-presidential​-statement​-climate​-change. 103 Sandrine Maljean-Dubois, ‘The Paris Agreement: A New Step in the Gradual Evolution of Differential Treatment in the Climate Regime?’ (2016) 25 Review of European, Comparative & International Environmental Law 151; Pieter Pauw, Kennedy Mbeva and Harro van Asselt, ‘Subtle Differentiation of Countries’ Responsibilities under the Paris Agreement’ (2019) 5 Palgrave Communications 86. 104 Paris Agreement (n. 1) Art. 9(2). 105 Ibid. Art. 13(1). 106 Decision 18/CMA.1(n. 55). See van Asselt and Kulovesi (n. 55). 107 For instance, differentiation also emerged as an issue in the context of international regulation of HFCs, aviation and shipping emissions. See Susan Biniaz, ‘I Beg to Differ: Taking Account of National Circumstances under the Paris Agreement, the ICAO Market-Based Measure, and the Montreal Protocol’s HFC Amendment’ (Sabin Center for Climate Change Law 2017).

The evolving architecture of global climate law  33 tation, attention has typically focused on instruments of public policy, although the private sector has also meaningfully contributed to instrument design and implementation (see also Section 3.7). Not only has climate policy engendered sophisticated approaches to instrumentation, with complex portfolios of instruments that vary in scope and regulatory approach, it has also proven a fertile laboratory for policy innovation at different levels of authority. This section provides a brief typology of climate policy instruments and their substantive rationale, tracing the evolution of major policy trends, and offering some thoughts about the features shared between climate policy instrumentation and global climate law more generally. In general terms, policy instruments are interventions to shape individual or collective behaviour. Different theoretical frameworks exist to justify such interventions, although by far the most influential has come from contemporary economics. There, the rationale of policy instruments is seen to originate in the need to correct market failures, which are described as an inefficient allocation of goods and services.108 Market failures relevant to climate change and to the management of its causes and effects include positive and negative externalities, market power and concentration, split incentives, and information asymmetries.109 Decision-makers seeking to address these failures can take recourse to a variety of policy instruments, each of which has distinct features and trade-offs. In practice, these instruments are applied alone or in varying combinations to different sectors, such as electricity generation, transport, buildings, and industry. Climate policy instruments can assume a nearly infinite variety of shapes, rarely resembling each other in all specific aspects of design and implementation. Still, they are commonly grouped under a more limited number of policy categories, including regulatory or, somewhat derogatorily, ‘command-and-control’ instruments that rely on coercion; economic instruments that operate through pricing and other flexible incentives; and a range of voluntary and suasive instruments that influence behaviour through information and cooperation. Lawyers often feel the greatest affinity to the first category, which recruits familiar solutions such as liability rules and different forms of administrative regulation, including building permits, operating licences, and performance or technology standards. All of these have variously assumed a role in climate policy, for instance in the form of periodic emission reporting obligations, emission standards for appliances and vehicles, or mandates to achieve a certain share of renewable energy in the electricity supply. Because of the pervasive scale of climate change, however, decision-makers have been uniquely sensitive to the economic cost of policy instruments and their impacts on both emitters and society at large. A perception that regulatory approaches are overly rigid and therefore too costly has accelerated the diffusion of concepts from economic theory into climate policy

Francis Bator, ‘The Anatomy of Market Failure’ (1958) 72 Quarterly Journal of Economics 351. Correcting externalities, in particular, is considered vital to meet the climate challenge: the negative externality related to greenhouse gas emissions, where the economic damage resulting from their accumulation in the atmosphere is borne – both presently and in the future – by society at large, rather than by the emitters themselves; and the positive externalities of innovation and network effects, where those bearing the economic cost of beneficial activities, such as developing new technologies and deploying infrastructure, are unable to reap the full economic benefits of their behaviour. In both cases, economic incentives are misaligned, resulting in levels of emissions and innovation that do not contribute to optimal welfare outcomes. For further details, see Adam B. Jaffe, Richard G. Newell and Robert N. Stavins, ‘A Tale of Two Market Failures: Technology and Environmental Policy’ (2005) 54 Ecological Economics 164. 108 109

34  Research handbook on climate change mitigation law debates, prompting the widespread adoption of more flexible instruments that seek to influence behaviour through price signals.110 Such economic instruments are considered particularly suited to address climate change because greenhouse gases are not in themselves toxic and the damage function of their accumulation in the atmosphere is shallow in the short run. Two approaches, in particular, have seen deployment for this purpose: pricing controls, such as carbon taxes and fees, as well as quantity rationing, where tradable units confer the right to discharge a specified amount of greenhouse gases and can be sold or purchased in a carbon market. Implemented at both the domestic and the international level, such carbon pricing policies have experienced occasional setbacks,111 yet their trajectory over the long term has been one of continued expansion,112 including through incorporation in the Kyoto Protocol and Paris Agreement.113 With a propensity for travel across regulatory planes, from the domestic to the international level and back, as well as extensive reliance on actors other than the state, this category of policy instruments exemplifies both the innovative dynamic and disruptive challenges posed by global climate law more generally. As indicated earlier, however, instrumentation in climate policy does not stop at these archetypal categories. Successfully managing climate change is also, for instance, a matter of ensuring necessary financial flows, with unprecedented levels of investment called for, from both public and private sources, through a variety of funding mechanisms.114 Climate finance has become another laboratory of policy innovation, with established channels such as the international climate funds operated under the UNFCCC or traditional bi- and multilateral development finance increasingly complemented by newer instruments such as green bonds; helping advance this evolution is the gradual emergence of enabling governance frameworks – some mandated by law, others adopted in the form of voluntary standards – that set out principles or criteria of sustainable finance115 and require enhanced transparency about corporate sustainability as well as disclosure of the financial risks arising from climate change.116 Going forward, climate policy instrumentation will continue to offer a locus of change and experimentation. Already, the frontier of policy evolution has shifted to new and emerging challenges, such as the need to curb the continued supply of fossil fuels and use of long-lived

By applying an explicit price to emitting activities, these instruments seek to internalise the social cost of carbon, yet afford flexibility for emission reductions to occur where they yield the greatest social benefits. For further details, see Michael A. Mehling, ‘Market Mechanisms’ in Lavanya Rajamani and Jacqueline Peel (eds), The Oxford Handbook of International Environmental Law (2nd edn, Oxford University Press 2021) 92. 111 Michael A. Mehling, ‘Between Twilight and Renaissance: Changing Prospects for the Carbon Market’ (2012) 6 Carbon & Climate Law Review 277. 112 World Bank, State and Trends of Carbon Pricing 2021 (World Bank 2021). 113 See Michael A. Mehling, ‘Governing Cooperative Approaches under the Paris Agreement’ (2020) 46 Ecology Law Quarterly 765. 114 For estimates of the financial flows needed for climate change mitigation and adaptation, see Mehling (n. 53). 115 See, for instance, Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 [2020] OJ L198/13, which sets out a taxonomy of criteria for economic activity to qualify as environmentally sustainable. 116 At the international level, see, for instance, the Task Force on Climate-Related Financial Disclosures (TCFD), Recommendations of the Task Force on Climate-Related Financial Disclosures: Final Report (Bank for International Settlements 2017). 110

The evolving architecture of global climate law  35 emitting assets; addressing the distributional impacts of climate change response measures to secure a just and equitable transition; targeting spillover and leakage effects induced by international trade in emissions-intensive goods and services; or governing the risks of untested and potentially disruptive breakthrough technologies, such as solar radiation management or different negative emissions technologies. Like global climate law itself, the future of climate policy instrumentation will remain fluid, adjusting to the accelerating pace and scale of climate action, and responding to new challenges as these arise on the horizon. 3.5 Legislation There has been a visible increase in the number of legislative instruments adopted to address climate change, with the ‘Climate Change Laws of the World’ database counting more than 2,000 laws at the time of writing.117 This legislation can in part be traced back to major international policy developments, such as the Copenhagen Climate Conference and the Paris Agreement.118 Among this body of climate legislation, national framework laws on climate change have rapidly become a key feature of various legal systems.119 National framework laws can be defined as all legislation expressly dedicated to climate change and providing a normative framework for economy-wide or cross-sectoral climate policy design, implementation, evaluation, and coordination. Although the 2008 United Kingdom (UK) Climate Change Act may be the most well-known example, in the past few years many other developed and developing countries – including Argentina, Finland, France, Germany, Kenya, Mexico, the Netherlands, Pakistan and more – have likewise adopted framework legislation on climate change. In 2021, furthermore, the European Union (EU) added an EU Climate Law to its already extensive instrument mix.120 Several framework laws are concise, merely setting out guiding objectives, principles and general procedures for climate policy development,121 whereas other countries have opted for comprehensive legislation with elaborate climate governance roadmaps.122 National framework laws are generally designed for durability, meaning that they can survive successive changes of government. This can help provide long-term certainty, including for investors in mitigation technologies.123 To this end, the UK Climate Change Act 117 London School of Economic and Political Science, Grantham Research Institute on Climate Change and the Environment, ‘Climate Change Laws of the World’ https://​climate​-laws​.org/​. See also Shaikh M. S. U. Eskander and Sam Fankhauser, ‘Reduction in Greenhouse Gas Emissions from National Climate Legislation’ (2020) 10 Nature Climate Change 750 (pegging the number of laws at 1,800). 118 Gabriela Iacobuta and others, ‘National Climate Change Mitigation Legislation, Strategy and Targets: A Global Update’ (2018) 18 Climate Policy 1114, 1130; Matthias Duwe and Ralph Bodle, ‘“Paris Compatible” Climate Change Acts? National Framework Legislation in an International World’ in Thomas L. Muinzer (ed.), National Climate Change Acts: The Emergence, Form and Nature of National Framework Climate Legislation (Hart 2020) 43, 44. 119 See Muinzer (n. 118); Matthias Duwe and others, ‘Climate Laws in Europe: Good Practices in Net-Zero Management’, Report (Ecologic 2020). 120 Commission (EU), ‘Commission Welcomes Provisional Agreement on the European Climate Law’, Press Release (21 April 2021) https://​ec​.europa​.eu/​commission/​presscorner/​detail/​en/​ip​_21​_1828. 121 For instance, in Austria, Denmark, Finland, Norway and Sweden. 122 For instance, in France, Mexico, New Zealand, Spain and the UK. 123 See Diarmuid Torney and Roderic O’Gorman, ‘Adaptability versus Certainty in a Carbon Emissions Reduction Regime: An Assessment of the EU’s 2030 Climate and Energy Policy Framework’ (2020) 29 Review of European, Comparative & International Environmental Law 167, 174.

36  Research handbook on climate change mitigation law introduced not only a long-term (i.e. 2050) climate target, but also pioneered the concept of ‘carbon budgets’ capping emissions over five-year periods, with three budgets set at a time and the budget set 12 years in advance.124 Although not many countries have followed the UK’s approach of setting regular carbon budgets, the durability of legislation can also be strengthened by planning simultaneously for the short and long term.125 Some framework laws further provide details on the legal instruments or sectoral mitigation measures to be implemented. While doing so may help clarify the long-term direction of a country’s climate policy, it may also make it harder to agree on the law.126 Lastly, the durability can be strengthened by making the targets legally enforceable. While durability is important, adaptability is likewise an important consideration. For instance, the carbon budgets under the UK Climate Change Act can be revised in the light of new information about the science of climate change or because of international policy developments.127 Other laws, such as those in Germany and Spain, include a provision that prevents governments from backsliding on progress made,128 mirroring the progression principle that can be found in the Paris Agreement.129 The adaptability of a national framework law can be enhanced by another key characteristic of national framework laws on climate change, which is the creation of an independent expert advisory body. Again, the UK Climate Change Act and its Climate Change Committee can be mentioned as an example.130 These expert bodies can play various roles, including advising policymakers, monitoring progress made, and stimulating public debate. To strengthen the role of these advisory bodies, some countries provide financial and administrative support. Moreover, the role of an advisory body can be significantly strengthened when a government is obliged to respond to the findings and recommendations put forward by the body.131 For all its promised merits, the trend towards increased deployment of framework climate legislation can also introduce new challenges. With its typically high degree of formality and procedural inertia, for instance, such legislation can also, if poorly crafted, lock in a level of climate effort that proves insufficiently ambitious over time. Conversely, the delegation of review and adjustment authority to the executive branch or an independent executive body may provide flexibility or improve accountability, yet it could also weaken the perceived legitimacy of the overall climate policy framework and undermine the very reason for adopting formal legislation in the first place. Finally, and perhaps most importantly, the greater durability of climate legislation may come at a price, namely that of deterring greater climate ambition. Faced with the need to first secure a broad societal consensus, which in turn will narrow the latitude of future policy discretion, some governments may prove reluctant to enshrine the greatest possible – or even the necessary – level of policy ambition in statutory law.

UK Climate Change Act https://​www​.legislation​.gov​.uk/​ukpga/​2008/​27/​contents. See Richard Macrory and Thomas L. Muinzer, ‘The UK’s Climate Change Act’ in Muinzer (n. 118) 69. 125 This is a key feature of the Finnish Climate Change Act. See Sara Kymenvaara, ‘Legally Obliged to Plan: Effective Climate Change Mitigation by Means of Policy Planning under the Finnish Climate Act?’ (2015) 12 Journal for European Environmental & Planning Law 286. 126 Duwe and others (n. 119) 26. 127 UK Climate Change Act (n. 124) s10. 128 Duwe and others (n. 119) 20–21. 129 Paris Agreement (n. 1) Art. 4(3). 130 UK Climate Change Act (n. 124) Part 2. 131 Duwe and others (n. 119) 32–4. 124

The evolving architecture of global climate law  37 3.6 Litigation Like the notion of ‘climate law’, the concept of climate litigation is broad and varied, ranging from situations in which a claimant appeals to a court to enforce existing climate law to those in which a claimant challenges the validity of a climate law.132 Irrespective of the definition adopted,133 it is clear that as climate law has matured, climate litigation is becoming increasingly common in both national and international courts (see Chapter 13). Until the mid 2000s, climate-related court cases were few and far between. This began to change following the landmark Massachusetts v EPA case, in which the US Supreme Court ruled that the US Environmental Protection Agency was required to make a finding on whether CO2 and other greenhouse gases qualify as pollutants, and subsequently must therefore be regulated.134 Since then, there have been a growing number of cases brought against governments, corporations and individuals across the world,135 with one estimate pegging the number of cases at 1,550 by the middle of 2020, albeit with a majority of those (1,200) filed in the United States.136 One factor explaining the growth in climate litigation is the slow progress with international and domestic climate policy: in the absence of effective climate governance, concerned actors have sought alternative venues in which to mobilise climate action. In other words, internationally and nationally, courts are being used to fill a governance gap.137 While the Paris Agreement may have helped fill this gap to some extent, the number of cases has continued to grow. Indeed, the Paris Agreement, among others through its long-term temperature and

132 Among the many academic contributions on climate litigation published since the first edition of this book, see Jacqueline Peel and Hari M. Osofsky, Climate Change Litigation: Regulatory Pathways to Cleaner Energy (Cambridge University Press 2015); Kim Bouwer, ‘The Unsexy Future of Climate Change Litigation’ (2018) 30 Journal of Environmental Law 483; Geetanjali Ganguly, Joana Setzer and Veerle Heyvaert, ‘If at First You Don’t Succeed: Suing Corporations for Climate Change’ (2018) 38 Oxford Journal of Legal Studies 841; Joana Setzer and Lisa C. Vanhala, ‘Climate Change Litigation: A Review of Research on Courts and Litigants in Climate Governance’ (2019) 10 WIREs Climate Change e580; Jacqueline Peel and Jolene Lin, ‘Transnational Climate Litigation: The Contribution of the Global South’ (2019) 113 American Journal of International Law 679; Annalisa Savaresi and Juan Auz, ‘Climate Change Litigation and Human Rights: Pushing the Boundaries’ (2019) 9 Climate Law 244; Jacqueline Peel and Hari M. Osofsky, ‘Climate Change Litigation’ (2020) 16 Annual Review of Law and Social Science 21; Jolene Lin and Douglas A. Kysar (eds), Climate Change Litigation in the Asia-Pacific (Cambridge University Press 2020); Alogna and others (n. 74); Francesco Sindico and Makane Moïse Mbengue (eds), Comparative Climate Litigation: Beyond the Usual Suspects (Springer 2021). In addition, surveys have been produced by the London School of Economics and Political Science (LSE) and UNEP: Joana Setzer and Rebecca Byrnes, ‘Global Trends in Climate Change Litigation: 2020 Snapshot’ (LSE 2020); UNEP, ‘Global Climate Litigation Report: 2020 Status Review’ (UNEP 2020). 133 See Lisa Vanhala and Chris Hilson, ‘Climate Change Litigation: Symposium Introduction’ (2013) 35 Law & Policy 141, 144; Peel and Osofsky (2020) (n. 132) 23–4. 134 Massachusetts v Environmental Protection Agency, [2007] 549 US 497. See Elizabeth Fisher, ‘Climate Change Litigation, Obsession and Expertise: Reflecting on the Scholarly Response to Massachusetts v. EPA’ (2013) 35 Law & Policy 236. 135 Setzer and Byrnes (n. 132) 7. 136 UNEP (n. 132) 13. The estimate is based on an ongoing tracker of climate litigation: http://​ climatecasechart​.com/​. 137 Vanhala and Hilson (n. 133) 142.

38  Research handbook on climate change mitigation law emissions goals and the NDCs, has provided litigants with new benchmarks to deploy in their claims against governments and corporations.138 One of the most high-profile cases through which litigants sought to strengthen climate action was Urgenda v. State of the Netherlands, in which a District Court in The Hague ruled that the Dutch government had to increase the ambition of its 2020 mitigation target – a ruling that was subsequently confirmed by a Court of Appeal as well as the Dutch Supreme Court.139 Urgenda embodies three intertwined trends in climate litigation. First, it can be considered an example of what Peel and Osofsky term the ‘rights turn’ in climate change litigation, with claimants grounding their claims in national and international human rights law obligations and courts showing a willingness to grant such claims.140 Second, Urgenda illustrates the advent of ‘strategic litigation’, with litigants making conscious decisions about what type of case to bring to ‘advance climate policies, drive behavioural shifts by key actors, and/or create awareness and encourage public debate’.141 Following Urgenda, a range of similar cases – some successful, others less so, have been brought against governments. In a novel turn, the legal arguments used in Urgenda have also been used against companies, with the same District Court in the Hague ordering oil and gas multinational Shell to achieve 45 per cent emission reductions along its supply chain.142 Third, Urgenda exemplifies the evolving use of climate science in litigation, with litigants and the courts drawing on IPCC reports.143 Other cases have also benefited from advances in climate science, particularly in the area of attribution science, which have made it easier to link specific climate impacts to greenhouse gas emissions.144

See Lennart Wegener, ‘Can the Paris Agreement Help Climate Change Litigation and Vice Versa?’ (2020) 9 Transnational Environmental Law 17; Brian J. Preston, ‘The Influence of the Paris Agreement on Climate Litigation: Legal Obligations and Norms (Part I)’ (2021) 33 Journal of Environmental Law 1. 139 Urgenda Foundation v State of the Netherlands, (2015) HA ZA C/09/00456689; State of the Netherlands v Urgenda Foundation, Hague Court of Appeal, case 200.178.245/01 (9 October 2018); State of the Netherlands v Urgenda Foundation, Supreme Court of the Netherlands, case 19/00135 (20 December 2019). See, for example, Kars J. de Graaf and Jan H. Jans, ‘The Urgenda Decision: Netherlands Liable for Role in Causing Dangerous Global Climate Change’ (2015) 27 Journal of Environmental Law 517; Benoit Mayer, ‘The State of the Netherlands v. Urgenda Foundation: Ruling of the Court of Appeal of The Hague (9 October 2018)’ (2019) 8 Transnational Environmental Law 167; Margaretha Wewerinke-Singh and Ashleigh McCoach, ‘The State of the Netherlands v Urgenda Foundation: Distilling Best Practice and Lessons Learnt for Future Rights‐Based Climate Litigation’ (2021) 30 Review of European, Comparative & International Environmental Law 275. 140 Jacqueline Peel and Hari Osofsky, ‘A Rights Turn in Climate Change Litigation?’ (2018) 7 Transnational Environmental Law 37, 40. 141 Setzer and Byrnes (n. 132) 4. 142 Milieudefensie and others v Royal Dutch Shell, HA ZA 19-379 C/09/571932 (26 May 2021). 143 For a critical discussion of the use of climate science in the Urgenda case, see Mayer (n. 139) 181–5. 144 Attribution of climate impacts to emissions is at stake in Lliuya v RWE, in which a Peruvian farmer is seeking to hold the German utility RWE liable for climate-related damage. See Order of the court in Lliuya v RWE (Higher Regional Court Hamm, 1-5 U 15/17 2 0 285/15, 30 November 2017). See further Sophie Marjanac and Lindene Patton, ‘Extreme Weather Event Attribution Science and Climate Change Litigation: An Essential Step in the Causal Chain?’ (2018) 36 Journal of Energy & Natural Resources Law 265; Michael Burger, Jessica Wentz and Radley Horton, ‘The Law and Science of Climate Attribution’ (2020) 45 Columbia Journal of Environmental Law 57. 138

The evolving architecture of global climate law  39 While ‘holy grail’ cases such as Massachusetts v EPA and Urgenda have understandably drawn significant attention, many cases concern arguably more mundane issues such as challenges against planning permissions for wind farms or cases concerning the allocation of allowances under emissions trading systems.145 Moreover, further attention is needed for cases in the Global South, where cases may display different characteristics (e.g. climate change being more peripheral to the argument, and potentially contentious climate-related claims being packaged together with other, less controversial claims).146 The impacts of climate change litigation, notably its influence (or lack thereof) on advancing climate action, remain contested.147 Even unsuccessful cases against governments and corporations may raise awareness, help shift the terms of the political debate on climate policy, or cause reputational damage to defendants.148 Conversely, even though big ‘wins’ such as Urgenda may be politically and symbolically of significance – and spark similar litigation elsewhere – the fact that the Dutch government for many years ignored the District Court ruling illustrates that litigation success does not necessarily translate into climate action.149 Moreover, litigation can also be used by corporations and governments as a strategy to thwart climate action.150 While the jury thus remains out on the consequences – both in the short term and in the longer run – it seems clear that climate litigation as a legal phenomenon is here to stay. 3.7 Privatisation From the inception of the international climate change regime, non-state actors such as businesses and NGOs have played a significant role in the normative development of the regime and in its implementation.151 One important development in global climate law is that such actors have also become involved in transnational governance initiatives of their own. Examples of climate governance ‘beyond the state’ abound. Some initiatives support corporations in making credible climate commitments (e.g. through the Science-Based Targets ini Bouwer (n. 132). On litigation related to the EU emissions trading system, see Sanja Bogojević, ‘EU Climate Change Litigation, the Role of the European Courts, and the Importance of Legal Culture’ (2013) 35 Law & Policy 184. 146 Peel and Lin (n. 132); Joana Setzer and Lisa Benjamin, ‘Climate Litigation in the Global South: Constraints and Innovations’ (2019) 9 Transnational Environmental Law 77. 147 Compare, for instance, the contributions by Cinnamon Piñon Carlarne and Guy Dwyer in Benoit Mayer and Alexander Zahar (eds), Debating Climate Law (Cambridge University Press 2021). 148 Ganguly and others (n. 132). 149 On the diffusion of climate litigation and Urgenda, see Suryapratim Roy and Edwin Woerdman, ‘Situating Urgenda v The Netherlands within Comparative Climate Change Litigation’ (2016) 34 Journal of Energy & Natural Resources Law 65. On the Dutch government ignoring the Urgenda rulings in the first two instances, see Laura Burgers and Tim Staal, ‘Negeren Urgendavonnis is Zorgelijk voor de Rechtsstaat’ Het Parool (2 July 2019) (in Dutch). 150 One example is the threat of investment arbitration against climate action, such as the case launched by RWE against the Netherlands for its coal phase-out. See ‘RWE Seeks Compensation for Dutch Plans to Shut Coal-Fired Plant’ Reuters (4 February 2021) https://​www​.reuters​.com/​article/​rwe​ -netherlands​-coal​-idUSL8N2KA5SU. 151 See, for example, Chiara Giorgetti, ‘From Rio to Kyoto: A Study of the Involvement of Non-Governmental Organizations in the Negotiations on Climate Change’ (1999) 7 New York University Environmental Law Journal 201; Harro van Asselt, ‘The Role of Non-State Actors in Reviewing Ambition, Implementation and Compliance under the Paris Agreement’ (2016) 6 Climate Law 91. 145

40  Research handbook on climate change mitigation law tiative152) and accounting for their carbon footprints (e.g. through GHG Protocol standards153). Another category consists of voluntary carbon markets that have been established in the shadow of international and national climate law.154 Subnational authorities have also become particularly active in the fight against climate change, as exemplified by the C40 initiative and the Global Covenant of Mayors for Climate and Energy, through which cities commit to climate action and report on progress.155 There are myriad reasons for the creation of these transnational climate governance initiatives. These reasons include systemic factors such as the general shift from government to governance and developments in international climate policy (such as the creation of market mechanisms under the Kyoto Protocol, or the United States’ withdrawal first from Kyoto and later from the Paris Agreement), as well as specific factors such as profit-making or an enhanced sense of urgency.156 An important feature of various initiatives outside the UNFCCC is their transnational nature, meaning that such initiatives cross national boundaries and jurisdictions.157 The growth in transnational climate governance arrangements is remarkable, especially when contrasted with the stagnation of intergovernmental arrangements since the 2000s.158 Although there may be a general unease among lawyers with the idea that norms can emerge without (or through weaker forms of) state consent,159 some have begun to acknowledge that international law may well emanate from sources other than the state or international organisations.160 Still, not all transnational climate governance arrangements are likely to be considered transnational climate regulation (let alone ‘law’), simply because the functions they fulfil are not jurisgenerative. The main functions of several transnational initiatives include agenda setting, information-sharing, networking, capacity-building, and financing161 as opposed to target-setting, rule-making, or other activities that could be considered norm production. A key

See https://​sciencebasedtargets​.org/​. See https://​ghgprotocol​.org/​. 154 Steven Bernstein and others, ‘A Tale of Two Copenhagens: Carbon Markets and Climate Governance’ (2011) 39 Millennium 161. 155 See, for example, Harriet Bulkeley, ‘Cities and the Governing of Climate Change’ (2010) 35 Annual Review of Environment and Resources 229; Helmut Philipp Aust, ‘The Shifting Role of Cities in the Global Climate Change Regime: From Paris to Pittsburgh and Back?’ (2018) 28 Review of European, Comparative & International Environmental Law 57; Jolene Lin, Governing Climate Change: Global Cities and Transnational Lawmaking (Cambridge University Press 2018). 156 Matthew J. Hoffmann, Climate Governance at the Crossroads (Oxford University Press 2011) 64–71; Jessica F. Green, Rethinking Private Authority: Agents and Entrepreneurs in Global Environmental Governance (Princeton University Press 2013) 14–16. 157 See generally Kenneth W. Abbott, ‘The Transnational Regime Complex for Climate Change’ (2012) 30 Environment & Planning C 571; Harriet Bulkeley and others, ‘Governing Climate Change Transnationally: Assessing the Evidence from a Database of Sixty Initiatives’ (2012) 30 Environment & Planning C 591. 158 Kenneth W. Abbott, Jessica F. Green and Robert O. Keohane, ‘Organizational Ecology and Institutional Change in Global Governance’ (2016) 70 International Organization 247, 251–5. 159 Nico Krisch, ‘The Decay of Consent: International Law in an Age of Global Public Goods’ (2014) 108 American Journal of International Law 1. 160 Joost Pauwelyn, Ramses A. Wessel, and Jan Wouters, ‘When Structures Become Shackles: Stagnation and Dynamics in International Lawmaking’ (2014) 25 European Journal of International Law 733. 161 Abbott (n. 157) 579–80; Bulkeley and others (n. 157) 595–6. 152 153

The evolving architecture of global climate law  41 area where rule-making beyond the state does take place is the carbon market. The creation of regulatory and voluntary markets for trading emissions credits has led to the emergence of new arrangements that seek to govern these markets. For instance, voluntary carbon offset standards such as the Verified Carbon Standard and the Gold Standard have been created to ensure some level of oversight of the voluntary – as well as some regulatory – markets in the absence of rules developed by regulatory bodies.162 Although this form of rule-making has generally been welcomed as a way of ‘greening’ carbon markets,163 it also highlights new challenges. For instance, private actors may develop rules on the emission reductions of offsetting projects, projects’ wider (sustainability) impacts, or both. The approach ultimately adopted will affect which projects will receive a standard, which may subsequently be reflected in the price of resulting credits on the carbon market. More generally, the rise of transnational climate regulation raises questions about who sets the rules, based on what authority, and with what effects – questions related to accountability of governance. Although various notions of accountability exist,164 the term generally refers to the idea that those bestowed with power need to take responsibility for their actions. Various questions can be raised under this heading: who should be held accountable, to whom should they be accountable; for what exactly; and using which standards?165 Importantly, there is not one type of accountability and there may be trade-offs between the different types (e.g. a private business actor involved in climate governance may find it difficult to be accountable both to its shareholders and to public authorities).166 To strengthen the accountability of the exercise of transnational regulatory power, it may be useful to resort to legal administrative standards and good governance principles.167 The rise of transnational climate governance also raises questions about the relationship between such initiatives and ‘traditional’ law-making and regulation. In the run-up to Paris, international negotiators increasingly began to emphasise the role and importance of non-state and subnational initiatives in climate action.168 This culminated in greater recognition of action by ‘non-party stakeholders’ in the decision adopting the Paris Agreement. Among others, the decision encourages the registration of new actions in a portal maintained by the UNFCCC Secretariat, launches annual high-level events, and establishes two ‘high-level champions’ to facilitate and scale up climate action.169 In 2019, UNFCCC parties decided to extend these activities to beyond 2020.170 Moving forward, a key question is how the intergovernmental

Heather Lovell, ‘Governing the Carbon Offset Market’ (2010) 1 WIREs Climate Change 353. James Salzman and William Boyd, ‘The Curious Case of Greening in Carbon Markets’ (2011) 41 Environmental Law 73. 164 Jonathan G. S. Koppell, World Rule: Accountability, Legitimacy, and the Design of Global Governance (University of Chicago Press 2010). 165 Tim Corthaut and others, ‘Operationalizing Accountability in Respect of Informal International Lawmaking Mechanisms’ in Pauwelyn, Wessel and Wouters (n. 76) 310. 166 Cf. Koppell (n. 164) 55–66. 167 Veerle Heyvaert, ‘What’s in a Name? The Covenant of Mayors as Transnational Environmental Regulation’ (2013) 22 Review of European Community & International Environmental Law 78, 87–9. 168 See Sander Chan and others, ‘Reinvigorating International Climate Policy: A Comprehensive Framework for Effective Non-State Action’ (2015) 6 Global Policy 466. 169 Decision 1/CP.21 (n. 56) paras 109–23. 170 UNFCCC, ‘Decision 1​.CP/​25, Chile Madrid Time for Action’ UN Doc. FCCC/CP/2019/13/Add.1 (16 March 2020) paras 27–9. 162 163

42  Research handbook on climate change mitigation law process can help facilitate (or ‘orchestrate’171) climate action by non-state and subnational actors, and how non-state action can in turn strengthen parties’ climate ambitions and support the achievement of the Paris Agreement goals.172

4 CONCLUSION This chapter has described an architecture of global climate law that is in existential flux; born out of the lofty aspirations of classic multilateralism, the formal treaty architecture which engendered the original framework of international climate cooperation has given way to a far more complex, less clear-cut governance architecture, where limited-membership initiatives operate alongside the established UNFCCC structures, and voluntary pledges, non-state actors and flexible policy instruments supplant or complement traditional treaty obligations. Some international lawyers will observe these trends with a sense of unease, as they put to question some of the central purposes and raisons d’être of a legally vested international regime, such as the importance of state consent, clear accountability mechanisms, transparency, and enforceable obligations. Yet to the extent that global aspirations to avoid dangerous climate change remain unachieved, it is likely that we will continue to see a diverse array of governance approaches emerging. Indeed, perhaps the sheer scale, cost and complexity of climate change have made the current assemblage an inevitable necessity. Furthermore, given the urgency of the climate challenge, arriving at practical solutions should arguably take precedence over formal preoccupations. The fact that climate change now permeates collective and individual decision-making processes in ways that were difficult to conceive three decades ago could be seen as an important sign that global climate law is, at long last, maturing.

On orchestration, see Abbott (n. 157) 587–8; Thomas Hale and Charles Roger, ‘Orchestration and Transnational Climate Governance’ (2014) 9 Review of International Organizations 59; Kenneth W. Abbott, ‘Orchestration: Strategic Ordering in Polycentric Governance’ in Andrew Jordan and others, Governing Climate Change: Polycentricity in Action? (Cambridge University Press 2018) 188. 172 Studies have begun to quantify the contribution of non-state and subnational action to climate change mitigation, suggesting they can help put the Paris Agreement’s goals within reach. See, for example, Angel Hsu and others, ‘Performance Determinants Show European Cities Are Delivering on Climate Mitigation’ (2020) 10 Nature Climate Change 1015; Takeshi Kuramochi and others, ‘Beyond National Climate Action: The Impact of Region, City, and Business Commitments on Global Greenhouse Gas Emissions’ (2020) 20 Climate Policy 275; and Swithin Lui and others, ‘Correcting Course: The Emission Reduction Potential of International Cooperative Initiatives’ (2021) 21 Climate Policy 232. For a critical discussion, see Sander Chan and others, ‘Climate Ambition and Sustainable Development for a New Decade: A Catalytic Framework’ (2021) 12 Global Policy 245. 171

3. Climate change mitigation and the precautionary principle Nicolas de Sadeleer

INTRODUCTION Human beings, like other living organisms, have always influenced their environment. However, since the start of the Industrial Revolution, the surge in human activities has been impacting the lithosphere and pedosphere, the atmosphere, the hydrosphere, the cryosphere, and the biosphere1 more deeply than we did in all previous periods combined. These are the major components of the climate system, in which complex interactions have produced a rather stable equilibrium around which climate revolves.2 The magnitude of these activities is affecting the face of the Earth in an unprecedented manner. Since the start of agriculture around 11,000 years ago, 70% of the Earth’s land surface has been altered by human activities.3 The anthropogenic mass has doubled roughly every 20 years. As a result, it is surpassing the global living biomass. Indeed, this is the first time in human history that we have altered ecosystems with such intensity, on such scale and with such speed.4 It comes as no surprise that the Earth is at a crossover point.5 For over a century, industrial societies have viewed nature both as a rich reserve of resources and as a dump for the refuse produced by resource exploitation. Natural resource over-exploitation as well as environmental pollution were belittled. Indeed, as pollutants were borne away by wind and water the solution to pollution was dilution. In addition, climate change issues were unknown. At the end of the 1960s, the public authorities in the Western world tried to stem the threats posed by the growing environmental pressures. However, they fell short in endorsing a monolithic regulatory approach. Since the inception of the environmental policy in the Western world,6 policy measures intended to counter environmental damage have undergone a succession of radical modifications. A first phase took the form of remedial action, which translates into ex post intervention 1 Since the start of agriculture around 11,000 years ago, the biomass of terrestrial vegetation has been halved, with a corresponding loss of more than 20% of its original biodiversity. See K.-H. Erb et al., ‘Unexpectedly Large Impact of Forest Management and Grazing on Global Vegetation Biomass’ (2018) 553 Nature 73–76; IPBES, Global Assessment Report on Biodiversity and Ecosystem Services (IPBES Secretariat 2019). 2 P. Lemke, ‘Dimensions and Mechanisms of Global Climate Change’ in G. Winter (ed.), Multilevel Governance of Global Environmental Change (Cambridge University Press 2006) 37. 3 C. J. A. Bradshaw et al., ‘Underestimating the Challenges of Avoiding a Ghastly Future’ Frontiers in Conservation Science (13 January 2021). 4 J. R. McNeill, Nothing New under the Sun. An Environmental History of the Twentieth-Century World (W. W. Norton & Company 2000) 3. 5 E. Elhacham et al., ‘Global-Human Made Mass Exceeds All Living Biomass’ (2020) 558 Nature 442–444. 6 This concept encompasses mostly OECD countries.

43

44  Research handbook on climate change mitigation law by the public authorities. At this stage damage has already occurred; the only possible course of action is remedy. This belated approach does not prevent the occurrence of environmental damage. It soon became apparent that this model was practicable only if it was buttressed by a preventive policy. For that reason, environmental policy evolved to include a preventive dimension, by which public authorities intervene prior to the occurrence of damage that is likely to take place if nothing is done to prevent it. This second stage is marked by a blind faith in science. In accordance with an ‘assimilative’ approach,7 it is not absolutely necessary to eliminate discharges of polluting substances, since emission standards may easily provide an appropriate response to any type of pollution by setting the exact level of a pollutant that an ecosystem can assimilate. It is assumed that as long as emissions do not exceed a certain critical threshold, receiving environments may absorb and disperse them. Ecological deterioration only takes place when the self-cleansing capacity of ecosystems is saturated as the result of too high concentrations or too rapid accumulations of polluting substances.8 In the course of the early 1990s, the litany of environmental threats became alarming: destruction of the stratospheric ozone layer, climate change, ecosystem acidification, the sheer loss of biological diversity, over-exploitation of marine resources, increased technological risks, etc. The emergence of an array of increasingly unpredictable risks enticed the authorities to base their policy on an anticipatory model. This model can be linked to the understanding of the limitations of scientific expertise. While prevention is based on the concept of certain risk, the anticipatory model is distinguished by the intrusion of uncertainty. Metamorphosed into a factor for revealing uncertainty, science raises controversies as often as it offers robust knowledge. The entire foundation of the ‘assimilative’ approach, which rests upon a blind confidence in science, is thus crumbling under the pressure of uncertainty. In a nutshell, the differences between prevention and precaution are over how experts know what causes the phenomenon and what the decision-makers’ responsibility is in light of that knowledge.9 Against this background, it became increasingly difficult to explain trends in global warming. Experts quickly took the view that mitigation should prevail over a curative approach. However, this statement does not resolve the issue as to the manner in which mitigation measures have to take uncertainties into consideration. Climate law does not ignore precaution. The precautionary principle was regularly invoked in the 1990s with respect to climate change issues, although the term precautionary approach rather than precautionary principle was favoured by Anglo-Saxon countries. In 1992, the right to adopt precautionary measures was enshrined in the UN Framework Convention on Climate Change (UNFCCC). At that time, the recognition of precaution in a major international agreement was deemed to be a breakthrough. This chapter seeks to analyse the implications of the precautionary principle on mitigation measures. After highlighting the specific features of climate change risks and highlighting the

The assimilative capacity of a component of the environment can be defined as the amount of material that could be contained within this component without producing unacceptable biological impacts. See E. D. Goldberg (ed.), ‘Assimilative Capacity of US Coastal Waters for Pollutants Proceedings of a Workshop at Crystal Mountain, WA’, NOAA Working Paper No. 1 (US Department of Commerce, Washington DC, 1979). 8 N. de Sadeleer, Environmental Principles (2nd edn, Oxford University Press 2020) 121, 125–127. 9 Ibid., 165–167, 170–175, 243–44, 253. 7

Climate change mitigation and the precautionary principle  45 lingering uncertainties (sections 3 to 5), it will explore how the decision-making process could better integrate uncertainties. It concludes by outlining how limiting the most severe impacts of global warming will require the integration of uncertainties into the decision-making process.

1

FALSE NEGATIVE V FALSE POSITIVE: THE RISE OF THE PRECAUTIONARY PRINCIPLE IN INTERNATIONAL CLIMATE LAW

Uncertainty affects both the likelihood of an event and when – and to what extent – it will produce damage. In a context of incomplete knowledge regarding climate change speed and impacts in the course of the 1980s, the international community was confronted with the following dilemma. Should the public authorities opt for a delayed regulatory approach with the aim of reducing the margin of uncertainty? Should they give credence to climatologists who predict catastrophic natural disasters? Or should they endorse an immediate preventive approach to counter threats that were merely suspected? By avoiding hasty and precipitate measures, the wait-and-see or business-as-usual approach appears to favour a more efficient allocation of economic resources than a pre-emptive approach which would sacrifice economic welfare for the sake of avoiding an event that was not likely to occur (false positive errors).10 In effect, the accumulation of scientific knowledge resulting from this delay offers decision-makers some hope of counting in the long run on more advanced and cheaper technologies. However, the uncertainties inherent in scientific investigation could delay the adoption of essential measures to ward off irreversible damage in the absence of incontrovertible proof. It follows that the proponents of a delayed approach may conclude there is no impact when actually there is one (false negative errors). Table 3.1 shows the distinctions between these two schools of thought. At the end of last century, a number of states nevertheless pushed for the adoption of a precautionary strategy, limiting GHG emissions in response to the threat they pose to climate stability and the Earth’s system. In their view, the stakes were simply too high to delay the adoption of key international decisions. Any failure to act quickly would result in false negative errors. What is more, ‘it may be less costly to spread the costs of averting climate change by beginning mitigation efforts early, rather than to wait several decades and take actions after the problem has already advanced much further’.11 This led to the conclusion of the UNFCCC in 1992. All subsequent international agreements – the 1997 Kyoto Protocol and the 2015 Paris Agreement – have emerged from the Framework Convention. Whilst the UNFCCC defines the conditions under which precautionary measures can be implemented,12 the latter does not refer to precaution at all. Although the 1997 Kyoto Protocol does not mention the precautionary principle, precautionary action was nonetheless

10 Many critics were contending in 1992 that too bold an interpretation of the precautionary principle generates false positive errors leading to over-regulation at the expense of welfare considerations. 11 IPCC, Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part A: Global and Sectoral Aspects, Contribution of Working Group III on Mitigation (Cambridge University Press 2014) 1.2.4 The Role of Uncertainty. 12 N. de Sadeleer, Environmental Principles (n. 8) 265–266.

46  Research handbook on climate change mitigation law Table 3.1

Wait-and-see and anticipatory approaches

Approach

Business-as-usual approach

Anticipatory approach

Advantage and disadvantages

A pre-emptive approach would sacrifice

A pre-emptive approach would avoid the

economic welfare

occurrence of irreversible damage

Should reduce the risk associated with

Should reduce the level of uncertainty in order

premature and costly measures

to foster optimal strategies

Sound science paradigm: Delay action until

Precautionary paradigm: Mitigate impacts

experts are able to provide strong evidence

irrespective of full scientific certainty

Types of action

Learn and then act

Better safe than sorry

Errors

False negative errors

False positive errors

Investment in research Paradigm

Table 3.2

Uncertainty in international treaties

Multilateral Environmental Agreement

1992 UNFCC

1997 Kyoto Protocol

2015 Paris Agreement

Level of uncertainty

High

Moderate

Increased confidence

strengthened at a time when scientific knowledge was still giving rise to conflicting opinions. The fact that, thanks to the reports of the Intergovernmental Panel on Climate Change (IPCC), a global consensus has been achieved regarding the anthropogenic cause of climate change perhaps explains the absence of any reference to precaution. Lastly, the Paris Agreement does not mention precaution at all. The following Table 3.2 highlights the manner in which uncertainties regarding the man-made origin of climate change have permeated these different agreements. Against this background, it was easier to reach a global agreement in Paris in 2015 than in 2009 in Copenhagen. Otherwise, one could also argue that the principle was embedded in a Framework Convention. As a result, there was no need to lay it down in further agreements. Needless to say, the proclamation of the precautionary principle in the UNFCCC has been a touchstone issue. Article 3(3) of the Convention provides for the following obligation: the Parties should take precautionary measures to anticipate, prevent or minimize the causes of climate change and mitigate its adverse effects. Where there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing such measures, 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 cost.

Moreover, its Preamble calls upon parties to prevent damage even if there are ‘many uncertainties in predictions of climate change, particularly with regard to the timing, magnitude and regional patterns thereof’. Precaution is coined in the UNFCCC neither as a principle nor as an approach. In order to avoid such a debate, Article 3(3) grants the right to the parties to enact precautionary measures; it does not compel them to do so. In other words, it encapsulates a right to take preventive measures and not an obligation to act. Moreover, the adoption of the precautionary measures under the UNFCCC is likely to be limited by a number of thresholds, such as the irreversibility and the seriousness of the damage, and the cost-effectiveness of the measures. In effect, precautionary measures must ‘be cost-effective so as to ensure global benefits at the lowest possible cost’. Given that much damage won’t be easily translated into monetary terms, the benefits of climate change policies are difficult to estimate accurately.

Climate change mitigation and the precautionary principle  47 So far, it is difficult to assess whether state authorities took advantage of that provision in order to adopt precautionary measures.

2

LARGE-SCALE ADVERSE EFFECTS OF CLIMATE CHANGE

Before the Industrial Revolution,13 the amount of greenhouse gases (GHG) in the atmosphere remained relatively constant. Although the climate has been relatively stable over the past 8,000 years, since the last Ice Age, it is now changing rapidly as atmospheric concentrations of carbon dioxide (CO), methane (CH4), nitrogen oxides (NO and NO2), and various manufactured synthetic GHG have all risen significantly. The causes are manifold. Cheap energy has been a key driver of the extremely fast economic and demographic growth. Industry, as well as dwellings, have relied extensively upon coal and, later, on other fuels for combustion. From the 1960s, road traffic became a significant source of GHG emissions. In addition, the industrialization of agriculture and landfilling of waste have contributed to the doubling of the concentration of methane in the atmosphere since pre-industrial times. Furthermore, land-use changes due to massive deforestation around the world and the expansion of agriculture have been contributing to the amplification of the phenomenon. Although experts have been warning since 1979 that a doubling of the concentration of CO2 will result in average heating of between 1.5 and 4.5 degrees, little has been done to avert that tendency. Changes in temperature are occurring very rapidly. Whilst in 2020 the average temperature has only increased by around 1 °C above pre-industrial levels, the situation has already become critical within the regions that are most exposed to risks of drought, heatwaves and flooding. The rise in temperature is already causing unprecedented changes with catastrophic consequences for the Earth system. Moreover, rising temperatures do not represent the only problem; the oceans are also acidifying at an alarming rate. Whilst some animals seem to be adapting to changing conditions, the vast majority of species are unable to cope with the rise of temperatures, the change of precipitation patterns and the weather getting less predictable and more extreme. Given the need to settle in cooler ranges, some species might not be able to migrate (encountering physical obstacles or the lack of suitable habitats) while others, not having the ability to migrate or with a too narrow range, are likely to disappear.14 In almost all cases, new information results in more pessimistic forecasts. To sum up, the manifold impacts of climate change include, among others: ● ● ● ● ● ●

decrease of snow-covered areas, melting and shrinking of glaciers, retreat of the ice cap in the Arctic, ocean warming (serving as a huge energy pump) and ocean acidification, sea level rise, bleaching of coral reefs,

Article 2(1)(a) of the 2015 Paris Agreement requires its parties to hold ‘the increase in the global average temperature to well below 2 °C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 °C’. However, the pre-industrial baseline is not defined. 14 M. R. Caldwell and M. Loughney Melius, ‘Coastal Issues’, in D. A. Farber and M. Peeters (eds), Climate Change Law (Edward Elgar Publishing 2016) 581. 13

48  Research handbook on climate change mitigation law ● ● ● ●

increase of extreme weather events such as heatwaves and fires, increase of precipitation in the northern hemisphere and decrease in the subtropics, shift of wild species range due to rising temperatures, species extinction.15

These impacts also mask other even more troubling surprises. Primary production, ecosystemic service stability and resource availability are all affected by this phenomenon.

3

SPECIFICITY OF CLIMATE CHANGE RISKS

The risks stemming from climate change are fundamentally different from earlier industrial types of risk. Indeed, climate risks are distinguished from industrial and technological risks both by their unpredictability over time and by the collective nature of the damage they are likely to cause. Indeed, their potential victims are less easy to identify than residents living near to a hazardous facility. First of all, climate change has much broader and more diffuse impacts than any other type of human activity. The regulatory response in order to prevent temperature rises is much more complex than within the traditional environmental field. In fact, the issue is more a question of the accumulation of GHG in the atmosphere due to mass production, globalization and free trade, intensive agriculture, along with increased transportation by road and air, than of emissions from a limited number of industrial plants whose pollution can be easily controlled and reduced. Secondly, as climate change is caused by an array of natural and human activities, experts cannot pinpoint the exact contribution of each of these activities to the phenomenon. For instance, methane – the second largest contributor to human-induced global warming – is emitted by both intensive agriculture and by natural sources which include wetlands, freshwater bodies, wildfires, and permafrost. To make matters more complicated, some gases have more powerful heat-trapping effects than others. Nitrous oxide (N2O) has a heat-trapping effect about 310 times more powerful than CO2 and methane’s heat-trapping effect is 25 times more powerful than CO2. Halocarbons are hundreds to thousands of times more potent than CO2 and remain in the atmosphere for centuries. Thirdly, the changes are unprecedented, at least since the end of the last Ice Age. The pace of change is swift compared to ordinary historic rates of climate change, and is also outpacing the ability of ecosystems to adjust.16 In contrast to industrial risks, we cannot learn from past experience. Given the novel nature of the threat, it would appear appropriate for decision-makers to act in accordance with the precautionary principle, which applies precisely where experts cannot reckon on former experience.

IPCC, ‘Summary for Policymakers’ in Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part A: Global and Sectoral Aspects, Contribution of Working Group III on Mitigation (Cambridge University Press 2014). 16 J. P. Holdren, ‘Introduction’, in S. Schneider and al., Climate Change Science and Policy (Island Press 2009) 5. 15

Climate change mitigation and the precautionary principle  49 Fourthly, the anticipated winners and losers from climate change are distributed unevenly throughout time and space,17 an issue which gives rise to difficult questions of equity (e.g. the principle of common but differentiated responsibility). Fifthly, irrespective of the considered scenario, the IPCC underlines how it is ‘virtually certain that there will be more frequent hot and fewer cold temperature extremes over most land areas on daily and seasonal timescales as global mean temperatures increase. It is very likely that heatwaves will occur with a higher frequency and duration.’18 Thanks to considerable scientific research, some uncertainties are being reduced. For instance, in its ‘Summary for Policymakers’ of the Sixth Assessment Report, the IPCC Working Group II is of the view that the level of risk is becoming high to very high at lower global warming levels than in the Fifth Assessment Report.19 That being said, although the growing body of expertise gathered since the creation of the IPCC has enormously increased our knowledge of the climate system, given its scope and novelty, climate change issues are still permeated by uncertainty. In effect, scientists are unable to determine with precision the regularity, frequency and magnitude of impacts, regardless of the quality of their models. The impacts climate change may provoke are thus likely to vary in terms of: ● time of latency between the increase of temperatures and the actual impact of damage (gradual or abrupt), ● speed (acceleration or deceleration), ● frequency of natural events (storms, floods, droughts, wildfires, erosion), ● duration (persistent, reversible, slowly reversible, irreversible, multigenerational), ● magnitude (cumulative or synergistic, serious or insignificant), ● localization (e.g. change in the regional distribution of precipitation, acidification of oceans, Arctic region warming more rapidly than the normal mean, warming over land greater than over the ocean, increased concentration of ozone), ● effects (human health, vulnerable countries, biodiversity loss, agricultural yields, tourism), ● and scale (global, continental, or regional).20 To further complicate matters, ● although the accurate quantification of anthropogenic and natural climate drivers is crucial for Earth system models, it is fraught with uncertainties, ● natural fluctuations in global temperature are ever-present, leading to multi-decadal and longer-term changes throughout the last millennium,21 and

H. Grassl and B. Metz, ‘Climate Change: Science and the PP’ in EEA Report 2013 (Publications Office of the European Union, 2014) 309. 18 IPCC, Climate Change 2013: The Physical Science Basis: Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2013). 19 IPCC, ‘Summary for Policymakers’, in Climate Change 2022, Impacts, Adaptation and Vulnerability, Contribution of Working Group II to the Sixth Assessment Report (Cambridge University Press 2022) 35. 20 N. de Sadeleer, Environmental Principles (n. 8) 262–263. 21 A. P. Schurer, ‘Importance of the Pre-Industrial Baseline in Determining the Likelihood of Exceeding the Paris Limits’ (2017) 7(8) Nature Climate Change 563–567. 17

50  Research handbook on climate change mitigation law ● variability is linked to natural forcing, particularly volcanic eruptions and anthropogenic aerosols. Uncertainty permeates all of these factors. In particular, it affects the calculation of the speed of the phenomenon as well as the nature and scope of the adverse effects it may entail. Against a backdrop of uncertainty, experts propose scenarios rather than assertions. The IPCC language of certainty is thus testament to the fact that there are many unknowns in the timing, magnitude and regional patterns of climate change,22 although many uncertainties have decreased over time. For instance, the 2019 IPCC’s Special Report on the Ocean and Cryosphere in a Changing Climate describes with ‘a very high confidence’ or ‘a high confidence’ a number of impacts of climate change (reduction in snow cover, increased permafrost temperature, shrinking of Arctic ice extent, etc.) and assesses as within a ‘likely’ or ‘very likely’ range forthcoming scenarios (ocean warming, sea-level rise, etc.). The fact is that temperatures are rising. Furthermore, the impacts are uneven. By way of illustration, at the North Pole, the observed temperature increase is twice as important as in lower latitudes. The most vulnerable regions vary across Europe. The intensity of precipitation has increased in the past 50 years in northern Europe whilst droughts are projected to increase in length and frequency in southern and south-eastern Europe. To make matters worse, the developing countries are likely to be more impacted than developed countries. In particular, climate change will exacerbate the problems in countries that experience chronic water shortages. In addition to having the least capacity to adapt, sub-Saharan Africa is expected to experience particularly harsh repercussions from climate change.23 Within countries, low-income communities – notably the ones established in coastal areas – are likely to be more severely impacted by sea level rises and hurricanes.

4

LINGERING UNCERTAINTIES

Uncertainty is neither an absolute, static nor clear-cut concept. As this term is subject to different interpretations, it is not an easy task to grapple with it. Scientific uncertainty exists whenever there is no adequate theoretical or empirical basis for assigning probabilities to the occurrence or the extent of a risk. As far as climate change risks are concerned, there is a strong deficit in predictive capability. Although evidence that climate change has a man-made origin has strengthened continuously since the 1995 IPCC report (from ‘very high confidence’ in the IPCC Assessment Report AR4 to ‘extremely likely’ in AR5), ‘the connections between emissions of GHGs and climate change are not yet fully understood’.24 Despite the efforts of the scientific community there is

P. Birnie, A. Boyle and C. Redgwell, International Law & the Environment (3rd edn, Oxford University Press 2009) 337. 23 O. Serdeczny et al., ‘Climate Change Impacts in Sub-Saharan Africa: From Physical Changes to their Social Repercussions’ (2017) 17 Regional Environmental Change 1585–1600. 24 IPCC, 2014 (n. 11). 22

Climate change mitigation and the precautionary principle  51 still no hope of fully understanding the complexities of the interactions of the atmosphere, the oceans, and GHGs.25 The following examples are illustrative of the hurdles faced by experts. ● Ecosystems do not respond in a linear way to the impacts of climate change. The absence of mitigation measures for ecosystems increases their vulnerability to degradation and collapse.26 ● The complex chain of feedbacks between climate and wildfires displays a large set of uncertainties. The adaptation of vegetation and ecosystems to fire is a complex topic. The effects of climate change on wildfire are likely to vary considerably according to the vegetation and by fuel availability or flammability (as a result of intense drought). The effect of wildfires in areas with different levels of species richness may be uneven.27 Forests with higher levels of protection for biodiversity conservation may display lower fire severity values whilst plantations are likely to be less resilient.28 ● Although oceans play a major role in global climate dynamics, considerable uncertainties remain regarding their influence on the climate systems.29 Their role as mitigating factor has been significantly underestimated.30 ● The cooling and warming effects of aerosols are dogged by uncertainty and accordingly complicate the assessment of climate sensitivity.31 ● With respect to the fate of many ecosystems and species, we are entering uncharted territory. In particular, although oceans and forests can undoubtedly reabsorb some portion of GHG emissions, increased evaporation of water from the ocean into the atmosphere is likely to result in more warming.32 To make matters worse, natural catastrophes such as fires are likely to become more frequent, in turn are giving rise to further emissions that have not been hitherto adequately accounted for in climate models. If warming accelerates evaporation, resulting in the formation of clouds, the latter could in turn strongly amplify the warming phenomenon (by trapping infrared radiation) rather than serving to stabilize it (by reflecting solar rays). In exploring such issues, scientists put forward scenarios rather than assertions. Moreover, other uncertainties are still lingering due to irreducible ignorance or disagreement between what is known and unknowable. For instance, epistemological uncertainty arises as a result of gaps in scientific knowledge. In other words, scientists know the effects of

IPCC, The Ocean and Cryosphere in a Changing Climate. Summary for Policymakers (2019). R. Kundis Craig, ‘Ocean Adaptation’, in D. A. Farber and M. Peeters (eds), Climate Change Law (Edward Elgar Publishing 2016) 569. 27 European Commission, JRC Technical Report. Forest Fire Danger Extremes in Europe under Climate Change: Variability and Uncertainty (Publications Office of the EU 2017) 17, 30. 28 M. J. Spasojevic, C. A. Bahlai, B. A. Bradley, B. J. Butterfield, M.-N. Tuanmu, S. Sistla, R. Wiederholt and K. N. Suding, ‘Scaling Up the Diversity–Resilience Relationship with Trait Databases and Remote Sensing Data: The Recovery of Productivity after Wildfire’ (2016) 22(4) Global Change Biology 1421–1432. 29 IPCC, 2014 (n. 11), 417. 30 IPSO, IUCN, ‘The State of the Ocean 2013, Perils, Prognoses and Proposals’ (2013) 74(2) Marine Pollution Bulletin 491–552 31 M. Mastrandrea and S. Schneider, ‘Climate Change Science Overview’, in S. Schneider et al. (eds), Climate Change Science and Policy (Island Press, 2009) 17–19. 32 Ibid., 21. 25 26

52  Research handbook on climate change mitigation law a situation, but are unable to ascertain the likelihood of their occurrence. Several factors might compound epistemological uncertainty. ● Indeterminacy. The causal relations are understood but the intensity of the relation between cause and effect cannot be estimated because the experts do not know all the factors influencing the causal chains. In this connection, climate change experts are unable to determine with precision the release of GHGs increasing the average temperature of the atmosphere. ● Ambiguity. The extent of any uncertainty is influenced by the way in which experts interpret the available scientific data. When considering the same data, two different experts may arrive at different conclusions as to whether or not there is any uncertainty. Contradictory results give rise to ambiguity. ● Inconclusiveness. The realities of science dictate that scientists, whatever the quality of their investigations, will never be able to eliminate some uncertainties; for instance, there may be too many unpredictable variables to enable the identification of the relative influences of each factor. ● Incommensurability. Given that the increase in temperature gives rise to manifold impacts, a multitude of hazards give rise to a problem of incommensurability. Regarding climate change, these subcategories are highly correlated. By way of illustration, the IPCC working group on mitigation has been stressing that ‘evaluation of uncertainty and the necessary precaution is plagued with complex pitfalls’. These include ‘the global scale, long time lags between forcing and response, the impossibility to test experimentally before the facts arise, and the low frequency variability with the periods involved being longer than the length of most records’.33 The remaining uncertainties are likely to be compounded by natural factors: resilience of ecosystems (their ability to bounce back from disturbances), reversibility or irreversibility of the damage, etc. The precautionary principle has real implications for risk managers when confronted with tipping points, beyond which abrupt and dramatic changes may occur. Some of these non-linear changes are related to positive feedbacks in the climate system and can therefore accelerate climate change.34 If a tipping point is crossed, the development of the system is no longer determined by the timescale of the forcing, but rather by its internal dynamics, which can be much faster than the forcing.35 A variety of tipping points have been identified. By way of illustration, large-scale singular events that are components of the global Earth system (slowdown of the AMOC, the El Niño–Southern Oscillation and the role of the Southern Ocean in the global carbon cycle) ‘are thought to hold the risk of reaching critical tipping points under climate change, and that can result in or be associated with major shifts in the climate system’.36 Other examples of non-linear irreversible change will be the increase in

IPCC, 2014 (n. 11), 10.4.2.2 Precautionary Considerations. Joint EEA–JRC–WHO Report, ‘Impact of Europe’s Changing Climate – 2008 Indicator-Based Assessment’ (EEA, 4/2008) 34. 35 IPPC, Climate Change 2007: Impacts, Adaptation, and Vulnerability (Cambridge University Press 2007) 83. 36 IPPC, Special Report Global Warming of 1.5 °C (World Meteorological Organization 2018) Chapter 3, 83. 33 34

Climate change mitigation and the precautionary principle  53 ocean acidity which would deplete marine biodiversity or the melting of permafrost caused by rising Arctic temperatures that could lead to an increase in methane emissions. Another case in point is the melting of snow and ice that have a high reflectivity (albedo). Up to 90% of the incident solar radiation is reflected by snow and ice surfaces. As the snow and ice are melting due to the higher temperatures, the oceans are likely to absorb the solar radiation and contribute to a greater extent to the heating of the climate system. How close are we to these tipping points?37 What will happen if they are reached? The risks associated with these major events become ‘moderate’ or ‘disproportionately high’ depending upon the increase in temperatures above pre-industrial levels.38 The level of scientific understanding of the crossing of these tipping points is low.39 Accordingly, the prospect of reaching a potential tipping point should enhance caution in this field. Last but not least, uncertainties can stem from more than a simple lack of data or an inadequate model of risk assessment. Aspects of uncertainty are associated with each link of the causal chain of climate change, beginning with GHG emissions, covering damage caused by climate change, followed by a swath of mitigation and adaptation measures. Accordingly, the IPCC reports project various GHG concentrations, varying due to a range of scenarios that are underpinned by different political, socio-economic, technological and demographic developments. In particular, damage estimates are prone to low confidence as they involve uncertainty in both natural and socio-economic systems.40 By way of illustration, there are a number of sources of uncertainty in wildfire modelling, as fire occurrence may additionally be linked with other, non-climatic factors (e.g. size and population density) that are also likely to evolve in the future. For example, fires near densely populated regions tend to be extinguished faster. Given the challenge of reliably projecting population, land use and cover, and their associated uncertainty under climate change scenarios, these relationships are difficult to assess.41 Although observed warming is unequivocal, for long-term impacts scientists are thus facing a high level of uncertainty compounded by an array of anthropogenic factors. ● Regarding the demographic trends, by 2050 the world population will likely grow to 9.9 billion and continue to grow well into the next century. This demographic growth is likely to increase the combustion of fuels and the emissions of GHG. ● Increase in trade and GDP growth, consumption patterns and energy policy choices are likely to lead to an increase of GHG emissions. ● Negative-emission technological innovations (carbon storage, ocean fertilization) could absorb some of the negative effects. However, given that these measures have not been tested on a large scale, their positive and negative impacts cannot be assessed; they may thus entail risk trade-offs.

37 According to the IPCC 2018 report, tipping points ‘refer to critical thresholds in a system that, when exceeded, can lead to a significant change in the state of the system, often with an understanding that the change is irreversible’. IPPC, 2018 (n. 36) 262. 38 IPPC, 2018 (n. 36) 83. 39 OECD, Environmental Outlook to 2005. The Consequences of Inaction (OECD, 2012) 87. 40 IPCC, 2014 (n. 11), 10.4.2.2 Precautionary Considerations. 41 European Commission, JRC Technical Report. Forest Fire Danger Extremes in Europe under Climate Change: Variability and Uncertainty (Publications Office of the EU 2017) 3.

54  Research handbook on climate change mitigation law ● Last but not least, potential effects of mitigating measures (investment in renewables, decarbonization of the economy, abatement policies) could play a positive role. Many ecosystems respond to anthropogenic stressors in a non-linear way.42 As a result, the intermingling of these natural and socio-political factors prevents clear-cut answers from being made. No matter how sophisticated the climate models, they will never fully capture the reality. So long as the science surrounding climate change is encumbered with a high level of uncertainty, the principle will have real implications for risk managers, in particular when they are confronted with the risk of crossing tipping points. They should therefore incorporate non-linear, unpredictable and extreme events, worst-case scenarios as well as impacts beyond 2100 into their climate change abatement and mitigation strategies.

5

SHAPING MITIGATION MEASURES

Needless to say, the transition to more resilient societies will require both adaptation and mitigation measures. The dividing line between these two categories of measures is a fine one. The former aim ‘at reducing unavoidable negative impacts already in the shorter term, reducing vulnerability to present climate variability, and exploiting opportunities provided by climate change’ 43 whilst mitigation measures aim at minimizing GHG emissions in order to limit the long-term adverse impacts of climate change. As stressed in the IPCC 5th ACR, when the overwhelming evidence is so compelling and the costs are mounting, ‘substantial and sustained reductions of GHGs emissions’ are required to limit further climate change.44 While there is no single recipe for a successful climate policy mix, there are certainly some instruments that are likely to be more effective than others.45 Given that the precautionary principle does not command any specific measure, each mitigation measure has to be determined on a case-by-case basis, taking into consideration the different socio-economic contexts. These measures may take the form of, inter alia, bans, restrictions, authorizations, emissions abatement, notifications, surveillance, requirements of best available technology (BAT), cap and trade, carbon taxes, fees, removing fuel subsidies, etc. Moreover, the activities likely to be subject to precautionary climate change measures may range from listed installations to aviation.46 As risk assessment interacts constantly with risk management, opposing science to precaution is unproductive. In climate change, uncertainty is the rule, rather than the exception. Scientists are not called on to remove uncertainties. However, in approaching the long-term adverse effects of this phenomenon, they must inform the decision-makers that the situation is

M. R. Caldwell and M. Loughney Melius, ‘Coastal Issues’ in D.A. Farber and M. Peeters (eds), Climate Change Law (Edward Elgar Publishing 2016) 581. 43 Joint EEA–JRC–WHO Report, ‘Impact of Europe’s Changing Climate – 2008 Indicator-Based Assessment’ (EEA, 4/2008) 35. 44 IPCC, ‘Summary for Policymakers’ in Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part A: Global and Sectoral Aspects, Contribution of Working Group III on Mitigation (Cambridge University Press 2014), 19. 45 OECD, Environmental Outlook to 2005. The Consequences of Inaction (OECD 2012) 91. 46 See Case C-366/10 ATAA (2011) C:2011:864. 42

Climate change mitigation and the precautionary principle  55 shrouded in scientific uncertainty. As we are facing the possibility of irreversible large-scale effects, they play a key role in apprising the decision-makers, although they are more likely to put forward scenarios than assertions. In this context, risk assessors should not discount long-term non-linear effects that are subject to greater uncertainty; they have to take into consideration all the uncertainties involved. In particular, environmental impact assessments (EIA) and strategic environmental assessments should not only reduce uncertainty but also explicitly acknowledge sources of uncertainty that remain, instead of burying these in mere assumptions.47 Both quantitative and qualitative dimensions of uncertainty have to be explained thoroughly. As a result, the identification of any lingering uncertainties should trigger a greater level of caution among decision-makers. An even more important step would be for the EIA procedure to force decision-makers to consider a number of reversible courses of action in order to take advantage of new knowledge. Even if it means forgoing a project, the author of an EIA should recommend reversible options in preference to those that are irreversible. The search for variants should become his principal task.48 Whilst the precautionary principle makes it difficult to delay adopting measures to prevent environmental degradation on the grounds that scientific certainty has not been established, scientific certainty or ‘sound science’ can no longer, a contrario, be considered as the absolute benchmark for long-term decision-making. Indeed, as has been acknowledged by the IPCC, uncertainty is not an argument for delaying action. Accordingly, decision-makers must take full account of the various scenarios set forth by experts and ask themselves how those potentially impacted can take steps to reduce the adverse impacts through better ecosystemic management.49 In particular, they should pay heed to the considerably extended timescales, as uncertainty prevails mainly during the period between a cause and the subsequent manifestation of a harmful effect. A full integration of the quantitative and qualitative dimensions to uncertainty should help them to better address long-term risks. By way of illustration, ocean warming has contributed to an overall decrease in maximum catch potential, compounding the impacts from overfishing for some fish stocks.50 Regarding fisheries that have been subject to over-exploitation, precaution should entice the agencies to err on the safe side. Regardless of the quality of the mitigation measures adopted so far, the build-up of GHG in the atmosphere is causing temperatures to rise. What matters is that precautionary measures are put in place with a view to achieving the level of protection stipulated by the parties in the Paris Agreement. The issue of how to determine an acceptable risk level has been fraught with controversies as the UNFCCC aims to stabilize GHG concentrations in the atmosphere ‘at a level that would prevent dangerous anthropogenic interference with the climate system’.51 This objective was further clarified in 2015. The Paris Agreement aims to prevent ‘the increase in the global average temperature to well below 2 °C above pre-industrial levels’ and ‘pursuing

N. de Sadeleer, Environmental Principles (n. 8) 341. Ibid., 342. 49 A. Dan Tralock, ‘Water Availability and Allocation’ in D. A. Farber and M. Peeters (eds), Climate Change Law (Edward Elgar Publishing 2016) 546. 50 IPCC, The Ocean and Cryosphere in a Changing Climate. Summary for Policymakers (2019) 13. 51 UNFCCC, Art. 2. 47 48

56  Research handbook on climate change mitigation law efforts to limit the temperature increase to 1.5 °C’.52 Although such an objective strengthens the global response to the threat of climate change, these safe levels are nonetheless problematic due to lingering uncertainties. Any threshold is thus questionable. Finally, the precautionary principle could buttress the duty to cooperate ‘in a spirit of global partnership to conserve, protect and restore the health and integrity of the Earth’s ecosystem’.53 The mention of the Earth’s ecosystem implies the oneness of that system in contrast to the division of the Earth into territorial states.54 Within the context of cooperation, developed countries should bear a larger responsibility in making abatement technologies available to developing countries. On a final note, it should be pointed out that the precautionary principle does not play any role in deciding how to allocate the costs of the preventive and mitigation measures. This issue must be resolved with reference to the precautionary principle and the principle of common but differentiated responsibility.55

6

CONCLUDING REMARKS

Although there is no doubt that the observed climate change is for a significant part attributable to the growth in human activities in the aftermath of the Industrial Revolution, the contribution of each activity to the phenomenon, the timing and the magnitude of the adverse effects are still heavily encumbered with uncertainty. Although the uncertainty has decreased over recent decades due to better methodologies and the work of the IPCC, it is still significant for long-term impacts, partly resulting from a lack of knowledge of the climate systems and the limitations of scientific research. So far, there is no way to quantify the probability of the occurrence and the magnitude of each of the manifold impacts, in particular at local level. Moreover, experts are facing difficulties in expressing the probability of the occurrence of a number of adverse effects. They have to reckon on a rather vague terminology such as ‘low probability’, ‘poorly known probability’, etc. Accordingly, the experts have to address both the quantitative and qualitative dimensions of the climate risks. Risk assessment has to integrate extreme events as well as worst-case scenarios. Whilst the scientific research community has been gathering more accurate and reliable evidence regarding the actual and potential impacts of climate change, it is much more difficult to calculate the risk of reaching or passing critical tipping points that entail possible large-scale and irreversible impacts. Despite the increasingly overwhelming evidence regarding the impacts of climate change, action is still sluggish. As a result, the international community is still falling short of adopting a robust GHG abatement strategy. Political decisions are not consistent with the emissions ceilings proposed to achieve the UNFCCC and the Paris Agreement objectives, and perhaps

Art. 2(a). Principle 7, Rio Declaration. 54 M. Bothe, ‘Whose Environment? Concepts of Commonality in International Environmental Law’ in G. Winter (ed.), Multilevel Governance of Global Environmental Change (Cambridge University Press 2006) 544. 55 UNFCC, Art. 3. 52 53

Climate change mitigation and the precautionary principle  57 will still not be in the near future.56 Admittedly, there is a fundamental incongruence between the speed of the Promethean exploitation of the biosphere and the slow implementation of mitigation measures.57 Therein lies the paradox.

Grassl and Metz (n. 17), 336. G. Winter, ‘Introduction’, in G. Winter (ed.), Multilevel Governance of Global Environmental Change (Cambridge University Press 2006) 3. 56 57

PART II CLIMATE CHANGE MITIGATION LAW AND POLICY IN THE REGIONS

4. The European Union and its rule-creating force on the European continent for moving to climate neutrality by 2050 at the latest Marjan Peeters and Delphine Misonne

INTRODUCTION Since the very first steps of global climate governance, the European Union has taken responsibility for addressing climate change.1 It did so particularly by means of taking an active role as a party to international treaties in the field of climate change, and by adopting a broad package of internal EU laws, even if the interplay between internal and external action was often the sort of ‘je t’aime, moi non plus’ relation.2 Stimulating sufficient ambition across the world was closely related to the need to overcome an awkward internal disagreement, as discussed by Kati Kulovesi, on how to steer the Union towards effective mitigation of its own emissions.3 Altogether, developing internal frameworks and exerting influence through bilateral or regional cooperation4 contributed to efforts to push the international agenda forward.5 In its internal order, the EU has built strong steering powers to address climate change by means of legal instruments, and has done so within the context of its fundamental values such

1 In a 1989 resolution of the Council the need for the (then) European Economic Community and the Member States to play their full part in the definition and implementation of a global response to the problem, and this without delay, was already asserted: Council resolution of 21 June 1989 on the greenhouse effect and the Community OJ C 183, 20/07/1989 P. 0004–0005. 2 An expression evoking a paradoxical love-hate relationship. 3 Kati Kulovesi, ‘Climate Change in EU External Relations: Please Follow My Example (Or I Might Force You To)’, in Elisa Morgera (ed.), The External Environmental Policy of the European Union (Cambridge University Press 2012), 115; Marc Pallemaerts, ‘Le cadre international et européen des politiques de lutte contre les changements climatiques’ (2004) 33 (no 1858–1859) Courrier hebdomadaire du CRISP 5–61, DOI 10.3917/cris.1858.0005, Chapter 5 on the EU policy on climate change (in French), evoking all early steps of the EU policy on climate change since 1989. The EU played, for instance, a decisive role in the adoption of the Kyoto Protocol, with the consequence that Member States had thereafter little other choice than to adopt legislation meant to comply with the new international duties. 4 See also in this respect the discussion of so-called ‘minilateralism’: Kati Kulovesi, ‘Addressing Sectoral Emissions outside the UNFCCC: What Roles for Multilateralism, Minilateralism and Unilateralism?’ (2012) 21 Review of European, Comparative & International Environmental Law (RECIEL), 193; Scott Barrett, Why Cooperate? The Incentives to Supply Global Public Goods (Oxford University Press 2007). 5 Elisa Morgera and Kati Kulovesi, ‘The Role of the EU in Promoting International Standards in the Area of Climate Change’, University of Edinburgh School of Law Research Paper No. 2013/22, p. 15, also in Poli et al. (eds), EU Governance of Global Emergencies (Brill 2013). The following authors also use the concept of minilateralism; Joanne Scott and Lavanya Rajamani, ‘EU Climate Change Unilateralism’ (2012) 23 European Journal of International Law, 469; Tom Delreux and Sander Happaerts, Environmental Policy and Politics in the European Union (Palgrave 2016), 205–230.

59

60  Research handbook on climate change mitigation law as democracy and, particularly, the rule of law.6 Indeed, in this specific international construct in which 27 states participate, law is a key driving force, which can be illustrated by the fact that EU law has primacy over the laws of the Member States,7 and that the EU judicial system specifically intends to ensure consistency and uniformity in the interpretation of EU law.8 With respect to addressing climate change, the European Union legislator is entrusted with a competence to adopt legally binding regimes in the field of the environment and energy.9 Such EU legislation applies to the territory of all Member States and impacts actors even beyond. Consequently, the European Union is without doubt a (potentially) powerful rule creator with respect to addressing climate change on the European continent. In order to understand the law-making force of the European Union in the field of climate change, this chapter focuses on newly established key elements of EU climate legislation, as developed in the context of implementing the Paris Agreement. The legislative developments are, particularly since 2018, impressive in terms of number and complexity.10 Moreover, with the Green Deal,11 the European Commission, as in office since 1 December 2019, is determined to accelerate further rule creation in order to translate political promises into practice. The following statement made by Mrs Ursula von der Leyen (now President of the Commission), before the European Parliament in 2019 illustrates the high ambition: ‘I want Europe to become the first climate-neutral continent in the world by 2050.’12 6 As codified in the Treaty on European Union (TEU), Article 2. The extent to which EU institutions respect the rule of law in practice (including the way in which this principle is interpreted) is one of the fundamental questions of EU law research. 7 Nonetheless, see the debate on national courts retaining ultimate authority with regard to legal interpretation and application of EU law in Richard Avinesh Wagenländer, ‘An Order of Deferential Monism: Why the Bundesverfassungsgericht’s PSPP Ruling Merely Restates the Limits of the EU Legal System’, European Law Blog 6 January 2021. 8 Opinion 2/13 (Accession of the EU to the ECHR) of 18 December 2014, EU:​C:​2014:​2454, paragraph 174. The Court of Justice of the European Union (CJEU) has the power to decide on the legality of EU acts and has the power to impose financial penalties on Member States after an action started by the European Commission. 9 As far as the competence of the EU reaches: the EU does not have full authority on all state matters but EU competence is based on the principle of conferral, and the use of competences is governed by the principles of subsidiarity and proportionality; see Article 5 TEU discussed by Robert Schütze, ‘EU Competences. Existence and Exercise’, in Anthony Arnull and Damian Chalmers, The Oxford Handbook of European Union Law (Oxford University Press 2015) 75ff. See, on the EU environmental competence(s), including its relationship with energy competence and the limits provided by the treaties, but also the quite pro-EU interpretation by the CJEU, Helle Tegner Anker, ‘Competences for EU Environmental Legislation: About Blurry Boundaries and Ample Opportunities’, in Marjan Peeters and Mariolina Eliantonio, Research Handbook on EU Environmental Law (Edward Elgar Publishing 2020) Chapter 2. 10 See for an account: Marjan Peeters, ‘EU Climate Law: Largely Uncharted Legal Territory’ (2019) 9 Climate Law 137–147. 11 Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions – The European Green Deal, COM(2019) 640 final. 12 Ursula von der Leyen, (in her position as) Candidate for President of the European Commission Opening Statement in the European Parliament Plenary Session, Strasbourg 16 July 2019, available at https://​ec​.europa​.eu/​commission/​presscorner/​detail/​en/​speech​_19​_4230; see also ‘A Union that strives for more. My agenda for Europe, Political Guidelines for the Next European Commission 2019–2024’, https://​ec​.europa​.eu/​commission/​sites/​beta​-political/​files/​political​-guidelines​-next​-commission​_en​.pdf; see also on YouTube https://​www​.youtube​.com/​watch​?v​=​8UrMwYDa​_yU 22 January 2020, containing

The EU and its rule-creating force for climate neutrality by 2050  61 However, from a geographical perspective, the EU consists of only 27 Member States while the European continent consists of more than 47 countries.13 Nonetheless, the EU can exert important influence on other countries in Europe and even beyond in the sense of stimulating them to adopt rules addressing climate change that are aligned to – or even connected to – the EU climate law package. The fact that Switzerland has decided to link to the EU Emissions Trading System (EU ETS), is illustrative of that concrete influence,14 as is the fact that Norway, Iceland and Liechtenstein – not being members of the EU – have also taken part in the EU ETS since 2008.15 Furthermore, in respect of other EU climate regulatory action, cooperation also takes place with Norway and Iceland: both countries have agreed to apply two important EU climate laws, being the Effort Sharing Regulation16 and the Land Use, Land Use Change, and Forestry Regulation17 (LULUCF).18 Even more regulatory influence can be exerted by the EU on other countries in Europe; for example, the EU expects candidate countries, with which negotiations are taking place for accession to the EU, to implement the EU

the statement ‘Europe will be the world’s first climate-neutral continent by 2050’ (all media accessed 2 August 2020). 13 For instance, the Council of Europe has 47 parties, but even more countries exist in Europe, such as Kosovo, which declared independence in 2008. See for the map of parties to the Council of Europe https://​www​.coe​.int/​en/​web/​portal/​47​-members​-states (accessed 2 August 2020). More accurate is the following expression in the context of the Green Deal Investment Plan: ‘The European Union is committed to becoming the first climate-neutral bloc in the world by 2050.’ https://​ec​.europa​.eu/​regional​ _policy/​en/​newsroom/​news/​2020/​01/​14​-01​-2020​-financing​-the​-green​-transition​-the​-european​-green ​ -deal​-investment​-plan​-and​-just​-transition​-mechanism (accessed 2 August 2020). 14 According to information provided by the European Commission, this linking basically entails a ‘mutual recognition of EU and Swiss emission allowances when surrendering allowances to cover emissions’, see https://​ec​.europa​.eu/​clima/​policies/​ets/​markets​_en (accessed 2 August 2020). To take effect, further decision-making is needed. The regulatory design and consequences of such linking, including the rate of compliance with imposed obligations, need to be further studied. See on linking, for instance, Andreas Tuerk and Andrj F. Gubina, ‘Linking Emission Trading Schemes: Concepts, Experiences and Outlook’, in Stefan E. Weishaar (ed.), Research Handbook on Emissions Trading (Edward Elgar Publishing 2016) 309–326. 15 These countries are party to the European Economic Area and the European Free Trade Association; see the official website: https://​www​.efta​.int/​eea (accessed 23 August 2020). The European Economic Area (EEA) compromises the EU Member States and the three EEA EFTA States (Iceland, Liechtenstein and Norway) in an Internal Market, with, in principle, the same package of rules. See, in respect of these three states’ participation in the EU ETS since 2008: https://​www​.efta​.int/​EEA/​news/​ Revised​-ETS​-Package​-incorporated​-EEA​-Agreement​-909 (accessed 23 August 2020). 16 Regulation 2018/842 of the European Parliament and of the Council of 30 May 2018 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement and amending Regulation (EU) No. 525/2013 [2018] OJ L156/26. 17 Regulation 2018/841 of the European Parliament and of the Council of 30 May 2018 on the inclusion of greenhouse gas emissions and removals from land use, land-use change and forestry in the 2030 climate and energy framework, and amending Regulation (EU) No. 525/2013 and Decision No. 529/2013/EU [2018] OJ L156/1 (LULUCF Regulation). 18 European Commission, ‘The European Union, Iceland and Norway Agree to Deepen their Cooperation in Climate Action’ (25 October 2019) https://​ec​.europa​.eu/​commission/​presscorner/​detail/​ en/​IP​_19​_6160: this document states that Iceland and Norway commit to binding annual greenhouse gas emission targets for the period 2021–2030 for those sectors of the economy that fall outside the scope of the EU Emissions Trading System, and that with regard to LULUCF same obligations and accounting rules will apply as in EU Member States.

62  Research handbook on climate change mitigation law acquis at the time of accession;19 or within the European Neighbourhood Policy, governing the EU’s relations with 16 of the EU’s closest eastern and southern neighbours.20 While this illustrates the (potential) large influence the EU has within the European continent, the EU has faced a dramatic moment in its history with the withdrawal of the United Kingdom from being a Member State on 31 December 2019, including the fact that the UK has left two core climate change instruments of the EU, being the EU Emissions Trading Scheme and the Effort Sharing approach. Nonetheless, the principle of ‘non-regression’,21 which also covers carbon pricing, that has been agreed on between the EU and the UK, serves as a starting point for comparing development in the EU and the UK, although the comparison of potentially different regulatory approaches, including those that would not have fixed emission limits such as a cap or that allow fluctuating prices, can pose methodological challenges.22 Even though the EU has less geographical scope after Brexit, with only 27 Member States, its rule-creating efforts (including its success and shortcomings) can still be examined as a benchmark for other countries on the European continent, and perhaps also for other countries and regions in the world. The purpose of this chapter is not to give a thorough understanding of EU climate legislation as it has developed over the years: one single chapter does not provide enough space for such a discussion. Instead, it focuses on selected new topics of EU climate law that seem of core relevance for the future effectiveness of EU climate action. In light of this, section 2 focuses on the new concept of ‘climate neutrality’ and its proposed codification in EU law, as a means to implement the Paris Agreement. Section 3 delves into the internal competence (and limited powers) for EU climate legislation and some legislative instruments, with special attention paid to legislation aiming to streamline investment in sustainable activities. Section 4 discusses the emergence of climate litigation in light of the relatively ambitious package of EU climate legislation. The chapter will be rounded off with a look into the future of the regulatory approach of the European Union in the field of climate change: until now, hard law has set the foundation for effectuating the decrease of emissions, but new regulatory approaches have been established, the effectiveness of which has yet to be proven. The potential role of national climate litigation is also emphasised.

See for further information provided by the European Commission, also on potential candidate countries: https://​ec​.europa​.eu/​environment/​enlarg/​candidates​.htm. 20 To the South: Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine, Syria and Tunisia; and to the East: Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. 21 As codified in Article 7.2(2): ‘A Party shall not weaken or reduce, in a manner affecting trade or investment between the Parties, its environmental levels of protection or its climate level of protection below the levels that are in place at the end of the transition period, including by failing to effectively enforce its environmental law or climate level of protection’, and Article 7.3(5): ‘Each Party shall maintain their system of carbon pricing insofar as it is an effective tool for each Party in the fight against climate change and shall in any event uphold the level of protection provided for by Article 7.2 [Non-regression from levels of protection]’, Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part, OL L444/14, 31.12. 2020. 22 See the principle of non-regression in the explanation mentioned in the previous note. The note also points to a possible linking of a new UK ETS with the EU ETS. 19

The EU and its rule-creating force for climate neutrality by 2050  63

1

ACHIEVING CLIMATE NEUTRALITY IN 2050 IN THE EU IN VIEW OF THE PARIS AGREEMENT

1.1

The EU’s Role with Regard to International Approaches Addressing Climate Change

In the TFEU, promoting measures at international level to deal with regional or worldwide environmental problems, and in particular combating climate change, is affirmed as of one the main goals of European policy on the environment.23 Meanwhile, the EU is a party to all main treaties on climate change, including the Paris Agreement.24 Member States are also parties to the Paris Agreement, with arrangements being made with the European Union on issues such as leading the negotiations or submitting the nationally determined contributions (NDC).25 While being a party to multilateral climate agreements such as the Paris Agreement, the EU has also tried to achieve climate action by a more stringent unilateral regulatory approach. This happened particularly when the international community did not respond, such as with regard to regulating aviation emissions, on which there was no effective international action in the first decade of this century. In view of this international regulatory gap, the EU legislator decided to stop waiting and to include international flights arriving and departing from EU territory in its EU ETS, which action was found lawful by the Court of Justice of the EU (CJEU).26 Nonetheless, given international resistance to this unilateral pressure, this regulatory approach has been watered down by excluding the applicability of the EU ETS from flights to and from countries not covered by this instrument.27 It is an example of, on the one hand, the willingness of the EU to regulate greenhouse gas emissions more effectively, and, on the

Article 191, §1, TFEU. This external action is the logical consequence of an internal competence to regulate the reduction of greenhouse gases. See Kulovesi (n. 3), 115. 24 The EU is, together with its Member States, a party to the UNFCCC, the Kyoto Protocol, the Doha Amendment and the Paris Agreement. Of course, the EU can only act as far as its competences allow. For instance, the declaration of the EU to the Paris Agreement states that ‘the commitment contained in its intended nationally determined contribution submitted on 6 March 2015 will be fulfilled through joint action by the Union and its Member States within the respective competence of each’; see https://​unfccc​ .int/​files/​focus/​ndc​_registry/​application/​pdf/​xxvii​-7d​_european​_union​_ndc​.pdf (accessed 2 August 2020). This notion of joint action is maintained in the updated NDC of December 2020. 25 Delreux and Happaerts (n. 5), 205–253. 26 CJEU, Case C-366/10, The Air Transport Association of America, American Airlines, Inc., Continental Airlines, Inc., United Airlines, Inc. v The Secretary of State for Energy and Climate Change [2011] OJ C260/9 (‘Case C-366/10’), Reference for a Preliminary Ruling from High Court of Justice Queen’s Bench Division (Administrative Court) (United Kingdom) made on 22 July 2010. Kati Kulovesi, ‘Make Your Own Special Song even if Nobody Else Sings Along: International Aviation Emissions and the EU Emissions Trading Scheme’ (2011) 2 Climate Law 535; Hans Vedder, ‘Diplomacy by Directive: An Analysis of the International Context of the Emissions Trading Directive’ in Malcolm Evans and Panos Koutrakos (eds), Beyond the Established Legal Orders – Policy Interconnections between the EU and the Rest of the World (Hart 2011); Morgera and Kulovesi (n. 5), 16. 27 Re-inclusion of international flights is still under consideration: in the Commission Communication, ‘Stepping up Europe’s 2030 climate ambition’ (COM(2020) 562 final of 17 September 2020) it is stated: ‘International cooperation on … aviation is desirable’ but should also be effective (p. 16). In light of this, the Commission puts forward ‘the ambition to include international emissions from aviation … into the EU ETS’. In this sense, the original situation where external flights were included, would, somehow, revive. 23

64  Research handbook on climate change mitigation law other hand, the (political) difficulty of taking unilateral action on the global problem of climate change when the multilateral approach falls short. With regard to the implementation of the Paris Agreement concluded on the European continent, the EU tries to take a lead, as it did before, in respect of the powers it retains according to the Treaties.28 This must be understood in the light of the Paris Agreement, together with the content of the latest reports of the Intergovernmental Panel on Climate Change (IPCC) showing how seriously and urgently an additional policy answer is needed.29 The Paris Agreement relies on the proactive and progressive actions parties will adopt individually, a specificity that can be further strengthened if subjected to a high degree of public pressure. While the European Council (providing political guidance to the European Union but not having regulatory power) concluded in 2014 – so before the Paris Agreement – that the EU should achieve a reduction of at least 40% in greenhouse gas emissions by 2030,30 new collective global goals as asserted in Paris require further commitments from the European Union. After new political guidance from the European Council for a more ambitious target, an updated nationally determined contribution was submitted in December 2020, with the pledge that the EU and its Member States, acting jointly, are committed to a binding target of a net domestic reduction of at least 55% in greenhouse gas emissions by 2030 compared to 1990.31 This EU pledge is part of a wider process across the EU continent. For example, Norway (not an EU member) had already submitted – before the EU did – an updated nationally determined contribution with a target of at least 50% reduction by 2030, thereby pointing towards cooperation with the EU for the increased ambition.32 In that sense, it is interesting to see that a third country officially puts forward, at the time of submission, a higher ambition (50%) See, regarding internal competence for climate action, section 3.1 below. See IPCC, ‘Summary for Policymakers’ in V. Masson-Delmotte et al. (eds), Global Warming of 1.5 °C. An IPCC Special Report on the impacts of global warming of 1.5 °C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty  (World Meteorological Organization 2018); IPCC, Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC 2015). 30 Conclusions of the European Council of 23–24 October 2014. Additionally, the EU has adopted measures with regard to renewable energy and energy efficiency. It is expected that ‘the agreement by the European Parliament and the Council to raise the targets for renewables and energy efficiency to 32% and 32.5% respectively by 2030 … will result in GHG emission reductions of over 45% by 2030’, see European Parliament, Resolution on the 2018 UN Climate Change Conference in Katowice, Poland (COP24), 25 October 2018, 2018/2598(RSP), available at https://​oeil​.secure​.europarl​.europa​.eu/​oeil/​ popups/​printficheglobal​.pdf​?id​=​690200​&​l​=​en. 31 UNFCC, NDC registry, available at https://​www4​.unfccc​.int/​sites/​ndcstaging/​Pages/​Party​.aspx​ ?party​=​EUU​&​prototype​=​1 (consulted on 31 December 2020). The European Council endorsed this target in its meeting from 10–11 December 2020, see https://​www​.consilium​.europa​.eu/​media/​47296/​ 1011​-12​-20​-euco​-conclusions​-en​.pdf. 32 Update of Norway’s nationally determined contribution (undated document – the website of the UNFCCC mentions 7 February 2020): By this submission, Norway updates and enhances its nationally determined contribution under the Paris Agreement to reduce emissions by at least 50 per cent and towards 55 per cent compared to 1990 levels by 2030. Norway seeks to fulfil the enhanced ambition through the climate cooperation with the European Union. In the event that Norway’s enhanced nationally determined contribution goes beyond the target set in the updated nationally determined contribution of the European Union, Norway intends to use voluntary cooperation under Article 6 of the Paris 28 29

The EU and its rule-creating force for climate neutrality by 2050  65 compared to the EU (40%), thereby, however, pointing at necessary cooperation with the EU (and in view of the yet to be further elaborated Article 6 of the Paris Agreement33) to achieve the increased ambition. Furthermore, the United Kingdom has pledged an even more ambitious reduction target compared to the NDC from the EU and its Member States, by means of an economy-wide net greenhouse gas emission target of at least 68% reduction in the UK by 2030.34 Such a difference between the EU NDC and the UK NDC needs further consideration, in view of the requirements of the Paris Agreement too. While generally at EU level, it is not required to pursue the highest possible environmental ambition, the Paris Agreement specifically asks parties to reflect ‘its highest possible ambition’ in their nationally determined contribution.35 How this international obligation has to be interpreted by a regional organisation such as the EU – allowing more stringent action by its Member States as stipulated in Article 193 TFEU for environmental measures, but submitting a joint declaration – needs further consideration and may be included in litigation strategies. The international context also consists of important developments in the area of trade and investment guarantees. For the first time indeed, with the Trade and Cooperation Agreement published on 31 December 2020 between the EU and the UK, the fight against climate change ranks among the essential horizontal elements for which a serious and substantial failure can lead to the termination or suspension of the Agreement.36 On the appreciation of what ‘serious and substantial’ might mean, the Agreement mentions that ‘for greater certainty’, an act or omission which materially defeats the object and purpose of the Paris Agreement shall always be considered a serious and substantial failure.37 On the other hand, the EU’s internal climate-related actions – such as legislative restrictions on the use of palm oil as biofuel Agreement to fulfil the part that goes beyond what is fulfilled through the climate cooperation with the European Union. Consent of the Parliament will be required. See https://​www4​.unfccc​.int/​sites/​ndcstaging/​PublishedDocuments/​Norway​%20First/​Norway​_updated NDC_2020%20(Updated%20submission).pdf (accessed 2 August 2020). 33 Article 6 of the Paris Agreement provides some flexibilities for achieving national commitments by means of cooperation with other parties, see for instance its first paragraph: ‘Parties recognize that some Parties choose to pursue voluntary cooperation in the implementation of their nationally determined contributions to allow for higher ambition in their mitigation and adaptation actions and to promote sustainable development and environmental integrity.’ The parties to the Paris Agreement have authority (and shall) adopt rules and other provisions for such cooperation, see Art. 6(7) with Art. 6(4) Paris Agreement. Negotiations on that Article were at the core of recent COP24 (Katowice) and COP25 (Madrid) but could not reach an agreement. Article 6 is on the agenda of COP26, delayed to 2021 due to the COVID-19 crisis. 34 See its first NDC submitted on 12 December 2020: https://​www4​.unfccc​.int/​sites/​ndcstaging/​ PublishedDocuments/​ U nited​ % 20Kingdom​ % 20of​ % 20Great​ % 20Britain​ % 20and​ % 20Northern​ %20Ireland​%20First/​UK​%20Nationally​%20Determined​%20Contribution​.pdf. 35 Article 4(2) Paris Agreement. 36 In which case a procedure will be activated, including the established Partnership Council. In the context of trade and investment agreements, see Pierre-Marie Dupuy and Jorge E. Vinuales, Harnessing Foreign Investment to Promote Environmental Protection, Incentives and Safeguards (Cambridge University Press 2013). On Brexit and climate change action, see House of Lords (UK), Brexit: environment and climate change, 14 February 2017, 12th Report of Session 2016–17; C. Reid, ‘Brexit and the Future of UK Environmental Law’ (2016) 34(4) Journal of Energy & Natural Resource Law 407–415. 37 Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part, OJ L 444, 31.12.2020, pp. 14–1462, Art.INST.35.4 (p. 421). Of course, the often vague provisions of the Paris Agreement can be an issue here.

66  Research handbook on climate change mitigation law because they can impact in third countries, including developing countries such as Indonesia – can be confronted by the need for justification. More specifically, Indonesia has filed – on this matter – a complaint against the EU to the WTO.38 Such cases illustrate that the ‘global leadership’ role that the EU often claims should not be exclusively assessed on the basis of activities under the umbrella of the Paris Agreement but also in other contexts, such as particularly in the field of trade and investment.39 Indeed, the Committee of the International Law Association, in its Declaration of Legal Principles Relating to Climate Change, has highlighted in Principle 10 the interrelationship of climate law with other international law, particularly international trade and investment law and international human rights law.40 In this vein, the principle points to the need for integration by states of climate considerations into their law, policies and actions at all relevant levels. Such a duty – albeit broadly formulated – can already be found in Article 11 TFEU, stating that ‘Environmental protection requirements must be integrated into the definition and implementation of the Union’s policies and activities, in particular with a view to promoting sustainable development.’ The origin of integrating the environmental concern (and thus climate change) in all other policies originates from the Single European Act (applicable from 1 July 1987),41 but its actual implementation is a challenge to be further examined.42 1.2

Climate Neutrality in 2050 on EU Territory: Political Support

Across the EU institutions, political will exists for becoming carbon neutral by 2050.43 This long-term aim, directly influenced by the need to implement the Paris Agreement and its See the WTO dispute number DS593, European Union – Certain measures concerning palm oil and oil palm crop-based biofuels, with information available at https://​www​.wto​.org/​english/​tratop​_e/​ dispu​_e/​cases​_e/​ds593​_e​.htm. Argentina, Colombia, Costa Rica, Guatemala, Malaysia and Thailand have joined the consultations requested by Indonesia. 39 The Energy Charter Treaty needs for instance to be made Paris-compatible. See in this respect also Art. 3(5) UNFCCC, prohibiting arbitrary or unjustifiable discrimination or a disguised restriction on international trade when taking climate measures. See for (reducing) the external footprint of the EU the work by Joanne Scott, ‘Reducing the EU’s Global Environmental Footprint’ (2020) 21 German Law Journal 10–16. 40 International Law Association, Resolution 2/2014, Declaration of Legal Principles Relating to Climate Change, adopted during the 76th Conference, 7–11 April 2014 (discussed by Marjan Peeters, ‘Environmental Principles in International Climate Change Law’ in Ludwig Krämer and Emanuela Orlando, Principles of Environmental Law (Edward Elgar Publishing 2018) 509–524. 41 ‘Environmental protection requirements shall be a component of the Community’s other policies’ (Art. 130 r(2) SEA). 42 This needs to be done in the light of Article 37 of the EU Charter of Fundamental Rights: see also the reinforcement of Article 11 TFEU by means of the ‘Do no harm principle’ presented in the Green Deal communication: ‘All EU actions and policies should pull together to help the EU achieve a successful and just transition towards a sustainable future’ – although there is no explicit connection made between on the one hand ‘Do no harm’ and external action in that communication: European Commission, ‘Communication from the Commission to the European Parliament, the European Council, the Council (etc.)’, Brussels, 11.12.2019, COM(2019) 640 final, p. 19. However, the Commission explicitly discusses trade policies as a specific tool in the course of acting as a global leader (pp. 20–21). Concrete actions in this respect need further examination. 43 See for instance the European Council Conclusions, 12 December 2019, https://​www​.consilium​ .europa​.eu/​en/​press/​press​-releases/​2019/​12/​12/​european​-council​-conclusions​-12​-december​-2019/​ (accessed 2 August 2020) stating: 38

The EU and its rule-creating force for climate neutrality by 2050  67 Article 4, will most likely be anchored in EU secondary law: the legislative process for this started with a proposal from the European Commission in March 2020 for a framework for achieving climate neutrality (henceforth called the proposed European Climate Law).44 The title of this proposed law, and the way it is presented, is inspired by a trend, at national level, to adopt a so-called ‘Climate Act’, inspired by, and often including similar features to, the original UK model of 2008 (with a long-term goal, mid-term goals, an independent committee, carbon budgets, etc.).45 Such an approach echoes a global trend to govern by goals46 but also a need to depart from former soft governance instruments, in order to build more legal certainty for investors (although it remains to be seen to what extent the objectives and goals laid down in climate laws are enforceable in court).47 The way in which the European Commission presented its proposal is remarkable: its website stated that the Commission proposed ‘the first European Climate Law’.48 However, and clearly, it would not be the first legislative action on climate at EU level: the EU had already adopted important laws on climate-related matters, including after the entry into force of the Paris Agreement, such as the Regulation on the Governance of the Energy Union and Climate Action (henceforth the Governance Regulation).49 In the light of the latest available science and of the need to step up global climate action, the European Council endorses the objective of achieving a climate-neutral EU by 2050, in line with the objectives of the Paris Agreement. One Member State, at this stage, cannot commit to implement this objective as far as it is concerned, and the European Council will come back to this in June 2020. 44 European Commission, Proposal for a regulation of the European Parliament and of the Council establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law) Brussels, 4.3.2020 COM(2020) 80 final 2020/0036 (COD). In the course of the legislative procedure, the Commission proposed an amendment to this law with a view to codifying a target for 2030, see Amended proposal for a Regulation of the European Parliament and of the Council on establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law), Brussels, 17.9.2020 COM(2020) 563 final. We refer to this proposed law as the EU Climate Law in this chapter. The wording used by the Commission is confusing: the title says it is an ‘Amended proposal’, but, textually, the document proposes amendments to the proposed EU Climate Law. 45 A. Averchenkova, S. Fankhauser and M. Nachmany, Trends in Climate Change Legislation (Edward Elgar Publishing 2017); H. Townsend, ‘The Climate Change Act 2008: Something to Be Proud of after All?’ (2009) 7(8) Journal of Planning and Environmental Law 842; P. McMaster, ‘Climate Change – Statutory Duty or Pious Hope?’ (2009) 20(1) Journal of Environmental Law 842; R. Macrory, ‘Towards a Brave New Legal World?’ in I. Backer, O. Fauchald and C. Voigt (eds), Pro Natura (Universitetsforlaget 2012) 306–322; M. Stallworthy, ‘Legislating against Climate Change: A UK Perspective on a Sisyphean Challenge’ (2009) 72(3) Modern Law Review 412; E. Scotford and S. Minas, ‘Probing the Hidden Depths of Climate Law: Analysing National Climate Change Legislation’ (2019) 28 RECIEL 67–81. 46 See http://​leycambioclimatico​.cl/​governing​-by​-the​-goals​-do​-we​-need​-domestic​-climate​-laws/​. 47 D. Torney and R. O’Gorman, ‘Adaptability versus Certainty in a Carbon Emissions Reduction Regime: An Assessment of the EU’s Climate and Energy Policy Framework’ (2020) 29 RECIEL 167–176. 48 In full: ‘The Commission’s proposal for the first European Climate Law aims to write into law the goal set out in the European Green Deal – for Europe’s economy and society to become climate-neutral by 2050’; https://​ec​.europa​.eu/​clima/​policies/​eu​-climate​-action/​law​_en (accessed 2 August 2020). 49 Regulation 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action amending Regulations (EC) No. 663/2009 and (EC) No. 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC,

68  Research handbook on climate change mitigation law Actually, one of the important challenges for the EU legislator in steering towards the 2050 climate neutrality objective would be to amend existing laws, imposing concrete obligations on Member States and emitters, in order to implement an increased ambition and eventually climate neutrality by 2050 in such obligations. Indeed, while climate change was one of the specific much-debated items in the run-up to the European Parliament elections in 2019, the EU had already secured the entry into force of an impressive, though extremely complex, legal framework50 aiming to achieve the 2030 greenhouse gas emissions reduction target of at least 40% compared to 1990.51 Table 4.1 gives an account of the most important legislation enacted to aim to reach this 40% reduction. The long-term ambition of the European Commission vested in its proposal for the EU Climate Law seems to have a great chance of getting codified. During the elections of the European Parliament, held between 23 and 26 May 2019 together with the subsequent nomination of the president of the new European Commission serving from 2019 to 2024, political willingness was already being expressed to move to more ambitious emission reduction goals.52 In a new Regulation from 2018, hence adopted after the entry into force of the Paris Agreement but before the EU elections in 2019, being the Regulation on the Governance of the Energy Union and Climate Action,53 the Commission was invited to develop an analysis regarding the contribution by the Union to the commitments of the Paris Agreement, ‘includ-

2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No. 525/2013 of the European Parliament and of the Council [2018] OJ L328/1 (Governance Regulation). See for a discussion: Estelle Brosset and Sandrine Maljean-Dubois, ‘The Paris Agreement, EU Climate Law and the Energy Union’ in Marjan Peeters and Mariolina Eliantonio, Research Handbook on EU Environmental Law (Edward Elgar Publishing 2020) Chapter 26. 50 Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action [2018] OJ L328/1 (Governance Regulation); Directive (EU) 2018/410 amending Directive 2003/87/EC on the EU emissions trading system [2018] OJ L76/3 (ETS Amending Directive); Regulation (EU) 2018/842 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement [2018] OJ L156/26 (Effort Sharing Regulation); Regulation (EU) 2018/841 on the inclusion of greenhouse gas emissions and removals from land use, land-use change and forestry in the 2030 climate and energy framework [2018] OJ L156/1 (LULUCF Regulation); Parliament and Council Directive (EU) 2018/2001 on the promotion of the use of energy from renewable sources (recast) [2018] OJ L328/82 (Renewable Energy Directive); and Directive (EU) 2018/2002 of the European Parliament and of the Council of 11 December 2018 amending Directive 2012/27/EU on energy efficiency [2018] OJ L328/210 (Energy Efficiency Directive). See Torney and O’Gorman (n. 47) for a description of each of these items; for the complexity of understanding the (new) EU climate law, see Peeters (n. 10). 51 The decrease of emissions could be even higher than the legal target: EEA Report 13/2020, Tracking progress towards Europe’s climate and energy targets; SWD(2020) 176 final, Impact assessment, Stepping up Europe’s 2030 climate ambition, 17 September 2020. 52 These elections have resulted in an increase of seats for Green politicians (cooperating in the European political party – in which national political parties cooperate – called ‘Greens/EFA’; EFA stands for European Free Alliance). However, the support for Green politicians is quite unevenly distributed across EU Member States; for more information, see for instance, https://​www​.election​-results​ .eu/​european​-results/​2019​-2024/​(accessed 2 August 2020), where the distribution of votes in individual Member States can also be viewed: in Germany the Greens saw an increase in seats, but they did not win any seats at all in Bulgaria, Cyprus, Slovenia and Poland. 53 See above: the proposed EU Climate Law includes provisions to amend this Regulation.

Legislative act (secondary law)

Environment – 192 TFEU

– 192 TFEU

Article 2(11) of the Regulation), including the Union-wide binding target of at least 40% domestic reduction in economy-wide

includes a monitoring mechanism. Reviews tasks for the European Commission

Direct EU/EEA aviation

By 2025 and 2020, each Member State shall ensure that emissions do not exceed removals

For land use and forestry: emissions shall be equal to absorption (but flexibilities are provided)

Regulation 2018/841 on emissions Direct

and removals from land use, land

use change and forestry

for new heavy-duty vehicles)

heavy-duty vehicles

CO2 emission performance requirements for new 15% (2015), 30% (2030), with flexibilities

Regulation 2019/1242 (CO2 Direct

flexibilities

commercial vehicles

for new passenger cars)

emission performance standards

Various EU fleet-wide targets, with

levels by 2030 in the non-ETS sectors

for new passenger cars and for new light

of an EU-wide 30% reduction below 2005

States based on a trajectory until 2030

Shares of the Union-wide target by means

(and flexibilities for compliance) for Member

Individual binding emission reduction targets

emission performance standards

Direct

Direct

a linear factor of 2.2%

CO2 emissions performance requirements

Regulation 2019/631 (CO2

2018/842

Effort Sharing Regulation

A Union-wide limit on the quantity of

1990 to be achieved by 2030

emissions applicable to large industries and intra allowances, with an annual decrease by

Small industries, Housing, road transport, etc., so-called ‘non ETS sectors’

(revision by Directive 2018/410)

Emission Trading Scheme

Large industry and intra EU/EEA aviation A cap & trade mechanism for greenhouse gas

for energy and climate (see Article 1 with

of integrated energy and climate plans and

and Climate Action

greenhouse gas emissions as compared to

Codification of the Union’s 2030 targets

Regulation 2018/1999 on the Paris Agreement. Imposes on MS the adoption

Reduction target

A governance mechanism, consistent with the

Main content

Governance of the Energy Union

Indirect

Impact on mitigation

Most relevant existing EU climate legislation for reducing greenhouse gas emissions

Energy – 194 TFEU & Environment Governance, monitoring

Legislative basis

Table 4.1

The EU and its rule-creating force for climate neutrality by 2050  69

headline target on energy efficiency of at

consumption of energy in 2030

Notes: Selected main legislative acts from the European Parliament and the Council, as adopted since the entry into force of the Paris Agreement (November 2016) and before March 2020 (date of the proposal for the European Climate Law), with the purpose of mitigating greenhouse gas emissions in view of reaching the at least 40% emission reduction target by 2030. The majority of these measures, if not all, will need to be amended in view of the increased ambition of the European Union for 2030. Please note that this schedule is not comprehensive, since other instruments are relevant as well, such as the carbon capture and storage Directive (Directive 2009/31/EC). The measures are arranged according to their legislative basis.

from renewable sources

promotion of the use of energy

sources in the Union’s gross final

of 11 December 2018 on the

the overall share of energy from renewable

energy from renewable sources

Parliament and of the Council

2018/2001 of the European

Imposes a Union-wide target of 32% for

A common framework for the promotion of

least 32.5%

final energy. Imposes a Union-wide 2030

on energy efficiency

Renewables Directive (EU)

energy or no more than 1086 Mtoe of

amending Directive 2012/27/EU

Indirect

to be no more than 1483 Mtoe of primary

energy efficiency within the Union

Reduction target The Union’s 2020 energy consumption has

Main content A common framework of measures to promote

Impact on mitigation Indirect

Council of 11 December 2018

European Parliament and of the

Legislative act (secondary law)

Directive (EU) 2018/2002 of the

Legislative basis

Energy – 194 TFEU

70  Research handbook on climate change mitigation law

The EU and its rule-creating force for climate neutrality by 2050  71 ing various scenarios, inter alia a scenario on achieving net zero GHG emissions within the Union by 2050 and negative emissions thereafter and their implications on the global and Union carbon budget’.54 At the same time, the EU legislator points towards the global dimension by stating: Although the Union pledged to deliver ambitious cuts in GHG emissions by 2030, the threat of climate change is a global issue. The Union and its Member States should therefore work with their international partners in order to ensure a high level of ambition by all Parties in line with the long-term goals of the Paris Agreement.55 (Emphasis added)

Whether this statement indicates that the EU may decide not to follow the highest ambitious path if other major emitters do not take sufficient responsibility is an important discussion for the near future,56 as is also the case in relation to global stocktakes as regulated by Article 14 of the Paris Agreement. Of course, such discussions will need to take place in the various institutions, including the Council and the European Parliament.57 The European Commission at least holds the following: ‘While the EU cannot solve climate change without others also acting, being responsible for less than 10% of global greenhouse gas emissions, it is a leader in the global transition towards a net-zero-greenhouse gas emissions economy.’58 While one can doubt whether the other players internationally see the EU as their leader,59 the EU can indeed claim to be one of the leading parties in view of having codified quite ambitious climate laws internally, and because it is trying to step up its ambition. At the same time, the Commission

Regulation 2018/1999, Governance Energy Union and Climate Action, preamble 10. Regulation 2018/1999, Governance Energy Union and Climate Action, preamble 11. 56 Delphine Misonne, ‘The Importance of Setting a Target: The EU Ambition of a High Level of Protection’ (2015) 4(1) Transnational Environmental Law 11–36. The requirement to achieve a high level of protection does not impose the highest possible ambition when the legal base of the measure is Article 192 TFEU, as Member States keep the possibility of strengthening the level of protection to themselves. Adopting more stringent measures than the international obligations has been recognised, by the ECJ, as an indicator of a high level of protection (ibid., p. 17). 57 The European Parliament has already made ambitious observations with regard to the objective of climate neutrality in its resolution of 14 March 2019: European Parliament resolution of 14 March 2019 on climate change – a European strategic long-term vision for a prosperous, modern, competitive and climate-neutral economy in accordance with the Paris Agreement: https://​www​.europarl​.europa​.eu/​ doceo/​document/​TA​-8​-2019​-0217​_EN​.html, stating: Welcomes the inclusion of two pathways aimed at reaching net-zero GHG emissions by 2050 and the Commission’s support for these, and considers the mid-century objective as the only one compatible with the Union’s commitments under the Paris Agreement; regrets the fact that no net-zero GHG pathways for before 2050 were considered in the strategy. Interestingly, such statements reveal a more ambitious stance than the Paris Agreement, of which Article 4(1) refers to achieving ‘a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century’. Importantly, this Article 4(1) is about a global balance, while the EU could (or should) interpret its obligations under the Paris Agreement as leading to more ambitious actions and hence achieving climate neutrality on its territory earlier. To arrive at such a decision, a due consideration of the principle of proportionality would probably be necessary, although legal research on that matter has yet to develop (as far as is known to us). 58 European Commission, Proposal for a regulation of the European Parliament and of the Council establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law) Brussels, 4.3.2020 COM(2020) 80 final 2020/0036 (COD), p. 3. 59 See in this respect also the critical observations by Brosset and Maljean-Dubois (n. 49). 54 55

72  Research handbook on climate change mitigation law also points to the level playing field it wants to uphold at the international level.60 Further guidance on that matter from the European Council will be key, although it is the EU legislator who can take measures such as imposing an eventual carbon border tax.61 1.3

The Proposed Legal Framework for Climate Neutrality in 2050 and the New(?) Principle of Do No Harm

The proposed Regulation introduces a ‘climate neutrality objective’, which means that Union-wide emissions and removals of greenhouse gases regulated in Union law shall be balanced at the latest by 2050, thus reducing emissions to net zero by that date.62 This codification of climate neutrality in EU law provides the keystone, establishing the ultimate aim of EU climate law. While the European Union has already been applying a rule-based approach to addressing climate change for some time, as can be illustrated by the introduction of the EU Emissions Trading Directive in 2003 (even before the entry into force of the Kyoto Protocol), the codification of the long-term goal reaffirms this tradition. The question is, however, how the path towards achieving climate neutrality will be governed, and how to deal with unforeseen positive and negative circumstances, including the developments of science, technological innovation, and the economy in a few decades from now – with health crises being among other potential yet unknown emergencies.63 This is one of the main issues in adopting such a long-term aim through legislative or even constitutional instruments: if their very ratio legis is to create long-term security, to what extent will this then be respected by the authorities at EU and national level, and, if this falls short, to what extent is the path towards the long-term aim enforceable through the courts? In light of taking steps to achieve the ultimate aim, in the course of the legislative procedure for the EU Climate Law, a strengthening of the 2030 target has already been undertaken, which also updates the EU’s nationally determined contribution.64 The European Council, again providing political guidance (and not having legislative power), has endorsed in its meeting of 10–11 December 2020 ‘a binding EU target of a net domestic reduction of at least 55% in greenhouse gas emissions by 2030 compared to 1990’.65 In order to have a mechanism to (try to) ensure the achievement of the long-term aim, the Climate Law proposal has a provision regarding a trajectory which requires the Commission

60 ‘The EU will keep promoting and implementing ambitious climate policy across the world, including in the context of a strong climate diplomacy, and engaging intensely with all partners to increase the collective effort while at the same time ensuring a level playing field.’ See the proposal from the Commission for the European Climate Law, p. 3. 61 According to the indicative timetable from the European Commission related to the Green Deal, a proposal for a carbon border adjustment mechanism for selected sectors is scheduled for 2021. See the Annex to the Communication on the European Green Deal, available at https://​eur​-lex​.europa​.eu/​ resource​.html​?uri​=​cellar:​b828d165​-1c22​-11ea​-8c1f​-01aa75ed71a1​.0002​.02/​DOC​_2​&​format​=​PDF. 62 Commission proposal, Art. 2. 63 Obviously, this question is also relevant for national laws codifying long-term goals, such as the Climate Change Act, adopted in 2008 in the United Kingdom. 64 See above section 2.1. 65 https://​www​.consilium​.europa​.eu/​media/​47296/​1011​-12​-20​-euco​-conclusions​-en​.pdf under para. 12.

The EU and its rule-creating force for climate neutrality by 2050  73 to assess periodically progress towards the 2050 objective.66 It is indeed exactly the path towards reaching the aim that will be decisive for success. This path consists of multiple elements, which also have to be regulated in legislation other than in the EU Climate Law, such as the gradually decreasing cap of the EU ETS. One of the options for establishing a more ambitious EU climate law policy is to let the cap decline much faster, which of course has to be regulated by law. Such steps are, however, not the subject of the proposed EU Climate Law, but require additional legislative action at EU level. Central to the current situation is that in the EU, emission reduction objectives are endorsed or even codified before the specific legislative amendments, stipulating the precise obligations relevant for emitters, are clear.67 With regard to the trajectory, the Commission proposes to be empowered to adopt so-called delegated acts for an indeterminate period of time (Art. 3). This eventual delegation of powers raises concerns in view of the limits formulated by EU treaty law, which in essence preserves that essential decisions have to be taken by the ordinary EU legislator.68 Article 290 TFEU subjects the delegation to strict conditions, in order to preserve democratic accountability in EU rulemaking.69

66 The notion of trajectory is not defined in the Commission proposal of March 2020. However, it mentions that ‘the trajectory shall start from the Union’s 2030 target for climate referred to in Article 2(3)’, a conditional item as it only establishes that ‘by September 2020, the Commission shall review the Union’s 2030 target for climate referred to in Article 2(11) of Regulation (EU) 2018/1999 in light of the climate-neutrality objective set out in Article 2(1) and explore options for a new 2030 target of 50 to 55% emission reductions compared to 1990.’ The deadline has not been met, but it is worth mentioning that Article 2(11) of Regulation 2018/1999 encompasses a moving target anyway: ‘“the Union’s 2030 targets for energy and climate” means the Union-wide binding target of … or any subsequent targets in this regard agreed by the European Council or by the European Parliament and by the Council for 2030’. 67 Illustrative are the European Council conclusions of 10–11 December 2020 (n. 31) endorsing a more ambitious target of 55% in 2030, but the Council at the same time invites the Commission to assess how all economic sectors can best contribute to the 2030 target and to make the necessary proposals, accompanied by an in depth examination of the environmental, economic and social impact at Member State level, taking into account national energy and climate plans and reviewing existing flexibilities. At the time of writing this chapter, the Commission has planned to publish specific legislative proposals in June 2021, and it is not clear when the decision-making on the EU Climate Law proposal, including the 2030 target, will be finished. 68 This concerns Article 290 TFEU; see Merijn Chamon and Marjan Peeters, https://​www​.​maastricht​ university​.nl/​blog/​2020/​03/​european​-climate​-law​-too​-much​-power​-commission, 30 March 2020. 69 As recalled by AG Jääskinen in Case C‑270/12, United Kingdom of Great Britain and Northern Ireland v European Parliament and Council of the European Union [2013], §76. The Court held as follows in Case C‑355/10 Parliament v Council [2012] ECR at paragraphs 64–66: According to settled case-law, the adoption of rules essential to the subject-matter envisaged is reserved to the legislature of the European Union … The essential rules governing the matter in question must be laid down in the basic legislation and may not be delegated … Thus, provisions which, in order to be adopted, require political choices falling within the responsibilities of the European Union legislature cannot be delegated … It follows from this that implementing measures cannot amend essential elements of basic legislation or supplement it by new essential elements. See generally on Article 290, C. Blumann, ‘À la frontière de la fonction législative et de la fonction exécutive: les « nouveaux » actes délégués’, Mélanges en l’honneur de Jean Paul Jacqué (Dalloz 2010) 127–144; C. Garzόn, ‘Les actes délégués dans le système des sources du droit de l’Union Européenne’ (2011) 12 ERA Forum 105–134.

74  Research handbook on climate change mitigation law In the present case, the delegation to the Commission is not restricted in time and concerns ‘the trajectory’, a notion which is not clearly defined.70 Looking at competences, there might be an even bigger problem: as Ludwig Krämer observes, ‘it is doubtful, whether Article 192(1) TFEU is the appropriate legal basis’.71 He grounds this observation on the significant impact the EU Climate Law would have on the energy structure of the Member States. Another important element of the Commission proposal is establishing a ‘framework for achieving progress in pursuit of the global adaptation goal established in Article 7 of the Paris Agreement’.72 Hence, both mitigation and adaptation are addressed in this proposed law, which, as such, need very different policy responses.73 However, it also needs consideration to what extent adaptation measures can be based on the environmental competence, including Article 192(1) TFEU: it depends on how widely adaptation needs to be interpreted, and whether it also covers town and country planning.74 The short discussion above illustrates that the proposed EU Climate Law contains without doubt new, yet unexplored elements to EU climate legislation, such as the trajectory with powers for the Commission. Actually, the notion of ‘law’ (mentioned in the title of the EU Climate Law) as an instrument for EU action does not exist under European Union primary law.75 The proposal aims to establish a Regulation, a legislative act that shall be binding in its entirety and directly applicable in all Member States and to EU institutions, including the European Environment Agency.76 The reason for the Regulation emanates from the need to strengthen the EU’s climate ambition.77 However, another possible reason, not formally expressed, is the need to emphasise the power of the EU lawmaker (the Council and the Parliament), where that legislative power has actually been partly captured, in practice, by the European Council, beyond its role to give a main political impetus to European institutions (and where Member States also retain a veto right, with decisions being obtained by consen-

Chamon and Peeters (n. 68). Ludwig Krämer, ‘Planning for Climate and the Environment: The EU Green Deal’ (2020) 17 Journal for European Environmental & Planning Law 267–306, at 270. 72 Commission proposal, Art.1. 73 We will not delve further into the adaptation element, although we want to flag that in light of the principle of subsidiarity, adaptation at EU level is more debatable than mitigation action. 74 See Article 192(2) TFEU with unanimity requirements in the Council. See also Cathrine Ramstad Wenger, ‘Article 7 Adaptation’, in Geert van Calster and Leonie Reins (eds), The Paris Agreement on Climate Change: A Commentary (Edward Elgar Publishing 2021) 172–199. 75 Article 288 TFEU mentions particularly regulations, directives and decisions. The term ‘law’ was perhaps put in the title based on communication needs. 76 Article 288 TFEU – see also the proposal at p. 5. Remarkably, the Commission does not elaborate on the bindingness of the climate neutrality objective for the Union itself, but only refers to requirements for the Commission and the EEA. However, Article 2 states that ‘The relevant Union institutions and the Member States shall take the necessary measures at Union and national level respectively, to enable the collective achievement of the climate-neutrality objective’. Of course, the enforceability of such obligations will be an interesting issue, but hopefully legal action to enforce compliance will not be needed. Unfortunately, the Commission does not explain the (legal) consequences if the EU objectives (targets) are not reached. 77 The existing level of policy ambition for 2030 is not sufficient to allow for a gradual transition to a climate-neutral EU economy by 2050 (p. 8) and the analysis of various policy developments shows that the current policies are insufficient for the EU to reach the 2050 climate-neutrality objective (p. 15). 70 71

The EU and its rule-creating force for climate neutrality by 2050  75 sus).78 Finally, the European Commission wants an instrument capable of pulling together ‘all EU actions and policies’, to help the EU to achieve a successful and just transition towards climate neutrality and a sustainable future, as stated in the European Green Deal.79 This Green Deal had put forward a new policy principle, called a green oath, to ‘do no harm’.80 This new expression, also included in the proposal for the Eighth Environment Action Programme, relates to the aim to ‘increase coherence and synergies between actions across all levels of governance by measuring progress towards environmental and climate objectives in an integrated way’.81 In essence, ‘all EU initiatives’82 would have to be aligned to this oath not to harm. The glossy expression necessarily calls up a positive mindset. While the expression ‘do no harm’ is – in our view – self-evident, it also sounds familiar in light of the customary no-harm principle, the cornerstone of international environmental law. The purpose of the expression ‘do no harm’ (to avoid inconsistencies among EU policies and goals in light of the environmental objectives) implies that the European Commission has a truly different understanding of this concept compared to the well-known customary law principle that addresses behaviour between states. The main provision in this regard put forward by the EU Climate Law proposal is that the Commission ‘shall assess any draft measure or legislative proposal in light of the climate-neutrality objective’ and the related trajectory.83 This strengthening, particularly its specification towards the climate change problem, of Article 11 TFEU is obviously a formidable challenge, and it will be interesting to see whether the strong emphasis on aligning all action in view of achieving the climate objective, including by using the appealing (but legally unclear) term ‘oath’, will have some relevance in court.84 Nonetheless, there are already signs of watering down the concept, since in the political agreement on the expenditure on the Recovery and Resilience Facility, the principle is suddenly called ‘do no significant harm’ – and is as such welcomed by the Commission …85

78 See the earlier reflection on the European Council urging consensus by the EU legislature: Marjan Peeters, ‘An EU Law Perspective on the Paris Agreement: Will the EU Consider Strengthening its Mitigation Effort?’ (2016) 6 Climate Law 182–195, at 191–192. 79 Commission proposal, EU Climate Law, p. 4. 80 European Commission, Communication from the Commission to the European Parliament, the European Council, the Council (etc.), Brussels, 11.12.2019, COM(2019) 640 final, p. 19. 81 Commission in its proposal for the eight General Union Environment Action Programme, COM/2020/652 final from 14 October 2020, p. 3. 82 Ibid., p. 4: ‘The Commission announced it will improve the way its better regulation guidelines and supporting tools address sustainability and innovation issues, with the objective that all EU initiatives live up to a green oath to “do no harm”.’ 83 Article 5(4) Commission proposal EU Climate Law. 84 However, for hurdles to reaching the courts, see Sebastian Bechtel, Client Earth, 17 June 2020, at https://​www​.clientearth​.org/​projects/​access​-to​-justice​-for​-a​-greener​-europe/​updates/​the​-european​ -climate​-law​-and​-access​-to​-justice/​. 85 European Commission, press release 18 December 2020: Commission welcomes political agreement on Recovery and Resilience Facility, https://​ec​.europa​.eu/​commission/​presscorner/​detail/​en/​ip​_20​ _2397 (accessed 24 December 2020). Article 17, Taxonomy Regulation (see section 2.4), as already accompanied by a Commission Technical Guidance on the application of ‘do no significant harm’ under the Recovery and Resilience Facility Regulation (COM(2021) 1054 final, 12.02.2021).

76  Research handbook on climate change mitigation law 1.4

Selected Key Issues from the European Parliament

The European Parliament adopted on 8 October 2020 many amendments to the proposed EU Climate Law, including important changes.86 This section sheds light on only a few of them. At the time of writing, the legislative process is ongoing, including the negotiations, also known as a trilogue.87 First, an important amendment departs from the collective nature of the objective of climate neutrality, when adding that ‘Each Member State shall achieve net zero greenhouse gas emissions by 2050 at the latest.’88 In our view, this is a fundamentally different view of what the European Union is or could be: with individual national climate neutrality, in its purest form, no use can be made of cost-effective options by taking the Union as a whole. For instance, it raises the question of whether this would mean individual caps under the EU ETS (and how to do so for aviation?). Secondly, the establishment of the trajectory is connected to the need for appropriate legislative proposals.89 In this respect, the European Parliament (EP) wants to keep power regarding setting out the path towards 2050.90 Regarding the Union’s 2030 target for climate, the EP wants an emissions reduction of 60% compared to 1990.91 While the EP accepts a net objective for 2050, it does not mention this explicitly in its amendment for the 2030 target.92 In connection with this more ambitious 2030 target, the European Commission shall assess, by June 2021, how ‘all of the Union legislation relevant for the fulfilment of the Union’s 2030 target for climate and other relevant Union legislation promoting the circular economy and contributing to reduce greenhouse gas emissions’ would need to be amended. As observed above, the legislative approach by the EU, at least this EP approach, is first to set (strong) targets and then to consider the implementation of them. Further reflection on whether this use of codification is the best regulatory choice to take is needed. Thirdly, the EP adopted an amendment introducing an access to justice provision within Member States.93 Earlier, a plea for better access to justice possibilities at EU and national

Amendments adopted by the European Parliament on 8 October 2020 on the proposal for a regulation of the European Parliament and of the Council establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law) (COM(2020)0080 www​ .europarl​ .europa​ .eu/​ doceo/​ – COM(2020)0563 – C9-0077/2020 – 2020/0036(COD)); https://​ document/​TA​-9​-2020​-0253​_EN​.html; see for the procedure: https://​oeil​.secure​.europarl​.europa​.eu/​oeil/​ popups/​ficheprocedure​.do​?reference​=​2020/​0036(COD)​&​l​=​en. 87 The trilogue entails an informal meeting of representatives of the three relevant legislative institutions (the Council, the European Parliament, and the Commission). See also Peeters (n. 78), 193. 88 European Parliament (n. 86), Amendment of Article 2 (p. 44). 89 European Parliament (n. 86), Amendment of Article 3 (p. 50). 90 The need to comply with the main goal of Union environmental policy, which is to achieve a high level of (climate) protection, is nowhere to be recalled, although the level of protection is of course specifically formulated: to achieve climate neutrality by 2050. 91 European Parliament (n. 86), Amendment of Article 2(a), p. 55. 92 European Parliament (n. 86): Article 2(a) does not mention ‘net’ so it can be read as a far more ambitious absolute target: ‘The Union’s 2030 target for climate shall be an emissions reduction of 60% compared to 1990’. We did not investigate (for instance by means of interviews) whether any further explanation is given of this. 93 European Parliament (n. 86), Amendment inserting a new Article 11(a) (p. 66). 86

The EU and its rule-creating force for climate neutrality by 2050  77 level, related to the EU climate law, was made.94 Clearly, access to justice would harden the governance approach and could help, as pointed out more generally by Verschuuren, in promoting the implementation of EU law in legal practice,95 although it is yet to be examined how wide and intense this adjudication would be in the specific case of the (often procedural type of) provisions as established by the governance approach. Nonetheless, harmonising access to justice regarding national decisions under the EU Climate Law and the Governance Regulation would establish a level playing field particularly with regard to standing. If this were to be adopted, its relevance in practice remains to be seen, particularly in view of the fundamental discussion raging in certain EU countries on the role of the judiciary.96 The highlights above regarding the amendments by the EP show how challenging the various topics to be decided upon are, ranging from setting the targets, including the decision whether to allow for a net target by 2030, and the decision whether climate neutrality should be an obligation for every Member State individually, to providing access to justice as a means to harden the governance approach by enabling litigation.

2

THE EU COMPETENCE AND EU CLIMATE LAW INSTRUMENTS

2.1

The EU’s (Limited) Competence to Address Climate Change

While the proposal for the EU Climate Law is, at the time of writing this chapter, still being discussed by the EU legislator, EU climate law already consists of a huge package of laws. Before delving into the specific EU climate law instruments, this section first discusses the EU’s internal competence regarding climate change. This internal competence emerged, in a logic of mitigating emissions, from its powers in the field of environmental protection.97 The post-Rio and post-Kyoto packages were all based on the environmental chapter of primary law.98 94 Client Earth (Sebastian Bechtel), 17 June 2020, https://​www​.clientearth​.org/​the​-european​-climate​ -law​-and​-access​-to​-justice/​. 95 J. Verschuuren, ‘The Netherlands’ in K. Kotze et al. (eds), The Role of the Judiciary in Environmental Governance (Wolters Kluwer 2009), 55–83. Verschuuren also points to the fact that access to justice helps to promote a level playing field for businesses. 96 And also leading to CJEU case law; see for instance, Marco Antonio Simonelli, ‘Thickening up judicial independence: the ECJ ruling in Commission v. Poland (C-619/18)’ https://​europeanlawblog​ .eu/​2019/​07/​08/​thickening​-up​-judicial​-independence​-the​-ecj​-ruling​-in​-commission​-v​-poland​-c​-619​18/. 97 As to the external competence, see for instance E. Morgera (ed.), The External Environmental Policy of the European Union (Cambridge University Press 2012). The negotiating powers of the European Union in the field of climate change were, since the first multilateral negotiations, based upon the environmental chapter of the Treaty, which was made clearer after Lisbon when the words ‘and in particular combating climate change’ were added to ‘promoting measures at international level to deal with regional or worldwide environmental problems’. 98 The first modest package of measures, adopted after the adoption of the UNFCCC, included a Council Directive 93/76/EEC of 13 September 1993 to limit carbon dioxide emissions by improving energy efficiency (SAVE) and a Council decision of 24 June 1993 for a monitoring mechanism of Community CO2 and other greenhouse gas emissions, which were both adopted on basis of the environmental chapter. They were accompanied by a decision to promote renewable energy, the launch of

78  Research handbook on climate change mitigation law However, it is through the new competence on energy, as established by the Lisbon Treaty, that various legislative acts were justified in very recent years. For example, the Governance Regulation is based on both environmental competence (Article 192 TFEU) and on energy competence (Article 194 TFEU).99 Hence, climate policies have largely become energy policies, while also often remaining environmental ones. However, some regulatory approaches were recently moved from one legal base to the other, once the Lisbon Treaty had established the chapter on energy.100 Even while the need to pursue a high level of environmental protection applies to all Union policy given the integration principle,101 one must observe that EU competence in the field of energy is narrower than its competence in the field of the environment. The energy competence is conditional on ‘the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment’ (Art. 194, §1 TFEU), whereas the environmental base is autonomous, not in any way conditional on the establishment and functioning of the internal market (Article 191 TFEU), and, moreover, shall aim at a high level of protection.102 The EU gained more power on environmental issues than on energy ones, where the conferral of power is restricted, a paradoxical situation when one knows that the European Economic Community was rooted in a need to mutualise the control of an essential energy source such as coal, leading to the founding of the European Coal and Steel Community in 1951. The energy chapter mentions that Union policy on energy ‘shall not affect a Member State’s right to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply’, except if this occurs on the basis of the environmental chapter, and therefore for environmental reasons, taking due account of Article 192(2)(c). This Article enables the Union to adopt environmental legislation significantly affecting a Member State’s choice between different energy sources and

a programme called Altener. The post-Kyoto package, including Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity from renewable energy sources in the internal electricity market, Directive 2002/91/EC of the European Parliament and of the Council of 16 December 2002 on the energy performance of buildings and the launch of a carbon market with Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, and even Directive 2003/30/EC of the European Parliament and of the Council of 8 May 2003 on the promotion of the use of biofuels or other renewable fuels for transport, were also based on the environmental chapter. 99 Article 194 TFEU: In the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment, Union policy on energy shall aim, in a spirit of solidarity between Member States, to: (a) ensure the functioning of the energy market; (b) ensure security of energy supply in the Union; (c) promote energy efficiency and energy saving and the development of new and renewable forms of energy; and (d) promote the interconnection of energy networks. See also Karen Makuch and Ricardo Pereira, Environmental and Energy Law (Wiley Blackwell 2012); John Birger Skjaerseth et al., Linking EU Climate and Energy Policies (Edward Elgar Publishing 2016). 100 P. Thieffry, Traité de droit de l’environnement et du Climat (Bruylant 2020) 1605, explaining the transformation of Directive 2002/91/EC of the European Parliament and of the Council of 16 December 2002 on the energy performance of buildings into Directive 2010/31 of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings. 101 See Art. 11 TFEU and Art. 37 Charter. 102 Article 191(2) TFEU.

The EU and its rule-creating force for climate neutrality by 2050  79 the general structure of its energy supply, on the condition that it is decided by the Council acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament, the Economic and Social Committee and the Committee of the Regions.103 Hence, it is possible to impact significantly a Member State’s choice between different energy sources, on the condition that the goal being pursued ranks among the main objectives of the EU on the environment (and mitigation of greenhouse gases is one of them) but also that all 27 Member States fully agree. This constitutes a block to achieving by means of law – at the EU level – a true industrial revolution in the energy sector: the Member States detain a veto right.104 By contrast to EU environmental policies, EU energy policies still largely remain under the control of individual states – and this can be illustrated by the following statement from the European Council from December 2020: ‘to respect the right of the Member States to decide on their energy mix and to choose the most appropriate technologies to achieve collectively the 2030 climate target, including transitional technologies such as gas’.105 This situation explains some European legislation that is actually only slightly prescriptive on content but heavily demanding on administrative processes. The Governance Regulation is symptomatic in that regard. Mimicking the managerial approach established by the Paris Agreement, in which parties are asked to plan in order to meet, on time, a collective objective, the Regulation imposes a heavy planning process on all Member States.106 EU action on climate has always been imagined within the system of competences for secondary law but more attention to improving primary law could be a means to better acknowledge the severity of the issue. From its very start, the European Economic Community was created in close relation to energy concerns. Its roots are to be found in the European Coal and Steel Community of 1951. The 1957 Treaties included the Euratom Treaty, the aim of which was no less than to facilitate investment in nuclear energy and to create the conditions necessary for the speedy establishment and growth of nuclear industries. On renewables, to implement the 1992 United Nations Framework Convention on Climate Change (UNFCCC), the European Community first tabled a very modest Council Decision to promote renewable energy107 and, even though the idea of a Treaty for the promotion of renewable energy sources

The topics for which unanimity in the Council is required, as specified in Article 192(2) TFEU, are interpreted narrowly by the CJEU; see the analysis by Helle Tegner Anker, ‘Competences for EU Environmental Legislation: About Blurry Boundaries and Ample Opportunities’ in Marjan Peeters and Mariolina Eliantonio, Research Handbook on EU Environmental Law (Edward Elgar Publishing 2020) 7–21, at 14. 104 See for an earlier discussion of this issue – including case law – Helle Tegner Anker (n. 103), and earlier: Marjan Peeters, ‘Governing towards Renewable Energy in the EU: Competences, Instruments and Procedures’ (2014) 21(1) Maastricht Journal of European and Comparative Law 39–63. 105 European Council, Conclusions 10–11 December 2020, https://​www​.consilium​.europa​.eu/​media/​ 47296/​1011​-12​-20​-euco​-conclusions​-en​.pdf. 106 The proposed EU Climate Law, discussed in section 2, also imposes new collective goals, without being prescriptive on content, on Member States. 107 Decision 93/500 concerning the promotion of renewable energy sources in the Community (1993) OL L235. See C. Streck and D. Freestone, ‘The EU and Climate Change’, in R. Macrory (ed.), Reflections on 30 Years of EU Environmental Law (Europa Law Publishing 2006), 100. 103

80  Research handbook on climate change mitigation law was once suggested in a resolution of the European Parliament in the late 1990s,108 it never moved in that direction. In the CJEU judgment on the Hinkley Point case set down on 22 September 2020,109 one can observe how important it can be for a new source of energy to be promoted by a legal act having the same legal value as the Lisbon Treaty. Austria contested before the CJEU the Commission decision declaring the United Kingdom’s financial support to Hinkley Point C nuclear power station in the UK compatible with the internal market, on the ground that the construction of a new nuclear power station does not constitute an objective of common interest, under the meaning of state aid (Article 107 TFEU), drawing links between such support and the potential negative impact on the promotion of renewable energy sources.110 The Court, in Grand Chamber, confirmed that the second subparagraph of Article 194(2) TFEU provides that the measures adopted by the European Parliament and the Council are not to affect a Member State’s right to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply, and does not preclude that choice from being nuclear energy.111 Thus, since the choice of nuclear energy is, under those provisions of the TFEU, a matter for the Member States, ‘it is apparent that the objectives and principles of EU environmental law and the objectives pursued by the Euratom Treaty, as recalled in the judgment – the development of a powerful nuclear industry – do not conflict’,112 and cannot be regarded as precluding, in all circumstances, the grant of state aid for the construction or operation of a nuclear power plant.113 This case demonstrates that it is not inconsequential for the nuclear industry to benefit from the support of a specific treaty, the Euratom Treaty. One can wonder why the wish to promote new sources of energy, such as renewables, does not also translate into the same kind of instrument with the same legal rank. If the EU wants to think big on climate neutrality and renewables, it may need to get inspired by the process and very existence of the Euratom Treaty.114 If the EU wants to achieve an ambition such as a zero pollution and a climate-neutral society, as put forward by the von der Leyen Commission, or even a new industrial revolution, White Paper for a Community Strategy and Action Plan COM(97)599 final (26/11/97), at 9, referring to PE 221/398.fin. 109 Case C-594/18P Austria v Commission ECLI:​EU:​C:​2020:​742. Alicja Sikora, ‘Applicability of the EU State Aid and Environmental Rules in the Nuclear Energy Sector, Annotation on the Judgment of the Court of Justice (Grand Chamber) of 22 September 2020 in Case C‑594/18 P Republic of Austria v Commission (ESTAL)’ (2020) 19(4) European State Aid Law Quarterly 515–520. 110 Paras 36 and 37. 111 Para. 48. 112 Para. 33. 113 Paras 48 and 49. The Court asserts that the Euratom Treaty and the TFEU have the same legal value, as illustrated by Article 106a(3) of the Euratom Treaty (para. 32). Accordingly, the provisions of the TEU and TFEU are not to derogate from the provisions of the Euratom Treaty; the rules of the TFEU apply in the nuclear energy sector when the Euratom Treaty does not contain specific rules, such as rules of EU law on the environment: para. 41. Therefore, the Euratom Treaty does not preclude the application in that sector of the rules of EU law on the environment. See also judgment of 27 October 2009, ČEZ, C‑115/08, EU:​C:​2009:​660, paragraphs 87 to 91. Markus Möstl, ‘Case C-115/08, Land Oberösterreich v ČEZ, Judgment of the Court of Justice (Grand Chamber) of 27 October 2008’ (2010) 47(4) Common Market Law Review 1221–1232. 114 To look further into reasons for the asymmetric approaches, see among others R. Engstedt, Handbook on European Nuclear Law: Competences of the Euratom Community under the Euratom Treaty (Kluwer 2020). 108

The EU and its rule-creating force for climate neutrality by 2050  81 it must be endowed with an institutional framework that actually matches that ambition, even within its own existing primary law. This may not yet be the case. Are the European Treaties Paris-proof? An academic discussion on that aspect has not even started. Meanwhile, and realistically, any further transposition of powers from national level to EU level – for instance in the field of renewable energy – will most likely face political resistance at the national level. 2.2

Core Legal Instruments Regulating Emission Reduction

Despite restricted powers, the EU has been rather successful at putting forward legally binding emission reductions.115 Such emission reductions are mainly enforced by precise obligations put on industries and Member States, and the outcome in terms of emission reduction is, until 2020, and taken as a whole, successful in the sense that emissions have dropped by 24% in 2019, even during economic growth.116 The three core instruments are respectively the Effort Sharing approach,117 specifying individual emission reduction pathways and targets for Member States until 2030, the EU Emissions Trading Scheme,118 setting an annually decreasing EU-wide cap on emissions from covered industries and aviation, and the LULUCF, establishing that the sum of emissions and removals by land and forestry has to be zero. The regulation of gases not covered by these three instruments should not be overlooked but generally gets less attention in legal scholarship.119 One of the climate-related concerns is the production of water vapour by aviation, currently not regulated.120 Another important

One can even argue that putting forward various legislative instruments, targeting multiple aims, such as emission reductions, renewable energy, and energy efficiency, leads to – to put it mildly – a mess of instruments instead of a proper mix. See Marjan Peeters, ‘Instrument Mix or Instrument Mess? The Administrative Complexity of the EU Legislative Package for Climate Change’ in Marjan Peeters and Rosa Uylenburg, EU Environmental Legislation: Legal Perspectives on Regulatory Strategies (Edward Elgar Publishing 2014) 173–192. 116 According to the EEA: Since 1990, greenhouse gas emissions in the EU have been steadily declining, with emissions in the EU-27 falling to 24% below 1990 levels in 2019. This highlights the results of effective climate policies implemented across the EU and shows that it is clearly possible to achieve more ambitious reduction targets by 2030, paving the way for a climate neutral EU by 2050. EEA, ‘EU on track to meet greenhouse gas emissions and renewable energy 2020 targets, progress in 2019 shows more ambitious long-term objectives are reachable’, News, 30 November 2020 (on file with authors). Importantly, however, the EEA notes that ‘In 2019, preliminary estimates point towards 12 countries with emission levels greater than their annual targets: Austria, Belgium, Bulgaria, Cyprus, Czechia, Estonia, Finland, Germany, Ireland, Luxembourg, Malta and Poland’ (same source). 117 Marjan Peeters and Natassa Athanasiadou, ‘The Continued Effort Sharing Approach in EU Climate Law: Binding Targets, Challenging Enforcement?’ (2020) 29 RECIEL 201–211. 118 There is a lot of literature about the EU ETS; see for a recent discussion, Stefan Weishaar, ‘EU Emissions Trading: Its Regulatory Evolution and the Role of the Court’ in Marjan Peeters and Mariolina Eliantonio (eds), Research Handbook of EU Environmental Law (Edward Elgar Publishing 2020). 119 The Commission states ‘Non-CO2 emissions of methane, nitrous oxide and so-called F‑gases represent almost 20% of the EU’s greenhouse gas emissions. By 2030, these can be reduced effectively by up to 35% compared to 2015.’ See Commission Communication ‘Stepping up Europe’s 2030 climate ambition’ (COM(2020)562 from 17 September 2020, p. 11. If we understand the communication correctly, there is no strengthening proposed for these F‑gases until 2030. 120 But it is a complex issue with uncertainties regarding the impacts of non-CO2 gases on climate change (nonetheless, less aviation would reduce such impacts!). See on the non-CO2 emissions from aviation: Commission Staff Working Document, Full-length report Accompanying the document Report 115

82  Research handbook on climate change mitigation law element is the regulation of hydrofluorocarbons (HFCs), which are harmful greenhouse gases (climate-warming fluorinated gases) regulated at international level in the 1987 Montreal Protocol on Ozone Depleting Substances, particularly by its 2016 Kigali Amendment (in force since 1 January 2019).121 This amendment was needed to establish a framework for controlling the replacements for substances that were reduced by the Montreal Protocol, that were not depleting the ozone layer, but were contributing to climate change.122 This is one important practical example of how the control of an environmental problem can shift pollution and harm to another environmental medium – which the von der Leyen Commission wants to prevent by means of the ‘do not harm’ principle, as explained above. Consequently, HFC gases are covered by the proposed EU climate law,123 illustrating the great width of the EU climate law approach.124 Meanwhile, it is a true challenge to develop a package of rules that steers the reduction of emissions in an efficient, effective, sufficiently fast and fair way towards climate neutrality, while not knowing how science, innovation, the economy, democracy, and legal systems, including case law, will develop. For instance, while on the one hand, there were fewer emissions from aviation in the first half of 2020 due to a dramatic external development,

from the Commission to the European Parliament and the Council, Updated analysis of the non-CO2 climate impacts of aviation and potential policy measures pursuant to EU Emissions Trading System Directive Article 30(4), available at https://​eur​-lex​.europa​.eu/​legal​-content/​EN/​TXT/​?uri​=​SWD:​2020:​ 277:​FIN (accessed 27 January 2021). 121 See https://​treaties​.un​.org/​Pages/​ViewDetails​.aspx​?src​=​IND​&​mtdsg​_no​=​XXVII​-2​-f​&​chapter​=​27​ &​clang​=​_en (accessed 3 December 2020). For a scholarly discussion, see Mark W. Roberts, ‘Finishing the Job: The Montreal Protocol Moves to Phase Down Hydrofluorocarbons’ (2017) 26(3) RECIEL 220–230. 122 See for a concise explanation the information provided by UNEP: https://​ozone​.unep​.org/​treaties/​ montreal​-protocol (accessed 3 December 2020) and also: Eric A. Heath, ‘Introductory note to the amendment to the Montreal Protocol on substances that deplete the ozone layer (Kigali Amendment)’ (2017) 56 ILM 193, DOI:​10​.1017/​ilm​.2016​.2. The European Commission explains on its website that the emissions of such gases ‘almost doubled from 1990 to 2014 – in contrast to emissions of all other greenhouse gases, which were reduced. However, thanks to EU legislation on fluorinated gases, F‑gas emissions have been falling since 2015’, at https://​ec​.europa​.eu/​clima/​policies/​f​-gas​_en (accessed 3 December 2020). The EEA has reported that ‘Fluorinated greenhouse gas emissions have been decreasing in the EU since 2015, after 15 years of uninterrupted annual increases’; see EEA, ‘Use of climate-warming fluorinated gases continues to drop across EU’ (News, 1 December 2020, on file with authors). According to information provided by the then European Commission, the ‘EU’s F‑gas emissions will be cut by two-thirds by 2030 compared with 2014 levels’; https://​ec​.europa​.eu/​clima/​policies/​f​-gas/​legislation​_en (accessed 3 December 2020). 123 In addition to already existing EU secondary legislation regulating these gases, such as, in particular, Regulation (EU) No. 517/2014 of the European Parliament and of the Council of 16 April 2014 on fluorinated greenhouse gases and repealing Regulation (EC) No. 842/2006. The aim is to reduce such emissions by at least 55% by 2030 compared with 2014 levels, see the new NDC for the EU from 17 December 2020, para. 23. 124 See Article 1, referring to Annex V part 2 of the Energy Union and Climate Action Regulation. Not only HCFs, but also perfluorocarbons (PFCs) and sulphur hexafluoride (SF6) are covered by the EU climate law. The UNFCCC excluded gases governed by the Montreal Protocol (see for instance its Article 4), but the Paris Agreement has no such provision. See on the complex reporting of greenhouse gases, UNFCCC, Methodological issues relating to fluorinated gases, https://​unfccc​.int/​process​-and​ -meetings/​transparency​-and​-reporting/​methods​-for​-climate​-change​-transparency/​methodological​-issues​ -relating​-to​-fluorinated​-gases (accessed 3 December 2020).

The EU and its rule-creating force for climate neutrality by 2050  83 COVID-19, the increase in electronic network-related emissions, including from networks such as 4G and 5G, needs consideration and action.125 The width of EU climate law also causes problems for understanding: as has been observed before, ‘given its breadth, complexity, and dynamic nature, it is a huge challenge … to acquire a good overview, let alone develop a comprehensive and in-depth analysis’ of current climate law.126 In order to contribute to further insights, the sections below will delve into a specific dimension of the EU climate rule package, which is to steer by means of financial laws, particularly by means of the Taxonomy Regulation adopted in 2020.127 2.3

Financial Laws: An as yet Underexplored Topic

An element of EU climate law still to be further examined concerns how governmental policies entail or influence investments that have an impact on the transition to a climate-neutral society. Lawyers perhaps intend to focus first and foremost on obligations that directly address polluting activities. However, the behaviour of companies, citizens and (institutional) investors such as pension funds can also be steered (or nudged) by law in a desired direction. In light of this, it would also be interesting to examine and understand how very different governmental actions, being on the one hand the direct imposition of obligations on greenhouse gas emitters, and, on the other hand, the regulation of financial market players, interact. This section aims to provide an introductory discussion of the role of financial laws adopted at EU level. Such discussion is needed in view of the Paris Agreement, which states that finance flows need to be consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.128 To what extent this objective can be seen as entailing a specific obligation for each party to the Paris Agreement cannot yet be identified with certainty, but, nonetheless, is a fundamental guiding principle for the implementation of the convention. Further case law could provide clarity on the fact whether, in domestic orders, governments – and perhaps even private parties – can be held to account to implement such a principle. While the ‘finance flow’ principle as codified in the Paris Agreement is indeed not directly applicable to private

125 See for example, https://​www​.euractiv​.com/​section/​energy/​news/​ericsson​-5g​-could​-dramatically​ -increase​-network​-energy​-consumption/​. 126 Peeters (n. 10), 137. 127 We would like to stress that the further improvement of the instruments mentioned above of course needs further research too, but falls outside the scope of this chapter. Changes of the instruments are already foreseen, and the European Court of Auditors also plays a role in this respect; see for example, ‘Special Report 18/2020: The EU’s Emissions Trading System: free allocation of allowances needed better targeting’, available at https://​www​.eca​.europa​.eu/​sites/​ep/​en/​Pages/​DocItem​.aspx​?did​=​54392, and the related council conclusions from 17 December 2020, available at https://​data​.consilium​.europa​ .eu/​doc/​document/​ST​-14198​-2020​-INIT/​en/​pdf. 128 Paris Agreement, Art. 2(1)(c). See in this respect the conclusions from the European Council stating that ‘As a general principle, all EU expenditure should be consistent with Paris Agreement objectives.’ European Council conclusions from 17–21 July 2020 on the recovery plan and multiannual financial framework for 2021–2027 https://​www​.consilium​.europa​.eu/​en/​press/​press​-releases/​2020/​07/​21/​ european​-council​-conclusions​-17​-21​-july​-2020/​, p. 7 (A21). Note also that ‘An effective methodology for monitoring climate-spending and its performance, including reporting and relevant measures in case of insufficient progress, should ensure that the next MFF as a whole contributes to the implementation of the Paris Agreement’, conclusions p. 14 (para. 18).

84  Research handbook on climate change mitigation law investors in particular, it can still serve as contextual legal guidance that – in some jurisdictions, especially those that are very open to applying international law in domestic judicial decisions – could have influence on or even become part of judicial argumentation.129 We say this with caution, since it is hard to predict how case law will develop; a first step would be that claimants point to this Article of the Paris Agreement. Back to the European Union: the fact that the EU is based on – and has established – an internal market, including the free movement of (financial) services and capital,130 and at the same time has ambitious climate policy goals, means that one can assume that the EU also tries to integrate climate concern into its market regulations. In essence, from a treaty perspective, the concern of climate change – being obviously an environmental concern – needs to be integrated into the Union’s ‘policies and activities’.131 Moreover, in the Commission proposal for the EU Climate Law, provisions are included in order to reach consistency of Union measures with the climate neutrality objective. This includes the assessment, already discussed above, of ‘any draft measure or legislative proposal in light of the climate-neutrality objective’ which needs to be included in ‘any impact assessment accompanying these measures or proposals’.132 The proposed provision reads as a procedural measure, since it is not clearly stated that all Union acts have to contribute to the climate neutrality objective. Moreover, the provision does not solve potential weighing problems either, for instance when climate measures would harm other environmental concerns, such as nature values.133 Admittedly, it is hard to forecast and regulate the priority that should be given to climate-related measures above other values, such

We are not aware – and did not examine comprehensively – whether the argument has been brought in specific cases in jurisdictions across the world. See for an example of litigation (in the UK) on how the government (the central bank) invests: R (on the application of People & Planet) v HM Treasury, addressing the policy adopted by HM Treasury for handling its investment in Royal Bank of Scotland (RBS) – with an argument that RBS provided financial support for many projects which had a detrimental effect on both climate change and human rights. The case is available at http://​climatecasechart​.com/​ non​-us​-case/​r​-on​-the​-application​-of​-people​-planet​-v​-hm​-treasury/​ and was decided in 2009, so before the conclusion of the Paris Agreement. Although the claim failed, it did get a lot of public attention (Master’s thesis, Kate Smethills, Maastricht University 2019–2020, p. 24, available upon request); and ‘In 2018, nine years since the claim was brought, RBS made a public announcement that it had officially ended all financial support for projects that had a detrimental effect on climate change and human rights as part of its investment policy.’ 130 TEU Article 3(3) states that the internal market ‘shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance.’ See further on free movement, TFEU Art. 26. 131 TFEU Art. 11. 132 Commission proposal, Article 5(4), discussed in section 2.3. At the time of writing it is not clear how the provision will be designed, particularly in connection to the trajectory that the Commission proposes. Interestingly, the provision does not exclude draft implementing or delegated acts. 133 This is a challenge yet to be further examined by legal scholarship. It is to be recalled that according to the TEU and TFEU, a high level of environmental protection has to be adhered to; however, this general objective does not solve the weighing issue, particular where it concerns intra-environmental conflicts such as the establishment of wind energy versus protection of nature. Furthermore, climate and other environmental values, such as biodiversity, must not be opposed to one another, nor be approached as static elements, as they are all part of the same dynamic system. The UNFCCC defines the ‘climate system as the totality of the atmosphere, hydrosphere, biosphere and geosphere and their interactions’ (Article 1). 129

The EU and its rule-creating force for climate neutrality by 2050  85 as other environmental values including preserving biodiversity, and also other concerns such as economic circumstances. After all, Article 11 TFEU, regulating the external integration principle, points at ‘sustainable development’, which traditionally entails a weighing of different values and concerns. To ‘facilitate and stimulate the public and private investments needed for the transition to a climate-neutral, green, competitive and inclusive economy’, but also to provide public funding, the EU has taken, or is trying to take, several measures.134 The European Council pointed at prioritising climate change in EU budgets, in the following way (where MFF stands for Multiannual Financial Framework and NGEU for New Generation EU): Climate action will be mainstreamed in policies and programmes financed under the MFF and NGEU. An overall climate target of 30% will apply to the total amount of expenditure from the MFF and NGEU and be reflected in appropriate targets in sectoral legislation.135 They shall comply with the objective of EU climate neutrality by 2050 and contribute to achieving the Union’s new 2030 climate targets, which will be updated by the end of the year. As a general principle, all EU expenditure should be consistent with Paris Agreement objectives.136

As well as actions that involve public money, including the Just Transition Mechanism and a Just Transition Fund aiming to address social and economic consequences related to the transition to a climate-neutral society,137 the financial activities of the private sector are also subjected to regulation. This illustrates the policy aim of the Union to ‘fully exploit the potential of the internal market to achieve’ sustainable development.138

See, for a coherent explanation, including the mobilisation of public funding, information provided by the EU, for example, the European Council conclusions from 17–21 July 2020 on the recovery plan and multiannual financial framework for 2021–2027 https://​www​.consilium​.europa​.eu/​en/​press/​ press​-releases/​2020/​07/​21/​european​-council​-conclusions​-17​-21​-july​-2020/​ and, earlier, the website from the European Commission https://​ec​.europa​.eu/​regional​_policy/​en/​newsroom/​news/​2020/​01/​14​ -01​-2020​-financing​-the​-green​-transition​-the​-european​-green​-deal​-investment​-plan​-and​-just​-transition​ -mechanism (accessed 2 August 2020). 135 Earlier, Regulation (EU) 2015/1017 of the European Parliament and of the Council specified a 40% climate investment target for infrastructure and innovation projects under the European Fund for Strategic Investment, see preamble, para. 17, of Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088, OJ EU L 198/13. 136 European Council Conclusions from 17–21 July 2020 on the recovery plan and multiannual financial framework for 2021–2027, p. 7 (A21). 137 More information is given on the website from the European Commission, for instance, https://​ ec​.europa​.eu/​commission/​presscorner/​detail/​en/​qanda​_20​_24 (accessed 4 August 2020), and see also about InvestEU, https://​ec​.europa​.eu/​commission/​priorities/​jobs​-growth​-and​-investment/​investment​ -plan​-europe​-juncker​-plan/​whats​-next​-investeu​-programme​-2021​-2027​_en (accessed 4 August 2020). 138 As stated in the preamble, para. 9, of Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088, OJ EU L 198/13. 134

86  Research handbook on climate change mitigation law 2.4

The Taxonomy Regulation: Aiming to Provide Clarity on ‘Environmentally Sustainable’ Investments

A new EU regulation, the so-called Taxonomy Regulation (entered into force in 2020),139 aims to stimulate sustainable investment by market actors.140 This Regulation is of a facilitative nature since it aims to provide clarity to the market with regard to the possibility of calling investments sustainable. This is done by introducing a classification system (a taxonomy) that aims to avoid ‘greenwashing’ (meaning that activities are called environmentally friendly while in practice they are not sufficiently green).141 In its preamble, the Regulation refers to article 2(1)(c) of the Paris Agreement (to make financial flows consistent with the climate objectives) and the Regulation is even said to be ‘a key step towards the objective of achieving a climate-neutral Union by 2050’ (emphasis added).142 Furthermore, the EU legislator expects that providing a classification system for sustainable investments may lure market participants not covered by the Regulation to publish information on the sustainability of their activities voluntarily.143 From a legal perspective, it needs to be observed that legal action against ‘false’ or greenwashing information may be hard to take, but is not impossible.144 The Aarhus Convention has not yet provided detailed and result-oriented provisions with regard to how to regulate environmental information disclosure by private actors, since its Article 5(6) only states that ‘Each Party shall encourage operators whose activities have a significant impact on the environment to inform the public regularly of the environmental impact of their activities and products, where appropriate within the framework of voluntary eco-labelling or eco-auditing schemes or by other means.’145 The Taxonomy Regulation moves beyond this provision and introduces hard law for the possibility for market actors covered by the Regulation to call investments environmentally sustainable.146 Importantly, the Regulation concerns ‘environmentally sustainable economic activities’, which illustrates that the environmental dimension of the concept of sustainable development

We are grateful to Gabrielė Vilemo Gotkovič, who wrote a paper on ‘EU Sustainable Finance Regulation & Institutional Investors’ in the academic year 2019–2020 at Maastricht University and, in this way, introduced us to this specific field of law. The paper contains an excellent introduction and discussion of EU sustainable finance regulation. 140 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088, OJ EU L 198/13 (published 22 June 2020; see for its entry into force Article 27). See the preamble for the history of its development, including the work of a High-Level Expert Group. 141 In words of the Regulation, ‘a shared, holistic understanding of the environmental sustainability of activities and investments’, preamble para. 6. 142 Taxonomy Regulation, preamble para. 3. 143 Taxonomy Regulation, preamble paras 15 and 22. 144 This issue needs further research (including examining the issue mentioned in preamble para. 21). Possibly national committees (codes) assessing the trustworthiness of public advertisements can play a role. 145 Of course, the Protocol on Pollutant Release and Transfer Register (PRTR protocol) provides important provisions on disclosing emissions information, but not in products or services. 146 Article 1 of the Taxonomy Regulation sets the scope, including ‘financial market participants that make available financial products’ and ‘undertakings which are subject to the obligation to publish a non-financial statement or a consolidated non-financial statement pursuant to Article 19a or Article 29a of Directive 2013/34/EU of the European Parliament and of the Council(68), respectively’. 139

The EU and its rule-creating force for climate neutrality by 2050  87 is the objective of the Regulation.147 This is important in view of the breadth, and, consequently, interpretation challenges of the term ‘sustainable development’.148 A variety of actors are under the obligation to disclose information so that the environmental sustainability of their activities can be understood.149 Disclosure duties are aligned to other EU laws such as the Regulation on sustainability-related disclosures in the financial services sector.150 As is almost always the case, this Regulation requires further rule-making, and particularly the rules that specify environmental impacts can be very complex, detailed and in need of regular updates.151 As a rule of thumb, ‘An economic activity should not qualify as environmentally sustainable if it causes more harm to the environment than the benefits it brings’ and for assessing this, the precautionary principle – by no means an easy principle to apply – is relevant, according to the EU legislator.152 Enforcement will be the task of national authorities, which will hence have the challenge to understand and check compliance with complex criteria.153 The Commission is entrusted with the task of adopting further rules by means of delegated acts to set the criteria for what can be called environmentally sustainable investments.154 This provision is critically described as the ‘Commission becomes the power that will regulate 147 See, for instance, its Article 3; nonetheless, see Article 3(c) and preamble para. 35 explaining that minimum safeguards related to human and labour rights need to be complied with. Article 22 of the Taxonomy Regulation hints at including social objectives in the future. 148 Gyula Bándi, ‘Principles of EU Environmental Law Including (the Objective of) Sustainable Development’ in Marjan Peeters and Mariolina Eliantonio, Research Handbook on EU Environmental Law (Edward Elgar Publishing 2020) Chapter 2. 149 Taxonomy Regulation; see for instance preamble para. 18 and Article 9. Six environmental objectives have been selected, which are: climate change mitigation; climate change adaptation; the sustainable use and protection of water and marine resources; the transition to a circular economy; pollution prevention and control; and the protection and restoration of biodiversity and ecosystems (para. 23). Obligations to disclose information can be found for instance in Articles 5, 6 and 8. 150 Taxonomy Regulation, preamble para. 19, referring to Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (OJ L 317, 9.12.2019, p. 1); see also Articles 5, 6 and 7 of the Taxonomy Regulation. 151 See in a nutshell the Taxonomy Regulation, preamble para. 38. 152 Taxonomy Regulation, preamble para. 40 and Article 19(1)(f). See for the legal definition of ‘environmentally sustainable economic activities’ Article 3. See also Article 16. 153 Taxonomy Regulation, preamble para. 18 and para. 55 (with reference to aligning the enforcement with other EU Regulations) and Articles 21 and 22. See also the following statement of awareness: To avoid overly burdensome compliance costs on economic operators, the Commission should establish technical screening criteria that provide for sufficient legal clarity, that are practicable and easy to apply, and for which compliance can be verified within reasonable cost-of-compliance boundaries, thereby avoiding unnecessary administrative burden. Technical screening criteria could require carrying out a life-cycle assessment where sufficiently practicable and where necessary. Taxonomy Regulation, preamble para. 47. Obviously, the intended avoidance of overly burdensome compliance costs will also have benefits for the enforcement authorities. 154 See, on the delegation of rule-making power to the European Commission, para. 54 and Article 22 of the Taxonomy Regulation. See for a critical comment highlighting opacity, imprecision and subjectivity: Daniel Guéguen, ‘The EU’s green finance taxonomy: an Orwellian mechanism’ (published on Euractive: https://​www​.euractiv​.com/​section/​energy​-environment/​opinion/​the​-eus​-green​-finance​ -taxonomy​-an​-orwellian​-mechanism/​) 20 November 2020 (accessed 3 December 2020). Delegated acts are made possible by Article 290 TFEU and are already discussed above in the context of the EU climate

88  Research handbook on climate change mitigation law issues of vital importance’.155 Nonetheless, the Regulation provides some criteria that the Commission of course has to adhere to, such as a kind of special treatment for ‘economic activities and sectors for which there are no technologically and economically feasible low-carbon alternatives’.156 Such activities can still be qualified as contributing substantially to climate change mitigation if their greenhouse gas emissions are substantially lower than the sector or industry average, they do not hamper the development and deployment of low-carbon alternatives and they do not lead to a lock-in of assets incompatible with the objective of climate neutrality, considering the economic lifetime of those assets.157

Since such activities are often also regulated by other EU climate law, such as the EU ETS (for instance with regard to the cement or steel industry, and, clearly, aviation emissions),158 one may expect that compliance with such law may also be relevant to qualifying as ‘sustainable’.159 However, the Regulation does not make any explicit cross-reference to the EU ETS Directive, while many other environmental Directives are referred to. But, taking the narrower focus of financial laws, the Taxonomy Regulation is already difficult to understand in terms of its relationships with other such laws. For instance, the disclosure obligations of the Taxonomy Regulation ‘supplement the rules on sustainability-related disclosures’ laid down in another Regulation on sustainability-related disclosures in the financial services sector which will apply from 10 March 2021.160 This law provides ‘additional disclosure requirements to the existing elements of [five] relevant sectoral legislations … via a self-standing text (lex specialis) providing full harmonisation, cross-sectoral consistency and regulatory neutrality’.161

law proposal. Guéguen highlights serious issues with the procedure of the adoption of the delegated act with criteria for the climate-related taxonomy. 155 Daniel Guéguen (n. 154). See, for a kind of expert committee (the ‘Platform sustainable finance’, being an advisory body) involved in this Commission decision-making, https://​ ec​ .europa​ .eu/​ info/​ publications/​sustainable​-finance​-platform​_en (accessed 4 December 2020). 156 Taxonomy Regulation, preamble para. 41 (quotes derived from this para.) and Article 10. 157 See n. 155. 158 We did not, however, check the exact coverage of the Regulation: it does not apply to aviation (and industrial) emissions directly, but may apply, we assume, to investments in such sectors. One interesting issue is the coverage by the Regulation of financial products: is trade in EU ETS allowances covered? See Article 1(2)(b) of the Regulation. And what about trade in (voluntary) offsets generated by forestry? Such issues need further exploration and research. 159 Article 10(2), providing a special arrangement for activities without technologically and economically feasible low carbon alternatives (will the cost of allowances play a role here?), puts forward that the activity ‘has greenhouse gas emission levels that correspond to the best performance in the sector or industry’. However, see also Article 17 (‘where that activity leads to significant greenhouse gas emissions’): the joint interpretation of Articles 10 and 17 needs further consideration. 160 Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector. 161 Explanation provided by the European Commission, https://​ec​.europa​.eu/​info/​business​-economy​ -euro/​banking​-and​-finance/​sustainable​-finance/​sustainability​-related​-disclosure​-financial​-services​ -sector​_en (accessed 3 December 2020). The European Commission only mentions the abbreviations of these five sectoral laws: AIFMD, UCITS, Solvency II, IDD and MiFID II.

The EU and its rule-creating force for climate neutrality by 2050  89 The aim of this discussion of the Taxonomy Regulation is not to provide a detailed insight into its content, or its relationship to other laws,162 but to flag that, as well as the hard law approaches discussed in section 3.2 above, and the governance approach undertaken by the Governance Regulation, to be complemented by the proposed EU Climate Law, other measures are taken that are also worthwhile to examine. One important issue is how effective will such a financial approach be towards reaching a sufficiently fast decrease of emissions, and, ultimately, climate neutrality? How will this body of law interact with or complement with hard core climate law instruments, such as emissions standards for cars and the EU ETS for industries and aviation? Besides this, there is also an important EU institutional law perspective: how is the balance of powers arranged between, on the one hand, the ordinary EU law-maker, and, on the other hand, the Commission as the sole institute entrusted with delegated and implementing powers? In that respect, and taken from a more societal perspective, how will society react to the increase of power at EU level, particularly in respect of the Commission, and will this result in more support for the EU or lead to an increase in resistance?163 What kind of EU action will be appreciated more in the national spheres; will it be the market approaches aiming to provide more clarity on what can be seen as environmentally friendly? Will the EU citizens be proud to be part of the journey to climate neutrality by a European Union predominantly using market forces – thereby trying to let the market work for sustainability? Anyway, for future legal research, it is clear that the thoroughness of the approach towards climate neutrality in the next decades should not only be assessed by scrutinising the performance of individual Member States – as orchestrated under the Governance Regulation – but also the performance of EU institutions, in particular the Commission being entrusted with important powers. One of the challenges is how the decision-making of the Commission will be perceived as doing the right thing. The technical and complex characteristics of the decisions are, however, a barrier in this respect.164 Nonetheless, and on a more positive note, the potential role the Taxonomy Regulation can play outside EU territory also needs further examination. Since the Taxonomy Regulation applies to large undertakings,165 requiring them to disclose inter alia ‘the proportion of their turnover derived from products or services associated with economic activities that qualify as environmentally sustainable’ the Regulation has – we assume – at least some reach outside EU

See, for an overview of sustainable finance laws (initiatives), Commission legislative proposals on sustainable finance https://​ec​.europa​.eu/​info/​publications/​180524​-proposal​-sustainable​-finance​_en (accessed 4 December 2020). 163 See, in this respect, earlier observations as to how citizens might perceive the increased EU powers with the EU ETS: Marjan Peeters, ‘Legislative Choices and Legal Values: Considerations on the Further Design of the European Greenhouse Gas Emissions Trading Scheme from a Viewpoint of Democratic Accountability’ in M. G. Faure and M. Peeters (eds), Climate Change and European Emissions Trading: Lessons for Theory and Practice (Edward Elgar Publishing 2008), 17–52. 164 See, as a randomly picked illustrative example, the following citizen comment: https://​ec​.europa​ .eu/​info/​law/​better​-regulation/​have​-your​-say/​initiatives/​12501​-Emise​-CO2​-z​-vozidel​-Monitorov​-n​-a​ -zku​-ebn​-postupy​-pro​-osobn​-automobily​-a​-dod​-vky​-aktualizace​-/​F541625 (regarding the consultation by the Commission for its decision on CO2 vehicle emissions – monitoring and test procedures for cars and vans). 165 Article 8 of the Taxonomy Regulation refers to undertakings covered by Directive 2014/95/EU amending 2013/34/EU on financial reporting. 162

90  Research handbook on climate change mitigation law territory.166 Further research can delve into the question of how the EU taxonomy approach relates to already existing voluntary approaches for qualifying and disclosing environmental information, and whether the EU has some global influence on what is to be perceived as sustainable investment in view of the needed climate transition. In conclusion, the financial streams established in the EU also matter with regard to the climate transition, but the legal dimensions have yet to be further examined. The political agreement reached between the European Parliament and the Council on the Recovery and Resilience Facility (RRF) makes a gigantic sum of money available for loans and grants (€672.5 billion), and, notably, at least 37% thereof, being part of national recovery and resilience plans, should support climate objectives.167 It will be interesting to see how all the different initiatives, including the Taxonomy Regulation focusing on private investments, will contribute to implementing the 2050 objective of climate neutrality.

3

CLIMATE LITIGATION IN THE EU

3.1

Litigation in the Context of Already Adopted EU Climate Laws

Next to adopted EU climate laws, another important force on the European continent stems from recent climate litigation on greenhouse gas reductions to be accomplished by governments, either at national level or at EU level. Obviously, climate litigation can cover many different issues and, for instance, with regard to the EU ETS but also the Renewable Energy Directive, many CJEU decisions have been laid down, but in this section we focus on the trend of taking governments, including EU institutions, to court, either to urge more ambitious mitigation action through the courts or to demand compliance with earlier reduction goals – set at either EU or national level.168 The litigation demanding more ambitious governmental policies is remarkable in light of the fact that the EU has already adopted relatively ambitious climate laws, particularly compared to other regions in the world.169 Meanwhile, given the policy (and legislative) developments to adopt a stronger interim target for 2030 and to codify the 2050 climate neutrality objective, it can be expected that litigation demanding governments to ensure compliance with the set goals will be one of the important trends in the next decades. However, litigation can also take place to demand even stronger targets than are already being considered for 2030 and 2050, as we will see below.

The scope and potential external influence of the Taxonomy Regulation deserve further investigation. See for an indication of the limited scope: communication to the Dutch Parliament from 15.01.2021 (2020–2021 Kamerstuk 35570-IX, nr. 42, Tweede Kamer der Staten-Generaal: Het Groene Label, Atradius Dutch State Business, Versie december 2020, p. 7). 167 Commission welcomes political agreement on Recovery and Resilience Facility, at https://​ec​ .europa​.eu/​commission/​presscorner/​detail/​en/​ip​_20​_2397 (accessed 24 December 2020). 168 This section will focus on litigation against governments and will be discussed from an EU law perspective. Other important litigation, particularly claims from private actors (particularly NGOs and/ or individuals) against emitters fall outside the scope of this section. It will be interesting, however, to examine how public law requirements will impact the litigation against emitters (will they be forced to do more than is already regulated by public law?). 169 Although the UK has, as a single country, submitted a target of 68% emission reduction by 2030 (see section 2). 166

The EU and its rule-creating force for climate neutrality by 2050  91 3.2

Litigating the Target for 2030 at EU Level

At EU level, an action urging more stringent EU climate legislation has been brought to the CJEU by a group of ten families, some living in the EU but others living outside Europe (Kenya and Fiji), together with an association governed by Swedish law, which represents young indigenous Sami (the Carvalho case).170 The application was made before the setting of the 2050 target and the strengthening of the 2030 target were proposed, and hence it focuses on attacking the 40% target for 2030. Locus standi is at the heart of this case, seeking the annulment of a broad EU legislative package, dedicated to greenhouse gas emissions, for its insufficient ambition. In short, the claimants argue that the technical and economic capacity of the European Union extends to reducing those emissions much more than has been legislated for in respect of emissions reductions by 2030 (being 40% emissions reduction). The claimants ask for an order to reduce emissions by at least 50 to 60%, or by such higher level of reduction as the Court shall deem appropriate.171 Given the fact that the EU is most likely moving to codify the target of 55% reduction in 2030, as has been discussed in the previous sections, the claim is still more ambitious than the current political will at EU level. However, it is uncertain whether the case will expand on substance, as, in an order of 8 May 2019, the General Court dismissed the action as being inadmissible – which order has been appealed. Reasserting the long-standing Plaumann doctrine,172 the General Court observed that it is true that every individual is likely to be affected one way or another by climate change, that issue being recognised by the European Union and the Member States who have, as a result, committed to reducing emissions. However, the fact that the effects of climate change may be different for one person than they are for another does not mean that, for that reason, there exists standing to bring an action against a measure of general application.173

An alternative means for citizens to try to realise more ambitious action – if that is not possible through the CJEU with its (often) marginal control of the legality of EU secondary law – would be to consider an European Citizens’ Initiative.174 Article 11 TEU states that not less than one million citizens who are nationals of a significant number of Member States may take the initiative of inviting the European Commission, within the framework of its powers, to submit any appropriate proposal on matters where citizens consider that a legal act of the Union is required for the purpose of implementing the Treaties.

T-330/18, Armando Carvalho v European Parliament and Council, 8 May 2019, ECLI:​EU:​T:​ 2019:​324. See, for a discussion (by a scholar involved in the case), Gerd Winter, ‘Armando Carvalho and Others v. EU: Invoking Human Rights and the Paris Agreement for Better Climate Protection Legislation’ (2020) 9(1) Transnational Environmental Law 137–164. 171 Case T-330/18, para. 18. 172 Judgments of 15 July 1963, Plaumann v Commission, 25/62, EU:​C:​1963:​17, p. 223; of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament and Council, C‑583/11 P, EU:​C:​2013:​625, paragraph 72; of 27 February 2014, Stichting Woonpunt and Others v Commission, C‑132/12 P, EU:​C:​2014:​ 100, paragraph 57; and of 27 February 2014, Stichting Woonlinie and Others v Commission, C‑133/12 P, EU:​C:​2014:​105, paragraph 44. 173 Case T-330/18, para. 50. 174 See Regulation (EU) 2019/788 of the European Parliament and of the Council of 17 April 2019 on the European Citizens’ Initiative, and Articles 11 TEU and 24 TFEU. 170

92  Research handbook on climate change mitigation law For legal scholarship, it would be interesting to examine why addressing the courts is seemingly more popular than using such a democratic instrument – the latter also being surrounded with complexities and barriers.175 One of the important debates in EU environmental law scholarship focuses on the issue whether standing criteria for the CJEU should be relaxed;176 in addition to this, legal scholarship should also examine whether other tools, such as the European Citizens’ Initiative, are useful instruments to accommodate concerns from citizens regarding important issues such as EU action with regard to climate change.177 This is essentially a choice between using upstream or downstream channels, the one having the potential to activate the democratic process, the other testing the limits of judicial control. Of course, the complementary functions of both channels are important to consider in this respect. An appeal is now pending in the Carvalho case, on the grounds that the General Court erred in ‘not adapting the Plaumann test in light of the compelling challenge of climate change and the foundation of the appellants’ case in their individual fundamental rights, including a guarantee of effective legal protection of those rights’.178 Even if the standing hurdle can be overcome, it is yet very uncertain that the CJEU would intervene in the legislative decision regarding the level of reduction of ambition.179 New jurisprudential developments are of course not excluded, particularly regarding the exceptional and dramatic problem of climate change, and perhaps the CJEU – if overcoming the standing requirements – would be willing

175 We are grateful to Julia Hönnecke who developed at Maastricht University a Bachelor’s thesis examining the development of European Citizen Initiatives in the field of climate change, showing that there has yet been no research on this specific item. To the best of our knowledge, environmental law literature has indeed hardly addressed this tool in the context of improving EU climate laws. 176 See, among many other publications, Matthijs van Wolferen and Mariolina Eliantonio, ‘Access to Justice in Environmental Matters in the EU: The EU’s Difficult Road towards Non-Compliance with the Aarhus Convention’ in Marjan Peeters and Mariolina Eliantonio, Research Handbook on EU Environmental Law (Edward Elgar Publishing 2020) 148–163. On the role of the preliminary ruling as a way to bypass standing issues, see S. Röttger-Wirtz, ‘Case C-616/17 Blaise and Others: The Precautionary Principle and its Role in Judicial Review – Glyphosate and the Regulatory Framework for Pesticides’ (2020) 27(4) Maastricht Journal of European and Comparative Law 529–542. 177 Perhaps legal scholars have more belief in litigation since they tend to find solutions through the discipline they are familiar with, see Catriona McKinnon and Marie-Catherine Petersmann, ‘Is Climate Change a Human Rights Violation?’ in Mike Hulme (ed.), Contemporary Climate Change Debates (Earthscan 2020) 168, with this quote from Koskenniemi: ‘lawyers are enchanted by the law that is familiar to them and the institutions and practices they are involved with; that makes them often unable to find a good solution to the problem they are faced with’. Are EU environment law scholars generally more familiar with litigation than with relatively new democratic instruments such as the European Citizens’ Initiative? 178 Appeal brought on 23 July 2019 by Armando Carvalho and Others against the order of the General Court (Second Chamber) delivered on 8 May 2019 in Case T-330/18: Carvalho and Others v Parliament and Council; Case C-565/19 P. 179 See for a discussion of CJEU case law thus far (so before the Carvalho case): Delphine Misonne, ‘The Importance of Setting a Target: The EU Ambition of a High Level of Protection’ (2015) 4(1) Transnational Environmental Law 11–36. See for a discussion of new developments, including that the requirement to reach a certain level of ambition is legally relevant and judicially cognisable, as demonstrated by the CJEU’s case law: Delphine Misonne and Nicolas de Sadeleer, ‘Art. 37’ in F. Picod, S.Van Drooghenbroeck and C. Riscallah (eds), Charte des droits fondamentaux de l’Union européenne (Bruylant 2020) 921–950; Alicja Sikora, ‘The Principle of a High Level of Protection as a Source of Enforceable Rights’ (2016) 1 Cahiers de droit européen 399–418.

The EU and its rule-creating force for climate neutrality by 2050  93 to perform an ‘informational catalyst’ role: asking the EU legislator for a reconsideration of the target, thereby taking into account the scientific basis for setting the target, but not ordering a precise target itself.180 However, it remains to be seen whether the EU legislator would be urged to take its highest possible ambition, in the light of the conditions laid down in the Paris Agreement,181 which would break new ground.182 One of the yet unknown features is whether, and if so, how, the Paris Agreement will play a major role, although it is already confirmed by the CJEU that international agreements prevail over acts laid down by European Union institutions.183 Importantly, Article 193 TFEU gives, in principle, possibilities for Member States to adopt more stringent approaches compared to an EU environmental act.184 It will be interesting to see whether, at the national level, such more-stringent climate actions will be (or are already) undertaken, or can even be compelled through national courts.185 Most likely, one of the impor See in a more general way, not focusing on climate change: J. Scott and S. Sturm, ‘Courts as Catalysts: Re-Thinking the Judicial Role in New Governance’ (2007) 13(3) Columbia Journal of European Law 565–594. See more specifically related to climate change, see the following starting point formulated by a German Court: ‘Measures must be based on careful analysis and justifiable assumptions. The state must, for instance, consider scientific findings such as those published by the Intergovernmental Panel on Climate Change’, as discussed by Thomas Schomerus, ‘Climate Change Litigation: German Family Farmers and Urgenda – Similar Cases, Differing Judgments’ (2020) 17 Journal for European Environmental & Planning Law 322–332, at 328. See furthermore about the importance of accepting that the EU legislature is the most important power – even in view of its shortcomings: Damian Chalmers, ‘The Democratic Ambiguity of EU Law Making and Its Enemies’ in Anthony Arnull and Damian Chalmers (eds), The Oxford Handbook of European Union Law (Oxford University Press 2015) 303–326. See, for different views on the role of courts in intervening with policymakers: Eloise Scotford, Marjan Peeters and Ellen Vos, ‘Is Legal Adjudication Essential for Enforcing Ambitious Climate Change Policies?’ in Mike Hulme (ed.), Contemporary Climate Change Debates (Earthscan 2020) 191–206. 181 As already discussed in section 2, the Paris Agreement states that ‘each Party’s successive nationally determined contribution will represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition, reflecting its common but differentiated responsibilities and respective capabilities, in the light of different national circumstances’ (Art. 4.3). Thus far, EU law does not imply a legal objective to attain the highest possible ambition in environmental policies, which also explains the raison d’être of Article 193 TFEU as far as the environmental chapter is concerned. 182 By contrast, for instance, to a dated CJEU case, not focused on exactly the same issue: Bettati v Safety HiTech Srl (1998) Court of Justice of the European Union, ECLI:​EU:​C:​1998:​353. 183 See Case C-352/19P, Région de Bruxelles Capitale v Commission, para. 25, referring to earlier case, Intertanko et al., C‑308/06. International agreements cannot prevail over EU primary law. The interpretation of the specific provisions of the Paris Agreement will be crucial. See, for a discussion, among many others: Daniel Bodansky, ‘The Legal Character of the Paris Agreement’ (2016) Review of European Community & International Environmental Law 142–150 . 184 See for a recent discussion of Article 193 TFEU: Leonie Reins, ‘Where Eagles Dare: How Much Further May EU Member States Go under Article 193 TFEU?’ in Marjan Peeters and Mariolina Eliantonio, Research Handbook on EU Environmental Law (Edward Elgar Publishing 2020) 22–35. Also L. Squintani, Beyond Harmonisation (Cambridge University Press 2019). 185 In light of Article 193 TFEU, including specific possibilities in secondary legislation for Member States to move to more stringent protection (and avoiding the so-called waterbed effect) would prevent legal uncertainty on how to interpret Article 193 TFEU. However, the dilemma is how to regulate that in view of the starting point of a collective effort for an EU-wide reduction target. Of course, the legal base of the contested acts and the (related) possibility left to Member States to adopt more ambition is a decisive aspect, together with the possible embedding with health issues (see in this respect, but not specifically on climate change and not on national discretion, but as an example of how the precaution180

94  Research handbook on climate change mitigation law tant debates in EU climate law will be to what extent and how Member States can use Article 193 TFEU (or even, more daringly, Article 194 TFEU?) to move to more ambitious climate action compared to EU climate legislation, or whether they can even be forced by the national courts to apply more stringent emission reductions compared to EU law,186 including eventually becoming climate neutral within their own territory. This shifts the focus to litigation in EU Member States, which will be discussed in the next section. 3.3

Litigation at Member State Level

Climate litigation on greenhouse gases reductions to be accomplished by governments has emerged in several EU Member States, but gaining a thorough understanding of it is truly a challenge. While important decisions have been laid down by courts in, for example, France, Germany, Ireland and the Netherlands, it falls beyond the scope of this chapter to provide an in-depth and comparative analysis (see Chapter 13). Legal research starts examining and compare the different cases in national orders thoroughly,187 taking the different national circumstances and judicial systems into account, in order to identify the reasons for judicial intervention, or lack thereof. 188 Authors have already illustrated that case law on seemingly the same matter in different jurisdictions differs remarkably,189 while also showing unusual features.190 Thus far, the claims asking for compliance with set EU or national law targets, or even asking for more ambitious action compared to EU law, have not yet induced national judges to submit preliminary questions to the CJEU which could provide some unity in judicial reasoning concerning EU climate law as the framework for national action.191 ary principle plays a role in case of uncertain risks for human health: C-616/17, Blaise, 2019, Grand Chamber, para. 42 and para. 52: ‘judicial review by the Court must necessarily be limited to whether the EU legislature … committed a manifest error of assessment’. 186 This has already been decided in the Urgenda case, to be discussed below. The issue of how to interpret Article 193 TFEU in this respect has not been submitted to the CJEU. See for the Supreme Court decision and its considerations on Article 193 TFEU ecli:​NL:​HR:​2019:​2007; for the official English translation, https://​uitspraken​.rechtspraak​.nl/​inziendocument​?id​=​ECLI:​NL:​HR:​2019:​2007. 187 See, for example, Christel Cournil, Les grandes affaires climatiques (DICE, Confluence des droits 2020) Vol. 10, available at https://​dice​.univ​-amu​.fr/​fr/​dice/​dice/​publications/​confluence​-droits/​ouvrages​ #numero10. 188 The timing also matters when examining the various cases: the Urgenda case was initiated at a time, in 2012, where the future of international law on climate change was most uncertain. The first instance judicial decision dates from before the conclusion of the Paris Agreement and at a time where EU law on climate and energy was very different. The legal context changed from the end of 2016 onwards, with the entry into force of the Paris Agreement, and with the expansion of EU law in order to implement the Paris Agreement, as discussed in sections 2–3 of this chapter. 189 Christel Cournil (n. 187); see also, for example, Thomas Schomerus, ‘Climate Change Litigation: German Family Farmers and Urgenda – Similar Cases, Differing Judgments’ (2020) 17 Journal for European Environmental & Planning Law 322–332. 190 Such unusual features concern, for example, communication tools, argumentation, nature and number of plaintiffs. See D. Misonne, ‘Renforcer l’ambition de l’Etat global dans un régime fédéral?’ in C. Cournil (ed.), Les procès climatiques (Pedone 2018), 149–164. 191 The Berlin administrative court gave a specific explanation for not submitting a preliminary question since the Effort Sharing Decision provided, in its view, sufficient clarity: Verwaltungsgericht Berlin, 31.10.2019 – 10 K 412.18. The full text is available at http://​www​.ge​richtsents​cheidungen​.berlin​ -brandenburg​.de/​jportal/​portal/​t/​17yp/​bs/​10/​page/​sammlung​.psml​?doc​.hl​=​1​&​doc​.id​=​JURE190015283​ &​ d ocumentnumber​ = ​ 3 ​ & ​ n umberofresults​ = ​ 1 72​ & ​ d octyp​ = ​ j urisr​ & ​ s howdoccase​ = ​ 1 ​ & ​ d oc​ . part​ = ​ L ​ &​

The EU and its rule-creating force for climate neutrality by 2050  95 As already observed above, and depending on the development of EU climate legislation, one important trend of EU climate law jurisprudence will most likely be actions for compliance with EU climate law. Already illustrative of this is a judgment of the French Conseil d’État of 19 November 2020,192 in which the higher French administrative jurisdiction, in order to be able to decide later on the substance of the case, asked more information from the French state as to how it truly intends to meet the trajectory already imposed by virtue of a French Decree of April 2020 on the national carbon budget, as related to the application of the EU 2018 Effort Sharing Regulation imposing a linear decrease of emissions – a requirement France is suspected of circumventing as it postponed it to a later part of the mitigation effort.193 For potential future litigation to enforce compliance with EU climate law, the conditions for accessing the national courts in order to address non-compliance by national governments are of course crucial. In other words, the implementation of Article 9(3) of the Aarhus Convention, in order to enable members of the public to address non-compliance with environmental law, including in particular obligations for Member States as provided for in EU climate law, is an important, but at the same time, sensitive issue for which no harmonising act has yet been adopted at EU level.194 In light of this, the European Parliament has attempted to reinforce access to national courts so that civil society can hold national governments to account with regard to their climate action: it adopted an amendment to the proposed EU Climate Law containing a provision on this matter, although it is limited to public consultation requirements as stipulated in Article 10 of the Governance of the Energy Union and Climate Action Regulation.195 Hence, EU law thus far lacks an access to national court provision that would enable civil society to enforce obligations for Member States, as stipulated in EU climate law, paramfromHL​=​true​#focuspoint (accessed 28 December 2020). Also, in the several court decisions in the Urgenda case, no need to submit a preliminary question was recognised; see on this matter regarding the first instance decision, Marjan Peeters, ‘Case Note Urgenda Foundation and 886 Individuals vs The State of the Netherlands: The Dilemma of More Ambitious Greenhouse Gas Reduction Action by EU Member States’ (2016) 25(1) RECIEL 123–129 and see, with regard to the Supreme Court decision, Chris Backes and Gerrit Van der Veen, ‘Urgenda: The Final Judgment of the Dutch Supreme Court’ (2020) 17 Journal for European Environmental & Planning Law 307–321, stating inter alia that ‘the court should have referred to the EU Court of Justice for a preliminary ruling on the validity of various EU law related norms’, p. 316. 192 Conseil d’État (France), Commune de Grande Synthe, 19 November 2020, no 427301. 193 Nicolas de Sadeleer, ‘Le Conseil d’État de France condamne le report de la réduction des émissions de gaz à effet de serre par les autorités françaises’, Justice en ligne, 8 January 2021, https://​www​ .justice​-en​-ligne​.be/​le​-Conseil​-d​-Etat​-de​-France. See https://​www​.conseil​-etat​.fr/​actualites/​actualites/​ emissions​-de​-gaz​-a​-effet​-de​-serre​-le​-gouvernement​-doit​-justifier​-sous​-3​-mois​-que​-la​-trajectoire​-de​ -reduction​-a​-horizon​-2030​-pourra​-etre​-respectee. While the Conseil d’État insisted on the need for France to interpret its legislation with due regard to the Paris Agreement, which it considers to be devoid of direct effect, it still did not consider the possible legal implications of the Effort Sharing Regulation. 194 Improving access to justice in environmental matters in the EU and its Member States, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, COM(2020) 643 final, 14 October 2020. 195 Amendments adopted by the European Parliament on 8 October 2020 on the proposal for a regulation of the European Parliament and of the Council establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law) (COM(2020)0080 – COM(2020)0563 – C9-0077/2020 – 2020/0036(COD)); https://​ www​ .europarl​ .europa​ .eu/​ doceo/​ document/​TA​-9​-2020​-0253​_EN​.html: (5a) the following Article is inserted: ‘Article 11a Access to justice:

96  Research handbook on climate change mitigation law through the courts.196 This seems an important gap since the proposed EU climate law includes a ‘shall’ obligation for Member States, ‘the Member States shall take the necessary measures at … national level respectively, to enable the collective achievement of the climate-neutrality objective set out in paragraph 1, taking into account the importance of promoting fairness and solidarity among Member States’.197 Since this ‘shall’ provision also contains vague terms (such as fairness and solidarity, and what would be the fair share of a Member State to the collective achievement?), it has yet to be seen whether courts would find it possible to derive specific obligations for Member States, which as such are not excluded depending on the specific circumstances.198 At least, this possibility of judicial intervention seems to be in the mind of national politicians, at least in the Netherlands, where of course the specific Urgenda court decision was laid down: the Dutch government informed its parliament that measures that have a negative impact on the achievement of the objectives as codified in the European Climate Law can be enforced through the courts across the EU, which would lead to a level playing field.199

1. Member States shall ensure that, in accordance with their national laws, members of the public concerned who have a sufficient interest or who claim the impairment of a right where administrative procedural law of a Member State requires such a right to be a precondition have access to a review procedure before a court of law or other independent and impartial body established by law with a view to challenging the substantive or procedural legality of decisions, acts or omissions subject to Article 10 of Regulation (EU) 2018/1999. 2. Member States shall determine the stage at which decisions, acts or omissions may be challenged. 3. Member States shall determine what constitutes a sufficient interest and impairment of a right, consistent with the objective of giving the public concerned wide access to justice. To that end, non-governmental organisation covered by the definition in Article 2(62a) shall be deemed as having a sufficient interest or having rights capable of being impaired for the purpose of paragraph 1 of this Article. 4. This Article shall not exclude the possibility of a preliminary review procedure before an administrative authority and shall not affect the requirement of exhaustion of administrative review procedures prior to recourse to judicial review procedures, where such a requirement exists under national law. Any such procedure shall be fair, equitable, timely and not prohibitively expensive. 5. Member States shall ensure that practical information is made available to the public on access to administrative and judicial review procedures.’ 196 Note that in the Dutch Urgenda case and in the German Family Farmers case the claims concerned policy targets, see the different judicial approaches in this respect in Schomerus (n. 188). For scholarly discussion it will be relevant to discuss to what extent policy targets stipulating a certain emission reduction should have legal effects (and hence, could be legally enforceable). 197 Art. 2(2); please note that the EU would also have this ‘shall’ obligation; see the full text of this proposed provision. 198 One should not forget that until 2030, specific emission reduction targets have been imposed on Member States for non-EU ETS emissions. National court procedures to enforce national governments to comply with those targets are not unthinkable. It remains to be seen, however, what the future is of this effort sharing approach after 2030: the Commission is even considering not continuing this approach: Commission Communication ‘Stepping up Europe’s 2030 climate ambition’ COM(2020)562 of 17 September 2020. See about the fear that future EU climate law would become more soft: Chamon and Peeters (n. 68). 199 In Dutch: ‘dat nationale maatregelen die negatief werken ten aanzien van het bereiken van de bindende doelstellingen vastgelegd in de verordening kunnen worden aangevochten voor de (nationale) rechter. Hierdoor ontstaat een gelijker speelveld binnen de Unie’. Brief van de Minister van buitenlandse

The EU and its rule-creating force for climate neutrality by 2050  97 Such a level playing field, to be achieved by judicial interventions, as considered by the Dutch government, is of course dependent on the implementation of Article 9(3) Aarhus Convention across EU Member States – an issue that indeed lacks harmonising legislation but on which strong CJEU jurisprudence has emerged, asking national courts to interpret Article 9(3) Aarhus Convention in a wide sense.200 However, if Member States are governed by rather vague provisions in EU climate legislation – as in the example above – it will be interesting to see how the national courts will strike the delicate balance between democratically developed national climate policies (including those codified in national legislation) and judicial intervention.201 Such national adjudication will of course also be influenced through future referrals for preliminary rulings, including referrals to clarify the provisions for the governance approach and the embedded discretion for Member States,202 next to more familiar legality checks against EU law.203 Addressing courts to hold national governments to account, particularly by means of legality checks against EU law, will obviously be important in case of shortfalls in compliance of Member States with EU climate legislation. In this respect, we can only hope that going to court will not be needed, through Member States acting sufficiently ambitiously. Furthermore, we would not be surprised if the gigantic financial stream flowing through EU channels, stimulating the needed transition, would be an even greater force for change than law is, leading to more emission reductions than legally required.

zaken aan de voorzitter van de Eerste Kamer der Staten-Generaal, 35 448 EU-voorstel: Voorstel voor een verordening van het Europees Parlement en de Raad tot vaststelling van een kader voor de totstandbrenging van klimaatneutraliteit en tot wijziging van Verordening (EU) 2018/1999 (Europese klimaatwet), Den Haag, 14 April 2020. 200 Brown Bear case I (Lesoochranárske zoskupenie VLK v Ministerstvo životného prostredia Slovenskej republiky, Case C‑240/09): It is, however, for the referring court to interpret, to the fullest extent possible, the procedural rules relating to the conditions to be met in order to bring administrative or judicial proceedings in accordance with the objectives of Article 9(3) of that convention and the objective of effective judicial protection of the rights conferred by European Union law, in order to enable an environmental protection organisation, such as the Lesoochranárske zoskupenie, to challenge before a court a decision taken following administrative proceedings liable to be contrary to European Union environmental law. 201 It would be even better, of course, if access to court were not necessary given, hopefully, sufficiently ambitious action by EU Member States. 202 In a webinar lecture by one of the authors on this chapter, the (uncertain but not unthinkable) prospect of national courts giving some (indirect) legal weight to recommendations from the Commission made on the basis of the governance approach is mentioned (since Member States would need to take due account of them – see Article 6(3) of the Commission proposal; if that happened, the Commission would gain more power in this indirect way. This issue is yet to be examined in more depth. See ‘The proposed EU climate law: towards climate neutrality in 2050’ (online presentation), event organised by the Environmental Law Network International (ELNI), held on 23 June 2020; online webinar Event was hosted by Delphine Misonne, CEDRE, Université Saint-Louis Bruxelles, link to slides and video: https://​ www​.youtube​.com/​watch​?v​=​ZacGDZP​_Q1k​&​feature​=​youtu​.be. 203 See J. Verschuuren (n. 95), 79.

98  Research handbook on climate change mitigation law 3.4

Litigating against European Countries in Strasbourg

While the EU has developed, and is in the course of further developing, the package of EU climate legislation, all EU Member States are subject to a claim from six Portuguese young people (in age ranging from 8 to 21 years) submitted to the European Court of Human Rights, calling for deeper emission cuts.204 The EU as such is not a party to the ECHR and cannot be brought before the Strasbourg Court. The claim also addresses six other European states, being the UK, Switzerland, Norway, Russia, Turkey and Ukraine. With regard to the EU Member States, were the case to proceed on the merits, it would remain to be seen whether the fact that the EU has put in place climate laws applicable to them – with the chosen EU-wide reduction ambition of at least 40% by 2030 – would lead the Human Rights Court to find itself deferring to these legislative ambitions, or whether the Court would find a way to consider that (since this EU ambition is not the highest ambition possible) Member States should individually strengthen their approach.205 In their application form, the claimants point inter alia at the need for the EU (and it is not clear whether this translates to each Member State individually) to move to 68%206 emission reduction by 2030 in light of the 1.5 degrees objective – which is obviously much more than the 40%.207 Meanwhile, the legislative development at EU level to codify the 2030 target (most likely 55% by 2030 given the political endorsement by the European Council from 11 December 2020) runs almost in parallel with this ECtHR procedure, and if the EU legislator codifies the new 2030 target faster than the judges in Strasbourg decide, it will be very interesting to see how the ECtHR would translate this collective target (not specified in individual Member States targets) in order to assess the individual responsibility of the EU Member States. All in all, it would be very surprising if the ECtHR did not defer to the strengthened legislative ambition of the EU legislator.

See about the claim and the claimants: https://​www​.climatechangenews​.com/​2020/​09/​03/​six​ -portuguese​-youth​-file​-unprecedented​-climate​-lawsuit​-33​-countries/​ (accessed 28 December 2020). See for more information: http://​climatecasechart​.com/​climate​-change​-litigation/​non​-us​-case/​youth​-for​ -climate​-justice​-v​-austria​-et​-al/​ (accessed 5 May 2021). 205 Obviously, this would then have to be considered as an Article 193 TFEU situation according to EU law. Nonetheless, according to Ole W. Pedersen, ‘it is hard to imagine the ECtHR making findings similar to the Dutch Supreme Court in Urgenda when it comes to the specific details of emission reduction obligations’. Ole W. Pedersen, ‘The European Convention of Human Rights and Climate Change – Finally!’ 22 September 2020, https://​www​.ejiltalk​.org/​the​-european​-convention​-of​-human​-rights​-and​ -climate​-change​-finally/​(accessed 28 December 2020). 206 Interestingly, the UK has submitted a target of exactly 68% in its first NDC (as mentioned in section 2.1). 207 Page 26 of the annex to the application form, referring to statements from the UN Environment Programme. The application is available at http://​blogs2​.law​.columbia​.edu/​climate​-change​-litigation/​wp​ -content/​uploads/​sites/​16/​non​-us​-case​-documents/​2020/​20200902​_12109​_complaint​.pdf. Note that the European Parliament adopted a position to move to 60% in 2030 which is more ambitious than the 55% (see section 2.4) . 204

The EU and its rule-creating force for climate neutrality by 2050  99

4

CONCLUSION: WHAT APPROACH (WORKS) TOWARDS 2050?

EU climate law is characterised by a continuous process of further expansion and deepening, particularly where it concerns laws focusing on reducing greenhouse gas emissions. While before the conclusion of the Paris Agreement in 2015, the EU climate law package was already impressive in terms of number and complexity, the current and planned legislative efforts at EU level to implement the Paris Agreement – and the ambition of the European Green Deal – complement and widen the EU climate law acquis enormously. It will be a tremendous challenge for everyone working with, or interested in, EU climate law to acquire a good understanding of all EU measures, and, notably, its implementation in EU Member States. This chapter has provided a discussion of some core new elements of current EU climate law, particularly the emerging legal pathway towards climate neutrality to be achieved by 2050 and the establishment of financial approaches, such as the Taxonomy Regulation. Climate litigation is discussed in the light of this regulatory context. Since the ambition of the EU has increased, which can be illustrated by the process for stepping up the 2030 ambition, it would be logical to expect that future litigation strategies will focus on achieving compliance. Indeed, from a legal perspective, translating targets into concrete rules and compliance is the most important challenge for the next decades, particularly the current one up to 2030. Indeed, at the time of writing, within a period of nine years, existing legislation has to be amended, and accelerated mitigation action needs to take place. Until 2030, the regulatory approach continues to mainly consist of hard law, with the EU ETS and the Effort Sharing Regulation as already long-standing pillars of the regulatory approach.208 A basic characterisation of these regulatory approaches is that standards are set, but these are often provided with flexibilities to facilitate cost-effective compliance with those standards. For the period after 2020, this typical market-based hard law approach is complemented by the LULUCF Regulation, which is an essential component when working with a net target, as the EU Commission is wanting to do for the intensified 2030 target.209 From a legal perspective, one may, however, wonder whether such a compensatory approach – which includes emissions and removals from land use, land use change and forestry – is too complicated a concept, with a risk of misunderstandings or even fraud regarding the measurement and calculations of emissions and removals of emissions.210 In other words, there is a risk that the EU will stretch its preference for providing flexibilities and cost-effectiveness too far, thereby

But other legislation is relevant too, such as the regulation of fluorinated greenhouse gases and car and van emissions. 209 The outcome of the trilogue negotiations is not dealt with in this chapter: the European Parliament has a preference for not using a net target by 2030. The LULUCF approach is not discussed in this chapter but needs further research. Its complexity, including the need to understand land use and forestry, makes it difficult to examine from a legal perspective. See on LULUCF, Seita Romppanen, ‘The EU Effort Sharing and LULUCF Regulations: The Complementary yet Crucial Components of the EU’s Climate Policy beyond 2030’ in Marjan Peeters and Mariolina Eliantonio, Research Handbook on EU Environmental Law (Edward Elgar Publishing 2020) Chapter 27. 210 Or will new techniques provided by satellites help to ensure precise calculation? See Marjan Peeters, ‘Only 29 years to go – The challenging path towards climate neutrality in 2050’, Maastricht University Blog, 18 January 2021 https://​www​.​maastricht​university​.nl/​blog/​2021/​01/​only​-29​-years​-go​ -challenging​-path​-towards​-climate​-neutrality​-2050. 208

100  Research handbook on climate change mitigation law bearing the risk of an unexecutable package of laws and non-compliance, or, even worse, fraud. Meanwhile, a softer mode of regulation is also introduced by the Governance Regulation, based on plans to be developed by the Member States and to be assessed by the European Commission. This governance approach resembles the set-up of the Paris Agreement, although the EU governance approach has a more detailed legal framework with, for instance, ample consultation requirements. The effectiveness of this governance approach remains to be seen, including the extent to which the consultation practices turn out to be adequate approaches, and the question of what influence, even legal influence, the Commission recommendations may have. The Taxonomy Regulation is a very new and again very different regulatory approach with which traditional environmental lawyers, often educated in, for example, environmental impact assessment laws, planning, and permissions for industrial installations, are usually not familiar. Its effectiveness is probably also harder to assess compared to traditional climate law, such as the setting of a cap (EU ETS) or a countrywide emission reduction standard (Effort Sharing).211 One of the questions related to the Taxonomy Regulation is how it is possible to reflect the strengthening of overall reduction standards: the Taxonomy Regulation was adopted before the intensification of the 2030 target was endorsed by the European Council and submitted to the UNFCCC secretariat in the updated NDC on behalf of the EU and the Member States. Does the Regulation provide sufficient opportunity to align the criteria that qualify investments as being sustainable with the updated EU target? This is only one illustration of scholarly work that has yet to be carried out. The many legislative initiatives planned for 2021 will lead to a plethora of new questions, while progress is necessary to address the climate change problem. Moreover, there are also important questions to answer with regard to the Paris Agreement and its consequences for adjudication in the EU and national orders, such as the interpretation of what is to be understood by the ‘highest possible ambition’.212 The conclusions above focus on EU secondary climate legislation. However, while discussing the evolving secondary EU climate law package is already demanding and important, we also have shed light in this chapter on the potential need for strengthening primary EU law, particularly with a view to the promotion of renewable energy. EU climate action has predominantly been imagined within the system of competences for secondary law, and the limits of this approach need further attention. However, for such steps, the political reality is crucial: in December 2020, the European Council gave a strong signal that a strengthening of the EU with respect to energy policies is not supported. In this situation, the main onus is on national decision-making for making sufficient energy transitions to become climate neutral. In other words: refusing further EU action makes the national orders, including obviously the national politicians, even more responsible. It will be interesting to see how climate litigation in the national orders will play a role in this respect. Finally, only the future will tell us who has been shown to be a leader in the process towards climate neutrality. Will it be some EU Member States who decide to (and do) become climate neutral in their territory, even earlier than 2050? Or will it be a non-EU state, such as particularly the UK, having previously been a European leader by putting forward the national Although checking compliance with the (monitoring and reporting) provisions under the EU ETS and Effort Sharing needs meticulous attention. 212 Article 4(3) Paris Agreement. 211

The EU and its rule-creating force for climate neutrality by 2050  101 2008 Climate Act? Or will the EU itself be the driving force, with its huge package of EU climate laws and a possible reinforced EU integration, not only making use of regulation but also of gigantic financial streams?213 Or will the complexity of this EU climate law package, together with shortfalls in compliance and a further weakening of support from EU citizens for the EU as a whole, turn out to be the sobering future? No one can predict. The transition to a climate-neutral society – or European continent for that matter – is not an easy path; we have never walked it before.214 We can only hope that for addressing the climate change problem, the rule-creating force of the European Union will be a driver for the whole continent, and beyond. What is important for legal research is to try to examine its successes and failures; both are important lessons, although the time frame for learning is only short.

POST SCRIPTUM (5 MAY 2021) The chapter above is based on research up to 31 December 2020. However, in the first quarter of 2021 very important legal developments have already happened, such as the decision of the CJEU from 25 March 2021 to dismiss the appeal made by Carvalho and others, confirming the General Court’s position on their lack of locus standi. In contrast with this decision, the German constitutional court – only one day before, on 24 March 2021 – found constitutional complaints against the Federal Climate Change Act partially successful. That judgment considers the concept of climate neutrality (in a national context) and contains important considerations on the need to better distribute the mitigation effort over time, in a way that respects fundamental rights: ‘one generation must not be allowed to consume large portions of the CO2 budget while bearing a relatively minor share of the reduction effort if this would involve leaving subsequent generations with a drastic reduction burden and expose their lives to comprehensive losses of freedom’ . Moreover, the negotiations by the EU legislative institutions on the EU climate law have resulted, on 21 April 2021, in a political agreement, and the European Commission has adopted – after fierce debates in civil society and an enormous number of comments from the public – a draft delegated act on taxonomy for climate change mitigation and climate change adaptation. Such a dynamic development as has happened up to May 2021 is most likely illustrative of the future of EU climate law up to 2030 and beyond. Meanwhile, the current legislative package, which needs to be amended soon in order to be suitable to steer towards climate neutrality by at the latest 2050, is already very complex, and it will also be a challenge to examine the emerging climate case law, particularly at the national level (in many different languages …), as well as at the CJEU level. We hence hope that the coverage and discussion of EU climate law in this chapter, realised at the end of the second decennium, and 30 years before the deadline for climate neutrality lapses, is valuable for those who truly want to delve into an understanding of the strengths and weaknesses of EU climate law.

If legally acceptable: we did not assess the lawfulness of the new financial instruments established during the COVID-19 pandemic. 214 As stated in Peeters (n. 209). 213

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SECOND POST SCRIPTUM (19 MAY 2022) The European Union legal framework has been completed by the ‘European Climate Law’ of 30 June 2021 (Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No. 401/2009 and (EU) 2018/1999 (‘European Climate Law’)). On 14 July 2021, the European Commission launched a series of legislative proposals (including a revision of the ETS scheme and the Effort Sharing Regulation) and the adoption of these laws will be important not only for achieving climate neutrality by 2050 at the latest, but notably also the intermediate target of 2030 (‘Fit-for-55’).

5. Climate change mitigation law and policy in the United States and Canada Katrina Fischer Kuh and Michael Charles Leach

INTRODUCTION As two of the highest per capita greenhouse gas emitters in the world, the United States (U.S.) and Canada have a particular global responsibility to mitigate climate change. However, the development of climate mitigation and policy and law in both countries has been neither smooth nor straightforward, reflecting patterns of fits and starts, repeated international commitment making, and frequent failure to meet targets. With their large sizes and dispersed population centres, the two countries share many geographic, economic, and social similarities, and thus their patterns of emissions are comparable. Both are heavily reliant on fossil fuels as producers and consumers, and both countries historically developed their economies over the past two centuries through the exploitation of their vast natural resource reserves. Their economies are heavily integrated, and they actively trade energy products with one another. Canada is the largest foreign supplier of crude oil to the U.S., supplying 48% of its total imports, which amounts to 98% of all Canadian crude oil exports.1 Despite these general similarities, U.S. and Canadian climate change and mitigation policies have not always been synchronous over the years, and their forms and dynamics are quite different. The aim of this chapter therefore is to not only describe how climate mitigation policy at the national level in both countries is equally fractious, haphazard, and betrays significant deficits of political will, but also to explore how and why it is that the policies also differ considerably from one another. In part these differences are due to political differences between their respective governments over the years. In other important senses, however, these differences are structural, related to the different ways that the countries have decentralized power through their federal constitutional legal orders, as well as economic in ways that make the political stakes behind mitigation policy somewhat different between them. Both U.S. and Canadian voters typically find fossil fuel price increases politically unpalatable, and in both countries industries reliant on and producers of fossil fuels have been energetically opposed to climate action, and have successfully exercised political influence to curtail regulatory ambitions on this level as much as possible over the years. As a result, in both countries, climate change policy has been highly sensitive to electoral politics and has flipped back and forth as governments have changed hands between the Republican and Democratic parties in the U.S., and the federal Liberal and Conservative parties in Canada. Regional policy cohesion has been possible in moments when there is ideological similarity between U.S. and Canadian governments in power, but has also noticeably stalled when they have different approaches to climate change, most recently evident in the vast differences 1 Natural Resources Canada, ‘Crude Oil Facts’ https://​www​.nrcan​.gc​.ca/​science​-data/​data​-analysis/​ energy​-data​-analysis/​energy​-facts/​crude​-oil​-facts/​20064 accessed May 1, 2021.

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104  Research handbook on climate change mitigation law between the governments of President Donald J. Trump and Prime Minister Justin Trudeau. Until the inauguration of President Joseph R. Biden in January 2021, the federal governments of Canada and the United States had only seen eye-to-eye on environmental policy for a mere 15 months in the previous decade, between October 2015 and January 2017 when the Obama and Trudeau administrations shared policy interests in addressing climate threats. As such, regional climate policy initiatives are incomplete and patchy, and mostly taking the form of transboundary governance regimes over shared ecological zones and resources.2 With the United States as its primary customer for its energy exports, Canada has often taken the role of a ‘policy taker’ responding to cues given by the U.S. for meaningful action on climate change, but also protective of its national sovereignty vis-à-vis their powerful neighbour.3 The 2021 ‘climate summit’ may have been a signal of a new continental policy shift towards more aggressive action on emissions reductions in this regard. However, the picture is complicated because the energy profiles of the two countries are quite different, and therefore the scope and nature of policy change that will be required to achieve future reduction goals will also differ between them. The U.S. emissions profile is more a product of its energy uses, while Canada’s reflects its energy production, especially from its tar sands in Alberta. This creates different opportunities and challenges for the two countries to achieve their significant emissions reductions commitments, more easily achieved through fuel switching in the U.S. than Canada, which has long struggled to confront the difficult reality of its national economy’s being heavily dependent on emission-producing fossil fuel extraction.4 This chapter will explore the interplay between policy, politics, economics, and law at the domestic and international levels in both of these countries. It will begin with an overview of their respective emissions profiles, followed by a related description of the political and economic contexts in which politicians and lawmakers have had to craft emissions policy over the past few decades. This will be followed by a description of their respective international commitments and an overview of the different national and sub-national legal frameworks for climate mitigation currently in place. It is through such an overview that the contextual and structural similarities and differences will be teased out to account for not only why these two neighbouring countries’ mitigation policies look the way they do, but also why they differ. The chapter then concludes with a mixed tone of restrained optimism, tempered by an acknowledgement of the significant and difficult political difficulties that both countries will face in any future effort to meet any of the long-term targets and obligations that they have and are currently committing themselves to.

2 Robert G. Healy, Debora van Nijnatten and López-Vallejo, Environmental Policy in North America: Approaches, Capacity, and the Management of Transboundary Issues (University of Toronto Press 2014) 129. 3 Isabel Studer, ‘Supply and Demand for a North American Climate Regime’ in A. Neil Craik, Isabel Studer and Debora van Nijnatten (eds), Climate Change Policy in North America (University of Toronto Press 2013). 4 Mat Huff, ‘The Case for Continental: Examining the Potential for Climate Change Policy Integration in North America’ in Owen Temby and Peter Stoett (eds), Towards Continental Environmental Policy?: North American Transnational Networks and Governance (State University of New York Press 2017) 365.

Climate change mitigation law and policy in the U.S. and Canada  105

1

NATIONAL EMISSIONS PROFILES

Canadian climate mitigation policy is heavily influenced by a number of contextualizing factors that shape its profile as a high-emitting country. Economically, it is a major oil producing and exporting nation with a GHG intensive economy and a very high per capita carbon footprint. Politically, Canada is a federation, composed of provinces and federally administered territories, each with different geographies, resource bases, and climate profiles and interests. Furthermore, it is a parliamentary-style democracy whose federal government has alternated between two major parties with very different climate policy approaches (along with other smaller ones in opposition). These factors combined have ensured that climate change and climate mitigation policy is and always will be heavily politicized, and is destined to always play itself out in the form of constant negotiations between governments and political interests at and between different levels. This institutional complexity, on top of an economy that is heavily committed to fossil fuel extraction, has posed and will continue to pose considerable political challenges to any government in power, regardless of how climate-friendly their policy commitments may be. Canada’s international commitments are always going to be hobbled by its domestic politics in ways that can make nationwide coordination around external climate targets difficult and subject to compromise and horse-trading, and this will always hamper its ability to follow through on its international commitments. Thus, the political support for climate change regulation has waxed and waned with changes in government at both the federal and provincial level, as well as with changes in government in the U.S. Propositions, impositions, and considerations of mitigation efforts, whether through cap-and-trade programs or carbon tax schemes are always deeply politically risky for any government in power, leaving governments vulnerable to critique for either attempting too much too quickly, or not enough. In short, it is an ever-shifting, multilayered political space that has proven highly difficult for climate and emissions mitigation policy to navigate. Compared to the rest of the world, Canada is a high per capita emitter, in part because its geography and climate pose challenges to reducing its high demand for energy, especially for heating and transportation in and to its dispersed communities outside its urban cores, but mainly because it is an oil and gas producer.5 In 2018, per capita emissions were 19.7 tonnes of CO2 per person, although this is down from its peak of 22.6 tonnes in 2005.6 Canada is the sixth largest energy producer in the world, providing 4% of world energy supply, such that in 2019, 81% of its total GHG emissions came from its energy sector, while agriculture con-

Hirushie Karunathilake and others, ‘The Nexus of Climate Change and Increasing Demand for Energy: A Policy Deliberation from the Canadian Context’ in Hassan Qudrat-Ullah and Muhammad Asif (eds), Dynamics of Energy, Environment and Economy: A Sustainability Perspective (Springer Nature 2020) 273. 6 Environment and Climate Change Canada, ‘Canada’s Greenhouse Gas and Air Pollutant Emissions Projections 2020’ (2021) 8. It is worth noting, however, that these emissions statistics calculate only emissions generated during the production of fossil fuel energy supplies and do not include those produced by combustion by the end users of Canada’s fuel exports. This is standard practice as per IPCC Greenhouse Gas Inventory Reporting Instructions, whereby emissions are calculated by locating them at the place of combustion. However, if one considers Canada’s normative responsibility as including emissions resulting from both the production as well as the combustion of the same fuel it exports, then its responsibility for GHG emissions would be far larger than these statistics suggest. See: IPCC, Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories, vol. 2 (IPCC 1996) s. 1.2. 5

106  Research handbook on climate change mitigation law stituted 8.1%, industry 7.4%, and waste 3.8%. The oil and gas sector represents an enormous and growing part of the Canadian economy, with energy exports in 2019 representing fully 23% of all national exports,7 and providing just under 5% of total employment in the country.8 National Resources Canada reported that fossil fuel extraction and production in 2018 was 32% higher than it had been in 2005, reflecting a faster rate of growth than that of the rest of the world, whose energy production increased by 25% in the same period. At the same time, however, according to the International Energy Agency, Canada has a relatively clean electricity profile among its member countries due to the percentage of hydroelectric and nuclear sources, as well as its plans to phase out coal-fired electricity plants by 2030.9 Furthermore, while it is true that Canada’s rate of emissions has increased over the past two decades, the national economy has grown faster, amounting to a relative decrease in emissions intensity for the entire economy, down 37% since 1990, 23% since 2005, which the government attributes to fuel switching, energy efficiency advances, modernizing industrial processes, and structural changes in the economy.10 In contrast, an overview of U.S. emissions reveals a heavy national reliance on high-emitting fossil fuels for energy consumption rather than for its export economy. In the U.S., CO2 represents over 80% of total GHG emissions, by far the largest source of which (over 92%) is fossil fuel combustion, primarily from transportation and power generation.11 The transportation end use sector accounts for over 35% of CO2 emissions from fossil fuel combustion, indexed to vehicle miles traveled (VMT) and to the emissions generated per mile of travel. Despite improvements in average new vehicle fuel economy measured by a nearly 50% increase in VMT from 1990 to 2019, total transportation emissions nevertheless have continued to increase. Power generation contributes roughly one-third of U.S. CO2 emissions from fossil fuel combustion, indexed to energy sources used to generate electricity. Over time, coal-fired electricity generation has decreased in relation to other sources (falling from 54% in 1990 to 28% in 2019), while electricity generation from natural gas has increased (rising from 11% in 1990 to 34% in 2019). This ongoing shift from coal-fired to natural gas-fired plants has helped to reduce emissions from fossil fuel combustion in the electric power sector, given that the carbon intensity of natural gas is about 55% of that of coal. However, natural gas nonetheless generates significant emissions and in order to meet future targets its continued production and use will need to be curtailed as well, raising concerns about the current build-up of the country’s Natural Resources Canada, ‘Energy and the Economy’ (2019) https://​www​.nrcan​.gc​.ca/​science​ -data/​data​-analysis/​energy​-data​-analysis/​energy​-facts/​energy​-and​-economy/​20062​#L2 accessed April 16, 2021. 8 Ibid. 9 International Energy Agency, ‘Canada’ (International Energy Association 2021) https://​www​.iea​ .org/​countries/​canada accessed April 16, 2021. 10 Environment and Climate Change Canada, ‘National Inventory Report 1990–2019: Greenhouse Gas Sources and Sinks in Canada – The Canadian Government’s Submission to the UN Framework Convention on Climate Change’ (2021) 27. An alternative explanation is that this is simply correlated to Canada getting richer, where the same technological changes that have increased its wealth over the years are producing the de-intensification of energy use. Steve Sorrell, ‘Reducing Energy Demand: A Review of Issues, Challenges and Approaches’ (2015) 47 Renewable and Sustainable Energy Reviews 74, 75. 11 For this, a data and a comprehensive review of U.S. GHG emissions, see Environmental Protection Agency, Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990–2019 ES-9 (April 2021), available from https://​www​.epa​.gov/​ghgemissions/​inventory​-us​-greenhouse​-gas​-emissions​-and​-sinks​-1990​-2019. 7

Climate change mitigation law and policy in the U.S. and Canada  107 natural gas infrastructure. Driving down emissions in the U.S. will require widespread electrification in tandem with a significant shift in electricity generation from fossil fuel sources to renewable energy sources. This presents a daunting task since in 2019 approximately 80% of the energy used in the U.S. was still produced through the combustion of fossil fuels.12

2

POLICY CONTEXTS

The central obstacle preventing the development of robust mitigation policy in both the U.S. and Canada has been a lack of consistent and broad political will, although the dynamics that shape political responses to climate change and the specific mechanisms through which it frustrates mitigation efforts differ. As noted above, because approximately 80% of energy used in the U.S. is produced from the combustion of fossil fuels, any interventions to reduce emissions from the transportation and energy sectors that increase the cost of gas and electricity will directly impact not only industrial and commercial sectors but also individuals. Mitigation interventions designed to reduce nationwide reliance upon, and ultimately replace, high-emitting, fossil fuel sources of energy threaten the core business of powerful interests, including coal and oil companies, which has and continues to occasion fierce opposition and significant hue and cry about their potential economic impacts. Meanwhile, disinformation campaigns funded and organized by fossil fuel interests have sowed doubt about the scientific fact, causes, and significance of climate change and the benefits of adopting mitigation policies. Together, these and other factors frustrate the development of political will, specifically support in the U.S. House of Representatives, U.S. Senate, and the President, to enact federal legislation to mitigate climate change. This general lack of political will at the federal level has historically made U.S. climate change mitigation policy a diverse and haphazard mix of mitigation approaches that are spread across numerous laws and domestic jurisdictions and that co-exist alongside other government actions that promote fossil fuel extraction and consumption. U.S. climate change mitigation policy can best be understood as the unfortunate product of intense political disputes over the threats posed by climate change and the prerogative to reduce emissions. The mitigation policies that are in place today were only achieved after hard-fought legal and political battles to overcome hostility, sometimes extreme, to federal efforts to mitigate climate change by important political and private actors. President Joseph R. Biden has recently announced a whole-of-government approach to federal climate change policy but, with uncertain existing legal authority and limited support for concerted action on climate change mitigation in the U.S. Congress, his ability to build a coherent national climate change mitigation framework will be constrained. Much of this constrained policy capacity is a structural feature of how executive power is counterbalanced by the legislature, most notably the U.S. Senate, in the U.S. federal system. It is worth recalling that the U.S. never ratified the Kyoto Protocol, largely because the U.S. Senate’s passage of the Byrd-Hagel Resolution in 1997 by a vote of ninety-five to zero, which effectively prevented the U.S. from entering into any climate change agreement that failed to require emission reductions from all countries or that ‘would result in serious harm to the economy of the United States’.13 A decade later Ibid., ES-9-ES-21, 3–9. S. Res. 98, 105th Congress (1997).

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108  Research handbook on climate change mitigation law in 2009 a lack of political will in the Senate again obstructed the development of a domestic climate change policy, and while that same year the U.S. House of Representatives passed the American Clean Energy and Security Act, which would have created a national cap-and-trade program for carbon in the U.S., the Senate declined to bring the legislation to a vote.14 The political and legislative battles fought over climate mitigation policy between the U.S. Presidency and the legislative branch are paralleled somewhat by similar battles fought in Canada, although there they play out between federal and provincial levels of government. Indeed, the federal nature of Canada’s constitutional framework (discussed later), in combination with the country’s immense geographic size and large resource deposits in regionally specific areas, has been determinative of the hesitant, contentious, and sometimes schizophrenic shape that Canadian climate mitigation policy has taken over the past few decades. The twists and turns of its evolution over time have reflected constant and imperfect economic and political balances struck between the perceived need to curb GHG emissions and acknowledging the importance, and regional specificity, of oil and gas as a significant part of the Canadian economy.15 Canadian climate mitigation policy is locked by the contours of this Sisyphean balancing act, which has played out within a very contentious political climate where Canada’s two main political parties have vied for power, making different commitments to emissions reductions, while sharing an interest in supporting its fossil fuel economy. The general climate policy conundrum facing any Canadian government is the strong correlation between increased wealth and increased energy consumption, which makes political promises of economic growth anathema to policy commitments to achieve reductions in energy demand and use.16 Policy goals to reduce consumption and provide cleaner energy sources conflict with the need for cheap and reliable energy supplies to support livelihoods and economic development.17 With a national economy dependent on the production of abundant, secure, and reliable fossil fuels, and with a generally high national standard of living based on high patterns of energy consumption, the prospect of divesting from fossil fuel use and reducing emissions without any accompanying economic impact is an inevitably difficult policy challenge. It is because of this that for Canada to meet its Paris Accord target of 80% reductions from 2005 levels by 2050 it will require very aggressive measures that come with considerable political risk.18 Thus, even though research demonstrates that there is little chance that Canada would reach its 2030 and 2050 international GHG reduction targets in the absence of carbon taxes or pricing mechanisms, or low-carbon fuel standardization,19 it is also true that there is no straight or easy path for political leaders to take to reduce national energy demand and emissions.20

The American Clean Energy and Security Act of 2009, HR 2454, 111th Congress (1st Sess. 2009). Angela V. Carter, ‘Policy Pathways to Carbon Entrenchment: Responses to the Climate Crisis in Canada’s Petro-Provinces’ (2018) 99 Studies in Political Economy 151. 16 Karunathilake and others (n. 5). 17 Sorrell (n. 10). 18 J. David Hughes, Canada’s Energy Outlook: Current Realities and Implications for a Carbon-Constrained Future (Canadian Centre for Policy Alternatives 2018). 19 William Hammond, Jonn Axsen and Erik Kjeang, ‘How to Slash Greenhouse Gas Emissions in the Freight Sector: Policy Insights from a Technology-Adoption Model of Canada’ (2017) 137 Energy Policy 111093, 11. 20 Karunathilake and others (n. 5) 274. 14 15

Climate change mitigation law and policy in the U.S. and Canada  109 Energy switching poses a problem for a country like Canada whose economy is so heavily reliant on fossil fuel production. Actually reducing energy demand is difficult in any complex economy, and to date higher prices have been proven to be the only mechanism that has consistently been able to decrease energy demand.21 While there is considerable agreement among economists that pricing carbon and other emissions would be the most efficient way to achieve demand reductions and emission mitigations, over the past three decades implementing any kind of nationwide carbon tax or cap-and-trade system has proven politically difficult in Canada because of a lack of a social consensus for it, and also because of the political difficulty of selling uncertain future gains or the promise of a healthier environment at the price of some very real financial costs in the present.22 Furthermore, the close integration of the Canadian economy with that of the U.S., both in terms of market share and competition, has also made it politically important for Canadian leaders to demonstrate continuity and synchronicity with U.S. environmental policy and regulation.23 While the voting public has increasingly expressed sympathy to climate policy over the years, and even though climate change is increasingly a factor in national elections, it is also true that the Canadian economy, demography, geography, and the nature of its energy infrastructure has made the country heavily reliant on production and consumption of fossil fuels for both revenue and employment. This dilemma is thrown into sharp relief whenever the price of oil plunges, as it did in 2020 during the global COVID-19 pandemic, economically paralyzing Canada’s oil-producing provinces, and raising the stakes for the federal government to commit itself to saving the sector. Surges in the price of oil, as seen in 2022, however, produce equally problematic dilemmas for the federal government by encouraging those same oil-producing provinces to now protect their suddenly lucrative revenue streams. Private sector actors in the Canadian oil and gas sector are heavily challenged by deciding how to deal with the major uncertainties not only of a changing climate and spasmodic oil prices, but also the shifting international and domestic political winds around fossil fuels, and an uncertain and changing regulatory environment.24 In such an environment, pathways to profit are not necessarily clear, and investors are faced with ‘a dilemma between on the one hand having the desire for a constant stream of dividend payments and on the other the need to put in place low-carbon strategies’.25

3

INTERNATIONAL COMMITMENTS

Policymakers in the U.S. and Canada who have been eager to promote economic growth and prosperity have been equally sensitive to this same conundrum, and as a result the tone of both U.S. and Canadian commitments to international efforts to mitigate climate change has waxed Sorrell (n. 10) 79. Karunathilake and others (n. 5) 288. 23 Steven Bernstein, ‘International Institutions and the Framing of Domestic Policies: The Kyoto Protocol and Canada’s Response to Climate Change’ (2002) 35 Policy Sciences 203, 217. 24 Christian Engau and Volker H. Hoffmann, ‘Effects of Regulatory Uncertainty on Corporate Strategy – An Analysis of Firms’ Responses to Uncertainty about Post-Kyoto Policy’ (2009) 12 Environmental Science & Policy 766. 25 Monica Cavalcanti Sa de Abreu and others, ‘From “Business as Usual” to Tackling Climate Change: Exploring Factors Affecting Low-Carbon Decision-Making in the Canadian Oil and Gas Sector’ (2021) 148 Energy Policy 111932, 8. 21 22

110  Research handbook on climate change mitigation law and waned in fits and starts since the 1990s. They have also been shaped by constraining factors in both countries’ federal frameworks and their fractious domestic political climates. Even when efforts have been made in international treaty negotiations to accommodate these structural constraints, the persistent lack of sustained political will to address climate change, especially in the U.S., has long undermined the international climate change treaty regime. The Paris Agreement was intentionally structured to combine mandatory procedural obligations and non-binding substantive obligations that would allow then-President Barack Obama to commit the U.S. to the Paris Agreement as an executive agreement that did not require Senate ratification. Jacob Werksman, a Lead Negotiator for the European Union during the Paris Agreement negotiations, commented that the core Paris Agreement structure of binding procedures and non-binding outcomes was designed to thread ‘[t]he needle of U.S. constitutional and political constraints’26 and that ‘a number of the compromises that weakened the Agreement's legal character were made, in part, to accommodate U.S. domestic politics’. 27 In spite of this, however, the U.S. later withdrew from the Paris Agreement under the administration of President Donald J. Trump. While this withdrawal from the Paris Agreement proved short-lived (the withdrawal became effective November 4, 2020, and the U.S. formally rejoined the Paris Agreement on February 19, 2021) it was nevertheless symptomatic of a significant rupture in domestic climate change policy. During his time in office, President Trump dismantled federal climate change policy and aggressively promoted fossil fuel extraction, undercutting the U.S.’s intended nationally determined contribution (INDC) pursuant to which the U.S. in 2015 had announced its intention to reduce emissions by 26–28% below 2005 levels by 2025, and to make best efforts to reduce emissions by 28%.28 Under President Biden, the U.S. quickly prepared and submitted an updated nationally determined contribution (NDC) setting a new target for the U.S. to achieve a 50–52% reduction from 2005 levels in economy-wide net greenhouse gas pollution by 2030.29 However, implementation of mitigation measures to achieve that target will be tempered by the lack of widespread political support for federal climate change legislation, just as the ambition of the original U.S. INDC reflected a calculation about how much mitigation would be feasible within the terms of then-existing statutory authority. This general lack of political will has also ensured that the present legal and policy landscape of climate change mitigation is haphazard and uneven, having developed not through thoughtful design but through the happenstance of where existing law permits plausible claims to legal authority to be made to undertake mitigation efforts and where pockets of political will to pass new mitigation law exist at the subnational or federal level. Some new federal climate change mitigation measures were included in the 2020 year-end omnibus spending bill, including a requirement to phase down production and consumption of HFCs by 85% by 2036, along with funding to support energy innovation, extensions of tax credits for renewable Jacob Werksman, ‘Remarks on the International Legal Character of the Paris Agreement’ (2019) 34 Maryland Journal of International Law 343, 353. 27 Ibid., 344–45. 28 United States, ‘Intended Nationally Determined Contribution’ (2015), http://​www4​.unfccc​.int/​ submissions/​INDC/​Published​%20Documents/​United​%20States​%C20of​%20America/​1/​U​.S​.​%20Cover​ %C20Note​%20INDC %20and%20Accompanying%20Information.pdf. 29 United States, ‘Intended Nationally Determined Contribution’ (2021), https://​www4​.unfccc​.int/​ sites/​ndcstaging/​PublishedDocuments/​United​%20States​%20of​%20America​%20First/​United​%20States​ %20NDC​%20April​%2021​%202021​%20Final​.pdf. 26

Climate change mitigation law and policy in the U.S. and Canada  111 energy, and support for carbon capture technology.30 The U.S. may ultimately adopt a comprehensive climate framework law, or perhaps its NDCs under the Paris Agreement will evolve to serve a similar function. But, for now, U.S. climate mitigation law and policy are still highly fragmented and continue to reflect the absence of broad and enduring political will to address climate change. The nature of Canada’s commitment to international climate change treaty regimes has also been haphazard and contradictory over the years because of structural and domestic political and economic factors. Ever since Canada signed onto the UNFCCC in 1992,31 federal environment ministers have had to strike delicate political balances in getting both provinces and the private sector to buy into emissions reduction schemes. Any interest governments have had in participating in global efforts to fight climate change since then have been counterbalanced by domestic political prerogatives to support Canada’s large oil and gas economy. Propositions to impose more stringent regulation on the sector or nationwide emissions mitigation measures have been repeatedly resisted by powerful political and commercial forces. As a result, in spite of the targets it has committed to internationally, total carbon emissions have increased rather than decreased over the years, from approximately 600 Mt in 1990 to 730 Mt in 2019, peaking in 2007 at 752 Mt.32 In the 1990s and into the early 2000s, the Liberal government under Jean Chrétien committed Canada to ambitious international environmental agreements that encountered resistance from domestic interests in the years that followed as their potential economic consequences became more politically contentious. Whatever multilateral idealism Canada took to Kyoto in 1997 was combined with a need for some economic practicality. As such, Canadian negotiators were instructed by Ottawa to stay close to whatever the U.S. position was, which then meant accepting demanding reduction targets of 6% reductions below 1990 levels by 2010 as the price for convincing the EU to agree to flexible market-based regulatory emissions reduction mechanisms.33 Since Kyoto, however, Canadian federal governments have been unable to follow through with domestic policies to achieve reduction goals in the face of resistance from high-emitting provinces and powerful private sector lobby groups.34 These interests were placated by assurances from Ottawa that any national climate plan would be developed together with the provinces, but Kyoto was followed by nearly two decades of half-hearted and largely ineffective efforts to reduce emissions through voluntary measures, even though public support for global warming-focused policymaking at the time was relatively high.35 After being elected in 2006, the first few years of the minority Conservative party governments under Steven Harper showed some enthusiasm for addressing climate change, even

30 Consolidated Appropriations Act, 2021, Pub L No. 116-260, 134 Stat 1182 (codified in scattered sections of USC). 31 United Nations Framework Convention on Climate Change, FCCC/INFORMAL/84 GE.05-62220 (E) 200705. 32 Environment and Climate Change Canada, ‘Greenhouse Gas Emissions: Canadian Environmental Sustainability Indicators’ (2021) 5. 33 Kathryn Harrison, ‘The Struggle of Ideas and Self-Interest in Canadian Climate Policy’ in Kathryn Harrison and Lisa McIntosh Sundstrom (eds), Global Commons, Domestic Decisions: The Comparative Politics of Climate Change (MIT Press 2010). 34 Canadian Manufacturers and Exporters, Pain Without Gain: Canada and the Kyoto Protocol (2001). 35 Harrison (n. 33).

112  Research handbook on climate change mitigation law making it a theme of the 2007 federal budget,36 and pledging to work with provinces and the United States to implement a GHG cap-and-trade system in its 2008 ‘Turning the Corner’ plan, which never materialized. These ambitions were later downscaled to efforts to harmonize regulations with those of the United States on a sector-by-sector basis, and then virtually evaporated when the disastrous ‘Green Shift’ electoral campaign by the Liberal party under Stéphane Dion in 2008 demonstrated how lukewarm the Canadian electorate was to nationwide carbon tax schemes during the ongoing global financial crisis.37 As a result, the sum of its actions amounted to little more than the introduction of new fuel economy regulations to match those of the Obama administration, and signing a few non-binding international agreements, like the Copenhagen Accord and the Declaration on Climate Change and Clean Energy with the U.S. and Mexico in 2009.38 After securing a majority government win in 2011, an emboldened Harper government became increasingly vocal in its opposition to carbon taxes and cap-and-trade schemes, passed no new regulations to curb the emissions of the oil and gas sector during its tenure,39 and ultimately withdrew Canada entirely from Kyoto that same year. This policy dynamic shifted with the 2015 national election, when the Liberals under Justin Trudeau won a majority with campaign pledges to create a national price on carbon and phase out gas and oil subsidies. Once elected, one of its first tasks was to sign the Paris Agreement, committing Canada to lowering total emissions by 30% by 2050. The following year, on December 9, 2016, the government announced its Pan-Canadian Framework on Clean Growth and Climate Change as its plan to ‘meet its emission reduction targets and grow the economy’ by pricing carbon across the country by 2018.40 The Framework spoke to a number of emission reduction strategies for a wide range of emitters, from vehicles and buildings, to heavy industries, but because many of the sectors it covered lay within provincial jurisdiction it placed considerable emphasis on collaboration between the federal and provincial governments. Its core component, however, was to oblige provinces to have a carbon plan in place by 2018 that would meet or surpass a federally mandated single carbon price backstop.41 Following provincial negotiations, this latter mechanism was formalized in the Greenhouse Gas Pollution Pricing Act (‘GGPPA’)42 which set an initial benchmark price of Can$10 per ton of CO2 in 2018, to rise incrementally to Can$50 by 2022.43 This plan allowed provinces to choose how they could achieve this price equivalency, and ensured that any revenues produced would be revenue-neutral and return payments to individual taxpayers via a system of tax credits. This tax refund construction is intended to allay concerns about the impact of higher fuel prices on consumers and increased energy poverty for disadvantaged citizens and

Department of Finance Canada, ‘Budget 2007: A Stronger, Safer, Better Canada’ (May 19, 2007) https://​www​.budget​.gc​.ca/​2007/​news​-nouvelles/​news​-nouvelles​-eng​.html accessed May 1, 2021. 37 Kathryn Harrison, ‘A Tale of Two Taxes: The Fate of Environmental Tax Reform in Canada’ (2012) 29 Review of Policy Research 383. 38 White House Office of the Press Secretary, ‘North American Leaders’ Declaration on Climate Change and Clean Energy’ (2009). 39 Aaron Wherry, ‘Policy Alert’ Maclean’s (April 6, 2011). 40 Environment and Climate Change Canada, Pan-Canadian Framework on Clean Growth and Climate Change: Canada’s Plan to Address Climate Change and Grow the Economy (Environment and Climate Change Canada 2016). 41 Government of Canada, ‘Pan-Canadian Approach to Pricing Carbon Pollution’ (2016) 49. 42 Greenhouse Gas Pollution Pricing Act (S.C. 2018, c. 12, s. 186). 43 Government of Canada, ‘Pan-Canadian Approach to Pricing Carbon Pollution’ (n. 41). 36

Climate change mitigation law and policy in the U.S. and Canada  113 communities, which the government has said will offset resulting higher energy costs for approximately 70% of citizens. Provincial opposition to the plan and the subsequent act was strongest in oil producing and politically conservative provinces, like Alberta and Saskatchewan, later joined by Ontario under the Premiership of Doug Ford. Opposition intensified when the federal carbon tax was first imposed on Saskatchewan, Ontario, Manitoba and New Brunswick in April 2019. In response, a number of provinces turned to the courts, arguing it amounted to an unconstitutional imposition of federal powers over provincial autonomy. This was accompanied by public campaigns to portray the mechanism as ineffective, economically damaging, and as a ‘tax grab’.44 Such arguments countered the findings of the independent Parliamentary Budget Office, which in 2016 calculated that while it expected the Pan-Canadian Framework to reduce GDP by 0.35%, that such a loss would be considerably outweighed by the greater cost of doing nothing.45 Such arguments countered the findings of the independent Parliamentary Budget Office, which in 2016 calculated that while it expected the Pan-Canadian Framework to reduce GDP by 0.35%, that such a loss would be considerably outweighed by the greater cost of doing nothing. It is likely that because of this kind of subnational political resistance the federal government in 2021 took a step to anchor its emissions reduction policy to its external international commitments and scientific expertise. This took the form of the Canadian Net-Zero Emissions Accountability Act (CNZEAA), which incorporates federal emission reduction planning into law and links it to Canada’s nationally determined contribution under the Paris Agreement.46 It also obliges the government to set five-year targets leading to eventual net-zero emissions by 2050 in line with its international commitments and based on the best scientific information available, and requires emissions targets for every five years between 2030 and 2050, emissions reduction plans and periodic progress reports with updates on each emissions reduction target and the implementation of federal measures, along with sectoral strategies for achieving them.47 Given the political and legal complexities of the federal government’s position, however, the Act notably only commits the federal government to setting national targets, and does not declare any specific requirements for provinces, nor articulate what exactly such targets or their transition plans should look like. If the Pan-Canadian Framework and the new CNZEAA give the Trudeau government some domestic and international credibility for taking climate change seriously, this has been offset by its simultaneous support of Canada’s emissions-heavy oil and gas production sector. This in part is an acknowledgement of the importance of the sector to the national economy, but it was also the price it paid to negotiate support from the provinces, in particular Alberta,

44 For example, see: Ashley Joannou, ‘“Another Attack on Alberta’s Economy”: Nixon Criticizes Ottawa’s Plan to Raise Carbon Tax to $170 a Tonne by 2030’ Edmonton Journal (Edmonton, December 12, 2020); also James Munson, ‘Canada Backs Off Clean Fuel Rule After Industry Voices Concerns’ Bloomberg (26 July, 2018). 45 Office of the Parliamentary Budget Officer, ‘Canada’s Greenhouse Gas Emissions: Developments, Prospects and Reductions’ (2016). 46 Canadian Net-Zero Emissions Accountability Act SC 2021, c. 22, ss 4, 7. 47 SC 2021, c. 22, ss 7, 9, 10, 14, 16.

114  Research handbook on climate change mitigation law for the Pan-Canadian Framework in 2016.48 The scale of its commitment has been most on display with its approval of three new pipelines, and its extraordinary purchase of one of them, the Trans Mountain pipeline, for Can$4.5 billion when Kinder Morgan announced that it was pulling out of the project because of persistent political and litigious uncertainty surrounding its licensing and construction.49 Furthermore, the Pan-Canadian Framework, while impressive on its face for introducing a carbon pricing mechanism, is remarkably silent when it comes to reducing the intensity of the oil and gas sector’s predominance in the national economy. In short, the climate record of the Trudeau government is somewhat contradictory. While the Trudeau government has taken pains to assert its commitment to its Paris targets, and pledged a 40–45% reduction below 2025 levels by 2030 at President Biden’s online climate conference on April 22–23, 2021,50 its continued support of the oil and gas sector begs difficult questions about its capacity to meet them.51

4

CONSTITUTIONAL AND FEDERAL LEGAL FRAMEWORKS

Any discussion about climate mitigation as national policy frameworks in both the U.S. and Canada requires careful consideration of their constitutional frameworks. As federal democracies, political power in both countries is divided and shared in particular, but different, ways that have strongly affected the political and legislative shapes and contents that their respective policy dynamics have taken over the past few decades. In the case of Canada, it would be no overstatement to argue that the country’s federal structure is a key, if not the main key determinant of and obstacle to crafting any countrywide climate mitigation policy. As the Supreme Court recently ruled, Canadian federalism is an inherently multifaceted balancing act whose objective is to ‘reconcile diversity with unity, promote democratic participation by reserving meaningful powers to the local or regional level and foster cooperation between Parliament and the provincial legislatures for the common good’.52 Given its multilayered federal and legal framework, the regionalized political and economic sensitivities involved, and the lack of political and electoral consensus about how best to reduce emissions, implementing any countrywide climate mitigation policy in Canada is inevitably a daunting task for any government of any ideological stripe. From the 1990s to the mid 2010s the general government response was to hedge Canada’s international commitments with relatively little domestic regulatory innovation beyond matching those of the U.S. This has changed from 2015 onwards as the Trudeau government has adopted a comparatively active and strategic form of federal

48 Kathryn Harrison and Sophie Harrison, ‘At a Crossroads: The Future of Canada’s Petro-Economy in a Carbon-Constrained World’ in Philippe Tortell, Margot Young and Peter Nemetz (eds), Reflections of Canada: Illuminating Our Opportunities and Challenges at 150+ Years (Peter Wall Institute for Advanced Studies 2017). 49 Kathleen Harris, ‘Liberals to Buy Trans Mountain Pipeline to Ensure Expansion Is Built’ CBC News (Ottawa May 29, 2018). 50 John Paul Tasker and Aaron Wherry, ‘Trudeau Pledges to Slash Greenhouse Gas Emissions by at Least 40% by 2030’ CBC News (April 22, 2021). 51 Kathryn Harrison, ‘Environmental Policy’ in Paul J. Quirk (ed.), The United States and Canada: How Two Democracies Differ and Why It Matters (Oxford University Press 2019). 52 References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11 at para. 48; Reference re Secession of Quebec, 1998 CanLII 793 (SCC), [1998] 2 S.C.R. 217, at para. 43.

Climate change mitigation law and policy in the U.S. and Canada  115 policymaking that has differed from what came before. Nevertheless, like its predecessors, it too has had to contend with the challenging political and legal intricacies of Canada’s federal constitutional order when designing how to do this. Canadian constitutional law is not explicit about what level of government has jurisdiction over the regulation of GHG emissions. Under s. 91 of the Constitution Act of 1867, the provincial and federal legislatures are considered equal branches of government. The powers of the federal government are limited to matters of national concern in pursuit of ‘peace, order and good government’ and to preserving national unity, while provinces are recognized as being autonomous within their respective jurisdictions.53 Section 92 confers specific jurisdiction to provinces over a number of matters, the most relevant being ‘property and civil rights’ under s. 92(13); non-renewable natural resources under s. 92(A); and the residual jurisdiction provided in s. 92(16) for matters of ‘a merely local or private Nature in the Province’. Taken together, these capture much of the trade, industry, and resource extraction that are responsible for much of Canada’s GHG emissions. Although it is the federal government in Ottawa that commits Canada to international emissions reduction targets, it is because of this constitutional arrangement that the primary regulatory responsibility for the activities that produce GHG emissions, especially Canada’s sizeable energy sector, lies at sub-federal levels. While the federal government has significant taxation powers, its uses of tax revenues to implement countrywide policies to produce nationwide effects require considerable cooperation with the provinces. This is especially the case in areas like the environment that intersect with so many differently delineated jurisdictional responsibilities. The policy effect of this constitutional arrangement is that while the climate changing impacts of emissions may be felt at the national and international levels, both the benefits of producing them as well as the costs of mitigating them are to be borne by individual provinces, with whom the federal government is required to coordinate. Canadian provinces are generally protective of their control over the use and exploitation of natural resources within their borders. This structural feature of Canadian federalism has made collective action on climate change politically difficult and contentious, and explains much of the relative domestic policy inaction at the federal level over the past 30 years. It is also the reason why it was necessary for the Greenhouse Gas Pollution Pricing Act to organize cross-provincial emissions reductions by setting a national minimum carbon ‘backstop’ price, and reserving some autonomy for the provinces to choose how to match or surpass it, rather than simply imposing a single national regulatory mechanism. In this way, the Act represents a particular balance struck between the exercise of central federal authority with the preservation of provincial autonomy, a balance whose constitutional validity was recently affirmed by the Supreme Court after years of litigation.54 The U.S. constitutional structure, in contrast to that of Canada, gives the federal government the power to directly mandate emissions reductions and/or limits on fossil fuel extraction throughout the U.S. Although this vesting of authority in the federal government avoids at least in theory some of the complexities occasioned by requirements for power sharing between the

Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3, at para. 22. See also Andrew Leach and Eric M. Adams, ‘Seeing Double: Peace, Order, and Good Government, and the Impact of Federal Greenhouse Gas Emissions Legislation on Provincial Jurisdiction’ (2020) 29 Constitutional Forum 1. 54 References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11. 53

116  Research handbook on climate change mitigation law federal and provincial governments in Canada, it nevertheless has not facilitated the development of robust and unified mitigation policy. This is in part because the constitutional need to obtain both congressional and presidential support for the adoption of new legislation has thus far proved elusive. Presidential administrations supportive of strong mitigation policy have failed to secure congressional approval for strong new climate laws and presidential administrations opposed to strong mitigation policy have blocked such laws. The federal government has thus been unable to exercise its constitutional authority to compel climate change mitigation through the enactment of new laws aimed directly at mitigation of climate change. As a result, most federal climate change mitigation policy in the U.S., and nearly all existing federal controls on GHG emissions, are authorized under laws of general application, or laws that, while not specifically adopted to address climate change, can be applied for that purpose. Stymied by a lack of political will to pass a comprehensive federal climate change mitigation law, climate advocates and presidential administrations supportive of climate change mitigation have turned to existing laws of general application for authority to require or encourage mitigation. Doing so has generated numerous ongoing legal disputes about whether those laws do, in fact, provide for such authority and, if so, whether and how it can or must be exercised. We describe the most significant of these disputes below in section 5.1. Because they typically center around how federal agencies interpret such laws, the shape that legal disputes take tends to depend largely upon the climate policy preferences of the relevant presidential administration. Under administrations hostile to federal climate change mitigation, federal agencies typically interpret statutes not to provide authority to mitigate climate change, interpret that authority narrowly, or simply decline to exercise statutory authority. Climate advocates then challenge those decisions. Under administrations that champion federal climate change mitigation, on the other hand, federal agencies typically interpret statutes to authorize or require strong climate change mitigation and accordingly promulgate robust mitigation policy. This is then challenged by those who are opposed to federal climate change mitigation (often fossil fuel interests or states opposed to federal climate change mitigation), and who claim that federal agencies have exceeded their statutory authority. Perhaps the best example of this dynamic, described in detail in section 5.1, is the contrast between the Obama-era EPA’s invocation of authority under the Clean Air Act to impose robust mitigation requirements on existing fossil-fuel power plants through the Clean Power Plan and the Trump-era EPA’s effort to replace the Clean Power Plan with the Affordable Clean Energy rule, which interpreted the agency’s authority to require mitigation narrowly and would have required little emission reduction. This has resulted in the courts playing the key role of determining the scope of government authority through their decisions on whether any given agency’s mitigation policy (or lack thereof) exceeds the authority granted by a statute of general application or fails to satisfy its minimum requirements. As such, litigation outcomes over time have become a central mechanism by which the scope of federal authority to engage in climate change mitigation under statutes of general application has been defined, and this has shaped the regulatory landscape accordingly. Distinct from litigation surrounding the effort to apply existing statutory authority to climate change, climate advocates in the U.S. are also actively litigating two types of constitutional and/or common law actions with the potential to shape U.S. climate change policy. The first type has been brought against state or federal governments and is grounded in the public trust doctrine and sometimes constitutional law, positing that these sources of law impose a duty on government to take stronger action to mitigate climate change and asking courts to order gov-

Climate change mitigation law and policy in the U.S. and Canada  117 ernment to adopt stronger mitigation measures.55 The second type has been brought directly against large emitters or fossil fuel interests and is grounded in common law tort (primarily nuisance) and sometimes product liability law, seeking injunctive relief (in the form of a court order to reduce or stop conduct giving rise to emissions) against and/or damages to compensate for harms caused by climate change directly from defendant corporations.56 To date, no case of either type has succeeded or even been decided on the merits as courts have dismissed every case that has been finally decided under various threshold doctrines relating to justiciability, including standing, the political question doctrine, and pre-emption or displacement. Numerous cases, particularly of the second type, are still being actively litigated, however, so a successful outcome for the plaintiffs remains possible. Nevertheless, these kinds of cases have influenced U.S. climate change mitigation policy. At the very least, they have helped to focus attention on the current harms and costs of climate change, the complicity of government in exacerbating climate change (for example, by allowing for the continued extraction of fossil fuels from federal lands and by failing to act responsibly to mitigate it by allowing continued emissions from private actors), and the role of myriad corporations in knowingly exacerbating these harms while seeking to sow doubt about climate change science to avoid being regulated. Some speculate that climate change litigation may also prompt defendant companies to support federal mitigation legislation, provided that it pre-empts lawsuits against them. Furthermore, in the event that plaintiffs would prevail in one of these cases, the outcome would significantly impact U.S. climate change either directly, in the form of a judicially imposed requirement that the government adopt or strengthen mitigation policy, or indirectly, by changing the position of major fossil fuel interests that have historically resisted the development of strong climate change mitigation policy. The legal questions raised by these cases are rich and interesting, and climate change litigation is explored in greater depth in Chapter 12. 4.1

U.S. Federal Legislative Framework

The federal government in the United States clearly possesses the legal authority to compel climate change mitigation through the adoption of federal legislation. However, as explained above, the United States has not developed the political will required to adopt new federal laws specifically addressed to climate change mitigation. As such, federal authority to engage in climate change mitigation resides, to the extent it exists, primarily within statutes of general application—statutes already in force the relevant provisions of which do not speak directly to climate change mitigation. Whether and to what extent these statutes of general application require or permit the implementation of federal mitigation policy has thus largely defined the scope of federal mitigation requirements. This section identifies the relevant provisions of key federal statutes of general application that authorize mitigation policy (the CAA, NEPA, and federal securities laws) and explains how those statutes have been interpreted by agencies and courts to form current federal mitigation policy.

For example, see: Juliana v. United States, 947 F.3d 1159 (9th Cir. 2020). For example, see: City of New York v. Chevron Corp., No. 18-2188, 2021 WL 1216541 (2d Cir. April 1, 2021). 55 56

118  Research handbook on climate change mitigation law A The Clean Air Act The only limits that the federal government places directly on GHG emissions are imposed under the Clean Air Act (CAA). At present, these limits are sector-specific and applied almost exclusively to new or modified sources of GHGs. Core emission limits under the CAA include restrictions requiring motor vehicles to meet fuel efficiency standards promulgated under section 202 of the CAA.57 Some major new or modified stationary sources that are already required to obtain a permit by virtue of their emission of conventional air pollutants must use ‘best available control technology’ (BACT) to limit their GHG emissions under the Prevention of Significant Deterioration (PSD) program.58 Some categories of major new or modified stationary sources, including new, modified, and reconstructed electric utility generating units like fossil fuel-fired power plants, must comply with ‘new source performance standards’ that reflect the best system of emission reduction under section 111(b).59 Furthermore, some existing stationary sources will likely be required under section 111(d) to reduce their GHG emissions, although whether the CAA provides authority to require such emission reductions and the scope of that authority remains uncertain. Current controls on emissions under the CAA are both significant60 and insufficient on their own to reduce U.S. emissions to levels necessary for meaningful progress on climate mitigation. There are ways to increase the number of sources of emissions subject to controls under the CAA and to increase the stringency of those controls, although it is unclear the extent to which expanded regulation under the CAA can achieve deep emission reductions within relevant time frames. Some sources of emissions, such as small sources or stationary sources that emit only GHGs, may not be covered by the CAA, or at least are not covered under the provisions of the CAA that have been successfully invoked to this point to address GHG emissions. Even when a source is subject to regulation under the Act, the substantive requirements of the CAA limit the stringency of the controls that can be applied. With respect to the PSD program, for example, permitting authorities setting BACT must take ‘into account energy, environmental, and economic impacts and other costs’ and determine that the standard ‘is achievable for such facility through application of production processes and available methods, systems, and techniques’.61 Furthermore, the processes required to develop and implement GHG emission controls under the CAA, which typically require lengthy rulemakings that are subject to judicial review, are slow and labor-intensive. Despite these limitations, given the absence of political will to adopt federal climate change legislation, it seems likely that expanding the regulation of GHGs under the CAA will remain an important focus for U.S. climate mitigation policy. Significant regulatory proceedings and legal decisions have produced current controls on GHGs under the CAA, and they provide a basis for evaluating the prospects of expanded regulation of GHGs under the CAA going forward.

42 USCA § 7521 (West 2021). 42 USCA § 7475 (West 2021). 59 42 USCA § 7411 (West 2021). 60 The transportation sector, for example, constitutes roughly one-third of U.S. GHG emissions and improved fuel efficiency requirements are already thought to have substantially reduced emissions. 61 42 USCA § 7479 (West 2021). 57 58

Climate change mitigation law and policy in the U.S. and Canada  119 B Tailpipe emission standards Section 202 of the CAA requires the Administrator of the Environmental Protection Agency (EPA) to set ‘standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines, which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare’.62 Although the term ‘air pollutant’ is defined very broadly in the CAA,63 in 2003 the EPA, acting at the direction of President George W. Bush, who opposed federal climate change mitigation, denied a petition to initiate rulemaking to set standards for GHG emissions from motor vehicles in part on the grounds that it did not possess authority to regulate GHGs under the CAA because they cannot be considered ‘air pollutants’ under the statute. Had this interpretation of the statute prevailed, it would have forestalled the regulation of GHGs under the CAA, placing them outside the statute’s reach. Less appreciated, but of perhaps equal import, the EPA and others opposed to the regulation of GHGs under the CAA characterized climate change and GHG emissions as being so unusual in scope and mechanism that they should elude regulation under the CAA’s general provisions. By extension, these arguments suggested that courts interpreting statutes of general application should adopt a kind of climate change exceptionalism to require something approaching express mention in legislation directed specifically to climate change to find authority for government action on climate change mitigation. Had this view prevailed, it could have forestalled the application of not just the CAA but many other federal statutes of general application to the myriad challenges posted by climate change. The Supreme Court, however, has cleared a path for the application of statutes of general application to climate change mitigation. In 2007, four years after the petition was filed, the Supreme Court confirmed the potential for GHGs to be regulated under the CAA, holding in Massachusetts v. EPA that GHGs constitute air pollutants, at least for purposes of section 202.64 The decision confirmed that statutes of general application can readily be interpreted to reach climate change, which opened the door to regulation of GHG emissions under section 202 and other provisions of the CAA. Furthermore, by finding that Massachusetts possessed standing to press the statutory claim, the Court indicated that climate change advocates seeking to require agencies to use existing statutory authority could seek the help of courts to do so. Commentators have heralded Massachusetts v. EPA as a significant victory for climate change mitigation, but it is important to note that the path to this decision was not easy and its outcome was far from certain. The D.C. Circuit Court of Appeals had, after all, upheld the EPA’s denial of the petition for rulemaking, making the possibility of obtaining review by the Supreme Court of that denial remote, and the ultimately successful outcome before the Supreme Court rested on a slim five to four majority on a narrow question of administrative law.65 Four years elapsed between the filing of the petition and the Supreme Court’s decision, and it was only six years after its filing that the EPA promulgated GHG tailpipe emissions 42 USCA § 7521(a)(1) (West 2021). 42 USCA § 7602(g) (West 2021) (‘The term “air pollutant” means any air pollution agent or combination of such agents, including any physical, chemical, biological, radioactive (including source material, special nuclear material, and byproduct material) substance or matter which is emitted into or otherwise enters the ambient air.’). 64 Massachusetts v. E.P.A., 549 US 497, 127 S. Ct. 1438, 167 L Ed 2d 248 (2007). 65 For a thorough account of the case that illustrates its uncertain outcome, see Richard J. Lazarus, The Rule of Five: Making Climate History at the Supreme Court (Harvard University Press 2020). 62 63

120  Research handbook on climate change mitigation law under section 202.66 Thus, while the decision did allow for the establishment of tailpipe emissions for GHGs and did open the door to federal regulation of GHGs under other provisions of the CAA, it also effectively blocked efforts to invoke the federal common law directly against large emitters of GHGs to require them to pay damages or reduce their emissions.67 Although Massachusetts v. EPA allowed some climate change mitigation to move forward under existing statutory authority without requiring the adoption of new climate change legislation, the decision did not overcome the general drag on policy created by the lack of political will for federal climate change mitigation.68 For even existing statutes to be implemented requires in significant measure the political will of the sitting president. Pitched disputes continue about the extent to which other provisions of the CAA apply to GHGs and, in terms of the application of section 202, Massachusetts v. EPA simply shifted the legal and policy battleground from questions about whether the EPA had sufficient authority to questions about the stringency of the limits that it could impose when exercising that authority. Under President Obama, the EPA acted pursuant to its authority under section 202 in conjunction with the National Highway Traffic Safety Administration and with authority under the Energy Policy and Conservation Act to improve fuel economy and reduce the GHG emissions of light-duty vehicles, setting standards for model years between 2012–2025, with the years 2017–2025 being a new national standard.69 The CAA contemplated that California could be granted a waiver to set its own standards independent of the statute that other states could elect to adopt.70 However, California ultimately equated compliance with the mitigation-friendly Obama-era standards as compliance with California’s own GHG emission standards. Under President Trump, the EPA sought to significantly weaken fuel efficiency requirements. It revisited the Obama-era rulemaking, which would have required approximately a 5% per year increase in fuel efficiency through 2026 (for a fleet average of roughly 46.6 miles per gallon), and relaxed the standards to instead require only approximately 1.5% annual increases in efficiency through 2026 (a fleet average of roughly 40.5 miles per gallon).71 It also sought to make these less stringent requirements mandatory for all states by revoking the waiver of pre-emption previously granted for the GHG and Zero-Emission Vehicle programs under California’s Advanced Clean Car Program, thereby preventing California (and, by extension, any other state) from adopting more aggressive fuel economy standards.72 With the election of another pro-mitigation president, President Biden, it seems likely that section 202 will once

Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards, 75 Fed. Reg. 25324 (May 7, 2010). 67 Am. Elec. Power Co. v. Connecticut, 564 U.S. 410, 420 (2011). 68 When the decision was issued, the EPA remained opposed to federal climate change mitigation under the CAA and declined to take any action for well over a year, causing the frustrated petitioners to file a Petition for Writ of Mandamus to Compel Compliance with Mandate in the Supreme Court. It was not until President Obama, who championed federal climate change mitigation, was elected in 2008 that the EPA moved forward with the regulation of GHGs under section 202. 69 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards, 77 Fed. Reg. 62623 (Oct. 15, 2012). 70 42 USCA § 7543 (West 2021). 71 The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021–2026 Passenger Cars and Light Trucks, 85 Fed. Reg. 24174 (Apr. 30, 2020). 72 The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program, 84 Fed. Reg. 51310 (Sept. 27, 2019). 66

Climate change mitigation law and policy in the U.S. and Canada  121 again be oriented toward more aggressive climate change mitigation.73 The change in fuel efficiency requirements between presidential administrations provides evidence, however, of the extent to which even once statutory authority is located for climate change mitigation, a lack of political will at the executive level can inhibit statutory implementation and mitigation progress. C Prevention of significant deterioration program The imposition of technology-based emission limits on new or modified major stationary sources under the CAA’s PSD program likewise required lengthy contestation of questions of statutory authority and regulatory standard setting. Under the PSD program, major emitting facilities must use BACT for each pollutant subject to regulation under the CAA and emitted from the facility. The CAA defines major emitting facilities to include sources in specified categories with the potential to emit 100 tons per year (tpy) or more of an air pollutant or any source with the potential to emit 250 tpy of an air pollutant.74 Under President Obama, the EPA, inclined to exercise its authority under the CAA to mitigate climate change, promulgated regulations imposing emission limits for GHGs under these statutory provisions. Industry and others opposed to federal climate change mitigation challenged the regulations and the Supreme Court ultimately granted certiorari and resolved questions relating to the scope of the EPA’s statutory authority in Utility Air Regulatory Group v. EPA (hereinafter UARG decision).75 With respect to whether the CAA authorizes the EPA to impose emission limits for GHGs on these sources, the Supreme Court held that the statute authorized the EPA to apply emission limits only to facilities already required, by virtue of their emission of other pollutants, to obtain a permit under the PSD program (‘anyway’ sources). A source could not be considered a major emitting facility subject to the strictures of the PSD program solely because of its GHG emissions because the term air pollutant in the relevant statutory provisions defining a major emitting source could not be interpreted to include GHGs. The Supreme Court reasoned that doing so would have caused numerous small sources to become subject to the PSD program (and CAA regulation) for the first time, imposing onerous regulatory requirements on numerous entities Congress did not contemplate would be subject to CAA controls and overwhelming the EPA’s capacity to administer the program.76 However, if a source was already subject to the PSD program by virtue of its emission of other, non-GHG air pollutants, the Supreme Court held that the EPA did have the authority to regulate emissions from these ‘anyway’ sources. The Supreme Court reasoned that the relevant statutory text was clear and that applying PSD requirements to those already-regulated facilities was consistent with

73 In December 2021, the EPA finalized a new rule once again imposing stringent tailpipe emission standards for passenger cars and light trucks. Revised 2023 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions Standards, 86 FR 74434 (December 30, 2021) (to be codified at 40 CFR Parts 86, 600). It also rescinded the Trump administration’s withdrawal of the EPA’s authority to issue a waiver. California State Motor Vehicle Pollution Control Standards; Advanced Clean Car Program; Reconsideration of a Previous Withdrawal of a Waiver of Preemption; Notice of Decision, 87 Fed. Reg. 14332 (March 14, 2022). 74 42 USCA § 7479 (West 2021). 75 Util. Air Regul. Grp. v. E.P.A., 573 US 302 (2014). 76 Ibid., 321–23.

122  Research handbook on climate change mitigation law Congress’s intent to impose controls on large, industrial sources and would not pose undue administrative burdens on the EPA.77 The Supreme Court’s interpretation of the scope of EPA authority to apply the PSD program to GHG emissions was narrower than that proposed by the EPA, but the decision was considered a practical victory for the EPA because the ‘anyway’ sources covered by the statute after the Supreme Court’s decision encompassed 83% of U.S. GHG emissions from stationary sources and the stationary sources that the Supreme Court held that the EPA could not regulate encompassed only 3% of U.S. GHG emissions from stationary sources. The UARG decision may, however, have troubling longer-term implications for the EPA’s regulation of GHGs under the CAA. The decision signals Supreme Court resistance to interpreting the CAA to apply to non-traditional (non-industrial, smaller) stationary sources of GHGs, thereby limiting the coverage of the statute.78 Notably, although the analysis above focused on the PSD program, the UARG decision also held that a source could not be considered a major source required to obtain a Title V operating permit—which imposes no substantive standards but does contain procedural requirements—simply by virtue of its emission of GHGs.79 The decision also suggests that, while the CAA can be interpreted to apply to GHG emissions and climate change in some contexts, the Supreme Court is not inclined to accept aggressive interpretations of the CAA vis-à-vis climate change that, in the view of the Court, would result in a ‘dramatic expansion of agency authority’.80 The Court signaled in dicta that it may not be inclined to allow creative regulatory approaches designed to accommodate the unique aspects of GHG emissions and climate change. The Court went out of its way to reiterate the ‘important limitations on BACT’ that constrain the EPA’s regulatory authority under the PSD program, to ‘acknowledge the potential for greenhouse-gas BACT to lead to an unreasonable and unanticipated degree of regulation’, and to admonish that its ‘decision should not be taken as an endorsement of all aspects of the EPA’s current approach, nor as a free rein for any future regulatory application of BACT in this distinct context’.81 The UARG decision can be understood as a judicial shot across the bow to the executive. Presidential administrations intent on regulating GHGs under the CAA would be wise to proceed with caution, to hew closely to the statutory text, and to align their regulatory approach to familiar methods and norms of regulation to maximize the chances that courts will uphold their regulatory interpretations. New source performance standards and section 111(d) D The UARG precedent will guide efforts to strengthen and expand the regulation of GHGs under the CAA. One of the most important questions in this endeavor is whether and how the CAA can limit emissions from existing stationary sources of GHGs. Section 111(d), which Ibid., 331–32. The Court observed that ‘A brief review of the relevant statutory provisions leaves no doubt that the PSD program and Title V are designed to apply to, and cannot rationally be extended beyond, a relative handful of large sources capable of shouldering heavy substantive and procedural burden.’ Ibid., 322. 79 Ibid., 329 (‘For the reasons we have given, EPA overstepped its statutory authority when it decided that a source could become subject to PSD or Title V permitting by reason of its greenhouse-gas emissions.’). 80 Ibid., 332. 81 Ibid., 331–32. 77 78

Climate change mitigation law and policy in the U.S. and Canada  123 is nested within the CAA provisions requiring that the EPA set standards of performance for certain categories of new sources, provides one potential source of authority for regulating existing stationary sources. Under section 111(d), the EPA identifies emission guidelines (reflecting the best system of emission reduction (BSER) that has been ‘adequately demonstrated’ for a given source category) and states then develop State Implementation Plans (SIPs) establishing standards of performance for the covered sources in their state. Section 111(d) requires the EPA to develop BSER and the submission of SIPs for existing sources of pollutants for which air quality criteria or a national ambient air quality standard have not been issued and which are not subject to regulation as hazardous air pollutants82 but to which a new source performance standard would apply if the source was a new source.83 Whether and how the EPA can use section 111(d) authority to impose GHG emission limits on existing sources, including existing fossil-fuel power plants, has been mired in regulatory and legal processes since 2014. The Obama-era EPA promulgated regulations under section 111(d) (the Clean Power Plan) (CPP) that defined BSER to include generation-shifting, or the reduction of emissions from shifting electricity generation from higher-emission power plants to less-polluting sources of energy.84 Opponents immediately challenged the CPP in court as an overly broad and impermissible interpretation of section 111(d) and the Supreme Court stayed its implementation.85 While legal challenges to the CPP were pending, the Trump-era EPA promulgated a new regulation repealing the CPP and reinterpreting section 111(d) to define BSER in a far more limited fashion to require primarily heat rate improvements at fossil fuel-fired power plants (the Affordable Clean Energy rule) (ACE).86 The differences between the CPP and ACE were stark in terms of the volume of emission reductions the different regulatory approaches could have achieved. The CPP was intended to reduce GHG emissions from the power sector by 32% in 2030 compared to 2005 levels, whereas the ACE would have reduced carbon dioxide emissions by less than 1% from baseline emission projections by 2035. The CPP repeal and ACE were, in turn, challenged in court and subsequently struck down by the D.C. Circuit Court of Appeals in American Lung Ass’n v. EPA.87 Although the Biden administration signaled that it will not seek to implement the CPP, the Supreme Court nonetheless granted certiorari to review the D.C. Circuit’s decision and thus appears poised to definitively resolve the scope of agency authority under section 111(d). It is not surprising that the Biden administration elected not to implement the CPP as, over the extended period of regulatory and legal wrangling outlined above, changed facts on the It is unclear whether this applies narrowly to pollutants already being regulated under section 7412 or more broadly to source categories already regulated under section 7412. 83 One prerequisite for the invocation of section 111(d) for GHGs is that the EPA must have set new source performance standards for GHGs under section 111(b). This prerequisite is satisfied because the EPA promulgated new source performance standards for electric utility generating units. Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,510 (Oct. 23, 2015). 84 Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662 (Oct. 23, 2015). 85 W. Virginia v. E.P.A., 136 S. Ct. 1000, 194 L. Ed. 2d 17 (2016). 86 Repeal of the Clean Power Plan; Emission Guidelines for Greenhouse Gas Emissions from Existing Electric Utility Generating Units; Revisions to Emission Guidelines Implementing Regulations, 84 Fed. Reg. 32,520 (July 8, 2019). 87 985 F 3d 914 (D.C. Cir. 2021), cert. granted, W. Virginia v. Env’t Prot. Agency, 142 S. Ct. 420 (2021). 82

124  Research handbook on climate change mitigation law ground outpaced the CPP. The CPP was projected to reduce carbon dioxide emissions from the electric power sector by 2030 to a level approximately 32% below the level in 2005. Preliminary data indicates that carbon dioxide emissions from the electric power sector in 2019 were already 34% below the level in 2005. That this occurred in the absence of federal controls on GHG emissions from existing power plants evidences the extent to which, during this extended period of uncertainty occasioned by lack of consistent political will at the federal level, U.S. climate change mitigation has been driven by policies and developments outside formal federal regulation (although perhaps influenced by the specter of future formal federal regulation). Possibilities for expanded regulation, NAAQS and section 115 E Broader regulation of sources of GHGs at the federal level, including existing sources, may also be possible under sections 108 and 115 of the CAA. Under section 108, the EPA could develop national ambient air quality standards (NAAQS) for GHGs and require that SIPs include measures designed to meet the standard.88 One benefit of this approach is that it would be comprehensive and flexible. States would have broad authority to regulate myriad sources and flexibility in deciding how to regulate sources. One significant legal question about setting a NAAQS for GHGs under section 108 is whether courts would uphold the EPA’s interpretation of ‘air pollutant’ in section 108(a)(1) to include GHGs. In UARG, the Supreme Court made clear that the term ‘air pollutant’ may not permissibly be interpreted to include GHGs in some circumstances, as where doing so would be administratively unworkable, conflict with the structure of the CAA, run contrary to legislative intent by imposing onerous new regulation on small sources and/or radically expand the EPA’s regulatory authority. Control measures within a single air quality control region cannot reasonably be expected to discernibly influence ambient levels of GHGs in the atmosphere, a fact which could be used to argue that section 108 cannot reasonably be interpreted to apply to GHG emissions. The EPA could also seek to expand the regulation of GHG emissions under the CAA by invoking its authority under section 115 of the CAA. As with section 108, section 115 would be comprehensive in terms of coverage and allow for flexibility. Under section 115, if the EPA has reason to believe that any air pollutant or pollutants emitted in the United States cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare in a foreign country (foreign endangerment finding) and it determines that foreign country has given the United States essentially the same rights with respect to the prevention or control of air pollution occurring in that country as is given that country by this section (reciprocity determination), the EPA must require that the state from which the emissions originate revise its State Implementation Plan to prevent or eliminate the endangerment.89 Section 115 has only been invoked on one prior occasion; there is little experience applying this provision of the CAA.90 Significant legal questions for courts reviewing the EPA’s assertion of section 115 authority would include whether the term ‘air pollutant’ in section 115 can reasonably be interpreted to encompass GHGs and how to evaluate the EPA’s reciprocity determination.

42 USCA § 7408 (West 2021). 42 USCA § 7415 (West 2021). 90 For an excellent analysis of how section 115 might be applied to GHG emissions, see Michael Burger (ed.) Combating Climate Change with Section 115 of the Clean Air Act (Edward Elgar Publishing 2020). 88 89

Climate change mitigation law and policy in the U.S. and Canada  125 F Clean Air Act conclusion At the time of writing, regulation of GHG emissions under the CAA is sector-specific and largely limited in its application to new or modified sources. Existing sources, including fossil-fuel power plants (which account for roughly one-third of U.S. carbon dioxide emissions), are not subject to GHG emission controls. The regulation of GHGs under the CAA could be enhanced by increasing the stringency of regulations promulgated under provisions of the CAA already being used to regulate GHGs (for example, strengthening fuel economy standards under section 202), extending the regulation of GHGs under those CAA provisions to new categories of sources (for example, promulgating NSPS for additional categories of new sources), and expanding the scope of GHG regulation by invoking authority under other provisions of the CAA, including possibly section 111(d), section 108 and/or section 115. The latter possibilities could potentially yield the most emission reductions by bringing a broader range of sources, including, importantly, existing sources, within the CAA’s coverage. But there is significant legal uncertainty about whether courts would uphold interpretations of the CAA extending it under those provisions. In evaluating the role of the CAA in U.S. climate change mitigation policy, it is important to note that the CAA contributes to climate change mitigation policy in ways beyond direct limits on GHG emissions. The Greenhouse Gas Reporting Program establishes mandatory GHG reporting requirements for some facilities and suppliers, which helps to inform climate change mitigation policy.91 Congress amended the CAA’s provisions oriented toward reducing the emission of ozone-depleting substances in December 2020 to require reductions in a potent GHG, hydrofluorocarbon (HFC), that had been used as a substitute for ozone-depleting substances.92 And the CAA can and does contribute to U.S. climate change mitigation through the regulation of non-GHG co-pollutants from sources that also emit GHGs. Regulation of non-GHG co-pollutants can result in incidental decreases in GHG emissions and increase the costs of emission controls for carbon-intensive industries, thereby reducing their market competitiveness as compared to less carbon-intensive alternatives. At this juncture, it is impossible to predict if the CAA will continue to serve as the core of federal climate change mitigation. The prospects for passage of a federal climate change framework law in the U.S. remain highly uncertain. One of the primary attributes to recommend the CAA as a tool for federal climate change mitigation policy is that the law already exists, thereby requiring some mitigation to occur despite a lack of political will to adopt new federal mitigation law. Experience under the CAA to date, however, underscores the extent to which a lack of consistent political will in the executive to implement the CAA can complicate, delay, and weaken the regulation of GHGs under the CAA. National Environmental Policy Act and federal securities laws G Although the CAA is the chief statute of general application that can directly compel those emitting GHGs to reduce their emissions, numerous other statutes of general application intersect with and have the potential to influence GHG emissions in less direct ways. Of these, NEPA and the securities laws stand out for their potential to support mitigation.93

40 CFR Part 98 (2021). Consolidated Appropriations Act, 2021, Pub. L. No. 116-260 § 103, 134 Stat. 1182, 1243 (2020). 93 Local zoning and building codes will be discussed below as subnational mitigation policies. 91 92

126  Research handbook on climate change mitigation law NEPA requires that federal agencies prepare an environmental impact statement for any major federal action that will significantly affect the quality of the human environment.94 Agencies must examine the environmental consequences of proposed actions, analyze the environmental impacts of a range of reasonable alternatives, and discuss mitigation measures to reduce environmental impacts.95 NEPA’s commands are procedural—it does not prevent the agency from moving forward with actions with significant environmental impacts. But if an agency fails to comply with NEPA’s procedural requirements, courts may enjoin agency action until the agency does so. In practice, documenting environmental impacts, alternatives, and the potential to reduce environmental impacts through mitigation can persuade agencies to abandon or modify environmentally harmful projects. Numerous court decisions confirm that, although the text of NEPA does not specifically reference climate change, a proposed action’s contribution to climate change (and/or climate change’s impact on a proposed action) must be considered as part of the NEPA process in some circumstances.96 Environmental reviews conducted under NEPA now regularly include consideration of climate change impacts, although uncertainty and dispute remain about the circumstances in which NEPA compels evaluation of a project’s contribution to climate change and the type of review required. The contours of required review of climate change impacts will continue to develop through the issuance of agency regulations, guidance, and court decisions. The Council on Environmental Quality (CEQ) publishes regulations that govern NEPA implementation by federal agencies; individual agencies often, in turn, develop regulations specific to the implementation of NEPA for the statutes that they administer. Under President Obama, CEQ issued guidance to agencies about how to incorporate climate change into NEPA review, recommending that, where possible, agencies quantify an action’s direct and indirect GHG emissions and identifying methods for agencies to analyze reasonably foreseeable direct, indirect and cumulative GHG emissions and climate effects.97 Under President Trump, CEQ rescinded the Obama-era guidance and proposed its own guidance that could be read to encourage less frequent and robust agency analysis of climate change impacts, emphasizing that ‘the rule of reason permits agencies to use their expertise and experience to decide how and to what degree to analyze particular effects’ and that agencies ‘need not give greater consideration to potential effects from GHG emissions than to other potential effects on the human environment’.98 The Trump-era CEQ also promulgated new regulations to govern NEPA’s application that may limit the circumstances in which agencies must consider impacts relating to climate change (in particular, by removing the express requirement to consider indirect

42 USCA §4322 (West 2021). 40 CFR § 1502.14 (2021). 96 For example, see: Center for Biological Diversity v. Nat’l Highway Traffic Safety Admin., 538 F 3d 1172 (9th Cir. 2008). 97 Memorandum from the Council of Environmental Quality on Final Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews (Aug. 1, 2016), https://​ceq​.doe​.gov/​docs/​ceq​ -regulations​-and​-guidance/​nepa​_final​_ghg​_guidance​.pdf. 98 CEQ, Draft National Environmental Policy Act Guidance on Consideration of Greenhouse Gas Emission, 84 Fed. Reg. 30,097, 30,098 (June 26, 2019). 94 95

Climate change mitigation law and policy in the U.S. and Canada  127 and cumulative effects).99 Barring legislative amendment of NEPA’s text, however, court enforcement of the statutory text will—even if interpreted in a miserly way by an administration hostile to mitigation efforts—continue to require some consideration of climate change impacts in some contexts. And the Biden administration is working to strengthen NEPA’s application to climate change. One area where NEPA could contribute significantly to the development of U.S. climate change mitigation policy would be to temper fossil fuel supply by slowing down or preventing approvals for fossil fuel extraction and the construction of new fuel infrastructure. Under President Trump, the federal government sought to maximize fossil fuel production and supply, including by limiting environmental review to expedite permitting.100 Going forward, information developed through NEPA may support agency decisions to withhold necessary federal authorization for fossil fuel supply approvals and projects on environmental grounds. The laws that govern the issuance of federal approvals for myriad aspects of fossil fuel supply—the leasing of coal, oil, and gas reserves on public lands, the construction of natural gas infrastructure (including interstate pipelines and liquefied natural gas export terminals), and the issuance of permits needed for the construction of oil pipelines in some contexts—afford agencies discretion and require the consideration of environmental effects.101 Credibly accounting for the emissions associated with actions that increase fossil fuel supply under NEPA can provide important information about climate change impacts for agencies to consider. Although agency consideration of the emissions implications of fossil fuel supply approvals may be most effective when agencies undertake programmatic NEPA review to understand the cumulative effects of multiple approvals, the federal government has never conducted a programmatic analysis to evaluate the cumulative effects of its leasing decisions or transport approvals on fossil fuel use and GHG emissions. The result is a patchwork of project-level NEPA documentation that provides only pieces of insight on how federal decisions about fossil fuel supply infrastructure affect fossil fuel use and GHG emissions.102

Further legal development of NEPA’s requirements will be necessary to achieve effective evaluation of the climate change impacts of federal actions affecting fossil fuel supply; doing so successfully could significantly shape U.S. climate change mitigation policy.

99 Update to the Regulations Implementing the Procedural Provisions of the National Environmental Policy Act, 85 Fed. Reg. 43,304 (Jul. 16, 2020) (codified at 40 CFR pt. 1500, 1501, 1502, 1503, 1504, 1505, 1506, 1507, 1508, 1515, 1516, 1517, and 1518). The new regulations were challenged in court with cases pending at the time of writing. 100 For example, see: Executive Order No. 13868, Promoting Energy Infrastructure and Economic Growth, 84 Fed. Reg. 15,495 (2019); Clean Water Act Section 401 Certification Rule, 85 Fed. Reg. 42,210 (Jul. 13, 2020) (codified at 40 CFR Part 121); Executive Order No. 13867 Issuance of Permits with Respect to Facilities and Land Transportation Crossings at the International Boundaries of the United States (2019) (‘Any decision to issue, deny, or amend a permit under this section shall be made solely by the President.’). 101 Michael Burger and Jessica Wentz, ‘Evaluating the Effects of Fossil Fuel Supply Projects on Greenhouse Gas Emissions and Climate Change under NEPA’ (2020) 44 William & Mary Environmental Law and Policy Review 423, 434 (‘The statutes authorizing these agencies to approve this infrastructure also require consideration of environmental impacts and the responsible agencies have broad discretion to deny approvals based on environmental impacts or other issues pertaining to the public interest.’). 102 Ibid., at 427.

128  Research handbook on climate change mitigation law Federal securities laws constitute another set of laws of general application with the potential to support mitigation. By mandating disclosure about the risks and opportunities that climate change poses to reporting companies, securities laws can prompt voluntary mitigation efforts. Regulation S-K, promulgated under the federal securities laws,103 requires public companies to report information to educate and inform investors. For example, Item 101 (Description of Business) requires that reporting companies disclose the material effects of complying with regulations concerning the environment and the material estimated capital expenditures for environmental control facilities;104 Item 103 (Legal Proceedings) requires that reporting companies disclose material pending legal proceedings (including judicial or administrative proceedings relating to discharges to the environment and environmental protection);105 Item 105 (Risk Factors) requires that reporting companies disclose the most significant factors that make an investment speculative or risky;106 and Item 303 (Management’s Discussion and Analysis) requires that reporting companies disclose known trends, events, demands, commitments, and uncertainties reasonably likely to have a material effect on their financial condition or operating performance.107 In 2010, the SEC issued an interpretive release providing general guidance about how disclosure requirements under federal securities laws and regulations apply to climate change matters.108 The 2010 interpretive release confirmed that the above-described items of Regulation S-K could require disclosure relating to climate change. Commenting on legislative, regulatory, business and market impacts related to climate change, the SEC observed that some companies might be directly affected by new GHG laws or regulations imposing compliance obligations upon them (for example, requiring them to reduce emissions or buy emissions credits) and that other companies could be indirectly impacted by resulting changes in the prices for goods or services.109 The SEC also observed that the physical effects of climate change ‘could have a material effect on a registrant’s business and operations’ by ‘impact[ing] a registrant’s personnel, physical assets, supply chain and distribution chain’.110 Disclosure by companies of the risks and opportunities of climate change can promote mitigation in numerous ways, including by informing investors who wish to divest from carbon-intensive industries and companies, ‘influenc[ing] companies to address climate change risks in their internal decision-making processes’, and ‘fostering investments in new companies that are innovating in clean energy’.111 Investors may choose not to purchase shares in companies with high emissions (as a matter of principle or because those companies are subject to regulatory risk), thereby reducing the share price of high emitters and encouraging them to reduce emissions. Investors may likewise shun companies with high risks from the impacts of climate change, including risks resulting from a company’s reliance on

Including the Securities Exchange Act of 1934, as amended, 15 USCA. §§ 78a et seq. (West 2021). 17 CFR § 229.101(c)(1)(xii) (2021). 105 17 CFR § 229.103 (2021). 106 17 CFR § 229.105 (2021). 107 17 CFR §229 (2021). 108 Commission Guidance Regarding Disclosure Related to Climate Change, Release No. 33-9106 (Feb. 2, 2010) [75 FR 6290 (Feb. 8, 2010)]. 109 Ibid., at 5–6. 110 Ibid., at 6. 111 Hari M. Osofsky, Jacqueline Peel, Brett McDonnell and Anita Foerster, ‘Energy Re-Investment’ (2019) 94 Indiana Law Journal 595, 597–98. 103 104

Climate change mitigation law and policy in the U.S. and Canada  129 carbon-intensive goods or services, thereby encouraging those companies to find lower carbon alternatives. There is clear and growing interest among investors for reliable climate change disclosure and robust development of voluntary protocols for climate change disclosure.112 Regrettably, the SEC has done little to refine and focus the broad guidance that it issued in 2010 through the issuance of more detailed guidance or through enforcement actions and ‘corporate disclosure obligations are not necessarily supporting changed corporate decision-making, nor is the disclosure of climate risks within SEC filings of a sufficient quality to provide useful information to investors to drive divestment decisions’.113 Under President Trump, the SEC missed opportunities to speak directly to climate change disclosure114 and took actions to frustrate efforts to use securities disclosure and associated divestment to promote climate change mitigation.115 Under the Biden administration, the SEC is seeking to more robustly apply the federal securities laws to require disclosure related to climate change.116 4.2

Canadian Federal Legislative Framework

Prior to the Pan-Canadian Framework discussed above, the main piece of national legislation dealing with greenhouse gases was the 1999 Canadian Environmental Protection Act (CEPA),117 which focused on controlling pollution and generally protecting the environment. CEPA enables the federal government to negotiate equivalency agreements with the provinces regarding their respective GHG regulatory systems, and allows provincial regulation to replace federal mechanisms in the event that they exceed environmental performance of federal standards. The CEPA gives both Environment and Climate Change Canada and Transport Canada mandates to regulate emissions from a number of sources in their remits, notably vehicles and the freight and trucking industry, which represent approximately 10% of national emissions.118 In part because of the internal political diversity among provinces, but also because of Canada’s close economic integration with the U.S., federal governments in the past have found it convenient to simply link or match national mitigation mechanisms to U.S. regulations, which is easily justified to the provinces because of the obvious economic importance

Madison Condon, ‘Market Myopia’s Climate Bubble’ (2022) 1 Utah Law Review 63. Osofsky et al. (n. 111) 624. 114 See generally: ‘Joint Statement of Commissioners Allison Herren Lee and Caroline A. Crenshaw on Amendments to Regulation S-K: Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information’ (Nov. 19, 2020); ‘Statement of Commissioner Caroline A. Crenshaw on the “Modernization” of Regulation S-K Items 101, 103, and 105’ (Aug. 26, 2020); ‘Statement of Commissioner Allison Herren Lee, Regulation S-K and ESG Disclosures: An Unsustainable Silence’ (Aug. 26, 2020). 115 For example: Financial Factors in Selecting Plan Investments, 85 Fed. Reg. 72846 (Nov. 13, 2020) (to be codified at 29 CFR Parts 2509 and 2550); Fair Access to Financial Services, 85 Fed. Reg. 75261 (proposed Nov. 25, 2020) (to be codified at 12 C.F.R. Part 55). 116 In April 2022, the SEC proposed new disclosure rules relating to climate change. The Enhancement and Standardization of Climate-Related Disclosures for Investors, 87 FR 21334 (Apr. 11, 2022). However, as with the CAA and NEPA, a lack of consistent political will at the executive level has complicated and slowed efforts to deploy the federal securities laws in support of mitigation. 117 Canadian Environmental Protection Act, 1999, S.C. 1999, c. 33. 118 Environment and Climate Change Canada, ‘Greenhouse Gas Emissions: Canadian Environmental Sustainability Indicators’ (n. 32). 112 113

130  Research handbook on climate change mitigation law of the U.S. as an export market for virtually every Canadian province and territory.119 Given the cross-border integration of the automobile industries and markets, Canadian governments since the 1980s have done this especially to align vehicular emission standards with U.S. standards, including recognizing emission certificates issued by the U.S. Environmental Protection Agency. This has been done through regulations promulgated under the CEPA, most importantly the Passenger Automobile and Light Truck Greenhouse Gas Regulations,120 amended in 2014, and the Heavy-Duty Vehicle and Engine Greenhouse Gas Emission Regulations121 and its standards published in 2017. Another regulatory regime arising from CEPA is that targeting coal-fired power plant emissions, controlled through the 2012 Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations,122 which impose performance standards on any new plants as well as on any existing plants that reach the end of their useful lives (generally 50 years of operation). These standards were updated in 2018 with amendments that required all coal-fired electricity generating units to achieve a performance standard of 420 Mt of CO2/GWh by 2030 at the latest.123 Contaminants in fossil fuels are controlled through the Gasoline Regulations124 which set standards for the content of lead, phosphorous, sulphur and benzene contained in gasoline. The carbon content of liquid fuels is regulated by the Renewable Fuels Regulation125 and at the time of writing, work is ongoing at Environment and Climate Change Canada to develop a regulatory framework for a clean fuel standard.126 For the most part, these regulatory regimes focus on setting quality standards, and are not necessarily designed to achieve emissions reductions. The primary legislative mechanism to achieve nationwide reductions is the 2016 Greenhouse Gas Pollution Pricing Act mentioned earlier. The GGPPA represents a significant departure from the largely voluntary and subsidy-based emissions reduction schemes that Canadian governments have imagined and occasionally attempted since Kyoto. Its core component is a pricing system on carbon that sets a floor for carbon pricing throughout Canada, and includes a carbon levy imposed on producers, distributors, and importers of fossil fuels, as well as a CO2e127 output-based pricing system for specific industrial facilities that surpass a specified tonnage threshold.128 When a province fails to meet the benchmark price, the GGPPA’s ‘backstop’ enforcement mechanism can be triggered, which empowers the federal cabinet to list the province as being subject to that benchmark price.129 Once listed, the federal government retains the discretion

Healy, van Nijnatten and López-Vallejo (n. 2) 135. Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations (SOR/2010-201). 121 Heavy-Duty Vehicle and Engine Greenhouse Gas Emission Regulations (SOR/2013-24). 122 Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations (SOR/2012-167). 123 Regulations Amending the Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations, SOR/2018-263. 124 Gasoline Regulations (SOR/90-247). 125 Renewable Fuels Regulations (SOR/2010-189). 126 Environment and Climate Change Canada, ‘Clean Fuel Standard Regulatory Framework’ (2017) https://​www​.canada​.ca/​en/​environment​-climate​-change/​services/​canadian​-environmental​-protection​-act​ -registry/​publications/​clean​-fuel​-standard​-regulatory​-framework​.html accessed 26 April 2021. 127 CO2e is a measure that refers to a carbon dioxide ‘equivalent’. 128 Greenhouse Gas Pollution Pricing Act SC 2018, c. 12, s. 186, ss 17, 20, 21. 129 Ibid., ss 3, 166(2). 119 120

Climate change mitigation law and policy in the U.S. and Canada  131 to grant net revenues generated by the benchmark mechanism to a province directly.130 To date, most provinces and territories have responded by either imposing a provincial carbon levy of one sort or another, or have been listed since the GGPPA was promulgated, including Ontario, New Brunswick, Manitoba, Saskatchewan, Yukon, Nunavut and Alberta.131 Only two provinces to date, Quebec and Nova Scotia, will be meeting the GGPPA price through cap-and-trade mechanisms.

5

SUBNATIONAL LEGAL FRAMEWORKS

As mentioned above, as federal democracies, both Canada and the U.S. reserve some legislative and enforcement authority for climate mitigation at the subnational levels. In contrast to the U.S., however, Canada’s federal constitutional order gives considerable political and legal authority to its subnational governments to pursue climate change policies of their own. Canada’s large size and highly varied geographical and resource make-up creates very different political interests among provinces vis-à-vis climate mitigation. There are wide variations in GHG emissions among provinces due to variable population densities, sources of energy, and economic structures. Provinces have very different energy uses, with different consumption patterns. The highest emitters traditionally have been Alberta and Ontario, emitting 275.8 and 163.2 Mt CO2e respectively in 2019, hardly comparable to smaller and more rural provinces like New Brunswick and Prince Edward Island, which emitted 12.4 and 1.8 Mt CO2e respectively the same year. One can also consider how the heating needs for communities in the relatively temperate climate of British Columbia’s West Coast, 80% of whose electricity is supplied by hydroelectric power, is far different from those of communities in the Far North in the Arctic that are not connected to the North American electric grid and are almost entirely dependent on external fossil fuel sources.132 Except when specifically linked to federal regulatory regimes, provinces have taken different approaches to climate change over the years. In major fossil fuel producers like Alberta and Saskatchewan, which are heavily dependent on the oil and gas sector for employment, both the government and society have been generally resistant to initiatives to transition away from fossil fuels, something that figures heavily in provincial and federal politics and electoral cycles.133 Other provinces that are less dependent on fossil fuel production for their economies have generally been more open to regulating emissions. Some provinces have even gone further than the federal government. British Columbia, for instance, was the first jurisdiction in North America to legislate a revenue-neutral carbon tax.134 Ontario and Quebec both created

Ibid., ss 17–35, 40, 48, 165. Alberta initially avoided being listed because of its Climate Leadership Act,⁠ but this changed once the Act was repealed in 2019.⁠ Climate Leadership Act, SA 2016, c. C-16.9; An Act to Repeal the Carbon Tax, SA 2019, c. 1. 132 Karunathilake and others (n. 5) 273. 133 Brendan Boyd, ‘A Province under Pressure: Climate Change Policy in Alberta’ (2019) 52 Canadian Journal of Political Science 183. This has not always been the case, however. Consider for instance Alberta’s passage of the Climate Change and Emissions Management Amendment Act in 2007 under the NDP government of Rachel Notley. Climate Change and Emissions Management Amendment Act, 2007, SA 2007, c. 4. 134 Harrison, ‘A Tale of Two Taxes: The Fate of Enviornmental Tax Reform in Canada’ (n. 37). 130 131

132  Research handbook on climate change mitigation law cap-and-trade schemes and joined the state of California in the Western Climate Initiative in 2008, later joined by Nova Scotia in 2019. After a change of government, though, the newly elected Conservative government under Doug Ford dismantled its scheme and withdrew Ontario from the WCI by passing the Cap and Trade Cancellation Act on October 11, 2018.135 It is because of this provincial autonomy to develop separate regulatory frameworks that climate mitigation in Canada is a kaleidoscope of regulatory frameworks at the provincial level, not only with regard to mechanisms to reduce emissions but also for other mitigation schemes, such as the promotion of renewable energy projects. This provincial differentiation means that renewable energy projects around the country face different monitoring and oversight regimes, enjoy different incentive schemes, and must contract with different provincial operators operating under different utilities legislation.136 Provinces also vary in their use of subsidies for things like low- or zero-emission electric vehicles, as offered in Quebec and British Columbia, which have been controversial among economists for their variable contributions to reducing emissions, especially in places where electricity grids are supplied through non-renewable power sources.137 While federal and provincial governments are the primary focus for climate mitigation policy, local and municipal governments across Canada have also adopted climate mitigation policies in a variety of ways. The inclusion of climate change mitigation policies in municipality planning has been credited to the work of the Federation of Canadian Municipalities, which administers the Partners for Climate Change Protection Program, first introduced in 1994, which has provided technical expertise and financial support to municipalities for their policy development work. In one study of 63 municipal climate mitigation policies across Canada, 80% were found to contain policies related to communication and raising awareness among citizens about reducing emissions, as well as promotions of energy efficiency and renewable energy, along with policies for managing water and waste. This reflected the majority of focus of such policies on consumer behaviour, and relatively few (38%) contained aspects related to food and agriculture, and few had robust provisions for monitoring and evaluation, with even fewer publishing their findings.138 Powers, responsibilities, and access to operating revenue are all delegated to local authorities by provincial statutes. They are not recognized as a separate order of government under constitutional law, and section 92(8) of the Constitution Act of 1867 gives exclusive powers to the provinces to make laws relating to ‘municipal institutions in the province’. As such, the shape and form of local government systems throughout the country varies from province to province and in federally administered territories. Only one province, Nova Scotia, has made climate change planning obligatory for municipalities, while a few others, like British Colombia, require municipalities to include GHG reduction targets in their municipal planning. The primary source of funding for municipalities is usually property taxes, with one-fifth Cap and Trade Cancellation Act, 2018, SO 2018, c. 13. Electrical energy projects that cross provincial borders, though, become subject to the federal National Energy Board Act, which governs inter-provincial electricity lines. National Energy Board Act, RSC 1985, c. N-7. 137 Zachary Thorne and Larry Hughes, ‘Evaluating the Effectiveness of Electric Vehicle Subsidies in Canada’ (2019) 155 Procedia Computer Science 519, 525; Germain Belzile and Mark Milke, ‘Are Electric Vehicle Subsidies Efficient?’ (Montreal Economic Institute 2017) 4. 138 Dave Guyadeen, Jason Thistlehwaite and Daniel Henstra, ‘Evaluating the Quality of Municipal Climate Change Plans in Canada’ (2019) 152 Climatic Change 121, 132. 135 136

Climate change mitigation law and policy in the U.S. and Canada  133 of their total revenue coming from government transfers from higher (provincial, territorial, federal) levels. There is no federal national urban policy, although the federal government can get involved at the municipal level through transfer payments to them that are administered and distributed by provinces and territories, as well as through financial schemes, like the Gas Tax Fund (GTF) to provide long-term funding to support municipal infrastructure for clean air and water, and lower GHG emissions.139 Whereas in Canada the subnational level is both a source of political complication for federal climate mitigation policy as well as the constitutional domain in which any concrete measures and efforts must be played out, in the U.S. it is the lack of political will at the federal level to adopt climate change law that has heightened the relative importance of subnational (regional, state, and local) mitigation measures. Some states have passed comprehensive mitigation laws to reduce state-wide GHG emissions. In 2006, under the Global Warming Solutions Act, California committed itself to reducing its statewide GHG emissions to 1990 levels by 2020,140 a goal which it met and subsequently strengthened. California is now focused on a goal of reducing statewide GHG emissions to 40% below 1990 levels by 2030. Key mitigation measures being implemented pursuant to the California Global Warming Solutions Act include a cap-and-trade program that sets a statewide limit on large sources responsible for 85% of California’s GHG emissions (including electricity generators and large industrial facilities) and a low carbon fuel standard designed to reduce the carbon intensity of fuels sold in-state by setting an average carbon content for fuels that declines annually. More recently, in 2019, New York passed the Climate Leadership and Community Protection Act, committing the state to reduce its economy-wide GHG emissions by 40% by 2030 and no less than 85% by 2050 from 1990 levels.141 The New York State Climate Action Council is preparing a Scoping Plan to detail how New York will achieve these reductions. At least a dozen states have announced net-zero carbon emission or 100% renewable generation goals. And many states without climate change mitigation laws that establish overall targets for state-wide GHG emissions have adopted less comprehensive, but nonetheless significant, mitigation policies like renewable portfolio standards, which require that a specified percentage of the electricity that utilities sell must come from renewable resources. Some states are working to coordinate their mitigation efforts with other states and even internationally. Eleven states in the north-east are members of the Regional Greenhouse Gas Initiative (RGGI). The RGGI creates a regional cap on carbon dioxide emissions from the power sector in participating states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia). The cap is scheduled to be lowered by 30% over the period 2020 to 2030. And California’s cap-and-trade program is linked with that of the Canadian province of Quebec. The linking of the two programs allows for trading of emission allowances and offset credits across the programs. Many local governments have likewise adopted measures to mitigate climate change. There are myriad actions local governments can take to reduce emissions, from adopting anti-idling

Government of Canada, ‘The Federal Gas Tax Fund’ (June 12, 2020) https://​www​.infrastructure​ .gc​.ca/​plan/​gtf​-fte​-eng​.html accessed May 1, 2021. 140 California Global Warming Solutions Act of 2006, California Health and Safety Code §§ 38500-38599 (West 2020). 141 NY Env’t Conserv. Law § 75-0107. 139

134  Research handbook on climate change mitigation law ordinances to installing methane-to-energy systems at municipal landfills.142 Of the mitigation interventions within the authority of local governments, some of the most important relate to shaping the built environment to reduce vehicle miles traveled, encourage energy efficiency, and facilitate electrification.143 Zoning codes and planning approaches that ensure access to public transportation hubs, support mixed-use development and walkable neighborhoods, promote safe biking, and discourage driving (for example, by imposing congestion fees or reducing parking requirements for new developments) can reduce vehicle miles traveled, and facilitating the development of charging infrastructure can support the transition to electric vehicles. Building codes can also be used to mandate energy efficiency and reduce building emissions and numerous local governments now have climate-friendly building codes. New York City’s Climate Mobilization Act, to provide one example, requires buildings larger than 25,000 square feet to reduce building emissions by 40% by 2030 and by 80% by 2050,144 which may help to prompt a transition from fossil fuel-fired boilers to electric options such as heat pumps. Despite the global nature of climate change, policymakers increasingly recognize the important role of local governments in developing and implementing mitigation policy, in part because of their unique capacity to influence the emissions-producing behaviors of their residents. Political hostility to the adoption of climate change mitigation policy at the federal level constrains subnational climate action, however. Some states oppose government mitigation outright and have declined to adopt laws designed to mitigate climate change, obstructing federal mitigation efforts (often by filing lawsuits challenging the application of laws of general application to climate change), and/or obstructing local mitigation efforts (by pre-empting and prohibiting local measures designed to mitigate climate change). Uneven political support for climate mitigation at the subnational level also creates holes or gaps where jurisdictions lack state or local mitigation policies, thereby limiting the general coverage of mitigation policy at the subnational level. Such holes can also frustrate mitigation efforts made in other subnational jurisdictions by creating leakage opportunities for emitters when emissions disallowed in one community can be merely displaced to another. Federalism requirements and federal hostility to climate change mitigation policy also constrain subnational climate change mitigation by impeding action even by subnational jurisdictions that are motivated to adopt and implement strong mitigation policies of their own. The U.S. Constitution prohibits states from entering into certain types of agreements with one another and with other countries (Compact Clause) and prohibits states from discriminating against or unduly interfering with interstate commerce (dormant Commerce Clause). State laws are also subject to pre-emption by federal law (Supremacy Clause).145 Together, these aspects of constitutional federalism limit the legal authority and purview of subnational actors to adopt climate change mitigation policy. For an overview of local mitigation interventions, see Katherine A. Trisolini, ‘All Hands on Deck: Local Governments and the Potential for Bidirectional Climate Change Regulation’ (2010) 62 Stan L Rev 669. 143 For a comprehensive analysis of the role of local governments in responding to climate change, in particular using land use authority, see John R. Nolon, Choosing to Succeed: Land Use Law & Climate Control (Environmental Law Institute 2021). 144 NYC, Loc L 97, § 28-320 (2019). 145 Daniel A. Farber, ‘Climate Change, Federalism, and the Constitution’ (2008) 50 Arizona Law Review 879, 892–910. 142

Climate change mitigation law and policy in the U.S. and Canada  135 For example, the Compact Clause prevents subnational jurisdictions from giving regulatory authority and enforcement powers to multi-state regulatory authorities.146 Regional programs can be more effective than state programs because they create larger economies of scale, provide more opportunities for trading, and regional requirements offer more consistency than state requirements. However, states attempting to coordinate mitigation policy regionally must take care to structure their coordination in ways that avoid violating the Compact Clause. The RGGI develops a model rule that must then be adopted under the law of each member state, and states are also free to withdraw with 30 days’ notice. Federalism doctrines similarly constrain subnational efforts to coordinate with other governments internationally. This restriction is not absolute, however, as demonstrated by California’s linkage of its cap-and-trade program with Quebec, which was unsuccessfully challenged by the U.S. government on the grounds that it violated the Compact Clause147 and was pre-empted under the Foreign Affairs Doctrine.148 In upholding the linkage of the cap-and-trade programs, the court emphasized that California retained policymaking, regulatory, and enforcement authority and that there was no enforceable prohibition on unilateral modification or termination. The dormant Commerce Clause also imposes a constraint on subnational climate mitigation policy. The Constitution grants the federal government the authority to regulate interstate commerce;149 and courts have interpreted this through the dormant Commerce Clause doctrine to impose limits on actions that subnational governments can take with respect to interstate commerce. The key proscriptions under the dormant Commerce Clause that limit the power of subnational governments to adopt climate change mitigation policy are that it prohibits subnational governments from discriminating against interstate commerce,150 unduly interfering with or burdening interstate commerce,151 and adopting extraterritorial regulation.152 One scholar advises that in order to avoid running afoul of the dormant Commerce Clause, states adopting climate mitigation policy ‘should be careful that their regulations as a matter of form apply only to in-state entities and transactions, and that impacts on out-of-state activities appear to be merely side-effects encountered in achieving legitimate local regulatory goals’.153 California’s Low Carbon Fuel Standard was initially struck down by a district court that held

146 U.S. Constitution Article I, § 10, cl. 3 (‘No State shall, without the Consent of Congress … enter into any Agreement or Compact with another State, or with a foreign Power’). 147 United States v. California, 444 F Supp 3d 1181, 1197 (ED Cal 2020). 148 United States v. California, No. 219CV02142WBSEFB, 2020 WL 4043034, at *5–12 (ED Cal. July 17, 2020). 149 U.S. Const. art. I, § 8, cl. 3 (‘The Congress shall have Power … to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes’). 150 City of Philadelphia v. New Jersey, 437 US 617, 624 (1978). 151 Pike v. Bruce Church, Inc., 397 US 137, 142 (1970) (‘Where the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.’). 152 Healy v. Beer Inst., Inc., 491 US 324, 336 (1989): [A] statute that directly controls commerce occurring wholly outside the boundaries of a State exceeds the inherent limits of the enacting State’s authority and is invalid regardless of whether the statute’s extraterritorial reach was intended by the legislature. The critical inquiry is whether the practical effect of the regulation is to control conduct beyond the boundaries of the State. 153 Farber (n. 145) 900.

136  Research handbook on climate change mitigation law that it impermissibly discriminated against interstate commerce, although that decision was reversed on appeal.154 Despite these constraints and limitations, subnational laws constitute a significant element of U.S. climate mitigation policy. The relative significance of subnational mitigation policy has been heightened by decades of halting federal action and, at times, federal hostility to climate mitigation policy. Motivated states and local governments have pushed ahead, to some extent filling the void created by a lack of comprehensive federal regulation of GHG emissions. In the process, they have demonstrated that regulating at the state and local levels offers some unique and essential benefits, such as the ability to use local land use to influence emitting behaviors, and their engagement in policy experimentation will inform the development of climate policy going forward. Ultimately, however, subnational mitigation policy on its own is likely insufficient to achieve sufficient reductions in U.S. GHG emissions. Due to jurisdictional holes mentioned earlier, subnational climate change mitigation policy is uneven and cannot effectively prevent leakage, and subnational jurisdictions lack the power to regulate important sources of emissions.

6 CONCLUSION Comparing the dysfunction of Canadian and U.S. efforts to adopt and implement effective climate change mitigation policy brings to the surface common and shared obstacles presented by economic prerogatives. In both countries, concerns about the economic costs of adopting mitigation policy measures and the outsized influence of fossil fuel interests have effectively stunted the development of robust climate change mitigation policy, albeit through social and political mechanisms that are unique to each. In the U.S., economic concerns and special interest group influence, in particular successful efforts to sow doubt about climate change science, have stunted public and political will to address climate change, thereby preventing the alignment of congressional and presidential will to adopt federal climate change mitigation law; slowing and weakening the application of existing statutes of general application to climate mitigation; and limiting the number of subnational jurisdictions that have adopted mitigation measures and constrained the scope of those measures. In Canada, the primary governance obstacle has been the economic and political lure on federal politicians to maintain support for its oil production economy while avoiding the political costs and fallout of dismantling Canada’s economic dependence on the sector. Their need to strike complex political balances of interests, spread across Canada’s federal and geographic landscape, has resulted in a complex plurality of national and subnational mitigation regimes that has made it very difficult to effectively coordinate climate mitigation responses at the national level. For the U.S., it is beginning to seem that a successful path forward will not be to insist that the dire impacts of climate change, fairness, or international obligations compel the prioritization of climate change mitigation over economic considerations. Instead, success will have to come through the use of myriad policy levers to change the economic equation itself, or at least the perception thereof. If climate mitigation becomes understood as a policy of relative economic promise compared to fossil fuel-fired business-as-usual, that may remove

Rocky Mountain Farmers Union v. Corey, 730 F.3d 1070 (9th Cir. 2013).

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Climate change mitigation law and policy in the U.S. and Canada  137 the central political obstacle to the adoption of federal mitigation law. It is hopeful to note that such a transformation of the perceived economics of climate change mitigation appears to be under way, aided by myriad policies that have increased the viability and reduced the cost of renewable energy, increased the costs and reduced the viability of the most carbon-intensive sources of energy generation, facilitated investor scrutiny of fossil fuel interests, and made increasingly believable promises of green technologies (such as electric vehicles), green jobs and a green economy. This gradual reorientation in the economics of U.S. mitigation policy, achieved through pressure on a number of fronts, may be the most significant legacy of the patchwork mitigation measures cobbled together to date, even more significant than the actual volume of emissions directly avoided through those policies. Whether and how Canada can navigate its primary economic obstacle to the adoption of strong mitigation policy, namely revenues from fossil fuel extraction and export, is somewhat less clear. While uncertainty surrounding the constitutionality of the GGPPA has now been relatively resolved by the Supreme Court, which has confirmed the constitutionality of at least a national baseline price on carbon and potentially future forms of federally directed regulatory coordination of provincial environmental policy regimes, on its own the GGPPA will not be enough to ensure that Canada achieves the mitigation targets to which it has committed itself internationally. At the time of writing, the Trudeau Liberals command a delicate minority government in the midst of a pandemic, which has left relatively little political space for the kind of drastic restructuring that will be necessary to achieve those targets. While such choices may be somewhat easier with the Biden administration south of the border setting a more ambitious pace and standard for change, the contradictions of Canadian mitigation policy are likely to continue as long as it remains tethered to its fossil fuel exporting economy, ultimately satisfying few and disappointing many on all sides of the debate.

6. Climate change mitigation law and policy in Central and South America Juliana Zuluaga Madrid

INTRODUCTION In 2020, most forecasts about the course of the world failed. From the macroeconomic projections of regions and continents to family economies; from the geopolitical trends and advancements in global social goals to the small-scale industries at the core of the system; from the public space and cultural rules to the private projects of millions of individuals, the COVID-19 pandemic left nothing unchanged. The environment was certainly not an exception, as the pandemic itself and the measures taken by governments (and society in general) to face it, interfered with the anthropogenic impacts to natural resources all over the world and also with the human efforts to control them, particularly in the field of climate change. Latin America and the Caribbean (LAC), as a region, was especially vulnerable to the effects of the pandemic.1 The developing economies could not resist extended lockdowns without collapsing and governments lacked economic resources to ensure a minimum level of income to all who needed it. On the health front, the challenge was enormous, with highly populated urban areas where a large percentage of the population lives below the poverty line, deficient health infrastructure in many places and limited access to health coverage, a catastrophe was only the natural outcome to expect.2 In this scenario, there are some existing and new challenges for climate change mitigation in the region. First, many of the countries have limited economic resources to invest in their mitigation strategies and tend to privilege investment in adaptation because their specific situation makes them particularly vulnerable to the negative effects of climate change (i.e. small island developing States), and therefore, many of the nationally determined contribution (NDC) unconditional commitments to decrease GHG emissions are not ambitious enough. There are conditional commitments that depend on the availability of international cooperation and funds but, in the new global economic scenario, these resources could be anything but guaranteed. Secondly, the national economies of many of the States in the region are closely tied to the financial resources from extractive industries,3 particularly fossil fuels, which may interfere with the energy transition processes that, according to experts, are needed to comply with the goals set in the Paris Agreement, especially in an economic recession.

See, generally, Henry Jiménez Guanipa and Marisol Anglés Hernández (eds), La Emergencia Sanitaria Covid-19 a la luz de la emergencia climática (Fundación Heinrich Böll 2020). 2 See ECLAC, ‘Pactos políticos y sociales para la igualdad y el desarrollo sostenible en América Latina y el Caribe en la recuperación pos-Covid-19’, Especial Report No 8, 15 October 2020. 3 That is, Mexico, Brazil, Chile and, to some extent, Peru and Colombia. 1

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Climate change mitigation law and policy in Central and South America  139 Finally, there are serious threats to the natural carbon sinks across the region, including for the irreplaceable Amazon, and the governments could take better advantage of the options to reduce emissions by preventing land-use change and improving agricultural and forest management practices. The actual impact of the pandemic in the economy, in the environment, and other aspects of life is still undetermined; and in the view of this uncertainty, climate change law and policy must rise to the challenge of enabling effective actions in the context of a world concerned with other equally urgent matters. In this scenario, it is more important than ever to show that the long-term impacts of the climate crisis can be much worse than the temporary impacts of the pandemic, or the medium-term impacts of slower economic development. The UN Special Relator David Boyd has warned that reducing global efforts against climate change under the excuse of the COVID-19 pandemic, in the light of the preceding global environmental crisis, would be ‘irrational, irresponsible, and dangerous for the rights of vulnerable people’.4 Climate change mitigation is at the top of the list for environmental regulators, prompted by the commitments of each signatory country to the Paris Agreement (2015), which are in the process of being updated, but the scenario has shifted in 2020, changing the priorities of many governments.5 The present chapter analyses some of the repercussions of the new scenario from the South and Central American perspective, hoping to offer some insights about the challenges that climate change mitigation implies for the region and for the international community in general from the greater perspective of achieving global goals and the expectations of getting financial and technological support on which some of the countries in the region condition the fulfilment of their NDCs.

1

INTERNATIONAL LAW CONTEXT

During the 21st session of the Conference of the Parties (COP 21) to the United Nations Framework Convention on Climate Change (UNFCCC),6 carried out in Paris, in December 2015, the parties adopted the Paris Agreement,7 establishing a global commitment to stabilize the emissions of greenhouse gases (GHG) in order to ensure that the global average temperature does not increase more than 2 °C above pre-industrial levels by 2100, with a more ambitious goal to keep it below 1.5 °C. The main strategy to achieve this was the adoption of NDCs by each party, representing their specific commitments to reduce the emissions of GHG within a certain time frame. Each NDC must be independently established by the party, taking into consideration its particular

Semana Sostenible, ‘Pandemia no es excusa para flexibilizar políticas ambientales: ONU’ (Semana Sostenible, 21 April 2020) https://​sostenibilidad​.semana​.com/​medio​-ambiente/​articulo/​coronavirus​ -en​-el​-mundo​-pandemia​-no​-es​-excusa​-para​-flexibilizar​-politicas​-ambientales​-onu/​50092 accessed 8 November 2020. 5 ECLAC, n. 2, 14. 6 United Nations Framework Convention on Climate Change (adopted 20 January 1994), A/ RES/48/189. 7 Paris Agreement to the United Nations Framework Convention on Climate Change (adopted 12 December 2015, entered into force 4 November 2016) TIAS 16-1104 (Paris Agreement). 4

140  Research handbook on climate change mitigation law resources, opportunities and challenges. The Paris Agreements included a binding rule to update and increase the NDCs every five years.8 There are close to 190 parties to the Paris Agreement, including all of the 33 countries in the LAC region.9 The total of the GHG emissions of Latin America and the Caribbean account for 8.3 percent of the world’s GHG emissions,10 estimated at 3.9 Gt of carbon dioxide equivalent in 2014 according to the World Resources Institute CAIT Climate Data Explorer, a relatively low overall contribution, mostly due to the fact that these are developing countries in the process of increasing industrialization and growing their economies, and they have not reached yet the peak of their GHG emissions. The emissions in the region, however, are very unequal, with only three countries being responsible for 60 percent of the total contribution of the region: Brazil (34.4 percent), Mexico (18.5 percent) and Argentina (11.2 percent).11 Paradoxically, albeit being among the lowest contributors of GHG emissions at a global level, many LAC countries are particularly vulnerable to the negative effects of a significant increase in the world’s average temperature; therefore, the majority of the regional governments are more concerned with adaptation strategies rather than mitigation of GHG. The NDCs reflect this, with 32 out of the 33 addressing adaptation to climate change and 70 percent including both mitigation and adaptation.12 The economic sectors on which the goals and programs focus the most are energy, land use and forests, transportation, agriculture and waste management. Around 23 percent of GHG emissions from the LAC region are linked with agriculture,13 making measures to improve sustainable agricultural practices relevant to mitigation efforts. Actions in the energy sector involve regulatory incentives for renewable energy projects and energy efficiency, whereas in the sector of land use and forests the goals are to fight deforestation and degradation of soils and to promote sustainable forest management.14 According to several sources, the expansion of renewable energies in the LAC region would account for the majority of GHG emissions reductions, as nearly 50 percent of the emissions of the region are linked to the energy sector.15 Some of the most notable goals in this regard are those of Costa Rica, which aims to generate 100 percent of its electricity from renewable

Ibid., Article 4(9). The countries included in the calculations for the LAC region are the following: Antigua and Barbuda, Argentina, Bahamas, Barbados, Belize, Bolivia (Estado Plurinacional de), Brazil, Chile, Colombia, Costa Rica, Cuba, Dominica, Ecuador, El Salvador, Granada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Dominican Republic, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Santa Lucia, Surinam, Trinidad and Tobago, Uruguay and Venezuela. 10 J. Samaniego et al., ‘Panorama de las contribuciones determinadas a nivel nacional en América Latina y el Caribe, 2019: avances para el cumplimiento del Acuerdo de París’ (LC/TS.2019/89-P), Santiago, Economic Commission for Latin America and the Caribbean (ECLAC), 2019, 29. 11 Ibid., 75. 12 Ibid. 13 According to data from 2014 found in the CAIT Climate Data Explorer of the World Resources Institute. 14 J. Samaniego et al., n. 10, 33. 15 D. Senshaw and J. Kim, ‘Meeting Conditional Targets in Nationally Determined Contributions of Developing Countries: Renewable Energy Targets and Required Investment of GGGI Member and Partner Countries’ (2018) 116 Energy Policy; J. Markard, ‘The Next Phase of the Energy Transition and its Implications for Research and Policy’ (2018) 3(8) Nature Energy. 8 9

Climate change mitigation law and policy in Central and South America  141 sources by 2030, and Guatemala, planning to achieve 80 percent of electricity from renewable sources by the same year. Cuba and Ecuador, on the other hand, have stated ambitious goals in terms of installed capacity to generate electricity from renewable sources, of 2.144 MW and 2.828–4.382 MW respectively.16 Regarding the general landscape of the NDCs, there is no uniformity in the way the different countries in the region have set their respective goals. Some countries, such as Brazil and Argentina, propose their GHG reduction goals in relation to the absolute emissions registered in the baseline year (2005), whereas others such as Colombia, Costa Rica and Mexico have set their goals taking as a reference a business as usual (BAU) scenario. Chile, on the other hand, proposes a goal in terms of CO2 intensity, in relation to the country’s GDP.17 It is important to note that many countries have proposed in the NDCs both unconditional goals and conditional goals. The latter are dependent on the availability of funds and technology from the international community to support their efforts. According to a recent study commissioned by ECLAC, the projected emissions of the region by 2030 are of 4.7 Gt of carbon dioxide equivalent. The unconditional commitments would reduce this amount 13 percent in comparison to the BAU scenario, while the conditional commitments would bring the decrease to 23 percent (4.1 Gt of CO2 eq. and 3.6 Gt of CO2 eq. respectively). A scenario in accordance with the target of 2 °C increase in temperature would require a reduction of 32 percent compared with the BAU scenario and a reduction in accordance with a 1.5 °C temperature increase would require reductions of about 50 percent, totaling 2.3 Gt of CO2 eq.18 According to projections, the current unconditional goals for reduction of GHG emissions among LAC countries would be insufficient to achieve an increase of average temperature of less than 2 °C in relation to preindustrial levels (taken as a proportional contribution based on emissions per capita of the reductions required worldwide). The achievement of the conditional goals in the countries’ NDCs would bring the region closer to the required threshold; thus, the role of the international community to adequately coordinate and effectively provide financial and technological support for developing countries can be crucial for the LAC region. 1.1

Law and Policy for Compliance with the NDCs

Climate change as a complex regulatory subject must be tackled from an integral perspective, introducing changes at the core of many systems and institutions to produce results in different fronts and through varied actions. The programs targeting mitigation of GHG emissions would look substantially different than programs oriented towards adaptation, yet they address the same phenomenon and must be connected and mutually supportive to increase their chances of being successful. Not all countries have enacted specific laws and policies for implementing and achieving their respective NDCs, although most have a general legal framework addressing climate

J. Samaniego et al., n. 10, 43. Ibid., 51. 18 J. Samaniego et al., n. 10, 69. The calculation of the contribution per region/country to achieve the 1.5 °C and 2 °C targets in increase of temperature is based on the projections of the IPCC of the ‘carbon budget’ for each region/country, considering a relation approximately lineal between emissions, CO2 accumulation and the rises in average temperature. Ibid., 80. 16 17

142  Research handbook on climate change mitigation law change and putting in place institutional and governance resources to promote the reduction of GHG emissions, prevent deforestation and other causes associated with climate change and to incentivize practices that are compatible with low-carbon economic development. Examples of the first are Mexico and Brazil; in the second scenario are Colombia, Ecuador and Guatemala. Costa Rica, Venezuela and Chile are currently discussing legislative proposals for climate change laws, although there are already public policy instruments regarding climate change action. To successfully comply with the Paris Agreement’s obligations to regularly report progress, updating NDCs to be ever more ambitious, and sharing information about the status of GHG emissions in the terms of the agreement, these frameworks should include a reliable system of measurement, monitoring, collection, data management and reporting about GHG emissions and mitigation efforts. As the basis of national climate change law and policy, countries generally adopt a framework law or a similar instrument, sometimes with direct support in their respective constitutions. Only the general laws of Brazil, Guatemala, Honduras, Mexico and Peru specifically mention the NDCs as a means to achieve mitigation goals.19 Within this framework, sectoral laws and policy are enacted to implement specific actions following the objectives of mitigation (and often of adaptation) designed for the specific industry or economic sector. In some federal countries, such as Brazil and Mexico, some cities and states have enacted their own framework laws for climate change mitigation and adaptation.20 Within the general framework of climate change management, specific laws and policies are adopted at sectoral level. In the region, the main sectors concentrating on climate change mitigation efforts are energy, forest and land planning, agriculture and infrastructure (including waste management).21 In the energy sector, the measures aim to promote the diversification of the energy matrix by giving subsidies, state aid and tax incentives to projects that employ non-conventional energy sources, as well as creating programs to reward energy efficiency efforts. Regarding forests and land planning, the policies generally involve reducing deforestation, promoting sustainable land use, forest protection and payments and compensations for ecosystem services. In agriculture, the policies aim to introduce more efficient systems, sustainable land use, low-carbon crops and restoration of degraded areas. Finally, regarding cities and infrastructure, the policies focus on carbon capture and storage, low-carbon construction and buildings, recycling and efficient management of urban waste.22 In the overall landscape of energy use, measures in transportation systems deserve special attention. Some of the most all-encompassing strategies aim to enhance public transportation systems with electrical or hybrid vehicles, cleaner fuels (i.e. biofuels) and introduce market measures to incentivize the use of more environmentally friendly alternatives such as bicycles instead of cars. It is worth noting that the effectiveness of shifting to electricity instead of fossil fuels to mitigate GHG emissions will depend on the actual sources of the electricity in each country. In Colombia, for example, electricity is considered one of the cleanest energy alter-

J. Samaniego et al., n. 10, 85. See inter alia, Mexico City’s Law of Mitigation and Adaptation to Climate Change and Sustainable Development 2011; São Paulo’s State Policy of Climate Change 2009; Rio de Janeiro’s State Policy on Climate Change and Sustainable Development 2010 and Buenos Aires’ Law of Adaptation and Mitigation of Climate Change 2011. 21 J. Samaniego et al., n. 10, 98. 22 Ibid., n. 10, 97. 19 20

Climate change mitigation law and policy in Central and South America  143 natives because 69 percent of the electrical power is produced by hydropower, an alternative low on GHG emissions.23 ECLAC suggests that, in order for NDCs to be complied with in a timely manner and efficiently, there should be specific policies that allocate specific responsibilities in GHG reduction to the different sectors. This would allow the taking of complementary cross-cutting measures or the creation of internal markets to make compliance less expensive, and to combine actions across sectors and territories. This approach is only starting to be considered among the countries in the region.24 Although the region as a whole has done the job of formulating detailed strategies and action plans, and defining clear goals and indicators to measure their success, the implementation of these policies might present serious challenges. The next sections explore some of the identified challenges from the general and comparative perspectives.

2

OVERVIEW OF THE REGIONAL ISSUES IN THE CURRENT LANDSCAPE

2.1

The Crucial Role of International Cooperation

Article 9(1) of the Paris Agreement establishes the obligation of developed country parties to provide financial resources to assist the developing country parties with their mitigation and adaptation efforts. Article 10, in turn, recognizes the importance of cooperative action on technology development and transfer, and also establishes that ‘support, including financial support, shall be provided to developing country Parties for the implementation of this Article’,25 and Article 11 addresses capacity-building and the commitment of all parties to the agreement to enhance the capacity of developing country parties to implement it.26 In recognizing the importance of international cooperation for developing nations, at the COP 15 in 2009, developed countries pledged to mobilize US$100 billion per year by 2020 for climate action in developing countries.27 In 2016, several developed country parties worked together on a roadmap to achieve this goal.28 In the same year, the Organisation for Economic Co-operation and Development (OECD) anticipated that the amount of public adaptation finance was going to double in volume between 2013–14 and 2020, from a baseline of about US$41 billion in 2014.29 23 Kevin Steven Bohorquez Guevara, ‘La oferta hidráulica equivale cerca de 69% de la matriz energética del país’ La República (30 March 2019) https://​www​.larepublica​.co/​especiales/​minas​-y​ -energia​-marzo​-2019/​la​-oferta​-hidraulica​-equivale​-a​-cerca​-de​-69​-de​-la​-matriz​-energetica​-del​-pais​ -2842181 accessed 10 January 2021. 24 Alicia Bárcena et al., ‘La emergencia del cambio climático en América Latina y el Caribe: ¿seguimos esperando la catástrofe o pasamos a la acción?’, Libros de la CEPAL, No 160(LC/PUB.2019/23-P), Santiago, Economic Comission for Latin America and the Caribbean (ECLAC), 2020, 240. 25 Paris Agreement, n. 7, Article 10(6). 26 Ibid., Article 11(4). 27 For further discussion please refer to Chapter 11 of this book. 28 See UNFCCC, ‘Roadmap to US$100 Billion’ (2016) https://​unfccc​.int/​sites/​default/​files/​resource/​ climate​-finance​-roadmap​-to​-us100​-billion​.pdf accessed 8 November 2020. 29 OECD (2016), ‘Projecting climate finance to 2020’ http://​www​.oecd​.org/​environment/​cc/​oecd​ -climate​-finance​-projection​.htm accessed 8 November 2020.

144  Research handbook on climate change mitigation law By September 2019, however, the target had still not been achieved.30 In 2017 financing provided and mobilized for developing countries amounted to US$71 billion, according to an OECD report.31 Based on the previous data and in consideration of the 2020 global scenario, it is not unreasonable to question if the financial support will continue to come and if it will be increased in accordance with the developed countries’ pledge. As previously mentioned, countries are changing their national priorities to face the effects of the COVID-19 pandemic and international cooperation has proved particularly challenging to mobilize global efforts in a unified strategy that would protect the most vulnerable countries from being disproportionally affected by the health crisis. At the G20 virtual meeting in March 2020, the governments of Mexico and Argentina, among others, pleaded that the war against COVID-19 should not lead to deeper inequalities between developed and developing countries, and that the supplies of health equipment and medicines (and eventually, access to a vaccine) should be supervised by the UN to ensure inclusive and egalitarian access for all countries.32 So far, the efforts for a coordinated strategy based on solidarity and cooperation do not seem to have been fruitful. It is easy to find examples of how countries are not cooperating in the fight against the virus and are rather seeking to protect their own nationals at any cost, including by preventing other countries from accessing essential resources such as masks, medicines and medical equipment.33 At the 75th session of the UN General Assembly, held virtually in September 2020, the representatives of developing countries, including small developing island States, stressed the uneven burden they face in mitigating climate change and securing development financing.34 ECLAC projects the regional average GDP to decrease 9.1 percent in 2020, losing the gains in terms of poverty reduction, equality and income per capita that were achieved in the last

Valéry Laramée de Tannenberg, ‘Wealthy countries still failing on $100 billion climate finance pledge’ (Euractiv.com, 17 September 2019) https://​www​.euractiv​.com/​section/​climate​-environment/​ news/​wealthy​-countries​-still​-failing​-on​-100​-billion​-climate​-finance​-pledge/​ accessed 8 November 2020. 31 OECD, ‘Climate finance for developing countries reached USD 71 billion in 2017’ (13 September 2019) http://​www​.oecd​.org/​environment/​climate​-finance​-for​-developing​-countries​-reached​-usd​-71​ -billion​-in​-2017​.htm accessed 8 November 2020. 32 Henry Jiménez and Simone Lucatello, ‘Cambio Climático, Covid-19 y la transición inaplazable’ in Henry Jiménez Guanipa and Marisol Anglés Hernández (eds), La Emergencia Sanitaria Covid-19 a la luz de la emergencia climática (Fundación Heinrich Böll 2020) 27. 33 See, among others, Andrea Shalal, ‘WTO report says 80 countries limiting exports of face masks, other goods’ (Reuters, 23 April 2020) https://​www​.reuters​.com/​article/​us​-health​-coronavirus​-trade​-wto​ -idUSKCN2253IX accessed 9 November 2020; and Gordon Brown and Daniel Susskind, ‘International Cooperation during the COVID-19 Pandemic’ (2020) 36(1) Oxford Review of Economic Policy https://​ academic​.oup​.com/​oxrep/​article/​36/​Supplement​_1/​S64/​5863407 accessed 10 November 2020. 34 UN Press Release, ‘COVID-19 Pandemic Demonstrates Multilateral Cooperation Key to Overcoming Global Challenges, President Stresses as General Assembly Concludes Annual Debate’ (29 September 2020) https://​www​.un​.org/​press/​en/​2020/​ga12273​.doc​.htm accessed 10 November 2020. 30

Climate change mitigation law and policy in Central and South America  145 decade,35 in what they call ‘the biggest economic and social crisis of the region in decades, with very negative effects in employment, the fight against poverty and reduction of inequality’.36 In this scenario, international cooperation is more important than ever in order to sustain the projects and initiatives of developing countries in their commitments under the Paris Agreement which are at risk of getting derailed or de-funded under the pressure of the devastation caused by the COVID-19 pandemic.37 2.2

The Institutional and Economic Challenges

The increase of GHG emissions is naturally linked to economic growth and energy demands; transportation, manufacturing, production and food, etc. which consume fossil fuel energy, and some processes of urbanization and agriculture that may involve deforestation.38 This is why there is usually a correlation between a higher GDP and higher GHG emissions.39 Latin America and the Caribbean registered a predictable trend of increasing emissions between 1990 and 2005 as GHG emissions increased, on average 1.9 percent annually, while the economy grew 2.9 percent per year. However, between 2005 and 2014, the data shows that the economy continued to grow but GHG emissions decreased, mainly due to results in reducing deforestation rates.40 This shows a decoupling between the increase in GDP per capita and GHG emissions, characteristic of a low-carbon economy. The rate at which GHG emissions are distanced from the increase in GDP per capita is another indicator to measure compliance with GHG reduction targets. In the BAU scenario, the reduction rate predicted is 2 percent annually. This rate must be brought to 2.8 percent (40 percent more than BAU scenario) in order to comply with the unconditional targets, and to 3.6 percent to achieve the conditional targets. A scenario of less than 2 °C increase in the average temperature requires a rate of 4.4 percent, whilst a rate of 6.3 percent would be compatible with the 1.5 °C scenario.41 These projections mean that the efforts to ‘decarbonize’ the economy must be greater than anticipated, in order to ensure the targets are achieved without affecting the potential of the economy to grow and with it the government’s means to fulfill their constitutional goals and to ensure the well-being of citizens.

35 Alicia Bárcena, ‘Enfrentar los efectos cada vez mayores del COVID-19 para una reactivación con igualdad: nuevas proyecciones’ (ECLAC, 15 July 2020) https://​www​.cepal​.org/​sites/​default/​files/​ presentation/​files/​final​_200714​_version​_revisada​_ab​-ppt​_informe​_covid​_5​_15​_julio​.pdf accessed 10 November 2020. 36 ECLAC, ‘CEPAL y OIT analizan los desafíos laborales en América Latina y el Caribe tras la pandemia del COVID-19’ (20 May 2020) https://​www​.cepal​.org/​es/​noticias/​cepal​-oit​-analizan​-desafios​ -laborales​-america​-latina​-caribe​-tras​-la​-pandemia​-covid​-19​#:​~:​text​=​La​%20pandemia​%2C​%20que​ %20trae​%20consigo​,la​%20reducci​%C3​%B3n​%20de​%20la​%20desigualdad accessed 19 November 2020. 37 Jerome X. Walcott, Ministry of Foreign Affairs of Barbados, warned at the 75th UN General Assembly that the COVID-19 pandemic has derailed progress towards the achievement of the 2030 Agenda for Sustainable Development. See UN Press Release, n. 34. 38 J. Samaniego et al., n. 10. 39 See, for instance, the World Bank’s World Development Indicators. 40 J. Samaniego et al., n. 10, 65. 41 J. Samaniego et al., n. 10, 73.

146  Research handbook on climate change mitigation law From an economic perspective to climate change, a successful strategy must introduce significant changes in the development style and consumption patterns, from agricultural activities to energy production and consumption trends, in urban development and infrastructure, management of water resources, forests and biodiversity. A national climate change strategy compatible with these recommendations would need to be comprehensive, integrative and to set new deep foundations for economic development across sectors, with tremendous social and political repercussions. This scenario is still distant for most LAC economies. Some of the medium rent economies, such as that of Mexico, are largely dependent on resources from extractive industries, which increases their vulnerability to external factors outside their control; these resources are also linked to high GHG emissions (particularly fossil fuel industries).42 McGlade and Ekins stated in 2015 that, in order to achieve the goal of 2 °C temperature rise, one-third of the world’s oil reserves, 50 percent of natural gas and 80 percent of actual reserves of carbon should remain unused between 2010 and 2050,43 which implies that effective environmental policies should consider keeping most of the fossil energy sources underground indefinitely. This alternative could be a luxury that countries of the LAC region cannot afford, because it would entail renouncing significant economic resources that are needed to keep the countries afloat. Although a progressive change towards a fossil fuel-free economy is one of the most effective alternatives to mitigate climate change, the LAC countries that have made explicit commitments to phase out fossil fuels as energy sources and achieve zero-carbon economies in the medium term could be forced to re-evaluate their strategy in the economic circumstances. This would reduce the rate of decarbonization of the economy to even lower than projected, making it still more difficult to achieve the goals of the Paris Agreement. ECLAC has warned of the risks that, due to the economic recession and scarcity of resources, governments will prioritize only the current health emergency and drop the ball in relevant areas of sustainable development, postponing environmental and social agendas and even reversing policies necessary to ensure the long-term well-being of citizens, particularly in terms of climate change, biodiversity protection and energy transition. Several international meetings and conferences, such as the UNFCCC COP 26, have already been suspended or postponed.44 2.3

The Opportunities in the Land-Use Sector for Climate Action

At the 2019 COP meeting in Katowice (Poland), a global initiative to emphasize the role of forests in achieving the goals of the Paris Agreement was brought by several countries, resulting in the Ministerial Declaration of Katowice, ‘Forest for the Climate’, which has already been endorsed by 81 parties to the UNFCCC.

See EITI report for Mexico, available at https://​eiti​.org/​mexico accessed 11 January 2021. Christophe McGlade and Paul Etkins, ‘The Geographical Distribution of Fossil Fuels Unused When Limiting Global Warming to 2 °C’ (2015) 517 Nature 187. 44 ECLAC, n. 2, 14. 42 43

Climate change mitigation law and policy in Central and South America  147 The strategies for mitigation through land use, land-use change and forestry (LULUCF) had already been addressed in a number of UNFCCC COP decisions.45 According to Stern, reducing deforestation and promoting afforestation (conversion of long-time non-forested land to forest) could provide up to 30 percent of the cost-effective global mitigation potential.46 Deforestation of tropical forests alone was reported to be responsible for 10 percent of the world net carbon emissions.47 It is well known that the LAC region hosts some of the most important carbon sinks in the world. There are in the region over 935 million hectares of forests, equivalent in 2015 to 23 percent of the world total, of which 34 percent are primary forests.48 The emissions from agriculture, changes in land use and forestry amount to 42 percent of the total in LAC, representing a relevant opportunity for mitigation strategies. In Central America, 39 percent of the total extent of the territory is covered with forests, a total of 20 million hectares. But in 1990, there were 27 million hectares.49 This reduction is calculated in terms of carbon storage, dropping from 3 million tons of CO2 eq. in 1990 to 2.316 million in 2016, as well as the loss in the provision of ecosystem services, soil degradation, economic losses from forest production and even in energy sufficiency for rural communities that use wood for cooking and heating.50 Undoubtedly, the degradation of soil and ecosystems is contributing to GHG emissions and to climate change, and there is great potential for mitigation by sustainably managing these resources in the LAC region. There are opportunities to channel the efforts for mitigation of climate change towards the conservation of natural goods. The Reduction of Emissions from Deforestation and Degradation of Forests (REDD+) is another strategy and it is based on the provision of financial incentives to preserve forests and thus maintain carbon stocks in forest ecosystems, as well as to enhance forest management.51 Initially formulated as REDD at the UNFCCC COP 16, in 2010, the strategy was described as ‘a way to financially compensate developing countries for any reduction in emissions associated with a decrease in the conversion of forests to alternative land uses’.52 International cooperation in support of REDD+ and other forest protection solutions is crucial and has been relatively successful for the LAC region. Among the current examples, there is the Andes Action initiative, led by UNEP to restore one million hectares of high Andean forest ecosystems in Argentina, Bolivia, Chile, Colombia, Ecuador and Peru over the next 25 years,53 and the ‘Restoring Forests and Lands as a Crucial Response to Climate Change and Sustainable Development’ initiative, led by the International Union for the Conservation

Bruno Locatelli et al., ‘Forest and Climate Change in Latin America: Linking Adaptation and Mitigation’ (2011) 2 Forests 431, 433. 46 S. N. Stern, The Economics of Climate Change (Cambridge University 2006) 27. 47 Giulia Parola Lodovica Toffoletto, ‘El “acaparamiento de tierras y el cambio climático”: una oportunidad perdida del Acuerdo de París’ in Henry Jiménez Guanipa and Marisol Luna Leal (eds), Crisis climática, transición energética y derechos humanos (Tomo 1, Heinrich Böll Stiftung 2020). 48 Alicia Bárcena et al., n. 24, 97. 49 Ibid., 107. 50 Ibid., 110. 51 Bruno Locatelli et al., n. 45, 434. 52 Charlie Parker, Andrew Mitchell, Mandar Trivedi, Niki Mardas and Karin Sosis, The Little REDD+ Book (Global Canopy Foundation 2009). 53 Ibid., 190. 45

148  Research handbook on climate change mitigation law of Nature (IUCN) with the support of 59 countries that have made commitments in the framework of the Bonn Challenge.54 The Juma Sustainable Development Reserve Project implemented by the Amazonas Sustainable Foundation, in Brazil, was the first REDD project in Latin America to be validated in accordance with the Climate, Community and Biodiversity (CCB) Standards.55 Notwithstanding all the efforts put by the international communities and government to preserve and rehabilitate forest areas as part of their mitigation strategies, the rates of deforestation are alarming. According to a report by Global Forest Watch, in 2019 the region lost 11.9 million hectares of forests, of which 3.8 million were primary humid tropical forests, very important for biodiversity and carbon storage.56 In this context, there is potential for REDD+ and other land-use initiatives to take a higher position in the mitigation agenda, especially for countries that may see their aspirations to invest in a cleaner energy matrix and reduce their exploitation of fossil fuels truncated by the economic crisis brought about by the COVID-19 pandemic. Along the same lines, nature-based solutions (protection, restoration and sustainable management of ecosystems) and payment for environmental services can be promising alternatives to create jobs in conservation and sustainable use of biodiversity. This strategy combines mitigation and adaptation, and may be particularly suitable for the LAC region. Examples of these initiatives are the restoration of forests in highlands, which protect the communities in lower-lying zones from floods and also serve as carbon sinks, and the increase of green zones and trees in urban areas, which can have a cooling effect in cities, capture carbon and protect against air pollution.57 Among the multilateral agreements that support nature-based solutions are the Convention on Biological Diversity (CBD), the UNFCCC and the Paris Agreement, and Agenda 2030 comprising the action plan for the Sustainable Development Goals. According to ECLAC, restoring the natural patrimony by reforestation is a fundamental step in the decarbonization of the economies; it is one of the safest and least costly alternatives to carbon storage and can offer a service of value to the international community.58 The LAC region has a unique opportunity to take advantage of its privileged position in biodiversity and forest conservation to promote these initiatives and mobilize resources towards activities that will report benefits in terms of mitigation of GHG and adaptation to climate change.

The Bonn Challenge is a global goal to bring 150 million hectares of degraded and deforested landscapes into restoration by 2020 and 350 million hectares by 2030; https://​www​.bonnchallenge​.org/​ accessed 12 November 2020. 55 CCB Projects, The Climate, Community & Biodiversity Alliance, Arlington, VA, USA, 2011; http://​www​.climate​-standards​.org/​projects/​ accessed 15 November 2020. 56 See Mariela León, ‘Global Forest Watch: América Latina concentra la mayor deforestación de 2019’ (20 June 2020) https://​www​.cambio16​.com/​america​-latina​-concentra​-la​-mayor​-deforestacion​ -de​-2019/​#:​~:​text​=​Brasil​%20encabeza​%20la​%20lista​%20de​,estadio​%20de​%20f​%C3​%BAtbol​%20en​ %202019​%E2​%80​%9D accessed 19 November 2020. 57 Alicia Bárcena et al., n. 24, 185. 58 Ibid., 194. 54

Climate change mitigation law and policy in Central and South America  149

3

COMPARATIVE APPROACH: BRAZIL, COLOMBIA AND MEXICO

Having sketched the lines of the current status of climate change mitigation goals, strategies and challenges, this section analyses mores specifically these considerations for three countries: Brazil, Colombia and Mexico. Brazil has led the way in terms of voluntary commitments to reduce GHG emissions. Since 2009, through Law 12.187 (National Policy of Climate Change), Brazil established a voluntary commitment to reduce GHG emissions between 36.1 percent and 38.9 percent by 2020 (against a reference scenario).59 The law mentioned, as its main goals, to (i) promote the reduction of GHG emissions in the national territory; (ii) to define and implement measures to promote adaptation to climate change by the states, regions and municipalities; as well as social and economic sectors; (iii) to achieve the commitments subscribed before the international community; and (iv) to prevent higher costs that would result from inaction or postponing of climate action.60 An updated goal of Brazil aims to reduce emissions by 37 percent in 2025 and 43 percent by 2030, compared to 2005 levels. As an additional effort, a non-binding document was formulated with 47 actions to be the foundation of the country’s strategy for the implementation and founding of its NDC, entitled Proposta Inicial de Implementação da Contribuição Nacionalmente Determinada do Brasil (NDC).61 During the process, civil society was involved in different forums, as well as the academic and industry sectors. In terms of mitigation, the main actions relate to energy efficiency and promotion of renewables and the assessment of the availability of water sources to produce hydropower. The document also refers to reduction of deforestation, preservation of protected areas, decreasing GHG emissions from forest fires, re-establishment and expansion of native forests and creating a forest carbon registry, among other measures. Finally, the proposal includes the establishment, in the short term, of sectoral targets and a system to monitor, verify and report GHG emissions. Colombia, in turn, enacted its Law of Climate Change (No. 1931) in 2018, aiming to set the foundations for a low-carbon and climate-resilient development, reducing the risks of climate change and purporting to take advantage of the opportunities from its management. After the Paris Agreement, some of the specific policy and regulatory actions taken by Colombia include a national carbon tax on fossil fuels aimed to reduce GHG emissions from their utilization and to promote a transition to alternative energy sources.62 Additionally, through Decree 298 of 2016, the government created the National Climate Change System (SISCLIMA) for the coordination, articulation, monitoring and assessment of climate law and policy, with the participation of public and private entities and NGOs at all levels of government. As policy, Colombia prepared the Colombian Strategy of Low-Carbon Development (2011), including goals in the short, medium and long terms led by the Ministries of Mining

Angelo C. Gurgel et al., ‘The impacts of the Brazilian NDC and their contribution to the Paris Agreement on climate change’ (2019) 24 Environment and Development Economics 395, 396. 60 Law 12.187 of 2009 (Brazil), available (in Portuguese) at http://​www​.planalto​.gov​.br/​ccivil​_03/​ _ato2007​-2010/​2009/​lei/​l12187​.htm accessed 2 November 2020. 61 Fórum Brasileiro de Mudança do Clima, ‘Initial Proposal of Implementation of the National Determined Contribution of Brasil’ (2018). 62 Colombia Law 1819 of 2016 and Decree 926 of 2016. 59

150  Research handbook on climate change mitigation law and Energy, Environment and Sustainable Development, Agriculture and Rural Development, Housing, Transportation and Commerce, in order to define sectoral actions and measures to contribute to the country’s mitigation commitments. The sectoral strategies were later included in the Sectoral Action Plans for Climate Change Mitigation. The National Climate Change Policy was approved in 2016; it contains the guidelines to include climate change management in private and public decisions, in order to achieve a pathway to low-carbon development and to reduce the risks associated with climate change. It adds new elements to harmonize with other public policy instruments that already existed, such as the Low-Carbon Development Strategy and the Strategy for the Reduction of Emissions from Deforestation and Degradation of Forests (REDD+), towards compliance with the NDC.63 Colombia has recently submitted its updated NDC, setting an ambitious target to decrease 51 percent of GHG emissions in comparison with a BAU reference scenario by 2030.64 The updated NDC complies with the condition of making progressively more ambitious commitments, as the NDC submitted in 2018 proposed to decrease GHG emissions by 20 percent in 2030. At the COP 23, in September 2019, President Duque, of Colombia, adhered to the pledge to aim for carbon-neutrality in 2050.65 A legislative proposal is also going through congress to establish a ‘Climate Pact for the reduction of GHG emissions’; if approved, the law would officially establish the government’s commitment to reduce emissions by at least 30 percent compared to the reference year 2010 by 2030, at least 70 percent by 2040, and to achieve carbon-neutrality in net emissions of GHG by 2050.66 Mexico has adopted several climate change policy instruments, starting with the 1988 General Law of Ecological Equilibrium and Environmental Protection, which was updated in 2011 to include a section on climate change mitigation and adaptation. It was also one of the first countries in the region to enact a general climate change law, with the approval, in 2012, of its General Climate Change Law, establishing provisions to face the adverse effects of climate change and take regulatory actions for climate change adaptation and mitigation.67 To support the implementation of the law, a National Climate Change System (SINACC) was created, with a similar purpose and function to Colombia’s SISCLIMA. As specific sectoral measures, the Mexican government implemented in 2014 a special tax over the carbon content in fossil fuels used in the provision of products and services. Its purpose is to provide a disincentive for the consumption of fossil fuels through rising prices, and in this way contributing to decreasing GHG emissions. Through an amendment in 2018, Mexico modified its General Climate Change Law to adapt to its commitments under the Paris Agreement.68 63 Colombia’s Ministry of Environmental and Sustainable Development, available (in Spanish) at https://​www​.minambiente​.gov​.co/​index​.php/​politica​-nacional​-de​-cambio​-climatico accessed 8 November 2020. 64 See updated NDC submission (in Spanish) available at https://​www4​.unfccc​.int/​sites/​ndcstaging/​ PublishedDocuments/​Colombia​%20First/​NDC​%20actualizada​%20de​%20Colombia​.pdf accessed 11 January 2021. 65 Colombia Ministry of Environment and Sustainable Development, ‘NDC de Colombia – Actualización 2020’ (public consultation version, 5 October 2020). 66 Colombian Congress, Law Project 312-20 of the Senate, 30 September 2020. 67 General Climate Change Law (Mexico), 2012, available (in Spanish) at http://​www​.diputados​.gob​ .mx/​LeyesBiblio/​pdf/​LGCC​_130718​.pdf accessed 2 November 2020. 68 See Tania García López, ‘La Ley General de Cambio Climático mexicana, tras la entrada en vigor del Acuerdo de Paris’ in Henry Jiménez Guanipa and Marisol Luna Leal, Crisis climática, transición energética y derechos humanos (Tomo 1, Heinrich Böll Stiftung 2020).

Climate change mitigation law and policy in Central and South America  151 As part of its NDC, Mexico committed to reduce its GHG emissions by 22 percent between 2020 and 2030, and 51 percent of its emissions from black carbon.69 The current toolbox of climate change policies in Mexico includes a national policy of adaptation, a policy for the reduction of methane emissions from the oil and gas sector, a national policy of electromobility, the implementation plan for the NDC defining routes and alternatives for 2030 and a transition strategy to promote the use of cleaner fuels and technologies in the medium and long term. As previously mentioned, of the three countries, Brazil and Mexico have taken specific regulatory actions to include the NDCs in their national policy frameworks. In reviews of their sectoral policies, Mexico and Colombia have adopted carbon taxes to promote alternatives that are lower in GHG emissions. In the wake of the new economic, social and political landscape after the COVID-19 pandemic, however, the implementation of the regulations and policies might be affected, and the well-intentioned plans and strategies might have to be adjusted to the new circumstances. In Mexico, in response to the drop of oil prices due to less demand because of the measures in the face of the COVID-19 pandemic, the government issued a decree granting fiscal benefits for the fossil fuel industries equivalent to more than three billion dollars. In practice, the grant was meant to rescue the State-owned PEMEX, responsible for 97 percent of production of oil and gas in Mexico,70 and to support the political project of President Andrés Manuel López Obrador, who has promised to return the oil industry to its former glory.71 Mexico’s General Climate Change Law, adjusted in accordance with the country’s commitments in the Paris Agreement, added a paragraph in the mitigation strategy stating that climate change policy ‘must ensure that the baseline of the commitment for Mexico does not limit the country’s economic growth, and the productive sectors must participate in the formulation of the baseline, in coordination with the national organisms in charge of the economic policy’72 (emphasis added). This policy approach could stand in the way of Mexico’s compliance with its NDC in the presence of an imminent economic crisis, as suggested by the initiative to give fiscal benefits to the oil industry affected by the COVID-19 pandemic. Colombia’s policy also supports the country’s fossil fuel industries, which represented 8.6 percent of the government’s income in 2019.73 After the Council of State suspended the legislation that allowed the implementation of hydraulic fracturing with horizontal drilling (‘fracking’) for the exploitation of non-conventional hydrocarbon deposits, the government is

The General Climate Change Law defines ‘black carbon’ as ‘particulate material produced by incomplete combustion of fossil fuels or biomass, which contributes to global warming as a short-life climate pollutant’; General Climate Change Law, n. 67, art. 3. 70 Jon Martin Cullell, ‘El desencuentro de López Obrador con las petroleras privadas pone en riesgo el futuro de Pemex’ (17 January 2020) https://​elpais​.com/​economia/​2020/​01/​17/​actualidad/​1579290251​ _706091​.html accessed 11 November 2020. 71 Margarita Palomino Guerrero, ‘Estímulos fiscales al sector hidrocarburos frente a la emergencia sanitaria: aciertos y desaciertos’ in Henry Jiménez Guanipa and Marisol Anglés Hernández (eds), La Emergencia Sanitaria Covid-19 a la luz de la emergencia climática (Fundación Heinrich Böll 2020). 72 Mexico General Climate Change Law, n. 67, art. 31. 73 ElEspectador.com, ‘Colombia se pregunta: ¿Qué pasa si perdemos la autosuficiencia petrolera?’ (2 February 2020) https://​www​.americaeconomia​.com/​negocios​-industrias/​colombia​-se​-pregunta​-que​-pasa​ -si​-perdemos​-la​-autosuficiencia​-petrolera accessed 18 November 2020. 69

152  Research handbook on climate change mitigation law ready to implement four pilot research projects to gather information about the environmental impacts and social aspects related to the application of the technique in order to determine its feasibility for commercial exploitation.74 In this scenario, the resources and efforts may shift towards strategies in other sectors instead of energy, such as forestry and land use, where investments in mitigation, for example in nature-based solutions, also have an impact in terms of economic growth for vulnerable communities and adaptation to climate change, and in some cases may represent alternatives to reduce GHG emissions with relatively lower abatement costs.75 There are policies and regulations in place that support these initiatives. Reportedly, 32 percent of Brazil’s GHG emissions come from the agricultural sector, and 28 percent are due to land-use changes and deforestation, followed in the third place by fossil fuel energy use with 27 percent.76 Considering that Brazil produces about 35 percent of the total of GHG emissions in the LAC region,77 there is great potential for mitigation initiatives in the agricultural and land-use sectors. The national strategy to achieve its mitigation goals foresees emissions cuts from land-use changes and deforestation of about 24.7 percent, between 4.9 and 6.1 percent in agriculture and between 6.1 and 7.7 percent in energy. A recent analysis simulating different scenarios for Brazil’s compliance with its NDC suggests that reductions from land-use change and agriculture would be cheaper than in other sectors of the economy, at least until 2030.78 In Brazil, between 2001 and 2015, nine states passed laws and regulations for payment of ecosystem services, six had other types of regulation and eight had regulatory proposals in progress. Mexico has several initiatives of payment for ecosystem services that are financed by the government as measures for the protection of the environment. In 2018, the program ‘Sembrando Vida’ was created, under which rural farmers with low income are incentivized to produce agroforestry crops. For a minimum of 2.5 hectares, the farmers receive US$250 per month to support the project.79 In Colombia, the World Bank and the Fundación Centro para la Investigación en Sistemas Sostenibles de Producción Agropecuaria (CIPAV) carried out a project to assess the impact of payment for environmental services in the adoption of silvopastoral systems,80 giving ranchers between US$2,000 and US$2,400 to implement these systems. The results showed a reduction of 60 percent in degraded pastoral areas, an increase of 71 percent in carbon sequestration, an increase of 10 percent in milk production and of 115 percent in the establishment’s income.81 Improving techniques of cattle farming can also have an important impact on the region’s GHG emissions. This is usually done through three mechanisms: (i) improving the productivity and reducing the intensity of cattle emissions by improving the feeding, genetics, health

See Brent Patterson, ‘Colombia’s top court rules that fracking pilot projects can proceed despite moratorium’ (26 September 2019) https://​pbicanada​.org/​2019/​09/​26/​top​-court​-ruling​-allows​-fracking​ -pilot​-projects​-to​-proceed​-in​-colombia/​ accessed 18 November 2020. 75 Angelo C. Gurgel et al., n. 59, 407. 76 Ibid., 396. 77 J. Samaniego et al., n. 10. 78 Angelo C. Gurgel et al., n. 59. 79 Alicia Bárcena et al., n. 24, 195. 80 Agroforestry arrangements in which there is a combination between forage crops, graminaceous plants and legumes with bushes and trees for animal feed and other complementary uses. 81 Alicia Bárcena et al., n. 24, 196. 74

Climate change mitigation law and policy in Central and South America  153 and breeding of animals; (ii) managing carbon by restoring degraded soils through selective intensification of production, favoring biodiversity and climate, provision of critical ecosystem services, protection of water sources and carbon sequestration, and (iii) integrating cattle in the circular economy, for example, by using the organic waste to produce biofuels and improve recovery of nutrients. It is estimated that the rehabilitation of pastures and implementation of integrated systems could result in reducing the extent of cropped land by 1.4 million hectares, and pastureland by about 4–5 million hectares. This land could then be used for reforestation and forest rehabilitation.82 Brazil has taken steps in this direction through the creation of the ‘carbon-neutral beef’ certification, an audited scheme that certifies beef whose emissions are neutralized or captured during the production process. Another concept is ‘low-carbon meat’, which is produced with an adequate system of pasture management in which carbon emissions are captured, mitigating the emissions produced by the animals.83 The positive experience of silvopastoral systems has also been adopted in the Llanos region of Colombia to restore plots of land for agriculture at a low cost, while also improving the health of the cattle and complementing their feeding with grazing, as well as generating other ecosystem services. In this system, the ratio of land per animal is improved, with 2.5 animals per hectare, compared with the usual 0.8 animals per hectare with conventional systems.84 Colombia also has a significant potential of climate mitigation in the land-use and forestry sector. The country could compensate up to 55 percent of its annual emissions just by preventing deforestation and improving forest management, by reforestation activities, and by increasing forest areas in agricultural lands.85 According to the recently published draft of the National Policy for the Control of Deforestation and the Sustainable Use of Forests, 52 percent of Colombia’s territory is covered by forests, but between 2000 and 2019, 2.8 million hectares of forests were lost to deforestation, causing not only GHG emissions but also poverty, social displacement and a lower quality of life for rural populations. The main causes for deforestation in Colombia are attributed to illegal mining, illegal crops, land-grabbing, and the building of roads, and are usually linked to remote places with low presence of the state authorities. The majority of the country’s deforestation, 62 percent, occurs in the Amazonian forests.86 In 2018, the Colombian Supreme Court of Justice declared that the Amazonian region was a subject of rights, and issued a series of mandates to preserve and protect its natural resources.87 This input, added to the international commitments of Colombia to ensure the Ibid., 326. Ibid., 329. 84 J. Restrepo, ‘Una visión de ganadería sostenible desde AGROSAVIA’, Innovaciones en Producción cárnica con bajas emisiones de carbono: experiencias y desafíos en ALC. Resúmenes del evento realizado en Montería, Colombia, Santiago, Organización de las Naciones Unidas para la Alimentación y la Agricultura/ Corporación Colombiana de Investigación Agropecuaria (FAO/AGROSAVIA), 2018. 85 B. W. Griscom et al., ‘National Mitigation Potential from Natural Climate Solutions in the Tropics’ (2020) 375(20190126) Philosophical Transactions of the Royal Society B. 86 Colombia National Council of Economic and Social Policy (CONPES), ‘Política para el control de la deforestación y gestión sostenible de los bosques’ (Draft version for public comments, 23 October 2020). 87 Colombian Supreme Court of Justice, STC 4360 of 2018. Among the main mandates was the formulation of an action plan in the short, medium and long term to decrease the deforestation rates and to face the effects of climate change, as well as the creation of an ‘Intergenerational Pact for Life in the Colombian Amazon’. 82 83

154  Research handbook on climate change mitigation law preservation and sustainable management of forests, including under the mechanisms adopted in the framework of the Paris Agreement, are the basis for the formulation of the national policy, with the aim of reducing deforestation rates in 30 percent by 2022, and to achieve net zero deforestation by 2030.88 To support REDD+ initiatives for the protection of the Colombian forests and to promote sustainable development, in 2015 the country signed a Joint Declaration of Intention, a voluntary cooperation agreement with the governments of Norway, Germany and the United Kingdom, to implement result-based payments for the reduction of emissions from deforestation and forest degradation. This commitment was extended in 2019 in recognition of Colombia having reduced the emissions from deforestation in the Amazon between 2013 and 2016, and as an acknowledgment of the importance of supporting states in their efforts.89 Additionally, in 2019, Colombia, Brazil, Bolivia, Ecuador, Guyana, Peru and Suriname subscribed the ‘Leticia Pact for the Amazon’, committing to join efforts against deforestation and degradation of the Amazonian region through conservation initiatives and actions promoting sustainable development and well-being of the population.90 Mexico, in turn, was one of the top five countries for deforestation in the LAC region in 2019, having lost 321,000 hectares of forest,91 much of it due to fires, of which 98 percent are started by human causes. Forest resources are very important in Mexico’s economy and they represent 40 percent of the renewable energy sources.92 The comparative data shows that Brazil, Colombia and Mexico have assumed commitments to reduce their GHG emissions in a significant way in the next decade, and have adopted internal policies and regulations aimed to implement such commitments. All of the countries foresee potential reductions in diversifying their energy matrix with more renewable energy sources, but experts suggest that decisive actions in this field would require progressively phasing out fossil fuels as energy sources, a process that these countries may not be ready to undertake in the current health and economic crisis. A promising alternative would be to concentrate efforts on preventing emissions from land-use changes and deforestation, a field where Brazil, Colombia and Mexico have great room for improvement and which would return added benefits in terms of adaptation and social well-being.

4 CONCLUSIONS International climate change policy has evolved from an early stage in which developed countries were expected to assume great commitments to reduce GHG emissions while developing countries continued to increase emissions as their economies grew and became more industrialized, to a more egalitarian regime in which all countries must assume responsibility and are

CONPES, n. 86. Ibid., 3, 21. 90 Ibid., 20. 91 Global Forest Watch, https://​www​.globalforestwatch​.org accessed 18 November 2020. 92 Oshiel Martínez Chapa and Jorge Eduardo Salazar Castillo, ‘La protección a los bosques y la agenda del desarrollo en México’ (2019) 97 CIENCIA UANL http://​cienciauanl​.uanl​.mx/​?p​=​9328 accessed 18 November 2020. 88 89

Climate change mitigation law and policy in Central and South America  155 encouraged to make voluntary commitments to contribute to the common goal of maintaining average world temperatures under a certain threshold. The Paris Agreement reflects this approach, but it also distinguishes among the different capacities of developing and developed countries to finance and execute their climate change strategies effectively, which is why a fund of 100,000 million dollars annually was also a part of the international commitments to support developing countries’ efforts towards mitigation and adaptation. Without this help, Latin America and the Caribbean are far from achieving the goals in terms of reduction of GHG emissions, decarbonization of the economy and climate resilience that would be compatible with a global target of less than 2 °C increase in average temperature. It should not go unnoticed that the different strategies to reduce GHG emissions come with a high opportunity cost for LAC countries. Achieving a determined carbon limit or quota implies that some sectors must make sacrifices in terms of growth and production for others to function. A decision to keep oil and gas reserves underground, for example, can have very significant economic impacts in a developing country. As countries in the LAC region are still battling to overcome extreme poverty and ensure the provision of essential services to their citizens, the economic resources that will no longer come due to the GHG reduction strategies and those that implementation itself may take from their reserves could make a big difference in terms of quality of life, protection of human rights and achieving other important international priorities included in the Sustainable Development Goals. The vulnerability of these countries becomes evident in cases of disasters, economic breakdowns, civil war and, notably, in cases of health threats such as the COVID-19 pandemic. Without a solid institutional structure capable of sustaining the population through these difficult times, it is even harder to commit to ambitious goals for modernization of transportation, investment in energy efficiency, technological transformation and funds for research and development required to materialize many of the countries’ strategies for climate change mitigation. This is why international cooperation is crucial. This review of the cases of Brazil, Mexico and Colombia offers a glance at the institutional commitment and coordinated efforts that the region has assumed as part of its global responsibility for climate change mitigation. The strategies are solidly built, with the participation of important stakeholders, taking into consideration the countries’ potential, opportunities and vulnerabilities, but their implementation remains challenging and uncertain, as it demands significant resources, human, technological, institutional and financial, that the countries may lack.

7. Climate change mitigation law and policy in the Asia-Pacific Alexander Zahar

INTRODUCTION The aim of this chapter is to provide an assessment of the climate change mitigation effort of states in the Asia-Pacific region. State-led mitigation manifests in several ways, including through policies, laws, emissions trends, transparency in communication, and comparative mitigation ambition, all of which will be considered here. Regarding the ‘Asia-Pacific’ notion itself, this chapter does not contend that there is anything meaningfully distinct about the region to justify separate treatment of it.1 Rather, the category consists, in essence, of the countries not covered in the other parts of this book. (Thus China, although part of Asia, is not covered here.) But that is not to suggest that examining an ‘Asia-Pacific’ group of countries comprising around two billion people is not useful for understanding global mitigation action. The large number of countries in the Asia-Pacific and myriad differences among them offer an opportunity to elicit, through their comparative examination, insights of general interest—for this somewhat ad hoc regional grouping is a plausible cross-section of the world’s countries. Having noted this richness in difference, one is also mindful of the fact that a chapter on mitigation action is entitled to minimize the space allocated to small, low-emitting developing countries (of which there are many in the Asia-Pacific), considering that whatever effort they make to reduce their emissions will have at most a symbolic impact on bringing climate change under control. Accordingly, the logical place to begin a chapter on mitigation in the Asia-Pacific is with the greenhouse gas emissions from the region’s relatively populous or otherwise high-emitting countries. This information, as will be seen, instantly highlights both country differences and policy challenges, but also epistemological issues. The comparative analysis of emissions from selected Asia-Pacific countries (a total of 15 states with a combined population of more than 1.2 billion) is followed by a discussion on what is being done by their governments to bring emissions down. In this later part, the focus will be on law and policy.

Exceptionalist claims about the region are not backed by convincing evidence. See, for example, Isabelle Whitehead, ‘Climate Change Law in Southeast Asia: Risk, Regulation and Regional Innovation’ (2013) 16 Asia Pacific Journal of Environmental Law 141 (‘Southeast Asia is a frontier space in global climate governance and scholarship’); and Takako Morita and Christina Pak, ‘Legal Readiness to Attract Climate Finance: Towards a Low-Carbon Asia and the Pacific’ (2018) 12(1) Carbon and Climate Law Review 6 (‘The urgency of legal reforms to support the low carbon transition is greatest in Asia and the Pacific where climate change has affected virtually every aspect of people’s lives’). See also Ed Couzens and Tim Stephens, ‘Editorial: The Prospects for a Truly Regional Asian Pacific Environmental Law?’ (2017) 20 Asia Pacific Journal of Environmental Law 1. 1

156

Climate change mitigation law and policy in the Asia-Pacific  157 In addition to the epistemological concerns alluded to, this chapter is particularly interested in the extent to which climate change policy is being implemented through the law, on the assumption that a supportive legal scheme for mitigation can be taken as an indicator of how well-established (if not how ambitious) mitigation effort is in a country. The chapter would not be complete without an assessment of the relative mitigation ambition of countries in the Asia-Pacific. After all, the degree of effort that each country exerts, and how it compares with that of other countries (and with the collective effort needed to avoid global warming of 2 °C or more), is the main issue. Nevertheless, there is no straightforward way of carrying out such an assessment. One reason is the epistemological one I have already referred to twice: viz. that the completeness, transparency, and reliability of information on emissions, mitigation measures, developmental visions, etc., is not the same across the region. It is not just that it is difficult to assess relative mitigation effort in the best of circumstances, it is impossible to do so when the prerequisite information is absent or deficient. Still, an attempt at comparison of ambition will be made.

1

SOURCES OF INFORMATION

One of the major achievements of the United Nations Framework Convention on Climate Change (UNFCCC) has been the facilitation of regularly updated, high-quality information from states about how they are responding to the problem of climate change—and with what effect on their greenhouse gas emissions.2 As the state response has deepened and widened, so has the treaty-generated information about it. A good example of the UNFCCC’s role is its decades-long effort to raise the quality of state reporting on greenhouse gas emissions. Annex I parties to the Convention have been producing annual emissions inventories, called National Inventory Reports (NIRs), since 2003.3 Emissions information from the much larger group of non-Annex I (developing country) parties is steadily increasing, although there are still major gaps. A non-Annex I party is not required under the UNFCCC to submit an NIR, although it is expected to produce a National Communication (NC) at four-year intervals if it has the capacity to do so.4 To acquire the capacity necessary to compile an NC, financial assistance may be obtained from the Global Environment Facility (GEF). Most developing countries have produced only two or three NCs since the UNFCCC came into force,5 compared to the seven that Annex I parties have completed so far (in addition to their annual NIR).6 An NC details and contextualizes a state’s response to climate change. Annex I parties’ NCs contain only a summary of their historical greenhouse gas inventory, as the full inventory for each year since 1990 is available through the NIR process. For non-Annex I parties, an NC is to include an inventory for a recent year (no more than that is required).

At the time of writing (December 2020), the Paris Agreement’s own reporting system (known as the Enhanced Transparency Framework, or ETF) was not yet operational. 3 See https://​unfccc​.int/​ghg​-inventories​-annex​-i​-parties/​2020. 4 For details, see Alexander Zahar, International Climate Change Law and State Compliance (Routledge 2015). 5 Mexico stands alone in having published six NCs: see https://​unfccc​.int/​non​-annex​-I​-NCs. 6 Annex I parties’ eighth NC was due in December 2021. 2

158  Research handbook on climate change mitigation law NCs in general are sprawling reports (hundreds of pages long), consisting of a large variety of information. They are not issued frequently enough, or written in a focused-enough way, to serve as instruments of accountability for state action on the mitigation of emissions. In 2010, the Cancun Agreements committed both Annex I and non-Annex I parties to undertake mitigation efforts covering the period 2013–2020.7 This arrangement gave rise to a new type of report, with two variants: the Biennial Report (BR) for Annex I parties and the Biennial Update Report (BUR) for non-Annex I parties. Both variants are designed to be mitigation-focused and relatively short, in addition to being biennial. As with all national reporting under the UNFCCC, biennial reporting is legally obligatory for Annex I parties but not so for developing countries, many of which face capacity issues. BRs and BURs are both independently reviewed, by Expert Review Teams and Teams of Technical Experts, respectively. (The TTEs operate more ‘supportively’ than the ERTs.8) The BR/BUR reports’ advantages as information sources include that they enable the scholarly study of mitigation in jurisdictions that would otherwise be very difficult to access linguistically, or be difficult to access for other reasons, such as a lack of systematically produced information on mitigation. Another advantage is that the reports may be regarded as reasonably reliable because of the independent review process that awaits them. Naturally, states would rather avoid any formal criticism of their reports. This chapter relies heavily on information drawn from the UNFCCC’s biennial reporting system to characterize mitigation law and policy in the Asia-Pacific. There are limitations to this approach. First, we must assume that all states ‘greenwash’ their mitigation performance, presenting it in the best possible light. The prospect of independent review does not constrain greenwashing. Second, while developing-country BURs are an invaluable resource and are competently produced even by the least-wealthy developing countries (on the basis of financial support from the GEF),9 they are not being submitted at the expected frequency (i.e. biennially) by all Asia-Pacific countries. Quite a number of them have yet to submit even a first BUR.10 Major information gaps therefore remain, as will be made clear below.

7 COP (UNFCCC), ‘Decision 1/CP.16, (“The Cancun Agreements”): Outcome of the Work of the Ad Hoc Working Group on Long-Term Cooperative Action under the Convention’, FCCC/CP/2010/7/ Add.1 (2010). 8 The author of this chapter serves as a member of ERTs and TTEs. 9 E.g. Indonesia, ‘Second Biennial Update Report under the United Nations Framework Convention on Climate Change’ (Directorate General of Climate Change, Ministry of Environment and Forestry 2018), I-10; Laos, ‘First Biennial Update Report’ (Ministry of Natural Resources and Environment 2020), I; Malaysia, ‘Third National Communication and Second Biennial Update Report to the UNFCCC’ (Ministry of Energy, Science, Technology, Environment and Climate Change 2018), 217; Papua New Guinea, ‘First Biennial Update Report to the United Nations Framework on Climate Change’ (Climate Change and Development Authority 2018), 15. 10 Asia-Pacific countries with no BUR submitted to date include Bangladesh*, Bhutan*, Brunei, Democratic People’s Republic of Korea, Fiji, Kazakhstan, Myanmar*, Nepal*, Pakistan, the Philippines, Samoa, and Sri Lanka (among others). The reasons for these instances of non-submission are not publicly known. In the case of the larger of these countries—Bangladesh, Pakistan, and the Philippines—their National Communications (dating to 2018, 2018, and 2014, respectively) have been used in this chapter as an alternative source of information. However, the NCs of developing countries cannot be considered as reliable as BURs, because they are not subjected to independent review. Above, several countries are marked with an asterisk. These are least developed countries (LDCs). Cambodia and Laos, which are LDCs, have submitted a BUR. LDC status alone, therefore, does not explain non-submission.

Climate change mitigation law and policy in the Asia-Pacific  159

2

GREENHOUSE GAS EMISSIONS

Table 7.1 shows the greenhouse gas emissions per capita for each of the 15 selected Asia-Pacific countries, based on their most recent inventory at the time of writing (December 2020). Note that, in the table, the emissions and ‘removals’ from the land use, land-use change, and forestry (LULUCF) sector are, in effect, separated out from emissions from other economic sectors. This is the conventional practice in accounting for greenhouse gas emissions. LULUCF emissions or removals are significant in most of the countries examined. The reason for reporting their estimates separately is their relatively high uncertainty.11 They cannot be left out of the picture, but, at the same time, they cannot be taken at face value. In interpreting the information in Table 7.1, it is necessary to proceed with caution. To begin with, the inventory year is not the same for all countries. The three Annex I parties in the Asia-Pacific (Australia, Japan, and New Zealand) had already published their 2017 inventory at the time of writing, whereas the region’s developing countries lagged behind by one or more years. For example, Laos had managed to produce only one BUR (published in 2020), based on a national inventory for 2014. The Philippines was exceptional in having no recent inventory to report, a fact that renders it a black box in this exercise. Yet, even for developing countries other than the Philippines, the comparison attempted in Table 7.1 is far from ideal. Some, like Vietnam, have strongly growing economies, which cause strong increases in emissions from year to year. Vietnam’s per-capita emissions in 2017 were probably significantly higher than they were in 2013—which is the year of its most recent inventory. Different rates of population growth in the region also contribute to weakening the accuracy of the comparisons in column 5 of the table, because such growth strongly affects emissions growth from year to year. In brief, Table 7.1’s figures on per-capita emissions would be different if all countries were reporting on an inventory for the same year. Second, the inventories from which the table’s figures are drawn are not all complete, nor are they equally reliable. The most reliable inventories are those of the Annex I parties. As noted in the previous section, Annex I parties are thoroughly practised in producing them, with permanent systems in place to do so. Their inventories (the NIRs) are moreover subjected to an independent quality-assurance process, carried out by the aforementioned Expert Review Teams (which also review Annex I parties’ NCs and BRs). The ERTs test the NIRs for completeness and other qualities that go to reliability. The developing-country inventories, by contrast, are not only not reviewed, most do not account for all of the greenhouse gases that Annex I parties are required to account for.12 For example, they leave out the industrial Thailand, for example, calculates that while the combined uncertainty of its estimated emissions from non-LULUCF sectors in 2013 was 5.54%, for the LULUCF sector it was 29.29%: Thailand, ‘Second Biennial Update Report’ (Ministry of Natural Resources and Environment 2017), 29. Thailand is ‘REDD+ ready’ (see ibid., 12), meaning that emissions data on its LULUCF sector are of a relatively high quality. (REDD+ is a UNFCCC programme to protect forests in developing countries.) For countries with less advanced forest-monitoring systems than Thailand’s, LULUCF uncertainty can be much higher. Vietnam, for example, which is not as advanced as Thailand with the REDD+ programme (see Vietnam, ‘Second Biennial Update Report to the United Nations Framework Convention on Climate Change’ (Ministry of Natural Resources and Environment 2017), 88–90), reports a LULUCF uncertainty of 61.6%: ibid., 39. 12 For the greenhouse gases covered by the climate treaties, see UNFCCC, ‘Decision 24/CP.19, Revision of the UNFCCC Reporting Guidelines on Annual Inventories for Parties Included in Annex I to the Convention’, FCCC/CP/2013/10/Add.3 (2013), Annex I, para. 28. 11

160  Research handbook on climate change mitigation law Table 7.1 Country

Per-capita emissions in selected countries of the Asia-Pacific, based on the most recent country inventory Inventory

Population (in IY)

year (IY)

Total emissions (Mt CO2 eq.)

Per-capita emissions (t CO2

[inc.]

eq.) [inc.]

554.1 [534.7]

22.5 [21.7]

Australiaa

2017

24,598,900

Bangladeshb

2012

151,000,000

n/a [152.3c]

n/a [1.0]

Cambodiad

2016

15,770,000

32.6e [163.6]

2.1 [10.4]

Indonesiaf

2016

261,600,000

822.3g [1,457.8h]

3.1 [5.6]

Japani

2017

126,800,000

1,291.7 [1,234.3]

10.2 [9.7]

Koreaj

2016

51,250,000

694.1 [649.6]

13.5 [12.7]

Laosk

2014

6,640,000

n/a [24.1l]

n/a [3.6]

Malaysiam

2014

29,870,000

317.6 [50.5]

10.6 [1.7]

New Zealandn

2017

4,794,000

80.9 [56.9]

16.9 [11.9]

Pakistano

2015

199,400,000

397.7 [408.1]

2.0 [2.1]

Papua New Guineap

2015

8,108,000

13.5 [15.2]

1.7 [1.9]

Philippines

2000q

76,504,077

not comparable

not comparable

Singaporer

2014

5,470,000

50.8 [50.9s]

9.3 [9.3]

Thailandt

2013

68,140,000

318.7 [232.6]

4.7 [3.4]

Vietnamu

2013

90,750,000

293.3 [259.0]

3.2 [2.9]

Notes: Mt/t CO2 eq. = megatonne/tonne carbon-dioxide equivalent; n/a = not available; [inc.] = including LULUCF emissions and removals. a Australia, ‘Fourth Biennial Report’ (Department of the Environment and Energy 2019), 4. b Bangladesh, ‘Third National Communication to the United Nations Framework Convention on Climate Change’ (Ministry of Environment, Forest and Climate Change 2018), v–vi. c Emissions of carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) only: ibid., v–vi. d Cambodia, ‘First Biennial Update Report to the United Nations Framework Convention on Climate Change’ (General Secretariat of the National Council for Sustainable Development/Ministry of Environment 2020), xvi. e Emissions of CO2, CH4, N2O, and hydrofluorocarbons (HFCs) only: ibid., xv. f Indonesia, ‘Second Biennial Update Report’, 1-4. g Emissions of CO2, CH4, and N2O only: ibid., 1-5. h This figure includes emissions from peat fires: ibid., 1-5. An explanation of the history of peat fires in the Asia-Pacific region is given by Malaysia in its 2016 Nationally Determined Contribution (NDC), page 4: ‘In the 1960s and 70s, peatlands were considered a wasteland and draining was considered an effective rehabilitation to improve the productivity. Some of these drained peatlands are now unmanaged and are susceptible to wildfires during the dry seasons. It is also expensive to re-wet these areas.’ NDCs are available at the UNFCCC’s website: https://​www4​.unfccc​.int/​sites/​NDCStaging/​Pages/​All​.aspx. i Japan, ‘Fourth Biennial Report under the United Nations Framework Convention on Climate Change’ (Ministry of the Environment 2019), 4. j Republic of Korea, ‘Third Biennial Update Report under the United Nations Framework Convention on Climate Change’ (Ministry of Environment 2019), 6. k Laos, ‘First Biennial Update Report’, ii. l Emissions of CO2, CH4, and N2O only: ibid., 17. m Malaysia, ‘Second Biennial Update Report’, xxxiv.n New Zealand, ‘Fourth Biennial Report under the United Nations Framework Convention on Climate Change’ (Ministry for the Environment 2019), 16–17. o Pakistan, ‘Second National Communication on Climate Change to United Nations Framework Convention on Climate Change’ (Ministry of Climate Change 2018), 20–21. p Papua New Guinea, ‘First Biennial Update Report’, 20. q No greenhouse gas inventory has been compiled by the Philippines since the year 2000: Philippines, ‘Second National Communication to the United Nations Framework Convention on Climate Change’ (Climate Change Commission 2014), 27. The only inventory pre-dating the 2000 inventory is one for 1994. To avoid an improper comparison with other countries, the Philippines’ emissions data for the year 2000 have not been included in the table. r Singapore, ‘Fourth National Communication and Third Biennial Update Report under the United Nations Framework Convention on Climate Change’ (National Environment Agency 2018), 66. s Singapore’s LULUCF sector accounted for only 1/16th of 1 Mt CO2 eq. in 2014. t Thailand, ‘Second Biennial Update Report’, iv–v. u Vietnam, ‘Second Biennial Update Report’, 25.

Climate change mitigation law and policy in the Asia-Pacific  161 gases or only report methane emissions from oil and gas production but not from other sectors. Moreover, the lowest calculation ‘tier’ (the least accurate one) is used by developing countries to report emissions from almost all emissions categories.13 Then there is LULUCF uncertainty. As indicated at the start of this section, many Asia-Pacific developing countries have large LULUCF sectors. For these, emissions uncertainty can easily reach 100% in the absence of the kind of sophisticated, systematically developed, satellite-monitored, and ground-proofed data employed by Annex I parties. Accordingly, Indonesia’s per-capita emissions including LULUCF might have been around 5.6 tonnes CO2 eq. in 2016, as shown in Table 7.1, but they might in fact have been much higher (or lower) had Indonesia been in a position to produce a more complete and reliable inventory. In the literature, one often sees figures on per-capita emissions treated as telling comparators between countries, especially in comparisons between developed and developing countries. However, in most such cases it is a comparison of apples and oranges. Moreover, as explained further below, even genuine differences between the per-capita emissions of different countries are far from straightforward in their implications, and can be misleading.14 Table 7.1, therefore, is the beginning of a discussion, not its conclusion. As part of that discussion, we may note that while the table draws the reader’s attention to its last column (per-capita emissions), the more interesting information as far as the future control of climate change is concerned might be column 3: population size. Were Australia to reduce its per-capita emissions by 1 tonne CO2 eq. and Indonesia to increase its own by the same amount, global emissions would increase by the significant amount of 237 Mt CO2 eq. per year, because Indonesia’s population is more than ten times that of Australia. Indonesia’s population is indeed expected to grow by 35 million people (from the 2016 figure shown in the table) by 2030.15 It is therefore far more important that Indonesia’s per-capita emissions do not increase (by very much), than that Australia’s decrease (by a lot). While this proposition is indisputably true and forms the main rationale for climate finance and for the international trading of emissions allowances, including through such programmes as the Clean Development Mechanism, it would be almost certainly rejected out of hand by Indonesia, which has its sights set on economic expansion. To put the same point differently and politically more neutrally: per-capita emissions say little about where the bulk of future emissions will come from. The next table takes information from Table 7.1 to create two top-ten lists based on countries’ per-capita emissions. One list excludes, and the other includes, net LULUCF emissions and removals. Cambodia occupies radically different positions in the two rankings, and the difference in standing of Malaysia and Laos, depending on the column, is also remarkable.

13 E.g., Laos, ‘First Biennial Update Report’, 17; Pakistan, ‘Second National Communication’, 21; Papua New Guinea, ‘First Biennial Update Report’, 28; Vietnam, ‘Second Biennial Update Report’, 21. Even Singapore uses Tier 1 for most emissions estimates: Singapore, ‘Fourth National Communication’, 20. Thailand is closer to Singapore than to the other developing countries in the group in using higher tiers for some of its estimates: Thailand, ‘Second Biennial Update Report’, 27. Annex I parties, by contrast, mostly use higher tiers in their reporting. On the tier system, see Subsidiary Body for Scientific and Technical Advice (UNFCCC), ‘Updated UNFCCC Reporting Guidelines on Annual Inventories Following Incorporation of the Provisions of Decision 14/CP.11’, FCCC/SBSTA/2006/9 (2006). 14 The figures seen in the literature are usually biased against Annex I parties for being limited to the non-LULUCF sectors, which make a higher contribution to the emissions of Annex I parties. See Table 7.2, below. 15 Indonesia, ‘Second Biennial Update Report’, I-1.

162  Research handbook on climate change mitigation law Table 7.2  

Exc. LULUCF

1

Australia

2

Top ten per-capita emitters in the Asia-Pacific (data from Table 7.1) t CO2 eq.  

Inc. LULUCF

t CO2 eq.

22.5  

Australia

New Zealand

16.9  

Korea

12.7

3

Korea

13.5  

New Zealand

11.9

4

Malaysia

10.6  

Cambodia

10.4

5

Japan

10.2  

Japan

9.7

6

Singapore

9.3  

Singapore

9.3

7

Thailand

4.7  

Indonesia

5.6

8

Vietnam

3.2  

Laos

3.6

9

Indonesia

3.1  

Thailand

3.4

10

Cambodia

2.1  

Vietnam

2.9

21.7

Australia, which is almost in a class of its own with its per-capita emissions, does not budge from the number one 1 spot, while the two other Annex I parties stay in the top five. But, as may been seen, two developing countries are also in the top five. Why is there an interest in comparing countries’ per-capita emissions? One answer is that it is a measure that highlights countries’ differential use of ‘atmospheric space’. Those with high per-capita emissions appropriate atmospheric space faster than other countries. In this thinking, available atmospheric space is delineated by a carbon budget that corresponds to the objective of keeping global warming below 2 °C (or 1.5 °C, or 500 parts per million CO2 eq., or another limit). It is apparent from Table 7.1 that people in the 15 Asia-Pacific countries help themselves to very different shares of the implied budget depending on where they live. True though this observation may be, it is hard to say what follows from it. There is, of course, no rule of international law that provides that every individual’s share in an atmospheric budget should be equal to everyone else’s. Such a notion would in any case be too simplistic, as it disregards ‘innocent’ differences in national circumstances. For example, Australia’s per-capita emissions are more than twice those of Singapore’s, but Singapore is a compact country (a large city), with low transport emissions. Moreover, it has no agricultural sector to speak of, whereas Australia’s farmers working the country’s vast expanses supply much of Asia with agricultural produce. It does not necessarily follow that Australians are unfairly appropriating more atmospheric space than Singaporeans. Figures on per-capita emissions also cannot be read as evidence in themselves that one country’s mitigation efforts are more (or less) ambitious than those of another. What the information presented above can do is highlight puzzles about the region that might generate interesting research questions. For example, Table 7.2 indicates that Malaysia has a strongly mitigating LULUCF sector, whereas Cambodia’s is very weak—so weak, indeed, that it puts its per-capita emissions on a par with New Zealand’s when net LULUCF emissions are included in its per-capita emissions. Why is there this difference between Malaysia and Cambodia? Does it point to a failure of Cambodia with respect to forest conservation? Could Cambodia learn something from Malaysia? Per-capita emissions figures certainly provide clues about differing national circumstances and about sectors in which mitigation effort may be strong or lacking. In addition to per-capita emissions measured at a point in time, it is also important to consider emissions trends over time. Table 7.3 presents what is known about emissions from the main emitters in the Asia-Pacific region over an eight-year period. As is apparent from Table 7.3, emissions from the three Annex I parties were essentially stable over the eight-year period. Australia’s LULUCF sector shows evidence of increasing

Climate change mitigation law and policy in the Asia-Pacific  163 Table 7.3

Emissions trends in selected countries of the Asia-Pacific region, 2010–2017, in Mt CO2 eq., excluding and including LULUCF

Country

2010

2011

2012

2013

2014

2015

2016

2017

Australiaa

537.3

538.3

540.6

530.4

525.0

535.2

546.8

554.1

586.0

567.7

558.7

537.7

533.1

531.6

530.4

534.7

-

-

-

-

-

-

-

-

-

-

152.3

-

-

-

-

-

26.3

-

-

-

-

30.1

32.6

-

157.3

-

-

-

-

161.1

163.6

-

690.0

740.0

790.0

750.0

790.0

810.0

822.3

-

1115.0

1355.0

1480.0

1349.8

1770

2372.5e

1457.8

-

1305.1

1356.1

1398.8

1410.3

1362.2

1323.6

1307.9

1291.7

1234.6

1286.2

1326.0

1344.1

1297.7

1264.0

1253.3

1234.3

657.4

683.0

687.1

696.7

690.9

692.9

694.1

-

603.0

628.7

638.0

652.0

648.3

650.1

649.6

-

-

-

-

-

24.1

-

-

-

Bangladeshb Cambodiac Indonesiad Japanf Koreag Laosh Malaysiai New Zealandj Pakistank Papua N. G.l

-

-

-

-

-

-

-

282.8

283.5

302.6

309.9

317.6

-

-

-

44.7

40.9

42.4

47.4

50.5

-

-

-

79.0

78.7

81.1

80.5

81.3

81.2

79.1

80.9

47.8

52.1

55.5

57.4

55.4

55.9

54.3

56.9

-

-

364.8

-

-

397.7

-

-

-

-

374.1

-

-

408.1

-

-

7.2

7.4

7.5

7.9

9.1

13.5

-

-

7.0

9.5

5.1

11.8

10.0

15.2

-

-

Philippinesm

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Singaporen

-

-

-

-

50.8

-

-

-

Thailando Vietnamp

-

-

-

-

50.9

-

-

-

314.9

314.3

324.8

318.7

-

-

-

-

250.0

243.3

240.0

232.6

-

-

-

-

273.3

-

-

293.3

-

-

-

-

252.6

-

-

259.0

-

-

-

-

Notes: The first line next to each country excludes LULUCF emissions and removals, whereas the second line includes them. a Australia, ‘Fourth Biennial Report’, 96. b Bangladesh, ‘Third National Communication’, 100. c Cambodia, ‘First Biennial Update Report’, xvi. d Indonesia, ‘Second Biennial Update Report’, 2–35. e Extensive forest fires in 2015 account for this anomaly in the series: ibid., 1-7/8. f Japan, ‘Fourth Biennial Report’, 224. g Republic of Korea, ‘Third Biennial Update Report’, 59. h Laos, ‘First Biennial Update Report’, ii. i Malaysia, ‘Second Biennial Update Report’, 54 and 169. j New Zealand, ‘Fourth Biennial Report’, 202. k Pakistan, ‘Second National Communication, 20–21 and 36. l Papua New Guinea, ‘First Biennial Update Report’, 21. m The country’s last inventory was for the year 2000. See corresponding note to Table 7.1. n Singapore, ‘Fourth National Communication’, 66. o Thailand, ‘Second Biennial Update Report’, 33. p Vietnam, ‘Second Biennial Update Report’, 37 and 41.

removals (or decreasing deforestation), counteracting a slight upward pressure on its emissions from the non-LULUCF sectors (energy, industrial processes, agriculture, and waste). Japan’s LULUCF sector’s removals are declining slightly,16 while its emissions in the other sectors curve upwards to 2013, then return to 2010 levels in 2017. It is too early to tell whether Japan’s

This is due to the maturity of its forests: Japan, ‘Fourth Biennial Report’, 4.

16

164  Research handbook on climate change mitigation law non-LULUCF emissions are now finally trending downward, although its government claims that they are.17 The country is not experiencing any of the pressures of population growth that are a feature of Australia’s and New Zealand’s national circumstances.18 So Japan’s government might be right about the downward trend. By contrast with the overall flatness of emissions from the Annex I parties, emissions from the developing countries in the Asia-Pacific region for which trend information exists (thus not counting Bangladesh, Laos, the Philippines, and Singapore) are steadily increasing, not only in the non-LULUCF sectors but also in the LULUCF sector. Note, for example, Indonesia’s unambiguous yearly increase in its non-LULUCF emissions, paralleled by its emphatic net annual LULUCF contributions, which presumably would have been much worse had Norway not committed US$1 billion as of 2010 to help Indonesia to stem deforestation.19 The sole exception to this pattern is Thailand, with emissions flat in the non-LULUCF sectors and removals improving in the LULUCF sector. The contrast between the two categories of countries is as expected. On the one hand, there is a steady growth in emissions in the non-Annex I group of countries, which operate without real constraints in this regard under all three of the climate treaties. The growth in their emissions is expected to continue until at least 2030 (see next section). On the other hand, Annex I parties, having already reaped all the low-hanging fruit of emissions reductions, are now travelling along an emissions plateau. Only Japan, with its negative population growth, might be on a downward-sloping exit ramp. Perhaps unexpected are the signs of a deterioration in the LULUCF sectors of the Asia-Pacific’s developing countries: the region’s tropical forests are net sources of emissions, not net sinks.20 Overall, the trends might be said to be discouraging: emissions and yet more emissions. It bears reiterating that the information in Table 7.3 on emissions from developing countries is so patchy for most of them that few conclusions on overall trends can reliably be drawn.

3

MITIGATION TARGETS

Is the discouraging picture painted by actual emissions improved once mitigation targets (i.e. planned future emissions) are considered? The practice of target setting, which began for Annex I parties with the Kyoto Protocol’s coming into effect in 2005, was widely adopted by developing countries following the Cancun Agreements in 2010 and has become the central feature of the Paris Agreement in the form of nationally determined contributions (NDCs). This brings us to Table 7.4. Reading through the

Japan NDC 2020, 1. Australia’s population grew by 2.57 million people (11.7%) between 2010 and 2017, and New Zealand’s by 443,000 (10.2%). Japan’s population decreased over the same period by 1.3 million people (−1%). All population data in this chapter are from the World Bank. 19 Bradley Evans, ‘Land Use, Land Use Change and Forestry: Asia-Pacific’, in Geert Van Calster, Wim Vandenberghe, and Leonie Reins (eds), Research Handbook on Climate Change Mitigation Law (Edward Elgar Publishing 2016), 344–58 at 355. 20 Alerts about the decimation of tropical forests have of course been with us for a long time (see, e.g., FAO, ‘The World’s Forests’ (1993) www​.fao​.org/​3/​t0829e/​T0829E04​.htm; and Evans (n. 19), 357–8). Emissions data merely confirms what we knew from other sources. 17 18

Climate change mitigation law and policy in the Asia-Pacific  165 Table 7.4

Internationally declared mitigation targets of Asia-Pacific countriesa

Country

Mitigation target for 2030 (or for the 2021–2030 period)

Australia

Reduce emissions by 26–28% below 2005 levels by 2030. Economy-wide target. To be developed into an emissions budget, covering the period 2021–2030. (Cf. Australia’s mitigation targets under the Kyoto Protocol’s first and second commitment periods: 8% above 1990 levels, and 0.5% below 1990 levels, respectively. The latter is equivalent to 13% below 2005 levels by 2020.)

Bangladesh

Unconditional contribution to reduce emissions by 5% (= 12 Mt CO2 eq.) from BAU levels by 2030 from the power, transport, and industry sectors only. The target rises to 15% subject to the provision of international support in the form of finance, investment, technology development and transfer, and capacity building.

Cambodia

Mitigation contribution as a whole for the period 2020–2030 is conditional upon the availability of international support. Target to reduce emissions by a maximum of 27% by 2030, compared with the BAU level, in the energy, industry, and waste sectors.b For the LULUCF sector, a combination of voluntary and conditional actions are to increase forest cover to 60% of national land area by 2030 (from 57% in 2016).

Indonesia

Unconditional reduction target of 29%, and conditional reduction target of up to 41%, of the BAU scenario in 2030. This scenario is projected to be 2,869 Mt CO2 eq. emissions, including LULUCF, in 2030. The separate conditional target is subject to international support in the form of finance, technology transfer, and capacity building.

Japan

Reduction of 26.0% by 2030 compared to 2013 (25.4% reduction compared to 2005). (Japan’s target under the Kyoto Protocol’s first commitment period was a 6% reduction from 1990. Japan did not have a Kyoto Protocol target in the second commitment period, but made a UNFCCC pledge: 3.8% reduction from 2005 levels by 2020.)

Korea

Reduction of 37% from BAU by 2030 (BAU = in 2030 estimated at 850.6 Mt CO2 eq.). Whether this will cover the LULUCF sector or not had not yet been decided by Korea at the time of its first NDC submission. Carbon credits from international market mechanisms will be used to achieve the 2030 target.

Laos

Subject to the provision of international support (> $1.1 billion requested): increase the share of renewable energy to 30% of energy consumption by 2025. For transport fuels, increase the share of biofuels to meet 10% of the demand for transport fuels by 2025. Road-network development will be undertaken to reduce the number of kilometres travelled by vehicles. New large-scale hydropower plants will provide clean electricity to neighbouring countries: 20,000 MW of additional hydroelectric capacity is planned for construction after 2020.

Malaysia

Reduce emission intensity of GDP by 45% by 2030 relative to 2005. (Emissions in 2005 = 288.7 Mt CO2 eq., including LULUCF. Emission intensity of GDP in 2005 = 0.531 tons CO2 eq. per thousand Malaysian ringgit. Gases covered: CO2, CH4, N2O only.) This consists of 35% unconditionally and 10% on condition of receipt of climate finance, technology transfer, and capacity building from developed countries.

New Zealand

Reduce emissions to 30% below 2005 levels (corresponds to 11% below 1990 levels) for the period 2021–2030. To be managed using a carbon budget for the period. Equates to a commitment to keep emissions for the period capped at approximately 601 Mt CO2 eq. Intention to use international market mechanisms, cooperative approaches, and carbon markets that enable use of a wide variety of outcomes.c (New Zealand’s target under the Kyoto Protocol’s first commitment period was 0% change from 1990. It did not have a Kyoto Protocol target in the second commitment period, but made a UNFCCC pledge: 5% reduction from 1990 levels over the period 2013–2020.)

Pakistan

Under BAU, emissions in 2030, including LULUCF, are projected to be 1,603 Mt CO2 eq. Peaking of emissions under BAU is expected to take place much later than 2030. An ‘exponential increase of GHG emissions for many decades is likely to occur before any decrease’, according to Pakistan.d Target: reduce emissions up to 20% of BAU by 2030 subject to availability of international grants to meet the total abatement cost of the 20% reduction, amounting to about US$40 billion.

166  Research handbook on climate change mitigation law Country Papua New Guinea

Mitigation target for 2030 (or for the 2021–2030 period) Paucity of data limits to CO2 only the gases considered for mitigation, except for the oil and gas sector, where CH4 fugitive emissions are included. The liquefied natural gas (LNG) industry, established in 2011, is expected to grow at a rapid pace. LNG production is energy intensive, and the industry’s growth will cause an increase in emissions, according to the country’s NDC. BAU CO2 emissions in 2030 could reach 18 Mt CO2 per year (including CO2 eq. emissions of CH4 from the oil and gas sector). Mitigation opportunities are extremely limited (as stated in the NDC) if economic growth progresses at current rates and the oil and gas sector expands as anticipated, other than in the forestry sector by implementing REDD+ activities in the context of adequate and predictable support. The country’s main mitigation contribution would be in terms of a replacement of fossil-fuel electricity generation with renewable energy sources. Only one quantified target is presented: close to 100% carbon-free electricity by 2030, conditioned on support (the nature of which is not specified). Other mitigation targets are not clearly specified.

Philippines

Reduction of about 70% from the non-LULUCF sector by 2030 relative to BAU. Assumptions on BAU: historical GDP for 2010–2014 with an average annual growth of 6.5% for 2015–2030; and average annual population growth of 1.85%. Contribution is wholly conditioned on the extent of internationally supplied financial resources, as well as technology development and transfer, and capacity building.

Singapore

To reduce emission intensity by 36% from 2005 levels by 2030, with the aim of peaking emissions at 65 Mt CO2 eq. around 2030. Full coverage of sectors and gases. (Emissions in 2005: 40.9 Mt CO2 eq.; GDP in 2005 (at 2010 prices): S$232.77 billion.) Target to be achieved through domestic efforts, but will consider international market mechanisms to support achievement if necessary. (Singapore’s target for the period to 2020 was to reduce its emissions by 16% below 2020 BAU levels; i.e. the earlier target was not expressed as an intensity target.e)

Thailand

To reduce emissions by 20% below the BAU level in 2030 (BAU = in 2030 estimated at 555 Mt CO2 eq.). A higher target of 25% below BAU is subject to enhanced and adequate access to international financial resources and support for technology development and transfer, as well as capacity building.

Vietnam

With domestic resources, by 2030 to reduce emissions by 8% compared to BAU (a reduction of 62.7 Mt CO2 eq.), consisting of a reduction in emission intensity per unit of GDP of 20% compared to 2010; and an increase in forest cover to 45%, from 41% in 2013. BAU emissions in 2030, not including those from industrial processes: 787.4 Mt CO2 eq. Conditional contribution: increase the 8% target to 25% (a reduction of 197.9 Mt CO2 eq.) if international support is received through bilateral and multilateral cooperation and through the implementation of the Paris Agreement’s Article 6(4) trading mechanism; in which case, emission intensity per unit of GDP will be reduced 30% compared to 2010. All sectors and gases are included, except as indicated.

Notes: The mitigation targets are detailed in each country’s NDC (along with adaptation targets, not summarized here) submitted pursuant to the UNFCCC and Paris Agreement (BAU = business as usual). a See the compilation of NDCs at https://​www4​.unfccc​.int/​sites/​NDCStaging/​Pages/​All​.aspx. New Zealand and Singapore each updated their NDC in 2020. b Cambodia, ‘First Biennial Update Report’, xviii. c In New Zealand’s update of its NDC, dated 22 April 2020, the country outlined its ‘new domestic target’ legislated in its Climate Change Response (Zero Carbon) Amendment Act 2019, namely to reduce net emissions other than emissions of biogenic methane to zero by 2050, and to reduce emissions of biogenic methane to 24–47% below 2017 levels by 2050, including to 10% below 2017 levels by 2030. It is not clear how, if at all, these targets affect the NDC target summarized in the table. d Pakistan NDC 2016, 27. e Singapore, ‘Fourth National Communication’, 11.

table’s list of targets, the reader may wish to consider whether any conclusions could be drawn about which are ambitious and which are not. Several important points emerge from the information presented in Table 7.4. I have arranged them under five headings.

Climate change mitigation law and policy in the Asia-Pacific  167 3.1

Use of BAU Emissions to Delineate the Mitigation Target

In comparison with the absolute reduction targets of Annex I parties, BAU-referenced targets, which are the target type preferred by most developing countries, are highly uncertain, as they are projections based on multiple assumptions about the future. See, for example, the Philippines’ target in Table 7.4. The assumptions may not be as conservative as they should be, and the BAU estimate may be too high as a result, allowing the developing country to commit to an impressive-sounding target that in fact requires little mitigation effort. Note Indonesia’s BAU for 2030, which is projected as a doubling of the country’s emissions in 2016. Indonesia does not explain how it calculated its BAU emissions for 2030. For Pakistan, BAU emissions in 2030 are four times the 2015 level. In Vietnam’s case, the chosen target is an example of a complex target, with an emission-intensity target making up part of the BAU target. Despite the emission-intensity component, Vietnam still has a BAU target. Targets fully expressed as emission-intensity targets, such as Malaysia’s,21 are more reliable than BAU targets, because they do not involve any counterfactual reasoning. However, they allow for unlimited growth in emissions. Another problem with the developing-country targets in Table 7.4, in particular with the BAU targets, is that they are not always economy-wide. They are often limited to certain sectors (see, e.g., Bangladesh and Laos), and to certain gases in those sectors, meaning that the mitigation target for the country is incomplete. Such a target allows for unlimited emissions increases in the non-covered sectors or for the non-included gases. 3.2

The Targets Are Not Straightforwardly Comparable

Baseline years for emissions (i.e. years used for historical reference, such as 1990) are not fixed in countries’ target-setting. Mitigation targets will often be referenced to a baseline year in which emissions were unusually high, which makes those targets sound grander than they would be otherwise. It is possible to convert a target referenced against a given baseline year into a target referenced against a different one, but the calculation involved is not a simple one and most observers are not able to carry it out. Another comparison problem is that some countries give final-year targets, whereas others give period targets managed through a budget. Again, conversion is possible, but not easy. Even when two targets denominated in the same way are compared, such as the Korean and Indonesian targets for 2030 (37% and 29% below BAU, respectively), it is still not possible to tell from this information alone whether one is more ambitious than the other. One would need to know, for example, about the assumptions that lie behind each target, such as the assumptions on which BAU calculations were based. 3.3

Conditioning of Targets on the Provision of International Support

The mitigation targets of developing countries in Table 7.4, with the exceptions of Korea and Singapore, are partially or wholly conditioned on internationally sourced climate finance, technology transfer, or capacity-building support (or all three). Of these, the targets of Cambodia, Laos, Pakistan, and the Philippines are wholly conditioned on such support.

Malaysia, ‘Second Biennial Update Report’, xxxv.

21

168  Research handbook on climate change mitigation law Conditional targets do not offer much precision or predictability, as they are not really ‘targets’ at all—they are merely mitigation potentials that largely depend for their fulfilment on the actions of Annex I parties (i.e. how much ‘support’ they will make available globally). In a few cases, the funding amounts requested for mitigation support have been stated explicitly; e.g. US$40 billion for Pakistan’s 20% reduction from BAU by 2030, and US$247 billion for Indonesia’s conditional target (costed for the full 2018–2030 period).22 These amounts, averaging US$4 billion and US$19 billion per year, respectively, over the relevant periods, just for Pakistan and Indonesia, are far higher than any climate finance received by any country so far.23 (Requests for adaptation support are even costlier.) Developing countries’ conditional NDC targets are an extension of the larger political issue about who is ‘at fault’ for climate change, and therefore who should take the lead in addressing its causes and who should provide what quantity of support and in what form. Most Annex I parties reject this framing, a fact that contributes to the essential meaninglessness of conditional targets. 3.4

Conditioning of Targets on the Existence of an International Market for Greenhouse Gas Emissions Allowances

The Annex I parties, plus Korea and Singapore, also condition their targets, but in a different way than developing countries. These countries plan to rely on international emissions-trading markets to achieve parts of their mitigation targets. This indicates that the potential for cost-effective domestic mitigation in these countries is severely limited. The problem with conditioning targets on international markets is that hardly any such markets exist. At the time of writing, Article 6 of the Paris Agreement (international emissions trading) had not been operationalized, due to disagreements among parties to the treaty. If well-functioning international markets are not set up soon, or if Annex I parties to the Paris Agreement are allowed to use surplus allowances from the Kyoto Protocol’s first commitment period to meet their NDC commitments,24 then some of these conditional targets are rendered partly illusory. 3.5

Mitigation Targets Are Not Necessarily Environmentally Friendly or Consistent with the Aims of Other Multilateral Environmental Agreements (MEAs)

Laos’s target, which is built on a plan to massively expand hydropower (a leap from 3,000 MW to 23,000 MW of installed hydropower),25 indicates that environmental values promoted by other MEAs will be threatened in the course of implementing targets pursuant to the Paris Agreement. Laos’s target, moreover, rests on the questionable claim that an expansion of the

Indonesia, ‘Second Biennial Update Report’, I-8. Cf. the miniscule amounts (by comparison) that Indonesia received in 2015–2016: ibid., I-10. In 2020, the Asian Development Bank’s climate financing from its own resources for mitigation stood at just US$4 billion per year for the whole program: Morita and Pak, ‘Legal Readiness’ (n. 1), 8. 24 On the huge amount of surplus allowances held by most Annex I parties, see, for example, New Zealand, ‘Fourth Biennial Report’, 44. 25 Laos, ‘First Biennial Update Report’, ii. 22 23

Climate change mitigation law and policy in the Asia-Pacific  169 country’s road network will reduce total vehicle kilometres travelled.26 For various reasons (including access to finance), these two targets are potentially unachievable. In light of the above points and the significant gaps in developing-country inventories discussed earlier in this chapter, it will be close to impossible to determine whether (most) developing countries are delivering on the targets summarized in Table 7.4, unless the data gaps are quickly filled and the targets are more carefully spelled out. For a country such as the Philippines, which has not produced an inventory of its emissions since 2000, mitigation targets are little more than well-intentioned abstractions in the absence of complete and reliable inventories. It follows that, for the declared targets to have meaning, domestic monitoring, reporting, and verification (MRV) of emissions in developing countries must be brought up to speed urgently. I will return to this point in the next section. Clearly, also, the targets that assume the existence of international emissions-trading markets (i.e. the targets of all three Annex I parties in the Asia-Pacific) are cause for concern. A second observation with which to conclude this section is that the incongruous and somewhat surrealistic picture that emerges from bringing all the targets together in one list (Table 7.4) is perhaps not very encouraging. I venture to suggest that greater uniformity and comparability are expected from the Paris Agreement’s implementation.

4

LAW AND POLICY

The general context outlined above is one of non-declining emissions in the Asia-Pacific region. In addition, most mitigation targets are oriented towards emissions growth and are incomplete, difficult to interpret or compare with each other, and conditioned on expectations about the future that are uncertain. What might usefully be added to this picture by a state-level analysis of mitigation law and policy? This section examines the extent and depth of implementation of mitigation law and policy in the countries of the Asia-Pacific in order to enable an assessment of mitigation ambition across the region. Below, I discuss the Asia-Pacific’s main law and policy issues under nine subheadings. 4.1

Maturity of Mitigation Policies and Mitigation-Supporting Regulation in the Asia-Pacific

All Asia-Pacific countries have some form of mitigation policy, although in some cases it does not appear to go much beyond the adoption of the NDC targets summarized in Table 7.4. In a few cases, mainly confined to the Annex I parties, mitigation policy has a long history (stretching back 20 years, more or less) with much of it solidly grounded in the domestic legal systems of those countries. Australia,27 Japan28 and New Zealand29 all have powerful climate change legislation in place that informs day-to-day climate policy and goes so far as to remove some aspects of it from the hands of the government and invest it in expert, independent

Cf. the more realistic assessment by the Philippines of its future transportation emissions: Philippines, ‘Second National Communication’, 16. 27 Australia, ‘Fourth Biennial Report’, 21, 30–31, 36, 38. 28 Japan, ‘Fourth Biennial Report’, 50. 29 New Zealand NDC 2020 Update, 1–2; New Zealand, ‘Fourth Biennial Report’, 32–3. 26

170  Research handbook on climate change mitigation law commissions.30 This is the reverse of the dynamic found in the region’s developing countries, where centralized policy instruments dominate31 and are occasionally strengthened by being incorporated into regulation32 or pre-existing legislation.33 Alternatively, any purpose-specific legislation in place in these countries tends to be a mere shell that does little work.34 Korea35 and Singapore36 are close to the Annex I parties in terms of strength, institutionalization, and integration of their climate change legislation. Malaysia is not far off.37 Korea38 and New Zealand39 have emissions-trading systems, and Singapore as of 2019 has a carbon tax.40 (Japan does not have an ETS, nor does it have a carbon tax as such.41) Having an ETS is a sure sign that mitigation policy is felt throughout the economy, even if the allowance ‘cap’ at any given time is not particularly tight. Compared with a carbon tax, an ETS is legislation-heavy and difficult to change once up and running. (About a decade ago, in Australia, nothing less than a change of government was needed to dismantle its nascent carbon tax, which had been due to evolve into an ETS. The new government replaced it with an incentive system, legally almost as complicated as an ETS.42) Countries that set up an ETS cannot be said to be without mitigation ambition. Differences in ‘maturity’ are, of course, a problem for a region when it comes to implementing mitigation targets in NDCs, none of which are simple to account for. 4.2

Plans for Development and Economic Growth in Developing Countries Tend to Overwhelm Mitigation Planning

All NDCs and biennial reports, but especially those of developing countries, are, at this point in time, more accurately thought of as justified carbon growth plans rather than mitigation commitments in a strong sense. Carbon growth, which was once potentially limitless and called for no justification, is now still potentially limitless but must be justified: ‘A rapidly growing country like Bangladesh needs a huge amount of energy to achieve its development targets. [As a result] GHG emissions are expected to increase by 150% by 2030 from their 2011 levels’43—so runs the justification by the government of Bangladesh. Cambodia’s GDP stood at US$1,561 per capita in 2018. In the same year, Australia’s was around US$54,000 per E.g. ibid., 33. E.g. Cambodia, ‘First Biennial Update Report’, xviii–xix, 16. 32 E.g. Laos, ‘First Biennial Update Report’, 26; Indonesia, ‘Second Biennial Update Report’, 3-3; Papua New Guinea, ‘First Biennial Update Report’, vii. 33 E.g. Vietnam, ‘Second Biennial Update Report’, 16; Cambodia, ‘First Biennial Update Report’, xx; Morita and Pak, ‘Legal Readiness’ (n. 1), 13. 34 Pakistan, ‘Second National Communication’, 81; Philippines, ‘Second National Communication’, 57; Papua New Guinea, ‘First Biennial Update Report’, 13. Scholarly comment on some of these instruments has been unjustifiably upbeat; see, e.g., Whitehead, ‘Southeast Asia’ (n. 1), 142, 151, 173. 35 Republic of Korea, ‘Third Biennial Update Report’, 7, 13–14, 18, 35. 36 Singapore, ‘Fourth National Communication’, 56. 37 Malaysia, ‘Second Biennial Update Report’, xxxiii. 38 Republic of Korea, ‘Third Biennial Update Report’, 13, 33–4. 39 New Zealand, ‘Fourth Biennial Report’, 34. 40 Singapore, ‘Fourth National Communication’, 11. 41 Japan, ‘The Long-Term Strategy under the Paris Agreement’ (Cabinet Decision, June 2019), 111–12. 42 See Jonathan Verschuuren, ‘Towards a Regulatory Design for Reducing Emissions from Agriculture: Lessons from Australia’s Carbon Farming Initiative’ (2017) 7(1) Climate Law 1. 43 Bangladesh, ‘Third National Communication’, vii. 30 31

Climate change mitigation law and policy in the Asia-Pacific  171 capita.44 Cambodia, quite naturally, ‘aspir[es] to attain upper middle-income status by 2030’, complete with new international airports to fly in seven million tourists annually,45 and in the meantime is proud of its average economic growth rate of 8% between 1998 and 201846 and for having lowered the poverty rate from 48% of the population in 2007 to 14% in 2014.47 Having laid down their developmental visions, countries such as Bangladesh and Cambodia proceed to detail the vast increases in greenhouse gas emissions that will be needed to realize them. Maximization of economic growth is the paramount value in these narratives.48 If the rate of emissions growth weakens in the process, as it has in Malaysia,49 for example, this is regarded as good progress and quite sufficient for the moment. Overwhelmingly, this is the narrative of pre-2020 Asia-Pacific BURs, which is at once entirely understandable and highly problematic.50 Some scholars have sought to resolve this tension by characterizing developing countries, such as Pakistan, as ‘victims of climate change’.51 Whether or not one agrees with this representation, it is safe to say that Annex I parties and developing countries tend to understand ‘mitigation law and policy’ differently. 4.3

The Establishment of Permanent MRV Systems for Greenhouse Gas Emissions and Removals is a Priority for Developing Countries in the Region if they are to Account for their Mitigation Targets

Severe shortcomings in MRV systems are experienced in many Asia-Pacific developing countries. In Bangladesh, for example, agricultural activities are not continuously or even regularly monitored for their emissions. Data is so lacking that not even the uncertainty level of the emissions reported by Bangladesh for this sector can be calculated.52 Cambodia concedes a ‘lack of national expertise to develop the national GHG inventory on a continuous basis’.53 Indonesia, despite having based its system for the preparation of its national greenhouse gas inventory on a ministerial regulation (i.e. on a relatively solid legal basis),54 has cautioned that none of its claimed achievements in emissions reductions have been verified.55 The reason is

Australia, ‘Fourth Biennial Report’, 10. Cambodia, ‘First Biennial Update Report’, 14. 46 Ibid., x. 47 Ibid., xi. 48 See, e.g., Indonesia, ‘Second Biennial Update Report’, I-3; Laos, ‘First Biennial Update Report’, 8; Pakistan, ‘Second National Communication’, 4; Philippines, ‘Second National Communication’, 13; Papua New Guinea, ‘First Biennial Update Report’, iv; Vietnam, ‘Second Biennial Update Report’, 12. Adaptation to climate change would then be the second paramount value; see Whitehead, ‘Southeast Asia’ (n. 1), 146. 49 Malaysia, ‘Second Biennial Update Report’, xxxv. 50 For a similar conclusion, see Whitehead, ‘Southeast Asia’ (n. 1), 186. 51 Emily Barritt and Boitumelo Sediti, ‘The Symbolic Value of Leghari v. Federation of Pakistan: Climate Change Adjudication in the Global South’ (2019) 30(2) King’s Law Journal 203, 205. 52 Bangladesh, ‘Third National Communication’, 73. 53 Cambodia, ‘First Biennial Update Report’, xxiii. 54 Indonesia, ‘Second Biennial Update Report’, 2-1; see also ibid., 3-7. 55 Ibid., I-6. 44 45

172  Research handbook on climate change mitigation law that implementation funding for its inventory system is ad hoc.56 When international grants are exhausted, work on MRV is likely to stop.57 Where uninterrupted MRV capacity does exist, it has often grown around project work, such as emissions-reduction projects under the CDM, REDD+, or Japan’s Joint Crediting Mechanism (JCM).58 While MRV systems aimed at achieving NDC implementation (specifically) do exist in a few Asia-Pacific developing countries, they were still in their planning stage in 2020.59 In some other countries, they were not even being planned.60 It took Annex I parties 20 years to build MRV systems up to an acceptable level of quality, an advantage that has allowed them to transition to the Paris Agreement’s Enhanced Transparency Framework almost effortlessly. Developing countries, even if they could move twice as fast (ten years instead of twenty), will not have acceptable MRV systems in place before 2030. An urgent start to work on this dry and unexciting, yet foundationally important, level of ‘mitigation ambition’ is therefore essential. 4.4

Extent of Regional Cooperation on Mitigation Effort

The factor of regional cooperation may serve as an indicator of the maturity of mitigation law and policy in the Asia-Pacific region (cf. section 4.1 above), albeit at a level of smaller networks. In a region which, in this respect, is advanced, one expects to see cooperation on mitigation challenges, such as linked emissions-trading schemes and cross-border trade in renewable energy, as well as ‘softer’ forms of cooperation (technology exchanges, joint research projects, etc.). In the Asia-Pacific, examples of cooperation on mitigation are modest.61 The most notable among them is Japan’s aforementioned JCM. The JCM may be thought of as Japan’s own version of the CDM—although with important differences.62 Credits generated by JCM projects in developing countries help Japan to meet its domestic mitigation targets.63 The programme got underway in 2013 and had 17 ‘partner countries’ by 2019, including Bangladesh, Cambodia, Laos, Thailand, and Vietnam.64 (JCM credits cannot be accepted under the Paris Agreement for the purpose of demonstrating Japan’s achievement of its NDC targets, because, unlike the case of the Kyoto Protocol, partner countries also have NDC targets, which would lead to double-counting of emissions reductions if both Japan and the credit source country were allowed to claim the reduction. This problem could be overcome Ibid., I-10. Laos, ‘First Biennial Update Report’, i. 58 E.g. Cambodia, ‘First Biennial Update Report’, xiii; Laos, ‘First Biennial Update Report’, 29; Papua New Guinea, ‘First Biennial Update Report’, viii; and Thailand, ‘Second Biennial Update Report’, vi. 59 E.g. Cambodia, ‘First Biennial Update Report’, xiv; Malaysia, ‘Second Biennial Update Report’, xliv; Papua New Guinea, ‘First Biennial Update Report’, 13–14. 60 Papua New Guinea, ‘First Biennial Update Report’, viii. 61 Merely modest cooperation in related areas of environmental concern has also been noted by: Ben Boer, ‘International Environmental Law’, in Simon Chesterman, Hisashi Owada, and Ben Saul (eds), The Oxford Handbook of International Law in Asia and the Pacific (Oxford University Press 2019) 170–204 at 190. 62 Justin Dabner, ‘Should Australia Introduce a Japanese Style Joint Crediting Mechanism?’ (2018) 35 Environmental and Planning Law Journal 659, 663. 63 Japan, ‘Fourth Biennial Report’, 48. 64 Ibid., 186. 56 57

Climate change mitigation law and policy in the Asia-Pacific  173 if Japan were able to convince the Paris Agreement parties to accept the JCM as a form of the Kyoto Protocol’s Joint Implementation mechanism, instead of the CDM; in that case, the source country would not be allowed to claim the reduction.65) Despite its widespread uptake in the Asia-Pacific, the JCM has so far not produced any significant amount of abatement: a mere 15 Mt CO2 eq. from 160 projects.66 Japan surely deserves credit for the JCM’s regional cooperation ambition; however, by 2020 the programme had not yet grown beyond the pilot stage.67 New Zealand’s Aid Programme, which is focused on the Pacific region,68 and the country’s Pacific Partnership with the European Union,69 have each contributed funds and expertise to Pacific Island nations for mitigation purposes70 and together represent the second most noteworthy (but still very modest) example of cooperation in the region. 4.5

Difficulties in Expanding Renewable Energy at Scale

A large-scale build-up of renewable energy may be beyond the reach of most Asia-Pacific countries. The causes of this important limitation in regional mitigation potential differ from country to country. For Singapore, its small size and dense urban landscape limit or exclude uses of solar and wind energy, let alone nuclear power.71 Its main mitigation policies, as a consequence, are waste-to-electricity production and energy efficiency. However, the low-hanging fruit of these and other options (such as fuel-switching to natural gas) were already picked some time ago.72 Despite an inability to significantly increase renewable energy, Singapore was ranked fourth in the world for sustainability in the 2018 Sustainable Cities Index, which makes the Index appear somewhat misleading in the context of the concerns of this chapter, considering that Singapore has no stated policy pathway forward to wean itself off its dependence on natural gas.73 Several developing countries mention renewable energy as having developmental ‘potential’ in their jurisdiction, which is, however, limited in practice due to shortfalls in international climate finance, technology (e.g. relating to power stability concerns), training (including in demand-side management), or supportive regulation.74 Korea, which has an annual mandatory supply rate for renewable energy, has increased its supply from 2% in 2012 to 5% in 2018, and the mandatory rate has been increased to 10% beyond 2023.75 Whether or not this represents high ambition for Korea given its national circumstances, the amounts involved seem modest: over the period 2012–2017, the share of renewable-energy generation in the country’s total

A hint of this may be found at ibid., 119. Ibid., 186; see also 135. 67 Dabner, ‘Joint Crediting Mechanism’ (n. 62), 665, 667. 68 New Zealand, ‘Fourth Biennial Report’, 108. 69 Ibid., 118–19. 70 Ibid., 109. 71 Singapore, ‘Fourth National Communication’, 11. 72 Ibid., 11. 73 Ibid., 56. 74 E.g. Cambodia, ‘First Biennial Update Report’, xxiii; Papua New Guinea, ‘First Biennial Update Report’, 10. 75 Republic of Korea, ‘Third Biennial Update Report’, 37. 65 66

174  Research handbook on climate change mitigation law power-generation mix increased by an annual average of just 0.77% over six years.76 Malaysia had a target for renewable-energy installations of 2,065 MW and 3,484 MW by 2020 and 2030, respectively;77 in its own words, it represents only a ‘moderate’ increase over the decade, due to the country’s self-identified ‘overdependence on fossil fuels’.78 Bangladesh’s installed renewable energy capacity is only 2.8% of total power-generation capacity.79 Vietnam has mapped out an ambitious-sounding growth programme for renewable energy through to 2050 (32% of primary energy consumption by 2030 and up to 44% by 2050), but the budget for it had not been determined and its BUR is ambiguous as to whether the programme is conditioned on receiving climate finance.80 Hydropower is frequently the only form of renewable energy to make a significant contribution to the energy profile of countries in the Asia-Pacific.81 It contributes 4% to Malaysia’s primary energy supply;82 however, it has no growth potential in that country.83 Vietnam’s hydropower is at about the same level as Malaysia’s, but growing slowly.84 Cambodia’s hydro-generation grew strongly between 2010 and 2015.85 Pakistan has no renewable energy to speak of except hydropower (11% of primary energy supply).86 (Laos’s plans for a massive expansion of hydropower were mentioned in the previous section.) The Philippines stands out in the region for being the second largest producer of geothermal energy in the world, after the United States: 21% of primary energy supply.87 Papua New Guinea follows in the Asia-Pacific with 10%.88 New Zealand has an aspirational goal (i.e. a soft target) of 100% renewable electricity by 2035, ‘in a normal hydrological year’.89 Papua New Guinea also has an NDC commitment of 100% renewable electricity, to be reached by 2030, but it is conditional on international climate finance.90 Australia’s renewable-energy policy has favoured wind energy, resulting in more than 2,000 turbines being operational in the country by 2015.91 This has helped reduce emissions from electricity generation by 30.2 Mt CO2 eq. (14.3%) between 2009 and 2018,92 despite strong population growth. Over 23% of Australia’s electricity was being produced by renewable energy by 2020, spurred on by the nationally legislated Renewable Energy Target.93 Ibid., 37. Malaysia, ‘Second Biennial Update Report’, xxxv. 78 Ibid., 220. 79 Bangladesh, ‘Third National Communication’, 102–3. 80 Vietnam, ‘Second Biennial Update Report’, 65. 81 David Leary, ‘The Prevailing Wind: Recent Developments, Challenges and Future Prospects for Wind Energy in the Coastal Zone in Key Jurisdictions in the Asia-Pacific Region’ (2017) 20(1) Asia Pacific Journal of Environmental Law 115, 116 (‘hydro-electric power dominates Asia’s renewable energy mix with 75 per cent of electricity generated from renewable sources coming from this source’). 82 Malaysia, ‘Second Biennial Update Report’, xxxiii. 83 Ibid., 220. 84 Vietnam, ‘Second Biennial Update Report’, 14. 85 Cambodia, ‘First Biennial Update Report’, 11. 86 Pakistan, ‘Second National Communication’, 6. 87 Philippines, ‘Second National Communication’, 15. 88 Papua New Guinea, ‘First Biennial Update Report’, v. 89 New Zealand, ‘Fourth Biennial Report’, 37. 90 Papua New Guinea, ‘First Biennial Update Report’, vii. 91 Leary, ‘Wind Energy’ (n. 81), 119. 92 Australia, ‘Fourth Biennial Report’, 7. 93 Ibid., 21. 76 77

Climate change mitigation law and policy in the Asia-Pacific  175 A related issue under this heading is that fossil-fuel energy costs are being subsidized by several developing countries in the Asia-Pacific (information on this point is missing from most BURs, although some do mention it94), creating a non-competitive environment for clean alternatives. Overall, it is not clear how the Asia-Pacific will be able to massively scale up renewable energy between now and 2030 or even 2050. 4.6

Long-Term Reliance on Coal as an Energy Source

Most countries in the Asia-Pacific are substantively reliant on coal use and have no policies explicitly aimed at eliminating it. Indonesia’s NDC target presumes that at least 30% of the country’s primary energy supply will come from coal in 2025, and at least 25% of it will do so in 2050.95 Note that these are relative limits (if they are limits at all), rather than absolute ones: they are a polite way of saying that coal consumption will massively increase. For Indonesia, coal represents energy security. The country has been increasing its domestically sourced production and supply of coal by 9% per year in order to wean itself off oil imports.96 It has been building coal-fired power-generation plants in parallel, with the result that coal’s share in Indonesia’s power-generation mix increased from 37.3% in 2000 to 54.7% in 2016.97 Cambodia too is expanding its network of coal-fired power-generation plants.98 As for Pakistan, it sits atop the 16th-largest coal reserves in the world (186 billion tonnes). Its ‘Thar’ coal field, discovered in 1991, and the largest, is as yet unexploited.99 Meanwhile, Pakistan has become reliant on oil imports that consume nearly two-thirds of its export earnings.100 It also imports more coal than it produces.101 Because domestic resources of oil and natural gas have been depleted, ‘Pakistan has no alternative but to seek meeting an increasingly large fraction of its future energy needs through the use of its practically unutilized vast coal resources’.102 Korea is opposed to new coal power plants, but only ‘in principle’; in actual fact, however, it plans to build, or to complete building, another 20.103 Japan is also reliant, long term, on coal, although in a different sense: when it needs to shut down its nuclear power plants, as it did in the period 2011–2014, the country’s only backup power plan is coal.104 No country in the Asia-Pacific is more closely identified with coal production and consumption than Australia. While euphemistic statements have been issued by Australia’s federal and state governments about the future of coal in the country,105 and while Australia

E.g. Malaysia, ‘Second Biennial Update Report’, 220; Cambodia, ‘First Biennial Update Report’,

94

10.

97 98 99

Indonesia NDC 2016, 3. Indonesia, ‘Second Biennial Update Report’, 1-5/6. Ibid., 1-6. Cambodia, ‘First Biennial Update Report’, 11. Pakistan, ‘Second National Communication’, 6. 100 Ibid., 4. 101 Ibid., 6. 102 Ibid., 76. 103 Republic of Korea, ‘Third Biennial Update Report’, 36. 104 Japan, ‘Fourth Biennial Report’, 7. 105 See Simon Magnus Anderson, ‘A Study of the National Energy Guarantee and Federal Governance Frameworks within the Power Generation Industry’ (2019) 36 Environmental and Planning Law Journal 7, 15–16. 95 96

176  Research handbook on climate change mitigation law reports the closure of 12 coal-fired power plants between 2012 and 2017,106 thereby lessening coal’s contribution to electricity generation, there is no policy directed at its elimination. The Asia-Pacific is probably no less coal-addicted than any other region in the world. 4.7

The Preservation of Sinks in Developing Countries Faces Grave Challenges Due Only in Part to the Illegal Activities of Individuals and Companies

‘Cambodia’s forests have experienced significant reduction in total forest and dense forest cover, due primarily to the increase in plantations, particularly rubber. Despite the creation of protected and community forests, illegal logging still poses a serious threat.’107 This statement by the government of Cambodia captures the paradox that fuels LULUCF emissions across the Asia-Pacific. On the one hand, deforestation is illegal; on the other hand, governments promote it for the purposes of growth and export earnings. It is a contradiction that thwarts the emergence of any preservation norm favouring nature’s land-based sinks. In 2010, Cambodia set a target for the country to maintain its forest cover at no less than 60% by 2015, but in fact had fallen to 50% by 2014 (from 73% in 1960)108 as land concessions continued unabated.109 In Laos, forest cover was down from 70% in 1940 to 41.5% in 2020.110 The government cites lawful activities as the main drivers: ‘commercial logging, household use, shifting cultivation, agriculture extension, mining, hydropower, infrastructure development and expansion of settlement area[s]’.111 Indonesia claims to have instituted a ‘moratorium’ on the clearing of primary forests, as well as prohibitions on the conversion of other forests;112 however, deforestation continues in the country, mainly as a consequence of non-illegal activities: ‘expansion of agriculture, mining activities, plantations and transmigration; unsustainable forest management … and forest fires’.113 Pakistan, which lost one million hectares of forest cover between 1990 and 2015,114 leaving it with a forest cover of only 5%, has launched a ‘Billion Tree Tsunami’ programme to restore 350,000 hectares of forest.115 It claims that any more-ambitious restoration would necessitate an injection of international climate finance, to the tune of billions of dollars.116 In Papua New Guinea, LULUCF-sector greenhouse gas removals by 2015 had decreased to 8% of what they were in 2000.117 Meanwhile, PNG’s non-LULUCF emissions grew, and the country went from being a net sink in 2000 to a net source of emissions in 2015.118 Non-illegal logging, subsistence agriculture, and the expansion

108 109 110 111 112 113 114 115 116 117 118 106 107

Australia, ‘Fourth Biennial Report’, 7. Cambodia, ‘First Biennial Update Report’, xi. Ibid., 8. Ibid., xvi. Laos, ‘First Biennial Update Report’, 3. Ibid., 3. Indonesia NDC 2016, 2. Indonesia, ‘Second Biennial Update Report’, 1-8. Pakistan, ‘Second National Communication’, 101. Ibid., 32. Ibid., 105. Papua New Guinea, ‘First Biennial Update Report’, vi. Ibid., vi.

Climate change mitigation law and policy in the Asia-Pacific  177 of oil-palm plantations were the main drivers,119 eliminating 262,000 hectares of forest and degrading a further 2,428,000 hectares between 2000 and 2015.120 Of all the developing countries examined, only Thailand claims success in reducing its deforestation rate,121 and only Vietnam claims that a slight increase in forest cover was achieved over a recent period.122 Several countries in the Asia-Pacific are ‘REDD+ ready’,123 waiting for the REDD+ programme to take off. It is unclear when this will happen—if at all. 4.8

Mitigation of Emissions from Livestock and Transport in Australia and New Zealand Has No Clear Policy Pathway Forward

New Zealand’s methane emissions from dairy cattle and CO2 emissions from transport account for most of the increase in emissions experienced by the country since 1990.124 (Traditionally a sheep-farming country, New Zealand has transitioned to higher-value, higher-emitting cattle to sustain its agricultural sector and export earnings.125) Its plans to reduce agricultural methane emissions remain vague,126 despite the fact that quantified mitigation targets for this subsector have been written into legislation.127 New Zealand’s ETS is the main policy instrument for reducing emissions from transport.128 Whether it will have the desired effect or not was not known at the time of writing. Australia, like New Zealand, faces apparently insoluble challenges from its increasing agricultural methane emissions. (Over one year, 2016–2017, agricultural emissions grew by 3.7 Mt CO2 eq.129) Unlike New Zealand, Australia has no ETS. Its national mitigation system, the Emissions Reduction Fund, has been criticized for having little or no capacity to reduce the country’s transportation emissions,130 which are also growing strongly.131

Ibid., 35. Ibid., 48. 121 Thailand, ‘Second Biennial Update Report’, 12. 122 Vietnam, ‘Second Biennial Update Report’, 13. On this topic, see also Evans, ‘LULUCF’ (n. 19), 347. 123 E.g. Laos, ‘First Biennial Update Report’, Annex I. 124 New Zealand, ‘Fourth Biennial Report’, 15. 125 Ibid., 19, 36. 126 Ibid., 37. 127 See the Climate Change Response (Zero Carbon) Amendment Act 2019, available at www​ .legislation​.govt​.nz/​act/​public/​2019/​0061/​latest/​LMS183736​.html, which sets a domestic target to reduce emissions of biogenic methane to 24–47% below 2017 levels by 2050, including to 10% below 2017 levels by 2030. 128 New Zealand, ‘Fourth Biennial Report’, 38. 129 Australia, ‘Fourth Biennial Report’, 6. 130 Prafula Pearce and Vanessa Johnston, ‘A New Fast Lane or Just a Roadblock? Mitigating Road Transport GHG Emissions under Australia’s Emissions Reduction Fund’ (2016) 33 Environmental and Planning Law Journal 181. 131 Australia, ‘Fourth Biennial Report’, 5, 7. 119 120

178  Research handbook on climate change mitigation law 4.9

Rice Cultivation Presents a Region-Specific Mitigation Challenge for Many Countries in the Asia-Pacific

As with cattle farming, methane emissions from rice paddies are impossible to capture, but they are also difficult to reduce, short of limiting production. In Asia’s rice-growing countries, around half of all methane emissions come from rice paddies.132 In a way, rice cultivation is equivalent to Australia’s and New Zealand’s mitigation challenge from livestock, except that it is more difficult to deal with, because rice is a staple food in much of the Asia-Pacific. In Cambodia, emissions from rice paddies increased two-and-a-half times in the period 1994–2016.133 Between 2013 and 2017, an additional 210,000 hectares of land in the country was converted to rice cultivation.134 Vietnam added 141,000 hectares of paddy in 2012 alone.135 Half of Thailand’s agricultural land in 2015, or 22% of the country’s land area (11 million hectares) was given over to paddy use.136 More than half of Thailand’s agricultural emissions in 2013 (27.9 Mt CO2 eq.) came from rice cultivation.137 Vietnam’s emissions from the same activity in 2013 reached 42.6 Mt CO2 eq.138 Rice production increases with population growth. In Laos, where the population is growing at a high rate,139 the government aims to mitigate emissions from rice paddies by increasing the number of planting seasons per year, thus reducing the rate of land conversion.140 But Laos’s target is not further elaborated in its BUR. None of the other mentioned countries appear to have any policies aimed at reducing emissions from this major agricultural activity.

5 CONCLUSION This chapter has reviewed the greenhouse gas mitigation challenges of countries in the Asia-Pacific. Many of them are universal, although a few are specific to the region. Some of the challenges are the same for both Annex I and developing countries, although there are also stark differences (e.g. in the management of LULUCF emissions and the sophistication of MRV systems). It is almost impossible to tell from the NDC targets of Asia-Pacific countries, whether read alone or in combination with the information on emissions presented in Tables 7.1 and 7.3, how they compare with each other in terms of mitigation ambition. The theory that states will lead by example under the Paris Agreement, or pressure each other to do better, presumes a degree of comparability that has not yet been attained in state reporting.

132 In Japan, in 2017, 45% of total CH4 emissions were from rice cultivation: Japan, ‘Fourth Biennial Report’, 9. 133 Cambodia, ‘First Biennial Update Report’, xvii. 134 Ibid., 6. 135 Vietnam, ‘Second Biennial Update Report’, 13. 136 Thailand, ‘Second Biennial Update Report’, ii. 137 Ibid., v. 138 Vietnam, ‘Second Biennial Update Report’, 23. 139 Laos, ‘First Biennial Update Report’, 6. 140 Ibid., 9.

8. Climate change mitigation law and policy in the Middle East Mehdi Piri

INTRODUCTION The consequences of the phenomenon of climate change begin with increasing solar radiation absorption and rising temperatures on Earth. Research shows the position of temperature changes in the Middle East in comparison to the world and it can be seen that the Middle East has seen a significant temperature change in the last century.1 The consequences of rising temperatures have spread beyond the environmental consequences to the economic, social and security fields.2 Given the nature and growing trend of climate change resulting from activities of human origin and the impossibility of controlling the event locally, the need for a collective effort by all countries of the world is clearly felt. Due to the importance of the issue and its implications for the economic development of countries and the need for poverty alleviation, on the other hand, countries have adopted various types of instruments guaranteeing different implementations in order to reduce greenhouse gas emissions. In the Middle East, by increasing awareness of the impacts of climate change on water resources, agriculture and forestry, natural terrestrial ecosystems, human settlements and coastal zones, states have been taking more serious measures to mitigate such adverse effects. It should be kept in mind that the countries in the region display wide diversity, in terms of economic and natural resources such as oil and gas reserves. Yet through this diversity runs a common thread: water scarcity which brings considerable risks to livelihoods, food security, peace, national and regional security (including the effect of terrorism), and the environment. States in the Middle East have been adopting appropriate measures at national and international level to deal with climate change. At the international level, States in the Middle East actively participated in the International Negotiating Committee for a Framework Convention on Climate Change (INC) which finally adopted the United Nations Framework Convention on Climate Change, as the first international instrument specifically addressing climate change. Within the framework of the mentioned Convention, the Conference of the Parties (COP), which consists of the representatives of the State Parties, has met at least 26 times and has approved several resolutions in order to fulfill the obligations mentioned in the Convention. Among the mentioned resolutions, which have been approved in the form of binding documents, one can mention the Kyoto Protocol, which, of course, focuses on mitigation and carbon trading. At the Conference of the Parties P. Lionello and others, ‘The Mediterranean Climate: An Overview of the Main Characteristics and Issues’ (2006) 4(1) Developments in Earth and Environmental Sciences 1–26; S. Russo and others, ‘When Will Unusual Heat Waves Become Normal in a Warming Africa?’ (2016) 11(5) Environmental Research Letters. 2 E. Bucchignani and others, ‘Climate Change Projections for the Middle East–North Africa Domain with COSMO-CLM at Different Spatial Resolutions’ (2018) 9(1) Advances in Climate Change Research, 66–80. 1

179

180  Research handbook on climate change mitigation law which was held in Paris in 2015, the State Parties signed an agreement in this regard, which is known as the Paris Agreement. In addition to addressing emissions reductions, the Paris Agreement addresses the issue of adaptation and governments’ efforts to mitigate the effects of climate change. The global approach to reducing emissions and adapting to its effects has undergone a major change in the Paris Agreement; pursuant to Article 3 of the Agreement, all Parties are required to provide the amount and manner of their participation in achieving the objectives of the Agreement in accordance with the rules set forth in other Articles of the Agreement. It should be noted that the programs that will be presented will include the efforts of member countries over a period of time and will take into account the support needed for developing countries and least developed countries. As a result, all countries of the world will be able to participate in achieving the aims of the Agreement. In principle, the countries themselves will determine the rate of emissions reduction in terms of their national technical and economic capabilities. Given the approach adopted in the Paris Agreement on mitigation, in this chapter the author first intends to examine the effects of global warming in the Middle East in general. After that a general overview on international obligations of states in international climate law with respect to mitigation will be provided. Then, measures which have been taken by Islamic Republic of Iran and the State of Qatar will be discussed and finally some conclusions will be offered by comparing the approaches of these two states.

1

IMPACTS OF CLIMATE CHANGE IN THE MIDDLE EAST

Climate change has various consequences on the natural and human environment. In general, the effects of climate change can be divided into damage to the human environment and to the natural environment. The damage to the human environment in general due to climate change may be referred to as the destruction of infrastructure, changes in social ethics due to extreme heat, lack of access to water resources for drinking and industry and agriculture, lack of food and lack of energy.3 These effects have potentially led to other economic and social consequences. Reductions in the levels of agricultural production, sharp drops in surface run-off and underground water storage, increase of mean temperature with its consequences (heat exhaustion and spread of some diseases), increased hot-spots for dust and sand storms (with adverse impacts on health and industry) as well as extreme vulnerability of biodiversity and natural resources are some of the direct and indirect extreme impacts of climate change.4 Also, increased air pollution, due to lack of appropriate technological support, with its increased health risks is another aspect of the country’s vulnerability. In accordance with IPCC Reports, climate change and global warming have led to widespread and persistent droughts, as well as non-uniform distribution of precipitation. In the Middle East, water resources are depleted and the region has been facing increasing water shortages. In the Middle East, climate change is a major challenge, especially if we look at the increasing and persistent droughts, as well as the growing demand for water and water scarcity. The IPCC estimates that the region will become warmer and drier in the future. An increase in temperature thresholds and a decrease 3 See generally John S. Dryzek and others (eds), The Oxford Handbook of Climate Change and Society (Oxford 2011). 4 Dorte Verner (ed.), Adaptation to a Changing Climate in the Arab Countries: A Case for Adaptation Governance and Leadership in Building Climate Resilience (World Bank Publications 2012).

Climate change mitigation law and policy in the Middle East  181 in rainfall will lead to severe droughts in the region. According to IPCC modeling, 80 to 100 million people will be exposed to water shortages in the region by 2050, and groundwater will decline rapidly.5 In Iran the reduction of approximately 50% of surface run-off, increased flood occurrence and growth in imports of agricultural products are predicted. These all clearly indicate serious impacts of climate change in Iran. Iran is also experiencing the increasing trend of drying wetlands, as an important indicator of the impact of climate change.6 It is suggested that taking into account Iran’s geographical location and economic structure, average precipitation and evaporation, Iran could be ranked within the category of vulnerable countries in accordance with Articles 4(8) and 4(10) of the UNFCCC. The same could be suggested for many of Middle Eastern countries. For example, in a study conducted in this regard in Khuzestan province, in the south of Iran, migration has been considered as one of the most important consequences of climate change. Climate change will exacerbate tensions in access to and exploitation of natural resources, undermine community livelihoods, and lead to displacement and human casualties.7 Also, in today’s world, with these global connections, the negative consequences of the impact of climate change on countries are not limited to their geographical borders and will affect the surrounding areas. Widespread migration from poor areas to better-off areas and its social consequences are part of the predictable tensions. The health sector is one of the areas affected by climate change, which has also been considered in the strategies of the World Health Organization. In general, the vulnerability of the country’s health sector is significant in this regard. Another consequence of climate change is threatening human security in so far as the UN Security Council is under considerable pressure to address climate change as a threat to international security.8 Climate change in the Middle East has also had very significant effects on the natural environment. Effects such as drought or floods caused by changes in rainfall patterns, and the secondary effects on food supply and public health, can be mentioned. Also, studies conducted in the Middle East region show that if the same pattern of air temperature increase continues, especially in hot seasons, the possibility of living in some cities or the possibility of holding some religious ceremonies will face major setbacks.9 Water, as it provides the basis of natural and human life, has always been a critical issue for dry and semi-dry countries, in particular in the Middle East. In cases of significant decrease or increase in its volume and change in its quality, the continuation of human or natural life could also be seriously threatened. On the other hand, water is an element that affects different economic, social and security sectors of each country. The global study shows that the effects of this, especially in the form of drought and water scarcity on the

Intergovernmental Panel on Climate Change, Working Group 2, Climate Change 2007 – Impacts, Adaptation and Vulnerability: Working Group II Contribution to the Fourth Assessment Report of the IPCC (Cambridge University Press 2007). 6 Zohre Ebrahimi-Khusfi, Reza Ghazavi and Mahdi Zarei, ‘The Effect of Climate Changes on the Wetland Moisture Variations and Its Correlation with Sand-Dust Events in a Semiarid Environment, Northwestern Iran’ (2020) 48(12) Journal of the Indian Society of Remote Sensing 1797–1808. 7 A. R. Khavarian-Garmsir, A. Pourahmad, H. Hataminejad and R. Farhoodi, ‘Climate Change and Environmental Degradation and the Drivers of Migration in the Context of Shrinking Cities: A Case Study of Khuzestan Province, Iran’ (2019) 47 Sustainable Cities and Society. 8 Ken Conca, ‘Is There a Role for the UN Security Council on Climate Change?’ (2019) 61(1) Environment: Science and Policy for Sustainable Development 4–15. 9 J. S. Pal and E. A. Eltahir, ‘Future Temperature in Southwest Asia Projected to Exceed a Threshold for Human Adaptability’ (2016) 6(2) Nature Climate Change 197. 5

182  Research handbook on climate change mitigation law geographical region of the Middle East, are very significant. However, in the current situation, this region is facing the most severe water stress. Part of the economic risks of climate change is due to the relationship between water, food, energy and the environment. Thus, the water shortage due to climate change, in addition to biological risks, has far-reaching economic and social effects. Despite the significant effects of climate change on the region, an increasing amount of greenhouse gases, including carbon dioxide, are emitted in the Middle East due to the large amount of oil and gas activity. This is because the Middle Eastern countries have abundant reserves of natural resource, such as crude oil and natural gas, and thus their economies remain heavily dependent on the revenues they earn from oil and gas exports. The Middle East’s share of worldwide oil reserves is about 50%, and about 40% of natural gas reserves.10 Many Middle Eastern countries, such as Iran, Saudi Arabia, Qatar, Iraq, Kuwait, and the United Arab Emirates (UEA), are major oil producing countries and their economies remain heavily dependent on crude oil and oil export revenues. Iran, as an example, holds some of the world’s largest deposits of proven oil and natural gas reserves, ranking among the world’s top ten oil producers and top five natural gas producers. In addition, according to one report, many Middle Eastern countries, such as Saudi Arabia, Egypt, Iran, Oman, Turkey, and the UEA, are among countries with high amounts of GHG emissions.11 This circumstance has posed difficult dilemmas of choice for Middle Eastern countries, since on the one hand they need to promote their economies, which require more investment in the oil and gas industries and more GHG emissions, and on the other hand, they are directly faced with the adverse consequences of climate change; a situation that not only makes it difficult for states to make decisions, but also requires the adopting of specific rules and regulations. As a result, the mitigation assessment of greenhouse gas emissions has been an integral part of national and climate policies in these countries.

2

THE INTERNATIONAL LEGAL REGIME AND THE MIDDLE EAST

The United Nations Framework Convention on Climate Change is one of the conventions that merely outlines the goals of the principles and the general obligations of countries concerning climate change. In other words, it has determined the general framework of countries’ cooperation on climate change. This framework is based on the two general principles of reducing greenhouse gas emissions and adopting programs to cope with the potential consequences of climate change. Article 4 of the Convention refers to the obligations of states. In the introduction to the Article and before explaining the commitments, it is mentioned that parties will implement the obligations set out in the text of the Convention in accordance with the principle of common but differentiated responsibility and taking into account regional and domestic development priorities and their conditions. Apparently, this means that parties should implement their commitments under the Convention alongside with their national and regional development priorities. The obligations of the parties to the Convention can be divided into three general BP, ‘Statistical Review of World Energy 2019’. https:// ​ w ww ​ . pbl ​ . nl/ ​ s ites/ ​ d efault/ ​ f iles/ ​ d ownloads/ ​ p bl ​ - 2020 ​ - trends ​ - in ​ - global ​ - co2 ​ - and ​ - total​ -greenhouse​-gas​-emissions​-2019​-report​_4068​.pdf. 10 11

Climate change mitigation law and policy in the Middle East  183 categories: the first category refers to the general obligations that will be applicable to all parties. The second category refers to the commitments of developed countries listed in Annex 1, which are committed to reducing emissions, and the third category refers to the countries listed in Annex 2, which are committed to financially supporting developing countries to achieve the objectives of the Convention. Countries in the Middle East are not listed in Annexes, hence, the second and third commitments are not applicable to the Middle Eastern states. Among the commitments that fall into the first category of commitments and are related to this chapter, the following can be mentioned: ● updating and submitting national inventories of anthropogenic emissions by sources and removals by sinks of all greenhouse gases not controlled by the Montreal Protocol and formulating and implementing national and regional programs containing measures to mitigate such emissions and sustainable management of sinks and reservoirs; ● promotion and cooperation for the development and implementation of measures that lead to the reduction or prevention of anthropogenic greenhouse gas emissions, including through the transfer of technology in all related fields as well as cooperation in the scientific fields of research technology and organized supervision in relation to climate systems. It should be kept in mind that, such national programs, in particular in developing countries, will be conducted by taking into account their relevant social, economic and environmental policies and actions. In the Convention there is no mechanism to control the fulfillment of the above obligations. In general, some of the above obligations are procedural obligations and some are substantive obligations. In the case of procedural commitments, it may be considered merely the observance of the necessary formalities to meet the obligations of the countries. On the other hand, cooperation in international fields will basically require the participation of two or more countries through the signing of separate bilateral or multilateral agreements. Therefore, although the above obligations are theoretically significantly adjusted to meet the aims of the Convention, what is clear is that a significant mechanism to control the fulfillment or non-fulfillment of such obligations is not developed under the Convention. It seems that countries in the Middle East, by ratifying the UNFCCC, initiate the adoption of appropriate policies with respect to mitigation of GHGs, at various levels. For instance, in Iran, in 2000, the General Policies for Energy,12 which is the highest level of policies in the Iranian legal system, addressed policies in relation to mitigation for the first time. The General Policies for Energy identify optimizing energy consumption and reducing energy intensity alongside creating diversity in the country’s energy resources and using them, taking into account environmental issues, and trying to increase the share of renewable energy. Meanwhile, such policies in countries in the Middle East were not so common and neither does the UNFCCC prescribe any specific guidance. In the Kyoto Protocol, following the commitments set out in the Climate Change Convention, certain quantitative targets have been set for emissions reductions by states parties to the Convention. These objectives are generally set out in the obligation to determine national programs and policies in accordance with national conditions

Determination of the general policies of the Islamic Republic of Iran after consultation with the Nation’s Expedience Council is one of the Authorities of Supreme Leader in accordance with Article 110 of the Iranian Constitution. 12

184  Research handbook on climate change mitigation law regarding the use of green energy and in order to reduce GHG emissions. The Kyoto Protocol imposed legally binding quantitative emissions targets on developed countries. Therefore, the main obligations under the Kyoto Protocol are the obligation of the parties listed in Annex I to the UN Convention. Of course, this does not mean that non-listed countries generally do not have any obligations under the Kyoto Protocol.13 However, certain obligations, the breach of which can be assessed and relied upon, are reserved only for the parties listed in Annex I. In fact, according to Article 10, all parties, taking into account their obligations under the UNFCCC, are required to formulate programs to improve the quality of local emission factors and, by considering their socio-economic conditions, to prepare national inventories of anthropogenic emissions by sources and removals by sinks of all greenhouse gases. Furthermore, all parties are bound to formulate programs containing measures to mitigate climate change and measures to facilitate adequate adaptation to climate change. These programs should cover the energy, transport and industry sectors as well as agriculture, forestry and waste management. Following the 2012 deadline and the lack of an international consensus on the continuation of the Kyoto Protocol in Cancun, the parties have taken a different approach to determining the framework for reducing emissions and adapting to climate change conditions. The Paris Agreement was initially adopted in 2015 under the auspices of the United Nations Framework Convention on Climate Change, and it was decided that the parties would subsequently ratify and accede to the Agreement. At present, the Agreement has been already entered into force and more than 175 states have already ratified it. In Article 2 of the Convention, one of the main objectives of the Agreement is to prevent an increase in the average temperature of the Earth by up to 2 degrees compared to the pre-industrial period and to try to limit it to 1.5 degrees. In addition, increasing the ability to adapt to the adverse effects of climate change, fostering climate resilience, providing financial resources to reduce greenhouse gas emissions and climate-resilient development have been included in its goals. It should be noted that, similar to the United Nations Framework Convention on Climate Change and the Kyoto Protocol, this Agreement emphasizes the principle of shared but different responsibilities of countries in terms of national capabilities. One of the main aims of the Paris Agreement, as articulated in Article 2, is increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience in a manner that does not threaten food production. The most important commitment under the Paris Agreement is to provide nationally determined contributions (NDCs) to reduce emissions and adapt to the consequences of climate change. The first and most important legal effect of acceding to the Paris Agreement will be to enforce the objectives of the NDCs in question, which have already been submitted to the Secretariat of the Convention. The NDCs were mostly submitted before the UN Climate Change Conference in Paris, in 2015, hence they are different in terms of content and form. Guidance on NDCs was adopted internationally by the UNFCCC in 2018.14 Each party has the authority to prepare and submit its NDC based on its own discretion, and parties are required to achieve the objectives identified in their respective NDCs. According to Article 4 of the Paris Agreement, parties are also required to report information necessary to track progress towards their NDCs. Furthermore, in accordance with Articles 14 and 15, a transparency framework, 13 B. Mustafa and others, ‘The Kyoto Protocol and Developing Countries’ (2000) 28(8) Energy Policy 525–536. 14 Climate Change Expert Group, ‘Reporting progress towards nationally determined contributions: exploring possible common tabular formats for the structured summary’(OECD 2020).

Climate change mitigation law and policy in the Middle East  185 a global stocktake, and a compliance and facilitation committee have been established to facilitate implementation of, and promote compliance with, the Paris Agreement. These form a binding transparency and information sharing mechanism, which promotes implementation of the Paris Agreement. What is certain is that the submission of NDCs is a legal obligation and parties are requested to implement the measures set out in their NDCs. It should be noted that the capacity to amend NDCs provided for in Article 4 of the Agreement is solely for the purpose of increasing obligations and not reducing them. The question that may arise here is the type of obligation mentioned in NDCs. In other words, it may be asked whether parties are merely committed to the declaration of NDCs or are they also committed to the realization of the declared measures? In response to this question, it should be said that the countries are both obliged to announce the amount of national participation in the schedules specified in the Agreement and with the required specifications, and also to implement the mentioned programs within the period specified in the text of the Agreement. This is because in the text of Article 3, countries are explicitly committed to achieving the goals of the Agreement through the implementation of NDCs. In accordance with the above Article, the submission of NDCs must be made within a period of five years and based on the periodic decisions of the Conference of the Parties. Parties’ NDCs shall be recorded in a system to be determined by the Conference Secretariat, and parties implement their NDCs alongside the development of their national programs. And, of course, joint actions for implementation of NDCs are authorized and permitted. This is in contrast to the Kyoto Protocol, in which guidelines adopted by the Conference of the Parties are only mandatory for developed countries. In the Paris Agreement, compliance with the guidelines adopted by the Conference of the Parties shall be implemented by all parties. The Paris Agreement commits both developing and developed countries to achieve its mitigation and adaptation goals. Thus, although the general commitments for developed countries’ governments are to work with developing countries to reduce emissions and adapt, the overall regime of commitments to reduce emissions and participate in the compliance control mechanism is similar. As a result, parties, regardless of their level of development, are obliged to fulfill these obligations. Moreover, parties are directed to support international cooperation on adaptation efforts by taking into account the needs of developing country parties with regard to sharing information, good practices, experiences, technical strengthening, institutional arrangements and providing technical support. As mentioned above, Iran has not yet ratified the Paris Agreement, but Iran has already submitted its own intended nationally determined contribution INDC, which apparently is not its final INDC and will be replaced by new one. Note, this is still an INDC and has not yet been converted to a nationally determined contribution (NDC). This is because although Iran has signed the Paris Agreement, it has not yet ratified it. Meanwhile, a brief description of Iran’s INDC on mitigation issues will be beneficial. COP 20 in 2014 invited parties to submit an INDC including mitigation components in accordance with Article 4.3, and Iran prepared its INDC accordingly.15 Iran’s INDC16 includes two plans for mitigation which basically relate

Fatima-Zahra Taibi and Susanne Konrad, Pocket Guide to NDCs under the UNFCCC (European Capacity Building Initiative 2018). 16 Iran’s Intended Nationally Determined Contribution prepared by Department of Environment, 2015, accessible at https://​www​.ctc​-n​.org/​sites/​www​.ctc​-n​.org/​files/​UNFCCC​_docs/​indc​_iran​_final​ _text​.pdf last visited 7 May 2021. 15

186  Research handbook on climate change mitigation law to the international sanctions on Iran. In the first plan, subject to financial resources and the requirements of the national development program, Iran declares its intention to mitigate GHG emissions by 4% by 2030 compared to the business-as-usual scenario year and by considering 2010 as the base year for calculation. As Iran’s INDC indicates, such mitigation will be achieved by developing combined-cycle power plants, renewable energy, nuclear power, as well as by reducing emissions from flaring gas and through energy efficiency. Further, to increase energy efficiency, these measures are suggested: substituting high-carbon fuels with natural gas, strategic planning for utilizing low-carbon fuels, intensifying economic diversification and participation in market-based mechanisms at the national and international levels. It is of importance to note that it is explicitly pointed out that such mitigation will be facilitated and speeded up in the absence of any form of sanction or restriction. Accordingly, one may infer that even such mitigation is subject to the lifting of sanctions. In the second plan, which is called the ‘Conditional Mitigation Action’, and is subject to the termination of sanctions and the availability of international resources in the form of financial support and technology transfer, Iran declares it has the potential to mitigate GHGs by up to 12% against the BAU scenario and by considering 2010 as the base year for calculation. Thus, in the second plan, it has announced an 8% reduction in addition to the required 4% and a total of 12% if sanctions are lifted. Such additional mitigation will be also obtained by focusing on the energy sector, conservation of forests, sustainable agriculture and waste management, and transfer of environment friendly technologies under UNFCCC. Of course as the share of energy sector in GHG emissions in Iran is higher than all other sectors by far, one of the requirements that is explicitly mentioned in the INDC is the country’s need for financial and technological improvement. These technologies include utilizing gas flares; reducing natural gas leakage in the distribution networks; increasing efficiency through the development of CHP and combined-cycle power plants; reducing transmission and distribution electricity losses; energy demand optimization and management; and use of renewable and alternative energy resources such as biofuels, biogas, waste to energy production and CCS. Moreover, it is estimated that the total annual investment needed to achieve unconditional and conditional GHG mitigation is about $17.5 billion and $52.5 billion respectively. Providing such investment requires measures at national level, such as the development of sound financial mechanisms and the economics of energy, as well as international investment and support. In the above-mentioned INDC, the method of calculation and reporting is based on the instructions issued by the Climate Change Working Group in 2006. Therefore, the implementation of the above-mentioned guidelines in preparing reports and presenting the national program is considered practically necessary. In the continuation of the mentioned plan, the annual growth of 8% is considered. Of course, in the INDC, no attempt has been made to link the rate of decline and annual rate of growth, but this does not mean that the two issues should be considered separately. In other words, in considering the relationship between economic growth and the amount of greenhouse gas emissions, mentioning the annual economic growth rate will cause an indirect relationship between the rate of growth and the amount of emissions. In the concluding text of the INDC presented by the Islamic Republic of Iran, one may realize that 4% mitigation plus an additional 8% (i.e. 12% in total) is difficult to achieve, taking into account both international and the US’s unilateral sanctions which are imposed on the Iranian economy. And such restrictions are literally stated in the INDS, in so far as one may conclude that the 4% reduction is also subject to the non-imposition of any international sanctions or restrictions and the availability of international financial resources and technology transfer.

Climate change mitigation law and policy in the Middle East  187 The first and most important legal effect of ratifying the Paris Agreement for Iran will be to enforce its INDC, which at that time is converted to an NDC. The implementation of the NDC is mandatory for the government and any information published in this regard will be reviewed by the Technical Committee in accordance with Article 15 of the Paris Agreement.

3

MITIGATION LAW AND POLICIES IN THE ISLAMIC REPUBLIC OF IRAN

The government of the Islamic Republic of Iran ratified the United Nations Convention on Climate Change in 1996 and subsequently ratified the Kyoto Protocol as a non-annexed state and without having quantitative targets for reducing greenhouse gas emissions. Under the auspices of the UNFCCC and the Kyoto Protocol, the government of the Islamic Republic of Iran has taken measures in accordance with domestic laws to reduce greenhouse gas emissions. In 2015, along with other governments, the government of the Islamic Republic of Iran also signed the Paris Agreement and began the formal process of ratifying the said Agreement in parliament; it was finally ratified by the parliament on November 14, 2016, but has still not been approved by the Guardian Council, hence it has been returned to the Parliament and is still pending, so is not yet in force. On the one hand, the issue of climate change and its two pillars, mitigation and adaptation, are widely recognized as important and inevitable issues, contributing to its attractiveness. On the other hand, there is no uniform regulation of national legislations and policies with respect to this issue. Clearly, attention to the development of renewable energy and reducing the use of oil and gas resources as energy sources and reducing energy intensity are among the first issues related to climate change that have been considered and taken into account in Iranian laws and regulations. In this section, we will first look at the instruments which particularly addressed climate change before the signing of the Paris Agreement, and then the laws and regulations that address mitigation and have been adopted after the signing of the Paris Agreement will be studied. The General Policies of Energy, as noted, is the first formal document to require more attention to developing renewable energies and reducing energy intensity. However, the first regulation specifically aimed at addressing climate change in Iran is the executive regulation adopted in 2008 by the State Cabinet.17 This regulation creates a framework that covers governmental activities in this field. The regulation first describes government policies and strategies. These policies are focused mainly on mitigation and can be divided into six categories: the first category of policies deals with measures which should be taken to fulfill the obligations set out in UNFCCC and Kyoto Protocol, including continuous preparation and submission of national reports with the participation of all relevant institutions through creating a structure to calculate the amount of greenhouse gas emissions by the relevant sector. The second category of policies is linked to improving the patterns of energy production and consumption and also increasing the share of low-carbon energy resources in the country’s energy basket in order to reduce the trend of greenhouse gas emissions. In this category policies such as ‘development and application of new carbon free-technologies’ as well as ‘increasing production and promoting the use of new and renewable energy’ are taken into consideration. The third category of policies deals 17 The Regulation on Implementing of the Climate Change Convention and the Kyoto Protocol 2008 with its further amendments in 2012 and 2015.

188  Research handbook on climate change mitigation law with developing bilateral, regional and international cooperation and assistance to achieve the purpose of the Convention in order to make optimal use of global environmental facilities in Iran to make more efficient use of international funds and transfer of technologies. The fourth category deals with training and research on climate change topics, such as allocation of funds and research facilities of relevant agencies for the purpose of the Convention, to form and activate climate change units in all relevant ministries. Moreover, planning and implementation of public information programs and also better and greater use of the educational facilities of the International Climate Change Board are pointed out. The fifth category is linked to capacity building to use the power of the clean development mechanism through creating legal capacity and facilities, and designing and implementing related projects. The sixth category deals with creating economic diversity to reduce the damage caused by the reduction of oil revenues as a result of countermeasures such as balancing and diversifying the country’s economic sectors with an emphasis on distancing oneself from the mono-product economy and creating added value in the downstream part of the oil and gas industry. As noted above, these policies are adopted by taking into account the particular economic environment of the country. In general, all these policies are relevant to climate change mitigation, albeit to varying degrees. Furthermore, each of these policies may require significant amounts of effort in terms of providing technology, finance, education and public awareness to implement them. For example, the second category of policies is linked to improving the patterns of energy production and consumption. The effective implementation of this policy requires a new price-setting mechanism in which producers of electricity generated from renewable energy resources benefit more than other energy producers. Obviously implementing this policy implies integrating renewables in electricity markets through government support schemes such as tax credits, feed-in tariffs, two price systems and so on.18 Or promoting the preferred patterns of energy consumption implies improving the thermal integrity of building structures with better insulation, which requires the availability of economically attractive solutions. Consequently, increasing the share of low-carbon energy resources in the country’s energy basket in order to reduce the trend of greenhouse gas emissions is costly and time-consuming. Therefore, the government should adopt appropriate policies with respect to mitigation of GHG emissions by prioritizing these policies through a cost-effective climate change strategy. Generally speaking, such policies are passed to meet the obligations as required under the UNFCCC and the Kyoto Protocol. Furthermore, a national working group has been established to manage all issues related to climate change in the country. Its main function with respect to mitigation is carrying out specialized matters related to the Convention and the Protocol at the national and international levels, such as preparing national reports. Moreover, the national working group is also authorized to plan and pursue appropriate executive policies in relation to the purpose of the Convention and the Protocol. In doing so, this national working group, which is composed of authorized representatives of relevant ministries and governmental organizations, will prepare appropriate mitigation and adaptation plans aligning with policies to deal with the consequences of climate change. These policies and plans should be accordingly implemented by the relevant authorities and results of their measures shall be reported. Furthermore, in coordination with the national working group, each of the relevant 18 See generally Juan M. Morales and others, Integrating Renewables in Electricity Markets: Operational Problems (Springer Science & Business 2013).

Climate change mitigation law and policy in the Middle East  189 ministries and organizations undertake specific tasks with respect to adaption and mitigation separately. In relation to mitigation, the relevant executive and supervisory bodies are obliged to prepare a report on the emission of greenhouse gases resulting from the activities of their area of ​​operation in the framework of the instructions of the Intergovernmental Panel on Climate Change and submit them to the national working group. For this purpose, the relevant bodies have explicit obligations and should prepare annual reports on emissions of greenhouse gases in these activities such as: fuel consumption in thermal power plants, industries, transportation, commercial and residential units, agriculture and coal mining and solid fuels and anaerobic municipal wastewater treatment plants; exploration, extraction, refining and transfer processes of crude oil, gas and petroleum products and combustion and process emissions of petrochemical units; process pollutants of industries such as cement, iron, steel and aluminum and industrial wastewater treatment plants; livestock, agriculture, forests and rangelands; and waste landfills. The Statistics Center of Iran is requested to include the statistics of carbon dioxide emissions per capita in the country’s statistical yearbook. In addition to the above reporting, the relevant ministries and organizations are required to: A. prepare a report on the progress of greenhouse gas emissions based on the continuation of the current situation and the implementation of approved programs within a 20-year horizon, within one year after the date of notification of this regulation; B. review, prepare and present emission reduction policies within the operational areas of their respective organizations; C. report annually to the national working group on the status of implementation of emission reduction policies in the operational areas of their respective institutions, emphasizing the effect of the implementation of each policy in reducing emissions. Given that the regulation has been passed after the ratification of the Kyoto Protocol, there are provisions specifically aimed to facilitate implementation of clean development mechanism projects such as formulating the necessary programs, identifying the obstacles to attracting these projects to the country and providing the necessary solutions to eliminate these obstacles. Of course, the Regulation does not limit the scope or applicability of the provisions to the Kyoto Protocol and it seems the continuing applicability of those provisions has extended to further legal regimes such as the Paris Agreement. The above policies clearly indicate that at this level the Iranian government is mainly focused on mitigation of GHGs by increasing awareness and providing the necessary platforms to reduce emissions by identifying sources of emissions by sectors and also requiring governmental bodies to take appropriate measures to reduce emissions. At this stage, emission reduction targets are not set and this could be because making such decisions requires more financial resources. It should be noted that the government of the Islamic Republic of Iran has modified the executive regulations of the UNFCCC and Additional Protocols in 2012 and 2015; in general, the executive framework of the Iranian government’s programs in this regard has been reformulated. Within the framework of the above-mentioned regulations, the executive strategies of the country in relation to the Convention and the following protocols have been specified. Here are some of the strategies that are related to mitigation: ● establish the necessary infrastructure and mechanisms to achieve the objectives of the UNFCCC and the Kyoto Protocol;

190  Research handbook on climate change mitigation law Table 8.1

Iranian strategies concerning mitigation by sub-sector Increasing energy efficiency Increasing the share of renewable energy in the country’s total

Reducing greenhouse gas emissions and carbon footprints in the country’s socio-economic development programs in the energy sector

primary energy supply Increasing the share of low-carbon energy in the country’s total primary energy supply Modify pricing/incentive/punitive policies to increase energy efficiency and develop renewable energy Use of lower carbon-emitting technologies

Reducing greenhouse gas emissions and carbon footprints in the

Carbon management in agriculture, forestry and land use

country’s socio-economic development programs in other sectors

Carbon management in the waste and wastewater sector

Source: Own compilation, based on Iran’s Department of Environment, ‘Strategic Plan on Climate Change’ (Haak Publication 2017).

● maximum use of global and regional environmental capacities and facilities in various technical, economic and educational dimensions within the framework of the Convention and the Protocol; ● supporting domestic research in order to achieve the objectives of the Convention and the Protocol; ● creating the necessary preparation to prevent and deal with the consequences of climate change. In this regard, the national working group determines specific strategies concerning mitigation in the sub-sectors shown in Table 8.1.19 According to Fawzy et al.,20 there are three main climate change mitigation approaches: the first includes conventional mitigation efforts such as CO2 emissions reduction including renewable energy, fuel switching, efficiency gains, nuclear power, and also carbon capture, storage and utilization. The second category includes: a new set of technologies that are deployed to capture and sequester CO2 from the atmosphere. The third category includes altering the Earth’s radiation balance through the management of solar and terrestrial radiation. The first category includes conventional mitigation efforts that are commonly used and will be the focus of this chapter. By looking at these mitigation strategies one may clearly observe that Iran is mostly focused on reducing greenhouse gas emissions, as will be discussed below. 3.1 CO2 Emission Reduction The mentioned policies were adopted before signing the Paris Agreement, in the Fifth Development Plan of the Islamic Republic of Iran Act (2011–2015); several articles relate to mitigation of GHG emissions.21 Under Article 139, in order to create infrastructure for the production of wind and solar power and to develop the use of clean energy and increase the share of production of this type of energy in the country, the government is allowed to support Department of the Environment, ‘National Strategic Plan on Climate Change’ (Haak Publication 2017). 20 S. Fawzy, A. I. Osman, J. Doran and D. W. Rooney, ‘Strategies for Mitigation of Climate Change: A Review’ (2020) Environmental Chemistry Letters 1–26. 21 The Fifth Development Plan of the Islamic Republic of Iran Act (2011–2015), 2011. 19

Climate change mitigation law and policy in the Middle East  191 the private and cooperative sectors through managed funds to provide 5,000 MW of wind and solar energy during the program. It is noteworthy to mention that in the Third Development Plan (2000–2005), according to Article 66 of the Law regulating part of the government’s financial regulations, the Ministry of Energy was obliged for the first time to purchase electricity from renewable sources from the private sector at incentive rates. Subsequent approvals continued more seriously. With the approval of Article 133(b) of the Fifth Development Plan Law and Article 61 of the Consumption Pattern Reform Law, the Ministry of Energy was allowed to enter into long-term contracts for the guaranteed purchase of electricity generated from renewable energy sources and clean energy with priority given to the private sector. In this regard, the purchase price of electricity from these power plants will be calculated according to the following criteria: the energy conversion costs in the competitive market, the annual average value of imported or exported fuel, and environmental costs including carbon emissions and pollutants. Items are calculated and announced by the Ministry of Energy according to the formula approved by the Economic Council, with the approval of the executive instructions of Article 61 of the Law on Reforming the Consumption Pattern and the diligent policies of the Ministry of Energy in developing the participation of the non-governmental sector in the construction of renewable and clean power plants and increasing the share of renewable electricity in the country’s energy basket. As Iran’s energy balance sheet for 2011 indicates, the capacity of renewable power plants in operation in the country in 2011, the first year of the Fifth Development Plan, compared to 2005, the first year of the Fourth Development Plan, has grown by 45.2%. In other words, it has grown by an average of 4.6% per year and has increased from 1.6 to 1.8 gigawatts. As the energy balance sheet for 2015, out of the total capacity of 76483.9 MW of power plants in the country, 11836.2 MW is attributable to renewable power plants, including hydropower plants and 256.4 MW is attributable to renewable energy sources excluding hydropower plants. As a result, we can observe a considerable rate of growth in renewable energy before international sanctions were imposed on Iran in 2012.22 3.2

Energy Efficiency

Energy Consumption Pattern Reform Law was enacted in 2011. In accordance with Article 8 of this law, the Ministry of Energy can establish an organization to increase productivity and use renewable resources as much as possible. This organization later was reformed and renamed as the Organization of Renewable Energy and Electricity Efficiency (SATBA). The Energy Consumption Pattern Reform Law calls for energy efficiency. To this end, the cabinet is requested to determine the energy consumption pattern of energy users in the domestic, commercial, public and special energy consumption sectors of industries (including oil and energy industries), mines, mining industries, agriculture and water pumping. It should also determine criteria and technical specifications and mandatory energy standards for energy equipment and machinery, industrial, mining and agricultural processes, as well as quality standards for various consumable fuels and electricity that manufacturers and importers must comply with. United Nations Security Council Resolution S/RES/1929 (2010) (on measures against Iran in connection with its uranium enrichment-related and reprocessing activities, including research and development). 22

192  Research handbook on climate change mitigation law The Ministry of Housing and Urban Development is obliged to regulate energy saving regulations in buildings with orientation towards green buildings and also urban planning in accordance with the mentioned model, with the cooperation of the Ministries of Oil, Energy, Interior and Strategic Planning and Supervision. All energy consumers with annual fuel consumption of more than five million cubic meters of gas or equivalent liquid fuel and demand for electrical power of more than one megawatt are required to create an energy management unit. The government should conduct energy audits and implement the necessary strategies to optimize energy consumption. In order to manage demand and implement policies related to optimizing fuel consumption in different sectors of consumption, the Ministry of Oil is obliged to develop the application of new energy conversion technologies in different sectors of consumption, reducing long-term costs due to energy demand, developing standards, criteria and guidelines related to energy efficiency, economic replacement of energy carriers along with the development of local capacity for energy and renewable energies. 3.3

Paris Agreement and INDC

As mentioned above, Iran has not yet ratified the Paris Agreement, but Iran has already submitted its own INDC, which apparently is not its final INDC and will be replaced by a new one. In order to implement the provisions of the INDC, it is necessary to establish appropriate domestic laws and regulations. It should be noted that while Iran has not yet ratified the Paris Agreement, several laws and regulations in alignment with it have been adopted in the Iranian INDC. We provide a brief overview of the some of them below. A Gas flare reduction Iran is one of the countries that burns high volumes of gas associated with oil extraction (flare gas). A 2015 study of Iran’s international situation in terms of burning this type of gas showed Iran in third place, after Russia and Iraq. Despite the plans that have been put into operation in Iran to use flare gas, data show that during the period 1996–2013, each year, on average, 40% of the gases associated with oil have been flared and the rest (60%) have been used. It has been reported that 36.8 million cubic meters per day of this amount has been flared and the remaining 55 million cubic meters per day has been used.23 As a result, collection of associated gas has been prioritized and in the sixth development plan of the Islamic Republic of Iran Act (2015–2020) the government is obliged to do so by handing over all projects in relation to collection, control and exploitation of associated gases to the private sector in such a way that at least 90% of the gases are controlled by the end of the program. Since the data on application of this law is not yet published, it is not possible to evaluate the implementation of this law. B Energy efficiency Energy efficiency plays a key role in mitigation plans and is also included in the Iranian INDC. Given the importance of energy efficiency, the sixth development plan of the Islamic Republic of Iran Act (2015–2020) included several duties to promote energy efficiency, including A report on explanation of the equipment and executive tools of associated gas collection projects and the limitations of private sector investment in these projects (Parliament (Majlis) Research Center 2018). 23

Climate change mitigation law and policy in the Middle East  193 replacing low-efficiency industrial and high-consumption products, such as worn-out cars, by 20% annually by providing the necessary incentives. There is also a requirement to decrease the annual energy losses in the construction sector to 5% and to reduce energy and carbon consumption in the transport fleet. C Renewable energy Several regulations have been adopted to increase the development of renewable energy. For instance, the government is obliged to increase the share of renewable and clean power plants with priority for investment in the non-governmental sector (domestic and foreign) to at least 5% of the country’s electricity capacity. Furthermore, in accordance with Article 19 of the Clean Air Law,24 the Ministry of Energy is obliged to develop, produce and supply renewable and clean energy in such a way that at least 30% of the annual increase in the required capacity of the country’s electricity supply is provided by renewable energy. In its INDC, Iran expresses its intention to mitigate GHG emissions and various regulation have been adapted. However, implementation of these regulations to a large extent requires access to financial resources and technologies, and because of unilateral and international sanctions imposed on Iran, it seems quite difficult to achieve the commitments in INDC.

4

MITIGATION LAW AND POLICIES IN THE STATE OF QATAR

Qatar is a small arid peninsula in the Persian Gulf, whose economy is highly dependent on the oil and gas industry. Other non-oil economic sectors of sizable contribution to the GDP include finance, real estate and insurance, manufacturing industries, building and construction. Terrestrial and marine biodiversity in Qatar includes a diverse range of habitats. Qatar has limited natural resources and hence insufficient to secure local food needs. Qatar’s mean annual temperature has increased slightly over the last 40 years. In an arid region like Qatar, with high climatic variability, any further climatic change could produce large effects on the ecosystems and environment as well as the economy. As sea level rise is one of the climate change impacts, it threatens Qatar’s coastal livelihoods.25 Furthermore, as Qatar’s economy is also reliant on oil and gas exports, it is vulnerable economically to global efforts to reduce greenhouse gas emissions.26 Therefore, climate change may effect this state in two ways: first on its ecological and human welfare and second by its impact on its economy, taking into account its total dependency on the export of oil and gas. Furthermore, energy consumption in Qatar, which is increasing, is already amongst the highest in the world. Taking into account the country’s dependency on desalinated seawater, which is hugely energy consuming, securing access to water is one of the challenges that the country may face as a result of climate change.

Clean Air Law passed by the Iranian Parliament in 2017. Mohammad Al-Saidi and others, ‘Urban Climate Change Vulnerability, Responses, and Policies in Qatar: An Assessment’ in Walter Leal Filho (ed.), Handbook of Climate Change Resilience (Springer 2018) 1–23. 26 Mohamed Darwish, ‘Towards Energy Conservation in Qatar’ (2013) 2(1) Open Journal of Energy Efficiency 176–191. 24 25

194  Research handbook on climate change mitigation law Qatar ratified the UNFCCC in 1996, the Kyoto Protocol in 2005 and the Paris Agreement in 2017 and submitted its INDC in 2015; after ratifying the Paris Agreement, its INDC was converted to an NDC and hence became binding on the state. The main policies to mitigate emissions of GHGs and to adapt to the consequences of climate change are incorporated in its NDC, and, in this chapter we will therefore concentrate on Qatar’s mitigation plan within its NDC, beginning with a brief overview of Qatar’s NDC. Only a small portion of Qatar’s NDC is allocated to adaptation and its NDC mainly addresses its planned measures for mitigation, although there is no quantitatively targeted mitigation plan. Instead, Qatar intends to enhance the diversification of its economy away from hydrocarbons. Interestingly, Qatar extends the scope of clean energy to natural gas and thereby includes liquefied natural gas (LNG) as clean energy. Accordingly, Qatar plans to contribute to global climate change mitigation by increasing LNG exports. Furthermore, energy efficiency, and clean energy and renewables, are two main points of its NDC mitigation plan. Qatar’s National Vision 2030 includes several plans with respect to energy efficiency and process optimization, but, no specific project or plan is suggested in its NDC. In its NDC, Qatar highlights the importance of the development of clean energy and renewable sources such as solar and wind power. Furthermore, it is emphasized that for utilizing such renewables as reliable power, the country needs high technology. Due to the fact that Qatar experiences an extremely high level of scarcity of natural resources and high rates of water consumption, natural resources management is one of the main reactions to climate change. Meanwhile, the main source of income of the country is the oil and gas sector which of course is one of main sources of GHG emissions. Therefore, the country has focused mostly on energy efficiency rather than reducing CO2 emissions. The government established a hierarchy of actions to prevent environmental pollution, recycling generated waste and energy generation. To this end, Qatar aims to use waste treatment technologies to generate significant amounts of clean energy. Furthermore, public participation and increasing public awareness are important tools to encourage local communities to become involved in mitigation and adaptation measures. Using these tools is envisaged in Qatar’s NDC, with the focus on lower energy consumption and energy-efficient buildings.

5 CONCLUSION The legal regime governing climate change has undergone major changes since the conclusion of the UN Convention on Climate Change. In the UN Convention on Climate Change, the commitments of states, especially developing countries such as the Islamic Republic of Iran and the State of Qatar, are limited to taking appropriate actions to mitigate greenhouse gas emissions and other general commitments such as submitting periodic reports on the amount of emissions, and measures and programs taken or underway to reduce and adapt to climate change. Although the Kyoto Protocol provided for certain quantitative commitments to reduce emissions for some developed countries, it did not set specific quantitative commitments and targets for developing countries. Now, in the Paris Agreement, all parties are required to submit nationally determined contributions, which include their ambitious targets concerning mitigation and adaptation. Both Iran and Qatar submitted their mitigation plans through their INDCs and NDCs. Iran’s mitigation plan includes specific targets at two levels, one of which is conditional upon lifting of the sanctions. Qatar, on the other hand, does not specify

Climate change mitigation law and policy in the Middle East  195 any target in its mitigation plan. It is committed to presenting a national program to mitigate GHG emissions, taking into account their domestic capabilities and, of course, conditional on international support. It is noteworthy to mention that Iran is under the so-called ‘maximum pressure campaign’, imposed by the US as a unilateral sanction, and Iran is therefore unable to achieve international cooperation and support. On the other hand, Qatar is the country with a highest rate of GDP in the world, and it is therefore not too difficult for it to secure financial resources to advance its mitigation plans. Accordingly, these two states are not faced with similar difficulties in implementing their mitigation plans. Qatar is only required to adopt appropriate laws and policies in order to be able to comply with its NDC. However, Iran needs to secure financial resources, in respect of which the sanctions are making it difficult for the country to comply with its climate obligations, notwithstanding laws and policies which have already been adopted by the country. Iran incorporated mitigation plans indirectly in various laws and regulations. Meanwhile, in both countries, there is currently no specific law providing for programs of mitigation; as a result, the approach to mitigation is scattered and it seems that it is necessary to adopt particular and specific laws to obtain satisfactory results.

9. Climate change mitigation law and policy in the BRICS Rafael Leal-Arcas, Mariam Al Zarkani, Lina Jbara, Ruqaya Mohamed Mubwana, Marianna Margaritidou and Angela van der Berg

INTRODUCTION The term “BRICS” (Brazil, Russia, India, China, and South Africa) comes from the term “BRIC” (Brazil, Russia, India and China), which was coined in a 2001 report by Jim O’Neil based on the countries that first formally met in 2009, and were joined by South Africa in 2010, hence updating the acronym to “BRICS.” The objective of this collective group of countries, which share similar economic situations, was to challenge the developing countries domination of the international economy, and make the voices of developing and under-developed countries heard. It is interesting to note that the BRICS countries have been underscored as being “part of the solution to climate change mitigation.”1 Why? Because they contribute significantly to climate change. This is due to the rapid growth of their economies, and in turn their increasing energy needs and consequent emissions. However, these countries will also be greatly impacted by climate change.2 As such, these countries have a clear stake in participating in climate change mitigation. Since their formation in 2009, the BRICs have met yearly to discuss a variety of issues. Below is a summary of the main topics relating to climate change that have been discussed over the years. As a general premise, the BRICS consider climate change policies as a collaborative effort. In 2009, the initial four BRIC countries began discussing “common but differentiated responsibilities” as a base for their climate change policies. In 2011, there was talk of reforming the current situation, and more specifically, how developed countries dominated the scene. In 2012, the by then five BRICS countries made a promise to use clean and renewable energy sources, and requested international support to develop safe nuclear energy. Support for the Kyoto Protocol was highlighted in 2014. The year 2015 saw a focus on agriculture, requesting the transfer of knowledge and promotion of agricultural technologies, in the context of increased food provision. In 2016, importance was given to nuclear energy, especially with regard to meeting the goals of the 2015 Paris Climate Change Agreement. In 2017, more talks regarding green development and the low-carbon economy were discussed, with the BRICS countries requesting financial, technical and capacity-building support from developed countries. Over the years, it has become clear that the BRICS countries require both

See generally R. Leal-Arcas, “The BRICS and Climate Change” (2013) International Affairs Forum 1–5. 2 Ibid. 1

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Climate change mitigation law and policy in the BRICS  197 financial support and non-financial assistance (knowledge and technology) in promoting green energy. This chapter examines the climate-change mitigation law and policy of five major developing countries: Brazil, Russia, India, China, and South Africa. It will first analyze the case of Brazil, then India, China, Russia, and lastly South Africa.

1 BRAZIL 1.1 Introduction Brazil, a country blessed with a diverse landscape, rich in resources such as forests, water, minerals and fossil fuels, is a major global actor in the fields of agriculture, minerals and oil. Because of rapid economic and urban growth through agricultural and infrastructure expansion, there has been an increased demand for energy and resources, with unavoidable environmental impacts. While Brazil uses hydropower to meet most of the country’s electricity demand, there are still harmful ongoing activities such as deforestation and predatory agricultural practices, which contribute to heavily intertwined local and global impacts. Brazil is considered the home of a unique ecosystem which is vulnerable to the challenges of climate change. The largest rainforest in the world, the Amazon rainforest is located in Brazil, and it is known as the lungs of the planet. Due to climate change phenomena, the Amazon’s ecosystem is being negatively affected. Rising temperatures and changes in rainfall patterns cause drought, disruption in the water cycle, loss of habitats and further loss of trees. In fact, it is expected that huge part of the Amazon rainforest will be transformed into savannah.3 Meanwhile, energy needs in Brazil are on the rise. This is critical because in 2014 the World Resources Institute’s statistics indicated that Brazil’s greenhouse gas emissions contribute 2.7% of the world’s emissions.4 The level of emissions situated the country as one of the largest polluting countries in the world. Since then, Brazil has employed significant efforts by being part of major legal instruments related to the mitigation and adaptation to climate change. However, due to recent changes in Brazil’s government, there is a legitimate fear that Brazil will be unable to meet its targets in contributing to a 2 °C world. In this chapter, we will explore what possible solutions are available for Brazil to minimize its contribution to global climate change given the current social, political, environmental and technological constraints. When trying to identify Brazil’s current national outlook and overall position on climate mitigation, we find several conflicting facts. For example, Brazil is a signatory of international agreements to mitigate climate change and has set out a national plan with mitigation and adaptation measures related to climate change (see details in section 1.2 below). A rural environmental registry was created in order to monitor compliance with environmental laws,

Michael Case, “Climate Change Impacts in the Amazon: Review of Scientific Literature” (WWF) https://​wwfint​.awsassets​.panda​.org/​downloads/​amazon​_cc​_impacts​_lit​_review​_final​_2​.pdf accessed 14 August 2020. 4 E. Gladun and D. Ahsan, “BRICS Countries’ Political and Legal Participation in the Global Climate Change Agenda” (2016) 3 BRICS Law Journal 8–42. 3

198  Research handbook on climate change mitigation law which more than two-thirds of the country’s rural properties joined before the end of 2017.5 However, recent political developments have not been promising. The policies that motivated the above-mentioned decrease of greenhouse gas emissions seen between 2005 and 2012 have since been relaxed. The current government, headed by President Jair Bolsonaro since 1 January 2019, has shown additional discouraging signs. For example, the country withdrew its offer to host the 25th United Nations Conference of the Parties in November 2019, citing “the government transition process and budgetary constraints” and has mentioned that environmental policy is “suffocating” the economy.6 The president has threatened to withdraw from the Paris Agreement, and there have been many changes in the Ministry of Environment, such as decreases in budget and shifting of climate change responsibilities to the Ministry of Agriculture.7 Recent decisions include removing restrictions on indigenous reserves, instead supporting agriculture and mining activities on the lands in question.8 Sadly, Brazil has become the deadliest country in the world when it comes to land defense, recording “the worst year on record anywhere in the world, with 57 murders in 2017.”9 The Brazilian legal structure is divided into three levels: federal, state and local. According to the 1988 Brazilian Federal Constitution, all matters related to energy are legislated at the federal level, while for water resources there is a decentralization between the federal government and states, in addition to the participation of municipalities. Legislation related to the agriculture sector is maintained at the federal level, with delegation to states and municipalities by the Ministry of Agriculture. Environmental regulation with regard to environmental protection is attributed to all levels of government, with federal level rules considered as general and binding, to be supplemented by states’ and municipalities’ rules specific to local interests. In addition, there are a myriad of public and private stakeholders involved in each of the above-mentioned sectors (energy, water, agriculture, and environmental protection). As such, it is clear that the different levels of the Brazilian government are highly interdependent and interconnected. The existing structure allows for connections between different levels on issues such as climate change policymaking.10 However, there is also a struggle between conflicting interests, for example between the Ministry of Environment and the Ministry of Agriculture. The Brazilian government is fraught with corruption, and legalization of illegal acts, such as giving amnesty to those who seize lands, further institutionalizes the corruption.11 5 P. R. Rochedo and others, “The Threat of Political Bargaining to Climate Mitigation in Brazil” (2018) 8 Nature Climate Change 695. 6 L. Viscidi and N. Graham, “Brazil Was a Global Leader on Climate Change. Now It’s a Threat” (Foreign Policy, January 4, 2019) https://​foreignpolicy​.com/​2019/​01/​04/​brazil​-was​-a​-global​-leader​-on​ -climate​-change​-now​-its​-a​-threat/​ accessed 24 March 2021. 7 M.-A. Paim and others, “Mainstreaming the Water–Energy–Food Nexus through Nationally Determined Contributions (NDCs): The Case of Brazil” (2019) 20 Climate Policy 163. 8 Viscidi and Graham (n. 6). 9 “Deadliest Year on Record for Land and Environmental Defenders, as Agribusiness Is Shown to Be the Industry Most Linked to Killings” (Global Witness, 24 July 2018) https://​www​.globalwitness​ .org/​en/​press​-releases/​deadliest​-year​-record​-land​-and​-environmental​-defenders​-agribusiness​-shown​-be​ -industry​-most​-linked​-killings/​ accessed 24 March 2021. 10 Paim (n. 7). 11 S. Eaton, “Tropical Forests Are Flipping from Storing Carbon to Releasing It” (The Nation, August 30, 2018) https://​www​.thenation​.com/​article/​archive/​tropical​-forests​-are​-flipping​-from​-storing​ -carbon​-to​-releasing​-it/​ accessed 24 March 2021.

Climate change mitigation law and policy in the BRICS  199 1.2

International Legal Framework and Climate Change

Climate change is a global environmental challenge that has no borders. The long-term rise in temperature threatens species and habitats, causing severe damage to the natural resources, economic growth, and wellbeing of the country. Through developing an international legal framework, the challenges of climate change will be reduced. It will also obligate countries to adopt targets and measures to reach the optimum goal. Additionally, international frameworks introduce standards to encourage renewable energy, which will lead to emissions reductions and provide energy security for all. In the case of Brazil, it has abundant hydropower dams, which generate clean energy. Brazil has employed substantial political effort internationally and nationally by taking part in international legislation to contribute to combating climate change impacts. Similarly, the country showed a leadership role in tackling the environmental challenges, such as hosting Rio 92, known as the Earth Summit, which was held in Rio de Janeiro in 1992.12 Major legal instruments were created to mitigate climate change and reduce GHG emissions. Some of these key agreements are the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol, the Vienna Declaration and Programme of Action, the Montreal Protocol, and the Paris Agreement. A The Kyoto Protocol and the Paris Agreement The Kyoto Protocol was established in 1992 and it only binds industrialized countries (Annex I countries) because they are the biggest polluters and responsible for the accumulation of emissions in the atmosphere.13 On the other hand, many developing countries (non-Annex I countries) like Brazil have ratified the agreement although they were not legally bound to reduce their emissions. In 1994, Brazil ratified the Kyoto Protocol by pledging to reduce GHG emissions, without any assigned reduction targets, and by taking initiatives through the implementation of the Clean Development Mechanism (CDM). The CDM allows countries to implement emission reduction projects in developing countries to earn certified emission reduction credits (CER), which can be traded and sold to meet the emissions targets set by the Kyoto Protocol.14 These types of market-based mechanisms, such as the Clean Development Mechanism, joint implementation, and international emission trading, help to integrate developing countries into the fight against climate change.15 For example, Brazil has focused its CDM on projects related to renewable energies as it is well known for its roles in the clean energy sector, such as the production of biofuel and hydroelectric power.16

12 Ministry of Science and Technology, “Brazil’s Initial National Communication to the United Nations Framework Convention on Climate Change” (UNFCCC 2004) https://​unfccc​.int/​resource/​docs/​ natc/​brazilnc1e​.pdf accessed 11 August 2020. 13 “What Is the Kyoto Protocol?” (UNFCCC) https://​unfccc​.int/​kyoto​_protocol accessed 3 July 2020. 14 “What Is the Kyoto Protocol?” (n. 13). 15 “What Is the Kyoto Protocol?” (n. 13). 16 Erica Reicher, “The Kyoto Protocol and Brazil: Effectiveness of Clean Development Mechanism (CDM) Projects” (2011) 6 SPICE, Philosophy, Politics, & Economics Undergraduate Journal https://​ repository​.upenn​.edu/​spice/​vol6/​iss1/​4 accessed 14 August 2020.

200  Research handbook on climate change mitigation law Furthermore, the Kyoto Protocol did not take into consideration the environmental issues faced by developing countries. In the case of Brazil, deforestation was left out, although it is a significant source of GHG emissions, and instead the CDM focused on afforestation and reforestation, establishing new forest and restoring damaged forests.17 Nevertheless, efforts were made to address the issue of deforestation, which was not highlighted in the Kyoto Protocol. Reduced Emissions from Deforestation and Degradation (REDD) was introduced in the Conference of Parties in 2005, aiming to incentivize developing countries to reduce their emissions from unsustainable land use.18 The Paris Agreement created a paradigm shift from a treaty that was Annex-structured into a harmonious global framework that started to grow from the Copenhagen Accord of 2009. The COP 21 was held in Paris in December 2015, when the international climate change agreement was approved and signed by 196 delegations, including 195 states and the European Union.19 The main objective of the COP 21 is to strengthen efforts towards reducing the temperature increase below 1.5 °C by the end of the century to witness a noticeable change on the climate.20 The Paris Agreement is considered to be balanced and flexible as it gives countries the responsibility to set a framework with their own intended nationally determination contributions (INDCs), commit to reducing emissions, and monitor these targets every five years. Brazil was one of the first major developing countries to ratify the Paris Agreement in September 2016, submit its INDC, and emphasize its willingness to do more to adapt to climate change in key sectors like agriculture, forestry and water resources.21 B Brazil’s intended nationally determined contributions (INDCs) In 2015, Brazil presented a broad scope of its INDCs to the United Nations, which included mitigation, adaptation, and means of implementation to achieve the ambitious objectives of the Paris Agreement.22 Brazil is committed to implement the INDC under the existing policies such as the National Policy on Climate Change (Law 12,187/2009), the Forest Code, and the Law on the National Structure of Conservation Units (Law 9,985/2000).23 Brazil intends to set mitigation measures to reduce GHG emissions from the largest sector, i.e., land use, land-use change and forestry (LULUCF), by 37% below 2005 levels by 2025 through restoring 12 million hectares of forest for different land use purposes.24 However, the energy, transport, industry and agriculture sectors will also have targets to meet the GHG reduction goal. Additionally, Brazil aims to reach a 45% share of renewables in the overall energy mix by 2030 and to expand the energy sources from solar, wind and biomass to at least 23%.25 Correspondingly, as the largest producer and consumer of ethanol, one of

17 Claudio Forner, “Deforestation under the UNFCCC: The Birth of a New Opportunity” (Center for International Forestry Research) https://​www​.fao​.org/​forestry/​11367​-037​4a95cafbeb​cb38e24c6e​ 3a611fe4bd​.pdf accessed 1 June 2022. 18 “UNFCCC – UN-REDD Programme Collaborative Online Workspace” (Unredd.net, 2017) https://​www​.unredd​.net/​about/​unfccc​.html accessed 11 August 2020. 19 (2017) https://​www​.gouvernement​.fr/​action/​la​-cop​-21 accessed 11 August 2020. 20 “What Is the Kyoto Protocol?” (n. 13). 21 Gladun and Ahsan (n. 4). 22 Federative Republic of Brazil, “Intended Nationally Determined Contribution” (UNFCCC). 23 Federative Republic of Brazil (n. 22). 24 Gladun and Ahsan (n. 4). 25 Paim (n. 7).

Climate change mitigation law and policy in the BRICS  201 Brazil’s INDCs is to increase the biofuel share up to 18%.26 Among these objectives, one is dedicated towards the protection of the Amazon rainforest to achieve zero illegal deforestation by enforcing the implementation of the existing Brazilian Forest Code legislation for better land management.27This code legally requires landowners in the Amazon to keep 80% of land as forest.28 In addition, the INDCs for both the transportation and industry sectors were not quantified by targets; however, Brazil aims to implement low carbon infrastructure in the industrial sector and improve the infrastructure of the transportation sector to improve the environment.29 1.3

Domestic Policies on Climate Mitigation

Reducing greenhouse gases is voluntary for developing countries. Yet, the Brazilian government has stepped in by taking serious actions to control the deforestation rate, in particular by establishing national plans and policies for climate change. In 2007, an inter-ministerial committee was formed to develop and monitor and assess the national climate change plan.30 The plan was launched in 2008 and had several targets and efforts to mitigate and adapt to climate change. Some of these targets are an 80% reduction of the deforestation rate per year by 2020, increasing the annual ethanol consumption by 11%, and increasing the co-generation of electricity production by 11.4% of the total amount by 2030.31 Following the national climate change plan, the president issued a decree for the national sector-based reduction targets of 36.1–38.9% of projected emissions by 2020, with 2000 as a baseline.32 Further implementation reduction measures were highlighted in the second Brazilian Greenhouse Gas Emissions Inventory, covering the 1990–2005 period.33 As part of Brazil’s climate change law, massive efforts and instruments were created that aim to mitigate the climate change impact. In 2009, the National Fund on climate change law (FNMC) was established to financially support projects related to education, REDD+, capacity-building, technologies, and policy development with funds of more than 26 million reais managed by the Brazilian Ministry of Environment.34 In addition, the Amazon Fund, initiated by the Brazilian government in 2008, was a national fund under the REDD+ mechanism to raise donations to invest in protecting, monitoring and conserving the Amazon Forest. Brazil is open to international funds and contributions to support global climate health. For example, the Norwegian government has donated one billion US dollars to protect this Paim (n. 7). Paim (n. 7). 28 WWF-Brazil, “Brazil’s New Forest Code: A Guide for Decision-Makers in Supply Chains and Governments” (WWF 2015) https://​www​.worldwildlife​.org/​publications/​brazil​-s​-new​-forest​-code​-a​ -guide​-for​-decision​-makers​-in​-supply​-chains​-and​-governments accessed 14 August 2020. 29 P. Gallo and E. Albrecht, “Brazil and the Paris Agreement: REDD+ as an Instrument of Brazil’s Nationally Determined Contribution Compliance” (2018) 19 International Environmental Agreements: Politics, Law and Economics. 30 “Low Carbon Green Growth Roadmap for Asia and the Pacific: Case Study – Brazil’s National Plan on Climate Change and Law” (Unescap.org) https://​www​.unescap​.org/​sites/​default/​files/​5​.​%20CS​ -Brazil​-National​-Plan​-on​-climate​-change​-and​-law​.pdf accessed 8 August 2020. 31 Ibid. 32 Ibid. 33 Ibid. 34 Ibid. 26 27

202  Research handbook on climate change mitigation law rainforest and combat desertification.35The deforestation rate in Brazil has shown an obvious decrease in recent years as a result of Brazilian national plans that have prioritized efforts to tackle unsustainable land use. A Current projections policy Climate modeling is a helpful tool for countries to understand how climate will change over time. It is a simulation of data from the past, present and future and the analysis of countries’ current policies towards climate change impact. According to the Climate Action Tracker (CAT) analysis, although there was remarkable progress in the decrease of Brazil’s emissions over the past years, scenarios have still projected that there will be an increase in emissions in most of the sectors at least until 2030. The independent analysis finding has stated that in the year 2025 emissions excluding LULUCF will be 1,056 million tons of carbon dioxide equivalent (Mt CO2eq) and 1,088 Mt CO2eq in 2030.36 Even though Brazil has INDC targets on renewables in its total energy mix, projections showed that emissions will continue to increase in the energy sector and INDCs will not be achieved if additional measures are not taken.37 In addition, the transport sector also plays an important role due to the intensity of GHG emissions that it can generate. Brazil is heavily investing in biofuels, which may help to reduce emissions. However, full decarbonization is required in the transport sector by investing more in new technologies and in electric vehicles.38 B Reality Under Brazil’s new administration, the country’s status in respect of mitigating climate change is doubtful. The country should work to mainstream climate change into its economy by mobilizing towards low carbon activities and investing more in clean energy. The current energy plan is expected to continue and expand the use of conventional sources of energy. In addition, with continuous development, projects that are leading to unsustainable land use will worsen the situation, causing failure to meet the national climate change plan set by Brazil. According to CAT, Brazil’s INDCs for 2030 and 2050 are “insufficient” to fulfill the Paris Agreement requirements with the temperature increase below 2 °C, let alone limiting it to 1.5 °C, and is compatible with an increase in temperature between 2 °C and 3 °C.39This means that Brazil should increase its willingness to protect the environment and overcome all political pressures in order to enforce the implementation of the current national plan targets by investing in market policies to shift to a long-term decarbonized economy. 1.4

Possible Solutions

Based on the above, it is clear that Brazil is at a crossroads. While it is true that for the moment, the bulk of greenhouse gas emissions result from activities such as deforestation and agricultural practices, rather than energy production, this may not remain the case in the near future.

Ibid. “Current Policy Projections, Climate Action Tracker” (Climateactiontracker.org, 2019) https://​ climateactiontracker​.org/​countries/​brazil/​current​-policy​-projections/​ accessed 11 August 2020. 37 Ibid. 38 Ibid. 39 Ibid. 35 36

Climate change mitigation law and policy in the BRICS  203 Moreover, it is logical to assume that the deciding factor in the eventual choices Brazil will make depend on the country’s leadership. For example, in the case of deforestation and predatory agricultural practices, the government’s position will ultimately decide whether there will be support for these activities or not. In addition to political will, it is important to empower climate change institutions. For example, maintaining the functions of the Inter-Ministerial Committee on Climate Change will offset the increasing power struggle of the agricultural sector.40 Since it is not possible to predict in exactly which direction the current leadership will take Brazil, it is important to continue our analysis and look into possible renewable energy options as potential mitigators of climate change. Recent studies seem to agree on one issue: hydropower alone can no longer sustain Brazil’s energy demands and offset the climate change effects of deforestation and predatory agricultural practices. Moreover, the current trend is moving towards smaller hydroelectric plants, due to their minimal environmental impacts.41 A combination of hydropower and wind power seems to be ideal due to the alternate periods of function: wind velocities are stronger during winter and spring, which is the time when rainfall decreases.42 As such, the two technologies seem to complement each other perfectly. Another positive factor is that the cost of wind farms is becoming more economically feasible.43 Bioenergy is predicted to be a major energy source in Brazil until 2050.44 As mentioned previously, the benefits of biomass are twofold: electricity generation and generation of liquid biofuels for flexible-fuel vehicles. Moreover, the residues used for biomass come from major cash crops in Brazil, such as sugarcane, soybean and maize.45 As such, it is reasonable to assume that the expansion of cultivation of these plants would have multiple benefits, such as job creation, increased crops and revenue, and increased residues used for energy and biofuels. However, it is important to proceed with caution, for fear of negative impacts on land use. Another caveat to this otherwise beneficial energy source is that flexible-fuel vehicles in Brazil may be replaced by other types of cars (e.g. electric).46 Aside from energy sources, there are other tools that can be used to mitigate climate change. For example, market-based instruments, such as high carbon taxes, could be effective in reducing emissions. Such a tool would, however, require political support, and as discussed previously, this is uncertain at the moment. 1.5 Conclusion In this section, we have analyzed the current Brazilian situation and tried to identify possible methods to mitigate global climate change given the existing social, political, environmental and technological constraints. It is clear that while Brazil had made substantial progress Paim (n. 7). R. Corrêa da Silva, I. de Marchi Neto and S. Silva Seifert, “Electricity Supply Security and the Future Role of Renewable Energy Sources in Brazil” (2016) 59 Renewable and Sustainable Energy Reviews 328. 42 Ibid. 43 Ibid. 44 A. F. P. Lucena and others, “Climate Policy Scenarios in Brazil: A Multi-Model Comparison for Energy” (2016) 56 Energy Economics 564. 45 Ibid. 46 Ibid. 40 41

204  Research handbook on climate change mitigation law between 2005 and 2012, the current political atmosphere in the country jeopardizes this laudable success. Moreover, previously the main sources of greenhouse gas emissions in Brazil were deforestation and the agriculture sector. This too is now changing, with increasing energy demands, and the very real possibility that the existing hydroelectricity network will no longer be able to support this demand by 2050. As such, if Brazil wants to successfully meet its global commitments such as the Paris Agreement and the Kyoto Protocol, it is essential that changes be made. First and foremost, the political leadership in Brazil needs to accept the fact that environmental issues are of equal importance to agricultural needs, and that the possible detrimental effects of not mitigating climate change will have very real impacts on Brazil and the whole world in a very short amount of time. Second, investment should be made into expanding renewable energy sources and creating an ideal energy mix suitable for Brazil. Finally, continued coordination with the BRICS countries is essential to keep the voices of underdeveloped countries heard.

2 INDIA 2.1 Introduction India is poised to become a key global economic power. With a population of 1.3 billion and a GDP of US$2.7 trillion,47 it is the third largest emitter of GHGs in the world, with a significant portion of its economy fueled by coal, oil and gas. A rapid urbanization rate puts further demands on cities to expand and provide infrastructure, mobility and social amenities, resulting in higher energy demands and increased emissions. This section explores various mitigation strategies in India. It also analyzes the national and regional context for reviving India’s large-scale hydroelectricity generation towards a more ambitious climate-change mitigation and energy transition policy. First of all, this section explores how India can successfully meet its climate change mitigation commitments by leveraging its megacities’ potential. The United Nations (UN) recognizes the role of non-state actors (NSAs) such as mayors, governors and non-governmental organizations (NGOs) in helping countries implement their climate actions.48 We also propose that renewable energy will drive this ambition, specifically solar and wind, mainly focusing on electricity production and transport. Finally, the section concludes by investigating the national and regional context for reviving India’s large-scale hydroelectricity generation towards a more ambitious climate-change mitigation and energy transition policy.

https://​data​.worldbank​.org/​indicator/​NY​.GDP​.MKTP​.CD​?locations​=​IN. A. Hsu, O. Widerberg, A. Weinfurter, S. Chan, M. Roelfsema, K. Lütkehermöller and F. Bakhtiari, “Bridging the Emissions Gap – The Role of Nonstate and Subnational Actors” in The Emissions Gap Report 2018. A UN Environment Synthesis Report (United Nations Environment Programme 2018). https://​wedocs​.unep​.org/​bitstream/​handle/​20​.500​.11822/​26093/​NonState​_Emissions​_Gap​.pdf​ ?isAllowed​=​y​&​sequence​=​1. 47 48

Climate change mitigation law and policy in the BRICS  205 2.2

The Dilemma between Development and Climate Change Mitigation

The last decades have spurred a debate on whether developing nations have the capacity to pursue extensive efforts aimed at climate change mitigation.49 India is now poised to become a key global economic power. With a population of 1.3 billion and a GDP of US$2.7 trillion,50 it is also the third largest emitter of GHGs in the world. Hence, irrespective of Prime Minister Modi’s commitments, any ambitious policy towards achieving this goal would have to be listed with, and probably below, other state priorities such as poverty alleviation and economic growth.51 This policy would largely entail a rapid urbanization rate and the provision of infrastructure, mobility and social amenities.

Source: Central Electricity Authority, Growth of Electricity Sector in India from 1947–2019 (May 2019) at 27, https://​cea​.nic​.in/​old/​reports/​others/​planning/​pdm/​growth​_2019​.pdf.

Figure 9.1

India’s utilities installed capacity in MW (March 2019)

However, as depicted by Figure 9.1, India’s high GHG emissions mainly derive from its reliance on coal. As the country develops, so will its current electricity deficit52 since electric-

Irem Askar Karachi, “Environmental Foreign Policy as a Soft Power Instrument: Cases of China and India” (2018) 17(1) Journal of Contemporary Eastern Asia 5–26 at 19. 50 https://​data​.worldbank​.org/​indicator/​NY​.GDP​.MKTP​.CD​?locations​=​IN. 51 Karachi (n. 49) 18–19. 52 Tommi Ekholm and Tomi Lindroos, An Analysis of Countries’ Climate Change Mitigation Contributions Towards the Paris Agreement (Research Analysis 239, VTT Technical Research Centre of Finland Ltd 2015) at 32. 49

206  Research handbook on climate change mitigation law ity (and subsequently, coal) demand is predicted to escalate.53 For instance, the expansion of electricity access to all rural villages as of April 201854 may have been a social success, but it inevitably caused electricity consumption to increase, as depicted in Figure 9.2.

Source: Central Electricity Authority, Growth of Electricity Sector in India from 1947–2019 (May 2019) at 15, https://​cea​.nic​.in/​old/​reports/​others/​planning/​pdm/​growth​_2019​.pdf.

Figure 9.2

India’s per capita consumption of electricity

Moreover, two-thirds of India is still undeveloped and further development will require a lot of energy,55 resulting in significant emissions. Despite this, India cannot afford to lose the opportunity to harness urbanization as an engine for growth as this would mean “losing the productivity advantage associated with dense population centers.”56 International Renewable Energy Agency, REMAP Renewable Energy Prospects for India (IRENA 2017) at 1–3. 54 Jennifer Perron, “Fatih Birol and David Victor on the Geopolitics of Energy” Brookings Planet Policy (2 July 2018). 55 Damien Carrington and Michael Safi, “How India’s Battle with Climate Change Could Determine All Our Fates” The Guardian (6 November 2017), https://​www​.theguardian​.com/​environment/​2017/​nov/​ 06/​how​-indias​-battle​-with​-climate​-change​-could​-determine​-all​-of​-our​-fates. 56 Shirish Sankhe and Richard Dobbs, “India’s urban rising” Financial Times (29 April 2010), McKinsey Global Institute https://​www​.mckinsey​.com/​mgi/​overview/​in​-the​-news/​urban​-rising​-in​-india. 53

Climate change mitigation law and policy in the BRICS  207 The dilemma between poverty and increased GHG emissions will continue unless and until India (a) diversifies its current electricity mix and (b) substitutes fossil fuels with non-conventional energy resources. Unfortunately, while existing policies actively pursue the first of these goals, primarily through the development of solar and wind energy,57 the current approach to the promotion of non-fossil fuels seems insufficient to meet the second objective. This is particularly the case since the expansion of renewable energy installed capacity does not have an immediate significant effect on the country’s actual electricity generation due to intermittency, distribution, and transmission issues of renewables,58 as depicted in Figure 9.3.

Source: Central Electricity Authority, Growth of Electricity Sector in India from 1947–2019 (May 2019) at 39, https://​cea​.nic​.in/​old/​reports/​others/​planning/​pdm/​growth​_2019​.pdf.

Figure 9.3

India’s utilities gross electricity generation (2018–2019)

The continuous reliance on conventional energy resources for electricity generation does not only make the country’s development GHG intensive, but might also thwart some of India’s policies which are ambitiously compatible with climate change mitigation, such as plans to electrify the mass transportation system and vehicle stock.59

57 Natural Resources Defense Council, Inc., “The Road from Paris: India’s Progress Toward its Climate Pledge” (November 2017) at 3. 58 Aparajit Pandey, “India’s Low Carbon Transition” (2016) Observer Research Foundation Occasional Paper 98 – August 2016 for the Organisation for Economic Co-operation and Development at 4. 59 Samir Saran (ed.), Financing Green Transitions (Observer Research Foundation 2019) at 99.

208  Research handbook on climate change mitigation law 2.3

India in the International Legal Framework

A Historical position The Kyoto Protocol was signed in 199760 and was at that time considered an achievement for two reasons: it had a temperature goal to limit global warming; and it prescribed the specific greenhouse gases (GHG) to be monitored and reported. However, it also received criticism for its top-down approach, which put requirements on countries to reduce GHG emissions, as well as exempting big emitters such as China and India from controlling their emissions.61 Initially, not all states ratified the agreement (to this day, the US is the only country that has not yet ratified the Kyoto Protocol) and it was considered weak and its accomplishments were generally seen as mediocre. India is a non-Annex I developing country under the Kyoto Protocol62 and is not bound by any legal obligations to mitigate its carbon footprint.63 Still, the 2008 Indian National Action Plan on Climate Change (NAPCC) includes, following amendments in 2014, 12 “National Missions” aimed at climate change mitigation, four of which are directly related to energy.64 B Nationally determined contributions India has even been considered amongst the “pioneers” to ratify the Paris Agreement65 and a “bridging nation” between developed and developing countries.66 Ever since, renewable energy integration has been an underlining theme in the country’s reforms of the energy market and the implementation of a new renewable energy policy67 pursuant to Indian’s non-fossil fuel NDC and shift in foreign policy. This was primarily demonstrated by the launch of the International Solar Alliance by Prime Minister Modi and the French President Hollande.68,69 However, there is still low optimism that India will reach its renewable energy target,70 much less start to replace its current conventional energy sources, especially in the absence

https://​unfccc​.int/​kyoto​_protocol. Michael Grubb, “Why it’s wrong to label the Kyoto Protocol a disaster” Climate Change News (10 June 2016) https://​www​.climatechangenews​.com/​2016/​06/​10/​why​-its​-wrong​-to​-label​-the​-kyoto​ -protocol​-a​-disaster/​. 62 Vasudha Foundation, “Unpacking the Paris Agreement: Implications and State of Preparedness – India” (January 2015) at 27. 63 Chukwumerije Okereke and Philip Coventry, “Climate Justice and the International Regime: Before, During, and After Paris” (2016) 7 WIREs Climate Change 834–851 at 837. 64 Gladun and Ahsan (n. 4) 30. 65 Karachi (n. 49) at 18. 66 David Bells, Simon Schunz, Tao Wang and Dhanasree Jayaram, “Climate Diplomacy and the Rise of ‘Multiple Bilateralism’ Between China, India, and the EU” (2018) 2 Carbon & Climate Law Review 85–97 at 89 and 90. 67 Ekholm and Lindroos (n. 52) at 32. 68 Katyayani Rajawat, “International Solar Alliance: India’s Potential in Clean Energy” (2019) 4(1) International Journal of Academic Research and Development 32–39 at 33. 69 Rajawat (n. 68) at 35. 70 For instance, the current estimate of the solar target’s success is barely over 50% by 2022: Varun Sivaram, “Still Shining? Our Third Annual Review on Solar Scale-Up in India” Council on Foreign Relations (20 February 2018). 60 61

Climate change mitigation law and policy in the BRICS  209 of an active energy transition and substitution policy. India submitted its Intended Nationally Determined Contribution (INDC) to the UN in 2016.71 2.4

Domestic Policies on Climate Change Mitigation

A Cities and climate change Today 55% of the world’s population lives in urban areas,72 and according to the International Energy Agency (IEA), “in 2013, the world’s urban areas accounted for about 65% of global primary energy use and produced 70% of the planet’s carbon dioxide emissions.”73 In India, in terms of population, some cities surpass countries and are called megacities. Defined as an urban agglomeration having over ten million inhabitants, five of the 33 global megacities are in India.74 Our premise is that with successfully implemented climate actions in megacities, half the battle of emissions reduction is already won. Looking at the profile of two Indian megacities, one can deduce that most of the emission intensity occurs there based on the economic activity. New Delhi has a population of 30 million,75 and a GDP of US$293.6 billion. Its economy is dominated by the service sector, mainly in information technology, telecommunications, hotels and banking. Mumbai has a population of 20 million, making it the second most populous city,76 and a GDP of US$368 billion.77 It is the commercial, entertainment and fashion center of India. B Non-state actors Globally, “much of the progress in reducing CO2 emissions is driven by mayors, governors, premiers, and corporate executives. It’s time to acknowledge that reality and move beyond traditional diplomacy by allowing cities, states, and companies to officially sign on the Paris Agreement.”78 The authors believe that sub-national involvement would facilitate emissions data accounting by equipping all stakeholders with the appropriate tools and authority. An example of the commitment and contribution of NSAs is the C40, a global network of 94 cities committed to pursue climate action. It is a platform that facilitates various initiatives to enable the mayors of the C40 and other NSAs to develop and implement climate actions.

UNFCCC, “India’s Intended Nationally Determined Contribution: Working towards climate justice” https://​www4​.unfccc​.int/​sites/​ndcstaging/​PublishedDocuments/​India​%20First/​INDIA​%20 INDC%20TO%20UNFCCC.pdf. 72 United Nations, Department of Economic and Social Affairs, Population Division, World Urbanization Prospects: The 2018 Revision (United Nations 2019) https://​population​.un​.org/​wup/​ Publications/​Files/​WUP2018​-Report​.pdf. 73 “Cities are the frontline of the energy transition,” 2018 https://​www​.iea​.org/​news/​cities​-are​-at​-the​ -frontline​-of​-the​-energy​-transition. 74 United Nations (n. 72). 75 https://​w​orldpopula​tionreview​.com/​world​-cities/​delhi​-population. 76 https://​w​orldpopula​tionreview​.com/​world​-cities/​mumbai​-population. 77 Brookings Institution, 2024 estimates, PPP-adjusted GDP ($BN) https://​en​.wikipedia​.org/​wiki/​ List​_of​_cities​_by​_GDP. 78 D. Esty and P. Boyd, “To Move Paris Accord Forward, Bring Cities and Companies on Board” (2018) Yale Environment 360. 71

210  Research handbook on climate change mitigation law Additionally, it provides a forum for cities globally to learn, exchange knowledge and engage in capacity-building.79 Five Indian cities belong to the C40: Bangalore, Chennai, Delhi NCT, Kolkata, and Jaipur. With a combined population of 68 million, the cities’ success in any mitigation actions stands to benefit India significantly. An example of an effective NSA initiative is India’s GHG inventory. The current inventories have gaps, and the data and information are met with skepticism,80 therefore introducing uncertainty as to its accuracy and usefulness. Without a robust inventory, it is impossible to develop effective mitigation strategies or actions. To address this, an alternative inventory was compiled by the GHG Platform India, a collective civil society initiative.81 “GHG Platform India draws its inspiration from a similar civil society initiative in Brazil, the System for Estimation of Emissions of GHG (SEEG). It is an excellent example of South-South Cooperation, where the Indian Platform has been enriched by the Brazilian experience and benefited from their technical inputs.”82 C Solar power In 2015 at the COP 21 in Paris, India’s Prime Minister, Narendra Modi, launched the International Solar Alliance (ISA), and further announced that India’s energy targets included an installed solar generation capacity of 100 GW by 2022. Since then, India has successfully diversified its energy mix by aggressively driving investment in renewable energy, especially wind and solar. By 2017, India had an installed capacity of about 330 GW of electricity while its peak demand was much lower at 164 GW.83 By continuing to drive a strategy of equipping residential and commercial properties with solar panels, Indian cities could significantly reduce their dependency on coal. The success of this depends on how well local governments strategize, and how mayors leverage their proximity to and influence on industry leaders, businesses, academia, NGOs and the public to contribute to climate actions. This can be achieved through awareness-building on the long-term benefits of decarbonization. City residents are more cognizant of the impacts of climate change on their daily lives, such as extreme weather events. They have better knowledge of the appropriate actions to reduce GHGs locally, such as energy-efficient buildings and transport. Cities can also negotiate competitive prices for group purchasing of clean electricity on the market, thereby driving competition from producers and distributors, and potentially drive innovation and ramp up production of clean energy. With battery technology improving, cities will have increased opportunities to harness solar energy and further drive decarbonization and rein in India’s emissions.84

https://​www​.c40​.org/​networks. S. Chakrabarty, “By the Numbers: New Emissions Data Quantify India’s Climate Challenge” (World Resources Institute 2018) https://​www​.wri​.org/​blog/​2018/​08/​numbers​-new​-emissions​-data​ -quantify​-indias​-climate​-challenge. 81 GHG platform India 2005–2015 Sub-National Estimates: 2005–2015 Series http://​ www​ .ghgplatform​-india​.org/​emissionestimates​-phase2. 82 Ibid. 83 Sivaram (n. 70). 84 Carrington and Safi (n. 55). 79 80

Climate change mitigation law and policy in the BRICS  211 D Electric vehicles In 2013 India launched a National Electric Mobility Mission Plan (NEMMP) 2020 to promote the uptake of hybrid and electric vehicles (EVs), with a target of seven million vehicle sales year-on-year from 2020 onwards. Additionally, the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India (FAME-India) scheme was introduced to implement the plan, with a second phase, FAME II, launched in 2019. The scheme is based on direct incentivization with tax rebates on car loans and general tax reductions.85 In 2015 India announced a target of 30% across all vehicle types by 2030. Its success will yield multiple benefits in reducing GHGs and air emissions, creating a new mobility economic sector and reducing the dependence on oil for transport.86 If the target is achieved, the savings will translate “to 474 million tonnes of oil equivalent and 846 million tonnes of net CO2 emissions over their lifetime.”87 Cities can maintain the momentum by providing incentives such as waivers for parking fees and road tolls, and promoting the low emission vehicle sector by creating low emission zones (LEZ). The success of the London, UK LEZ can be duplicated.88 E India’s unexploited hydropower potential (1) Background India ranks fifth in the world in terms of hydropower potential.89 Yet, 69.2% of this resource remains unexploited. Unlike solar and wind energy, hydropower is both a flexible and stable energy source, which can effectively enhance the reliability of the grid system. Not only can it meet load fluctuations by the minute, but it has the potential to store energy in the form of reservoirs.90 These two characteristics make hydropower an ideal replacement for fossil fuels as a supporting energy source to renewable energies.91 From a financial standpoint, there are multiple investment deterrents including India’s regulatory uncertainty, lack of strong contract enforceability rules, and delays in the bidding process.92 However, India is privileged with one of the lowest total installed costs for large-scale hydropower projects in the world.93 Furthermore, a hydroelectricity plant’s relatively high initial capital investment required for civil works and electro-mechanical equipment 94 will be

85 FAME India Scheme Phase II, Ministry of Heavy Industries and Public Enterprises, Government of India, https://​fame2​.heavyindustry​.gov​.in/​content/​english/​15​_1​_FAMEI​.aspx. 86 P. Bhagwat et al., Charging Up India’s Electric Vehicles: Infrastructure Deployment and Power System Integration (European University Institute 2019). 87 Richa Sahay, “How Can India Transition to Electric Vehicles? Here’s a Roadmap” (World Economic Forum 2019) https://​www​.weforum​.org/​agenda/​2019/​10/​how​-can​-india​-transition​-to​-electric​ -vehicles​-heres​-a​-roadmap/​. 88 For a comprehensive overview of the London low emission zones, see https://​tfl​.gov​.uk/​modes/​ driving/​low​-emission​-zone. 89 Sanjeev Sharma and Jagdish Chandra Kuniyal, “Hydropower Development and Policies in India: A Case of Himachal Pradesh in the Northwestern Himalaya, India” (2016) 11(4) Energy Sources Part B: Economics Planning and Policy 377–384 at 378. 90 International Renewable Energy Agency, Renewable Power Generation Costs in 2014 (January 2015) at 114. 91 International Renewable Agency (n. 90) at 114. 92 Pandey (n. 58) at 5. 93 International Renewable Energy Agency (n. 90) at 117. 94 International Renewable Energy Agency (n. 90) at 115 and 117.

212  Research handbook on climate change mitigation law balanced by its low operational and maintenance costs95 as well as additional advantages such as water storage, irrigation, and flood control.96 The above has not been ignored by the Indian government, which adopted a five-year plan aimed at the exploitation of large-scale hydropower potential.97 However, large-scale hydropower projects involve a wide spectrum of social and environmental implications resulting in the failure to accelerate hydropower development.98 Currently, a range of complications such as the lack of environmental clearance, the funding deficit, and extensive bureaucratic procedures are holding back 114 hydroelectricity projects.99 Additionally, the construction of large-scale dams in India has given rise to historical controversies of social injustice.100 A prominent example of this was the Sardar Sarovar Dam.101 In order to acquire land for this project, the Indian government treated 70–85% of the local tribal population as “landless” to avoid the payment of compensation.102 While the approach has been rectified, further concerns have emerged regarding the adverse effects of hydropower dams on the surrounding ecosystem, the region’s biodiversity, and downstream rural populations. That said, it is arguable that injustice and human rights abuse would be greater in vulnerable countries, such as India, when there is inaction or lack of ambition, than if there is implementation of rigorous decarbonization policies.103 This by no means implies that environmental concerns and human rights should be ignored. Instead, there should be a revived recognition of the importance of hydropower in climate change mitigation as a way for governments to commit themselves to address the issues in order to ensure its legitimacy and sustainable development. Hence, the government should abandon its telescopic perspective to decision-making and implement inclusive participatory procedures and stakeholder engagement in environmental impact assessments to reach consensus with the local populations.104 Moreover, such policy could adopt an integrated approach105 to address matters such as navigation, regional connectivity, and flood control as well as water scarcity and agricultural productivity concerns.106

International Renewable Energy Agency (n. 90) at 118. International Renewable Energy Agency (n. 90) at 114. 97 Saeed Ahmed, Anzar Mahmoud, Ahmad Hasan, Guftaar Ahmad Sardar Sidhu, and Muhammad Fasih Uddin Butt, “A Comparative Review of China, India, and Pakistan Renewable Energy Sectors and Sharing Opportunities” (2016) 57 Renewable and Sustainable Energy Reviews 216–225 at 218. 98 Cecilia Tortajada and Udisha Saklani, “Hydropower-Based Collaboration in South Asia: The Case of India and Bhutan” (2018) 117 Energy Policy 316–325 at 319–320. 99 Tortajada and Saklani (n. 98) at 319; for further information see Ganesan Seetharaman, “Hydel Power in India is Growing at the Slowest Pace” Economic Times (27 January 2019). 100 Tortajada and Saklani (n. 98) at 319. 101 Sophie Namy, “Addressing the Social Impacts of Large Hydropower Dams” (2007) 7 The Journal of International Policy Solutions 11–17 at 12. 102 Namy (n. 101) at 12. 103 Okereke and Coventry (n. 63) at 840. 104 Sanjib Baruah, “Whose River Is It Anyway: Political Economy of Hydropower in the Eastern Himalayas” (2012) 47(29) Economic and Political Weekly 41-52 at 43. 105 Golam Rasul, Nilhari Neupane, Abid Hussain, and Binaya Pasakhala, “Beyond Hydropower: Towards an Integrated Solution for Water, Energy and Food Security in South Asia” (2019) International Journal of Water Resources Development 7. 106 Rasul et al. (n. 105) at 3. 95 96

Climate change mitigation law and policy in the BRICS  213 India’s decision to cease categorizing large hydropower projects as renewable since 2015107 and their removal from its 2022 Renewable Energy Plan108 is not a long-term solution to any of the above-mentioned obstacles related to hydroelectric power plants. Yet, there is still reluctance to completely abandon this sector. In 2018, the Indian government has approved investments in the country’s largest hydropower plant, located in the Lower Dibang Valley District of Arunachal Pradesh.109 Moreover, India has long since turned to bilateral cooperation on hydropower with Bhutan.110 (2)

The role of large hydropower projects in enhancing South Asian cooperation for cross-border electricity trade The countries of South Asia, albeit divided by geopolitical tension and historical rivalries,111 have an equal interest in promoting large-scale renewable energy to mitigate climate change, as depicted in Figure 9.4.

Source: Govinda Timilsina, “How Would Cross-Border Electricity Trade Stimulate Hydropower Development in South Asia?” (2018) World Bank Group Policy Research Working Paper 8513 at 11, https://​openknowledge​ .worldbank​.org/​bitstream/​handle/​10986/​29986/​WPS8513​.pdf​?sequence​=​1​&​isAllowed​=​y.

Figure 9.4

Hydropower potential in South Asia (MW)

Seetharaman (n. 99). Tortajada and Saklani (n. 98) at 320. 109 ET Bureau, “Cabinet Approves Investments in India’s Largest Hydropower Plant” Economic Times (17 July 2019). 110 Tortajada and Saklani (n. 98) at 320. 111 Tortajada and Saklani (n. 98) at 317. 107 108

214  Research handbook on climate change mitigation law South Asia is the most densely populated region in the world112 and a “hot spot” for climate migration,113 likely to be caused by the inundation of the Maldives as well as the coastlines of Bangladesh, Sri Lanka, Myanmar, and Pakistan.114 Another common concern relates to the potential impact of climate change on the agricultural sector, which is the largest source of employment and GDP contributor of the region.115 Finally, being all developing countries with high poverty rates,116 there is a common vision amongst them to reconcile climate change mitigation and economic growth. Currently, there is already cross-border hydroelectricity trade in the region of South Asia, based on a series of bilateral electricity trade agreements between India, Bhutan, Bangladesh and Nepal.117 Focusing specifically on hydropower, the Indo-Bhutanese bilateral cooperation has allowed India to benefit from a reliable and affordable renewable energy resource to support its peak load and reduce its GHG intensity rates.118 On the other hand, Bhutan was able to generate revenue from hydropower energy exports by relying on Indian finance and technology.119 However, at the other end of the spectrum in the India’s foreign relations is Pakistan.120 The geopolitical tensions between the two states have important repercussions on the exploitation and trade of hydroelectricity mainly in respect to shared water sources located in the contested territories of Jammu and Kashmir (e.g., Indus River basin 121). For instance, this has allowed Pakistan to raise objections to the inauguration of a 330MW hydroelectricity power plant located in Kishanganga in May 2018.122 Nonetheless, the difference between the respective electricity demands and hydropower capacity potentials of South Asian states make the region an ideal ground for international cooperation123 for harnessing and utilizing their full electricity generation potential.124 Countries with high electricity demand will be able to benefit from those with an electricity surplus125 on a broader scale than the bilateral agreements. This surplus, and subsequently any

112 Mannava Sivakumar and Robert Stefanski, “Climate Change in South Asia” in Rattan Lal et al. (eds) Climate Change and Food Security in South Asia (Springer 2010) 13–30. 113 Laura Parker, “143 Million People May Soon Become Climate Migrants” National Geographic (19 March 2018). 114 Nitin Pai, “Climate Change and National Security: Preparing India for New Conflict Scenarios” (2008) The Indian National Interest Policy Brief 1, April 2008 at 2. 115 Sivakumar and Stefanski (n. 112) at 25. 116 Rasul et al. (n. 105) at 2. 117 Govinda Timilsina, “How Would Cross-Border Electricity Trade Stimulate Hydropower Development in South Asia?” (2018) World Bank Group Policy Research Working Paper 8513 at 3. 118 Tortajada and Saklani (n. 98) at 321. 119 Amit Ranjan, “India-Bhutan Hydropower Projects: Cooperation and Concerns” (2018) Institute of South Asian Studies and National University of Singapore Working Paper 309, 17 October 2018 at 2. 120 Pai (n. 114) at 5. 121 For further reading on the dependency of India and Pakistan on the Indus River basin see Shaista Tabassum, “The Indus Basin Is Indispensable: An Agro-Hydropower Dependency of India and Pakistan” (2018) 25(1) Journal of Political Studies 257–269; for further reading on the water management conflicts in Jammu and Kashmir see Pai (n. 114) at 3–4. 122 Seetharaman (n. 99). 123 Timilsina (n. 117) at 12. 124 Timilsina (n. 117). 125 Timilsina (n. 117) at 2–3 and 12.

Climate change mitigation law and policy in the BRICS  215 revenue generation, will otherwise be wasted if potential exporting states do not have access to neighboring markets.126 Collaboration will also be essential to provide the necessary funds to cover the high initial cost of hydropower projects127 incurred by small South Asian developing countries. In return, investing states will benefit from a cost-effective solution to address growing demand, increase energy supply, and diversify energy sources to reduce GHG emissions.128 Such regional alliance for hydropower generation could initiate the establishment of an international governance framework addressing integration obstacles and disputes such as new complaints raised by the government of Bhutan relating to the low electricity purchase price, India’s Cross Border Trade of Electricity Guidelines of 2016, which are unfavorable to Bhutan especially in terms of project shareholding, debt-related issues, and the marginal participation of Bhutanese private sector and national employees in projects.129 A regional framework for large-scale cross-border hydroelectricity trade would justify the implementation of a super grid to directly transmit electricity to areas where it is needed the most on a larger scale across South Asia. India suffers from frequent outages and unplanned interruptions.130 As shown by the Indo-Bhutanese cooperation, hydroelectricity imports are able to support peak loads131 and prevent blackouts. A super grid will enhance the system’s flexibility, stability, and utilization by taking advantage of the different seasonal load profiles across South Asian countries.132 In such collaboration, India has great potential to demonstrate its regional leadership as a game-changing actor. In fact, without its support, such a plan is likely to fail not only for lack of finance, but also geographical discontinuity. Finally, on a longer-term basis, enhanced cross-border hydroelectricity trade may be the basis of a South Asian partnership to develop smart grid technology.133 While there are currently multiple obstacles to smart grid implementation,134 India can benefit from its clear technological advantage as the second largest software exporting country in the world.135 Expanding the green software technology sector will not only be in line with the current ‘Make in India’ and ‘Skill India’ government initiatives,136 but also create green jobs and if successful, be an opportunity for India to export this technology globally.

Timilsina (n. 117) at 13 and Tortajada and Saklani (n. 98) at 316. Ahmed et al. (n. 97) at 220. 128 Tortajada and Saklani (n. 98) at 316. 129 Ranjan (n. 119) at 5–7 and 9. 130 Timilsina (n. 117) at 2. 131 Tortajada and Saklani (n. 98) at 321. 132 Timilsina (n. 117) at 21. 133 Central Electricity Authority, Growth of Electricity Sector in India from 1947–2019 (May 2019) at 57. 134 For further reading see Suyash Jolly, “Smart Grid Development in India: Separating Promises from Messy Reality” presented at the KTH Royal Institute of Technology (Vetenskap Och Konst) Higher Seminar of 24 October 2016. 135 Xing Li and Zhi-Jie Cheng, “China-Russia-India—The BRICS Countries in Eurasia Are the Key Factors in the Construction of the Silk Road Economic Belt” (2016) 6(3) Journal of Literature and Art Studies 286–297 at 287. 136 Pandey (n. 58) at 2. 126 127

216  Research handbook on climate change mitigation law 2.5 Conclusion In terms of countries, India produces the third highest emissions globally, mainly from the energy sector. Most of the power runs factories in cities and provides electricity to the megacities. India is still growing in population and GDP and if it follows a path of using coal and oil to support this growth, the potential emissions outcome will be catastrophic, not just for India, but for the entire globe. By empowering cities, India can leverage their residents’ resourcefulness, innovativeness, energy and ambition. City-level climate action is unique because, for the residents, it inherently has a tangible relevance and immediacy. Cities can rapidly mobilize the appropriate resources to drive successful outcomes. Cities can also form global networks to enhance governing structures such as coalition-building and strategy implementation. India can deliver on the Paris Agreement if it embraces bold urban reforms and devolves authority to cities and supports global partnerships. It must recognize that Mumbai alone has economic strength superior to entire countries, with the potential to effectively influence a green agenda that could transform India and the world. Finally, despite the current social, environmental and diplomatic obstacles to large-scale hydropower projects and hydroelectricity trade, climate mitigation should not be debated on grounds of dystopic or utopic scenarios as effective climate change mitigation policy realistically involves tough decisions and compromises. It is only through addressing the obstacles and actively searching for solutions that the long-term merits of currently controversial strategies, such as hydropower growth, may come to light.

3 CHINA 3.1 Introduction China is the largest emitter of greenhouse gas (GHG) emissions in the world. As of 2019, the country’s share of global GHG emissions was about 27%.137 These emissions have grown by more than 340% in the last three decades138 due to a massive expansion of economic output and a high reliance on fossil fuels. GHG emissions in China started to grow again in 2017–2019, after a period of decrease in 2013–2016.139 Despite the large increase in carbon emissions since 1990, China’s GDP has grown even more, resulting in a substantial decrease of carbon emissions per unit of GDP.140 In 2017, coal accounted for more than 60% of the Chinese total energy supply and 80% of GHG emissions.141 The carbon intensity of the energy mix has increased between 1990 and https://​climateactiontracker​.org/​countries/​china/​, this share excludes emissions from land use, land-use change, and forestry. In addition, this share attributes emissions embedded in exported goods to China. China’s emissions would be lower if accounting was done according to consumption and not production, see Dirk Heine, Michael G. Faure, and Goran Dominioni, “The Polluter-Pays Principle in Climate Change Law: An Economic Appraisal” (2020) 10(1) Climate Law 94–115. 138 https://​www​.iea​.org/​countries/​china. 139 https://​www​.iea​.org/​countries/​china. 140 https://​www​.iea​.org/​countries/​china. 141 https://​www​.iea​.org/​countries/​china. 137

Climate change mitigation law and policy in the BRICS  217 2013, and since then, it has decreased slightly.142 While domestic coal supply covers a large segment of domestic coal demand, China remains the largest importer of coal globally, with imports amounting to more than 171 million tonnes in 2017.143 China also imports a substantial amount of oil and natural gas. These imports may explain China’s recent interest in developing the extraction of shale gas and coal-bed methane.144 Due to the critical role that China plays in the production of fossil fuels and GHG emissions, as well as China’s significant weight in climate-related international negotiations, China’s domestic and international laws and policies related to energy and climate change are of crucial importance to climate change action. Avoiding the severe climate-related costs of not meeting the temperature targets of the Paris Agreement145 is very difficult, if not almost impossible, unless China decarbonizes substantially. 3.2

China’s Climate Change Policy in International Negotiations: From Kyoto to Today

China’s posture in climate change negotiations has changed substantially in the last three decades. This section provides as brief overview of China’s posture on climate change-related international negotiations from the Kyoto Protocol to today. Under the Kyoto Protocol to the UNFCCC (signed in 1997 and entered into effect in 2005), China was not included in the Annex I countries, and it was thus not subject to emissions limits. The country’s substantial economic expansion between 1997 (US$1.8 trillion GDP) and 2009 (about US$5.5 trillion GDP),146 meant that China’s emissions grew substantially in that period. As China’s contribution to climate change grew, major developed economies increasingly pressured China to accept limitations to its emissions.147 Tensions on this matter between China and developed economies escalated during COP 15 (Copenhagen, 2009), at which China refused to commit to limit its emissions, and international media blamed the country for the failure of the negotiations.148 After Copenhagen, international pressure on China to mitigate its emissions continued. At COP 20 (Lima, 2014), China agreed to submit its intended nationally determined contributions (INDCs), i.e. a voluntary commitment to limit GHG emissions.149 This non-binding govern-

https://​www​.iea​.org/​countries/​china. OECD, “China Fossil Fuels Support – Country Note” (OECD 2019). 144 OECD (n. 143). 145 On the severe consequences of not meeting the stricter temperature targets of 1.5 °C over pre-industrial levels, see: IPCC, “Summary for Policy-Makers” in “Global Warming of 1.5 °C. An IPCC Special Report on the impacts of global warming of 1.5 °C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty” (IPCC 2018) available at https://​www​.ipcc​.ch/​sr15/​. 146 Values expressed in constant 2010 US$, see https://​data​.worldbank​.org/​indicator/​NY​.GDP​.MKTP​ .KD​?locations​=​CN. 147 Wei Shen and Lei Xie, “Can China Lead in Multilateral Environmental Negotiations? Internal Politics, Self-Depiction, and China’s Contribution to Climate Change Regime and Mekong Governance” (2018) 59(5–6) Eurasian Geography and Economics 708–732. 148 ZhongXiang Zhang, “Are China’s Climate Commitments in a Post-Paris Agreement Sufficiently Ambitious?” (2017) 8 Wiley Interdisciplinary Reviews: Climate Change e443. 149 https://​unfccc​.int/​news/​lima​-call​-for​-climate​-action​-puts​-world​-on​-track​-to​-paris​-2015. 142 143

218  Research handbook on climate change mitigation law ance approach was in line with China’s preferences on the subject matter and enabled negotiations to overcome the Kyoto approach of a strict separation between Annex I and non-Annex I countries’ obligations to mitigate climate change.150 China had a leading role among developing nations in bringing about this result. Despite India and Brazil taking a similar stance on the subject matter, they are reported to have conducted negotiations mainly prompted by China.151 The advances made in COP 20 facilitated reaching a global climate change agreement at COP 21. In November 2014, ahead of COP 21, China and the US released a historic joint statement on climate change152 whereby the two largest economies and GHG emitters recognized their contribution to anthropogenic climate change and expressed their ambition to collaborate to address the problem.153 As a sign of its commitment to contribute to international cooperation on climate change, China committed before COP 21 to fund US$3.1 billion for climate cooperation in developing countries through a South–South Climate Cooperation Fund.154 Negotiations at COP 21 resulted in the Paris Agreement. The temperature goals of this agreement are to keep the increase in global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the increase to 1.5 °C. At COP 21, China coordinated its position with the other BRICS countries to maintain differentiation between developed and developing countries.155 These efforts resulted in a compromise between BRICS and the US: the Paris Agreement still recognizes the principle of common but differentiated responsibilities and respective capabilities (CBDRRC), with the addition of “in the light of different national circumstances,” to allow a dynamic interpretation of this principle, in line with US demands. In the Paris negotiations, China also played a significant role in strengthening the commitment from developed nations to mobilize US$100 billion per year for climate change mitigation and adaptation by requiring the setting up of a “concrete roadmap,”156 and obtaining the inclusion in Article 2 of the Paris Agreement of the aim of “making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.”157 Countries also agreed to a five yearly update of countries’ voluntary commitments; this was a point that was initially opposed by China, but to which China agreed in light of the concessions made by other countries.158 After the US officially informed the United Nations about its intention to withdraw from the Paris Agreement in summer 2017, EU leaders and international media urged China to take a more active role in climate change negotiations.159 Since then, the Chinese government has repeatedly reaffirmed its commitment to the Paris Agreement, and in October 2017,

Zhang (n. 148). Zhang (n. 148) at 3. 152 https://​obamawhitehouse​.archives​.gov/​the​-press​-office/​2014/​11/​11/​us​-china​-joint​-announcement​ -climate​-change. 153 Shen and Xie (n. 147). 154 See, China Daily, “China South–South Climate Cooperation Fund benefits developing countries” (30 November 2015), available at https://​www​.chinadaily​.com​.cn/​world/​Xi​attendsPar​isclimatec​ onference/​2015​-11/​30/​content​_22557413​.htm. 155 Zhang (n. 148) at 4. 156 Shen and Xie (n. 147). 157 Shen and Xie (n. 147). 158 Shen and Xie (n. 147). 159 Shen and Xie (n. 147). 150 151

Climate change mitigation law and policy in the BRICS  219 a high-profile report to the 19th Party Congress President Xi Jinping has announced China’s intention to lead in international cooperation to address climate change.160 At COP 24 (Katowice, 2018), China played a central role in negotiations, acting as a bridge between developed nations and developing ones. A key issue at COP 24 was establishing a rulebook for the Paris Agreement, which included rules on monitoring, reporting, and verification of emissions. China reached an agreement with the EU and other major economies to accept a common set of standards. In line with its previous position, China negotiated to obtain flexibility on implementation, in light of the limited capacity of the developing nations.161 3.3

Key Domestic Policies in Favor of and Against Climate Change Mitigation

This section provides a brief overview of China’s key domestic policies that support or hinder climate change mitigation. A Carbon pricing The Chinese government has long been interested in carbon pricing. In 2011, it announced plans to implement a domestic emission trading scheme (ETS). In the subsequent years, pilot ETS programs were launched in eight cities and provinces: Beijing, Chongqing, Fujian, Guangdong, Hubei, Shanghai, Shenzhen, Tianjin. Despite the sub-national nature of these programs, they have the potential to contribute substantially to climate change mitigation as they account for between 40% and 60% of emissions released in these jurisdictions,162 and these jurisdictions combined release more GHG than the whole of India, the third largest GHG emitter worldwide. However, as of today, this potential is not entirely untapped as most of these programs allocate emissions for free and have significant liquidity issues.163 Alongside these pilot ETSs, China has started collaborations with other jurisdictions to increase domestic knowledge in ETSs, including the EU and California.164 These efforts aim to build sufficient capacity to implement a Chinese national ETS. This ETS was initially announced before COP 21 (Paris) and was launched in 2017 with a roadmap to develop the ETS. According to this roadmap, the ETS will initially cover the power sector and then expand to other sectors.165 When it becomes operational, China’s national ETS is expected to be the largest ETS worldwide in terms of GHG emissions covered, as it would cover about 26% of Chinese GHG.166

Xi Jinping, “Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the Great Success of Socialism with Chinese Characteristics for a New Era,” Delivered at the 19th National Congress of the Communist Party of China, 18 October 2017, available at http://​www​.xinhuanet​.com/​english/​special/​2017​-11/​03/​c​_136725942​.htm. 161 David Sandalow, Guide to Chinese Climate Policy 2019 (Columbia – SIPA Center on Global Energy Policy 2019). 162 Beijing accounts for 45% of GHG emissions, Chongqing 50%, Fujian 60%, Guangdong 60%, Hubei 45%, Shenzhen accounts for 40%, Shanghai accounts for 57%, and Tianjin 55%, see https://​ca​ rbonpricin​gdashboard​.worldbank​.org/​map​_data. 163 Sandalow (n. 161). 164 Sandalow (n. 161). 165 World Bank, State and Trends of Carbon Pricing 2019 (World Bank 2019). 166 https://​ca​rbonpricin​gdashboard​.worldbank​.org/​map​_data. 160

220  Research handbook on climate change mitigation law The implementation of the national ETS has been slower than initially anticipated because there are substantial differences in capacity between authorities and companies located in different regions.167 China is currently setting the basis for the monitoring, reporting, and verification requirements for the national ETS,168 after having released draft ETS regulation for public consultation in 2019.169 In the short term, the national ETS is expected to work in parallel with pilot programs implemented at the city and province level, as there is little overlap between the emissions covered by these schemes.170 Subsequently, these sub-national ETSs are expected to be integrated into the national one, as the latter expands its coverage.171 B Energy efficiency China has long focused on improving the energy efficiency of its economy. Since the 1980s, many Five-Year Plans172 include increasingly ambitious energy intensity goals, and the plan for the period 2016–2020 sets a national target of reducing energy intensity 15% below 2015 levels by 2020.173 At the time of writing, the 14th Five-Year Plan (for the period 2021–2025) has not been released yet. To achieve these five-year targets, the NDRC sets annual targets at the national level.174 For instance, the goal for 2019 was to reduce energy consumed per unit of GDP by 3%.175 In addition, each province is expected to reach an energy intensity target, the achievement of which is used to assess the performance of local officials by the central government.176 Furthermore, the central government acts also at the sectoral level (e.g. in the building sector)177 by enacting regulations.178 Lastly, the government provides direct funding, subsidized loans, and credit guarantees to spur investments in energy efficiency.179 C Renewable energy In 2018, renewable energy accounted for about 12% of Chinese primary energy consumption, with hydropower accounting for about 8% and the remainder divided between wind, solar, biomass, and geothermal.180 Various policies have supported the creation of this energy gen World Bank (n. 165). World Bank, State and Trends of Carbon Pricing 2020 (World Bank 2020). 169 World Bank (n. 165). 170 https://​ca​rbonpricin​gdashboard​.worldbank​.org/​map​_data. 171 https://​icapcarbonaction​.com/​en/​ets​-map. 172 Five Years Plans are development initiatives undertaken by the Chinese government since 1953 to set economic objectives (e.g. growth targets) and reforms. 173 Sandalow (n. 161). 174 Sandalow (n. 161). 175 In 2019, China failed to achieve this target, reaching a reduction of 2.6%, see https://​www​.reuters​ .com/​article/​us​-china​-parliament​-energy/​china​-misses​-2019​-energy​-efficiency​-target​-state​-planner​ -idUSKBN22Y0E7​#:​~:​text​=​SHANGHAI​%20(Reuters)​%20​%2D​%20China​%20fell​,in​%20a​%20report​ %20to​%20parliament. 176 Sandalow (n. 161). 177 For a discussion of China’s approach to green buildings, see Y. Shen and M. Faure, “Green Building in China” (2021) 21 International Environmental Agreements 183–199. 178 Sandalow (n. 161). 179 Sandalow (n. 161). 180 BP, “BP Statistical Review – 2019 China’s energy market in 2018” (2019), available at https://​ www​.bp​.com/​en/​global/​corporate/​energy​-economics/​energy​-outlook/​country​-and​-regional​-insights/​ china​-insights​.html. 167 168

Climate change mitigation law and policy in the BRICS  221 eration capacity throughout the years. Earlier policies focused primarily on R&D investments and product popularization and targeted the supply side; subsequently, the focus has gradually shifted towards demand-side policies and aimed at expanding the domestic market.181 The Five-Year Plan for the period 2016–2020 sets a 15% target for 2020 and a 20% target by 2030 in terms of the share of renewable energy in primary energy consumption, as well as an increase in renewable power capacity to 680 GW by 2020.182 The plan aims to reach these targets primarily by increasing renewable power capacity, promoting offshore wind power, and increasing the distribution of solar energy generation.183 This plan also calls for innovation in renewable energy technology and for the reduction of curtailment in renewable power.184 In recent years, the cornerstone of China’s policy on solar and wind energy has been feed-in tariffs (FIT), meaning instruments that offer generators that sell electricity to the grid long-term guaranteed purchase prices.185 Since 2018, China has announced a shift away from FIT in favor of two alternative policies: (i) auctions where developers that bid prices below or equal to those of coal tariffs are guaranteed the purchase of energy for at least 20 years at fixed prices, and (ii) renewable electricity consumption quotas which impose an obligation on individual companies (e.g. grid operators and large energy users) to purchase minimum amounts of renewable energy.186 This shift is primarily motivated by the need to reduce costs related to the program’s feed-in tariffs and administrative challenges.187 The auctioning system makes renewables compete with coal, and thus it risks curtailing the expansion of solar and wind energy in the coming years compared to a system like the FIT, which supports them.188 Although China continues leading in terms of increases in wind and solar capacity worldwide, the combined added capacity (solar and wind) dropped from 66 GW in 2018 to 56 GW in 2019.189 D Support for fossil fuels As in many, if not all, jurisdictions, China’s energy policy approach is not entirely consistent with a sustainable transition. Alongside policies that aim at mitigating carbon emissions, the Chinese government supports the production and consumption of fossil fuels in various ways. There are different ways to identify the support that the government grants to fossil fuel consumption.190 According to the International Energy Agency (IEA),191 in 2019 China ranked second in terms of subsidizing fossil fuels (oil, and electricity produced with fossil fuels), after Iran, at 181 Liang-Cheng Ye, João F. D. Rodrigues, and Hai Xiang Lin, “Analysis of Feed-In Tariff Policies for Solar Photovoltaic in China 2011–2016” (2017) 203 Applied Energy 496–505. 182 IEA, “China 13th Renewable Energy Development Five Year Plan (2016–2020),” 2018. 183 IEA (n. 182). 184 Renewable energy curtailment is a significant issue in China, as a large fraction of renewable energy generated is not absorbed by the grid; Michael Standaert, “Why China’s Renewable Energy Transition Is Losing Momentum” (2019) Yale Environment 360. 185 Ye et al. (n. 181). 186 Sandalow (n. 161). 187 Sandalow (n. 161). 188 Standaert (n. 184). 189 Anders Hove, “Current direction for renewable energy in China,” Oxford Energy Comment, 2020. 190 For a recent review of different ways to define fossil fuel subsidies, see World Bank (n. 165). 191 The IEA uses a price-gap analysis approach, according to which domestic fuel prices are compared with a reference price, such as the import parity price, and this gap is then multiplied by the quantity of fuel consumed in a jurisdiction, see IEA, World Energy Outlook 2018 (IEA 2018).

222  Research handbook on climate change mitigation law least in absolute terms (more than US$30 billion).192 These subsidies vary substantially across time, primarily due to changes in international prices for fossil fuels.193 For instance, they were about US$25 billion in 2015, but over US$50 billion in 2018.194 In relative terms (subsidies/GDP), Chinese subsidies are relatively low (0.2%) compared to many other countries. According to the IMF’s post-tax estimates,195 in 2015 (latest estimates available), China was by far the largest subsidizer in absolute terms of fossil fuels worldwide (US$1.4 trillion).196 This large number is partially the result of the air quality harm of coal consumption, which is included in the IMF’s calculations. China was also the country with the highest fossil fuel subsidies (post-tax estimate) in 2013, amounting to US$1.8 trillion.197 The OECD keeps track of China’s budgetary and tax expenditure policies that support fossil fuel production and consumption in its Inventory of Support Measures for Fossil Fuels.198 According to these estimates, support dropped significantly (by about half) in 2015, but increased again in 2016, even though only slightly. The lion’s share of support accrues to oil.199 In 2009, the G20 countries pledged to phase out, in the medium-term, fossil fuel subsidies that incentivize wasteful consumption.200 As the first step towards this commitment, China and the US announced their intention to undergo a process of reviewing and peer-reviewing their fossil fuel subsidy policies under the auspices of the G20. The peer-review process was completed in 2016, and the analysis indicated that the Chinese government supported fossil fuel subsidies in various ways.201 For instance, the residential sector benefited from a lower VAT rate applied to certain energy products (e.g. coal gas and natural gas).202 Some professional users also benefited from fuel subsidies, such as fishermen, public transport companies, and taxi drivers.203 These subsidies are expected to decrease in the future, down by 60% in 2020, after which further measures might be introduced.204

https://​www​.iea​.org/​data​-and​-statistics/​charts/​value​-of​-fossil​-fuel​-subsidies​-by​-fuel​-in​-the​-top​-25​ -countries​-2019. 193 World Bank (n. 165). 194 https://​www​.iea​.org/​data​-and​-statistics/​charts/​value​-of​-fossil​-fuel​-subsidies​-by​-fuel​-in​-the​-top​-25​ -countries​-2019. 195 The International Monetary Fund (IMF) provides pre-tax and post-tax estimates of fossil fuel subsidies. While the former are estimated using a method that is similar to the one used by the IEA, post-tax subsidies include pre-tax subsidies and tax expenditures. Tax expenditures include the external cost of consuming fossil fuels, such as climate-related harm, air pollution, and traffic congestion. See David Coady et al., “Global fossil fuel subsidies remain large: An update based on country-level estimates” (2019) 19.89 IMF Working Papers 39. 196 Coady et al. (n. 195). 197 David Coady et al., “How Large Are Global Energy Subsidies?” (2015) 15.105 IMF Working Papers. 198 OECD (n. 143). 199 OECD (n. 143). 200 G20, “G20 Leaders Statement: The Pittsburgh Summit,” September 24, 2009. 201 G20, “China’s efforts to phase out and rationalize its inefficient fossil-fuel subsidies: A report on the G20 peer review of inefficient fossil-fuel subsidies that encourage wasteful consumption in China” (2016). 202 G20 (n. 201). 203 G20 (n. 201). 204 OECD (n. 143). 192

Climate change mitigation law and policy in the BRICS  223 3.4

Is China on a Sustainable Climate Change Trajectory?

China’s intended nationally determined contributions (INDCs) include the following critical economy-wide commitments: peak carbon emissions around 2030 and strive to peak earlier; reduce carbon emissions per unit of GDP by 60–65 % by 2030 over 2005 levels; reach non-fossil fuel primary energy consumption levels of about 20 % by 2030; and increase forest stock volume by 4.5 billion cubic meters by 2030 over 2005 levels.205 It is unclear whether these commitments include LULUCF.206 Research indicates that China is currently on a good course to meet its pledge to peak emissions before 2030,207 and according to NDRC, China’s carbon intensity has declined by 46%.208 Despite some uncertainty, research indicates that China can reach a 20% share of primary energy consumption from non-fossil fuel sources by 2030, but achieving this aim may require additional policy action.209 Despite the existence of challenges in China’s legal framework to increase the forest stock,210 some Chinese forestry projects have been recognized as very successful.211 China announced in 2019 that it had already met the pledge to increase the forest stock, 11 years earlier than required by the INDC.212 Overall, China is also on a good course to meet its INDC.213 China’s good track record does not necessarily mean that the country is moving towards a sustainable future. According to Climate Action Tracker, China’s first INDC is not aligned with the temperature targets of the Paris Agreement, as it lacks sufficient ambition.214 However, China’s good track record in meeting the INDC’s targets brings hope that the second INDC will be substantially more ambitious.

The unofficial translation of the Chinese INDC is available at https://​www4​.unfccc​.int/​sites/​ submissions/​indc/​Submission​%20Pages/​submissions​.aspx. 206 https://​climateactiontracker​.org/​countries/​china/​pledges​-and​-targets/​. 207 Zhifu Mi et al., “Socioeconomic impact assessment of China’s CO2 emissions peak prior to 2030” (2017) 142 Journal of Cleaner Production 2227–2236; Kelly Sims Gallagher et al., “Assessing the Policy Gaps for Achieving China’s Climate Targets in the Paris Agreement” (2019) 10(1) Nature Communications 1–10. 208 Jonathan Watts, “China sets first targets to curb the world’s largest carbon footprint,” The Guardian (November 26, 2009); NDRC, “China’s Policies and Actions for Addressing Climate Change” (November 2018) at 1. 209 Nan Zhou et al., “A Roadmap for China to Peak Carbon Dioxide Emissions and Achieve a 20% Share of Non-Fossil Fuels in Primary Energy by 2030” (2019) 239 Applied Energy 793–819; Gallagher (n. 207). 210 For instance, see Yixin Xu, “An Analysis of China’s Legal and Policy Framework for the Sustainability of Foreign Forest Carbon Projects” (2017) 7(2–3) Climate Law 150–184. 211 UNEP, “Chinese Initiative Ant Forest Wins U.N. Champions of the Earth Award” (2019), available at https://​www​.unenvironment​.org/​news​-and​-stories/​press​-release/​chinese​-initiative​-ant​-forest​-wins​ -un​-champions​-earth​-award​#:​~:​text​=​19​%20September​%202019​%20​%2D​%2D​%20Ant​,of​%20China's​ %20most​%20arid​%20regions. 212 Sandalow (n. 161). 213 Michel den Elzen et al., “Are the G20 Economies Making Enough Progress to Meet Their NDC Targets?” (2019) 126 Energy Policy 238–250. 214 https://​climateactiontracker​.org/​countries/​china/​pledges​-and​-targets/​. 205

224  Research handbook on climate change mitigation law 3.5

Are China’s Trade Ambitions Consistent with Global Success on Climate Change?

Although China is on a good course to meet its INDC targets, its trade and commercial ambitions pose a severe risk of hindering global efforts to curtail carbon emissions. This section provides an overview of the sources of these risks. China’s current most significant trade endeavor is the Belt and Road Initiative (BRI). The BRI was announced in 2013 and aimed to foster economic cooperation and development and cultural exchange between China and other participating countries.215 The BRI has two main components: the Silk Road Economic Belt, which links China to Europe via three routes (Central Asia, Persian Gulf, and West Asia), and the 21st Century Maritime Silk Road, which will connect China to Europe via the South China Sea and the Indian Ocean.216 The bulk of infrastructure investments is destined for 68 countries with different levels of development (e.g. going from South Korea to Ethiopia).217 However, the initiative has a broader geographical, political, and economic scope; as of January 2020, the Chinese government has entered cooperation agreements related to BRI with 138 countries and 30 international organizations.218 The Chinese government has repeatedly stressed that the BRI should foster green development,219 and has launched several green development policies at the Second Belt and Road Summit in 2019. For instance, these initiatives include the Belt and Road Green Cooling Initiative, which promotes, via advocacy and capacity-building activities, the deployment of energy-efficient technologies in the sectors of cooling and air conditioning.220 The Chinese government has also issued the “Guidance on Promoting Green Belt and Road,” which promotes a decisive green narrative of the BRI.221 For instance, the former calls companies to “to prioritize low-carbon, energy-saving, environment-friendly and green materials and technical processes”222 and aims to “guide the businesses to tighten their R&D efforts on key technologies to address climate change.”223

National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce of the People’s Republic of China, “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road” (2015), available at http://​2017​.beltandroadforum​ .org/​english/​n100/​2017/​0410/​c22​-45​.html. 216 SCIO, “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road” (SCIO 2016) http://​www​.scio​.gov​.cn/​xwFbh/​xwbfbh/​yg/​2/​Document/​1476317/​ 1476317​.htm. 217 L. Zhou, S. Gilbert, Y. Wang, M. Muñoz Cabre, and K. P. Gallagher, “Moving the Green Belt and Road Initiative: From Words to Actions” Working Paper (World Resources Institute 2018) available at http://​www​.wri​.org/​publication/​moving​-the​-green​-belt. 218 Johanna Coenen et al., “Environmental Governance of China’s Belt and Road Initiative” (2021) 31(1) Environmental Policy and Governance 3–17. 219 Xi Jinping, “Speech at Opening of Belt and Road Forum” Global Times (May 14, 2017). 220 Hu Min and Diego Montero, “Leveraging China’s ‘Green Soft Power’ for Responsible Belt and Road Initiative Investment” Forbes (May 14, 2019). 221 Coenen (n. 218). 222 NDRC, MEP, MOFCOM and MFA, “Guidance on Promoting Green Belt and Road” (May 8, 2017) (in English). 223 NDRC, MEP, MOFCOM and MFA (n. 222). 215

Climate change mitigation law and policy in the BRICS  225 Despite these efforts, many analysts have expressed severe concerns about the climate change impacts of the BRI.224 The “Guidance on Promoting Green Belt and Road” does not contain any implementation or enforcement mechanisms, which leaves the document a mere instrument of moral persuasion.225 Symptomatic of the Chinese government’s low attention towards climate-related issues in BRI development is the fact that there is no requirement set by the Chinese government to evaluate the environmental or climate change impacts of BRI projects approved by Chinese authorities.226 Climate risks related to BRI are exacerbated by the limited governance systems and capacity to enforce the environmental standards of many BRI countries;227 in some instances, governments may also prioritize short-term economic growth over environmental integrity.228 The lack of rules/guidelines/enforcement capacity that bind BRI-related activities to green development is worrying, as these activities have the potential to severely set back climate change action in a large number of countries. These concerns exist mainly because a large part of BRI’s related investments concern transportation infrastructure (e.g. highways, railroads, port infrastructure) and energy-related infrastructure (e.g. thermal power plants, oil and gas pipelines, mining).229 According to a recent study, between 2014 and 2017, much investment has gone into the development of fossil fuels.230 For instance, more than 60% of loans financed entirely by the China Development Bank and/or China Eximbank were in fossil fuels, as were more than 90% of SRF’s investments in the energy sector, and 95% of cross-border investments in energy made by Chinese state-owned enterprises.231 The concern exists that these investments may lock many BRI countries into a highly fossil-fuel dependent development pathway.232 In particular, a significant source of concern among analysts is the large proportion of BRI investments in coal-fired power plants.233 A recent study finds that BRI countries (including China), which currently release about 28% of global carbon emissions, may account for 66% of global carbon emissions in 2050 unless stronger climate action is taken.234 Other sources of concern related to the effects of land-use change and deforestation are the construction of roads and railroads.235 In addition, potential mode transport shifts that favor more polluting modes of transports (e.g. a shift from rail transport to road transport), or trade growth favored by higher connectivity, may also increase carbon emissions.236 The net effects

224 Jonathan Elkind, “Toward a Real Green Belt and Road” (Columbia-SIPA Center on Global Energy Policy 2019); Zhou et al. (n. 217); Coenen (n. 218). 225 Sandalow (n. 161) at 130. 226 Elkind (n. 224). 227 Elkind (n. 224). 228 Elkind (n. 224). 229 Zhou et al. (n. 217). 230 Zhou et al. (n. 217). 231 Zhou et al. (n. 217). 232 Zhou et al. (n. 217). 233 For a review of the BRI-related investments in coal-fired power plants up to 2016, see Ren Peng, Liu Chang and Zhang Liwen, “China’s Involvement in Coal-Fired Power Projects Along the Belt and Road” (Global Environmental Institute 2017). 234 Ma Jun et al., “Decarbonizing the Belt and Road: A Green Finance Roadmap” (Tsinghua University 2019). 235 Elizabeth Claire Losos et al., “Reducing Environmental Risks from Belt and Road Initiative Investments in Transportation Infrastructure” (World Bank 2019). 236 Losos et al. (n. 235).

226  Research handbook on climate change mitigation law of the transport-related investments linked to BRI activities are uncertain, and, to the best of our knowledge, they have not been estimated so far.237

4 RUSSIA 4.1 Introduction Russia is the fourth-largest emitter of GHG emissions globally, after China, the US, and India. As of 2019, the country’s share of global GHG emissions was about 4.5%.238 In absolute terms, Russia’s GHG emissions have decreased substantially since 1990,239 mainly due to the economic decline that the country underwent after the collapse of the Soviet Union. While carbon emissions have remained relatively stable since 2000, the economy has grown, resulting in a significant reduction of carbon emissions per unit of GDP, especially in the period 1998–2008.240 In 2017, natural gas accounted for the lion’s share of total energy supply (about 50%), with oil contributing about 20%, and coal more than 15%.241 Non-fossil fuel energy supply is dominated by nuclear power, followed by hydropower.242 In the same year, natural gas accounted for more than 50% of carbon emissions, and coal for about 25%.243 The carbon intensity of the energy mix has decreased reasonably steadily between 1990 and 2017.244 Russia is a major player in climate change mitigation, being the third-largest producer of fossil fuels worldwide, and having the third largest reserve of coal and the second largest of natural gas.245 Russia is also the third-largest producer of oil, after the US and Saudi Arabia.246 Overall, Russia accounted for about 10% of primary energy production worldwide and 16% of international trade of energy in 2016.247 Due to the significant role of Russia’s energy production in the global supply, the country’s approach to climate change mitigation has significant consequences outside its domestic borders. 4.2

Russia’s Climate Change Policy in International Negotiations: From Kyoto to Today

Understanding Russia’s posture in climate change negotiations requires consideration of the country’s main drivers for the energy transition. Although Russia might be one of the econo-

Losos et al. (n. 235). https://​www​.statista​.com/​statistics/​449817/​co2​-emissions​-russia/​#:​~:​text​=​In​%202019​%2C​ %20Russia​%20accounted​%20for​,the​%20fourth​%20highest​%20volume​%20worldwide. 239 https://​www​.statista​.com/​statistics/​449817/​co2​-emissions​-russia/​#:​~:​text​=​In​%202019​%2C​ %20Russia​%20accounted​%20for​,the​%20fourth​%20highest​%20volume​%20worldwide. 240 https://​www​.iea​.org/​countries/​russia​#analysis. 241 https://​www​.iea​.org/​countries/​russia​#analysis. 242 https://​www​.iea​.org/​countries/​russia​#analysis. 243 https://​www​.iea​.org/​countries/​russia​#analysis. 244 https://​www​.iea​.org/​countries/​russia​#analysis. 245 OECD, “Russia Fossil Fuels Support – Country Note” (OECD 2019). 246 OECD (n. 245). 247 https://​www​.eriras​.ru/​files/​forecast​_2016​.pdf. 237 238

Climate change mitigation law and policy in the BRICS  227 mies most harmed by not meeting the Paris Agreement’s temperature targets,248 and despite the recognition of climate-related risks by Russian authorities,249 climate change mitigation does not feature prominently in Russia’s policy priorities. Various factors account for this situation. A primary reason is that fossil fuel production is a significant segment of the Russian economy. As of 2017, hydrocarbons accounted for about 25% of GDP, 40% of revenues of the federal budget, and 65% of earnings from exports.250 While the high reliance of the Russian economy on fossil fuels reduces the country’s incentives to act vigorously on climate change mitigation at the domestic level, the risks that global decarbonization poses to the country’s economy hinder Russia’s interest in pushing for climate action abroad. For instance, the Energy Research Institute of the Russian Academy of Sciences (ERI RAS) estimates that a global sustainable energy transition may severely impact the contribution of oil and gas to the Russian economy.251 A recent empirical study estimates the impact on the Russian economy of climate change mitigation policies implemented abroad up to 2050 and finds that these interventions will reduce Russia’s GDP yearly growth rate by about 0.5%.252 Another factor, not necessarily unrelated, that reduces Russia’s climate ambition is the widespread skepticism among the Russian elite on the anthropogenic nature of climate change.253 This skepticism has been repeatedly expressed by academics and critical policymakers, and has sometimes been accompanied by the idea that moderate climate change could be beneficial to the Russian economy.254 A recent survey conducted in 26 countries indicates that the Russian population is among the least worried about climate change.255 A third factor that hinders Russia’s ambition in climate change mitigation is that Russian emissions have decreased considerably since the 1990s. Although this decrease was mainly a result of the decline of the Russian economy in the aftermath of the Soviet Union’s collapse, the Russian government has often argued that the country has already substantially contributed to reducing carbon emissions.256 Despite the low domestic incentives to take action at the international level to mitigate carbon emissions, Russia’s stance in international negotiations has not always been hostile to See Matthew E. Kahn et al., “Long-Term Macroeconomic Effects of Climate Change: A Cross-Country Analysis” (2019) National Bureau of Economic Research, Paper No. w26167. 249 The Climate Doctrine (adopted in 2009), recognizes that climate change poses a threat to the Russian Federation, but adds that human activities may contribute to climate change, see Anna Korppoo, Max Gutbrod, and Sergey Sitnikov, “Russian Law on Climate Change” in Kevin R. Gray, Richard Tarasofsky, and Cinnamon Carlarne (eds), The Oxford Handbook of International Climate Change Law (Oxford University Press 2016). 250 Tatiana Mitrova and Yuriy Melnikov, “Energy Transition in Russia” (2019) 3 Energy Transitions 73–80, at 74. 251 A.A. Makarov, L.M. Grigoriev, and T.A. Mitrova (eds), Global and Russian Energy Outlook 2016 (ERI RAS – ACRF 2016) 198. 252 Igor Makarov, Henry Chen, and Sergey Paltsev, “Impacts of Climate Change Policies Worldwide on the Russian Economy” (2020) Climate Policy 1–15. 253 Mitrova and Melnikov (n. 250). 254 Guri Bang, Gørild Heggelund, and Jonas Vevatne, “Shifting Strategies in the Global Climate Negotiations” CICERO Report (2005). Some research indicates that the Russian economy may benefit from moderate climate change, see for an overview, Kahn et al. (n. 248). 255 https://​www​.pewresearch​.org/​global/​2019/​02/​10/​climate​-change​-still​-seen​-as​-the​-top​-global​ -threat​-but​-cyberattacks​-a​-rising​-concern/​. 256 See, for instance, https://​www​.climatechangenews​.com/​2019/​09/​23/​russia​-formally​-joins​-paris​ -climate​-agreement/​. 248

228  Research handbook on climate change mitigation law climate action. However, Russia’s adherence to climate action has been primarily motivated by non-climate concerns. Notably, Russia’s position in respect of climate change mitigation during the negotiations that led to the Kyoto Protocol was largely dictated by potential economic gains. The weak economic condition of the country in the 1990s, and the related drastic reduction in GHG emissions that followed the collapse of the Soviet Union, put Russia in a position to negotiate a fairly favorable deal: the country agreed to not increase GHG emissions above 1990 levels by 2012, which was an easy target to meet given that emissions had plummeted by 34% in the period 1990–1997.257 This target could have also allowed Russia to sell some of its emission reduction allowances through an international emission trading mechanism to other countries, especially the US.258 The economic attractiveness of this arrangement decreased substantially in 2001 after the US withdrew from the Kyoto Protocol. In the aftermath of this event, Russia used the Kyoto Protocol’s ratification as a bargaining chip in other international negotiations, including the membership of Russia in the World Trade Organization.259 Russia finally ratified the Kyoto Protocol in 2004. In the negotiations that lead to the 2009 Copenhagen agreement, Russia maintained an open attitude to the establishment of emission targets but also pushed for having them set for all major polluters.260 In addition, Russia pushed to obtain recognition of the contribution of Russia’s forests to decarbonization.261 In the Copenhagen Accord (2009), Russia pledged to limit emissions by 15–25% below 1990 levels by 2020.262 Although Russia did not undertake a new target for the second commitment period of the Kyoto Protocol (negotiated in 2012), in 2013 it adopted a domestic limitation target (Decree No. 752 On Reducing Greenhouse Gas Emissions) of reducing emissions by 25% below 1990 levels by 2020. This target was reaffirmed in 2014 in Decree No. 504-p.263 Research suggests that meeting this target does not require strong additional policy efforts.264 At COP 21 (2015, Paris), Russia took the position of not blocking a deal that had the approval of other major economies.265 Russia signed the agreement in 2016 but waited until 2019 to ratify it. In negotiations that followed COP 21, Russia singled itself out, together with Kuwait, Saudi Arabia, and the US, by refusing to “welcome” the 1.5 °C IPCC report,266 which stresses the urgency of climate action compatible with a 1.5 °C temperature increase target to avoid severe climate costs.267

Liliana B. Andonova and Assia Alexieva, “Continuity and Change in Russia’s Climate Negotiations Position and Strategy” (2012) 12(5) Climate Policy 614–629. 258 Andonova and Alexieva (n. 257). 259 Andonova and Alexieva (n. 257). 260 Andonova and Alexieva (n. 257). 261 Andonova and Alexieva (n. 257). 262 Russian Federation Government, Pledge of the Russian Federation to the Copenhagen Accord (2010). 263 Russian Federation, Decree No. 504-p (2014). 264 Anna Korppoo and Alexey Kokorin, “Russia’s 2020 GHG Emissions Target: Emission Trends and Implementation (2017) 17(2) Climate Policy 113–130. 265 https://​www​.theguardian​.com/​environment/​2015/​dec/​07/​russia​-pledges​-not​-to​-stand​-in​-the​-way​ -of​-paris​-climate​-deal. 266 https://​www​.ipcc​.ch/​sr15/​. 267 Russian Federation. Decree No. 504-p (2014). 257

Climate change mitigation law and policy in the BRICS  229 4.3

Key Domestic Policies in Favor and Against Climate Change Mitigation

A Key measures that reduce carbon emissions Historically, Russia’s domestic climate change policies have been weak and primarily motivated by non-climate goals, such as energy security and the efficient use of resources. An exception to this trend was the draft climate legislation that the Russian government proposed in 2018, which aimed at reducing GHG emissions through a number of instruments, including an ETS and tax breaks for companies that reduced or captured their emissions.268 After its proposal, the bill has encountered strong opposition from domestic stakeholders in the energy sector, leading to a reduction of ambition (now a five-year GHG emissions audit).269 Despite the Russian government not having passed laws specifically aimed at mitigating climate change, there are policies in Russia that, while aiming at non-climate targets, indirectly lead to a reduction of carbon emissions. Russia has a high energy intensity per GDP ratio that is significantly higher than the world average because of its geographical size, cold weather, lack of organization, and old technologies.270 Energy efficiency gaps are abundant in many sectors of the Russian economy. According to the IFC and the World Bank, energy efficiency improvements could reduce primary energy consumption by 45% in Russia and provide significant benefits in terms of reduced budget expenditures, increased revenues from fuel exports, and reduced environmental costs.271 The Russian government has implemented various measures to improve energy efficiency.272 An example of this type of policy is the regulation of associated petroleum gas (APG). APG is gas (e.g. methane) that is released in the extraction of oil. Russia is the country with the highest gas flaring volumes in the world,273 and APG accounted for about 1.8–2.7% of the country’s emissions in 2012.274 While these gases have traditionally been treated as waste, they can be used as fuel, re-injected into the ground to increase pressure in oilfields, or used in the chemical industry.275 In 2009, the Russian government introduced a 5% threshold on APG flaring starting from 2012; if the threshold is passed or flaring is not metered, penalties are applied.276 In subsequent years this policy has been revised various times to change the amount of the penalties that apply and introduce some exemptions, including oilfields with small emissions or new oilfields (i.e. less than three years old), and flaring that occurs during maintenance.277 Research suggests that, while this policy was able to reduce APG flaring

https:// ​ w ww ​ . climatechangenews ​ . com/ ​ 2 019/ ​ 0 3/ ​ 2 2/ ​ r ussia ​ - floats ​ - first ​ - law ​ - regulate ​ - carbon​ -emissions/​. 269 https://​climateactiontracker​.org/​countries/​russian​-federation/​. 270 Mitrova and Melnikov (n. 250). 271 International Finance Corporation, “Energy Efficiency in Russia: Untapped Reserves” (World Bank 2014). 272 For a review of these policies, see Svetlana Vladislavlevna Lobova et al., “The Fuel and Energy Complex of Russia: Analyzing Energy Efficiency Policies at the Federal Level” (2019) 9(1) International Journal of Energy Economics and Policy 205. 273 World Bank, “Global Gas Flaring Tracker Report,” 2020. 274 Anna Korppoo, “Russian Associated Petroleum Gas Flaring Limits: Interplay of Formal and Informal Institutions” (2018) 116 Energy Policy 232–241. 275 Korppoo (n. 274). 276 Korppoo (n. 274). 277 Korppoo (n. 274). 268

230  Research handbook on climate change mitigation law somewhat, it is de facto only partially implemented.278 In addition, weak metering systems leave uncertainty regarding the actual amount of APG flaring.279 Other measures that help to reduce GHG emissions are the development and deployment of renewable energy sources. In 2019, renewable energy sources (including hydropower) accounted for about 6% of primary energy consumption in Russia, with hydropower alone accounting for about 5.8%.280 Despite the development of renewable energy sources being among the five key aims of Russia’s draft energy strategy up to 2035,281 analysts suggest that the development of the renewable energy sector is likely to remain of marginal priority for the Russian government,282 as it is primarily driven by technology policy, not energy security or climate concerns.283 Currently, the backbone of Russia’s renewable energy policy is Decree 449 (2013), which sets incentives for renewable energy development, especially wind and solar. In particular, it enables energy developers with an output equal to or higher than 5 MW to bid for capacity supply contracts, with the aim of obtaining 15-year contracts with fixed tariffs that pay for the additional capacity they add and for the energy they supply.284 This system is expected to be in place until 2024, and it is unclear how Russia’s renewable energy policy will look afterwards.285 In 2015, the Russian government also set an obligation on network companies to buy electricity generated from renewable energy sources.286 B Support for fossil fuels Alongside a weak legal and policy framework to drive climate change mitigation, Russia also has substantial policies in place that favor the release of carbon emissions. According to IEA estimates produced with the price-gap analysis, Russia ranks fourth among countries that subsidize more fossil fuel consumption. These subsidies focus primarily on natural gas and oil and represent about 1.5% of Russia’s GDP.287 Russia is also one of the main subsidizers of fossil fuels if the IMF’s post-tax subsidies are taken into account, and these amount to US$551 billion, second only to China and the US.288 The OECD identifies several measures through which the Russian government supports fossil fuel industries. Producers of oil and natural gas are totally or partially exempted from the federal extraction tax in specific

Korppoo (n. 274). Korppoo (n. 274). 280 Statista, “Primary Energy Consumption in Russia between 2017 and 2019, by Fuel, 2020”, available at https://​www​.statista​.com/​statistics/​294308/​primary​-energy​-consumption​-in​-russia​-by​-source/​ #:​ ~:​ t ext​=​ In ​%202019​ % 2C​ % 20natural​ % 20gas​ % 20accounted ​,by ​ %20oil ​%2C ​%20exceeding ​%2022​ %20percent. 281 Draft Energy Strategy of the Russian Federation for the Period up to 2035. 282 Tatiana Mitrova and Vitaly Yermakov, “Russia’s Energy Strategy-2035: Struggling to Remain Relevant” (2019) IFRI, Russie.Nei.Reports, Report 28, 2019. 283 Mitrova and Melnikov (n. 250). 284 Mitrova and Melnikov (n. 250). 285 Mitrova and Melnikov (n. 250). 286 Korppoo, Gutbrod, and Sitnikov (n. 249). 287 https://​www​.iea​.org/​topics/​energy​-subsidies. 288 Coady (n. 195). 278 279

Climate change mitigation law and policy in the BRICS  231 fields.289 Mineral extraction activities in certain regions are supported through tax breaks.290 Consumption is supported through artificially low prices for electricity and gas.291 Recent research finds that eliminating fossil fuel subsidies in Russia (estimated as a sum more in line with IEA, OECD, and IMF pre-tax subsidies than to IMF post-tax subsidies) would reduce emissions much more than in many other countries.292 4.4

Is Russia on a Sustainable Climate Change Trajectory?

Russia’s intended nationally determined contributions (INDCs) include the following key economy-wide commitment: an unconditional target to limit “anthropogenic greenhouse gases in Russia to 70–75% of 1990 levels by the year 2030 … subject to the maximum possible account of absorbing capacity of forests.”293 According to the Climate Action Tracker, Russia is very likely to meet its INDC target due to the low ambition of the target.294 This organization finds Russia’s INDC critically insufficient to meet the Paris Agreement’s temperature targets, and it is in line with a more than 4 °C temperature increase over pre-industrial levels.295 Observers were also disappointed that Russia failed to increase the ambition of its INDC when it ratified the agreement in 2019, more than three years after having signed it.

5

SOUTH AFRICA

5.1

Introduction: South Africa’s Climate Profile and Challenges

Climate change is a global issue. Like the other BRICS countries, South Africa is especially vulnerable to its impacts. In 2017, the country ranked 24th in the Global Climate Risk Index.296 The rankings indicate that South Africa is at a high risk for economic, social and human loss (fatalities) due to extreme weather events, particularly floods and drought.297 South Africa is also the world’s 14th largest GHG emitter.298 Its emissions are principally due to the energy sector’s heavy reliance on fossil fuels.299 The energy sector (which includes electricity genera OECD (n. 245). OECD (n. 245). 291 OECD (n. 245). 292 https://​www​.nature​.com/​articles/​nature25467​#MOESM1. 293 The unofficial translation of the Russian INDC is available at https://​www4​.unfccc​.int/​sites/​ submissions/​indc/​Submission​%20Pages/​submissions​.aspx. 294 https://​climateactiontracker​.org/​countries/​russian​-federation/​. 295 https://​climateactiontracker​.org/​countries/​russian​-federation/​. 296 Sönke Kreft, Eckstein David and Melchio Inga, “Global Climate Risk Index” (2017) https://​ germanwatch​.org/​sites/​default/​files/​publication/​16411​.pdf accessed 14 April 2021. 297 David Eckstein, Vera Künzel, and Laura Schäfer, “Global Climate Risk Index 2020: Who Suffers Most from Extreme Weather Events?” (2020) https://​germanwatch​.org/​sites/​default/​files/​20​-2​ -01e​%20Global​%20Climate​%20Risk​%20Index​%202020​_14​.pdf accessed 12 April 2021. 298 Robert McSweeney and Jocelyn Timperley, “South Africa’s Carbon Brief Profile” (2018) https://​ www​.carbonbrief​.org/​the​-carbon​-brief​-profile​-south​-africa accessed 16 April 2021. 299 Beyond Petroleum, “Statistical Review of World Energy” (2020) https://​www​.bp​.com/​content/​ dam/​bp/​business​-sites/​en/​global/​corporate/​pdfs/​energy​-economics/​statistical​-review/​bp​-stats​-review​ -2020​-full​-report​.pdf accessed 16 April 2021. 289 290

232  Research handbook on climate change mitigation law tion and liquid fuels production from both crude oil and coal) contributes 84% of the country’s total GHG emissions.300 South Africa faces significant challenges and conflicting interests in reducing emissions in the energy sector as it continues to be at the center of economic and social development, and is one of the largest contributors to the labor market and economy.301 It is generally agreed that South Africa cannot successfully mitigate or respond to the impacts of climate change without reducing its overall GHG emissions and moving towards a low carbon economy.302 Notably, the South African government has made two major commitments in this regard. Domestically, the first commitment translates into a peak, plateau and decline target whereby South Africa’s emissions are expected to peak between 2020 and 2025, plateau for approximately a decade, and decline in absolute terms between 2025 and 2030.303 This commitment to work towards stabilizing and reducing emissions is underpinned by the national government’s goals to reduce overall dependency on carbon, natural resources and energy; decouple economic activity from environmental degradation; and decrease consumption of renewable natural resources.304 The second commitment is informed by South Africa’s ratification of the UNFCCC, Kyoto Protocol and the Paris Agreement. In terms of the Paris Agreement, specifically, South Africa committed, through its NDC, to a medium-term goal of 398–614 Mt CO2e between 2025 and 2030 (representing a peak GHG emission phase), and lowering to reach net zero emissions by 2050.305 These aspirations are, however, subject to conditions of technical and financial support from other developed countries.306 5.2

South Africa’s Institutional and Governance Framework for Climate Change

South Africa follows a quasi-federal approach to governance. The government consists of three distinct yet interdependent and interrelated spheres, namely, national, provincial and local government.307 Each sphere of government is responsible for governing specific functional areas as listed in the Constitution. While the “environment” is listed as a concurrent functional competency of national and provincial government, all three spheres of government have legislative and executive responsibilities for protecting the environment.308 As far as it pertains to climate change, national government plays a leading role in law and policy development and in establishing certain institutional and policy mechanisms for the purpose of climate governance. Several national ministries/departments are involved in climate governance, most notably, at the national level, the Climate Change, Air Quality and Department of Energy “Integrated Resource Plan” (2018) http://​ www​ .energy​ .gov​ .za/​ IRP/​ irp​ -update​-draft​-report​-2018​.html accessed 17 April 2021. 301 Department of Energy (n. 300). 302 Department of Energy (n. 300). 303 Department of Environmental Affairs “South Africa’s Intended Nationally Determined Contribution” (2015) https://​www​.environment​.gov​.za/​sites/​default/​files/​reports/​draftna​tionalydet​ erminedcon​tributions​_2021updated​.pdf accessed 17 April 2021. 304 National Planning Commission “National Development Plan Vision 2030” (2011) https://​www​ .gov​.za/​issues/​national​-development​-plan​-2030​?gclid​=​Cj0​KCQjwsqmEB​hDiARIsANV​8H3bVaYAdD​ -o1RVP​lZuwEGVKGP​up8yZefess​-n0RBIpVvO​F5eorjPqDJ​IaArf1EALw​_wcB accessed 21 April 2021. 305 Department of Environmental Affairs (n. 303). 306 Department of Environmental Affairs (n. 303). 307 Constitution of the Republic of South Africa, 1996. 308 Le Sueur and Another v Ethekwini Municipality and Others (9714/11) (2013) ZAKZPHC 6 (30 January 2013). 300

Climate change mitigation law and policy in the BRICS  233 Sustainable Development (CCAQSD) Agency, situated in the Department of Environmental Affairs, and the Inter-Ministerial Committee on Climate Change (IMCCC).309 The CCAQSD identifies, gathers, analyzes and distributes climate change data and information to ensure informed climate response decision-making. It is also tasked with leading, monitoring and supporting national, provincial and local climate mitigation responses. The IMCCC, in turn, serves to align and integrate the climate change responses of the key ministries with national policies and legislation, and coordinates and oversees the implementation of the law and policy. More recently, the South African President, Cyril Ramaphosa, established the Presidential Climate Commission (PCC). The PCC was established to coordinate the country’s transition to a low carbon and climate resilient society by 2050. Amongst other duties, the PCC is tasked with monitoring progress towards mitigation and adaptation goals as well as linking these goals to the just transition.310 Other key role-players include the Department of Mineral Resources and Energy and the Department of Trade and Industry, which are responsible for promoting the transition to a low carbon economy in their respective sectors. Most notably, however, Eskom, a state-owned company, is the country’s main power utility. Eskom accounts for over 90% of the country’s electricity generating capacity. Only a few independent power producers have emerged in recent years. Such producers require Eskom’s permission to access the national transmission grid, and as a result Eskom remains the monopoly supplier and provider of electricity.311 5.3

South Africa’s Climate Change Mitigation Law and Policy Framework

The focus of this chapter falls on national mitigation law and policy. It is, however, important to note that provinces and local government (municipalities) also have the authority to develop law and policy for climate change, subject to it being aligned with the priorities and goals underpinned in national and provincial law and policy.312 Currently, there are no specific provincial laws for climate change. In the context of local government, municipalities typically integrate climate change into their strategic and spatial planning instruments including, to some extent, into their environmental governance instrumentation. Domestic law framework A The Constitution is the supreme law of the Republic.313 It forms the foundation and starting point for the articulation of any government responsibilities in terms of the environment and associated responsibilities for climate change. The Constitution includes an explicit environmental provision which elevates the duty of the state to safeguard and protect the

Switchin Lui et al., “Climate Governance: Assessment of the Government's Ability and Readiness to Transform South Africa into a Zero Emissions Society” (2019) https://​climateactiontracker​.org/​ documents/​545/​2019​-09​-30​_CAT​_ClimateGovernance​_SouthAfrica​.pdf accessed 27 April 2021. 310 Presidential Climate Commission 2022, “Presidential Climate Commission: Towards a Just Transition” available at https://​www​.climatecommission​.org​.za/​accessed 22 June 2022. 311 Panos Constantinides and Mira Slavova, “From a Monopoly to an Entrepreneurial Field: The Constitution of Possibilities in South African Energy” (2020) 35 Journal of Business Venturing 1–22. 312 Section 156(1) of the Constitution of the Republic of South Africa, 1996. 313 Section 2 of the Constitution of the Republic of South Africa, 1996. 309

234  Research handbook on climate change mitigation law environment to a higher, more enduring level.314 This “environmental right” is included in the Bill of Rights and places a positive duty on the state to take the necessary and reasonable measures to secure a certain environmental quality that is not harmful to people’s health or well-being, and to protect the environment for present and future generations.315 The measures may be legal, extra-legal, or both, and must “prevent ecological pollution and degradation, promote conservation, and secure ecologically sustainable development and use of natural resources whilst promoting justifiable economic and social development.”316 The measures may include virtually anything that is not unconstitutional and which achieves the objective of the environmental right – including as it relates to mitigating the impacts of climate change and addressing its root causes. Given the scope of the responsibilities pertaining to the environmental right, it may be argued that the South African government holds a broad authority to develop laws and regulations aimed at enhancing the protection of the environment and, by implication, responding to climate change. This authority is evident in the existence of comprehensive national environmental framework legislation, sectoral legislation and their relevant regulating policies. The National Environmental Management Act 107 of 1998 (NEMA) is South Africa’s framework legislation for the environment. While NEMA contains no explicit mention of climate change mitigation, it is underpinned by several internationally recognized environmental law principles, including sustainable development, the polluter pays principle, the duty of care, and the precautionary principle.317 These principles are expected to guide all law and policy relevant to the environmental sector, including law and policy related to climate change mitigation. Other legislation relevant to climate change includes sectoral legislation for: air quality – National Environmental Management: Air Quality Act 39 of 2004 (NEM:​AQA); agriculture – a draft Bill for the Preservation and Development of Agricultural Land 2016 (PDAL); waste – the National Environmental Management: Waste Act 59 of 2008 (NEM:WA); transport – National Land Transport Act 5 of 2009 (NLTA); and energy – notably, the National Energy Act 34 of 2008 (NEA) and the Electricity Regulation Act 4 of 2006 (ERA). None of these laws mentions climate change or establishes explicit mitigation responsibilities. However, some of the provisions in the laws, or the national regulations promulgated in terms of these laws, do apply to climate mitigation. For instance, the NEM:​AQA refers to the Constitutional Environmental Right and requires the protection and enhancement of air quality in the Republic, including the prevention of air pollution and ecological degradation.318 In 2017, the national government published National Greenhouse Gas Emission Reporting Regulations under the NEM:​AQA. These regulations are informed by the IPCC Guidelines for National Greenhouse Gas Inventories (2006)319 and establish a single national reporting system for the transparent reporting of GHG emissions, which are intended to maintain a National Greenhouse Gas Inventory to enable South Africa to meet its international obliga-

314 Anél Du Plessis and Louis Kotzé, “The Heat Is On: Local Government and Climate Governance in South Africa” (2014) Journal of African Law 145. 315 Section 24 Constitution of the Republic of South Africa, 1996. 316 Section 24(b) Constitution of the Republic of South Africa, 1996. 317 Section 2 of the National Environmental Management Act 107 of 1998. 318 Section 2 of the National Environmental Management: Air Quality Act 39 of 2004. 319 IPCC, “Guidelines for National Greenhouse Gas Inventories” (2006) https://​www​.ipcc​-nggip​.iges​ .or​.jp/​public/​2006gl/​ accessed 21 April 2021.

Climate change mitigation law and policy in the BRICS  235 tions and to inform the formulation and implementation of national legislation and policy.320 Emission sources and data providers covered by the Regulations are set out in Annexure 1 and Regulation 4. The sectors include energy, transport, industry and forestry. The Regulations also set out the reporting requirements, calculation methodology, verification procedure (to be carried out by the National Inventory Unit) and penalties (which include fines and imprisonment). As far as it pertains to agriculture, the PDAL Bill mentioned earlier, once it is adopted into law, will emphasize the use of sustainable farming practices that are environmentally non-degrading, technically appropriate and make the most efficient use of non-renewable resources and, where appropriate, natural biological cycles and controls.321 It is important to note that currently the agricultural sector is not required to report emissions to the National GHG Inventory.322 In addition to the above, the NEM:WA aims to secure the Constitutional environmental right by advocating for an overall reduction, re-use, recycling and recovery of waste.323 The Act also establishes a duty for the state to, through its national waste management policies, prevent pollution and ecological degradation. In line with this responsibility, the national government frequently publishes an updated version of the National Waste Management Strategy.324 Regulations published in terms of this strategy include norms and standards for classification of waste and for the assessment and disposal of waste for landfill. The government is increasingly encouraging the upgrading of landfill sites with organic waste treatment technologies in order to reduce methane emission and air pollution. In line with the goals of the NLTA to restructure and transform South Africa’s transport system,325 the national government recently published the Green Transport Strategy 2050 (GTS).326 The GTS provides the strategic direction for the contribution of transport to the green economy and the promotion of sustainable mobility. The Strategy aims to support reductions in the contribution of the transport sector to national GHG emissions through interventions that include local electric vehicle and battery production and the roll-out of solar-powered charging stations; continued use of fuel economy norms and standards for fuel efficiency and vehicle emissions; and facilitating a shift of freight from road to rail.327

320 Department of Environmental Affairs, “National Greenhouse Gas Emission Reporting Regulations” (2017) https://​www​.gov​.za/​documents/​national​-environmental​-management​-air​-quality​ -act​-regulations​-national​-greenhouse​-gas​-3​?gclid​=​Cj0KCQjw​1a6EBhC0AR​IsAOiTkrFd​oPDfvC2cST​ 9h7uW8dtSr​7nij6HOvlp​FnSTHfnIYf​p9HHDPMCG8saAmq1EALw​_wcB accessed 17 April 2021. 321 Section 1 of the Bill for the Preservation and Development of Agricultural Land 2016. 322 Department of Environmental Affairs, “South Africa’s 2nd Annual Climate Change Report” (2016) https://​www​.environment​.gov​.za/​otherdocuments/​reports/​southafricas​_secondnational​_clima techange accessed 18 April 2021. 323 Section 2 of the National Environmental Management: Waste Act 59 of 2008. 324 Department of Environmental Affairs, “National Waste Management Strategy” (2012) https://​ www​.gov​.za/​documents/​national​-waste​-management​-strategy​?gclid​=​Cj​0KCQjw1a6E​BhC0ARIsAO​ -iTkrG7bTcojow ​ - 76​ H BbUo4xAKa​ Y iP6teBNJe​ z 5bhdx3lWT ​ g bLbwGp4eM ​ 0 aAvGAEALw ​ _ wcB accessed 17 April 2021. 325 Section 2 of National Land Transport Act 5 of 2009. 326 Department of Transport, “Green Transport Strategy 2050” (2018) https://​www​.transport​.gov​ .za/​documents/​11623/​89294/​Green​_Transport​_Strategy​_2018​_2050​_onlineversion​.pdf/​71e19f1d​-259e​ -4c55​-9b27​-30db418f105a accessed 19 April 2021. 327 Department of Transport (n. 326).

236  Research handbook on climate change mitigation law With regard to energy, the both the NEA and ERA aim to promote diversity of supply of energy resources in sustainable quantities and at affordable prices.328 The government publishes and updates several plans related to energy. Most notable is the Integrated Energy Plan (IEP), published under the NEA, and the Integrated Resource Plan (IRP), published under the ERA. The IEP aims to provide a 20-year roadmap for energy planning. It analyzes current energy consumption trends within different sectors of the economy (i.e. agriculture, commerce, industry, residential and transport) and uses this to project future energy requirements, based on different scenarios.329 The plan predicts that the electricity, transport and manufacturing/industrial sectors will continue to place a higher demand on energy until 2030.330 As such it underscores the need to invest in a diversified energy mix that reduces reliance on primary energy sources such as coal and crude oil. The IEP must be read with the IRP, as the IRP provides financial investment guidance for the energy sector. In this regard IRP indicates the need to decommission outdated coal power plants and places a preference on investment for renewable energy, particularly wind, solar and gas.331 These investments are expected to steadily increase by 2030 and to form the bulk of energy infrastructure investments in the future.332 Finally, in addition to the above sectors, South Africa adopted the Carbon Tax Act in 2019 (Carbon Tax Act 15 of 2019 – CTA) and aims to adopt its first national climate change law in the near future. This law is currently in the form of the Climate Change Bill (CCB) 2022. The Bill was formally introduced in Parliament on 18 February 2022, more than three years after an earlier version of the Bill was first published for public comment on 8 June 2018. It is guided by the environmental principles set out in NEMA (discussed above). Once adopted into legislation, the Climate Change Bill will make provision for regular monitoring and updating to South Africa’s Peak, Plateau, Decline Emissions Trajectory Range to ensure the fulfillment of the country’s international commitments.333 With respect to mitigation, the Bill provides for future review and determination of the national greenhouse gas emissions trajectory; determination of sectoral emissions targets for emitting sectors and subsectors; and allocation of carbon budgets.334 It also makes provision for the development of plans to phase down or phase out the use of synthetic greenhouse gases line with the Kigali Amendments to the Montreal Protocol.335 The Carbon Tax Act, in turn, symbolizes South Africa’s post-Paris Agreement mitigation commitments to offset the negative costs of emissions. The Act introduces the country’s first carbon tax system. The tax rate is set at ZAR144 per ton of CO2e (carbon dioxide equivalent), rising 10% a year for the first five years of implementation of the Act.336 The following sectors

Section 2 of the National Energy Act 34 of 2008 and Section 2 of the Electricity Regulation Act 4 of 2006. 329 Department of Energy, “Integrated Energy Plan” (2016) https://​www​.gov​.za/​documents/​integrated​ -energy​-plan​-south​-africa​?gclid​=​Cj0KCQ​jwsqmEBhDi​ARIsANV8H3​a2emtkkzSi​-o​w9r1TQaWF3​ 2CxMGATKnh​WWLpsNDA1d​V0BNIA6s6H​4aAimiEALw​_wcB accessed 17 April 2021. 330 Department of Energy (n. 329). 331 Department of Energy, “Integrated Resource Plan” (2019) https://​www​.gov​.za/​sites/​default/​files/​ gcis​_document/​201910/​42778gon1359​.pdf accessed 21 April 2021. 332 Department of Energy (n. 331). 333 Section 12 of the Climate Change Bill 2018. 334 Section 12 of the Climate Change Bill 2018. 335 Section 12 of the Climate Change Bill 2018. 336 Section 5 of the Carbon Tax Act 15 of 2019. 328

Climate change mitigation law and policy in the BRICS  237 are the most affected by the implementation of a carbon tax: the energy sector, the manufacturing and construction industry, the mining sector, various mineral industries (cement, glass and lime production), the chemical industry, and the metal industry (iron and steel, aluminum, zinc and lead production).337 These emitters are required to license their activities that are liable for carbon tax, and payment of this environmental levy is due annually in July of each year.338 During the first phase of implementation (1 June 2019–31 December 2022), the waste sector, as well as the agricultural, forest and other land use sectors, are excluded. Paradoxically, the Act also excludes South Africa’s largest emitter – Eskom. The rationale behind this exclusion lies in the argument that the utility already pays an electricity levy on its generation of non-renewable electricity.339 B Policy framework In addition to the above laws, the National Climate Change Response White Paper (NCCRWP),340 together with the National Development Plan Vision 2030 (NDP)341 and the Low-Emission Development Strategy 2050 (LEDS)342 remain the main guiding policies establishing climate-related responsibilities for government. The NDP serves as South Africa’s main strategic development policy. It includes the overarching objective of eliminating poverty and reducing inequality by 2030.343 The NDP outlines a set of goals and actions to meet the country’s environmental sustainability needs and challenges, and dedicates a full chapter to “Environmental Sustainability: An Equitable Transition to a Low-Carbon Economy.”344 This chapter includes an overview of South Africa’s economic and development priorities and places these in context with the need to secure an environmentally sustainable future that is less carbon intensive.345 It forms the foundation for the country’s initial and future discussions and policy development for emission reductions, energy efficiency and financial and infrastructural investments surrounding greener technologies, specifically for the electricity and manufacturing industries. The NCCRPW, in turn, represents South Africa’s very first climate change policy. It dates back to 2011 and echoes the objective of the NDP to provide a climate-specific overarching policy framework for facilitating a “just transition to a low carbon economy.”346 In this regard the policy encourages the use of incentives and disincentives, including regulatory, economic,

Schedule 2 of the Carbon Tax Act 15 of 2019. Section 16 of the Carbon Tax Act 15 of 2019. 339 National Treasury, “Explanatory Memorandum of the Carbon Tax Bill 2018” (2018) http://​ www​.treasury​.gov​.za/​public​%20comments/​CarbonTaxBill2019/​Explanatory​%20Memorandum​%20to​ %20the​%202018​%20Carbon​%20Tax​%20Bill​%20​-​%2020​%20Nov​%202018​.pdf accessed 17 April 2021. 340 Department of Environmental Affairs, “National Climate Change Response White Paper” (2011) https://​www​.gov​.za/​sites/​default/​files/​gcis​_document/​201409/​nationalcl​imatechang​eresponsew​ hitepaper0​.pdf accessed 23 April 2021. 341 National Planning Commission (n. 304). 342 Department of Environmental Affairs, “Low-Emission Development Strategy 2050” (2018) https://​www​.environment​.gov​.za/​sites/​default/​files/​docs/​2020lowemission​_developmentstrategy​.pdf accessed 20 April 2021. 343 National Planning Commission (n. 304). 344 National Planning Commission (n. 304). 345 National Planning Commission (n. 304). 346 Department of Environmental Affairs (n. 340). 337 338

238  Research handbook on climate change mitigation law and fiscal measures to provide appropriate price signals to nudge the economy towards a more sustainable growth path.347 It requires the appropriate measures to be developed in line with the “polluter pays principle.” The NCCRWP further introduced the National Climate Change Response Monitoring and Evaluation System (M&E System).348 The M&E System was established in 2016 and is set to become the primary tool through which South Africa’s NDC under the Paris Agreement is implemented.349 The M&E System aims to provide an online information system to support South Africa’s transition to a low carbon economy. The system follows a tiered approach: Tier 1 – country level indicators; Tier 2 – sectoral indicators; and Tier 3 – indicators for the impact of individual response measures, through which data must be reported and monitored.350 This system is intended to be used alongside the National GHG Inventory, and should guide decisions of all relevant national departments.351 The M&E System is operational, but is currently in a learning phase through which the institutional arrangements for the system are being refined.352 The LEDS, in turn, represents the final policy-related discussion relevant to climate mitigation in South Africa. The LEDS provides an overview of the existing policies (also discussed in this chapter) related to climate mitigation.353 It confirms that from 2030 onwards, a number of existing coal-fired power stations will be retired and that investments in green energy will be prioritized.354 It also speaks to the institutional and financial constraints South Africa faces in the implementation of its policies for climate mitigation. In this regard, the LED highlights that low carbon development is dealt with in a fragmented manner and that integration and cooperation between various sectoral departments should be improved.355 For this purpose, the LEDS suggests the establishment of a Presidential Climate Change Coordinating Commission to oversee the maximization of resources and policy implementation across sectors.356 It further calls for the development of a comprehensive climate finance strategy aimed at quantifying the sum of climate finance required for infrastructure and technology investment, fostering climate finance networks (by means of identifying stakeholders and activities along the climate finance value chain), and establishing the necessary institutions and procedures to monitor the climate finance system.357 5.4 Conclusion From the above discussion, it may be argued that South Africa boasts a comprehensive environmental law and policy framework that provides a strong mandate for the state to protect

Department of Environmental Affairs (n. 340). Department of Environmental Affairs, “The National Climate Change Response Monitoring and Evaluation System Framework” (2015) https://​www​.environment​.gov​.za/​sites/​default/​files/​reports/​ themeB​_monitoring​_evaluation​.pdf accessed 21 April 2021. 349 Department of Environmental Affairs (n. 348). 350 Department of Environmental Affairs (n. 322). 351 Department of Environmental Affairs (n. 322). 352 Department of Environmental Affairs (n. 348). 353 Department of Environmental Affairs (n. 342). 354 Department of Environmental Affairs (n. 342). 355 Department of Environmental Affairs (n. 342). 356 Department of Environmental Affairs (n. 342). 357 Department of Environmental Affairs (n. 342). 347 348

Climate change mitigation law and policy in the BRICS  239 the environment for present and future generations. This mandate is extended to mitigating the impacts of climate change and addressing its root causes. The legal framework is, however, still developing. In the absence of a dedicated single nationally adopted climate change Act which provides for detailed climate mitigation responsibilities, the legal approach remains fragmented and silo based. While there are institutions that have been established to oversee policy development and implementation, it is unclear how all of the institutions mentioned in this chapter should work together. For example, there seems to be a disconnect between established institutions, such as the CCAQSD and IMCCC, and actors in the National GHG Inventory or other national departments, in relation to the extent to which these do and should coordinate climate mitigation activities. Nevertheless, the adoption of a national climate Act is imminent. It therefore remains to be seen whether this new Act addresses the institutional and policy gaps and establishes a coordinated, detailed and dedicated climate mitigation framework.

6

CONCLUDING REMARKS

While South Africa claims to have a comprehensive environmental law and policy framework that provides a strong mandate for the state to protect the environment for present and future generations, it is still developing. Russia is very likely to meet its INDC target due to the low ambition of the target. However, Russia’s INDC is insufficient to meet the Paris Agreement’s temperature targets and Russia failed to increase the ambition of its INDC when it ratified the Paris Agreement in 2019. In the case of China, the lack of rules/guidelines/enforcement capacity to bind BRI-related activities to green development is worrying, as these activities have the potential to severely set back climate change action in a large number of countries. These concerns exist mainly because a large part of the BRI’s related investments concern transportation infrastructure and energy-related infrastructure. Regarding India, there is still low optimism that it will reach its renewable energy target, much less start to replace its current conventional energy sources, especially in the absence of an active energy transition and substitution law and policy. Lastly, to achieve the ambitious objectives of the Paris Agreement, Brazil is committed to the implementation of its INDCs under existing policies and intends to set mitigation measures to reduce GHG emissions from LULUCF through restoring forests for different land use purposes. All five BRICS countries are aiming high to decarbonize their economies at their own pace based on their national economic circumstances. Two countries to pay attention to in the coming years, if the world is serious about mitigating climate change, are China and India. In the latter case, especially because it is about to become the most populous country in the world and has ambitions to continue to grow macro-economically. As for the former, it is ironic that, in the 2000s, the US criticized China for not embracing multilateralism. In the late 2010s, it was the US who abandoned multilateralism (for example, by withdrawing from UNESCO and the Paris Agreement on Climate Change, and by blocking the nomination of new members of the Appellate Body of the World Trade Organization) and China has become the champion of multilateralism, taking a position of leadership in multilateralism that the Trump administration of the US had rejected.

10. Climate change mitigation law and policy in Africa Olivia Rumble and Andrew Gilder

INTRODUCTION Sub-Saharan Africa is highly vulnerable to the impacts of climate change and has the least capacity to adapt to its impacts.1 It hosts a record of seven out of ten countries worldwide that are considered to be the most threatened.2 For that reason, the focus of policy and planning instruments has leaned towards increasing resilience and reducing vulnerability.3 This focus is also unsurprising since the continent is responsible for only a fraction of global greenhouse gas (GHG) emissions, representing less than 4% of total GHG emissions worldwide.4 That notwithstanding, African countries are committed to making a fair contribution to global mitigation efforts and to pursuing low carbon development. At the Eight Conference on Climate Change and Development in Africa in 2019, the African Union Commission recognised that urgent action is necessary to avert irreversible climate impacts and noted that, “for Africa, the contribution to the global effort is avoiding emission intensive production, distribution and consumption in pursuit of sustainable development pathways”.5 For that reason there is considerable support among African countries for renewable energy and the sustainable use of natural resources, and a progressive reduction in fossil fuel reliance.6 This support is propelled by existing high levels of energy poverty and a lack of access to electricity, a rapid growth in energy demand in cities, and a relatively high reliance on biomass and fossil fuels.7 The continent also has the richest solar resources in the world, as well as considerable geothermal and hydropower potential.8 In this chapter we refer to sub-Saharan Africa as “Africa”. IPCC, “Global warming of 1.5 °C. An IPCC Special Report on the impacts of global warming of 1.5 °C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty” (World Meteorological Organization 2018). 2 African Development Bank Gap Analysis Report, “African Nationally Determined Contributions (NDCs)” (2018). The cited countries include the Central African Republic, Chad, Eritrea, Ethiopia, Nigeria, Sierra Leone and South Sudan. 3 World Meteorological Organization, “State of the Climate in Africa” (2019) WMO 1253, which discusses NDC focuses of African countries. 4 International Energy Agency Country statistics 2019; and African Development Bank (above note 2). 5 Eighth Conference on Climate Change and Development in Africa Conference (CCDA-VIII), African Union Commission, Addis Ababa, Ethiopia, 28–30 August 2019 ECA/CCDA/2019/INF/2. 6 Ibid. 7 International Energy Association, “Africa Energy Outlook 2019” (IEA 2019) https://​www​.iea​.org/​ reports/​africa​-energy​-outlook​-2019, last accessed June 2021. 8 African Development Bank (above note 2). For example, the estimated potential of hydropower on the continent is 1,750 TWh and that of geothermal energy is estimated at 9,000 MW. 1

240

Climate change mitigation law and policy in Africa  241 In this chapter we explore how African countries have sought to mitigate their emissions and pursue low carbon development. We do so by first considering national policy responses, focusing on Africa’s implementation of the Paris Agreement and how NDCs have addressed mitigation ambition. We then provide a brief overview of continental, regional and national climate change mitigation policies, strategies and plans, primarily engaging with how they address mitigation and low carbon development. As part of this review, we focus on market mechanisms such as carbon pricing and how this has been a particular regional priority on some parts of the continent. Our analysis then traces climate change legislative developments in Africa, first discussing how it has fused with various sectoral laws and then engaging with the development of framework legislation in a handful of countries. We then conclude by unpacking the climate change framework laws of Kenya and Uganda, discussing how they provide for climate mitigation responses within institutional, administrative and financial mechanisms and structures.

1

SUB-SAHARAN AFRICAN IMPLEMENTATION OF THE PARIS AGREEMENT

1.1

Initial NDCs

Prior to the Paris Agreement, many African governments produced climate policy frameworks such as Nationally Appropriate Mitigation Actions (NAMAs), in line with UNFCCC requirements, but many did not implement them meaningfully, nor did they develop institutional capacities to respond climate change.9 Since 2015, nationally determined contributions (NDCs) have been the primary instrument guiding the policy response in most African countries that have ratified the Paris Agreement.10 Fifty-two African countries submitted their first NDCs under the Paris Agreement.11 Initial African NDCs primarily address adaptation considerations, although the majority also include mitigation actions.12 That notwithstanding, support for renewable energy and low carbon development is clear. Most African nations have committed to transitioning to low carbon sources of energy within a relatively short time frame, with clean energy and agriculture prioritised in over 70% of them.13 The majority of mitigation actions are framed within the energy, transport, industry, min­ing, waste and building sectors. Since a considerable portion of emissions arises from land use, the agriculture and forestry sectors feature prominently.14 Whilst African countries are supportive of a low carbon future, there are concerns regarding

African Climate Policy Centre “Climate Governance and Climate Policy in Africa” (undated) https://​www​.uneca​.org/​african​-climate​-policy​-centre/​climate​-governance​-and​-climate​-policy​-in​-africa, last accessed June 2021. 10 World Meteorological Organization (above note 3). 11 Ibid. 12 Ibid. 13 Ibid. 14 Food and Agricultural Organization, “Regional Analysis of the Nationally Determined Contributions of Eastern Africa” (2017) http://​www​.fao​.org/​3/​a​-i8165e​.pdf, last accessed June 2021; and Climate Legal, Kieti Advocates and Promethium Carbon, “Carbon Pricing in sub-Saharan Africa” (Konrad-Adenauer-Stiftung e. V. 2019). 9

242  Research handbook on climate change mitigation law what is considered to be a drastic energy transition on the continent on an unprecedented scale.15 For this reason, African countries have called on the global community to embed a just transition in low emission development strategies to address the socio-economic implications of such a transition, and to develop a global regime to further localise renewable energy value chains in Africa.16 1.2

NDC Review

The first generation of African NDCs were criticised for being hastily put together, with limited information, little or absent cross-sectoral and public participation; for failing to take the long-term effects on national development goals into consideration; and for largely assuming the availability of inter­national finance for their implementation.17 Consequently, it has been suggested that they did not truly reflect national needs.18 For this reason, considerable effort has been focused on ensuring that the next iteration of NDCs reflects national ambition and is subject to a more rigorous public process. Most African countries reviewed and updated their NDCs during the course of 2020 and 2021. This process has been compromised by the COVID-19 pandemic, which has amplified concerns by African nations about climate finance for implementation,19 in the context of a global push for net-zero targets. Climate finance has long been a concern of African nations, not only to achieve mitigation goals but also because the costs of adaptation are out of reach for most countries.20 Whilst the pandemic’s impact on the African NDC revision process is likely to be unavoidable, African countries have nevertheless expressed considerable support for increasing ambition and revising their NDCs, with interim data indicating an overwhelming support for enhanced ambition on the continent.21 A number of the African countries, which expressed their intention to increase ambition, made such statements under the banner of the Climate Ambition Alliance, a coalition of state and non-state actors committing nations to be more ambitious in their NDCs and to set net-zero targets by 2050. Thirty-five of the 103 countries in the Alliance are from Africa.22

Eighth Conference on Climate Change and Development in Africa (above note 5). Ibid. 17 African Development Bank (above note 2). 18 Ibid. 19 O. Rumble and A. Gilder, “Implications of the COVID-19 Pandemic for Global Climate Change Responses” (South African Institute for International Affairs 2021) https://​ saiia​ .org​ .za/​ download/​ implications​-of​-the​-covid​-19​-pandemic​-for​-global​-climate​-change​-responses/​, last accessed June 2021. 20 African Development Bank (above note 2). 21 See O. Rumble and A. Gilder, “Updating NDCs in Times of COVID-19 Lost Momentum?” (Konrad Adenauer Stiftung 2020) https://​www​.kas​.de/​en/​web/​mned​-bruessel/​single​-title/​-/​content/​ updating​-african​-ndcs​-in​-times​-of​-covid​-19​-lost​-momentum, last accessed June 2021. 22 Namely Angola, Botswana, Cabo Verde, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Eritrea, Ethiopia, Gambia, Ghana, Guinea, Guinea-Bissau, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Rwanda, Senegal, Sao Tome and Principe, Seychelles, Sierra Leone, Somalia, South Sudan, Togo, Uganda, United Republic of Tanzania, Zambia, Zimbabwe. 15 16

Climate change mitigation law and policy in Africa  243

Note: The figure represents the situation in 2018. A continually updated version of the figure is available at https://​www​.climatewatchdata​.org/​2020​-ndc​-tracker. Source: Climate Watch NDC Content (World Resources Institute 2018).

Figure 10.1

Climate Watch NDC Content 2018

Rwanda was one of the first African countries to have revised its NDC in May 2020. Its level of ambition has been praised for its renewal of “climate optimism”.23 Despite its relatively small GHG emissions profile, Rwanda intends to reduce emissions by 38% by 2030.24 It commits to nearly equal spending on mitigation and adaptation of up to US$11 billion.25 This is slightly more than the total value of its annual national domestic economic output. Other countries that have submitted their revised NDCs include Sudan, Angola, Nigeria, Cabo Verde, South Sudan, Ethiopia, Zambia, Senegal, Kenya and Tonga. A brief review suggests that many of the revised NDCs still contain two mitigation targets, with increased ambition being subject to greater levels of international support. For example, Zambia has a target of: ● reducing its emissions by 25% by 2030 against a base year of 2010 with limited international support (an “unconditional target”); alternatively, ● 47% by 2030 (38,000 Gg CO2 eq.) if substantial international support is provided (a “conditional target”).26 The African Development Bank has noted that unconditional commitments represented 23% of the overall reductions in initial NDCs, while 77% of reductions were conditional on receipt of international support, most notably climate finance.27 This underscores the continued importance of international support to African countries in achieving their mitigation targets.

NDC Partnership, “Rwanda Renews Climate Optimism: Africa’s First Revised NDC Shows Global Leadership” (2020) https://​ndcpartnership​.org/​news/​rwanda​-renews​-climate​-optimism​-africa’s​ -first​-revised​-ndc​-shows​-global​-leadership, last accessed June 2021. 24 Republic of Rwanda, “Updated Nationally Determined Contribution” (2020). 25 Ibid. 26 Zambia, “Updated Nationally Determined Contribution” (2020). 27 African Development Bank (above note 2). 23

244  Research handbook on climate change mitigation law 1.3

Barriers to NDC Ambition and Implementation

The focus on climate finance and international support is a key component of Africa’s implementation of the Paris Agreement and, as illustrated above, continues to inform national approaches to mitigation targets. In 2009, developed countries pledged to annually mobilise US$100 billion in climate finance for developing countries by 2020, from both public and private sources. A revised amount will be negotiated for 2025. The UNFCCC’s Standing Committee on Finance (SCF) and the Organisation for Economic Co-operation and Development (OECD) have independently acknowledged improvements in the availability of climate finance,28 partly due to an elevated investment in private sector renewable energy. Only a fraction of the finances have, however, benefitted Africa.29 The continent has previously secured only 12% of the global total for 2017.30 According to the OECD, climate finance to developing countries reached US$71.2 billion in 2017.31 At the same time, it was estimated that Africa will require approximately US$3 trillion by 2030 to implement the adaptation and mitigation components of their initial NDCs.32 Not only is quantum of finance an issue, but there are also a myriad of issues around accessing available finance, and conditionalities and other requirements imposed upon its issue, that will need to be overcome in order to build trust and facilitate NDC implementation.33 Finance is not the only barrier to NDC implementation and increased mitigation ambition. Limited human resources, a lack of relevant expertise and skills, and competing priorities constrain the ability of many national governments to both generate and implement fully integrated climate change policies and strategies.34 This is made worse by the increased complexity of the skills required to design and implement sectoral and multisector decarbonisation policies.35 In this context, African countries are constrained to negotiate increased financial flows, improved ease of access to finance, and to pursue domestic measures that build capacity and integrate climate change objectives within broader planning instruments. Some applications of UNFCCC, “Summary and Recommendations by the Standing Committee on Finance on the 2018 Biennial Assessment and Overview of Climate Finance Flows” https://​ unfccc​ .int/​ sites/​ default/​files/​resource/​51904​%20​-​%20UNFCCC​%20BA​%202018​%20​-​%20Summary​%20Final​.pdf, last accessed June 2021; and OECD, “Climate Finance Provided and Mobilised by Developed Countries in 2013–2017” (OECD Publishing 2019) https://​www​.oecd​-ilibrary​.org/​environment/​climate​-finance​ -provided​-and​-mobilised​-by​-developed​-countries​-in​-2013​-17​_39faf4a7​-en, last accessed June 2021. 29 The AFDB has noted that annual climate finance flows across sub-Saharan Africa have remained static at US$12 billion for 2015/2016. Further, considerable portions of this finance have been directed to South Africa, amounting to over 20% of total approved funding (African Development Bank (above note 2)). 30 Climate Policy Initiative, “Global Climate Finance: An Updated View 2018” (November 2018). 31 OECD (above note 28). 32 African Development Bank, “Climate Action: African Development Bank calls for global collaboration to turn nationally determined contributions into investment plans” (20 March 2019) available at https://​www​.afdb​.org/​en/​news​-and​-events/​climate​-action​-african​-development​-bank​-calls​-for​-global​ -collaboration​-to​-turn​-nationally​-determined​-contributions​-into​-investment​-plans​-19108, last accessed June 2021. 33 Statement by the African Group of Negotiators (undated) available at https://​afric​angroupofn​ egotiators​.org/​wp​-content/​uploads/​2020/​09/​EN​_EFFECTS​-​.pdf, last accessed June 2021. 34 World Meteorological Organization (above note 3). 35 Ibid. 28

Climate change mitigation law and policy in Africa  245 this may entail the development of investment plans for NDC implementation,36 prioritisation of NDC actions highlighting issues of greatest, need, risk and vulnerability; focusing efforts on private sector investment for NDC implementation; and strengthening mechanisms to promote donor and investor confidence, such as robust systems and processes for monitoring, reporting and verification of emissions, as well as monitoring and evaluation of adaptation, climate finance and technological support outcomes.37 In view of the relatively high percentage of emissions based on LULUCF activities, coupled with renewable energy potential, the African Development Bank (AFDB) has also encouraged African countries to use suitable policy tools and regulations to incentivise renewable energy deployment, climate-smart agriculture and sustainable forest and land management practices across the continent.38 Equally, countries have been encouraged to promote the mitigation of air-pollution impacts that would have dual climate and human health outcomes; to enhance energy-supply security by increasing diversity, technological innovation and employment; and to reduce urban migration.39 A number of African countries have already developed laws and policies to give effect to the above. A regional overview of relevant policies is contained in the following section. Thereafter the discussion turns to a broad overview of the nature and types of laws and related approaches seen on the continent.

2

CLIMATE CHANGE LEGAL AND POLICY DEVELOPMENTS IN AFRICA

2.1

Climate Change Policies

At a continental level, the African Union (AU) has not yet settled on a final climate change strategy. A Draft African Union Strategy on Climate Change was published in 2014 (Draft Strategy), in response to a call for such a strategy from the 2009 African Union Summit; however, to date, the draft has not yet been finalised.40 The purpose of the Draft Strategy is to provide the AU, the Regional Economic Communities, member states and other stakeholders with strategic guidance to address climate change challenges.41 The Draft Strategy is centred around four thematic areas, namely: climate change governance; promoting research, education, awareness raising and advocacy; mainstreaming climate change considerations in planning, budgeting, and development processes; and the promotion of national, regional, and international cooperation. The focus of the Draft Strategy is primarily on responding to the impacts of climate change, i.e. adaptation responses. It takes a position, based on equity, that in view of the “infinitesimally” small contribution of African states to global GHG emissions, that these are best addressed by historic emitters/developed countries on the principle of common but differentiated responsibility.42 That notwithstanding, the Draft Strategy seeks 36 AFDB (above note 32). A well-developed NDC that has an associated investment plan with costed actions will boost investor confidence and can serve as a good resource mobilisation tool. 37 African Development Bank (above note 2). 38 African Development Bank (above note 2). 39 Ibid. 40 African Strategy on Climate Change (May 2014) AMCEN-15-REF-11 (draft). 41 Ibid. 42 Ibid. at 8.

246  Research handbook on climate change mitigation law to promote “climate smart” socio-economic development, and notes that African countries may, based on their specific national circumstances, elect to take mitigation actions including, where appropriate, strategies, policies, plans, programmes, projects and other activities.43 This statement is, however, caveated by the need for developed country support for such action, noting that the scale of any action would be commensurate to the scale of financial support provided; and by the confirmation that it is only developed countries that are bound to take mitigation actions. This position is reflective of the AU’s sentiment in 2014 when the Draft Strategy was compiled, which was also before the Paris Agreement. Possibly in response to the Paris Agreement and its inclusion of all countries in the collective mitigation of climate change impacts, a new study was undertaken to update the AU’s Draft Strategy.44 The purpose of this review was to take cognisance of developments since 2014, including the Paris Agreement, Agenda 2063 (discussed below) and the COVID-19 pandemic.45 Pursuant to this study the African Union then commenced with the development of a draft African Climate Change Strategy 2020–2030, with the support of the Economic Commission for Africa. 46 One of the stated purposes in the initial draft of this document is to be a framework to guide actions in member states towards low carbon emissions development. It also recognises that the African continent has a huge mitigation potential which if fully unlocked, can realise significant resource inflows into the continent to fund adaptation and resilience building. The massive untapped potential for clean renewable energy on the continent is an advantage for its own low emission development and the ever-rising global demand for clean energy …47

Although the draft revised strategy acknowledges this position and it is intended to guide low carbon development, it unsurprisingly continues to have an adaptation focus. Furthermore, mitigation does not feature in the strategy’s main objectives, which include: building effective institutional capacities to implement climate change strategies; harmonising climate change strategies; ensuring Africa “speaks with one voice”; building resilience and reducing vulnerability; and increasing access to finance.48 The draft African Climate Change Strategy 2020–2030 being devised by the AU is intended to operate together with the AU’s Agenda 2063. The latter is a 50-year vision (2014–2063) operating as a shared strategic framework for inclusive long-term sustainable socio-economic and integrative transformation and growth for Africa. Agenda 2063 calls for higher levels of collaboration and support for African-led initiatives and it identifies key programmes to accelerate economic growth and industrial development. This document is incorporated into the national planning frameworks of over 30 countries and is intended to align with and support the achievement of the Sustainable Development Goals. The Agenda recognises climate

Ibid. at 22. Economic Commission for Africa, “ARFSD2021: Panellists call on Africa to adopt greener pathways for development” (3 March 2021). 45 Ibid. 46 African Union, “Draft Africa Climate Change Strategy 2020–2030” (2020) available at https://​ archive​.uneca​.org/​sites/​default/​files/​uploaded​-documents/​ACPC/​2020/​africa​_climate​_change​_strategy​_​ -​_revised​_draft​_16​.10​.2020​.pdf, last accessed June 2021. 47 Ibid. at 31–32. 48 Ibid. at 49. 43 44

Climate change mitigation law and policy in Africa  247 change as a major threat to the continent’s development. To that end it prioritises “inclusive growth and sustainable development” realised through the achievement of environmentally sustainable and climate resilient economies and communities. This includes, amongst others, achieving sustainable consumption and production patterns; and the roll-out of renewable energy. The regional economic blocs have been more successful in the development of climate change strategies and plans. For example, in the Southern African Development Community (SADC), there is the Climate Change Strategy and Action Plan (2015), which is complemented by the SADC Support Programme on Reducing Emissions from Deforestation and Forest Degradation 2012–2015 (2011). Similarly, the East African Community (EAC) has developed an EAC Climate Change Policy (2011), the implementation of which is guided by the EAC Climate Change Strategy (2011) and the EAC Climate Change Master Plan (2011–2031). The Economic Community of West African States (ECOWAS) is in the process of developing a regional climate strategy, to provide coordinated actions at the regional level, aiming to strengthen the level of ambition of West African countries and to develop resilience.49 Lastly, individual countries have made considerable progress in developing national climate change policies and response strategies, and in some instances these have cascaded down to a local level. For example, Ghana has developed a National Climate Change Policy (2013), as have a number of other African countries, including Gabon, Kenya, Zimbabwe, Lesotho and Rwanda.50 Whilst considerable focus is on adaptation and resilience measures in these policies, they do contain dedicated chapters on mitigation. For example, Ghana’s Climate Change Policy focuses on REDD+, renewable energy, energy efficiency measures, and low carbon transport. Other countries, such as Zimbabwe, have dedicated policies and plans for mitigation-specific issues, namely the National Renewable Energy Policy (2020) and Biofuels Policy (2020). Similarly, Mauritius has launched a “Renewable Energy Roadmap 2030” (2019) for the electricity sector and Namibia has published a Renewable Energy Policy (2017). Unsurprisingly, due to high forest cover, REDD+ activities feature prominently in these plans. In total, 28 African countries are partner countries in the UN-REDD Programme.51 Several of them, such as Ghana, Nigeria, Uganda and the Democratic Republic of the Congo, have also drafted national REDD+ strategies, some of which have evolved into national programmes (readiness plans) for REDD+.52 Many countries, such as Angola, the DRC, Madagascar, Malawi, the Republic of the Congo and Zambia, also made express references to the use of REDD+ in their NDCs and they listed the importance of various national REDD+ projects to the realisation of their mitigation goals.53

49 Economic Community of West African States, “Five years after the adoption of the Paris Agreement: ECOWAS is more mobilized than ever for climate action” (11 December 2020) https://​ www​.ecowas​.int/​five​-years​-after​-the​-adoption​-of​-the​-paris​-agreement​-ecowas​-is​-more​-mobilized​-than​ -ever​-for​-climate​-action/​, last accessed June 2021. 50 See the various climate change plans listed for the AU member states in www​.climate​-laws​.org. 51 The UN-REDD Programme is the United Nations Collaborative Programme on Reducing Emissions from Deforestation and forest Degradation (REDD+) in developing countries. 52 See the UN REDD Programme, African country profile: https://​www​.unredd​.net/​regions​-and​ -countries/​africa​.html, last accessed June 2021. 53 Climate Legal (above note 14).

248  Research handbook on climate change mitigation law

3

MARKET MECHANISMS: CARBON PRICING

Heightened global interest in national carbon pricing measures, and financial and political imperatives to introduce them, are compelling an active discussion in Africa on regional and country-appropriate approaches.54 In addition to South Africa’s carbon tax legislation,55 Burkina Faso, Côte d’Ivoire, Rwanda, Senegal and Nigeria are apparently considering or advancing carbon pricing domestic measures.56 Nascent interest in carbon pricing at a regional level is also beginning to emerge; however, discussions remain very much in the early stages. For example, two new regional groups, the West African Alliance on Carbon Markets and Climate Finance and the East African Alliance on Carbon Markets and Climate Finance, have expressed a desire to investigate regional carbon pricing initiatives. These include potentially an emissions trading scheme (ETS) and national taxation. Lastly, the Vulnerable Twenty (V20) Group of Ministers of Finance (of the Climate Vulnerable Forum that includes the Comoros, the DRC, Kenya, Madagascar, Malawi, Rwanda and Tanzania) has put forward its desire to both remove fossil fuel subsidies by 2020, and to work towards implementing “carbon pricing mechanisms”, by 2025, calling on the G20 to lead with the V20 in a drive towards “ensuring all emissions are subjected to carbon pricing”. To date there has been considerable research on the domestic co-benefits of carbon pricing, positing that it generates substantial domestic environmental co-benefits, mobilises domestic revenues for expenditure on social goods and services, puts peer pressure on others, and leverages external finance.57 Notwithstanding such potential benefits and ambitious regional statements of intent, the majority of African countries, particularly those below the equator, have not expressed an intention towards the more traditional forms of carbon pricing, such as an ETS or carbon tax.58 Instead, they have tended to dwell on other forms of carbon pricing,59 such as participation in and benefitting from the Clean Development Mechanism (CDM), or its successor under Article 6 of the Paris Agreement, as well as REDD+, as a form of results-based climate finance (RBCF), as domestic ways of “putting a price on carbon”. This may be indicative of the fact that many African countries lack sources of carbon value (typically industrial-scale GHG emissions), for which taxation and ETSs are the accepted means of imposing a carbon price,60 meaning that alternative sources such as those discussed above become more feasible and attractive. For example, where forestry sequestration represents a source of potential carbon value, it has been suggested that neither carbon taxation nor an

Ibid. South African Carbon Tax Act 15 of 2019. 56 According to the summary of the Africa Climate Week on 19 March 2019, available at https://​ www​.car​bonpricing​leadership​.org/​news/​2019/​3/​21/​africa​-climate​-week​-carbon​-pricing​-seen​-as​-key​ -tool​-to​-drive​-sustainable​-development​-and​-social​-benefit, last accessed June 2021. 57 International Monetary Fund, “Fiscal Policies for Paris Climate Strategies – From Principle to Practice” (May 2019). 58 Climate Legal (above note 14). 59 Carbon pricing includes so-called “explicit” forms of carbon pricing, and entails not only carbon taxation and ETSs but also encompasses less traditional forms, such as results-based climate finance (RBCF) and project-based offsetting approaches. World Bank, “State and Trends of Carbon Pricing 2019” (2019). 60 Climate Legal (above note 14). 54 55

Climate change mitigation law and policy in Africa  249 ETS would be appropriate for imposing a cost thereon.61 As noted earlier, REDD+ is a considerable focus of many African countries, and a means to mitigate their emissions, and for this reason there may be heightened interest in promoting its expansion on the continent. Further research needs to be undertaken on non-traditional forms of carbon pricing (such as RBCF and REDD+) and how it may or may not benefit the continent’s transition to a low carbon economy. Such additional research should include the potential benefits of implicit forms of carbon pricing, such as the removal of fossil fuel subsidies. Fossil fuel subsidies have achieved increased attention in recent years and are now being included in global analyses as part of increased awareness of the role they play in market distortion and the role that their reform will play in ensuring low carbon development. The issue of fossil fuel subsidies is of particular interest in sub-Saharan Africa, where these are relatively high in quantitative terms (although not necessarily when compared to global averages).62 The impacts and risks of the removal of fossil fuel subsidies requires further research in order to fully understand their extent, the socio-economic effects that may arise from their removal and any mitigation or transitional measures that may be appropriate for their phase down or phase out.63

4

CLIMATE CHANGE LEGISLATION

Climate legislation is developing quickly on the continent, with both framework and sectoral laws in abundance.64 A framework climate change law is loosely described as a statute offering a comprehensive, unifying basis for climate change policy, which addresses multiple aspects or areas of mitigation or adaptation (or both) in a holistic and overarching manner.65 The precise contours and content of what such a law should contain remain, however, ill defined.66

Climate Legal (above note 14). Estimates of fossil-fuel subsidies, including those related to electricity, in 30 sub-Saharan African countries were US$32 billion for 2013, dropping to US$26 billion in 2015 due to reform efforts and the falling prices of oil, gas and coal (Shelagh Whitley and Laurie van der Burg , “Fossil Fuel Subsidy Reform in sub-Saharan Africa: From Rhetoric to Reality” (2015) New Climate Economy Working Paper, at p. 7, available at http://​newclimateeconomy​.report/​misc/​working​-papers, last accessed June 2021. 63 Climate Legal (above note 14). 64 O. Rumble, “Facilitating African Climate Change Adaptation Through Framework Laws” (2019) 13(4) Carbon & Climate Law Review 237–245 (Rumble, “Facilitating”); and O. Rumble, “Climate Change Legislative Development on the African Continent” in P. Kameri-Mbote et al. (eds) Law | Environment | Africa (Nomos Verlagsgesellschaft mbH & Co. KG 2019). 65 T. Townshend et al., “Legislating Climate Change On A National Level” (2011) 53 Environment: Science and Policy for Sustainable Development 5; Abbie Clare, Sameul Fankhauser and Caterina Genaioli, “The National and International Drivers of Climate Change Legislation” in Alina Averchenkova, Samuel Fankhauser and Michal Nachmany, (eds), Trends in Climate Change Legislation (Edward Elgar Publishing 2017); Samuel Fankhauser, Catarina Gennaioli and Murray Collins, “Domestic Dynamics and International Influence: What Explains the Passage of Climate Change Legislation?” Centre for Climate Change Economics and Policy Working Paper (2014); Michal Nachmany et al., ‘The 2015 Global Climate Legislation Study: A Review of Climate Change Legislation in 99 Countries: Summary for Policy-Makers”, Grantham Research Institute on Climate Change and the Environment (2015) http://​www​.lse​.ac​.uk/​GranthamInstitute/​wp​-content/​uploads/​2015/​05/​Global​_climate​_legislation​_study​ _20151​.pdf, last accessed June 2021. 66 Rumble, “Facilitating” (above note 64). 61 62

250  Research handbook on climate change mitigation law Sectoral laws address climate change by the grafting of climate change-related provisions into existing laws, such as environmental impact assessment, energy laws or forest management.67 In this section we address both approaches, by providing a high-level summary of some of the most recent developments of sectoral and framework laws in several African countries. We then explore and draw similarities between the content of the framework laws for Kenya and Uganda. 4.1

Sectoral Climate Change Legislation

Over the past decade, existing laws across the continent have been infused with climate considerations to varying degrees. This can be achieved in different ways, for example by the amendment and insertion of specific climate change provisions within existing laws such as existing environmental management laws; by the publication of dedicated climate change regulations like GHG reporting regulations under existing laws; or through the enactment of sector-specific legislation dedicated to a single issue, for example a dedicated energy efficiency law. In summary, sectoral approaches tend to focus on sector-specific issues such as energy generation, energy efficiency, land use management, forestry, transport or dedicated GHG monitoring and reporting laws. In respect of energy generation, for example, Nigeria has dedicated regulations, issued in terms of the Electric Power Sector Reform Act 2005, to incentivise renewable energy. The Regulations on feed-in-tariffs for renewable energy sourced electricity in Nigeria 2015, provide that a total of 1,000 MW by 2018 and 2,000 MW by 2020 should be generated through renewable energy, including biomass, small hydropower, wind and solar. It also instructs distribution entities to source a minimum of 50% of their total supply from renewable energy sources. Similarly, with regard to energy efficiency, Mauritius passed an Energy Efficiency Act in 2011, which establishes the Energy Efficiency Management Office. The latter is tasked with promoting and facilitating the implementation of energy efficiency measures. The Act also mandates energy audits and provides for the development of various related regulations. In relation to forestry, Guinea’s Forest Code68 provides that areas that stabilise water regimes and the climate can be classified as forests, or enjoy similar legal status and related protections under the Code.69 Similarly article 46 provides that owners of forests under the control of the Administration are responsible for developing inventories of plant biomass to estimate the extent to which it acts as a carbon sink as well as for evaluating its biomass fuel potential. Rwanda is one of the few countries to have imposed legislative limits on CO2 emissions, through the passing of a law which establishes emission standards for CO2, as well as other pollutants of concern.70 It also prohibits the open burning of any substance, except for recreational and ceremonial fires or those for agricultural pest control and open-air fires for cooking.

Eloise Scotford, Stephen Minas and Andrew Macintosh, “Climate Change and National Laws across Commonwealth Countries” (2017) 43 Commonwealth Law Bulletin 318. 68 Ordinary law L/2017/060/AN, 2017. 69 Ibid., section 21. 70 Ministerial Order No. 003/16.01 of 15 July 2010 Preventing Activities that Pollute the Atmosphere. 67

Climate change mitigation law and policy in Africa  251 Rwanda has also developed a dedicated law for its National Fund for the Environment, FONERWA.71 The law sets out the organisation and functions of FONERWA as well as its mandate. The fund is dedicated to addressing general environmental as well as climate change matters. Its sources of funding include special grants and subsidies aimed at the management of climate change and its impacts; 0.1% of the total cost of any project which requires an environmental impact assessment in the country; as well as fees paid to the state derived from cutting wood and forestry activities.72 The Seychelles has also established a climate change trust fund under a dedicated law;73 however, the fund’s objectives are primarily adaptation focused. As mentioned above, there are also a few sectoral laws dedicated to carbon pricing. These include South Africa’s Carbon Tax Act 15 of 2019, which imposes a carbon tax of ZAR134 (US$9.40) per ton of CO2e. The Act permits taxpayers to reduce their carbon tax liability through the use of various allowances, one of which is a 10% carbon offset allowance. Regulations have been published that determine the nature of the carbon offsets eligible under the offset allowance and other limitations, as well as procedures and requirements for the listing, trade and retirement of offsets under the Carbon Tax Offset Administrative System.74 Other forms of carbon pricing on the continent include vehicle taxes, which have risen in popularity in several countries. In Kenya, the Finance Act 23 of 2019 increased the excise tax on petrol fuelled vehicles with engine capacities of more than 1.5 litres, from 20% to 25%.75 Moreover, vehicles fuelled by diesel are liable to an excise duty of 35%.76 By contrast, the excise duty on fully electric vehicles has been halved to 10% in an attempt to encourage the use of cleaner transport technologies.77 Malawi has also recently implemented a tax on vehicles to increase government revenue and mitigate climate change impacts. The amount of the tax depends on the engine size or cylinder capacity (cc) of the motor vehicle. South Africa has also imposed a GHG-related vehicle tax in the form of an environmental levy on new motor vehicles produced in the country.78 4.2

Framework Climate Change Laws

Framework climate change laws tend to share common characteristics, such as the establishment of institutional structures and planning provisions and obligations for reporting and information management. Often, although not always, they will also contain provisions to oblige or incentivise GHG emissions reductions.79

Law No. 16 of 22 May 2012, determining the Organisation, Functioning and Mission of the National Fund for Environment. 72 Ibid., section 7. 73 Conservation and Climate Adaptation Trust of Seychelles Act (2015). 74 GN 1556 of 29 November 2019: Regulations on carbon offsets under section 19 of the Act. 75 Finance Act, Act No. 23 of 2019, section 26(a)(ii). 76 Ibid. It applies to models exceeding a 2.5-litre engine capacity. A 20% duty is applied to smaller cars. 77 Ibid. 78 Customs and Excise Act No. 91 of 1964, sections 54A–54D, 101 and 119A. 79 Rumble, “Facilitating” (above note 64). 71

252  Research handbook on climate change mitigation law In Africa, Benin,80 Uganda and Kenya have enacted framework climate change laws, and South Africa and Nigeria have devised Climate Change Bills for public comment.81 The Kenyan Climate Change Act 2016 (Kenyan Act) was the first in Africa and has influenced the content of the various draft framework laws seen in Nigeria, Uganda and South Africa.82 Whilst it is regarded as a model law in many respects, its implementation, including the establishment of the Council and development of regulations required for implementation, has been beset by delays, as discussed in the analysis that follows. In April 2021, Uganda’s National Climate Change Bill 2020 (Ugandan Bill)83 was passed by Parliament. The Bill is a result of a detailed drafting process that commenced in 2017. Climate laws, including those from Kenya, Ghana, Gambia, Senegal, Zambia, Rwanda and the Seychelles were considered as part of the drafting process, and a nationwide consultation process facilitated the incorporation of stakeholder comments.84 The Bill took just under a year to be passed by Parliament; however, it is still awaiting presidential assent. The South African Climate Change Bill was published by the Department of Forestry, Fisheries and the Environment for public comment in 2018; however, it has yet to be tabled in Parliament.85 In February 2020, the South African President committed to finalising the Bill shortly, during his annual State of the Nation Address. In the intervening period, South Africa has revisited some of the institutional aspects set out in the Bill and has established a Presidential Commission on Climate Change. Two attempts were made to develop a framework law in Nigeria in 2009 and 2017, but both were unsuccessful. The draft of 2017 was supported by the National Assembly and civil society, but lacked the support of the Executive.86 In 2018, it was refused by the President on the basis that it sought to create new entities when government was seeking to downsize.87 In 2019, the federal Ministry of Environment established a legal working group which is working on a further iteration of a national framework law.88 In addition to Nigeria, Zimbabwe and Ghana are also considering the potential development of a draft framework Climate Change Bill.89 There is a faint commonality between the laws that have been published, particularly insofar as they focus on institutional requirements, finance and adaptation or give equal priority to adaptation amongst other measures.90 Most of these laws also contain dedicated provisions on mitigation, either directly in the form of carbon allowances or empowering provisions to Law No. 2018/18 on Regulating Climate Change. The Nigerian Climate Change Bill, 2017. 82 Rumble, “Facilitating” (above note 64). 83 Ugandan National Climate Change Bill, Bill No. 1, Uganda Gazette No. 8, Volume CXIII, 7 February 2020. 84 Ibid. 85 South African Climate Change Bill, Government Gazette 41689 Notice 580 of 8 June 2018. 86 Constance Dlamini, Edward Wabwoto, Huzi Mshelia, Nkiruka Chidia Maduekwe, Bernard Namanya and Pascale Bird, “Legislating the Paris Agreement in Africa: Approaches to Climate Legislation in Eswatini, Kenya, Nigeria, and Uganda” (European Capacity Building Initiative March 2021) https://​ecbi​.org/​sites/​default/​files/​National​%20Climate​%20Legislation​_0​.pdf, last accessed June 2021. 87 Ibid. 88 Ibid. 89 No drafts have been published to date for public comment. 90 Rumble, “Facilitating” (above note 64). 80 81

Climate change mitigation law and policy in Africa  253 direct mitigation measures, or alternatively indirectly, such as including mitigation within the mandate of institutional structures. The subsections which follow discuss some of the commonalities between the Kenyan Act and the Ugandan Bill, highlighting some of their successes and challenges.

5

COMPARATIVE REVIEW: UGANDA AND KENYA’S FRAMEWORK CLIMATE CHANGE LAWS

5.1

Institutions and Governance

Globally, there is a trend to a more integrated, multilevel and multisector approach to climate change planning with a number of institutions now covering all aspects of climate change in the form of inter-ministerial coordinating bodies, intersectoral technical working groups, and multi-stakeholder coordinating bodies.91 Although there is no best practice on this issue, ideally institutional design should be responsive to national circumstances and existing institutions, and when operating they should incorporate the participation or be guided by other agencies, scientific advisory committees, and stakeholders.92 The ability of these institutions to wield power and be effective is also directly a consequence of the adequacy and breadth of their legal mandate.93 In Kenya, the National Climate Change Council (Council) is chaired by the President, with the Cabinet Secretary for environment and climate change affairs acting as Secretary to the Council.94 The Council acts as an “overarching national climate change coordination mechanism”,95 and is constituted by ministers from across Cabinet, including the Cabinet Secretary of Energy, as well as the Cabinet Secretary of Economic Planning. It is designed to be highly inclusive, and within the Council are individual representatives of the private sector, civil society, academia and a representative of a marginalised community. Their nomination is determined by rules set out in section 7(2) of the Act. Although the Act does not provide for the establishment of a technical advisory body, notionally such technical expertise could be provided through the non-governmental representatives. Included within the Council’s functions is a duty to oversee the “mainstreaming” of climate change within national and country governments; the approval and oversight of the implementation of the National Climate Change Action Plan; the provision of guidance on the review and harmonisation of sectoral laws across the country; and the “setting of targets for the reg-

IPCC (V. R. Barros et al. (eds)), Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part B: Regional Aspects. Contribution of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2014) 1203. 92 Richard Lazarus, “Super Wicked Problems and Climate Change: Restraining the Present to Liberate the Future’(2008) 94 Cornell Law Review 1153. 93 Michal Nachmany et al., “Global Trends in Climate Change Legislation and Litigation: 2017 Update” (Grantham Research Institute on Climate Change and the Environment 2017), available at http://​www​.lse​.ac​.uk/​GranthamInstitute/​publication/​global​-trends​-in​-climate​-change​-legislation​-and​ -litigation​-2017​-update/​, last accessed June 2021. 94 Section 5 of the Kenyan Act. 95 Section 6 of the Kenyan Act. 91

254  Research handbook on climate change mitigation law ulation of [GHGs]”.96 The Act is non-specific on the entities to which the targets will apply, and neither does it clarify their wider purpose or objective. It also does not set out relevant considerations for their determination. Moreover, the Council has not yet been constituted, some five years after the Act’s promulgation. In this regard Wambua notes the absence of provisions directing the time frames for the nomination of members to the Council, or for its first sitting.97 The formalisation of the Council has also been delayed by litigation relating to the appointment of representatives of civil society and marginalised communities and contestation about who these representatives should be. The President had initially sought to appoint representatives of these groupings to the Council without first having them vetted by Parliament, as required by the Act.98 This process was found by the courts to be procedurally unlawful.99 Until such time as the Council is formally constituted, a number of the key provisions in the Act, such as the development of the fund (discussed below) will be delayed. The Ugandan Bill adopts a different approach to institutional structures. Initially there was a degree of consternation on the point, with some stakeholders wanting to continue using the Department of Climate Change, while others were strongly in favour of establishing a new and independent institution.100 The final version kept the Department of Climate Change as a key authority, but it reports to and executes the instructions of the existing multi-ministerial Policy Committee on Environment. It was felt that the Department and the existing Committee were sufficiently capable of discharging the coordination function across sectors if adequately strengthened by the new law and because apparently government policy prohibited the establishment of new authorities/agencies, especially where existing government departments are able to execute the relevant function.101 The Department of Climate Change is accordingly mandated under the Ugandan Bill to ensure that the country meets its international obligations and with “coordinating, monitoring and evaluating the programmes and actions of government” on climate change.102 Its mandate is, amongst other things, to promote the development application and diffusion of emission reduction technologies; to serve as a national knowledge and information centre; to support district governments, and in collaboration with lead agencies to “develop a mechanism to, amongst other things, enhance low carbon growth”.103 The Department is to act in concert with the existing Policy Committee on Environment, established under the National Environment Act 5 of 2019. The latter is to advise the Department on the implementation of the Bill and has a wide and relatively undefined mandate to make “decision[s] and policies”, presumably in relation to climate change, for implementation by the Department. Under the National Environment Act 5 of 2019, the mandate of the Committee does include the provision of guidance in the formulation and implementation of climate change policies, plans and pro-

Section 6 of the Kenyan Act. C. Wambua, “The Kenya Climate Change Act 2016: Emerging Lessons from a Pioneer Law” (2019) 13(4) Carbon & Climate Law Review 257–269. 98 Section 7(2) of the Kenyan Act. 99 Republic v National Assembly & 5 others Ex-parte Greenbelt Movement & 2 others [2018] eKLR; Judicial Review 11 of 2017. 100 Dlamini et al. (above note 86). 101 Ibid. 102 Section 13(1) of the Ugandan Bill. 103 Section 13(2)(f) of the Ugandan Bill. 96 97

Climate change mitigation law and policy in Africa  255 grammes.104 The Environmental Management Act also confirms that the Policy Committee on Environment is chaired by the Prime Minister and is made up of 16 ministers from various sectors of cabinet, including the ministers responsible for water and the environment; finance, planning and economic development; energy and mineral development; and local government and internal affairs.105 At a district level, the Natural Resources Departments are also designated as responsible for climate change, and for implementing district climate change action plans. Equally the District Environment and Natural Resources Committee, established under the National Environment Act, is mandated to deal with various climate change integration and implementation functions at a district level, under the Ugandan Bill.106 5.2

National Action Plans and Mitigation

Both laws contemplate the development of a national plan or strategy. In the case of Kenya, the Cabinet Secretary responsible for Environment and Climate Change is responsible for compiling a National Climate Change Action Plan, for approval by the Council. The Action Plan is required to prescribe measures and mechanisms, amongst other things, to guide the country towards the achievement of low carbon climate resilient sustainable development; for “mitigation against climate change”; to identify actions that are enablers of climate change responses; to set out structures for public awareness and engagement; to review and determine mechanisms for climate change knowledge management and access to information; to enhance energy conservation, efficiency and use of renewable energy in industrial, commercial, transport, domestic and other uses; to strengthen approaches to climate change research and development training and technology transfer; to “review and recommend duties of public and private bodies on climate change”; and to review levels and trends of greenhouse gas emissions.107 The Kenyan Act further requires the Cabinet Secretary to have regard to various prevailing national circumstances as well as international law and policy when developing the Action Plan.108 Interestingly the Action Plan is elevated to have quasi-legal status, and all public powers are “bound by the contents of” the Plan, when exercising any power or discharging any statutory duty or function.109 It has been criticised for failing to specify its relationship to other statutes or plans and strategies, particularly Kenya’s National Energy Policy.110 In a similar fashion the Ugandan Bill requires the Department of Climate Change to develop a Framework Strategy on Climate Change (the Strategy).111 Its purpose is to guide government in planning and budgeting for, financing, and monitoring climate change programmes and activities.112 The Department is required to be informed by the obligations of Uganda under the UNFCCC and the Paris Agreement when developing the Strategy. The Act 104 Section 6 of the National Environment Act 5 of 2019. The Ugandan Bill refers to the Environment Act 2015; presumably this is meant to be a reference to the 2019 Act. 105 Section 6 of the National Environment Act 5 of 2019. 106 Section 18 of the Ugandan Bill. 107 Section 13 of the Kenyan Act. 108 Section 13(5) of the Kenyan Act. 109 Section 13(9) of the Kenyan Act. 110 Wambua (above note 97). 111 Section 5(1) of the Ugandan Bill. 112 Section 5(2) of the Ugandan Bill.

256  Research handbook on climate change mitigation law is relatively focused on the adaptation content of the Strategy, but also requires it to “specify the mechanism for achieving climate-resilient development and low [GHG] emissions and its financing”.113 It also provides for public awareness and education, information dissemination, research and development needs. The Act further contemplates the development of a Climate Change Action Plan to facilitate the implementation of the Strategy.114 The latter is required to indicate the measures and actions to be undertaken to enhance sinks and reservoirs of GHGs.115 Action plans are also required to be developed at the district level. Unlike Kenya, the Ugandan Bill does not elevate these plans to having the “force of law” in the country. However, it is unusual insofar as it annexes the UNFCCC, the Kyoto Protocol and the Paris Agreement and provides that these agreements additionally have the “force of law” in the country.116 5.3

Private Sector: Mitigation Obligations

The Kenyan Act does not contain any specific provisions relating to a duty of private entities to meet emission reduction targets or comply with allowances. Rather it empowers the Council to set “targets for the regulation of [GHGs]”,117 but then does not discuss the role of such targets elsewhere in the Act. It does, however, provide that the Council may, in consultation with the Cabinet Secretary for Environment and Climate Change and “relevant” State Departments, impose “climate change obligations” on private entities, including Public Benefit Organisations.118 Although the Act does not elaborate what these obligations may entail, it could conceivably include an obligation on an emitter to reduce its GHG emissions. It also contemplates the development of regulations for reporting on the extent to which the prescribed obligations have been complied with.119 It is an offence to fail to comply with a climate change obligation, which upon conviction may result in a fine of up to ten million shillings (approximately US$93,000), and/or imprisonment of up to ten years. The Ugandan Bill adopts a similar approach. It empowers the Minister, in consultation with the Department or a lead agency, to impose “climate change obligations” on individuals and private entities, the details of which are to be prescribed in regulations.120 Under a separate provision, the Act further empowers “lead agencies” to establish “mitigation, adaptation and compatibility standards, measures and performance levels for responding to the climate change matters which relate to the mandate of the respective lead agencies”.121 The wording of the section implies that these measures could apply to both private individuals (since there is a sanction for failing to comply with them) as well as to the lead agency itself. Although section 16(1) applies to both mitigation and adaptation, section 16(2) then sets out a duty of the lead agencies to establish climate change “measures”; these measures are, however, limited to adaptation and resilience actions. Presumably section 16(1) is worded sufficiently broadly to give lead agencies the power to prescribe mitigation measures in addition to adaptation actions 115 116 117 118 119 120 121 113 114

Section 5(4)(d) of the Ugandan Bill. Section 6 of the Ugandan Bill. Section 6(2)(c) of the Ugandan Bill. Section 4 of the Ugandan Bill. Section 6 of the Kenyan Act. Section 16(1) of the Kenyan Act. Section 16(2) of the Kenyan Act. Section 22 of the Ugandan Bill. Section 16(1) of the Ugandan Bill.

Climate change mitigation law and policy in Africa  257 on private individuals; however, the section is not a model of clarity. Under the Bill it is an offence to fail to comply with such measures as may be prescribed, which upon conviction may result in a fine of approximately US$28,100 and/or five years’ imprisonment.122 It also allows for directors’ liability for corporate offences.123 Unusually, the Ugandan Bill also has a dedicated provision that regulates carbon offsets. It first recognises various offset instruments, referred to as “climate change mechanisms”, namely compliance and voluntary ETSs, non-market and cooperative approaches in Article 6 of the Paris Agreement, as well as any other “mechanism” prescribed by regulation.124 The Bill requires the project proponent to obtain the consent of the Minister before benefitting from or participating in any of the above-listed climate change mechanisms, including the voluntary market.125 This unusual and restrictive provision unfortunately will likely have a profoundly stifling effect on the implementation of the market, particularly the voluntary carbon market, within the country. Section 8 also requires the Department to monitor the participation of project proponents to ensure conformity with the conditions of approval, and empowers the Minister to make regulations prescribing the process for approval, as well as ownership of emission reduction units and certified emission reductions.126 5.4

Public Sector: Mitigation Obligations

In relation to public entities, the Kenyan Act empowers the Council to impose “duties relating to climate change” on any public entity and all levels of government.127 In view of the fact that the Council is not yet operational, no such duties have been prescribed yet. In addition to the above, each State Department must incorporate climate change within their sectoral strategies and action plans and report on sectoral GHG emissions for the national inventory.128 It also requires them to designate a unit with adequate staff and financial resources to coordinate the implementation of the national Action Plan and related functions into relevant sectoral strategies.129 In Uganda, the Minister is empowered to prescribe a national base year, reference levels, and “targets for the reduction of [GHG] emissions” for each year for each “lead agency” within government.130 A lead agency is defined to include a ministry, department or local government responsible for implementing climate change actions under the Bill, i.e. the Bill does not identify the specific departments and ministries in a schedule. Lead agencies are also required to submit annual reports on the status of implementation of the standards, measures and performance levels for responding to climate change.131 If the reports disclose

124 125 126 127 128 129 130 131 122 123

Section 16(5) of the Ugandan Bill. Section 16(6) of the Ugandan Bill. Section 8(1) of the Ugandan Bill. Section 8(2) of the Ugandan Bill. Section 8(4) of the Ugandan Bill. Section 15(10) of the Kenyan Act. Section 15(5) of the Kenyan Act. Section 15(5) of the Kenyan Act. Section 10(1) of the Ugandan Bill. Section 26(1) of the Ugandan Bill.

258  Research handbook on climate change mitigation law “unsatisfactory performance” the Minister may require the relevant department to undertake an investigation and report further.132 5.5 Incentives The Kenyan Act aims to promote low carbon technologies, improve efficiency and reduce emissions intensity by facilitating approaches and the uptake of technologies that support low carbon and climate resilient development.133 Although relatively unspecific on this point, the Kenyan Act requires the Cabinet Secretary for Environment and Climate Change, in accordance with the Cabinet Secretary responsible for Finance, to grant incentives for climate mitigation (and adaptation) activities, including renewable energy and accredited training programmes.134 Although the incentive regulations were required to be published within a year after the promulgation of the Act, they have not yet been finalised.135 In a similar fashion, albeit less detailed, the Ugandan Bill also provides that the Minister, in consultation with the Minister of Finance, may provide incentives for mitigation actions, and requires the Minister to make regulations to this effect.136 5.6

Information and Reporting

The adequacy of a mitigation response is highly dependent on the accuracy of mitigation data within the country. The Paris Agreement also imposes a more expansive approach to information reporting by individual countries, who will need to gather the requisite data from across sectors in order to meet these commitments. For these reasons many recent framework laws or their regulations contain information and reporting requirements. Under the Kenyan Act, there is a multitude of reporting obligations. Included within these is a duty on each state department and national government public entity to report on sectoral GHG emissions for the national inventory.137 The Act also requires the Cabinet Secretary for Environment and Climate Change to make regulations (i) to guide the reporting and verification of climate change actions,138 and (ii) for the monitoring and reporting by private companies on their performance of their assigned climate change obligations under section 16, as well as the verification thereof.139 In Uganda, the Bill indirectly refers to the existence of a national inventory of emissions.140 It requires a determination of the volume of GHG emissions and removals every two years, in accordance with internationally acceptable reporting practices under the UNFCCC and the Paris Agreement.141 The Minister is also required to prescribe in regulations the stand-

Section 26(2) of the Ugandan Bill. Section 26(2) of the Kenyan Act. 134 Section 26(1) of the Kenyan Act. 135 Section 26(4) of the Kenyan Act and Wambua (above note 97). According to Dlamini et al. (above note 86), the delay in establishing the Council and ensuing litigation, was partially as a result of the lack of a clear framework on the resolution of disputes regarding the Council’s membership. 136 Section 21 of the Ugandan Bill. 137 Section 15(5) of the Kenyan Act. 138 Section 22 of the Kenyan Act. 139 Section 16(2) of the Kenyan Act. 140 Section 12(1) of the Ugandan Bill. 141 Section 9(2) of the Ugandan Bill. 132 133

Climate change mitigation law and policy in Africa  259 ard format, requirements and methodologies for the measurement of GHG emissions and removals.142 The Bill requires the Minister to prepare national communications under the Paris Agreement and UNFCCC, and also requires such reports to be laid before Parliament.143 Lastly it requires “all information and reports” submitted to the Department by lead agencies, individuals and private entities to be verified by registered verifiers. To this end it requires any person who intends to conduct verification to apply for registration, unless they are already an “internationally accredited” verifier.144 5.7 Financing As outlined earlier in this chapter, financing of climate change is a priority for many African countries, and the issue features prominently in African framework laws as well as sectoral legislation. It could be speculated that the structured, transparent, rule-based trust funds that are governed by statute, with clear objectives and spending and accounting requirements, and which are separated from the national fiscus, may become, in time, a more attractive means through which to provide international donor finance.145 Potentially they also afford national governments more flexibility on how to spend such finance instead of the more typical project-based approach to climate finance. The Kenyan Act establishes a dedicated climate change fund. The fund is administered by the Council which is mandated, amongst other things, to define eligibility criteria for the fund to finance climate change actions and enhance achievement of low carbon climate resilient development.146 The fund has a relatively wide remit, including the power to fund grants for climate change research and innovation; to provide grants and loans to business, industry, civil society, academia and other stakeholders for development of innovative climate change actions; finance, through grants and loans the implementation of adaptation and mitigation actions; and to provide funds for technical assistance to country governments. This fund is intended to operate alongside a strategy to identify sources of funding, the monitoring of expenditure and to avoid corruption in the national use of climate finance.147 As noted earlier, however, the Council has not yet met and this has delayed operationalisation of the Act, including the fund. Under the Ugandan Bill, the issue of a climate change fund was contentious during the stakeholder engagement process. Some commentators favoured the creation of an independent fund, similar to Kenya and Rwanda, whilst others preferred the use of the Finance Ministry in collaboration with the Ministry for Environment.148 The government elected to follow the latter approach, as the Finance Ministry had a policy that prohibited the creation of new funds, and because previous attempts to establish dedicated funds (such as the Tree Fund and Environmental Fund) were considered to be ineffective.149 Accordingly, under the Bill, the Minister responsible for Finance is obligated to provide for “climate change financing”, 144 145 146 147 148 149 142 143

Section 9(6) of the Ugandan Bill. Section 11(4) of the Ugandan Bill. Section 12 of the Ugandan Bill. Rumble, “Facilitating” (above note 64). Section 25(5) of the Kenyan Act. Section 25(9) of the Kenyan Act. Dlamini et al. (above note 86). Dlamini et al. (above note 86).

260  Research handbook on climate change mitigation law taking into account viable climate financing mechanisms at the national level and international climate financing mechanisms referred to in Article 9 of the Paris Agreement.150 The finance is for multiple purposes, including financing climate change actions and measures and grants and loans and incentives to individuals, corporations and local government for climate change research and innovation.151

6 CONCLUSION The African continent has been relatively prolific in the development of climate change policy and law. To date, countries have understandably focused on adaptation priorities, mindful of the high levels of vulnerability faced by most African countries and the continent’s relatively low emissions profile. That notwithstanding, of late, regional and national policies are increasingly emphasising the value and need for low carbon development, conditional on international financial and technical support. African countries have also demonstrated considerable support for the Paris Agreement and an appetite to enhance ambition in the second round of NDCs. The continent’s ability to achieve its mitigation aspirations, however, remains hampered by multiple constraints, including challenges encountered in the quantum of and access to climate finance, as well as capacity and technological constraints. For this reason, the latest iteration of NDCs continues to provide conditional and unconditional mitigation targets subject to the receipt of enhanced financial and other support. The development of the AU’s African Climate Change Strategy 2020–2030, once finalised, will be instrumental in shaping a continental vision towards mitigation and it will be interesting to see how issues such as climate finance, the global push towards national net-zero mitigation targets, carbon pricing and Article 6 of the Paris Agreement are dealt with in the final draft. In the interim, guidance from the regional blocs (so far including East, West and Southern Africa), including the relevant climate change policies and strategies developed for each, will be critical in shaping regional ambition and intent. It appears that such blocs will be particularly influential in the development of regional carbon pricing initiatives in the medium term. Legislative developments have also been relatively abundant. As this chapter has illustrated, there are a number of sector-specific laws across multiple countries. These include dedicated statutes and regulations on energy efficiency, energy generation and renewable energy, carbon pricing and forestry; and laws establishing dedicated climate change funds. A handful of countries have also either developed a framework climate change law or are in the process of developing one. In this chapter the mitigation-related provisions of the Kenyan Act and the Ugandan Bill, which was recently passed by Parliament, were considered. There are a number of similarities between these laws, including broad powers to impose climate change duties on private emitters, obligations on departments and ministries relating to mitigation, and dedicated provisions on financing climate change. In the case of Kenya, implementation has been hampered by litigation regarding the establishment of the Council and the ensuing delay in its constitution. This has had indirect delays on the implementation of various other provisions requiring the approval and/or direction of the Council. The Kenyan Section 20(1) of the Ugandan Bill. Section 20(2) of the Ugandan Bill.

150 151

Climate change mitigation law and policy in Africa  261 Act has also been criticised for its lack of specificity on the scope, content, and considerations underpinning the setting of GHG emission targets, the lack of a time frame for developing such targets (and ensuing delay in doing so); the unstipulated duties of private and public entities with regard to emission reduction; and a failure to have enacted the prescribed incentives for emission reduction activities.152 Similar criticisms could be levelled against the Ugandan Bill, at least insofar as there is a lack of specificity on the potential mitigation content of the proposed climate change obligations on the private sector. Notwithstanding criticisms against these laws, they are to be applauded for their detail and scope. They are ambitious in the extent and reach of their obligations across both the public and private sectors, and in their detailed requirements on monitoring and reporting, planning and climate change mainstreaming across government. Kenya’s Act, amongst other national and international developments, has also been catalytic in the development of other framework laws across the continent, and it has served as a model for a number of countries, including Uganda, in the process of developing a framework law.153 It is likely that these laws will cross-pollinate to other jurisdictions, duly modified to take local and national considerations into account.154 It will also be interesting to observe developments in other African countries as they grapple with the legal and policy-enabling environment to facilitate the implementation of national policies and NDCs. African countries will be hard pressed to do so whilst also responding to the dual impacts of the pandemic and related multiple debt crises; urgent adaptation imperatives; and within the broader framework of the international impetus for net-zero targets and negotiations around enabling factors to achieve these.

152 Wambua (above note 97). She further notes that whilst the Act anticipates that regulations will be made on these issues, and goes as far as setting out a timeline for the development of related incentives, so far the requisite targets from the Council have not been set and regulations have not been developed, a feature of the slippage common in environmental law. 153 See for example Dlamini (above note 86) and Rumble, “Facilitating” (above note 64). 154 Rumble, “Facilitating” (above note 64).

PART III OVERARCHING LEGAL TOOLS FOR CLIMATE CHANGE MITIGATION

11. Climate finance after Paris David Driesen and Cinnamon Carlarne

INTRODUCTION This chapter will examine carbon finance – the funding of greenhouse gas abatement and adaptation – in light of the Paris Agreement. The Paris Agreement hinged to a large extent on developed country pledges to enhance carbon finance, as the Conference of the Parties saw developed country efforts to help developing countries address global climate disruption as essential to making a just transition to a carbon free economy.1 We can fruitfully think of carbon finance in terms of two potential sources of capital, public and private. Often governments finance projects mitigating greenhouse gas emissions in their jurisdictions with public capital. But the global climate regime has always aimed to stimulate the creation and enhancement of international institutions funded by developed country governments to aid greenhouse gas abatement and adaptation in developing countries.2 The parties to the United Nations Framework Convention on Climate Change (UNFCCC) have viewed this from the beginning of the regime as a key component of climate equity, both because developed countries bear the primary responsibility for creating and perpetuating the climate crisis, and because developing countries often lack sufficient resources to play their needed part in abatement without outside assistance.3 Alternatively, private capital can finance greenhouse gas abatement projects. When scholars speak of climate finance, they often have in mind carbon trading’s creation of incentives for private investment in greenhouse gas abatement projects.4 The primary international example prior to the Paris Agreement involved the Clean Development Mechanism (see Chapter 9).5 An important distinction exists between private and public finance in terms of their impact on global climate disruption. Public finance of mitigation generally reduces greenhouse gas emissions, while private finance generally does not.6 The reason for this is fairly simple. When a project developer privately finances greenhouse gas abatement, s/he does so with the expectation that the abatement project will produce a credit of some kind that s/he can sell to recoup the expenditure with some profit. The purchaser of the credit has an interest in buying it because possession of the credit justifies not making an otherwise required emission reduction. Forgone emission reductions in one place pay for the abatement project generating carbon 1 Cinnamon P. Carlarne and J. D. Colavecchio, “Balancing Equity and Effectiveness: The Paris Agreement and the Future of International Climate Change Law” (2019) 27 N.Y.U. Envtl. L.J. 107, 143–45. 2 See infra, section 2 (discussing the evolution of climate finance mechanisms under the UNFCCC). 3 United Nations Framework Convention on Climate Change, Art. 2, Art. 4(3), May 9, 1992, S. Treaty Doc. No. 102-38, 1771 U.N.T.S. 107. 4 David M. Driesen and David Popp, “Meaningful Technology Transfer for Climate Disruption” (2010) 64 J. Int’l Aff. 1, 1–2. 5 Ibid. 6 Ibid. at 3.

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264  Research handbook on climate change mitigation law credits in another. The privately financed project does not increase net emission reductions; it lowers the cost of abatement. By contrast, when a government finances abatement without claiming a credit it may generate additional emission reductions, not just a lowering of the cost of already planned abatement. Recent developments, however, reveal some potential for private finance to spur additional abatement. Thanks in part to public finance of carbon abatement before Paris, the cost of renewable energy has drastically decreased.7 So, we now see the emergence of private green bonds that may add emission reductions, not just limit the cost of government-required abatement.8 We begin this chapter’s treatment of carbon finance with an account of how the Paris Agreement reshaped the international institutional structure aiming to stimulate climate finance. Because the following chapter focuses on carbon trading, we mostly emphasize the creation of the Green Climate Fund and only briefly address the evolution of the flexibility mechanisms (international trading programs). We will then discuss both the history and the future of green finance’s contribution to greenhouse gas abatement. We begin with some examples of common subsidies that have long lowered market barriers to greenhouse gas abatement, such as publicly financed transportation and funding of more energy efficient buildings. These subsidies have helped lower the cost of renewable energy and reduced our energy footprint, while contributing to environmental justice. We continue with a discussion of the use of pollution taxes and auctioning of emission allowances to generate funds to enhance and expand public finance of carbon abatement. We then discuss the recent emergence of a substantial market in green bonds. And we close by discussing the implementation of the Green Climate Fund. Throughout we evaluate carbon finance’s potential to contribute to environmental justice and the ambitious decarbonization goal suggested by the Paris Agreement.9

1

CLIMATE FINANCE BEFORE AND AFTER THE PARIS AGREEMENT

Despite more than three decades of efforts, both substantive commitments to climate mitigation and adaptation and the financing of these efforts remain woefully inadequate. Moreover, the ongoing global pandemic is putting pressure both on political commitments to and the financing of climate efforts due to strains on governmental resources and a widespread economic downturn. As Paul Rose suggests “the economic impact from COVID-19 will reverberate in the economy for years to come,”10 with far-reaching impacts across governmental programs and services. Moreover, despite the fact that COVID-19-induced changes to mobility and daily life may have brought about a temporary decline in emissions,11 even with the Al Gore, “Where I Find Hope” N.Y. Times (December 13, 2020). See, e.g., Alex Ross, “Green Bonds: Securities Regulation Towards a Low-Carbon Economy,” (2018) 24 NZBLQ 259. 9 John C. Dernbach, “Legal Pathways to Deep Decarbonization: Lessons from California and Germany” (2017) 82 Brook. L. Rev. 825. 10 Paul Rose, “Towards a National Resilience Fund” (2021) SSRN Electronic Journal 10.2139/ ssrn.3780035. 11 Corinne Le Quéré et al., “Temporary Reduction in Daily Global CO2 Emissions During the COVID-19 Forced Confinement,” (2020) 10 Nature Climate Change 647–53, https://​www​.nature​.com/​ articles/​s41558​-020​-0797​-x accessed 13 November 2020. 7 8

Climate finance after Paris  265 lockdown, carbon dioxide levels in the first months of 2020 were higher than 2019.12 As the pandemic wanes and the global economy increasingly picks up pace, “unless there is a clear focus to promote equity, environmental health, around a just transition to a green economy,” emissions will rise.13 The intersection of crises – climate change, inequality, and COVID-19 – compounds the challenges of responding to climate change, even as it reveals deep and persistent vulnerabilities and inequalities that make rapid response all the more important. Consequently, even with all of the challenges the pandemic has brought, this is a critical time to maintain momentum on climate financing. Climate finance is not a new field. In fact, it is now entering its third decade and its forms are becoming increasingly varied and sophisticated. As Alexander Thompson notes, “from the earliest days of the global climate change regime, the question of how to finance efforts to address the problem” has played a prominent role “in policy debates and international negotiations.”14 The Climate Policy Initiative estimates that, in 2019, “annual [financial] flows rose to USD 579 billion, on average, over the two-year period of 2017/2018, representing a USD 116 billion (25%) increase from 2015/2016. The rise reflects steady increases in financing across nearly all types of investors.”15 Similarly, the Climate Bonds Initiative, which tracks bond issuances labelled as “green” or “climate” bonds, calculates a total of US$257.5 billion issued in 2019, with US$192.9 billion issued in 2020, at the time of writing, with this estimated to increase to US$350 billion by the end of the year.16 Despite this steady increase, the gap between climate finance needs and climate finance flows remains significant. For example, even as flows of climate financing reached record highs in 2019, the World Bank suggested that “the financing required for an orderly transition to a low carbon, resilient global economy must be counted in the trillions, not billions.”17 Similarly, focusing more narrowly on adaptation finance, a 2016 report produced on behalf of the United Nations Environment Programme (UNEP) cautioned that the costs of adaptation are likely to be two-to-three times higher than current global estimates by 2030, and potentially four-to-five times higher by 2050. Previous global estimates of the costs of adaptation in developing countries have been placed at between US$70 billion and US$100 billion a year for the period 2010–2050. However, the national and sector literature surveyed in this report indicates that the costs of adaptation could range from US$140 billion to US$300 billion by 2030, and between US$280 billion and US$500 billion by 2050.18

World Health Organization, “Q&A: Climate change and COVID-19” (April 22, 2020), https://​ www​.who​.int/​news​-room/​q​-a​-detail/​q​-a​-on​-climate​-change​-and​-covid​-19 accessed 13 November 2020. 13 Ibid. 14 Alexander Thompson, “The Global Regime for Climate Finance: Political and Legal Challenges” in Cinnamon P. Carlarne, Kevin R. Gray and Richard Tarasofsky (eds), The Oxford Handbook of International Climate Change Law (Oxford University Press 2016). 15 “Global Landscape of Climate Finance 2019” Climate Policy Initiative Report (October 2019), https:// ​ w ww ​ . cli ​ m atepolicy ​ i nitiative ​ . org/ ​ p ublication/ ​ g lobal ​ - landscape ​ - of ​ - climate ​ - finance ​ - 2019/​ accessed 11 November 2020. 16 The Climate Bond Initiative, https://​www​.climatebonds​.net accessed 11 November 2020. 17 The World Bank, “Climate Finance” https://​www​.worldbank​.org/​en/​topic/​climatefinance accessed 11 November 2020. 18 Daniel Puig et al., “The Adaptation Finance Gap Report 2016. United Nations Environment Programme” (2016) https://​unepdtu​.org/​publications/​the​-adaptation​-finance​-gap​-report/​ accessed 11 November 2020. 12

266  Research handbook on climate change mitigation law Moreover, in order to meet the Paris Agreement’s target of limiting warming to 1.5 °C, the IPCC estimates that we would need to see an “upscaling of supply-side energy system investments between now and mid-century, reaching levels of between 1.6–3.8 trillion USD … globally with an average of about 3.5 trillion USD … over 2016–2050.”19 Thus, as Rose suggests, “Climate finance is thus operating at less than 20% of what is required to meet the Paris Agreement’s challenge.”20 Even as both estimates of climate financing needs and climate financing flows have increased, the parties to the UNFCCC have sought ways to prioritize climate finance by centering it at the heart of international climate agreements and climate commitments. Again, this is not a new phenomenon. Since the inception of international climate law with the adoption of the UNFCCC in 1992, the parties to the Agreement have sought to create mechanisms for climate finance. Historically, these mechanisms have been fragmented and, frequently, ill-performing.21 Under the UNFCCC alone, a handful of mechanisms exist or are used to finance mitigation and adaptation measures, including the Global Environmental Facility, the Adaptation Fund, the Special Climate Change Fund, the Least Developed Countries Fund, and the Green Climate Fund. As Thompson describes the terrain of UNFCCC climate finance: Only one organization, the [Global Environmental Facility], was originally designated in the FCCC to operate its financial mechanism. The [Global Environmental Facility] has since been joined by the GCF and they compete with several additional multilateral organizations and funds involved in channeling North-South finance. The result is a complicated tapestry of governance institutions.22

As Thompson describes, the Global Environmental Facility was the original funding entity for the UNFCCC.23 However, because of the Global Environmental Facility’s institutional linkages to the World Bank, with its complicated donor-driven history, many developing countries opposed relying on the Global Environmental Facility as the primary climate finance

19 Joeri Rogelj et al., “Mitigation Pathways Compatible with 1.5 °C in the Context of Sustainable Development” in Intergovernmental Panel on Climate Change, Global Warming of 1.5 ºC (2018) https://​ www​.ipcc​.ch/​sr15/​ accessed 11 November 2020. 20 Paul Rose, “Debt for Climate: Green Bonds and Other Green Financial Instruments” in Michael Mehling and Harro van Asselt (eds), Research Handbook on Climate Finance and Investment Law (Edward Elgar Publishing forthcoming 2023). 21 Global Environmental Facility, “Progress Report on the Least Developed Countries Fund and the Special Climate Change Fund” (December 11, 2018) GEF/LDCF.SCCF.25/03, https://​www​.thegef​.org/​ sites/​default/​files/​council​-meeting​-documents/​EN​_GEF​.LDCF​_​.SCCF​_​.25​.03​_Progress​_Report​.pdf accessed 15 December 2020; Global Environmental Facility, “Progress Report on the Least Developed Countries Fund and the Special Climate Change Fund” (Oct. 8, 2014) GEF/LDCF.SCCF.17/03 iii https://​www​.thegef​.org/​sites/​default/​files/​council​-meeting​-documents/​GEF​-LDCF​.SCCF​_​.17​-03​%2C​ _Progress​_Report​_on​_the​_LDCF​_and​_the​_SCCF​%2C​_2014​-10​-08​_4​.pdf accessed 15 December 2020 (e.g., noting that “the demand for LDCF resources considerably exceeds the funds available for new approvals”). 22 Thompson (n. 14) at 13. 23 Nicholas Van Praag, “The Global Environmental Facility: Instrument Established” (1994) 33 I.L.M. 1273.

Climate finance after Paris  267 mechanism.24 Partly in response to these concerns, between 2000 and 2001, the parties to the UNFCCC adopted decisions creating the Adaptation Fund, the Special Climate Change Fund, and the Least Developed Countries Fund. All three of these funds were created by the parties to the Kyoto Protocol in 2001, with the goal of providing additional assistance to developing countries for adaptation, technology transfer, and economic diversification.25 The Adaptation Fund was designed to fill a funding gap for developing country parties that are particularly vulnerable to the adverse effects of climate change. The Fund is used to finance adaptation projects and programs in developing countries. Unlike the Special Climate Change Fund and the Least Developed Country Fund, which rely on voluntary contributions, the Adaptation Fund is financed through a percentage levy on all Certified Emission Reduction Units produced by Clean Development Mechanism projects.26 Moreover, unlike the Special Climate Change Fund and the Least Developed Country Fund, which are both operated by the Global Environmental Facility, the Adaptation Fund is overseen and managed by the Adaptation Fund Board, which was created by the parties to the Kyoto Protocol in 2007 and is fully accountable to the parties of the Protocol.27 The Least Developed Countries Fund is similarly designed to support developing countries, but focusing more narrowly on assisting the 49 Least Developed Country parties28 in implementing the least developed country work program, including preparing and implementing national adaptation programs of action. Similarly, the Special Climate Change Fund is intended to finance adaptation, technology transfer, and capacity building projects in developing countries and is designed to implement the Adaptation Fund and the Least Developed Country Fund. Since their creation, however, the demand for resources from each of these funds has far exceeded both available funds and approvals, even as funds have increased and the operation of the funds has become more efficient.29 These funds, which seek to direct financing towards some of the highest need adaptation projects and to the highest risk but most overlooked regions, remain marginal entities within the increasingly complex and crowded global climate finance arena. Each of these mechanisms, as well as the Green Climate Fund, possess different missions, leadership, and operating policies. Consequently, they intersect and compete with one another to receive and funnel North–South finance, creating a fragmented and ill-coordinated UNFCCC climate finance regime. Further complicating the terrain of climate finance is the fact that the UNFCCC mechanisms exist alongside a growing number of other public and

Thompson (n. 14) at 13, noting that the choice of the [Global Environmental Facility] to manage climate financing was controversial because it was tied institutionally to the World Bank and was viewed by the developing world as excessively controlled by donor countries. … By the late 1990s there was growing discontent among developing countries with the state of climate finance and they began pushing for alternatives that served their priorities and offered them more control. 25 Decision 1/CMP.3, “Adaptation Fund,” FCCC/KP/CMP/2007/9/Add.1 https://​unfccc​.int/​resource/​ docs/​2007/​cmp3/​eng/​09a01​.pdf​#page​=​3 accessed 11 November 2020. 26 United Nations Climate Change, “Adaptation Fund,” https://​unfccc​.int/​Adaptation​-Fund accessed 11 November 2020. 27 Decision 1/CMP.3, “Adaptation Fund” (2007) FCCC/KP/CMP/2007/9/Add.1. The Global Environmental Facility does, however, provide secretariat services for the Fund. 28 UNFCCC, “Least Developed Countries under the UNFCCC,” (2009) https://​unfccc​.int/​resource/​ docs/​publications/​ldc​_brochure2009​.pdf accessed 11 November 2020. 29 Global Environmental Facility (n. 27). 24

268  Research handbook on climate change mitigation law private financing institutions, ranging from international bodies such as the IMF and World Bank, to regional development banks, to individual state aid programs, to non-profits. The general field of climate finance, therefore, is complex, fragmented, and increasingly crowded. This fragmentation allows experimentation and diversification, but it may inhibit iterative learning and create both inefficiencies and inequities. Our understanding of both patterns of climate finance, and climate finance needs, is still nascent, but is evolving rapidly. Clearly, both mitigation and adaptation financing are on the up swing, but there is both a need for significant further increases in financing to meet estimated needs, as well as a need to better map the field in order to understand where money is coming from, where it is going, what kinds of projects it is supporting, and what kinds of successes and failures it is producing. Recognizing both the centrality of climate financing and the shortcomings of the current system, in the 2009 Copenhagen Accord, the parties to the UNFCCC proposed the creation of a new climate financing mechanism, the Green Climate Fund. With the Green Climate Fund, the parties sought to create a new institution that would serve as “an operating entity of the financial mechanism of the Convention to support projects, programs, policies and other activities in developing countries related to mitigation including REDD-plus, adaptation, capacity-building, technology development and transfer.”30 Moreover, at the time of its proposal, developed countries committed to mobilizing jointly US$100 billion a year in new and additional public and private climate finance by 2020,31 a significant portion of which should flow through the newly proposed Green Climate Fund. In addition to proposing a new stand-alone UNFCCC-specific climate fund, the proposal for the Green Climate Fund reflected the shifting priorities of the parties to the treaty in its emphasis on financing mitigation and adaptation activities equally. In the 2010 Cancun Agreements,32 the parties to the UNFCCC formally established the Green Climate Fund as an operational entity of the financial mechanism of the Convention and laid out the key governance and operational framework for the Fund. Subsequently, in the 2015 Paris Agreement, the parties committed to “Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development,”33 reiterating existing financial obligations of developed country parties and

U.N. Framework Convention on Climate Change, “Copenhagen Accord” 8, U.N. Doc. FCCC/ CP/2009/L.7 (December 18, 2009), https://​unfccc​.int/​resource/​docs/​2009/​cop15/​eng/​11a01​.pdf accessed 11 November 2020. 31 Ibid. 8, noting that “Scaled up, new and additional, predictable and adequate funding as well as improved access shall be provided to developing countries, in accordance with the relevant provisions of the Convention,” and that In the context of meaningful mitigation actions and transparency on implementation, developed countries commit to a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries. This funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance. 32 United Nations Framework Convention on Climate Change, Ad Hoc Working Group on Long-Term Cooperative Action, Thirteenth Session, Cancun, Mexico, November 29– December 10, 2010, “Outcome of the Work of the Ad Hoc Working Group on Long-Term Cooperative Action Under the Convention” UN Doc. FCCC/AWGLCA/2010/L.7 (December 10, 2010), (hereinafter LCA Report), https://​unfccc​.int/​resource/​docs/​2010/​awglca13/​eng/​l07​.pdf accessed 11 November 2020. 33 UNFCCC, “Report of the Conference of the Parties on Its Twenty-First Session,” U.N. Doc. FCCC/CP/2015/10/Add.1, Art. 2 (January 29, 2016) (hereinafter Paris Agreement). 30

Climate finance after Paris  269 the goal of balancing adaptation and mitigation efforts,34 and created a series of new climate finance reporting requirements. The Paris Agreement renews and deepens commitments to climate finance. As Bodansky suggests, however, the Agreement did not create “any new substantive obligations. Instead, the only new substantive norm in the Paris Agreement is soft, recommending that the mobilization of climate finance ‘should represent a progression beyond previous efforts.’”35 The climate finance components of the Paris Agreement, like the Agreement itself, are progressive and forward looking, but they are neither novel nor, arguably, sufficiently ambitious. Even if developed country parties meet the mobilization targets set out in the Cancun Agreements and advanced by the Paris Agreements, this financing will fall short of anticipated needs. In this respect, it resembles the substantive policy commitments the financing supports. Even if parties completely fulfilled the commitments they make in their nationally determined commitments, it is unlikely that those pledges would hold warming below 2 °C, much less achieve the 1.5 °C target36 that the parties agreed to as the appropriate goal for global mitigation efforts. Furthermore, despite increasingly healthy flows of money – albeit still well below called-for levels – Thompson highlights an ongoing challenge in climate finance, which is that “much of this total is not ‘new and additional’ and, absent a precise definition of what ‘counts’ as climate finance under the FCCC, it is not a clear indicator of progress toward the goal of $100 billion.”37 That is, it is extremely difficult to determine how much of present levels of what states are calling “climate finance” was or would have been provided to developing countries under other labels or other existing development and aid programs even absent calls for climate financing. And, of course, recent political shifts combined with the ongoing pandemic threaten to derail the improved, but still anemic climate finance commitments from governmental actors. For example, as Sachs points out:

Ibid. Art. 9. Daniel Bodansky, “The Paris Climate Change Agreement: A New Hope?” (2016) 110 Am. J. Int’l L. 288. 36 In fact, one estimate suggests that, if parties fulfilled all of the commitments they have made, this would “limit warming to about 2.8 °C above pre-industrial levels, or in probabilistic terms, likely limit warming below 3.1 °C.” Climate Action Tracker, “Effect of Current Pledges and Policies on Global Temperature” http://​ climateactiontracker​ .org/​ global​ .html accessed 11 November 2020 (stating that: “unconditional pledges or promises that governments have made, including NDCs as of 1 November 2016, would limit warming to about 2.8 °C above pre-industrial levels, or in probabilistic terms, likely limit warming below 3.1 °C.”). See also, Report of the Conference of the Parties on its twenty-first session, held in Paris from 30 November to 13 December 2015 II(17), UNFCCC, FCCC/CP/2015/10/ Add.1 (January 29, 2016). In key part the decision Notes with concern that the estimated aggregate greenhouse gas emission levels in 2025 and 2030 resulting from the intended nationally determined contributions do not fall within least-cost 2 °C scenarios but rather lead to a projected level of 55 gigatonnes in 2030, and also notes that much greater emission reduction efforts will be required than those associated with the intended nationally determined contributions in order to hold the increase in the global average temperature to below 2 °C above pre-industrial levels by reducing emissions to 40 gigatonnes or to 1.5 °C above pre-industrial levels by reducing to a level to be identified in the special report referred to in paragraph 21 below. 37 Thompson (n. 14) at 154. 34 35

270  Research handbook on climate change mitigation law Developed nation pledges to the Green Climate Fund, the leading source of governmental climate assistance to the developing world, have totaled $10.3 billion since 2010, but governments have transferred only about $3.5 billion to the Fund. In 2017, President Trump terminated any new U.S. contributions to the Fund. On the verge of the new decade, it seems unlikely that the developed world will raise and distribute $100 billion annually through the 2020s to finance climate change mitigation and adaptation in the developing world.38

Even if flows of funding increased to the desired levels of US$100 billion per year and, even if this funding was “new and additional,” existing estimates suggest that much more is needed.39 As one recent report suggests, “there is a need for a tectonic shift beyond ‘climate finance as usual.’ Annual investment must increase many times over, and rapidly, to achieve globally agreed climate goals and initiate a truly systemic transition across global, regional, and national economies.”40 Five years out from the adoption of the Paris Climate Agreement, progress is visible. Countries worldwide are expanding climate policies and market signals “are starting to reflect the urgency both of increasing finance for mitigation of and adaptation to the effects of climate change, and of making all financial flows consistent with a pathway toward low-carbon and climate-resilient development.”41 However, more is needed – more efforts to control emissions, more efforts to facilitate adaptation, and more flows of finance to fund all of these efforts.

2

SUBSIDIES AND QUASI-SUBSIDIES

While we may not be aware of it, some forms of carbon finance have been with us a long time. Governments have paid for various amenities that effectively reduce carbon emissions, usually by paying for energy efficiency improvements. In many cases, governments put these programs in place to serve people’s basic needs for transportation and habitation, and they often ameliorate various injustices. They often came on the scene before governments began to address global climate disruption. Still, these programs produce greenhouse gas abatement and their expansion can help countries meet the ambitious goals established in the Paris Agreement. Perhaps the most obvious example involves government funding of mass transit, which frees people from complete reliance on private vehicles and reduces net carbon emissions from transport. Governments also commonly subsidize low-income weatherization (weath38 Noah M. Sachs, “The Paris Agreement in the 2020s: Breakdown or Breakup?” (2019) 46 Ecology L.Q. 865, 898. 39 E.g. Lean Alfred Santos, “For Jeffrey Sachs, $100B Climate Finance Target has 2 Major Problems,” https://​www​.devex​.com/​news/​for​-jeffrey​-sachs​-100b​-climate​-finance​-target​-has​-2​-major​ -problems​-86658 accessed 11 November 2020 (quoting Sachs as critiquing the $100 billion pledge thusly: “The $100 billion [commitment] cuts in two ways. On the one hand, the countries have not been honest at all in mobilizing that funding. Second, had they been honest, we would see that it’s much too small to be decisive.” Ibid.). 40 “Global Landscape of Climate Finance 2019” (n. 15): [E]stimates of the investment required to achieve the low-carbon transition range from USD 1.6 trillion to USD 3.8 trillion annually between 2016 and 2050, for supply-side energy system investments alone (IPCC 2018), while the Global Commission on Adaptation (GCA 2019) estimates adaptation costs of USD 180 billion annually from 2020 to 2030. 41 Ibid.

Climate finance after Paris  271 erproofing) projects, which enable people of modest means to afford heat in winter and air conditioning in the summer, by making homes more energy efficient. Both mass transit and weatherization serve justice by helping people of modest means. Governments around the world also more broadly subsidize the improvement of the energy efficiency of existing buildings, partly through demand-side management programs for electric utilities. Prior to the 1970s, governments commonly built new power plants as the means of matching supply and demand. They increased the supply of energy to match estimates of future demand, often by issuing bonds and passing the costs on to ratepayers. Beginning late in the 1970s, governments and utility managers realized that instead of increasing supply to meet demand, they could more efficiently pay to reduce demand for more electricity and more power by funding energy efficiency improvements in buildings. According, utility commissions began to require least-cost planning (sometimes called demand-side management), where electric utilities had obligations to use the least-cost method of reconciling supply and demand, which usually meant funding energy efficiency improvement rather than building new power plants.42 This approach reduced conventional pollution and these programs also reduce carbon dioxide emissions. These programs typically pass the cost of retrofitting buildings to make them more energy efficient on to ratepayers, the same mechanism used to finance new sources of power. Governments also commonly subsidize energy production, including renewable energy, either directly or through tax credits (or both). (Fossil fuel subsidies, however, tend to dwarf renewable energy subsidies.) One of the more intriguing and successful finance mechanisms, although not technically a subsidy under EU law, involves feed-in tariffs (see Chapter 14).43 In these programs, governments offer a fixed-rate tariff for production of renewable energy, which can be fairly generous. This mechanism provides powerful incentives to increase the use and reduce the cost of renewable energy and has contributed to massive increases in renewable energy use in some countries. Some countries pay for these programs by passing the cost on to ratepayers, others through taxation. Because the programs tend to reduce costs over time, governments have to reduce the tariff downward to avoid excess profits (at public expense) while taking care to keep sufficiently robust and stable incentives in place to encourage ongoing investment. Large relatively wealthy countries with extremely low utility sector carbon emissions rely heavily on public subsidies for either hydroelectric power (as in Brazil) or nuclear power (in France).44 France currently plans to reduce reliance on nuclear power but continues to heavily subsidize new reactors as it shuts down some aging facilities. Now that renewable energy prices have come down substantially, a key remaining challenge for carbon finance involves paying for the electricity grid improvements needed to use many widely dispersed sources of intermittent energy effectively to deliver electricity – such as new grid connections and smart metering. Utilities typically fund grid improvements through rate increases. We also may need public financial support for developing advanced battery

42 Ralph C. Cavanagh, “Least-Cost Planning Imperatives for Electric Utilities and Their Regulators” (1986) 10 Harv. Envtl. L. Rev. 299. 43 Marc Ringel, “Fostering the Use of Renewable Energies in the European Union: The Race Between Feed-in Tariffs and Green Certificates” (2006) 31 Renewable Energy 1. 44 David M. Driesen, “Toward a Populist Political Economy of Climate Disruption” (2019) 49 Envtl. L. 379, 393.

272  Research handbook on climate change mitigation law technologies, which make it possible to store excess energy when supply exceeds demand and release it when needed. On the transportation side, introduction of electric vehicles has begun to bring down emissions in the transport sector.45 While this has been accomplished through regulation, it requires financial support for the infrastructure needed by electric vehicles. California, for example, has a program called CalStart, which encourages the creation of charging stations for electric vehicles and other projects to encourage electric vehicles and other clean transportation solutions.46

3

CARBON TAXES AND ALLOWANCES REVENUE

Because the next chapter in this book addresses carbon trading, this chapter will focus primarily on carbon taxes and the use of revenue raised through auctioning of allowances in trading programs. Other aspects of trading will receive attention in the next chapter. 3.1

Carbon Taxes

A key question for climate finance, of course, involves how to scale it up to adequately finance rapid decarbonization without creating injustice. This question becomes especially acute for measures that put a price on carbon, like a carbon tax, owing to their potentially regressive effects.47 Carbon taxes require payment of a fixed price per unit of carbon released to the environment. They provide a cost-effective means of stimulating greenhouse gas emission reductions, because emitters with abatement costs exceeding the tax rate usually pay the tax, while those with abatement costs less than the tax rate will likely choose to abate emissions. While simple in theory, they often prove complex in practice. Most countries that use carbon taxes provide exemptions for energy-intensive industries, which undermines their main purpose.48 Commonly countries do not tax carbon emissions uniformly, often varying the tax to reduce or increase burdens in particular sectors. Indeed, most of the taxes commonly counted as putting a price on carbon are not technically carbon taxes at all, because they are not based on the amount of carbon dioxide actually emitted. Instead, they tax particular substances or activities associated with carbon emissions. A gasoline tax provides perhaps the most common example. While frequently characterized as a climate finance mechanism, the technical correctness of this characterization depends on how the government uses the revenue collected from the tax. If the government uses the tax revenue to finance carbon abatement (for example, by subsidiz-

45 For a more in-depth discussion of climate change mitigation law and policy in the transport sector, please refer to Chapter 15 of this book. 46 See Calstart​.org/​cars/​; Amanda Myers, “How States Can Overcome the Looming Electric Vehicle Charging Infrastructure Gap” Forbes (April 3, 2019) (explaining that public utility commissions have helped finance charging stations in California and other states). 47 Cf. Lawrence H. Goulder et al., “Impacts of a Carbon Tax Across US Household Income Groups: What Are the Equity–Efficiency Tradeoffs” (2019) 175 J. Pub. Econ. 44, 45. 48 Chris Bataille et al., “A Review of Technology and Policy Deep Carbonization Pathway Options for Making Energy-Intensive Industry Production Consistent with the Paris Agreement” (2018) 187 J. Cleaner Production 960, 962.

Climate finance after Paris  273 ing renewable energy or energy efficiency improvements), then it finances mitigation. If not, the government incentivizes mitigation, but does not finance it. Because low-income households often devote a large percentage of their budgets to energy costs, carbon taxes can financially harm low-income households.49 Concerns about costs made visible through taxing carbon have led to protests in France. But carbon taxes around the world are not high enough to produce enough reductions in greenhouse gas emissions to meet the Paris Agreement’s goals. Making them high enough may only be possible if governments can build in design features that make them fair enough for society to accept them. Because of regressivity concerns, policy experts recognize that carbon taxes should include some sort of mechanisms for ameliorating their impacts on low-income households, for example through targeted rebates. Some economists favor giving rebates to everybody, as a way of building political support for continuing carbon taxes. Economists frequently advocate making carbon taxes revenue neutral by financing the reduction of other taxes, for example, taxes on wages. Some advocates claim that this revenue neutral approach can yield a “double dividend” by reducing carbon dioxide while increasing overall economic efficiency.50 While economists’ assumption that people vote according to their economic interests points toward rebates and revenue neutrality, political science seems to point the other way. Opinion polls suggest that voters respond more positively to carbon taxes when authorities promise to use the proceeds to fund energy efficiency and renewable energy than when they promise rebates.51 One of this chapter’s authors has argued that a proposal to use carbon investments to finance creation of green infrastructure can help support populist politics favoring more ambitious and just climate policies, by generating high-wage jobs.52 3.2

Allowance Revenue from Auctioned Allowances

The first phases of the EU’s Emissions Trading Scheme gave away emissions allowances for free, following the model provided by the United States acid rain program. This generated windfall profits for electric utilities and demands for change. Learning from the EU experience, the northeastern states in the United States auctioned off allowances that electric utilities governed by their Regional Greenhouse Gas Initiative (RGGI) needed to purchase in order to comply with the RGGI’s emissions trading program. The EU then revised its approach to auction off increasing percentages of allowances and so did California, broadly following the RGGI model. Thus, current practice with respect to carbon trading programs usually generates revenue, just as carbon taxes do.53 Authorities running carbon trading programs accordingly face the same questions and opportunities that governments face when they tax carbon regarding how to spend the money. The states participating in RGGI devoted the revenue primarily to funding renewable energy

49 Elenas Aydos, Sven Rudolph, and Achim Lerch, “‘I Know What I Must Do. It’s Just …!’ Justice in Emissions Trading Design and Recent Reforms in New Zealand” (2020) 2 CCLR 118, 120. 50 Dale W. Jorgenson et al., Double Dividend: Environmental Taxes and Fiscal Reform in the United States (MIT Press 2013). 51 Natalie B. Fitzpatrick et al., “American Opinions on Carbon Taxes and Cap-and-Trade: 10 Years of Carbon Pricing in the NSEE” (June 2018) 35 Issues in Energy and Environmental Policy 8. 52 Driesen (n. 44). 53 Cf. Aydos et al. (n. 49), at 124. See also Chapter 12 of this volume.

274  Research handbook on climate change mitigation law and energy efficiency improvements.54 Its member states have also rebated revenue to electricity consumers, sometimes to all and sometimes focusing on low-income consumers. As it happened, RGGI over-allocated allowances in its first phases, so that the revenue expenditures may have generated more benefits than the trading programs. California’s “greenhouse gas reduction fund,” derived almost entirely from auction revenue, funds a large variety of environmental projects, but also supports economic development in low-income communities, and rebates to utility customers.55 More than half of the investment flows to low-income, minority, and disadvantaged communities under a state law requiring significant investment in “priority populations.”56 EU ETS Directive of 2003 requires that member states invest at least 50% of the revenue they gain from allowance sales in the EU ETS to climate mitigation, but in practice the member states usually invest about 80% of their revenue in carbon abatement projects.57 In 2017 the member states invested about 41% of allowance revenue in energy efficiency projects and about 32% in renewable energy.58 The EU addresses equity through preferential treatment of low-income countries in the distribution of allowance revenue. Pricing pollution while spending the revenue generated thereby on financing cleaner technology can powerfully incentivize innovation and ambitious change, as Mikael Skou Anderson pointed out decades ago.59 Because price differentials drive innovation and displacement of dirty technologies, doubling the price differential from that implied by pricing carbon alone maximizes incentives for innovation. Some governments have put this principle to work with “feebate” schemes. Under these schemes, those purchasing relatively dirty vehicles pay a fee, which finances subsidies for cleaner vehicles (like electric cars). France’s Malus Bonus program provides a good example of such a program, and Sweden, Singapore and some other governments have implemented similar programs.60 3.3

Combining Revenue Streams

When governments adopt economic stimulus packages, they sometimes finance greenhouse gas abatement and combine revenue streams to accomplish that. The European Union has earmarked 30% of its US$880 billion plan for recovering from COVID-19’s economic impacts for climate measures.61 Some of this money will fund a Green Deal, including a “Just Transition Mechanism,” which will not only fund cleaner energy and energy efficiency, but 54 Regional Greenhouse Gas Initiative, Inc., “The Investment of RGGI Proceeds in 2018” (RGGI 2020) at 3 (showing 56% of cumulative investment in energy efficiency, 14% in “clean and renewable energy,” and 9% in greenhouse gas abatement). 55 See California Climate Investments, “Annual Report” (2020). 56 See ibid. at viii. 57 Catherine Weise et al., “The Strategic Use of Auction Revenue to Foster Energy Efficiency: Status Quo and Potential within the EU Emissions Trading System” (2020) 13 Energy Efficiency 1677, 1681–82. 58 Ibid. at 1683. 59 Mikael Skou Andersen, Governance by Green Taxes: Making Pollution Pay (Manchester University Press 1994). 60 John German and Dan Meszler, “Feebate Review and Assessment, Best Practices for Feebate Program Design and Implementation” (International Council on Clean Transportation 2010) 6, https://​ www​.globalfueleconomy​.org/​transport/​gfei/​autotool/​approaches/​economic​_instruments/​ICCT​_feebate​ _may10​.pdf accessed 6 October 2020. 61 “Power in the 21st Century” The Economist (London, September 19–25, 2020) 13.

Climate finance after Paris  275 also programs to aid workers negatively impacted by the contemplated move away from fossil fuels.62 President Joe Biden has proposed spending US$2 trillion to decarbonize America.63 His plan includes funding electricity grid updates, public transportation, electric vehicle charging stations, and clean energy. In both cases, the plans aim to address economic hardship and injustice, as well as climate disruption. The European Parliament has sought to rely not only on borrowing to fund its COVID-19 recovery plan, but also on revenue from the EU Emissions Trading Scheme, a carbon border tax, and other sources.64 Joe Biden, on the other hand, plans to fund his “climate and environmental justice proposal” by increasing taxes and ending fossil fuel subsidies. Meeting the Paris challenge likely requires scaling up carbon finance in many ways. Governments can fund these efforts in a variety of ways but must take justice concerns into account to make their program successful and sustainable.

4

GREEN BONDS

In a landscape of scarce public resources, finding new and transformative ways to mobilize flows of public and private capital is essential. One method for doing so is green bonds. A green bond is a bond used for environmental purposes, such as funding climate mitigation or renewable energy.65 In brief, “green bonds are public sector, private sector, or multilateral institution debt issuances used to finance climate-friendly or other environmental projects,” including “renewable energy and energy efficiency projects; clean transportation projects, such as light rail facilities; construction of energy efficient buildings; reforestation, and other investments.”66 Green bonds are a relatively new climate finance instrument, but have quickly become the most commonly used green financing vehicle. The first green bonds were issued by the European Investment Bank in 2007 and the World Bank in 2008.67 Over the past decade, the issuance of these bonds had grown rapidly, from US$11 billion in 2013, to US$155.5 billion in 2017,68 to US$200 billion as of 2020.69 Today, green bonds are issued by 62 “Just Transition Fund: Helping EU Regions Adapt to Green Economy” News: European Parliament (September 17, 2020). 63 “Power in the 21sth Century” (n. 61). 64 “EU Budget: Parliament pushes for New Revenue Sources” News: European Parliament (September 16, 2020). 65 Nathan Bishop, “Green Bond Governance and the Paris Agreement” (2019) 27 N.Y.U. Envtl. L.J. 377, 378; Kevin M. Talbot, “What Does ‘Green’ Really Mean? How Increased Transparency and Standardization Can Grow the Green Bond Market” (2017) 28 Vill. Envtl. L.J. 127, 128–29. 66 State of California Dept. of the Treasurer, “Growing the U.S. Green Bond Market, Vol. 1, Barriers and Challenges” (2017) https://​www​.treasurer​.ca​.gov/​greenbonds/​publications/​reports/​green​ _bond​_market​_01​.pdf. Similarly, the Green Bonds Initiative describes them as any type of bond instrument where the proceeds will be exclusively applied to finance or re-finance, in part or in full, new and/or existing eligible Green Projects … and which are aligned with the four core components [use of proceeds, process for project evaluation and selection, management of proceeds, and reporting] of the GBP. 67 Talbot (n. 65) at 128. 68 Bishop (n. 65) at 378. 69 “Green bond issuance surpasses $200 billion so far this year: research” Reuters (October 5, 2020) https://​www​.reuters​.com/​article/​us​-greenbonds​-issuance/​green​-bond​-issuance​-surpasses​-200​-billion​-so​ -far​-this​-year​-research​-idUSKBN26Q21C accessed 13 November 2020.

276  Research handbook on climate change mitigation law governments, corporations, banks, non-profit organizations, and inter-governmental organizations like the European Union.70 Notable players include China, India, Apple, and even Massachusetts.71 International Finance Corporation (IFC) took the financial world by storm with a US$1 billion green bond that sold out in under an hour.72 In the United States, key public actors, from the State of California to New York City,73 have pushed for the growth of the green bonds market. Despite rapid growth, green bonds remain a small part of the market. As John Chiang, a former California State Treasurer, summarized: The international green bond market is growing quickly. But even as it is growing, it is important to understand that this market still accounts for less than one percent of all bond sales worldwide. While the United States is the single largest issuer, its volume is lagging the issuance levels seen elsewhere in the world. The United States’ share of outstanding green bonds is even smaller when measured as a percentage of the $3.8 trillion of state and local government bonds outstanding in mid-2016.74

As Rose details, “much of the rise of green financial instruments,” including green bonds, “is attributable to the development of private regulatory frameworks,” which have “emerged to facilitate capital formation and liquidity well before formal government regulation.”75 Within this private regulatory context, two initiatives, the Green Bond Principles and the Climate Bond Initiative are the most prominent. The Green Bond Principles, the best known and most widely adopted of these, create a set of voluntary guidelines that guide bond issuances as well as the use of other green financial instrument issuances.76 Climate bonds have emerged as a subset of the burgeoning green bonds initiative. As Mackenzie and Ascui describe, while green bonds “are issued by a government or corporate entity in order to … finance … an environmental project” generally, climate bonds focus on raising funds for “investments in emission reduction or climate change adaptation” specifically.77 Thus, climate bonds form a subset of green bonds. Rose further explains that “the framework follows the essential pattern of the Green Bond Principles, with a definition and evaluation process and a reporting framework designed to

Bishop (n. 65), at 380, 385. Through the European Investment Bank (EIB). Luke Trompeter, “Green Is Good: How Greenbonds Cultivated into Wall Street’s Environmental Paradox” (2017) 17 Sustainable Sev. L. & Pol’y 4, 5. 72 Ibid. at 5. 73 New York City, “A Green Bond Program for New York City” (2014), https://​comptroller​.nyc​.gov/​ reports/​a​-green​-bond​-program​-for​-new​-york​-city/​. 74 State of California Dept. of the Treasurer (n. 66) at 4, further noting that: The green bond market has grown rapidly in Europe and Asia, but lags in the United States, the world’s second-largest emitter of greenhouse gases. Less than one-tenth of one percent of bonds outstanding in the United States are green, well below the percentage in Western Europe, China, India, and South Africa. 75 Rose (n. 20) 7. 76 Ibid. The Green Loan Principles were developed in 2018 by the Loan Market Association (LMA) and the Asia Pacific Loan Market Association, with assistance from the ICMA. The Green Loan Principles are available at https://​www​.lma​.eu​.com/​application/​files/​9115/​4452/​5458/​741​_LM​_Green​ _Loan​_Principles​_Booklet​_V8​.pdf. 77 Craig Mackenzie and Francisco Ascui, “Investor Leadership on Climate Change: An Analysis of the Investment Community’s Role on Climate Change, and Snapshot of Recent Investor Activity” (United Nations Global Compact Office 2009) https://​www​.unpri​.org/​download​?ac​=​5884 accessed 13 November 2020. 70 71

Climate finance after Paris  277 cabin the use and management of proceeds.”78 To advance climate investment, the Climate Bond Initiative provides a taxonomy of green assets and invests, a reporting framework, and a certification process. In key part, the taxonomy “identifies the assets and projects needed to deliver a low carbon economy and gives GHG emissions screening criteria consistent with the 2-degree global warming target set by the COP,”79 and creates a “traffic light” system for assessing which assets and projects are “considered to be automatically compatible with a 2-degree decarbonization trajectory” or require further review.80 The taxonomy is complemented by a reporting framework and certification process that advances transparency and consistency and seeks to ensure that all bonds comply with pre- and post-issuance requirements. The taxonomy itself seeks to offer clarity for investors, but the validity of the labeling is substantively questionable given the challenge of determining that any one discreet project is 2-degree compliant, as well ongoing gaps and discretions in how projects are defined and assessed across the green bond market.81 Even as the green bond market grows and evolves,82 investors are also turning to other green investment vehicles, including green sukuk, a “Shariah compliant” form of investment, green loans, and green equity.83 As these initiatives expand and facilitate the growth of green bond and green investment initiatives, the future growth of climate finance, particularly private finance “must solve a set of interrelated problems of risk that are crucial for the long-term success of the market.”84 Green investments often lack appealing risk-return, suffer from a lack of liquidity since they are not included in an index, and have to compete with conventional “brown” investments, many of which continue to be heavily subsidized.85 Moreover, despite the increasingly robust Green Bond Principles and Climate Bond Initiative taxonomy that are used to characterize bonds as sustainable, concerns about standards, greenwashing, and compliance persist.86 In particular, bonds that claim to be green may actually be “brown” and, as is the problem with the larger body of climate finance, “the question of whether an investment is ‘green’ or ‘brown’ is often … complex.”87 So long as these schemes remain ambiguous, voluntary, and unenforceable, consumer faith in the reliability of the classifications and the integrity of the issuers will continue to limit growth in the Ibid. Climate Bonds Initiative, “Climate Bonds Taxonomy,” https://​www​.climatebonds​.net/​files/​files/​ CBI​_Taxonomy​_Tables​-Nov19​.pdf. 80 Ibid. 81 Climate Bonds Initiative, “Growing Green Bond Markets: The Development of Taxonomies to Identify Green Assets” (March 2019) https://​www​.climatebonds​.net/​files/​reports/​policy​_taxonomy​ _briefing​_conference​.pdf. 82 See, e.g. Rose (n. 20) at 10 (describing evolving green market frameworks, e.g. the Hong Kong Green Bond Framework). 83 Ibid. at 7. See Table 3, Hong Kong Green Bond Framework: Eligible Categories. 84 Ibid. at 3. 85 See, e.g. Wal van Lierop, “Fossil Fuel Subsidies and Impact Greenwashing Are Stalling the Energy Transition,” Forbes.com (November 14, 2019) https://​www​.forbes​.com/​sites/​walvanlierop/​2019/​ 11/​14/​fossil​-fuel​-subsidies​-and​-impact​-greenwashing​-are​-stalling​-the​-energy​-transition/​#4f91954e46b3 (analyzing the net profits of the 1,801 largest publicly traded oil, gas and coal companies worldwide for the year 2013, and finding direct subsidies that year worth US$700 billion, compared to US$120 billion-worth of renewables subsidies in the same year). 86 Talbot (n. 65) at135. 87 Rose (n. 20) at 9. Projects that skirt the line between brown and green include those that increase the efficiency of fossil fuel generators. 78 79

278  Research handbook on climate change mitigation law market. Thus, while progress has been made to begin defining and categorizing green and climate-related investments and to create responsive taxonomies, reporting, and certification systems, these schemes remain fragmented and untested and confidence in both the reliability of the systems and the ability of the investments to generate adequate returns remains low compared to traditional investments. The continued growth of these and other forms of climate finance requires both the development of reliable regulatory frameworks and positive risk-return profiles. Climate finance constitutes a small percentage of the market and will remain so unless it is able to generate investments that are both certifiably green and financially competitive. As Rose summarizes: Many investors, including some of the largest institutional investors, operate under legal obligations to maximize returns for their beneficial owners. For climate finance to flourish in competitive investment markets, governments may need to level the playing field through interventions that force brown financial instruments to price in their negative externalities, or that subsidize green investments so that they are competitive with subsidized brown investments.88

These interventions could take the form of taxes, regulations, subsidies (adding or removing), or the deployment of financial technologies that help even the playing field, internalize environmental externalities, and improve faith in green investment strategies. The growth of climate finance, thus, hinges on a complex interplay between public and private actors, highlighting the continuing importance of the state, including recalcitrant actors such as the United States, even as the growth of climate finance turns more to the private sector.

5

THE GREEN CLIMATE FUND SINCE PARIS

The growth in green bonds and other forms of innovative climate finance is facilitated by the increasing stability of the Green Climate Fund, which serves as the institutional backdrop and superstructure of international climate finance. The parties to the UNFCCC established the Green Climate Fund to signal the prioritization of climate financing as a fundamental component of international efforts to address climate change. To this end, the Green Climate Fund now functions as the primary financial institution through which industrialized countries can mobilize climate financing to aid mitigation and adaptation efforts in developing nations.89 As discussed infra, the Green Climate Fund was initially proposed as part of the 2009 Copenhagen Accord, and subsequently became operational in 2014.90 To date, the Green Climate Fund is the largest source of public climate finance.91 Operationally, the Green Climate Fund is overseen by a board of 24 members, drawing equally from developed countries and developing countries, and representing small island

Ibid. at 23. Richard K. Lattanzio, “International Climate Financing: The Green Climate Fund” (2014) CRS Report 7-5700, 1. 90 Ibid. at 1. 91 Lauren E. Sancken, “The Price of Sovereignty in the Era of Climate Change: The Role of Climate Finance in Guiding Adaptation Choices for Small Island Developing States” (2020) 38 UCLA J. Envtl. L. & Pol’y 217, 244. 88 89

Climate finance after Paris  279 states and least developed countries.92 The Green Climate Fund’s guiding principles are to balance resources devoted to mitigation and adaptation, pursue “country-driven” approaches, and to confirm that all developing country parties are in fact eligible to receive resources. The Green Climate Fund Board evaluates all program proposals submitted by developing countries seeking funding. The overarching US$100 billion commitment to the Green Climate Fund, however, is general and unenforceable. Neither the Paris Agreement nor the Green Climate Fund specifies the amount that particular parties should mobilize, instead relying on states to communicate and follow through on individualized commitments. That is, the contributions are voluntary, unenforceable, and designed to reflect both public commitments as well as commitments to mobilize private finance. The Green Climate Fund became fully operational as a project-funding mechanism in 2015,93 and as of November 2020, the Green Climate Fund has committed US$6.2 billion to 143 projects. Of these funds, 35% (US$2.2 billion) has come from the private sector, with the remaining 65% (US$4 billion) flowing from the public sector. The funding has been distributed primarily in the form of grants (48%) and loans (42%), with the remainder issued through results-based payments, guarantees, and equity. While projects vary in size, scope, and focus, the Green Climate Fund prioritizes investment in eight areas: energy generation and access; transport; buildings, cities, industries and appliances; forests and land use; health, food, and water security; livelihoods of people and communities; ecosystems and ecosystem services; and infrastructure and the built environment. According to the mission of the institution, across these priority areas, these funds must be allocated equally between mitigation and adaptation efforts.94 Moreover, at least 50% of adaptation funds must support projects in climate-vulnerable countries, including the least developed countries. Despite this mandate, adaptation projects remain underfunded,95 receiving roughly 25% of the financing, with mitigation projects accounting for 40% of financing, and cross-cutting projects accounting for the remaining 35%.96 Even as the Green Climate Fund confronts both significant funding shortfalls and challenges in balancing mitigation and adaptation financing, it is grappling with complex questions of politics and equity. In common with climate negotiations writ large, for example, tensions exist between developed and developing countries as to the forms and function of

Lattanzio (n. 89) at 5–6. See Charlene Watson and Liane Schalatek, “Climate Funds Update, Climate Finance Fundamentals: The Green Climate Fund” (2019) at 1, 2 https://​climatefundsupdate​.org/​wp​-content/​plugins/​download​ -attachments/​includes/​download​.php​?id​=​5308 accessed 10 November 2020. 94 Mikkel Funder et al., “Making the Green Climate Fund Work for the Poor” at 2 (Danish Institute for International Studies 2015). 95 In addition to project funding, however, the Green Climate Fund provides “up to $1 million per country for readiness grants to assist with the management and technical assistance needed for project implementation and up to $3 million per country for designing a National Adaptation Plan.” Sancken (n. 91) at 245. See also Green Climate Fund, “Readiness and Preparatory Support Programme Guidebook” (2020), https://​www​.greenclimate​.fund/​sites/​default/​files/​document/​readiness​-guidebook​_1​ .pdf accessed 11 November 2020. 96 Green Climate Fund, “GCF at a Glance: Project Portfolio” (October 15, 2020), https://​www​ .greenclimate​.fund/​sites/​default/​files/​document/​gcf​-glance​_3​.pdf accessed 11 November 2020. 92 93

280  Research handbook on climate change mitigation law international climate financing.97 Mirroring long-standing conflicts in international financing, developed countries frequently seek to retain modes of control over climate projects – both which projects are funded and how – and often prefer to keep funneling money through bilateral rather than multilateral channels. In contrast, developing countries increasingly demand both greater control of climate projects and greater use of multilateral institutions such as the Green Climate Fund.98 These tensions, in part, are what led the parties to the UNFCCC to move away from the World Bank-affiliated Global Environmental Facility and to create the Green Climate Fund as a stand-alone climate finance institution. As the Green Climate Fund was being created, these long-standing questions of control shaped the conversation over how Green Climate Fund funds would be dispersed.99 Developing countries advocated for the creation of a new institution to disperse the funds in response to perceptions of heavy developing country control through existing institutions. In contrast, many developed countries preferred to continue using existing multilateral and bilateral finance institutions. Developed countries also advocated for flexibility in providing funding, whereas developing countries emphasized the need for greater transparency and predictability as to both available amounts and available sources of financial support.100 Conflicting views of climate finance reflect both larger conversations about forms and flows of international aid, as well as the differing views of roles and responsibilities that sit at the heart of international climate change negotiations. These tensions underlie ongoing negotiations under the Paris Agreement. The Paris Agreement calls for a future in which climate change is constrained but wherein access to energy is universal, and efforts continue apace to advance sustainable development and to address poverty, and racial and gender inequality.101 In contemplating the pathway towards a more sustainable and equitable future, the Paris Agreement prioritizes the continuing need for richer countries to take a greater role in facilitating the full range of efforts that will be needed to adequately address climate change. The reality, however, is that current mitigation goals – as expressed through the parties’ nationally determined contributions (NDCs) – fall short of allowing the parties collectively to achieve the goal of the Paris Agreement to limit warming to 1.5 °C above pre-industrial levels. Specifically, as of September 2020, the pledges that governments have made – assuming they are fulfilled – would only limit warming to roughly 2.7 °C above pre-industrial levels by 2100.102 Thus, from a collective ambition standpoint the NDCs fall short of achieving the goals of the Paris Agreement. These ongoing collective mitigation failures amplify the equity challenges that define international climate change law. As a reminder, the top ten emitting countries produce roughly 60% of total global GHG emissions.103 These top emitters are also among the parties least vulnerable to climate change. There is, therefore, a distinct and deep disconnect between those actors contributing to, and

Mathias Fridahl et al., “Supporting Nationally Appropriate Mitigation Actions through the Green Climate Fund: Governance Capacities and Challenges” (2014) 8 Carbon & Climate L. Rev. 257, 263. 98 Ibid. 99 Joëlle De Sépibus, “Green Climate Fund: How Attractive Is It to Donor Countries?” (2015) 9 Carbon & Climate L. Rev. 298, 298. 100 Fridahl (n. 97) at 260. 101 See Carlarne and Colavecchio (n. 1). 102 Climate Action Tracker, https://​ climateactiontracker​ .org/​ global/​ temperatures accessed 13 November 2020. 103 Glenn Althor et al., “Global Mismatch Between Greenhouse Gas Emissions and the Burden of Climate Change” (2016) 6 Nature: Sci. Rep. 1, 2–3. 97

Climate finance after Paris  281 benefitting from, the processes of industrialization and economic activity that are intimately linked to anthropogenic climate change and those experiencing the harms and development limitations associated with resulting patterns of climate change. Moreover, the mitigation ambition gap is then further compounded by the absence of clear and ambitious commitments from developed countries for climate finance. The intersection between mitigation and climate finance failures means not only that climate change will be worse globally than if warming was limited to 1.5 °C,104 but also that the worst effects will be experienced disproportionately by those countries that are both least responsible for contributing to climate change and least able to invest in adaptation projects that would help minimize the negative effects. Moreover, the mitigation and financing gaps exacerbate equity issues not only among states, but also within states. Within states, certain members of society – for example, women, the elderly, youth, minorities – may be more vulnerable to climate effects than others. The Green Climate Fund has sought to navigate complex questions of equity by integrating questions of vulnerability and, in particular, gender into climate finance decisions from the outset. The Green Climate Fund’s Results Management Framework, for example, takes into account the particular needs of “vulnerable groups,” and a growing number of Green Climate Fund projects target particular vulnerable groups within countries.105 Despite this emerging focus, the Green Climate Fund lacks an overarching framework for evaluating how individual and collective programs will affect poor and vulnerable communities within states and continues to center on achieving global equity in climate finance. That is, the primary focus of the Green Climate Fund remains on advancing inter-state equity in climate finance, as opposed to intra-state equity. Notably, however, the Green Climate Fund has taken steps since the outset to advance gender equity. The Green Climate Fund, in fact, claims to be the first climate finance mechanism to mainstream gender perspectives within decision-making frameworks and identifies gender and gender-responsive climate actions as “a key element of its programming architecture.”106 The Green Climate Fund’s Governing Instrument prioritizes adopting a gender-sensitive approach to climate financing and the Green Climate Fund has taken subsequent steps to advance a fund-wide gender-sensitive approach to climate finance.107 To this end, the Green Climate Fund commits to taking into account: “the potential contribution of men and women to social changes”; “methods and tools to promote gender equity”; and assessing “the impact of activities on women and men.”108 In addition, the Green Climate Fund’s Gender Action Plan See IPCC, “Summary for Policymakers” in “Global Warming of 1.5 °C. An IPCC Special Report on the impacts of global warming of 1.5 °C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty” (2018) at 7 https://​www​.ipcc​.ch/​site/​assets/​ uploads/​sites/​2/​2019/​05/​SR15​_SPM​_version​_report​_LR​.pdf accessed 5 May 2022). 105 See Green Climate Fund, “Bolstering the Resilience of Poor, Climate-Vulnerable Communities” (8 June 2020) https://​www​.greenclimate​.fund/​news/​bolstering​-resilience​-poor​-climate​-vulnerable​ -communities accessed 13 November 2020. 106 Green Climate Fund, “Gender” https://​ www​ .greenclimate​ .fund/​ projects/​ gender accessed 13 November 2020. 107 See Green Climate Fund, “Options for a Fund-Wide Gender-Sensitive Approach” (February 9, 2014), GCF/B.06/13, https://​www​.greenclimate​.fund/​sites/​default/​files/​document/​gcf​-b06​-13​.pdf accessed 13 November 2020. 108 Markus Ihalainen et al., “What Should Be Included in the Green Climate Fund’s New Gender Policy and Action Plan?” (2017) 179 Center for International Forestry Research Info Brief, 1. 104

282  Research handbook on climate change mitigation law requires that accredited entities investigate gender dynamics that can and should shape climate strategies and collect data on how mitigation and adaption projects can respond to the needs of women and men based on the particular climate challenges posed.109 The Gender Action Plan does not, however, set targets or identify indicators for assessing the impact of Green Climate Fund programs on gender equality itself. Nevertheless, by anchoring the policy in commitments to gender equality and equity and inclusiveness, the Green Climate Fund centers equity and, specifically, gender equity in a way that is still lacking in the overarching international climate framework.110 Within this fraught context, the greatest ongoing challenge the Green Climate Fund Board faces – and that climate finance faces more generally – is building trust with developing countries while also attracting adequate levels of financial support from developed countries in order to address the most pressing climate finance needs worldwide.111

6 CONCLUSION Climate finance is central to international efforts to limit and respond to climate change. As Sachs suggests, “In the 2020s, the scale of climate change finance will become central to parties’ perceptions of whether the Agreement is working,” and “Reneging on promises for climate finance could hurt the prospects for the treaty as much, or more so, than shortfalls on achieving NDCs.”112 Even as key actors such as the United States and Brazil continue to push back against global climate collaboration and as levels of public finance lag, levels of private climate finance continue to grow and green financial markets continue to expand. With the onset of the global pandemic and the resulting political challenges and economic downturn, however, it has become both more challenging and more important to maintain momentum in mobilizing climate finance. On the other hand, recovery from the pandemic provides fresh opportunities to enhance both the fairness and the scale of climate finance.

Green Climate Fund, “Gender Policy and Action Plan” (October 6, 2014), GCF/B.08/19, https://​ www​.greenclimate​.fund/​sites/​default/​files/​document/​gcf​-b08​-19​.pdf accessed 13 November 2020. 110 See Cinnamon P. Carlarne, “Environmental Law and Feminism” in Deborah L. Brake, Martha Chamallas, and Verna L. Williams (eds), The Oxford Handbook of Feminism and Law in the United States (Oxford University Press forthcoming). 111 Fridahl (n. 97) at 264. 112 Sachs (n. 38) at 899. 109

12. Incentivizing carbon transition – a comparison of carbon trading in the EU and China Stefan E. Weishaar, Kateryna Holzer and Bingyu Liu

INTRODUCTION For the last one million years carbon dioxide (CO2) concentrations in the Earth’s atmosphere did not exceed 300 parts per million (ppm). With the start of the Industrial Revolution global CO2 emissions started to increase, first slowly, and then more rapidly since the 1950s.1 While in the 1960s increases were around 0.9 ppm per annum, in the 2020s increases are at 2.5 ppm per annum,2 reaching 416.75 ppm in February 2021.3 The dramatic increase in greenhouse gases in the atmosphere has dramatic implications for the climate because CO2 unfolds it maximum warming potential about one decade after its emission and for the most part will persist for more than a century.4 According to the IPCC’s ‘Special report on global warming of 1.5 °C’ we need to reduce emissions by 45% below 2010 levels by 2030 and reach net-zero emissions by 2050 to have a chance of limiting global temperature increases to 1.5 °C. To achieve this, a fundamental transition of the economy and our way of living is critical. Given that most of the economies have not even decoupled their economic growth from greenhouse gas emissions, and that GHG emissions are increasing in most countries, this is a truly daunting task. A rich instrument toolkit is available for policymakers. One prominent instrument of choice to combat climate change and mitigate GHG emissions is carbon trading. This chapter presents the international legal framework on carbon trading and tracks the development of prominent Emissions Trading Systems (ETS) at regional (EU) and at national level (China), and critically assesses their ability to incentivize transitions. The chapter pays particular attention to price support schemes, offset rules and leakage measures. With increasingly ambitious climate targets it is expected that carbon leakage safeguards (conventionally, free allocation to exposed sectors) will have to change in order to incentivize the transition towards a low-carbon economy of energy-intensive and trade-exposed industry. The alternative solution is then, of course, carbon border adjustments. This chapter therefore discusses carbon border adjustment measures under WTO rules. It is a topic relevant to any ETS but will be reviewed with a keen eye to the developments in the EU. The chapter first concisely introduces carbon trading and how transition is incentivized (section 2). Subsequently it reviews carbon trading in the international law context (section 3),



See https://​ourworldindata​.org/​co2​-emissions. See Annual Mean Growth Rate at Manau Lao, available at https://​www​.esrl​.noaa​.gov/​gmd/​ webdata/​ccgg/​trends/​co2​_data​_mlo​_anngr​.pdf. 3 https://​www​.esrl​.noaa​.gov/​gmd/​ccgg/​trends/​mlo​.html. 4 Katharine L. Ricke and Ken Caldeira, ‘Maximum Warming Occurs About One Decade After a Carbon Dioxide Emission’ (2014) 9 Environmental Research Letters 124002. 1 2

283

284  Research handbook on climate change mitigation law the EU ETS (section 4) and the Chinese national ETS (section 5). Thereafter the focus shifts to WTO rules and challenges to introduce border carbon adjustments (section 6). A conclusion will highlight the main findings.

1

CARBON TRADING AND INCENTIVIZING ABATEMENT

From an economic perspective, greenhouse gas emissions are conceptualized as a negative externality.5 Just over 100 years ago Arthur C. Pigou published his seminal work The Economics of Welfare6 in which he provides a research framework for negative externalities. His ideas sparked an entirely new branch of research on how to use taxation or other monetary incentives to address externalities such as climate change. The lynchpin of a tax in the Pigouvian tradition is that it should reflect the value of the social costs – something that is inherently difficult to determine. To circumvent this problem Baumol and Oates (1971) proposed a second-best approach where the government would determine a socially acceptable level of pollution and set a tax rate in such a way that would achieve this pollution standard.7 Under a tax system the price is certain, but it remains uncertain if the emission reduction target will be realized as this is dependent upon how market actors react to the set incentives. It is clear that Pigouvian taxes offer optimal incentives to invest in new abatement technology because the tax rate is equivalent to the externality created by each unit of production. For the Baumol and Oates type of taxes, such incentives can be less strong because taxes are often levied as a fixed proportion per unit of production or consumption and must be paid independent of actual emissions or the detriment caused to society.8 An alternative way to tax externalities is to introduce a market in pollution rights. This idea was first described in a structured fashion by John Dales in his 1968 book, Pollution, Property and Prices.9 By contrast to taxation where the price is set and the quantity response is uncertain, emissions trading works the other way around, setting a quantity and letting the price be determined by scarcity and overall abatement costs. The legislator avoids the information problem of having to estimate abatement cost structures across businesses because in an ETS companies determine themselves if they should abate or not. An ETS thereby automatically leads to an equalization of the marginal abatement costs and thereby avoids some of the inefficiencies of tax approaches and automatically ensures that the environmental target is achieved (at least if a cap-and-trade system is used).10 Emissions trading systems also have the added advantage

An externality is conventionally understood as a situation in which the positive or negative effects of a decision are not taken into account by the decision maker and hence gives rise to a socially undesirable over- or under-provision of a good or service. 6 A. C. Pigou, The Economics of Welfare (Macmillan and Co. 1920). 7 William J. Baumol and Wallace E. Oates, ‘The Use of Standards and Prices for Protection of the Environment’ (1971) 73(1) Swedish Journal of Economics 42–54. 8 This would be the case if the tax is levied in a proportional manner. See B. C. J. Van Velthoven and P.W. Wijck, Recht en efficiëntie (6th edition, Wolters Kluwer 2019), section 8.4.3. 9 See J. H. Dales, Pollution, Property and Prices (University of Toronto Press 1968). Before that Crocker had already suggested tradable permitting: T. D. Crocker, ‘The Structuring of Atmospheric Pollution Control Systems’ in H. Wolozin (ed.) The Economics of Air Pollution (Norton 1966) 61–86. 10 For a more elaborate comparison of taxes, ETS systems, and other instruments see M. Faure and S. E.Weishaar, ‘The Role of Environmental Taxation: Economics and the Law’ in J. E. Milne and M. 5

Incentivizing carbon transition – carbon trading in the EU and China  285 that unlike taxes, they function as an automatic stabilizer, having higher prices when the economy is growing, and lower prices when it is in recession. Emissions trading systems incentivize the transition towards a low-carbon economy by placing a price on emissions. Companies find it cheaper to abate emissions rather than to pay the price for emission allowances. Investments in abatement technology require strategic planning and time for implementation and a robust expectation that future allowance prices will be high enough to render investments in new (and potentially more expensive) production processes economically viable. Regulatory certainty and clarity of legal provisions play an important role in this context as they allow companies to act ex ante, i.e. in a timely fashion to unfolding market developments. In this chapter the EU ETS and the Chinese national emissions trading system are considered. The former constitutes a cap-and-trade system where the overall allocation is known ex ante and where price stabilization mechanisms were introduced to counter the effects of economic contractions. The latter is supposed to be an intensity-based trading system where the allocation of emission allowances is undertaken during the trending phases and is in part dependent on the overall development of the gross domestic product (GDP); it is therefore of an ex post nature. In the area of carbon trading there is a variety of different types and designs to be found in the theoretical literature and in practice.11 Price levels are an integral determinant for setting the incentive to transition to a low-carbon future. The High-Level Commission on Carbon Prices was set up at the 22nd Conference of the Parties (COP) of the United Nations Framework Convention on Climate Change (UNFCCC) in 2016 at the invitation of the Carbon Pricing Leadership Coalition (CPLC) High-Level Assembly. Chaired by Joseph Stiglitz and Lord Nicholas Stern, the Commission set out to identify indicative corridors of carbon prices that could guide the design of carbon-pricing instruments and other climate policies, regulations, and measures to incentivize bold climate action and stimulate learning and innovation to deliver on the ambition of the Paris Agreement and support the achievement of the Sustainable Development Goals. The commission concludes that carbon price levels consistent with achieving the temperature targets under the Paris Agreement would have to be at least US$40–80/tCO2 by 2020 and US$50–100/tCO2 by 2030, provided a supportive policy environment was in place.12 However, it bears mentioning that coverage of carbon pricing schemes is often limited and that effective carbon prices in jurisdictions that have carbon trading or other pricing schemes are limited and that effective world carbon prices are negligible.13 A few success stories do exist, where jurisdictions have succeeded in setting effective carbon prices, such as Sweden and Finland, for example.

S. Anderson (eds), Handbook of Research on Environmental Taxation (Edward Elgar Publishing 2012) 399–421. 11 See S. Rudolph and E. Aydos, Carbon Markets Around the Globe: Sustainability and Political Feasibility (Edward Elgar Publishing 2021), and S.E. Weishaar, Emissions Trading Design – A Critical Overview (Edward Elgar Publishing 2014). 12 ‘Report of the High-Level Commission on Carbon Prices’ (2017) available at https://​static1​ .squarespace​.com/​static/​54ff9​c5ce4b0a53​decccfb4c/​t/​59244​eed17bffc0​ac256cf16/​1495551740633/​ CarbonPricing​_Final​_May29​.pdf. 13 See Figure 4, G. G. Dolphin, M. G. Pollitt and D. M. Newbery, ‘The Political Economy of Carbon Pricing: A Panel Analysis’ (2020) 72(2) Oxford Economic Papers 472–500, https://​doi​.org/​10​.1093/​oep/​ gpz042.

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2

INTERNATIONAL LAW

The United Nations Framework Convention on Climate Change (UNFCCC) was set up in 1994 and has, with 197 members, nearly universal coverage. In 2015 the Paris Agreement was adopted by 196 UNFCCC members at the 21st Conference of the Parties (COP 21) in Paris. It quickly entered into force (on 4 November 2016) and has been ratified by 191 UNFCCC members. This legally binding treaty enhances the UNFCCC by holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 °C above pre-industrial levels.14 Importantly, under the Paris Agreement all parties are to undertake and communicate their ambitious efforts which take the form of nationally determined contributions.15 Moreover, the Paris Agreement invites countries to formulate and submit long-term low greenhouse gas emission development strategies. In contrast to the Kyoto Protocol, the Paris Agreement does not set a mandatory target for signatory countries but leaves it up to the members to determine their own contribution. It also constitutes a framework agreement where specific modalities are not yet clarified. In particular, Article 6 is subject to much debate. This Article allows for the trade of emission reductions under voluntary cooperative approaches between signatory countries, in the spirit of sustainable development and environmental integrity, or under a new UNFCCC administered carbon market mechanism. Article 6.2 introduces a trading mechanism between countries, allowing for international cooperation and the use of internationally transferred mitigation outcomes towards nationally determined contributions if they promote sustainable development and ensure environmental integrity and transparency. This provision may enable the linking of emissions trading systems or the use of offsets. Article 6.4 introduces another trading mechanism focusing on public and private initiatives by creating a new international carbon market and a body to supervise its operation. This provision may lead to the creation of mechanisms that are similar to the mitigation methodologies, projects or carbon credits used under the Kyoto Protocol. The Conference of the Parties shall adopt rules, modalities and procedures regarding the carbon markets under Article 6.4, but there is disagreement on the distribution of control over such markets and projects between national and UN authorities.16 Other contentious issues are linked to additionality and double counting. Despite the world community’s best efforts, it is apparent that the current level of determination represented by the nationally determined contributions to climate change is nowhere close to compatible with the goal of containing global warming to 2 °C and even less 1.5 °C.17

Paris Agreement Article 2.1.A. Paris Agreement Article 3. 16 Paris Agreement Article 6.7. 17 PBL (Netherlands Environmental Assessment Agency), PBL Climate Pledge NDC tool (2020) https://​themasites​.pbl​.nl/​climate​-ndc​-policies​-tool. 14 15

Incentivizing carbon transition – carbon trading in the EU and China  287

3

EU LAW

The European Emissions Trading System (EU ETS) is the largest ETS in the world. Covering around 40% of the EUs’ GHG emissions, it has been operating since 2005 and has successfully attained the emission reduction targets due to having a rigid emissions allowance cap. Since its inception, emissions have been reduced by around 35%.18 Despite this impressive track record, the development of the EU ETS has been turbulent and allowance prices – generally believed to incentivize investments in abatement technology – have been too low to incentivize transitions. Moreover, most of the emission reductions stem from the energy sector while the industry sector has scarcely contributed to reductions. This part of the chapter will therefore review the evolution of the EU ETS and the incentives it sets for transitioning the economy.19 Already in the early 1990s the European Commission was undertaking actions in the area of climate change. It sought the introduction of a carbon tax in 1992 but failed due to the unanimity requirement in the Council. It acceded to the UNFCCC20 and in 2000 launched the European Climate Change Programme21 to facilitate the realization of the Kyoto Protocol targets of reducing emissions by 8% below 1990 levels and to help Member States attain their commitments under the Burden Sharing Agreement.22 Since its repeated attempts to introduce carbon taxation failed, the European Commission embraced emissions trading instead. The EU ETS was established and linked to the Kyoto Protocol offsets.23 The operation of the EU ETS started on 1 January 2005 and covered around 12,000 installations of about 5,000 operators in the EU Member States. The EU ETS covered four broad sectors: energy, ferrous metals, minerals, and pulp and paper. Aviation was added a few years later. The EU ETS extends over several trading phases (first: 2005–2007, second: 2008–2012, third: 2013–2020 and fourth: 2021–2030). The first trading phase was a ‘learning by doing’ phase, allowing the Commission to gain relevant information on actual emissions and to recalibrate the system. Perhaps owing to the overall too-optimistic expectations by both industry and Member State governments, there was substantial over-allocation of emission allowances. Allowance prices quickly approached 27 euros, but following the first verification instance, allowance market prices halved by May 2006 and by October were at around 10 euro cents. The national allocation plans for the second trading phase benefited from better data availability. Nevertheless, conflicts arose between the European Commission and several Member States because the Commission acted ultra vires by superimposing its own data over that of some Member States.24

See https://​ec​.europa​.eu/​clima/​policies/​ets​_en. In part this section follows the historic description of the EU ETS already presented in S. E. Weishaar, ‘EU Emissions Trading – Its Regulatory Evolution and the Role of the Court’ in M. Peeters and M. Eliantonio (eds), Research Handbook on EU Environmental Law (Edward Elgar Publishing 2020) 443–457. 20 Council Decision 94/69/EC of 1993. 21 COM(2000)88. 22 This agreement redistributed reduction obligations across EU Member States, see COM(98)353 final and COM(99)230 final. 23 Directives 2003/87/EC and 2004/101/EC. 24 T-183/07, Poland v Commission, ECLI:​EU:​T2009:​350 and T-263/07 Estonia v Commission, ECLI:​EU:​T:​2009:​351. 18 19

288  Research handbook on climate change mitigation law Since there was no banking of allowances between the first and second trading phases (2008–2012), the EU ETS was essentially reset and consequently demonstrating high prices (around 30 euros). These were, however, not long lived as in 2008 the global economic crisis led to a decline in economic production and thus also to a low demand for emission allowances: a situation of prolonged excess supply of allowances resulted.25 Due to banking between the second and third trading periods, allowance prices meandered between 5 and 7 euros. Legislative measures took several years to be implemented and did little to affect prices in the second trading period. Yet at the inception of the second trading phase the EU ETS was fundamentally overhauled by Directive 2009/29/EC,26 changing the allocation format from decentralized national allocation plans to a centralized allocation format27 where the Commission was in the driving seat.28 Due to the better ability of the power sector to pass on environmental costs to customers, auctioning is now its default mode of allocation. Free allocation in the other sectors is reduced over time as the auction share was intended to increase from 20% in 2013 to 70% in 2020. Free allocation is determined by several factors: benchmarks, historic activity levels, carbon leakage exposure factor, and a cross-sectoral correction factor.29 The linear reduction factor lowers the overall EU ETS allowance cap by 1.74% cent annually.30 The 2009 reform that was taking effect in the third trading phase (2013 onward) did little to prepare the EU ETS for reality. In 2008/2009 the global financial crisis led to a substantial economic downturn. The EU ETS, working as an economic stabilizer, alleviated the pressure of covered entities as demand and prices for allowances fell. A prolonged situation of excess supply arose. This was further exacerbated by the sale of emission allowances from the national new entrance reserves (about 100 million) and from the European Investment Bank’s NER 300 programme set up to raise funds to support carbon capture and storage. Moreover, the early auction of emission allowances in 2013 to facilitate the transition between phases 2 and 3 (120 million allowances) added additional market supply to a market that was already

25 C. Kettner, ‘The EU Emission Trading Scheme: First Evidence on Phase 3’ in L. Kreiser, M. Skou Andersen, B. Egelung Olsen, S. Speck, J. E. Milne and H. Ashiabor (eds) Carbon Pricing – Design, Experiences and Issues (Edward Elgar Publishing 2015) 63–75. 26 Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community OJ L 140, 5.6.2009, pp. 63–87. 27 Article 9 was amended by Directive 2009/29/EC so national allocation plans did not have to be drawn up anymore. 28 See Directive 2009/29/EC, Commission Decision of 27 April 2011 determining transitional Union-wide rules for harmonised free allocation, 2011/278/EU and 2013/448/EU: Commission Decision of 5 September 2013 concerning national implementation measures for the transitional free allocation of greenhouse gas emission allowances in accordance with Article 11(3) of Directive 2003/87/EC of the European Parliament and of the Council OJ L 240, 7.9.2013, pp. 27–35. 29 The historic activity level represents the average of two median production values during the periods 2005–2008 or 2009–2010 See Article 10a(1) of Directive 2009/29/EC and Article 9(1) of 2011/278/EU: Commission Decision of 27 April 2011 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council (notified under document C(2011) 2772) OJ L 130, 17.5.2011, pp. 1–45. 30 Article 9, Directive 2009/29/EC.

Incentivizing carbon transition – carbon trading in the EU and China  289 long. Last but by no means least, the use of offsets (Certified Emission Reductions) had also been rising in the second trading period.31 Given the oversupply situation, allowance prices in the second trading period were low. Because there was the possibility to bank allowances between trading periods, allowance prices in the third period (2013–2020) were also too low (around 3.50 euros in 2013) to stimulate transition. The EU ETS was envisaged to be the powerhouse in the EU’s climate policy and to drive change in the area of renewable energy and energy efficiency, but allowance prices were by no means high enough to attain this. The Commission undertook several actions to address this problem. The use of offsets was severely restricted and 80% of the offsets used in 2010 were effectively banned in 2013 by excluding HFC-23 and N2O projects.32 The restriction of offsets was, however, not enough to counterbalance the significant amount of excess supply on the allowance market and that rendered the second trading phase long, and due to banking, this situation spilled over into the third trading phase, rendering it oversupplied as well. It was estimated that this oversupply situation remained even into the fourth trading period.33 Legislative reform is always time consuming. So the Commission first sought to clarify the legal provisions on auctioning contained in the EU ETS Directive with a view to time-shifting the auctioning of allowances to the end of the third trading period (backloading).34,35 This subsequently led to the amendment of the auction regulation itself and a reduction of the auctions in the years 2014–2016 and to increase the auctions in 2019 and 2020. 36,37 In order to address the structural deficiencies of the EU ETS, the Commission held a public consultation in which it clearly indicated its preferences,38 and unsurprisingly these were sub EC Commission Staff Working Document SWD(2012) 234 final of 25.7.2012. See Commission Regulation 550/2011 of 7 June 2011 on determining, pursuant to Directive 2003/87/EC of the European Parliament and of the Council, certain restrictions applicable to the use of international credits from projects involving industrial gases, OJ L 149/1 of 08/06/2011. Around 80% of the CDM credits that were surrendered in 2010 are banned as of 1 May 2013. See SWD(2012) 234 final of 25.7.2012 and Commission Regulation 550/2011. 33 Martijn Verdonk, Corjan Brink, Herman Vollebergh and Mark Roelfsema, Evaluation of policy options to reform the EU Emissions Trading System: Effects on carbon price, emissions and the economy (PBL (Netherlands Environmental Assessment Agency) 2013) available at http://​www​.pbl​.nl/​ publicaties/​evaluatie​-van​-opties​-om​-het​-europese​-e​missiehand​elssysteem​-te​-hervormen 30. 34 COM (2012) 416, Proposal for a Decision of the European Parliament and of the Council amending Directive 2003/87/EC clarifying provisions on the timing of auctions of greenhouse gas allowances, 2012/0202/COD. 35 European Parliament legislative resolution of 10 December 2013 on the proposal for a decision of the European Parliament and of the Council amending Directive 2003/87/EC clarifying provisions on the timing of auctions of greenhouse gas allowances (COM(2012)0416 – C7-0203/2012 – 2012/0202(COD)) available at http://​www​.europarl​.europa​.eu/​sides/​getDoc​.do​?type​=​TA​&​language​=​EN​&​reference​=​P7​ -TA​-2013​-0543​#BKMD​-44. 36 Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/ EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community, OJ L 302, 18.11.2010, pp. 1–41. 37 See http://​ec​.europa​.eu/​clima/​policies/​ets/​reform/​docs/​com​_2014​_xxx​_en​.pdf. And Commission Regulation (EU) No 176/2014 of 25 February 2014 amending Regulation (EU) No 1031/2010 in particular to determine the volumes of greenhouse gas emission allowances to be auctioned in 2013–20 Text with EEA relevance OJ L 56, 26.2.2014, pp. 11–13. 38 COM(2012) 652 final. 31 32

290  Research handbook on climate change mitigation law sequently proposed by the Commission, namely the increase of the annual reduction factor to 2.2%39 and the introduction of the market stability reserve as of 2019.40 Since the time-shifting of auctions did not reduce the excess supply as such during the trading phase, it did little to increase allowance prices. The market stability reserve (MSR) was having a bigger effect because it envisaged the taking of 12% of the excess allowances exceeding 833 million tons into a reserve and they would only be released in batches of 100 million allowances once oversupply had fallen to 400 million allowances.41 Before the MSR could commence operation, it was already overhauled in the 2018 EU ETS reform. In the 2018 EU ETS reform, Directive 2018/41042 increased the feed-in rate of the MSR to 24% between 2019 and 31 December 202343 and introduced the cancelling of allowances if the MSR exceeds the auction volume of the preceding year.44 The 2018 reform was directed in particular towards the fourth trading phase (2021–2030) and reflected the increased environmental concern and the strengthened EU ETS emission reduction target of 43% below 2005 levels.45 This is achieved though the increase of the linear reduction factor to 2.2%. But there are also other important changes. Auctioning is increased to at least 57%. Naturally, competitiveness concerns remain a weak spot and exposed sectors will receive allocations for free.46 Less exposed sectors will, however, see their free allocation to be reduced linearly from 30% in 2026 to zero in 2030.47 Energy-intensive and trade-exposed (EITE) installations at the highest risk of carbon leakage will receive allocations for free. Even though the carbon leakage list for the fourth trading period saw a strong reduction from 175 sectors and subsectors48 to 63 sectors,49 still 39 COM(2014) 15 final, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, A policy framework for climate and energy in the period from 2020 to 2030. 40 COM(2014) 20/2, Proposal for a Decision of the European Parliament and of the Council concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and amending Directive 2003/87/EC. Decision (EU) 2015/1814 of the European Parliament and of the Council of 6 October 2015 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and amending Directive 2003/87/ EC (OJ L 264, 9.10.2015, p. 1). 41 Decision (EU) 2015/1814. 42 Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814, OJ L 76, 19.3.2018, pp. 3–27. 43 Article 2 of Directive 2018/410 of 14 March 2018. 44 Article 2 of Directive 2018/410 of 14 March 2018. 45 This is achieved by sharpening the linear reduction factor in 2021 to −2.2% (from −1.74%) as already discussed. Member States have to reduce emissions by on average 30% below 2005 levels pursuant to Regulation 2018/842 of 30 May 2018 (OJ L 156, 26, 19.6.2018) in non-ETS sectors such as transport, buildings and heat. The 2030 goals have increased markedly from the 10% goal in 2020 pursuant to Decision 406/2009/EC of 23 April 2009, OJ L 140, 5.6.2009, p. 136). 46 Articles 1(13a) and 1(15) of Directive 2018/410 of 14 March 2018. For the list of sectors of the carbon leakage list see the Annex to the Commission Delegated Decision C(2019) 930 final of 15.2.2019. 47 Article 1(15.4) of Directive 2018/410 of 14 March 2018. 48 Commission Decision 2014/746/EU of 27 October 2014, determining, pursuant to Directive 2003/87/EC of the European Parliament and of the Council, a list of sectors and subsectors which are deemed to be exposed to a significant risk of carbon leakage, for the period 2015 to 2019, OJ L 308/114, 29.10.2014. 49 Commission Delegated Decision (EU) 2019/708.

Incentivizing carbon transition – carbon trading in the EU and China  291 94% of industrial emissions fall into this category.50 Moreover, Member States are allowed to compensate up to 75% of companies’ indirect emission costs (increases in electricity prices resulting from the inclusion of the costs of greenhouse gas emissions due to the EU ETS) if they are at a genuine risk of carbon leakage.51 Furthermore, two new funds have been introduced to support low-carbon innovation and energy sector modernization.52 Even before the fourth trading phase commenced, it was apparent that another deep reform of the EU ETS was necessary. The effective implementation of all climate-related measures mandated by EU law is estimated to deliver a reduction of around 45% below 1990 levels.53 Yet in November 2019 the European Parliament declared a climate emergency and requested the Commission to reduce emissions by 55% below 1990 levels and to ensure that all relevant legislative and budgetary proposals be designed to limit global warming to 1.5 °C.54 President of the European Commission Ursula Von der Leyen presented the European Green Deal in December 2019, envisaging greenhouse gas emission reductions by 50–55% below 1990 levels by 2030 and climate neutrality by 2050.55 At the time of writing the Commission still needs to review the 2030 targets and to assess which legislation will need to be amended (this should be completed by 30 June 2021).56 In principle a linear reduction factor of 2.9% between 2021 and 2030 is in line with the 55% reduction of the EU ETS, but regulatory changes are time consuming, and if they can only be implemented in 2026 a reduction factor of 3.6% is required.57 Even higher linear reduction factors of 3.6% and 5% would be required to ensure consistency with national coal phase-out plans.58 The latter are particularly important because thus far the energy sector has delivered nearly all of the emission reductions achieved under the EU ETS. Several Member States have made progress in the area of a coal phase-out,59 entailing that any allowances not used for energy generation would be available for industry because Member States do not have to cancel them in case of closure of electricity generation capacity.60

Adoption of the Delegated Decision on the carbon leakage list for 2021-2030, 15.2.2019, available at: https://​ec​.europa​.eu/​clima/​news/​adoption​-delegated​-decision​-carbon​-leakage​-list​-2021​-2030​_en. 51 Communication from the Commission, Guidelines on certain State aid measures in the context of the system for greenhouse gas emission allowance trading post-2021 (2020/C 317/04). 52 Annex IIb and Articles 1(14h) and 1(16) of Directive 2018/410 of 14 March 2018. These are the Innovation Fund and the Modernisation Fund. 53 Report from the Commission to the European Parliament and the Council, Preparing the ground for raising long-term ambition, EU Climate Action Progress Report, COM(2019) 559 final of 31.10.2019, p. 3. 54 20191121IPR67110. 55 Ursula Von der Leyen, ‘A Union that strives for more, My agenda for Europe, Political Guidelines for the Next European Commission 2019–2024’ (2019) p. 5. 56 Proposal for a Regulation of the European Parliament and of the Council establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law), COM(2020)80 final, Brussels, 4.3.2020, Article 2(3) and 2(4). 57 Aleksandar Zaklanan, Jakob Wachsmuth and Vicki Duscha, ‘The EU ETS to 2030 and Beyond: Adjusting the Cap in Light of the 1.5 °C Target and Current Energy Policies’ (2021) 21(6) Climate Policy 778–791 https://​doi​.org/​10​.1080/​14693062​.2021​.1878999. 58 Ibid. 59 G. Rentier, H. Lelieveldts and G.J. Kramer, ‘Varieties of Coal-Fired Power Phase-Out across Europe’ (2019) 132 Energy Policy 620–632. 60 According to Article 12.4 Directive 2003/87/EC, in the event of closure of electricity generation capacity Member States may (not shall) cancel allowances. 50

292  Research handbook on climate change mitigation law The above treatment clearly shows that the EU ETS has been a continuous construction site. It has delivered on the environmental target, but the prolonged periods of low allowance prices and the variations in prices have not led to a transformation of European industry. Undoubtedly the carbon leakage safeguards in place have made a positive contribution to this because until now the EU ETS has not led to a negative impact on the economic performance of covered entities or undermined their competitiveness.61 The EU ETS is approaching a turning point. Even though the coal phase-outs can free substantial amounts of emission allowances for industry, eventually industry will have to start to contribute to decarbonization. The carbon leakage safeguards championed thus far (free allocation and compensation of indirect emissions) are not viable options when taking the economy on a path to decarbonization. Carbon border adjustments are the logical way forward. These are discussed below.

4 CHINA China is not only one of the largest economies in the world; it is also one of the largest emitters of greenhouse gases, accounting for around 28% of global emissions in 2019.62 China is emerging as one of the global climate change actors and perhaps leaders, and has promised to have its emissions peaked by 2030 and to attain net-zero emissions by 2060. Because China’s national emissions trading system is still in the making, this chapter also examines China’s climate change policy. Particular focus is placed on the system’s ability to incentivize transitions, carbon offsets, leakage provisions and price stabilization measures. 4.1

Chinese Climate Change Policy

The 11th Five Year Plan (2006–2010) already included a target to reduce energy intensity and in 2007 a leading group on climate change, energy saving and emissions reduction was set up.63 The 2007 Chinese National Climate Change Programme set targets for energy consumption reduction and covered GHG mitigation, adaptation, climate science and technology, public climate change awareness and institutional development, as well as international cooperation, but did not yet embrace market-based instruments.64 In its 12th Five Year Plan (2011–2015) China set itself the goal to reduce energy consumption per unit of GDP by 16% and to increase non-fossil fuels in the primary energy mix to above 11% and to reduce the carbon intensity per unit of GDP by 17% below 2005 levels by 2015.65 In addition to setting national targets, the 12th Five Year Plan called for the setting-up

61 A. Dechezleprêtre, D. Nachtigall and F. Venmans, ‘The Joint Impact of the European Union Emissions Trading System on Carbon Emissions and Economic Performance’ (2018) OECD Economics Department Working Papers, No 1515, paragraph 109, https://​doi​.org/​10​.1787/​4819b016​-en. 62 See https://​ourworldindata​.org/​co2/​country/​china. 63 State Council (2007) Notice of the State Council on Establishment of the National Leading Group on Climate Change, Energy Saving and Emissions Reduction. 64 NDRC, China’s National Climate Change Programme, 2007, https://​en​.ndrc​.gov​.cn/​newsrelease​ _8232/​200706/​P0​2019110148​1828642711​.pdf. 65 NDRC (2012) China’s policies and actions for addressing climate change, available at http://​en​ .ccchina​.org​.cn/​Detail​.aspx​?newsId​=​38742​&​TId​=​107.

Incentivizing carbon transition – carbon trading in the EU and China  293 of low-carbon pilot zones in five provinces and eight cities and also led to the setting-up of emission trading pilots. In 2014 the National Climate Change Plan (2014–2020) was approved by the state Council.66 This plan outlines the 2020 targets relating to, inter alia, GHG emissions, climate change adaptability, and the national ETS; importantly the emissions from steel and cement should stabilize at 2015 levels.67 The 13th Five Year Plan (2016–2020) also includes ‘greening’ as one of its focus areas, in particular with regard to the development of the environmental technology industry, ecological living and ecological culture. An important objective is to reduce carbon dioxide emissions per unit of GDP by 18% below 2015 levels. The Work Plan for Controlling Greenhouse Gas Emissions during the 13th Five Year Plan disaggregates its targets into concrete measures and targets to the climate goals outlined in the Five Year Plan. Coal consumption is to be reduced, the CO2 production benchmarks for large power generation companies are tightened, carbon intensity reduction targets for several provinces are set, several near-zero emissions pilot zones are created, the low-carbon cities programme is enhanced and several low-carbon industrial zones are created, and some heavy industry sectors are called upon to peak emissions around 2020. Moreover, a national emissions trading system is to be created and operational by 2020. The 14th Five Year Plan (2021–2025) is, at the time of writing, currently being shaped. The Chinese climate ambitions have recently been concretized. President Xi Jinping pledged that China would become carbon neutral by 2060.68 Not only has China set targets and taken steps to achieve the climate transition domestically, but China has also assumed responsibility internationally. In 2010 it made voluntary commitments under the Copenhagen Accord and announced goals for 2020 and committed to reduce its carbon intensity per unit of GDP by 40–45% below 2005 levels, to increase the share of non-fossil fuels in primary energy consumption to around 15% by 2020 and to increase forest coverage by 40 million hectares and forest stock volume by 1.3 billion cubic metres by 2020 from 2005 levels.69 A few years later, in 2016, China declared in its nationally determined contributions (NDC) for 2030 a goal of achieving a peaking of its carbon dioxide emissions by 2030 and making best efforts to achieve this earlier, to lower carbon dioxide emissions per unit of GDP by 60–65% (from 2005 levels), to increase non-fossil fuels in primary energy consumption to 20% and to increase forest stock by 4.5 billion cubic metres (above 2005 levels).70

Available at https://​policy​.asiapacificenergy​.org/​node/​3011. Available at https://​policy​.asiapacificenergy​.org/​node/​3011. 68 Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy / Vice-President of the European Commission, ‘China carbon neutrality in 2060: a possible game changer for climate’ 23/10/2020 https://​eeas​.europa​.eu/​headquarters/​headquarters​-homepage/​87431/​ china​-carbon​-neutrality​-2060​-possible​-game​-changer​-climate​_en. 69 S. U. Wei, ‘Letter including autonomous domestic mitigation actions for China’, in Appendix II – Nationally appropriate mitigation actions of developing country Parties, Copenhagen Accord, COP 15 and CMP 5, available at: https://​unfccc​.int/​files/​meetings/​cop​_15/​copenhagen​_accord/​application/​pdf/​ chinacphaccord​_app2​.pdf. 70 https://​www4​.unfccc​.int/​sites/​ndcstaging/​Pages/​Party​.aspx​?party​=​CHN​&​prototype​=​1. 66 67

294  Research handbook on climate change mitigation law 4.2

China’s National ETS

The above has shown China’s increasing ambition to curb GHG emissions. In order to address global warming and to attain its emission targets, China was quick to embrace carbon pricing. The concept of carbon trading was first adopted in China in relation to the Clean Development Mechanism under the Kyoto Protocol. Since then, there has been a growing interest in market-based instruments. The establishment of an emissions trading market to address climate change was mentioned in the Central Committee’s suggestions on formulating the 12th Five Year Plan in 201171 and subsequently included in the actual plan as an official measure for achieving China’s carbon reduction objectives. In October 2011 the National Development and Reform Commission (NDRC) issued the Notice on the Implementation of Carbon Emission Trading Pilots, authorizing the pilot projects of ETSs in several cities (Beijing, Tianjin, Shanghai, Chongqing and Shenzhen) and provinces (Guangdong and Hubei).72 The seven ETS pilots differ by scope and design and cover substantial parts of the population (19%), economic activity (33% of GDP), energy use (20%) and CO2 emissions (16%).73 Over time the necessary rules for the operation of the carbon markets in these pilots were developed and they started to operate formally. As of September 2017, the seven ETS pilots had integrated more than 20 industries and nearly 3,000 key emission units, the cumulative allowance trade amounted to 197 million tons of carbon dioxide equivalent, and the cumulative turnover was about 4.516 billion yuan.74 It is therefore not surprising that the ETS pilots were so attractive that they also inspired Fujian province to set up its own trading system (in 2016). The ETS schemes provided the legislator with the opportunity to study and analyse the working of trading systems in a Chinese context and to assess the usefulness of this instrument at national level. The regional ETS pilots are expected to continue operation until 2025, before being integrated into the national ETS.75 The national ETS developed incrementally. Between 2013 and 2015 several accounting and reporting guidelines were enacted for several industries.76 As early as August 2014 the

Central Committee, ‘The CCP Central Committee’s Suggestions on Formulating the Twelfth Five-Year Plan for National Economic and Social Development of the People’s Republic of China’ (2011). 72 See Eun Jung Kim, Stefan Weishaar, Anil Bhatta and Xiaoping Zhang, ‘The Implementation of Climate Change Mitigation Policy after Paris Agreement – A Comparative Study on EU, AU, China and Korea’ (Korean Legislation Research Institute 2016), 128. 73 2010 figures, see F. Jotzo, ‘Emissions trading in China: principles, design options and lessons from international practice’ (2013) Centre for Climate Economics & Policy, CCEP Working Paper 1303, 4. 74 Kangkang Zhang, Deyi Xu, Shiran Li, Na Zhou and Jinhui Xiong, ‘Has China’s Pilot Emissions Trading Scheme Influenced the Carbon Intensity of Output?’ (2019) 16(10) International Journal of Environmental Research and Public Health 1854. 75 ETS China.org reports that the ETS pilots are likely to operate until 2025 before being integrated into the national ETS. See https://​ets​-china​.org/​news/​of 25 November 2019. 76 NDRC, ‘Notice of the General Office of NDRC on Issuing GHG Accounting and Reporting Guidelines for the 1st Batch of 10 Industries (Trial)’ (2013) http://​www​.gov​.cn/​zwgk/​2013​-11/​04/​ content​_2520743​.htm; NDRC, ‘Notice of the General Office of NDRC on Issuing GHG Accounting and Reporting Guidelines for the 2nd Batch of 4 Industries (Trial)’ (2014) https://​www​.ndrc​.gov​.cn/​xxgk/​ 71

Incentivizing carbon transition – carbon trading in the EU and China  295 NDRC announced that it envisaged the launch of a national ETS by 2016 and in December 2014 it released a document on the ‘Interim Measures for the management of carbon emissions trading’, outlining basic guidelines on the framework and design of a national ETS.77 In January 2016 the NDRC circulated the Landmark Notice on National ETS Guidance,78 specifying a broad scope and coverage of the system, including power, petrochemicals, chemicals, iron and steel, non-ferrous metals, building production and materials, pulp and paper and aviation. Companies consuming more than 10,000 tonnes of coal equivalent per year would be covered. The national ETS also envisaged allocation on the basis of a combination of grandfathering and benchmarking, support for trade-exposed industries, and extra allowances for a market stabilization instrument and a new entrants reserve.79 Given the extensive scope, the national ETS – once fully implemented – would be double the size of the EU ETS. In December 2017 the NDRC issued the Emissions Trading Market Construction Scheme for the power generation sector and launched the national carbon emissions trading scheme.80 The national ETS is initially extending to major power generators (conventional power plants, co-generation of heat and power, and biomass, as well as captive power plants81), which account for more than half of the carbon emissions in the country.82 Later it is to be extended to petrochemicals, chemicals, building materials, steel, non-ferrous metals, paper and domestic aviation. At this stage the National Measures for the Administration of Carbon Emissions Trading (Trial) define key emitters that carry out combustion of fossil energy, industrial production, land-use change, forestry activities, or using purchased power and heat with greenhouse gas emissions.83 This indicates that the scope of the national ETS will go beyond the energy sector. At this moment, however, only energy is covered. The thresholds for inclusion of emitters under the ETS is set at 26,000 tonnes CO2 per annum or entities that consume more than 10,000 tonnes of standard coal equivalent per year, covering around 1,700 entities that account for 30% of China’s emissions.84,85 The national emissions trading system will eventually cover six greenhouse gases (CO2, CH4, N2O, HFCs, PFCs SF6 and NF3)86 but at this stage it only covers CO2. zcfb/​tz/​201502/​t20150209​_963759​.html; NDRC, ‘Notice of the General Office of NDRC on Issuing GHG Accounting and Reporting Guidelines for the 3rd Batch of 10 Industries (Trial)’ (2015) https://​ www​.ndrc​.gov​.cn/​xxgk/​zcfb/​tz/​201511/​t20151111​_963496​.html. 77 NDRC, ‘Interim Measures for the management of carbon emissions trading’, DRC Order No 17. 78 See J. Swartz, ‘China’s National Emissions Trading System’ (2016) International Centre for Trade and Sustainable Development (ICTSD), Issue Paper No 6, 17. 79 Ibid. 80 See Jianjun Wu, Qinghai Guo, Jiahai Yuan, Jianyi Lin, Lishan Xiao and Dewei Yang, ‘An Integrated Approach for Allocating Carbon Emission Quotas in China’s Emissions Trading System’ (2019) 143 Resources, Conservation & Recycling 291–298. 81 Ministry of Ecology and Environment (MEE), ‘Notice on Emissions Data Collection for 2019’ (27 December 2019), see https://​ets​-china​.org/​news/​. 82 Wu et al. (n. 80). 83 Article 47 Interim Measures for the Administration of Carbon Emissions Trading and Article 50 of the National Measures for the Administration of Carbon Emissions Trading (Trial). 84 See Rudolph and Aydos (n. 11) Chapter 6. 85 Other sources suggest that 2,225 entities are covered, see http://​www​.mee​.gov​.cn/​xxgk2018/​xxgk/​ xxgk03/​202012/​W0​2020123073​6907682380​.pdf. 86 Article 47 Interim Measures for the Administration of Carbon Emissions Trading and Article 50 of the National Measures for the Administration of Carbon Emissions Trading (Trial).

296  Research handbook on climate change mitigation law Work continued on the still non-covered ETS sectors on the national registry and trading system, as did data collection,87 and a public consultation on the implementation legislation of the national ETS, the ‘Interim Regulation on Emissions Trading’, was held in March 2019.88 The Interim Regulation on Emission Trading was adopted by the Ministry of Ecology and Environment (MEE) on 31 December 2020 and came into force on 1 January 2021.89 According to the public consultation on the draft Interim Regulation on Emissions Trading of March 2019, the national ETS is implemented by the MEE’s Department of Climate Change90 and its local branches and it is responsible for sectoral coverage and cap-setting. It will also publish trading data and emissions and compliance information regularly. The national ETS will have a risk management system including price limits and safeguards against market manipulation. There will also be sanctions for companies and verifiers that fail to monitor correctly or violate the trading rules. Companies that fail to surrender allowances will be fined between two to five times the average allowance market price per tonne of CO2.91 Currently China is making legislative progress on the Interim Rules for the Administration of Carbon Emission Trading, the cap-setting and allowance allocation plan for the national ETS, the allocation guidelines for power generation and other relevant monitoring, reporting and verification regulations on GHG emissions.92 On 2 November 2020 the MEE presented two legal documents, the National Measures for the Administration for the Carbon Emissions Trading (Trial) and the Administrative Measures for Registration, Trading and Settlement of the National Carbon Emissions Rights (Trial) for public consultation. These will provide the legal basis for the national emissions trading system and hence supersede the 2014 Interim Measures for the Administration of Carbon Emissions Trading Order 17. The National Measures for the Administration for the Carbon Emissions Trading (Trial) include rules on allowance management; emissions trading; monitoring, reporting and verification (MRV); compliance; offsets; supervision and management; and accountability. The Administrative Measures for Registration, Trading and Settlement of the National Carbon Emissions Rights (Trial) describe the basic elements and oversight system of allowance registration, trading and settlements, and the tasks and responsibilities of the respective agencies. On 17 March 2021, the MEE released rules on national registry, emission trading, and transaction and settlement respectively.93 It is noteworthy that both regulations are taking the form See Notice on Emissions Data Collection for 2019, referred to in https://​ets​-china​.org/​news/​. https://​ets​-china​.org/​news/​mee​-publishes​-the​-draft​-interim​-regulations​-on​-the​-management​-of​ -carbon​-emissions​-trading/​. 89 See http://​www​.gov​.cn/​zhengce/​zhengceku/​2021​-01/​06/​content​_5577360​.htm. 90 In 2019 the National Development and Reform Commission (NDRC) transitioned to the new Ministry for Ecology and Environment. 91 See the Ministry of Ecology and Environment (MEE) public consultation on the draft Interim Regulations on the Management of Carbon Emissions Trading, 29 March 2019, https://​ets​-china​.org/​ news/​. 92 30 August 2019: in a press conference of the Ministry of Environment and Ecology, Mr Li Gao, Director General of the Department of Climate Change (DCC), introduced the progress of the carbon market construction, and its next steps, as well as its future development under the 14th Five Year Plan; https://​ets​-china​.org/​news/​. 93 http://​www​.mee​.gov​.cn/​xxgk2018/​xxgk/​xxgk01/​202105/​t20210519​_833574​.html​?keywords​=​ %E7​%99​%BB​%E8​%AE​%B0. 87 88

Incentivizing carbon transition – carbon trading in the EU and China  297 of a departmental regulation rather than a State Council regulation. This is relevant because departmental regulations can be changed more easily than State Council regulations94 and it is suggested that they might be subject to revision in the future.95 For the 14th Five Year Plan the MEE expects a stable and effective national ETS. China also aims to reduce other non-CO2 GHG emissions under the national ETS, while its legal regulations, data management and market supervision system will be further refined.96 The above collection of information has shown that the Chinese national ETS is still very much in development. Several of the essential elements required for an effective working of an ETS are not yet in place. An ETS is conventionally viewed as an incentive-based policy instrument that is capable of incentivizing behavioural change through monetary incentives. It is therefore interesting to observe that the Chinese national ETS has not yet clarified relevant determinants. The overall degree of scarcity is set in terms of intensity targets per unit of GDP. GDP can, however, be influenced by both monetary and fiscal instruments, or by changes in the accounting practices or statistical calculations.97 GDP is therefore not a stable benchmark for environmental targets. The MEE is said to set an annual absolute volume of a cap for a market, around 3,300 million tonnes of CO2 equivalent which will then be adapted in accordance with the GDP development until 2030.98 The ecological and environmental authorities at provincial level are charged with the task of issuing emission allowances in their respective area and to collect the emission allowances every year. Given that at this stage it remains unclear what the precise determinants and mode of allocation will be, and how the GDP will develop, covered entities will not be able to determine ex ante their best course of action. If incentive structures are not clear ex ante, the effectiveness and efficiency of the trading system will be impaired. Similarly, the detailed working of the price formation mechanism, bringing demand and supply into equilibrium, or mechanisms to effectively prevent abnormal price fluctuations, are not clearly determined yet.99 Moreover, carbon leakage safeguards are not yet clear. We do not yet have sufficient information on essential elements that could shed light on the question on how rules on these design

In accordance with Article 27 of the Ordinance concerning the Procedures for the Formulation of Administrative Regulations, the legislative affairs agency of the State Council shall, in accordance with the State Council’s review and comments on draft administrative regulations, revise administrative regulations and report to the Premier for signing the State Council Order for Publication. Article 37 of the Ordinance concerning the Procedures of the Formulation of Administrative Regulations states that the State Council can organize post-legislative assessments of administrative regulations or provisions in administrative regulations and use these as an important tool for revising or abolishing relevant administrative regulations. 95 https://​icapcarbonaction​.com/​en/​news​-archive/​728​-china​-publishes​-two​-major​-policy​-drafts​-for​ -national​-ets. 96 See n. 92. 97 Prices could, for example, be required to also take changes in product qualities or properties into account (hedonic pricing) and could therefore be different from mere monetary values. 98 See Rudolph and Aydos (n. 11) Chapter 6. 99 See Rudolph and Aydos (n. 11) Chapter 6.4.6. Ministry of Ecology and Environment, Notice of Public Consultation on the ‘National Measures for the Administration of Carbon Emissions Trading (Trial)’ (Draft for Consultation) and the ‘Administrative Measures for the Settlement of National Carbon Emission Rights Registration and Trading (Trial)’ (for Consultation) (2020) Arts 9 and 23, available at http://​www​.mee​.gov​.cn/​xxgk2018/​xxgk/​xxgk06/​202011/​t20201102​_805822​.html. 94

298  Research handbook on climate change mitigation law features could be shaping redistributive patterns, for example, between future linked systems or trading partners. It is expected that China’s Certified Emissions Reductions can be used as offsets under the national emissions trading scheme.100 At this stage, however, little is known about the use of quality and quantity restrictions of offsets under the national emissions trading system. It is also yet unclear when new rules will be drafted and/or if the 2012 NDRC Interim Measures for the Management of Voluntary GHG Emission Reduction Transactions will be revised. The above sections have shown that China has set ambitious long-term climate mitigation goals, and that it has taken the first steps towards establishing a national carbon trading system. Once fully implemented, it would be the largest emissions trading system in the world. At present, it only applies to electricity generation, does not cover process emissions and only extends to CO2. The scope of the system is thus still restricted. Moreover, essential design features have not been clarified, undermining the ability to incentivize the transition of the economy towards carbon neutrality. These seem to include ex post adjustments based on GDP developments, and how sufficiently high carbon prices will be supported and in what ways EITE industries would be supported, or if offsets could be used, and in what form. Such design features are critical for making credible policy commitments and hence important for covered entities to be incentivized to undertake carbon mitigation investments, especially since in China economic growth is by default a desired component of the intensity-based ETS design. It should of course be noted, however, that many of the companies covered by the national ETS will be state owned enterprises (SOEs), which may take decisions based on criteria other than carbon prices. In any event it can be expected that once China’s emission prices increase, safeguards will also need to be reviewed and carbon leakage measures will need to be introduced. Carbon border adjustments will therefore play an important role in the near future, when CO2 prices rise.

5

BORDER CARBON ADJUSTMENT

5.1

The Rationale behind Border Carbon Adjustment

The previous sections have shown that the climate crisis demands strong and determined action to combat global warming and that the economy must make the transition towards carbon neutrality. Current goals and carbon pricing designs are often still out of tune with this gigantic challenge. Carbon pricing instruments set prices to incentivize transitions. Thus far it has been mainly the energy sector that has borne the brunt of emission reductions (both in the EU ETS and in the Chinese national ETS), but if industry should contribute as well, it is clear that current carbon leakage safeguards cannot continue and also that EITE companies have to be exposed to the carbon price. Carbon leakage safeguards are important elements of an ETS. They serve to prevent carbon leakage, a situation, in which emissions reductions achieved in a jurisdiction with carbon restrictions are offset by increased emissions elsewhere

MEE (2020), Art. 31.

100

Incentivizing carbon transition – carbon trading in the EU and China  299 due to unequal carbon prices.101 Carbon leakage can be a consequence of the relocation of carbon-intensive production from a country with high emissions costs to countries where emissions costs are low. This will lead to an increase in the production of carbon-intensive products abroad and an increase in the net carbon footprint of the country with carbon restrictions. In any case, producers of the country with carbon restrictions will incur competitiveness losses, as their products will have to compete with cheaper products of their competitors not bound by emissions reduction obligations. Some kind of a measure thus needs to be taken to level the playing field for domestic and foreign producers. So far, the most widely used safeguard measure within ETSs has been free allocation of emissions allowances. Emissions allowances are usually issued free to EITE sectors, where the risk of carbon leakage is the highest. Free allocation has so far been effective in preventing carbon leakage.102 However, this safeguard is unlikely to remain effective with the rising level of climate ambition.103 To create a carbon price that is high enough to drive the transition to a low-carbon economy, the caps on emissions need to be tightened. By contrast, the free allocation of emissions allowances distorts the carbon market, suppressing the carbon price, creating windfall profits for companies and discouraging them from reducing emissions. It also deprives the state budget of revenues that would have been collected, had the allowances been distributed through auctions.104 Being aware of these downsides of free allocation and projecting a shortage of emissions allowances available for free allocation in the future, when the emissions cap will be very tight, the EU is currently considering a border carbon adjustment (BCA), officially called a carbon border adjustment mechanism (CBAM), as an alternative or additional safeguard to free allocation. In its communication of the European Green Deal (the EU growth strategy towards a net-zero economy by 2050), the EU Commission referred to the existing differences in levels of ambition worldwide and stated that a CBAM would be needed for selected sectors to reduce the risk of carbon leakage and ensure that the price of imports reflect their carbon content.105 It is expected that the EU Commission will prepare a proposal on a CBAM in July 2021 to be further developed and put in practice by 2023. Apart from preventing carbon leakage, a BCA can help achieve other climate policy objectives.106 For instance, it can mobilize climate finance, if the revenues from a BCA are earmarked for climate change mitigation and adaptation projects. A BCA can also induce other countries to put a national price on carbon by adopting a carbon tax or an ETS, especially if a BCA scheme foresees the exemption for imports from countries with a comparable carbon price. It can also induce foreign producers to reduce the carbon intensity of their products, particularly if there is a possibility for foreign

101 H. Naegele and A. Zaklan, ‘Does the EU ETS Cause Carbon Leakage in European Manufacturing?’ (2017) DIW Berlin, Discussion Paper 1689, 2. 102 Naegele and Zaklan (n. 101), 24. 103 V. Graichen, J. Graichen and S. Healy, ‘The Role of the EU ETS in Increasing EU Climate Ambition: Assessment of Policy Options’ (2019) SITRA Studies 161. 104 K. Holzer, ‘Emissions Trading and WTO Law’, in Stefan E. Weishaar (ed.) Research Handbook on Emissions Trading (Edward Elgar Publishing 2016), 330. 105 The European Green Deal, Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions, Brussels, 11.12.2019. 106 A. Marcu, M. Mehling and A. Cosbey, ‘Border Carbon Adjustments in the EU: Issues and Options’ (ERCST 2020) 15–16.

300  Research handbook on climate change mitigation law producers to pay a BCA charge on the actual carbon footprint of their products. In general, a BCA introduced by the EU may increase climate ambition under the Paris Agreement. A CBAM, which is currently being contemplated by the EU, seems to imply a charge on importation. However, besides an imposition of emissions costs on foreign producers through imports, a BCA scheme can consist of a compensation for emissions costs for national exporters (an export-side border tax adjustment) or combine the emissions charges on importation and the rebates of emissions costs on exportation.107 What implications might these different BCA options have? 5.2

Practical Issues

An important factor in considering a concrete design of a BCA scheme is its practical feasibility. A precise BCA scheme based on the actual carbon footprint of imported products covering all possible emissions108 and compensating domestic producers for all possible emissions reduction costs109 would be most desirable. It would allow the addressing of the problem of carbon leakage and competitiveness most effectively.110 However, it will face technical and administrative hurdles, which are primarily linked to tracing emissions in products and the related verification procedures. In most sectors, there is no single technology for the manufacturing of a product. Technologies vary in different countries and even within a country. Energy used in the manufacturing of products can be of different origins too. Emissions embodied in a ton of steel of the same physical quality can vary substantially depending on the energy source used in its production and also on the methods of steelmaking.111 Steel can be very carbon-intensive if it is produced in an open-hearth furnace. It is less carbon-intensive, but still having a considerable carbon footprint, if made in an oxygen blast furnace, which is a predominant method of production worldwide. At the same time, some types of steel products can be made without the use of coal in an electric arc furnace. While this is generally the least carbon-intensive method of steelmaking, electric arc furnaces require a considerable amount of electricity and therefore the carbon footprint of steel in this case will depend on whether electricity is generated from fossil fuels or renewable energy. Furthermore, the carbon footprint of steel would vary depending on whether steel is produced from pig iron (and also scrap) making it carbon-intensive or without an intermediary pig iron production, resulting in lower carbon emissions. A difficulty also arises in calculating emissions in the coupled steel production, when slag is produced together with steel in an oxygen blast furnace. In this case,

107 K. Holzer, Carbon-Related Border Adjustment and WTO Law (Edward Elgar Publishing 2014) 293–294. 108 Besides direct emissions resulting from the production process itself, one can also count indirect emissions that are associated with the whole product’s life cycle. This would cover, for instance, emissions from the use of energy (electricity, fuels) for offices, transportation of the product to the market, etc. 109 Including indirect emissions costs, such as increased prices for electricity and intermediate goods used as inputs. 110 OECD, Climate Policy Leadership in an Interconnected World: What Role for Border Carbon Adjustments? (OECD Publishing 2020) 18–19. 111 T. Gerres et al., ‘Green Steel Production: How G7 Countries Can Help Change the Global Landscape’ (Leadit 2021), 2–3.

Incentivizing carbon transition – carbon trading in the EU and China  301 it is difficult to say how much of the emissions are to be counted as due to the slag production and how much to steel alone. All these technological peculiarities will complicate the tracing of emissions and the process of verification of the actual carbon footprint will be costly. If it is up to the importer to provide information on the carbon footprint of a product, the question is how to verify the quantity of emissions released during the production process abroad. Given that there is no single international standard for the carbon footprint calculation and there are a variety of carbon footprint certification schemes with sometimes scientifically unsound methodologies,112 this would require a plant-by-plant determination of carbon footprints under an accredited verification process. It will be a complex and expensive procedure. Most countries do not have registries of facility-level emissions. Moreover, many final products are based on long value chains with raw materials and intermediary products sourced from dozens of countries. Therefore, the level of adjustment (or the level of emissions to be charged in imported products) in most cases can only be set as a constructed or assumed value.113 For instance, it can be based on the average level of emissions in the production of the product in the importing country or on the level of best available technology for the production of the product or the level of the predominant method of production (a technology used by most producers in a given sector). Using such an assumed value is the only way of avoiding a verification of emissions abroad. The problem of tracing emissions in imported products bears also on the question of sectoral coverage by a BCA scheme. It is much easier to trace carbon in raw materials and primary products like steel, electricity and cement than to calculate the carbon footprint in downstream products with long international value chains, like cars and toys. Therefore, it is more feasible to include only upstream industries in a BCA scheme and leave downstream industries outside a BCA scheme. However, this presents a big trade-off between practical feasibility of a BCA scheme and the objectives it is meant to achieve, namely, minimizing the loss of competitiveness and maximizing emissions reductions.114 Limiting the BCA coverage to primary products prevents the achievement of the highest possible level of emissions reductions. A lion’s share of emissions is contained in value-added products, such as cars made of steel and plastic components. Therefore, excluding these products from a carbon charge will leave a big chunk of emissions unrestricted. Moreover, in trying to address the competitiveness problem of sectors covered by a domestic ETS, a BCA on imports can undermine the competitiveness of industries not covered by an ETS. If a BCA applies only to products from upstream industries, it is likely to drive up the prices for inputs and make downstream industries less competitive. Foreign producers from downstream industries not being subject to a BCA will have a competitive advantage in the market of the country implementing a BCA and in the world market, because they will have access to cheaper inputs abroad. The problem of competitiveness of downstream industries is one of the trickiest issues in the design of a BCA scheme. By introducing an import-BCA 112 K. Holzer and A. H. Lim, ‘Trade and Carbon Standards: Why Greater Regulatory Cooperation Is Needed’ in Daniel Esty and Susan Biniaz (eds), Cool Heads in a Warming World: How Trade Policy Can Help Fight Climate Change (Yale Center for Environmental Law and Policy 2019), 3–8, https://​ envirocenter​.yale​.edu/​sites/​default/​files/​files/​CoolHeads​_Holzer(1)​.pdf. 113 R. Ismer and K. Neuhoff, ‘Border Tax Adjustment: A Feasible Way to Support Stringent Emission Trading’ (2007) 24(137) European Journal of Economic Law 147–148, 155. 114 A. Marcu, M. Mehling and A. Cosbey, ‘Border Carbon Adjustments in the EU: A Policy Proposal’ (ERCST 2021) 13–14.

302  Research handbook on climate change mitigation law solely on upstream products, a country, which is export-oriented and dependent on imports of intermediate products, might shoot itself in the foot.115 Policymakers are also faced with a dilemma of whether to adjust only direct costs of emission reductions or also indirect costs. The adjustment of indirect costs would include the increased price of energy (electricity, fuels) resulting from the participation of energy-generation facilities and refineries in an ETS (scope 2 emissions), as well as all other indirect emissions in the life cycle of the products, including emissions associated with any intermediate products, transportation of products to market, etc. (scope 3 emissions).116 To create a truly level playing field, a country needs to adjust indirect costs as well. However, the adjustment of indirect costs of emissions reductions faces practical obstacles, as it is impossible to precisely calculate indirect costs from complex international value chains. As follows from the above, there is a big trade-off between the practical feasibility of a BCA scheme and its environmental integrity and economic expediency. The compliance with international trade rules of the WTO adds an additional variable to the equation. 5.3

Legal Challenges

Legal feasibility is another important factor that influences a BCA design.117 Albeit of course not limited to the EU but highly relevant to all jurisdictions that rely on carbon pricing, this section mainly focuses on the EU context because it is currently being discussed at the highest political levels. In its communication of the European Green Deal, the EU Commission stated that a CBAM would be designed to comply with WTO rules. Indeed, the consistency of a CBAM with WTO rules is important, as a BCA is not a domestic tax but a trade measure having an impact on imports (in some cases also on exports). The current international climate change regime does not provide for the application of trade restrictions in connection to climate policy. Consequently, a BCA will qualify as a unilateral measure and have to comply with a country’s obligations under WTO law. Given that a BCA is a novel measure, which has never been tested in a WTO dispute settlement, the field is characterized by legal uncertainty and political risks that need to be taken into account when designing a BCA and assessing its potential benefits. There are many aspects of consistency of BCAs with WTO law.118 Below we outline some general issues. A fundamental rule of border adjustment is the rule of even-handedness, whereby border adjustment measures on imports and exports are imposed in parallel with domestic measures. This means that if the EU imposes a BCA in the form of a carbon import tax, it must have a domestic carbon tax in place to be able to levy it on imports. If there is no domestic tax, there is nothing to be adjusted. There are carbon taxes in some EU Member States on some products; however, there is no EU-wide carbon tax. Therefore, before introducing a BCA in the form of a carbon import tax, the EU would need to adopt an EU-wide carbon tax in the correspond115 A Müller et al., ‘Border Tax Adjustments: Can energy and carbon taxes be adjusted at the border? Schlussbericht vom 6. Juni 2013 zuhanden des Staatsekretariats für Wirtschaft SECO und der Eidgenössischen Finanzverwaltung EFV’ (2014) https://​www​.zora​.uzh​.ch/​id/​eprint/​106383/​1/​Ecoplan​ _2013​_e​.pdf. 116 OECD (n. 110) 18. 117 J. Pauwelyn, ‘U.S. Federal Climate Policy and Competitiveness Concerns: The Limits and Options of International Trade Law’ (Nicholas Institute for Environmental Policy Solutions 2007). 118 Holzer (n. 107).

Incentivizing carbon transition – carbon trading in the EU and China  303 ing sectors. Given that taxation is a shared responsibility of the EU and EU Member States, introducing an EU carbon tax would require a unanimous vote in the EU Council of all 27 EU Member States.119 There would also be an overlap with the EU ETS, given that a number of sectors are currently covered by the ETS. The exclusion of these sectors from an EU carbon tax would leave the carbon leakage problem within the EU ETS unaddressed. Keeping this in mind, the substitution of the EU ETS with an EU-wide carbon tax as an alternative emissions reduction mechanism cannot be realized in the short term. Presuming that a carbon tax on imports is nevertheless imposed, what would be the WTO legal constraints? To be adjustable at the border, a tax needs to qualify as an indirect tax. It is a widespread practice that indirect taxes, such as value-added taxes and excise duties on cigarettes, alcohol and gasoline, are levied on imported products and rebated on exportation.120 However, border adjustment is not allowed for direct taxes, such as corporate taxes, payroll taxes and income taxes. Export rebates of direct taxes are prohibited by the rules on subsidies contained in the WTO’s Agreement on Subsidies and Countervailing Measures (ASCM).121 It is uncertain whether a carbon tax could qualify as an indirect tax, because it is a tax imposed in connection to emissions, i.e. processes and production methods (PPMs) rather than products.122 A PPM-based tax has never been tested in a WTO dispute settlement, except for the US Superfund tax more than three decades ago.123 The qualification of a carbon tax as an indirect tax is particularly important for the export-side BCA through carbon tax rebates on exportation. If it fails to qualify as an indirect tax, its rebates could appear to be a prohibited export subsidy.124 The level of adjustment is also decisive. The national treatment rule of Article III.2 of the General Agreement on Tariffs and Trade (GATT) requires that an import tax rate be exactly the same as a tax rate for like domestic products. If the adjustment level is fixed based on the emissions level of the best available technology in the EU or even at the average level of 10% of most-efficient EU producers, imports would most probably be taxed at that level, which is for lower emissions than the actual emissions released during the production process abroad. Accordingly, there should not be a discrimination against imports. However, for some products it might not be true. Depending on technologies used by individual factories, some foreign producers can be less carbon-intensive than the EU’s most-efficient producers.125 For

A. Marcu, M. Mehling and A. Cosbey, ‘Border Carbon Adjustments in the EU: Issues and Options’ (ERCST 2020) 23. 120 Paul Demaret and Raoul Stewardson, ‘Border Tax Adjustments under GATT and EC Law and General Implications for Environmental Taxes’ (1994) 28(4) Journal of World Trade 6. 121 See item (e) of ASCM Annex 1. 122 P. Low, G. Marceau and J. Reinaud, ‘The Interface between the Trade and Climate Change Regimes: Scoping the Issue’ (2011) WTO Staff Working Paper ERSD-2011-1, 9–10. 123 The Superfund tax was found illegal on the grounds that it was levied on inputs in final products. This is despite the fact that the Superfund tax was less complicated than a carbon tax, for the inputs of different substances in chemical products were physically present in the final product, unlike emissions. 124 Even if such export rebates were considered to be rebates of indirect taxes, they would have difficulty satisfying the ASCM ‘not in excess’ rule for export rebates, given that there is still free allocation in industrial sectors and differences in constantly fluctuating emissions allowance prices. See K. Holzer, ‘Emissions Trading and WTO Law’, in Stefan Weishaar (ed.) Research Handbook on Emissions Trading (Edward Elgar Publishing 2016) 345. 125 A. Marcu, M. Mehling and A. Cosbey, ‘Border Carbon Adjustments in the EU: Sectoral Deep Dive’ (ERCST 2021) 70. 119

304  Research handbook on climate change mitigation law this reason, it is important to give importers the possibility to show the actual carbon footprint of their products, enabling them to pay a lower tax. What would be different, if a BCA were designed as an extension of an ETS to imports (an emissions allowance requirement to an importer)? Such a BCA is likely to qualify as a domestic regulation rather than a tax. WTO rules for domestic regulations that apply to imports are not the same as for taxes levied on imports. An extension of the EU ETS to imports would fall under the national treatment rule of GATT Article III.4, which requires a treatment of imported products not less favorable than for like domestic products. In light of the above-mentioned complexities related to the implementation of a BCA scheme, a violation of this rule can happen. As regards the compensation of the costs of emissions allowances to exporters, the compatibility with WTO rules is more questionable than in the case of a carbon tax. An export-side BCA based on an ETS, especially if provided only to some selected ETS sectors, is very likely to violate WTO subsidy rules.126 Given that a BCA scheme can hardly avoid non-compliance with non-discrimination rules of the GATT, it makes sense to design a BCA scheme so that it can be justified as an exception. Such exceptions are available under GATT Article XX for measures taken with certain public policy objectives. A BCA can particularly fall under two exceptions, either as a measure that is necessary to protect human, animal or plant life and health or a measure relating to the conservation of exhaustible natural resources. A successful justification of a BCA measure depends largely on its ability to meet the requirements of the Chapeau of Article XX. A BCA should not constitute a means of arbitrary or unjustifiable discrimination or any form of disguised protectionism. According to the WTO jurisprudence, this means that a BCA scheme should take into account conditions in other countries, which can be relevant for the objective pursued by the measure. Since the main objective of a BCA is preventing carbon leakage, a BCA scheme should be flexible enough to exclude imports from countries having a carbon price comparable to the carbon price of the country imposing a BCA. Under stricter interpretations, it might even require the exclusion of imports from countries with any kind of climate policy-related measures in place.127 While the requirements under Article XX are quite stringent, the justification of an import-side BCA as an exception is in principle available. There is one nuance, however. It will be more difficult to justify a BCA under Article XX, if a BCA on imports is coupled with a BCA on exports. Rebates of a carbon tax or costs of emissions allowances on exportation are likely to be interpreted as contrary to the climate policy objective.128 Consequently, the whole BCA scheme can be viewed as serving economic objectives of protecting domestic producers rather than environmental purposes. Importantly, the justification under Article XX is unlikely for export rebates per se, should they fail to qualify as indirect taxes and constitute

For a comprehensive analysis of ASCM rules and how they apply to emissions trading, see R. Ismer, H. van Asselt, J. Haverkamp, M. Mehling, K. Neuhoff and A. Pirlot, ‘Climate Neutral Production, Free Allocation of Allowances under Emissions Trading Systems, and the WTO: How to Secure Compatibility with the ASCM’ (2021) DIW Berlin Discussion Paper 1948, 12–16. 127 Holzer (n. 107) 167–175. 128 G. C. Hufbauer, S. Charnovitz and J. Kim, Global Warming and the World Trading System (Peterson Institute for International Economics 2009) 69. 126

Incentivizing carbon transition – carbon trading in the EU and China  305 an export subsidy. This is because the application of GATT Article XX to violations of ASCM provisions is problematic.129 In sum, BCAs are not a priori illegal under WTO law, at least not for reasons exclusively related to their special nature, namely, the fact that they are imposed in relation to emissions that are not visible in products. Considering WTO jurisprudence, the PPM-character of a BCA is not per se legally unacceptable. However, it is important that a BCA does not discriminate against imported products when applied on importation or amount to an export subsidy when applied on exportation. These requirements are contained in the GATT and the ASCM, which apply to a BCA measure. While these requirements are clear, the devil is in the detail, given the complexity of a BCA scheme, especially its practical difficulties.

6 CONCLUSION It was this chapter’s ambition to present the international legal framework on carbon trading, to track the development of the EU ETS and the Chinese national ETS, and to critically examine their ability to incentivize transitions. It was found that the international efforts orchestrated by international climate accords have not generated sufficient nationally determined commitments to avoid or even mitigate the climate crisis we are heading for. Among the various policy tools that can be deployed to mitigate GHG emissions, both China and the EU have opted for carbon pricing and especially for emissions trading. The systems they have selected do, however, differ. The EU ETS design follows a cap-and-trade design while the Chinese national ETS seems to follow an intensity-based trading system that seeks to reduce emissions per unit of GDP. An emissions target has been set but it may be subject to ex post adjustment. Clear incentive setting, however, requires that actors know what to expect ex ante so that they can take the right strategic decisions. Abstract policy objectives alone do not lead to strategic firm behaviour and transition. The European experience has shown that setting a cap alone is insufficient to foster a transition of the economy. The EU ETS has been frequently overhauled and even though it delivered its environmental target, the low allowance prices obstructed the transformation of the European industry. Effective carbon leakage safeguards clearly contributed to this because until now the EU ETS has not led to a negative impact on the economic performance of covered entities or undermined their competitiveness. With the increased political acceptance of the climate crisis and the strong policy goals of carbon neutrality by 2050, the EU ETS is approaching a turning point. Even though coal phase-outs could offer industry a breathing space, eventually industry will have to start to contribute to decarbonization. The carbon leakage safeguards championed thus far (free allocation and compensation of indirect emissions) are not viable options when bringing the economy on a path to decarbonization. Carbon border adjustments are the logical way forward. China has made clear international commitments to reduce the GHG emissions intensity per unit of GDP by 2030 and pledged that it would be climate neutral by 2060. These commitments are endorsed at the highest political levels so there should not be any doubt about 129 M. Wilke, ‘Feed-in Tariffs for Renewable Energy and WTO Subsidy Rules: An Initial Legal Review’ (International Centre for Trade and Sustainable Development (ICTSD) 2011) 19–20.

306  Research handbook on climate change mitigation law the determination of the government to achieve these objectives. Just as for the European objectives, realization of these objectives requires a fundamental transition of the economy. The Chinese national emissions trading system will be instrumental to support this climate change ambition. Its contribution, however, cannot yet be estimated since many of the critical elements are not yet clarified. These include price support mechanisms, carbon leakage safeguards, offsets, the role of state-owned enterprises, and ex post adjustments. From both the Chinese and the EU experience we can thus state that setting the right incentives is critical to fostering economic transition. ETS design is complex and non-trivial, and we see that it took the EU more than 15 years, and the process is still ongoing. China is just starting, and many of the core elements required for transition are not yet there. The devil is in the detail and there is no time to waste. One important element in this struggle to foster transition is of course the element of carbon leakage and EITE industries – decarbonization of the economy cannot be achieved without the industry doing its share. Both in the EU and in China, this is not yet the case. Border carbon adjustments will be critical in a world where some jurisdictions have stronger climate ambitions than others. We find that BCAs are not a priori illegal nor that their PPM character would render them legally unacceptable per se. But their design is critical, as may also be their acceptability to trading partners. It may therefore still take many years before a workable carbon pricing system is in place that can properly incentivize a full transition of the economy both in the EU and in China.

13. Climate litigation in the context of mitigation: an evolving jurisprudence Patrick Parenteau

INTRODUCTION Climate litigation is exploding across the globe. As of May 2022, there were close to 2,000 cases according to the databases maintained by the Sabin Center on Climate Change Law at Columbia University and the Grantham Research Institute on Climate Change and the Environment.1 Cases have now been filed in at least 33 countries, in addition to cases brought in regional or international courts or commissions.2 Most of the cases continue to be filed in the United States, followed by Australia, United Kingdom, European Union, New Zealand, Canada and Spain.3 Though the bulk of the cases involve questions of administrative law and statutory interpretation there has been a noticeable ‘rights turn’ in the types of claims being brought based on constitutional law and human rights guarantees embodied in various sources of domestic and international law.4 This is likely to continue in the wake of the landmark Urgenda ruling in December 2019, discussed below, which according to the United Nations (UN) High Commissioner for Human Rights ‘provides a clear path forward for concerned individuals in Europe – and around the world – to undertake climate litigation in order to protect human rights’.5A considerable body of scholarly literature has developed to categorize and dissect the goals, theories, and outcomes of the various cases.6 What qualifies as climate 1 Sabin Center on Climate Change Law, ‘Climate Case Chart’ (Sabin Centre on Climate Change Law, 2022) http://​climatecasechart​.com/​last accessed 25 May 2022; Grantham Research Institute on Climate Change and the Environment, ‘Climate Change Laws of the World’ (Grantham Research Institute on Climate Change and the Environment, 2022) https://​climate​-laws​.org/​litigation​_cases last accessed 25 May 2022. 2 A major new work has just been published which provides the most detailed comparative analysis of climate cases around the world: Francesco Sindico and Makane M. Mbengue, Comparative Climate Change Litigation: Beyond the Usual Suspects (Springer 2021). Thirty authors contributed to the book which is part of the Ius Comparatum – Global Studies in Comparative Law series. 3 Joanna Setzer and Rebecca Byrnes, ‘Global Trends in Climate Change Litigation: 2020 Snapshot’ (Grantham Research Institute on Climate Change and the Environment July 2020). 4 Jacqueline Peel and Hari M. Osofsky, ‘A Rights Turn in Climate Change Litigation?’ (2018) 7 Transnational Environmental Law 37. 5 Office of the High Commissioner for Human Rights, ‘Bachelet welcomes top court’s landmark decision to protect human rights from climate change’ (UN Human Rights, 20 December 2019) https://​ www​.ohchr​.org/​en/​press​-releases/​2019/​12/​bachelet​-welcomes​-top​-courts​-landmark​-decision​-protect​ -human​-rights​-climate last accessed 25 May 2022. 6 See Jacqueline Peel and Hari M. Osofsky, Climate Change Litigation: Regulatory Pathways to Cleaner Energy (Cambridge University Press 2015); Maria L. Banda and Scott Fulton, ‘Litigating Climate Change in National Courts: Recent Trends and Developments in Global Climate Law’ Environmental Law Reporter (Washington DC, 2017) https://​www​.eli​.org/​sites/​default/​files/​elr/​ featuredarticles/​47​.10121​.pdf last accessed 25 May 2022; Maria Banda, ‘Climate Science in the Courts:

307

308  Research handbook on climate change mitigation law litigation is itself a matter of debate.7 Some limit it to cases that directly raise issues of climate science and remedies addressed to climate mitigation or adaptation. Others include cases that challenge fossil fuel production and infrastructure based on general environmental laws dealing with air and water pollution, environmental assessments, and protection of fish and wildlife habitat. Still others include challenges to government regulations imposing limits on GHG emissions or other land use controls. This chapter focuses on cases where climate change mitigation itself is the central focus and the claims seek to hold government and private sector interests accountable for the accelerating impacts and damage. The treatment will necessarily be selective given the large number and variety of cases. The goal is to highlight and compare major decisions from different countries looking at the ways the courts approach the separation of powers question in the context of setting and enforcing mitigation requirements. The remainder of the chapter is organized into four sections. Section 1 discusses the role that climate science plays in this litigation. Section 2 evaluates the effect that these cases have had so far on advancing the goals of climate mitigation. Section 3 offers some thoughts on the future course of climate litigation, and section 4 concludes the chapter.

1

CLIMATE SCIENCE IN THE COURTROOM

1.1

Judicial Acceptance

There is now almost universal acceptance of the basic facts of climate science by courts and administrative tribunals in the United States and throughout the world.8 Courts understand the relationship between the emission of greenhouse gases,9 the rise in average global temperatures, the warming and acidification of the oceans and other effects of anthropogenic causes of climate change. In general judges accept the fact that anthropogenic climate change poses serious threats to human health and safety, national security, the global economy, ecosystem integrity and biodiversity.10

A Review of US and International Judicial Pronouncements’ (Environmental Law Institute 2020); Eric Posner, ‘Climate Change and International Human Rights Litigation: A Critical Appraisal’ (2007) 155 University of Pennsylvania Law Review 1925; Luciano Butti, ‘The Tortuous Road to Liability: A Critical Survey on Climate Change Litigation in Europe and North America’ (2011) 2 Sustainable Development Law & Policy 32; Laura Burgers, ‘Should Judges Make Climate Change Law?’ (2020) 9 Transnational Environmental Law 55; Philip Alston, ‘Litigating Climate Change in Ireland’ (2020) New York University School of Law Public Policy and Legal Theory Paper Series Working Paper No. 20-19 1; David Markell and J.B. Ruhl, ‘An Empirical Assessment of Climate Change in the Courts: A New Jurisprudence or Business as Usual?’ (2012) 64 Florida Law Review 15. 7 Jacqueline Peel and Hari M. Osofsky, ‘Climate Change Litigation’ (2020) 16 Annual Review of Law and Social Science, 2. 8 For a very thorough examination of how courts across the globe have dealt with climate science issues in a variety of contexts see Maria Banda, ‘Climate Science in the Courts: A Review of US and International Judicial Pronouncements’ (Environmental Law Institute 2020). 9 There are six recognized greenhouse gases (GHGs). Carbon dioxide represents 60% of GHGs but scientists have become more concerned about immediate reductions of methane, a very powerful short-lived greenhouse gas that is around 120 times more powerful than CO2 at trapping heat and 86 times stronger over a 20-year period. 10 Banda (n. 8) 11–16.

Climate litigation in context of mitigation: evolving jurisprudence  309 The big breakthrough in the US came in the landmark Massachusetts v Environmental Protection Agency decision, discussed at length below, where the late Justice Stevens opened his opinion with this observation: ‘A well-documented rise in global temperatures has coincided with a significant increase in the concentration of [CO2] in the atmosphere. Respected scientists believe the two trends are related.’11 Likewise, in the path breaking Urgenda Foundation v State of the Netherlands case, the first judicial decision in the world to order an immediate reduction in GHG emissions by a specific amount, the Dutch Supreme Court noted the findings of the Intergovernmental Panel on Climate Change (IPCC) in its 2018 Special Report on Global Warming of 1.5 °C12 The IPCC warned that exceeding that limit ‘may have extremely dire consequences, such as extreme heat, extreme drought, extreme precipitation, a disruption of ecosystems that could jeopardise the food supply, and a rise in the sea level resulting from the melting of glaciers and the polar ice caps’. All of which will jeopardize the lives, welfare and living environment of many people all over the world, including in the Netherlands.13 In the leading climate case in the United States, Juliana v United States, discussed below, the US Court of Appeals for the Ninth Circuit acknowledged the conclusive evidence of the impact that fossil fuel combustion was having on the Earth’s climate system: The record leaves little basis for denying that climate change is occurring at an increasingly rapid pace. It documents that since the dawn of the Industrial Age, atmospheric carbon dioxide has skyrocketed to levels not seen for almost three million years. Copious expert evidence establishes that this unprecedented rise stems from fossil fuel combustion and will wreak havoc on the Earth’s climate if unchecked.14

In her dissent from the majority’s decision to dismiss the case for lack of standing, Judge Staton went even further: In these proceedings, the government accepts as fact that the United States has reached a tipping point crying out for a concerted response—yet presses ahead toward calamity. It is as if an asteroid were barreling toward Earth and the government decided to shut down our only defenses.15

In similar vein the Lahore High Court of Pakistan in Ashgar Leghari v Federation of Pakistan stated: ‘For Pakistan, climate change is no longer a distant threat – we are already feeling and experiencing its impacts across the country and the region.’16 Of course, science has not settled all the questions. For example, gauging the sensitivity of the climate system to the cumulative loading of the atmosphere with greenhouse gases is one

Massachusetts v EPA, [2007] 549 US, 497, 505. Intergovernmental Panel on Climate Change (IPCC) ‘Summary for Policymakers’ (IPCC 2018). 13 Supreme Court of the Netherlands, Civil Division, ‘Judgment in the matter between: The State of the Netherlands (Ministry of Economic Affairs and Climate Policy), and Stitching Urgenda’ (Rechtspraak.nl, 20 December 2019) https://​www​.urgenda​.nl/​wp​-content/​uploads/​ENG​-Dutch​-Supreme​ -Court​-Urgenda​-v​-Netherlands​-20​-12​-2019​.pdf last accessed 25 May 2022. 14 Juliana v United States, [2020] 947 F. 3d 1159, 1166 (9th Cir.). 15 Ibid. 1175. 16 Ashgar Leghari v Federation of Pakistan, [2015] Case No: W.P. No. 25501/2015. http://​blogs2​ .law​.columbia​.edu/​climate​-change​-litigation/​wp​-content/​uploads/​sites/​16/​non​-us​-case​-documents/​2015/​ 20150414​_2015​-W​.P​.​-No​.​-25501201​_decision​.pdf. 11 12

310  Research handbook on climate change mitigation law of the more challenging puzzles. So far, the models have tended to underestimate the effects, including the accelerating rates at which the ice sheets and glaciers are melting and sea levels are rising, the increasingly destructive nature of storms and wildfires, the escalating number of deadly heat waves, and the growing list of species facing extinction.17 1.2

How Climate Science Informs Climate Litigation

The overwhelming scientific consensus on the growing dangers of climate change does not guarantee success in court. But science does have an important role to play in sorting out the rights and responsibilities of the parties before the court in at least four ways. First, in order to satisfy standing (locus standi) requirements to bring a case to court the plaintiff or other moving party is required to demonstrate a cognizable injury.18 Constitutional standing requirements in the US are particularly demanding. The US Supreme Court has set forth a multi-pronged test. First, the plaintiff must demonstrate an ‘injury in fact’ that is ‘concrete, particularized, and imminent’.19 Second, the injury must be ‘fairly traceable’ to the conduct being challenged. Third, the relief sought must be likely to prevent or at least alleviate the injury.20 Finally an environmental plaintiff must demonstrate that she uses or enjoys, on an ongoing basis, a specific geographic location that will be impacted by the challenged action or inaction of the defendant.21 Climate science can help plaintiffs meet all these tests. Climate change is causing or exacerbating a host of cognizable injuries to people and places. The impacts on public health and safety are increasing. Killer heat waves are increasing in Europe and elsewhere, especially the Global South.22 Air pollution episodes are increasing, triggering asthma attacks, respiratory ailments, and premature death while weakening immune systems to disease outbreaks such as the coronavirus (COVID-19).23 Floods do not only drown people and destroy their homes but also release toxic chemicals from hazardous waste sites and industrial facilities.24 Wildfires do not only leave a path of death and destruction through communities but spread smoke and hazardous air pollutants over vast areas, while also destroying millions of acres of wildlife habitat and recreation areas. Climate change does not only threaten the survival of iconic species such as the polar bear, disrupting its migratory behavior, but is also causing entire ecosystems to shift poleward and upward, disrupting migratory and breed-

17 Jacob Schewe and others, ‘State-of-the-Art Global Models Underestimate Impacts from Climate Extremes’ (2019) Nature Communications 1. 18 See generally Peel and Osofsky (n. 6) 270–79. 19 Lujan v Defenders of Wildlife, 504 US 555 (1992), 560–61. 20 Ibid. 561. 21 Summers v Earth Island Institute, [1992] 555 US 488 (2009). 22 Sarah E. Perkins-Kirkpatrick and Sophie C. Lewis, ‘Increasing Trends in Regional Heatwaves’ (2020) 11 Nature Communications 1. https://​www​.nature​.com/​articles/​s41467​-020​-16970​-7. 23 European Society of Cardiology, ‘Study estimates exposure to air pollution increases COVID-19 deaths by 15% worldwide’ (2020) https://​www​.escardio​.org/​The​-ESC/​Press​-Office/​Press​-releases/​study​ -estimates​-exposure​-to​-air​-pollution​-increases​-covid​-19​-deaths​-by​-15​-world last accessed 25 May 2022. 24 Phil McKenna, ‘Climate Change Threatens 60% of Toxic Superfund Sites, GAO Finds’ Inside Climate News (New York, 20 November 2019) https://​insideclimatenews​.org/​news/​20112019/​ superfund​-flooded​-climate​-change​-toxic​-health​-risk​-sea​-level​-rise​-wildfires​-gao​-report​-epa/​#:​~:​text​=​ Sixty​%20percent​%20of​%20the​%20nation's​,a​%20new​%20federal​%20report​%20warns. last accessed 25 May 2022.

Climate litigation in context of mitigation: evolving jurisprudence  311 ing behavior of many species.25 Climate models are becoming finer grained in their ability to predict how these impacts will affect specific locations and to attribute effects to increases in GHGs.26 Establishing a direct cause and effect relationship between these impacts and specific sources of GHG emissions remains a challenging undertaking but the emerging climate science can help plaintiffs satisfy the less demanding ‘fairly traceable’ prong of standing.27 Second, climate science is relevant to the assertion of constitutional rights to life, bodily integrity, and human dignity, which are increasingly being pressed, with mixed results, by climate litigants.28 The merits of these cases will be discussed below but suffice to say here that attribution science plays an important role in litigation seeking to compel governmental action on climate change. The warnings from climate scientists are growing increasingly dire. According to the World Meteorological Organization, the world is currently headed for a 3–5 °C future unless decisive and timely action is taken.29 At 4 °C large areas of the planet become uninhabitable, in some places literally too hot for human survival.30 According to the latest findings of the IPCC emissions must peak by 2030 and the world must achieve carbon neutrality by 2050 in order to meet the goals of the Paris Climate Agreement namely, to hold average global temperatures ‘well below’ 2 °C and ideally no greater than 1.5 °C.31 This will require unprecedented and transformative changes in every sector of the global economy – energy, transportation, agriculture, and land use. Climate change threatens the very foundations of democratic governance and ‘ordered liberty’.32 Courts exist in large part to safeguard democracy and to ensure protection of fundamental rights, including unenumerated or derived

United States Geological Survey (USGS), ‘Understanding Species’ Range Shifts in Response to Climate Change: Results from a Systematic National Review’ (USGS, 31 December 2017) https://​www​ .usgs​.gov/​centers/​casc​-sc/​science/​understanding​-species​-range​-shifts​-response​-climate​-change​-results​-a​ ?qt​-science​_center​_objects​=​0​#qt​-science​_center​_objects last accessed 25 May 2022. 26 Union of Concerned Scientists (UCS), ‘The Science Connecting Extreme Weather to Climate Change: Appendix A: List of Climate Attribution Studies’ (UCS 2018). 27 Bradford C. Mank, ‘Standing for Private Parties in Global Warming Cases: Traceable Standing Requirement Does Not Require Proximate Causation’ (2012) Michigan State Law Review 869. 28 Erin Daly and James R. May, Dignity Law: Global Recognition, Cases, and Perspectives (Hein 2020). 29 Laura Millan Lombrana, ‘Global Warming Prediction Sounds Alarm for Climate Fight’ Bloomberg News (New York, 3 December 2019) https://​www​.bnnbloomberg​.ca/​global​-warming​-prediction​-sounds​ -alarm​-for​-climate​-fight​-1​.1356590 last accessed 25 May 2022. 30 Colin Raymond, Tom Matthews and Radley M. Horton, ‘The Emergence of Heat and Humidity Too Severe for Human Tolerance’ (2020) 6 Science Advances 1. 31 Chris Mooney and Brady Dennis, ‘The world has just over a decade to get climate change under control’ Washington Post (7 October 2019) https://​www​.washingtonpost​.com/​energy​-environment/​ 2018/​10/​08/​world​-has​-only​-years​-get​-climate​-change​-under​-control​-un​-scientists​-say/​ last accessed 25 May 2022. 32 Palko v Connecticut, [1937] 302 US 319, 325; Rebecca Brown, ‘Separated Powers and Ordered Liberty’ (1963) 139 University of Pennsylvania Law Review 1513. 25

312  Research handbook on climate change mitigation law rights.33 In the US these include many of our most cherished rights such as the right to privacy and all that entails, as recognized in Griswold v Connecticut.34 Third, climate science could come into play when litigants are seeking to invoke the equitable powers of the court to issue injunctions that can be either prohibitive or affirmative in character. Prohibitive injunctions block activities that would exacerbate climate change, like leasing rights to develop fossil fuel resources or permitting construction of pipelines and other infrastructure. Affirmative injunctions order parties, usually governmental bodies, to take affirmative actions to reduce emissions, such as regulating emissions from power plants, automobiles, and other major sources. In addition to proving a likelihood of success on the merits, a plaintiff seeking an injunction must prove that they will suffer irreparable harm without it. Courts must also consider the economic or other harm from granting an injunction and ‘balance the equities’ to arrive at a just result.35 Climate science can inform the court’s judgment about the imminence and severity of the harm threatened by defendant’s action or inaction. It can also point the way to what needs to be done to avoid plunging over the climate cliff. Finally, climate science will be a critical component of the litigation seeking damages against the world’s largest oil companies known as the ‘carbon majors’.36 Groundbreaking work by Richard Heede and colleagues at the Climate Accountability Institute has shown that 100 companies are responsible for 91% of industrial GHGs in 2015 and over 70% of all anthropogenic GHG emissions.37 It is also possible to apportion responsibility for climate change damage among those most responsible.38 These issues are discussed in more detail below.

33 The Ninth Amendment of the US Constitution is the source of many ‘unenumerated’ rights. It states: ‘The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people’ (Congress.gov, ‘Ninth Amendment’(Constitution of the United States, 2022) https://​constitution​.congress​.gov/​constitution/​amendment​-9/​#:​~:​text​=​The​%20enumeration​%20 in%20the%20Constitution,others%20retained%20by%20the%20people last accessed 25 May 2022). The Supreme Court has found that unenumerated rights include such important rights as the right to travel, the right to vote, the right to keep personal matters private and to make important decisions about one’s health care or body. 34 Griswold v Connecticut, [1965] 381 U.S. 479. 35 Winter v Natural Resources Defense Council, [2008] 555 US 7, 15 (‘A preliminary injunction is an extraordinary remedy never awarded as of right. In each case, courts must balance the competing claims of injury and consider the effect of granting or withholding the requested relief, paying particular regard to the public consequences.’). 36 See discussion in section 2.4 below, ‘Holding the Oil Companies Accountable’. 37 The Report concludes: ‘If the trend in fossil fuel extraction continues over the next 28 years as it has over the previous 28, then global average temperatures would be on course to rise around 4 °C above preindustrial levels by the end of the century.’ Paul Griffin, The Carbon Majors Database: CDP Carbon Majors Report 2017 (CDP UK 2017). 38 Daniel Farber, ‘Apportioning Climate Change Costs’ (2008) 26 UCLA Journal of Environmental Law and Policy 21.

Climate litigation in context of mitigation: evolving jurisprudence  313

2

WHAT CLIMATE LITIGATION HAS ACCOMPLISHED

Climate litigation is not going to save the world. As Professor Richard Lazarus has written, climate change is a ‘super wicked problem’39 that will take all the forces of government worldwide, with the cooperation of the private sector and strong public support, to tackle. Courts are limited by separation of powers constraints. They do not make policy; they do not write new laws; they do not appropriate funds; and they do not administer the regulatory and non-regulatory programs needed to transition the world to a cleaner, more sustainable future. That said, litigation does have a role to play, and courts are not powerless to accord meaningful relief in appropriate cases. In large part the types of remedies that have been ordered are ‘plain vanilla’ administrative law remedies. These include declaratory judgments, vacatur of unlawful agency actions, and injunctions. But courts also have the power to award monetary damages, levy fines and penalties, and prosecute criminal violations. Courts also have ‘extraordinary’ equitable powers to order an ‘accounting’ by government officials with fiduciary obligations, appoint special masters and monitors to ensure compliance with decrees, and enforce their orders through contempt.40 This section looks at five categories of cases that have produced significant results for climate mitigation: spurring more ambitious government action to reduce emissions (2.1); keeping fossil fuels in the ground(2.2); forcing more robust assessment and disclosure of climate risks (2.3); making polluters pay for climate damage and abatement measures (2.4); and preserving natural carbon sinks like the Amazon Basin (2.5). 2.1

Spurring More Ambitious State Action to Reduce Emissions

Cases seeking to hold national governments accountable for their failure to take more aggressive action to mitigate climate change, or in some cases taking actions that exacerbate the problem, have had a mixed record in the courts. The primary obstacle has been the separation of powers doctrine and the reluctance of some courts, particularly in the United States, to overstep their constitutional authority. Success has largely depended on convincing the court that climate change poses serious threats to constitutional and human rights protected by treaty and international law triggering a duty of care on the part of government actors. The following cases highlight the successes and challenges that climate activists have experienced in court. A Urgenda The Urgenda climate case achieved a real milestone in the developing law of climate litigation. For the first time ever, a court ordered the government to immediately reduce GHG emissions. On 20 December 2019, the Dutch Supreme Court upheld the judgments of the lower courts confirming the order that the Netherlands must reduce its emissions by a minimum of 25% by the end of 2020 compared to 1990 levels. The Court ruled that the government has a ‘duty of care’ to prevent dangerous climate change. This duty derives, in large part, from Articles 2

39 Richard J. Lazarus, ‘Super Wicked Problems and Climate Change: Restraining the Present to Liberate the Future’ (2009) 94 Cornell Law Review 1153. 40 See Michael T. Morley, ‘The Federal Equity Power’ (2018) 59 Boston College Law Review 21. https://​lawdigitalcommons​.bc​.edu/​bclr/​vol59/​iss1/​6/​. See also Harmon v Brucker, [1958] 355 US 579, 581–2 (‘Generally, judicial relief is available to one who has been injured by an act of a government official which is in excess of his express or implied powers.’).

314  Research handbook on climate change mitigation law and 8 of European Convention on Human Rights (ECHR). Article 2 protects the right to life and Article 8 protects the right to private and family life. The ECHR established the European Court of Human Rights (ECtHR), which has power to issue advisory opinions. According to the case law of the ECtHR, contracting parties like the Netherlands have an obligation to take suitable measures where there is a real and immediate risk to people’s lives and welfare and the state is aware of those risks. The Supreme Court turned to climate science to find that climate change does indeed pose the kind of immediate risk to human life and well-being that requires preventive action. Noting the global nature of the problem and the commitments that the Netherlands and other parties to the UNFCC treaties have made, the Court said that ‘each country is thus responsible for its own share; and that ‘a country cannot escape its own share of the responsibility to take measures by arguing that compared to the rest of the world, its own emissions are relatively limited in scope and that a reduction of its own emissions would have very little impact on a global scale’. Rather, each nation is obliged to reduce greenhouse gas emissions in proportion to its share of the responsibility. The Court said: ‘This obligation of the State to do “its part” is based on Articles 2 and 8 ECHR, because there is a grave risk that dangerous climate change will occur that will endanger the lives and welfare of many people in the Netherlands.’ To determine what ‘its part’ meant for the Netherlands, the Court turned again to the science as reflected in the 2007 report of the IPCC, which said that to keep global temperatures below 2 °C the developed countries would have to reduce emissions by 25–40% by 2020 compared to 1990. The Court further noted that before 2011, the policy of the Dutch government was to achieve a 30% reduction by 2020. After 2011 the government lowered the target to 20% without explanation. On this basis the Court concluded that the lower court’s order to reduce emissions by 25%, representing the lower end of the IPCC recommendation, was reasonable. The Supreme Court directly addressed the separation of powers question. The Court said it was only in ‘clear-cut cases’, where there was broad agreement and ‘common ground’ among the nations to the international agreements on climate mitigation, that a court would intervene to order stronger measures to protect human rights. The Court reviewed all the agreements reached at the various COP meetings as well as the commitments made by the EU to arrive at an understanding of where the ‘common ground’ lay on the need for urgent action and the relative shares of industrialized nations versus developing nations. The Court did not dictate how the government was to meet the 25% target. There was some question about whether the government would comply with the Court’s order and what would happen if it did not. The matter was resolved when the Dutch parliament passed a law requiring a variety of measures to achieve the 25% reduction, including a 75% reduction in capacity at the country’s three coal-fired power plants and large reductions in livestock herds.41 The government adopted 30 of the recommendations from Urgenda’s Climate Solutions Plan, which was drawn up in collaboration with 800 civil society groups and other organizations. B Climate case Ireland Friends of the Irish Environment did not get the blockbuster ruling on a constitutional right to a healthy environment they were hoping for, but they did win a significant victory in quashing Jonathan Watts, ‘Dutch officials reveal measures to cut emissions after court ruling’ The Guardian (London, 24 April 2020) https://​www​.theguardian​.com/​world/​2020/​apr/​24/​dutch​-officials​ -reveal​-measures​-to​-cut​-emissions​-after​-court​-ruling last accessed 25 May 2022. 41

Climate litigation in context of mitigation: evolving jurisprudence  315 the National Mitigation Plan. Several aspects of the Court’s ruling are worth noting. First, the Court read the Climate Action and Low Carbon Development Act 2015 as creating enforceable obligations; specifically, the obligation to publish a plan with sufficient detail to show the public how the objective of achieving the NTO would be met.42 Second, the Court said the statute requires greater transparency and public participation than was afforded. The Court explained that: The purpose of requiring the Plan to be specific is to allow any interested member of the public to know enough about how the Government currently intends to meet the NTO by 2050 so as to inform the views of the reasonable and interested member of the public as to whether that policy is considered to be effective and appropriate.

The emphasis on meaningful public involvement in the next iteration of the plan should help to boost the government’s ambition. Third, the Court noted the importance of the Climate Change Advisory Council and characterized it as not simply ‘an informal body but rather one which is established by statute and has, therefore, a role in law’. The Court said the views of the Council were entitled to ‘significant weight’. The Council was critical of the Mitigation Plan and is expected to play an even greater role in the next round of planning. At the time of writing, there is a new coalition government in Ireland and the Oireachtas (Ireland’s legislative body) is considering legislation to strengthen the 2015 law. In a statement the Climate Action Minister said the new government was ‘now committed to an average 7% per annum reduction in overall greenhouse gas emissions from 2021 to 2030, equivalent to a 51% reduction over the decade and to achieving net zero emissions by 2050’.43 Notwithstanding these expressions of political support, there are significant obstacles to achieving the targets. Transportation and agriculture are Ireland’s largest sources of GHG emissions.44 There are no easy solutions for those categories. Observers believe that further litigation to spur continued efforts is inevitable. Although the Court cast serious doubt on whether a right to a healthy environment can be found in the Irish Constitution, it suggested that the threat of climate change could implicate the constitutional rights to life and bodily integrity.45To avoid the standing problem, a future case would have to be brought in the name of an individual rather than a corporate entity like FIE, although the organization would be permitted to join and provide financial support to deal with the loser pays problem. The Court also left open the possibility of bringing an Urgenda type case premised on violations of Articles 2 and 8 of the ECHR (rights to life and family life).

Friends of the Irish Environment v Government of Ireland [2018] AC 205/19 (IESC) (Ireland). Judgment of Mr. Justice Clarke [6.27]. 43 Kevin O’Sullivan, ‘Climate Bill a “significant milestone” but firmer requirements needed, environment groups warn’ The Irish Times (Dublin, 8 October 2020) https://​www​.irishtimes​.com/​news/​ environment/​climate​-bill​-a​-significant​-milestone​-but​-firmer​-requirements​-needed​-environment​-groups​ -warn​-1​.4375736 last accessed 25 May 2022. 44 Environmental Protection Agency Ireland (EPAI) ‘Ireland’s Greenhouse Gas Inventory’ (EPAI 2014). https://​www​.epa​.ie/​publications/​monitoring​-​-assessment/​climate​-change/​air​-emissions/​. 45 Judgment in Ireland [8.17]. 42

316  Research handbook on climate change mitigation law C Ashgar Leghari v Pakistan Leghari is the first climate decision from the Global South. Though primarily concerned with climate adaptation, it has lessons for the role of the courts in ordering government action to address mitigation. Similar issues of standing and separation of powers are presented whether the relief sought is for mitigation or adaptation. On 4 September 2015, the Lahore High Court, known as the Green Bench, ruled that the climate change is ‘a defining challenge of our time’ and ‘is a clarion call for the protection of fundamental rights of the citizens of Pakistan’.46 Judge Syed Mansoor Ali Shah cited ‘constitutional principles of democracy, equality, social, economic and political justice … the international principles of sustainable development, precautionary principle, environmental impact assessment, inter and intra-generational equity, and public trust doctrine’.47 Judge Ali Shah determined that ‘the delay and lethargy of the State in implementing the Framework offend the fundamental rights of the citizens’.48 Invoking the right to life and the right to dignity protected by the Constitution of Pakistan and international principles, including intergenerational equity and the precautionary principle, Judge Ali Shah called for greater attention to climate justice. As a remedy, Judge Ali Shah ordered the formation of a Climate Change Commission comprised of the representatives of the key ministries, NGOs, and technical experts. In a subsequent order he listed each official appointed as a ‘focal person’ on climate change and the members of the Climate Change Commission. The Green Bench retained jurisdiction to monitor and receive reports from the Commission concerning its progress. In an interview Judge Ali Shah said he had no intention to ‘put officials on the mat’ but wanted to help them.49 He noted that senior government officials were ‘totally at sea’ with ‘no idea what was going on or what climate change was’ and stressed the need for greater awareness raising and capacity building. He characterized the case as having ‘jump-started’ the government’s climate change efforts at a time when they had been ‘totally dead’. Judge Ali Shah viewed his role as a facilitator rather than simply an ‘umpire calling balls and strikes’.50 Judge Anne Aiken expressed the same view in her decision to allow the Juliana case to go to trial. She wrote: ‘Federal courts too often have been cautious and overly deferential in the arena of environmental law, and the world has suffered for it.’51 Judge Aiken, like Judge Ali Shah, saw the value a court can provide in convening the parties and overseeing an objective, fact-based process to explore options for addressing a problem as ‘wicked hard’ as the climate emergency.

46 Lahore High Court Judicial Department, ‘In the Lahore High Court Lahore Judicial Department, elaw​ .org/​ system/​ files/​ Case No: W.P. No. 25501/2015, Order Sheet’ (4 September 2015) https://​ attachments/​publicresource/​pk​.leghari​.090415​_1​.pdf last accessed 25 May 2022 [6]. 47 Ibid [7]. 48 Ibid [8]. 49 Malini Mehra, ‘Pakistan ordered to enforce climate law by Lahore court’ Climate Home News (New York, 9 February 2015) https://​www​.climatechangenews​.com/​2015/​09/​20/​pakistan​-ordered​-to​ -enforce​-climate​-law​-by​-lahore​-court/​ last accessed 25 May 2022. 50 In his confirmation hearings Chief Justice John Roberts famously compared the role of a judge to an umpire at a baseball game: ‘Judges are like umpires. Umpires don’t make the rules, they apply them.’ Administrative Office of the U.S. Courts, ‘Chief Justice Roberts Statement – Nomination Process’ (uscourts.gov, 29 September 2005) https://​www​.uscourts​.gov/​educational​-resources/​educational​ -activities/​chief​-justice​-roberts​-statement​-nomination​-process last accessed 25 May 2022. 51 217 F. Supp 3d (D. Or. 2016) 1262.

Climate litigation in context of mitigation: evolving jurisprudence  317 D Massachusetts v EPA This is by far the most important judicial decision for climate mitigation in the US. The ruling that GHGs are ‘air pollutants’ under the Clean Air Act opened the door to regulation of power plants, oil refineries, cement plants, landfills, and many other industrial sources as well as cars, trucks, heavy equipment, airplanes, vessels, and other mobile sources. In 2009, under the Obama administration, the EPA published what are called the ‘endangerment’ and ‘cause or contribute’ findings.52 Based on the holding in Mass. v EPA, these findings imposed a mandatory duty on the EPA to adopt regulations to reduce GHG emissions from all covered sources. The two most important rules deal with emissions from powerplants and motor vehicles. Under Obama, the EPA adopted the Clean Power Plan designed to achieve a 32% reduction in CO2 emissions relative to 2015 by 2030;53 and a combined fuel economy and tailpipe emissions standard designed to achieve a 54.5 MPG (miles per gallon) ‘fleetwide’ standard by model year 2025.54 These rules were a critical component of the nationally determined contribution (NDC) submitted by the US under the Paris Agreement.55 However, the Trump administration, in addition to withdrawing the US from the Paris Agreement,56 repealed both the CPP and the fuel economy rules and substituted much weaker rules.57 Lawsuits challenging these rollbacks as well as many others are pending in the DC Circuit Court of Appeals and in other courts.58 The incoming Biden administration has rejoined Paris and pledged to undo the rollbacks and adopt stronger emission controls across a wide range of industrial and mobile sources. It is unlikely that Mass. v EPA would be completely overturned, although that possibility cannot be entirely dismissed; it is more likely that the expansive view of the authority the EPA claimed in 52 USEPA, ‘Endangerment and Cause or Contribute Findings for Greenhouse Gases under the Clean Air Act’ (USEPA, 7 December 2009) https://​www​.epa​.gov/​climate​-change/​endangerment​-and​-cause​-or​ -contribute​-findings​-greenhouse​-gases​-under​-section​-202a last accessed 25 May 2022. 53 USEPA, ‘FACT SHEET: Overview of the Clean Power Plan’ (USEPA, 3 August 2015) https://​ archive​.epa​.gov/​epa/​cleanpowerplan/​fact​-sheet​-overview​-clean​-power​-plan​.html last accessed 25 May 2022. 54 The White House Office of the Press Secretary, ‘Obama Administration Finalizes Historic 54.5 MPG Fuel Efficiency Standards’(The White House, 28 August 2012) https://​obamawhitehouse​.archives​ .gov/​the​-press​-office/​2012/​08/​28/​obama​-administration​-finalizes​-historic​-545​-MPG​-fuel​-efficiency​ -standard last accessed 25 May 2022. 55 The White House Office of the Press Secretary, ‘U.S. Reports its 2025 Emissions Target to the UNFCCC’ (The White House, March 21 2015) https://​obamawhitehouse​.archives​.gov/​the​-press​-office/​ 2015/​03/​31/​fact​-sheet​-us​-reports​-its​-2025​-emissions​-target​-unfccc last accessed 25 May 2022 here. 56 The withdrawal came into effect on 4 November 2020 (Matt McGrath, ‘Climate change: US formally withdraws from Paris Agreement’ BBC News (London, 4 November 2020) https://​www​.bbc​.com/​ news/​science​-environment​-54797743 last accessed 25 May 2022. President Joe Biden rejoined the Paris Agreement, signing an executive order on his first day in office. National Public Radio (NPR), ‘U.S. Officially Rejoins Paris Agreement on Climate Change’ NPR (Washington, DC, February 19 2021) https://​www​.npr​.org/​2021/​02/​19/​969387323/​u​-s​-officially​-rejoins​-paris​-agreement​-on​-climate​-change​?t​ =​1652451866870 last accessed 25 May 2022. 57 Dana Nuccitelli, ‘The Trump EPA strategy to undo Clean Power Plan’ Yale Climate Communications (New Haven, CT, June 21 2019) https://​ya​leclimatec​onnections​.org/​2019/​06/​the​-trump​ -epa​-strategy​-to​-undo​-the​-clean​-power​-plan/​ last accessed 25 May 2022; Rebecca Beitsch, ‘Trump administration rolls back Obama-era fuel efficiency standards’ The Hill (Washington DC, 21 March 2020) https://​thehill​.com/​policy/​energy​-environment/​490318​-trump​-administration​-rolls​-back​-obama​ -era​-fuel​-efficiency​-standards last accessed 25 May 2022. 58 Niina H. Farah, ‘D.C. Circuit showdown over Trump carbon rule begins’ E&E News (Arlington, VA, 8 October 2020) https://​www​.eenews​.net/​stories/​1063715773 last accessed 25 May 2022.

318  Research handbook on climate change mitigation law developing the Clean Power Plan under section 111(d) of the Clean Air Act would not garner five votes on the reconstituted Court.59 E Juliana v United States Though the Juliana case has not succeeded in the goal of establishing a constitutional right to a climate system capable of sustaining human life, or in securing a broad remedy ordering the US government to produce a science-based plan to eliminate GHG emissions and draw down atmospheric concentrations of carbon, it has accomplished some important milestones. First the Ninth Circuit panel decision made several important findings. It found that the youth plaintiffs have suffered ‘particularized’ injuries from climate change, including increased asthma attacks and having their homes flooded; and that the actions and inactions of the government caused or contributed to those injuries. It agreed with plaintiffs that climate change poses an existential threat to the nation and that the other branches of government were not doing enough to address it and in some cases were making matters worse. And it rejected the government’s argument that plaintiff’s sole recourse was to challenge individual government actions under the Administrative Procedure Act as opposed to asserting constitutional rights. Second, the Juliana case received a massive amount of publicity in the US and around the world and served to educate the public about the nature of the climate crisis, the urgent need for action at all levels of government, the availability of technologies and other measures to address the problem and the consequences of delay. Polls have shown a steady increase in the number of Americans who accept the realities of climate change and support stronger regulations to control carbon pollution.60 The Juliana case is not the only reason for the change in public attitudes, but it has certainly contributed to raising the consciousness of the American public. Third, Juliana has inspired many other youth-led climate lawsuits around the world, including the Future Generations case, which led to the landmark ruling by the Colombian Supreme Court discussed above. The Our Children’s Trust legal team supports litigation in five countries, including federal climate cases that span North America, from LaRose v Her Majesty the Queen in Canada61 to Jovenes v Gobierno de Mexico in Mexico.62 It inspired eight youth plaintiffs in Australia to bring a class action against the Federal Minister for the Environment resulting in a landmark Federal Court ruling that the government has a common law duty of care to protect young people from the climate change impacts of the proposed Vickery Extension Coal Project.63 Justice Bromberg held that the Environment Minister ‘must take reasonable care to not cause the Children harm resulting from the extraction of coal and

Grace Weatherall, ‘“A Great Deal of Discretion”: Bostock, Plain Text, and the Future of Climate Jurisprudence’ (2020) 45 Harvard Environmental Law Review Online 17. https://​harvardelr​.com/​wp​ -content/​uploads/​sites/​12/​2020/​11/​45​.Online​-Weatherall​.pdf. 60 Our Children’s Trust, ‘Global Legal Actions’ (Our Children’s Trust, 2022) https://​ www​ .ourchildrenstrust​.org/​global​-legal​-actions accessed 30 November 2020. 61 Our Children’s Trust, ‘Active Global Legal Actions Canada’ (Our Children’s Trust, 2021) https://​ www​.ourchildrenstrust​.org/​canada last accessed 25 May 2022. 62 Our Children’s Trust, ‘Active Global Legal Actions Mexico’ (Our Children’s Trust, 2021) https://​ www​.ourchildrenstrust​.org/​mexico last accessed 25 May 2022. 63 Sharma by her litigation representative Sister Marie Brigid Arthur v Minister for the Environment [2021] FCA 560. 59

Climate litigation in context of mitigation: evolving jurisprudence  319 emission of CO2 into the Earth’s atmosphere’. The Court declined to issue an injunction and the case is on appeal. More recently the European Court of Human Rights has ordered 33 European governments to respond to a landmark climate lawsuit lodged by six youth plaintiffs from Portugal.64 The youth plaintiffs assert that the respondent nations are failing to take actions to contain the rise in the average temperature of the planet to significantly below 2 °C compared to pre-industrial levels and to continue the action taken to limit the rise in temperature to 1.5 °C as set forth in the Paris Agreement, to which the respondents are parties. The Court has directed the respondents to explain whether their failure to take actions necessary to achieve these targets violates Articles 2, 3 and 8 of the ECHR, taken alone and in conjunction with Article 14, as well as Article 1 of Protocol No. 1 to the Convention. In particular, the ECtHR framed the question as whether the respondent states have fulfilled their obligations under the Convention ‘read in the light of the relevant provisions and principles such as the principles of precaution and intergenerational equity, contained in international environmental law, including in international treaties to which they are Parties’. Of note, the ECtHR also invoked Article 3(1) of the United Nations Convention on the Rights of the Child, which requires that any decision affecting them be based on the overriding consideration of the best interests of the child. Fourth, Juliana has helped galvanize the youth vote in America, which led to a record turnout in the recent presidential election. Exit polls showed youth voter turnout (ages 18 to 29) surged by around 8% in 2021 compared to 2016. Nationwide, 62% of young voters cast their vote for Biden compared to 35% for Trump, according to estimates from the New York Times.65 2.2

Keeping Fossil Fuels in the Ground

In the US and elsewhere, environmental litigation is often used as a tactic to delay construction of harmful projects, to force disclosure of their impacts, to educate the public, to rally support for political action, and to advocate cleaner alternatives. The main takeaway from these cases is that litigation can delay the ‘lock-in’ effects of massive capital investments in fossil fuel production and infrastructure, thereby buying valuable time for market forces to deliver less carbon-intensive technologies and for political forces to mobilize around stronger mitigation actions at all levels of government. The rapid growth of renewables66 and the surging market for electric vehicles67 are two examples of the transitions underway in the market facilitated by the ‘stalling tactics’ that climate litigation provides. One of the most successful efforts in this regard is the Sierra Club’s Beyond Coal campaign. Funded in large part by donations from former NYC Mayor Michael Bloomberg totaling over

Duarte Agostinho v Portugal and 32 Other States ECHR (30 November 2020). The New York Times, ‘National Exit Polls: How Different Groups Voted’ The New York Times (New York, 6 January 2021) https://​www​.nytimes​.com/​interactive/​2020/​11/​03/​us/​elections/​exit​-polls​ -president​.html last accessed 25 May 2022. 66 International Energy Agency (IEA), Renewables 2020 (IEA, 2020). (‘Renewables will account for almost 90% of the increase in total power capacity worldwide in 2020 and will accelerate in 2021 to their fastest growth in the last six years.’) 67 Ariel Cohen, ‘Plugging into the Future: The Electric Vehicle Market Outlook’ Forbes (Jersey City, NJ, 26 October 2020) https://​www​.forbes​.com/​sites/​arielcohen/​2020/​10/​26/​plugging​-into​-the​-future​-the​ -electric​-vehicle​-market​-outlook/​?sh​=​ef3c3d698121 last accessed 25 May 2022. 64

65

320  Research handbook on climate change mitigation law US$174 million,68 the goal of this campaign is to close all coal plants in the US and replace them with cleaner sources of electricity. The campaign has played a major role in the retirement of 60% of the coal fleet, 318 out of 520 plants, as of September 2020. This amounts to 840 megawatts of ‘dirty’ energy.69 The Sierra Club has employed several legal strategies, including intervention in utility ratemaking and integrated resource planning before state utility commissions. In November 2017, a similar campaign, called Europe Beyond Coal, was launched in the UK. This campaign is an alliance of civil society groups working to speed the closures of coal mines and power plants, prevent the building of any new coal projects and hasten the just transition to cleaner, more efficient energy. Over 30 NGOs, including Greenpeace, WWF, EEB, Climate Action Network Europe and many others are involved.70 Much of the success of these campaigns is attributable to market forces that are making low carbon alternatives such as natural gas and renewables like wind and solar more competitive. The US Energy Information Administration estimates CO2 emissions from coal fell 14.6% in 2019, contributing to a 2.8% drop in total energy-related emissions. The drop in emissions mirrored a 16% decline in coal generation, as electricity production from the fuel fell to its lowest level since 1976.71 Through its litigation, the Sierra Club has been able to negotiate agreements to speed up the retirement of coal plants and diversify the long-range portfolios of major utilities like Xcel Energy and Duke Power. By highlighting the growing financial risks posed by reliance on fossil fuels, coupled with the mounting evidence of the damage that climate change is causing, groups like the Sierra Club are moving the needle on the transition to carbon neutral energy systems. The ‘keep it in the ground’ movement has also had success using the courts to block fossil fuel developments and infrastructure projects. A coalition of ranchers and conservationists in Montana defeated a proposed coal mine and railroad after 20 years of litigation under the National Environmental Policy Act (NEPA) and the Administrative Procedure Act.72 Environmental groups have blocked coal mines and oil and gas leasing on public lands in the western US in several cases.73 While these are procedural victories that do not permanently foreclose development, they have bought valuable time for a political solution. The recent election of Joe Biden, who has vowed to phase out these leasing programs, provides the opportunity to cancel the leases. Environmental organizations have been fighting pipelines carrying crude oil and natural gas. The longest running battle has been over the Keystone XL pipeline, designed to bring heavy ‘tar sands’ oil from Alberta, Canada, to refineries on the Gulf Coast 68 The Sierra Club Press, ‘Bloomberg Philanthropies and Sierra Club’s Beyond Coal Campaign Reaches Landmark Closure of 318th U.S. Coal Plant, on Track to Retire All Coal Plants by 2030’ Bloomberg (15 September 2020) https://​tinyurl​.com/​33y9fpjc last accessed 25 May 2022. 69 Sierra Club, ‘Beyond Coal’ (Sierra Club, 2022) https://​coal​.sierraclub​.org/​accessed 10 November 2020. 70 Europe Beyond Coal https://​beyond​-coal​.eu/​last accessed 25 May 2022. 71 Benjamin Storrow, ‘Coal’s Decline Continues with 13 Plant Closures Announced in 2020’ E&E News (Washington DC, 27 May 2020) https://​www​.scientificamerican​.com/​article/​coals​-decline​ -continues​-with​-13​-plant​-closures​-announced​-in​-2020/​ last accessed 25 May 2022. 72 Nick Engelfried, ‘How Montanans stopped the largest new coal mine in North America’ (YES! Media, 28 March 2016) https://​www​.yesmagazine​.org/​environment/​2016/​03/​28/​how​-montanans​ -stopped​-the​-largest​-new​-coal​-mine​-in​-north​-america last accessed 25 May 2022; Northern Plains Resource Council, Inc. v Surface Transp. Bd., 668 F.3d 1067, 1073 n. 2 (9th Cir. 2011). 73 WildEarth Guardians v Jewell, [2013] 738 F.3d 298 (D.C. Cir. 2013); WildEarth Guardians v US BLM, [2020] 457 F. Supp. 3d 880, 890 (D. Mont. 2020); High Country Conservation Advocates v US Forest Service, [2014] 52 F. Supp. 3d 1174, 1196 (D. Colo. 2014).

Climate litigation in context of mitigation: evolving jurisprudence  321 for export. President Obama opposed the pipeline, but former President Trump approved it. Recently the federal court in Montana invalidated a Corps of Engineers permit to construct the pipeline on the ground that the Corps failed to consult with the US Fish and Wildlife Service under the Endangered Species Act.74 President Biden has voiced his opposition to the pipeline. In another case, Dominion Energy and Duke Energy announced that they are cancelling the 600-mile Atlantic Coast Pipeline project.75 The shutdown comes after six years of entrenched legal battles, public protest, and direct action to disrupt construction, and a price tag that grew to US$8 billion. Environmental groups are not the only ones questioning or delaying fossil fuel infrastructure. Some states are also erecting roadblocks. The State of Washington denied a key permit for construction of the Millennium Bulk Terminals in Longview.76 The Washington Department of Ecology denied the permit, citing nine problem areas, including rail safety, air pollution, noise pollution and tribal resources. Montana and Wyoming, which are major coal producing states, have brought an original action in the US Supreme Court claiming that Washington’s action is an unconstitutional infringement on interstate commerce.77 The State of Oregon denied a key permit for the Jordan Cove LNG terminal.78 Oregon’s Department of Land Conservation and Development decided that the proposed export terminal in Coos Bay would have significant adverse effects on the state’s coastal scenic and aesthetic resources, endangered species, critical habitat, fisheries and commercial shipping. On the other side of the country the Supreme Court of Maine upheld the Clear Skies Ordinance passed by the City of South Portland which prohibited the bulk loading of crude oil onto vessels in the City’s harbor. The ordinance had the effect of preventing the Portland Pipe Line Company (PPLC) from using its infrastructure to transport oil from Montréal to South Portland via a system of underground pipelines. The goal of the project was to export heavy crude from the Alberta tar sands region of Canada. The Maine Supreme Court rejected the company’s argument that the ordinance was preempted by state law.79 The company also sued in federal court alleging that the ordinance was preempted by the federal Pipeline Safety Act and constituted an undue burden on interstate commerce in violation of the dormant commerce clause. The federal district court ruled against the pipeline company, finding that the ordinance was based on legitimate concerns regarding the local air quality and land use impacts of the proposed project.80 The case is now on appeal to the First Circuit Court of Appeals.

74 Northern Plains Resource Council v United States Army Corps of Engineers, [2020] No. CV-19-44-GF-BMM, F. Supp. 3d, 2020 WL 1875455 (D. Mont. 15 April 2020). 75 Duke Energy, ‘Dominion Energy and Duke Energy Cancel the Atlantic Coast Pipeline’ (Duke Energy, 5 July 2020) https://​tinyurl​.com/​bdhjmr3b last accessed 25 May 2022. 76 Hal Bernton, ‘Washington state denies key permit for Columbia River coal terminal, potentially dooming project’ Seattle Times (Seattle, WA, 26 September 2017) https://​tinyurl​.com/​2p9ynpar last accessed 25 May 2022. 77 Tripp Baltz, ‘Montana, Wyoming Urge Supreme Court to Take Coal Terminal Case’ Bloomberg Law (New York, 21 January 2020) https://​news​.bloomberglaw​.com/​environment​-and​-energy/​montana​ -wyoming​-urge​-supreme​-court​-to​-take​-coal​-terminal​-case last accessed 25 May 2022. 78 Ted Sickinger, ‘Oregon denies key permit for Jordan Cove LNG project on eve of federal decision’ OregonLive (Portland, OR, 19 February 2020) https://​www​.oregonlive​.com/​politics/​2020/​02/​oregon​ -denies​-key​-permit​-for​-jordan​-cove​-lng​-project​-on​-eve​-of​-federal​-decision​.html last accessed 25 May 2022. 79 Portland Pipe Line Corp. v City of South Portland, 332 F. Supp. 3d 264, 303–8 (D. Me. 2018). 80 Portland Pipe Line Corp. v City of South Portland, [2016] 164 F. Supp. 3d 157 (D. Me. 2016).

322  Research handbook on climate change mitigation law The lesson from these cases is that litigation challenging fossil fuel extraction and infrastructure can lead to better decision-making by government agencies and tribunals charged with approving or reviewing such projects. The evidence adduced in these cases often reveals better alternatives to accomplishing the objectives of such projects with greater long-term benefits to society. 2.3

Forcing Assessment and Disclosure of Climate Risks

The largest category of climate litigation deals with the obligations of governmental agencies to consider the effects of climate change resulting from their actions and decisions.81 These administrative actions take many forms including planning, permitting, leasing, and funding. The claims seek a variety of remedies including preparation of environmental impact assessments, consultation with expert agencies, public disclosure of accurate information, and provision of meaningful opportunities for public involvement. These cases assert procedural rights based on statutes and regulations or other administrative instruments having the force of law. The remedies typically involve remands to the agencies to correct errors and sometimes result in the underlying actions being vacated or enjoined pending compliance. Some examples of these cases from various countries follow. A United States In the US most of the cases are based on NEPA, which the US Supreme Court has said is a purely procedural law requiring that impacts and alternatives must be considered but leaving the final decision to the agency in charge.82 Some cases involve failure to consider the cumulative GHG emissions resulting from the leasing of coal or oil and gas deposits on public lands and in offshore waters.83 Others involve licensing or permitting fossil fuel infrastructure such as pipelines, railroads, or export terminals.84 Courts often require agencies to quantify, using the best available information, the amount of carbon emissions that can be expected from decisions authorizing the extraction and transportation of fossil fuels.85 NEPA requires an agency to evaluate the indirect effects of a proposed action, ‘which are caused by the action

Sabin Center on Climate Change Law, ‘Climate Case Chart’ (Sabin Centre on Climate Change Law, 2022) http://​climatecasechart​.com/​last accessed 25 May 2022. 82 Robertson v Methow Valley Citizens Council, 490 US 332, 350 (1989). 83 Arnold W. Reitze, Jr, ‘Dealing with Climate Change under the National Environmental Policy Act’ (2019) 43 William & Mary Environmental Law and Policy Review 173. 84 Romany M. Webb, ‘Climate Change, FERC and Natural Gas Pipelines’ (2020) New York University Environmental Law Journal 179. 85 See WildEarth Guardians v US Bureau of Land Management [2020] 457 F. Supp. 3d 880 (D. Mont. 2020): ‘[E]ven though BLM cannot ascertain exactly how all of these projects contribute to climate change impacts felt in the project area, it knows that less greenhouse-gas emissions equals less climate change.’ See also WildEarth Guardians v Zinke, [210] 368 F. Supp. 3d 41 (D.D.C. 2019): [T]he challenged EAs failed to take a hard look at the climate change impacts of oil and gas drilling because the [environmental assessments] (1) failed to quantify and forecast drilling-related GHG emissions; (2) failed to adequately consider GHG emissions from the downstream use of oil and gas produced on the leased parcels; and (3) failed to compare those GHG emissions to state, regional, and national GHG emissions forecasts, and other foreseeable regional and national BLM projects. 81

Climate litigation in context of mitigation: evolving jurisprudence  323 and are later in time or farther removed in distance, but are still reasonably foreseeable’.86 Moreover, in determining what effects are reasonably foreseeable, an agency must engage in ‘reasonable forecasting and speculation’.87 In addition, courts have required agencies to calculate the ‘social cost of carbon’ (SCC) using available modeling tools. SCC is an estimate of the economic damage that would result from emitting one additional ton of greenhouse gases into the atmosphere.88 The SCC is used in cost–benefit analysis to quantify the dollar-value of a policy’s effect on climate change due to changes in greenhouse gas emissions. The Biden administration has established an ‘interim’ price of US$51 per ton of carbon dioxide pollution pending further review by an interagency panel.89 An example of how US courts deal with the NEPA and SCC issues is High Country Conservation Advocates v Forest Service. There the court acknowledged the uncertainties involved in estimating the costs of methane emissions from coal mining but faulted the agency for not employing the SCC tool that had been developed by the interagency work group. The court noted that: Even though NEPA does not require a cost-benefit analysis, it was nonetheless arbitrary and capricious to quantify the benefits of the lease modifications and then explain that a similar analysis of the costs was impossible when such an analysis was in fact possible and was included in an earlier draft EIS.90

The demise of the Atlantic Coast Pipeline is another example of how litigation can thwart further investments in fossil fuel infrastructure. The project was abandoned after being tied up in years of court challenges to various permits that had doubled the costs.91 In one of the more dramatic decisions the Fourth Circuit Court of Appeals blocked construction of a major compressor station that was slated to be constructed in a predominantly black community.92 B Australia The decision of the New South Wales Land and Environment Court in the Rocky Hill case has been hailed as a landmark decision in climate litigation. It represents the first time an Australian court has refused to approve a coal mining project not only based on unacceptable NEPA, 40 C.F.R. § 1508.8(b). Scientists’ Inst. for Pub. Info., Inc. v Atomic Energy Comm’n, 481 F.2d 1079 (D.C. Cir. 1973). 88 Kevin Rennert and Cora Kingdon, ‘Social Cost of Carbon 101’ (Resources for the Future 2019). https://​ www​.rff​.org/​publications/​explainers/​social​-cost​-carbon​-101/​?gclid​=​CjwKCAiA8ov​_B​RAoEiwAOZo​ gwaoR1ncKT​-qFJkgdcM​2TVuunZNtU​1TaCzt9c2o​wFXLMYPuRe​_Sd2pBoCTW0QAvD​_BwE. 89 The White House Briefing Room, ‘Memorandum on Restoring Trust in Government Through Scientific Integrity and Evidence-Based Policymaking’ (27 January 2021) https://​www​.whitehouse​.gov/​ briefing​-room/​presidential​-actions/​2021/​01/​27/​memorandum​-on​-restoring​-trust​-in​-government​-through​ -scientific​-integrity​-and​-evidence​-based​-policymaking/​ last accessed 25 May 2022. 90 High Country Conservation Advocates v US Forestry, 333 F. Supp. 3d 1107 (D. Colo. 2018); see also, Centre for Biological Diversity v National Highway Traffic Safety Admin, [2008] 538 F.3d 1172 (9th Cir. 2008), which finds it arbitrary and capricious to assign a cost of $0/ton to emissions when none of the identified estimates was that low. 91 Erin Cox and Gregory S. Schneider, ‘Energy companies abandon long-delayed Atlantic Coast Pipeline’ Washington Post (5 July 2020) https://​www​.washingtonpost​.com/​local/​virginia​-politics/​ atlantic​-coast​-pipeline​-canceled/​2020/​07/​05/​da1c0f40​-bef5​-11ea​-b178​-bb7b05b94af1​_story​.html last accessed 25 May 2022. 92 Friends of Buckingham v State Air Pollution Control Board, [2020] 947 F.3d 68 (4th Cir. 2020). 86 87

324  Research handbook on climate change mitigation law ‘planning, visual and social impacts’ but to prevent a new source of GHG emissions. Chief Judge Preston explained his decision this way: An open cut coal mine in this part of the Gloucester valley would be in the wrong place at the wrong time. Wrong place because an open cut coal mine in this scenic and cultural landscape, proximate to many people’s homes and farms, will cause significant planning, amenity, visual and social impacts. Wrong time because the GHG emissions of the coal mine and its coal product will increase global total concentrations of GHGs at a time when what is now urgently needed, in order to meet generally agreed climate targets, is a rapid and deep decrease in GHG emissions.93

To keep the decision in perspective it is important to note that climate change was not the only or even the most important basis for the court’s decision. There were serious local impacts from the mining itself. Plus, the judgment arose from an initial government decision to refuse the mine, whereas challenges to mining approvals could face a stiffer test. But the court rejected the mining company’s argument that the emissions were too small to matter and that other sources would replace the Rocky Hill coal (the market substitution or ‘whack a mole’ theory) with no benefit to the climate. As Judge Preston put it: ‘An environmental impact does not become acceptable because a hypothetical and uncertain alternative development might also cause the same unacceptable environmental impact.’ At a minimum the decision provides a sound framework for judicial review of proposals for new fossil fuel projects in a carbon-constrained world. Cases in Australia span several different substantive categories including mitigation cases, adaptation cases, cases on corporate climate risk accountability, constitutional and human rights cases, and cases that broaden access to justice in climate cases. Professor Jacqueline Peel at the University of Melbourne School of Law maintains a very detailed and up-to-date database on all the cases.94 In terms of mitigation, challenges to coal mining and electricity generation represent the largest category of cases, though challenges to wind farms have been increasing. These cases primarily involve administrative challenges to government decision-making under planning and environmental legislation. Sea level rise, coastal flooding and bushfires have been the subject of a second stream of adaptation cases. The cases have normalized the practice of including climate change impacts in project reviews and development plans and heightened public awareness of the growing dangers and need for more rigorous adaptation planning and investments in building community resilience. However, as Professor Peel points out, ‘climate change litigation in Australia has not achieved the transformative impact seen in other countries’.95 The latest development in Australian climate change litigation is the settlement in McVeigh v REST.96 The litigation was brought by a university student against his pension fund, Retail Employees Superannuation Pty Ltd (REST), alleging a breach of trustee obligations to adequately disclose climate risk in its investments. The settlement required REST to issue a media statement detailing that ‘climate change is a material, direct

Gloucester Resources Ltd v Minister for Planning [2019] NSWLEC 7 [699]. University of Melbourne, ‘Australian Climate Change Litigation’ (University of Melbourne, 2022) https://​law​.app​.unimelb​.edu​.au/​climate​-change/​index​.php last accessed 25 May 2022. 95 Jacqueline Peel, Hari Osofsky and Anita Foerster, ‘Shaping the “Next Generation” of Climate Change Litigation in Australia’ (2017) 41 Melbourne University Law Review 793. 96 Mark McVeigh v Retail Employees Superannuation Pty Ltd, Federal Court of Australia, NSD1333/ 2018, Amended Complaint, 21 September 2018. 93 94

Climate litigation in context of mitigation: evolving jurisprudence  325 and current financial risk to the superannuation fund’ and to take specific initiatives to manage and address the financial risks of climate change on behalf of its members. To address this risk, REST agreed to implement a net-zero carbon footprint by 2050 goal for the fund, to measure, monitor and report climate progress to ensure investor climate disclosure, and to publicly disclose portfolio holdings, among other commitments. South Africa C On 8 March 2017, the North Gauteng High Court in South Africa handed down judgment in the matter of Earthlife Africa Johannesburg v The Minister of Environmental Affairs.97 Hailed as South Africa’s first climate change case, the High Court set aside approval of the 1200 MW Thabametsi Coal Station and remanded the decision for reconsideration of the climate impacts in the environmental impact assessment that had been prepared. The judgment contains a number of precedent-setting declarations including that climate change poses a substantial risk to sustainable development in South Africa, invoking the right to a healthy environment under section 24 of the South African Constitution; that assessment of climate change impacts must take place before project approval; that proper assessment of climate change impacts requires a ‘professionally researched climate change impact report canvassing both mitigation and adaptation measures’; and that the precautionary principle reinforces the need to consider climate change prior to the approval of major development projects. As a postscript the international consortium that was planning to build the plant pulled the plug on the project in 2019.98 Yet another example of a lawsuit delaying a project long enough to change the economics. D United Kingdom On 16 December 2020, the Supreme Court of the United Kingdom overturned an earlier decision by the Court of Appeal which had blocked the construction of a third runway at Heathrow Airport.99 The case was brought by Friends of the Earth and a small NGO called Plan B Earth. The lower court had ruled that the Secretary of State for Transport’s decision to permit construction of the runway had failed to take full account of the UK government’s commitments to mitigate climate change under the Paris climate accord. The Supreme Court disagreed, finding that the UK’s domestic climate obligations had been considered in formulating the Airports National Policy Statement and that it was inappropriate to consider the Paris Agreement in this context. The Court also ruled that the Climate Change Act of 2008 constituted the applicable government policy on climate change and that the sixth carbon budget published on 9 December 2020 imposes stricter national climate targets than those prescribed by the Paris Agreement. Finally, the Court said the environmental report took sufficient account of the UK’s international obligations as part of the Paris Agreement. Notwithstanding the Supreme Court’s decision, the fate of the third runway remains in doubt. Investors have

Earthlife Africa Johannesburg v Minister of Environmental Affairs and others, [2017] ZAGPPHC 58 (2017) 65662/16. 98 Mfuneko Toyana, ‘Exclusive: Consortium pulls plug on South Africa’s Thabametsi coal plant’ Reuters (London, 17 November 2020) https://​www​.reuters​.com/​article/​us​-climate​-change​-safrica​-coal​ -exclusive​-idINKBN27X2LC last accessed 25 May 2022. 99 R (on the application of Friends of the Earth Ltd and others) v Heathrow Airport Ltd, [2020] UKSC 52. 97

326  Research handbook on climate change mitigation law been lukewarm. The government of Prime Minister Boris Johnson stayed out of the litigation and has not thrown its weight behind the project. For its part, Friends of the Earth has vowed to take the case to the European Court of Human Rights. E Norway On 22 December 2020, Norway’s Supreme Court struck down a challenge from environmental groups trying to stop oil exploration in the Arctic, after a long-running battle over the country’s climate change commitments.100 By a vote of 11 to 4, the Court rejected the argument of Greenpeace and Young Friends of the Earth Norway that the granting of ten oil exploration licenses in the Barents Sea in 2016 was unconstitutional. In a case also known as The People vs. Arctic Oil the organizations argued that the oil licenses violated article 112 of Norway’s constitution, which guarantees the right to a clean environment. The judges said that the right to a clean environment did not bar the government from drilling for offshore oil, and that Norway was not legally responsible for emissions stemming from oil it has exported. The court also held that the granting of oil permits did not violate the ECHR, in part because the permits did not represent ‘a real and immediate risk’ to life and physical integrity. The four dissenting judges said that a procedural error had been made in granting approval, and that the government had failed to assess any potential climate emissions stemming from the oil that would be exported. F France In 2019, Friends of the Earth (FOE) sued the oil company Total in France, alleging that it had failed to adequately assess the threats to human rights and the environment of the Tilenga oil project in Uganda and Tanzania. Under France’s Duty of Vigilance Law, French companies must identify and prevent risks to human rights and the environment that could result from their business practices. FOE alleged that Tilenga’s vigilance plan did not properly account for the project’s potential life-cycle greenhouse gas emissions. However, the action was dismissed by the Nanterre High Court on the ground that it lacked jurisdiction.101 More recently a new case has been filed against Total by several French NGOs as well as more than a dozen local governments.102 The legal issue is whether the French Commercial Code requires Total to adequately report climate risks associated with its activities and take action to mitigate those risks in line with the goals of the Paris Agreement. The case is pending in the Nanterre District Court. The main takeaways from these cases are that climate litigation is forcing decision-makers within and outside the government to pay closer attention to climate science, to understand the risks and consequences of inaction, to develop and deploy the measures needed to reduce and ultimately eliminate carbon emissions, to educate and involve the public in the work that needs to be done, and fundamentally to change the way we think about the world and our place in it.

Greenpeace Nordic Ass’n v Ministry of Petroleum and Energy ECHR, 2016 20-051052SIV-HRET. Friends of the Earth et al. v Total, Cour de cassation, [2021] civile, Chambre commerciale, 15 December 2021, 21-11.882 21-11.957, Publié au bulletin. 102 Judicial Court of Nanterre, Notre Affaire à Tous and Others v Total (Judicial Court of Nanterre, 2020) http://​blogs2​.law​.columbia​.edu/​climate​-change​-litigation/​wp​-content/​uploads/​sites/​16/​non​-us​ -case​-documents/​2020/​20200128​_NA​_complaint​.pdf last accessed 25 May 2022. 100 101

Climate litigation in context of mitigation: evolving jurisprudence  327 2.4

Holding the Oil Companies Accountable

Government policies and regulations can only go so far in achieving the emission reduction goals needed to meet the Paris targets. Corporations must also step up to the challenge. The growing number of companies adopting environmental, social and governance (ESG) principles and practices, some pledging zero carbon emissions and beyond,103 is a very positive development. But the fossil fuel industry has been slow to make the changes necessary and many are still investing heavily in new sources of production.104 Pressure for change is coming from many directions – banks, brokers, shareholders, customers, regulators – and from the courts. Though climate litigation aimed at private companies is still in its formative stages, there are developments underway that warrant attention. A United States cases The economic damage from climate change continues to mount. In 2020, the United States experienced a record-smashing 22 weather or climate disasters that each resulted in at least US$1 billion in damage, including a record seven linked to hurricanes or tropical storms.105 Cities and towns are bearing the brunt of these costs as well as the costs of defending their communities against these escalating disasters and adapting to a world grown more dangerous and unpredictable. Adaptation is a costly proposition. Coastal cities from Boston to Miami have considered building sea walls and tidal gates like the Netherlands, only to find that the costs are prohibitive and the efficacy hard to evaluate given the uncertainties in projecting future sea level rise conditions. Not to mention the negative environmental effects of such hard armoring structures. Armored shorelines can prevent sandy beaches, wetlands, and other intertidal areas from moving inland as the land erodes or sea levels rise, but they also have the potential to eliminate habitat for marine organisms and beach front for the public by restricting the natural movement of sediments. These mounting costs have prompted over a dozen states and municipalities to sue a collection of the world’s largest oil companies – the carbon majors – in state courts. The claims are based on several common law tort theories including nuisance (public and private), trespass, negligence, product liability, and strict liability. The claims assert that liability is joint and several due to the indivisible nature of global GHG emissions and climate change impacts. Though frequently denominated as public nuisance cases, a more accurate description would be ‘failure to warn’. The tortious conduct alleged is that defendant corporations have known for decades that their products were a major cause of climate change and that, rather than warn

103 For example, more than 100 companies have signed the Climate Pledge committing to achieving net-zero carbon by 2040 or sooner. See The Climate Pledge (2022) https://​www​.theclimatepledge​.com/​ last accessed 25 May 2022. 104 Documents recently uncovered by Bloomberg News reveal that Exxon Mobil Corp. has been planning to increase annual carbon-dioxide emissions by as much as the output of the entire nation of Greece. See Kevin Crowley and Akshat Rathi, ‘Exxon Mobil’s investment plan adds millions of tons of carbon output’ Bloomberg News (New York, 5 October 2020) https://​www​.bloomberg​.com/​news/​articles/​ 2020​-10​-05/​exxon​-carbon​-emissions​-and​-climate​-leaked​-plans​-reveal​-rising​-co2​-output last accessed 25 May 2022. 105 Adam B. Smith, ‘2020 U.S. billion-dollar weather and climate disasters in historical context’ (NOAA Climate.gov, 8 January 2021) https://​www​.climate​.gov/​disasters2020 last accessed 25 May 2022.

328  Research handbook on climate change mitigation law their customers, shareholders, and regulators, they engaged in a multi-decade campaign of disinformation and misrepresentation, and in some cases outright deceit, meant to stall meaningful action to mitigate and adapt to the effects of climate change. The seminal book Merchants of Doubt recounts much of this story of deception.106 Even more telling are the revelations and internal corporate documents uncovered by the investigative reporting of Inside Climate News, the Columbia School of Journalism, and the Los Angeles Times. The oil companies have sought to remove all the cases from state court to federal court, expecting a more favorable outcome there.107 So far, that strategy has failed.108 However, the companies did win a narrow procedural victory with the US Supreme Court’s decision in the City of Baltimore case, requiring the lower courts to conduct a broader analysis of potential grounds for federal court jurisdiction.109 This will delay the progress of the cases, over a dozen at this point, that have been remanded to state court. However, the companies failed in their bid to have the Court rule that all the cases belong in federal court. Justice Gorsuch’s opinion made clear that the decision was purely procedural and had ‘nothing to do with the merits’ of the claim for damages. A verdict awarding substantial damages, perhaps in the billions, in one or more of these cases could have several impacts on climate mitigation. First, it would have the effect of putting a price on the carbon content of the companies’ products, which would be passed on to consumers, sending a price signal to the market. Second, it would reduce the value of the companies’ assets and affect financing of future developments. Third, it would create a material risk that would have to be reported in annual securities filings, which could discourage investors. And finally, it would energize shareholders to challenge corporate managers on their plans for meeting the sustainability goals that many corporations have endorsed, at least in principle.110

106 Erik M. Conway and Naomi Oreskes, Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming (Bloomsbury 2012). 107 The demise of the New York City case, which was recently dismissed by the US Court of Appeals for the Second Circuit, has given the companies hope they can escape liability. City of New York v Chevron Corp., 993 F.3d 81 (2d Cir. 2021). In what appears in hindsight to have been a tactical error, NYC filed the case in federal court and limited its claims to public nuisance and trespass and did not allege deception or failure to warn as a basis for limiting the scope of liability for otherwise lawful activity. The Second Circuit dismissed the case on the ground that these types of claims have been displaced by the Clean Air Act which does not provide any basis for recovery of damages for carbon pollution. The ruling is not binding outside the Second Circuit and it may not have any precedential effect given the fact that the claims in the other cases are distinguishable. 108 Four Circuit Courts have rejected the oil companies’ arguments for removal to federal court and remanded the cases to state court. See Norman W. Spindel, Mark S. Heinzelmann and Zachary L. Berliner, ‘Circuit Courts Give Climate Change Litigation New Life in State Court’ (Lexology, 3 August 2020) https://​www​.lexology​.com/​library/​detail​.aspx​?g​=​c81ffafb​-c4ef​-4b7c​-9eab​-52843c10803d last accessed 25 May 2022. 109 BP PLC v Mayor and City Council of Baltimore, [2018] 141 S.Ct. 1532. The Supreme Court, Justice Gorsuch, held that the statute, allowing for appellate review of orders remanding a case to the state court from which it was removed pursuant to the federal officer removal statute or civil rights removal statute, permitted the Court of Appeals to review the entire remand order, not just the part of the order deciding the federal officer removal ground. 110 James Murray, ‘How the six major oil companies have invested in renewable energy projects’ NS Energy (Nottingham, 20 January 2020) https://​www​.nsenergybusiness​.com/​features/​oil​-companies​ -renewable​-energy/​last accessed 25 May 2022. Of the six ‘super-majors’ – BP, Shell, Chevron, Total,

Climate litigation in context of mitigation: evolving jurisprudence  329 B The Netherlands Building on the successful Urgenda case, Milieudefensie/Friends of the Earth Netherlands and co-plaintiffs sued Royal Dutch Shell in the Hague District Court, alleging violations of its duty of care under Dutch law and human rights obligations. On 26 May 2021, the court issued a blockbuster decision ordering Shell to reduce its CO2 emissions by 45% by 2030 compared to 2019 levels.111 That target is in line with United Nations guidance for member states aimed at preventing global temperatures rising more than 1.5 degrees Celsius above preindustrial levels. Apparently, this is the first time in history that a court has ordered a private company to achieve emission reductions that will require fundamental changes in its business model. Notably the court held Shell responsible for emissions from its customers (scope 3) and suppliers. Acknowledging that the decision would have ‘far reaching consequences’ for Shell and ‘require an adjustment of the Shell group’s energy package’ the court nonetheless concluded that the public interest in preventing dangerous climate change ‘outweighs the Shell group’s commercial interests’. An appeal is expected and will be closely watched. 2.5

Protecting Carbon Sinks

Preserving and expanding the natural systems that serve as carbon sinks is a critical part of the mitigation and drawdown strategy to secure a stable climate. Forests and tropical forest ecosystems in particular, store large amounts of carbon in their biomass. As a result of land-use change, deforestation and forest overexploitation, this stored carbon is released into the atmosphere as CO2 and contributes to global climate change. According to figures from the Intergovernmental Panel on Climate Change (IPCC), the resulting greenhouse gas emissions make up roughly 12% of total anthropogenic emissions worldwide. Similar to the rights that corporations enjoy, courts in some countries have recognized enforceable rights of ‘personhood’ for individual animals,112 for rivers113 and for entire ecosystems.114 The rights of nature movement, which began with the indigenous populations in developing countries, has been gaining strength, spearheaded by groups like the Community Environmental Legal Defense Fund115 and De Justicia.116 These cases are building a body of law in parallel with the human rights cases providing a broad ecosystem approach to climate Eni and Exxon – many of them have pumped billions into clean energy projects, although the total investment represents only 1% of their combined budget. 111 Milieudefensie and others v Royal Dutch Shell plc, [2021] ECLI:NL: RBDHA:​2021:​5339. 112 Rachel Feltman, ‘Orangutan granted rights of personhood in Argentina’ Washington Post (22 December 2014) https://​www​.washingtonpost​.com/​news/​speaking​-of​-science/​wp/​2014/​12/​22/​orangutan​ -granted​-rights​-of​-personhood​-in​-argentina/​ last accessed 2 June 2022. 113 Center for Social Justice Studies et al. v Presidency of the Republic et al., [2016] Judgment T‑622/16 Constitutional Court of Colombia (10 November 2016); the Atrato River case (English translation by the Dignity Rights Project at Widener University Delaware Law School). 114 In September 2020 the Cotachi Court in Ecuador issued a constitutional injunction barring copper mining in the Los Cedros biosphere reserve unless the government can prove that it will not threaten the existence of a number of endemic species. For further information, see Rebekah Hayden, ‘Rights of Nature in Ecuador’ Ecologist (London, 6 November 2020) https://​theecologist​.org/​2020/​nov/​06/​rights​ -nature​-ecuador last accessed 25 May 2022. 115 CELDF, ‘Community Rights’ https://​celdf​.org/​community​-rights/​last accessed 25 May 2022. 116 Dejusticia website: https://​www​.dejusticia​.org/​en/​last accessed 25 May 2022.

330  Research handbook on climate change mitigation law mitigation. A prominent example is the decision of the Colombian Supreme Court in Future Generations v Colombia. This case was brought in 2017 by De Justicia on behalf of 25 children and young adults against the President of Colombia, several ministries, and 14 municipalities.117 The youth plaintiffs brought this case as a tutela, a legal instrument available to all Colombians to secure their fundamental constitutional rights to life, health, minimum subsistence, freedom, human dignity, food, water, and a healthy environment. The case charged that the government failed to reduce deforestation in the Colombian Amazon as promised in the NDC that Colombia filed under the Paris Agreement. Instead, deforestation in the area increased by 44% between 2015 and 2016. The Colombian Supreme Court found that most of the logging and land conversion was illegal, and it ordered the government to formulate and implement a set of plans to phase down and to reduce deforestation to net zero by 2020. The Court declared that the Amazon itself was an entity with legal rights and ordered the creation of an Intergenerational Pact for the Life of the Colombian Amazon in consultation with the plaintiffs, affected communities, climate scientists and research groups. So far neither of these orders has been complied with and De Justicia is planning further actions in court.118 The Future Generations ruling was based on the prior decision of the Colombian Constitutional Court in the Atrato River case declaring that ‘the Atrato River, its basin and tributaries will be recognized as an entity subject to rights of protection, conservation, maintenance and restoration by the state’.119 The Constitutional Court ordered the government to exercise legal guardianship and establish an institutional framework to manage the river with representatives of the plaintiffs and the ethnic communities that inhabit the basin. The Court also ordered creation of an advisory team of experts drawn from the Humboldt Institute and World Wildlife Foundation Colombia. These rights of nature cases are providing another body of law and judicial intervention to support stronger climate mitigation efforts through conservation of the natural systems that remove carbon from the atmosphere and help to restore and maintain the Earth’s energy balance.

3

FUTURE DIRECTIONS FOR CLIMATE LITIGATION IN THE CONTEXT OF MITIGATION

Climate litigation is still in its infancy, although it is maturing rapidly. There have only been a handful of truly impactful decisions thus far but there have been a significant number of procedural victories that have had positive effects on government decision-making, corporate behavior, and public understanding of the problem and the need for urgent action. The sheer 117 Dejusticia, ‘Climate Change and Future Generations Lawsuit in Colombia: Key Excerpts from the Supreme Court’s Decision’ (Dejusticia, 13 April 2018) https://​www​.dejusticia​.org/​en/​climate​ -change​-and​-future​-generations​-lawsuit​-in​-colombia​-key​-excerpts​-from​-the​-supreme​-courts​-decision/​ last accessed 25 May 2022. 118 Dejusticia, ‘The Colombian government has failed to fulfill the Supreme Court’s landmark order to protect the Amazon’ (Dejusticia, 5 April 2019) https://​www​.dejusticia​.org/​en/​the​-colombian​ -government​-has​-failed​-to​-fulfill​-the​-supreme​-courts​-landmark​-order​-to​-protect​-the​-amazon/​ last accessed 25 May 2022. 119 Center for Social Justice Studies et al. v Presidency of the Republic et al., [2016] Judgment T‑622/16 Constitutional Court of Colombia (10 November 2016).

Climate litigation in context of mitigation: evolving jurisprudence  331 number of actions in so many venues is generating 24/7 media coverage to keep the pressure on public and private entities for more rapid change. The cases have helped galvanize a vigorous youth climate movement and linked climate justice with the broader environmental justice and civil rights movements gaining ground in the US and elsewhere. Standing and separation of powers will continue to present challenges to litigants seeking substantive outcomes against the government. In the US the trend of the case law on standing is to allow procedural but not substantive challenges. The lesson of the Juliana case is to seek more limited forms of relief than a court-enforced plan to decarbonize the entire economy.120 Courts in the US and elsewhere are mindful of the boundaries between law and policy, between adjudication and legislation. Yet courts are also cognizant of the duty to declare and enforce constitutional rights based on national law as well as rights guaranteed under international or transnational law. How this balance will be struck will vary from nation to nation and depend on many factors that will have to be evaluated case by case. Courts are also concerned about their ability to enforce whatever decrees they may issue. That was a major concern of the Juliana court. The Urgenda and Leghari decisions offer potential ways to deal with this problem and show respect for the separation of powers. In Urgenda the plaintiffs sought to enforce modest reductions in GHG emissions that the Dutch government had already committed to and that were strongly supported by the recommendations of the IPCC. This gave the court a scientifically valid, objective standard to measure the government’s conduct and impose an obligation it found to be proportionate and reasonable. The proof of its wisdom was borne out by the government’s compliance with its judgment. In Leghari the Green Bench declared a constitutional right to a safe climate and found fault with the way the Pakistani government was preparing the country for its impacts. But rather than order any specific remedy it saw its role as a convener and overseer to prod the disparate branches of the government to more coordinated, timely, and effective action. In this way the court served as a catalyst to overcome bureaucratic inertia or political gridlock. A similar result obtained in Future Generations, in which the Colombian Supreme Court ordered the government to develop a plan to end deforestation of the Amazon, but it recognized the need for time and coordination among many departments and stakeholders. It established a process, still ongoing, to accomplish the goal. In this way the court served less like an umpire calling balls and strikes and more like the cop on the beat ensuring order and obedience to the law. The moral of the story is not to look to the courts to perform any miracles. The more that the requested relief is grounded in functions that the courts are familiar with, the better. The more discrete and reasonable the remedy, the more likely the court will at least consider it. In some cases, simply asking for the equitable remedy of an accounting by the government of what it is or is not doing about the climate crisis may be appropriate.121 This type of remedy is usually associated with relationships between private parties involving a fiduciary or trust The Juliana plaintiffs have recently filed a motion for leave to file a new complaint with the Oregon District Court seeking only a declaratory judgment that the youth plaintiffs have a constitutional right to a stable climate system that the government must respect in its decision-making on energy policy and other matters. Judge Aiken has ordered the parties into mediation in hopes that a settlement can be worked out that would avoid the need to rule on the motion. The plaintiffs have also requested an extension of the deadline for filing a petition for review of the Ninth Circuit decision by the US Supreme Court. 121 Palazzo v Palazzo, [1986] 121 A.D.2d 261, 264 (1st Department 1986); ‘The right to an accounting is premised upon the existence of a confidential or fiduciary relationship and a breach of the duty 120

332  Research handbook on climate change mitigation law responsibility. But it could also be applied where background principles of common law or constitutional law impose a fiduciary duty on the government to protect natural resources.122 Traditionally this public trust duty applied to navigable waters but there is a considerable amount of scholarship supporting its application to the atmosphere as well.123 With this general background, the following are some of the areas where we can expect to see increased levels of legal activity in the coming years and efforts to push the law forward. As the dire consequences of uncontrolled climate disruption become ever clearer, the law itself must change to meet the challenge. 3.1

Expanding Human Rights Claims

In December 2005, the Chair of the Inuit Circumpolar Conference (ICC) submitted a petition to the Inter-American Commission on Human Rights (IACHR) requesting relief for human rights violations resulting from the impacts of global warming and climate change.124 The petition specifically alleged that the United States, as the largest emitter of greenhouse gases, had violated the Inuit’s human rights by failing to adopt adequate GHG controls. Although the IACHR never issued a decision, the petition did succeed in drawing public attention to the severe effects of global warming on the Inuit and sparking further dialogue about the human rights implications of climate change.125 Since that seminal event the assertion that climate change is a matter of human rights has played an increasingly important role in climate advocacy in a variety of international tribunals. For example, on the eve of the COP 25 meeting in Madrid in 2019, the Philippine Commission on Human Rights issued a landmark decision concluding that 47 of the carbon major companies could be found legally and morally liable for human rights violations arising from climate change.126 The decision came after a three-year investigation triggered by a petition from Greenpeace Southeast Asia and local Filipino communities devastated by typhoon Haiyan. The Commission decision has no binding legal effect, but it provides persuasive evidence with recommendations that cases can and should be brought to national courts to find remedies under national legal regimes. Where existing national laws are not adequate, the Commission recommended that governments have an obligation to implement legal reforms to ensure access to justice for affected communities. The Commission

imposed by that relationship respecting property in which the party seeking the accounting has an interest.’ 122 John C. Dernbach, ‘The Role of Trust Law Principles in Defining Public Trust Duties for Natural Resources’ (2021) 54 University of Michigan Journal of Law Reform 77. 123 Mary C. Wood, Nature’s Trust: Environmental Law for a New Ecological Age (Cambridge University Press 2014); Michael C. Blumm and Mary C. Wood, The Public Trust Doctrine in Environmental and Natural Resources Law (2nd edn, Carolina Academic Press 2020); Kassandra Castillo, ‘Climate Change & The Public Trust Doctrine: An Analysis of Atmospheric Trust Litigation’ (2015) 6 San Diego Journal of Climate & Energy Law 221. 124 Sheila Watt-Cloutier, ‘Petition to the Inter-American Commission on Human Rights Seeking Relief from Violations Resulting from Global Warming Caused by Acts and Omissions of the United States’ (The Inuit Circumpolar Conference 2005). 125 Hari M. Osofsky, ‘The Inuit Petition as a Bridge? Beyond Dialectics of Climate Change and Indigenous Peoples’ Rights’ (2007) 31 American Indian Law Review 675. 126 Republic of Philippines Commission on Climate Change, ‘National Inquiry on Climate Change’ (Republic of Philippines Commission on Climate Change, 2018) http://​chr​.gov​.ph/​nicc​-2/​last accessed 25 May 2022.

Climate litigation in context of mitigation: evolving jurisprudence  333 cited the United Nations Guiding Principles on Business and Human Rights in support of its finding that the carbon majors have a duty to invest in renewable sources of energy. In 2019, a group of eight Torres Strait Islanders submitted a petition against the Australian government to the United Nations Human Rights Committee.127 The petition alleges that Australia is violating the plaintiffs’ fundamental human rights under the International Covenant on Civil and Political Rights (ICCPR) due to the government’s failure to address climate change. This petition represents the first climate change legal action in Australia based on a violation of human rights. It is also the first legal action filed with a UN body by inhabitants of low-lying islands against a national government for inaction on climate change. In November 2020, the European Court of Human Rights in Strasbourg, France, gave the green light to an application filed by six Portuguese children and young adults against 33 European countries, claiming government climate inaction jeopardized their futures. The Court requested the governments of the 33 industrialized countries to respond promptly, giving the case priority status because of the ‘importance and urgency of the issues raised’.128 The 33 countries have until the end of February to respond, unless a ‘friendly settlement’ is reached before then. The application invokes Articles 2 and 8 of the ECHR. The young applicants also argue that the increasing effects they will suffer over the course of their lifetimes entail discrimination on grounds of age, and therefore breach Article 14, when read with Articles 2 and 8. The core of the argument is that because each of the Respondents contributes to global emissions, they must be presumed responsible for the risk that climate change at its current trajectory towards 4 °C increase poses to the Applicants, in breach of their rights under the ECHR. The Applicants draw upon the authoritative ‘Guiding Principles on Shared Responsibility in International Law’, which impose a form of shared responsibility, which in the US would be called joint and several liability, on parties responsible for an indivisible harm. Together with 15 other children, Greta Thunberg has filed a complaint against five polluting countries before the United Nations (UN) Committee on the Rights of the Child.129 This is the first time that children have filed a formal complaint about climate change under the United Nations Convention on the Rights of the Child. The young people are asking the Committee to make specific recommendations to the five nations about what they need to do to meet their treaty obligations. A declaration by the Committee has no legal effect but it does have moral force. Perhaps the cumulative weight of these official decrees will eventually reach the tipping point for political action.

127 Client Earth, ‘Client Earth Torres Strait FAQ’ (Client Earth, 2019) http://​blogs2​.law​.columbia​.edu/​ climate​-change​-litigation/​wp​-content/​uploads/​sites/​16/​non​-us​-case​-documents/​2019/​20190513​_Not​ -Available​_press​-release​.pdf last accessed 25 May 2022. 128 Paul Clark, Gerry Liston and Ioannis Kalpouzos, ‘Climate Change and the European Court of Human Rights: The Portuguese Youth Case’ (EJIL: Talk!, 6 October 2020) https://​www​.ejiltalk​.org/​ climate​-change​-and​-the​-european​-court​-of​-human​-rights​-the​-portuguese​-youth​-case/​ last accessed 25 May 2022. 129 Chiara Sacchi and others, ‘Communication to the Committee on the Rights of the Child’ (23 September 2019) https://​earthjustice​.org/​sites/​default/​files/​files/​2019​.09​.23​-crc​-communication​-sacchi​ -et​-al​-v​.​-argentina​-et​-al​-redacted​.pdf last accessed 25 May 2022.

334  Research handbook on climate change mitigation law 3.2

Claims against Financial Institutions

Tort claims are not only being brought against the carbon majors. Banks, pension funds, and other money managers are also being sued for failure to disclose climate risks of investments and failure to take those risks into account when valuing assets. There are three types of risks: the physical risks of extreme weather damaging infrastructure and disrupting supply chains; the regulatory risk of ‘stranded assets’ as GHG emission regulations become more stringent and the world transitions to non-fossil fuels; and the reputational risks for companies with a high public profile. The nonprofit group Ceres, which represents institutional investors, recently issued a report investigating climate-related financial risks and the exposure banks face from not paying closer attention to the energy transition that is underway. The investigation found that a majority of bank lending is in climate-exposed sectors and provided a blueprint for how banks can evaluate their climate risk exposure by stress testing their loan portfolios and adopting mitigation strategies by, for example, requiring that clients provide more data in key climate-related areas, such as energy technology and emissions profiles.130 Meanwhile shareholders are taking matters into their own hands. In Abrahams v Commonwealth Bank of Australia (CBA), shareholders sued the bank, alleging that its 2016 annual report violated Australian corporate law by failing to disclose the risk of investing in the controversial Adani Carmichael coal mine. The shareholders withdrew the claim following publication of CBA’s 2017 annual report, which included an acknowledgment from the directors that climate change posed a risk to CBA’s operations – the first time such a statement was included in its annual reporting. CBA subsequently pledged not to lend money to the coal mine project. This came after the Australian Federal Court had dismissed a case brought against the Australian Conservation Foundation (ACF) that there was no definitive proof that coal from the Carmichael mine would increase global greenhouse emissions, because multiple factors affect how much coal is burned annually.131 On 30 January 2020, Friends of the Earth Australia, along with three bushfire survivors, filed a complaint with the Australian National Contact Point (ANCP) of the OECD against Australia and New Zealand Banking Group Limited (ANZ).132 The complaint alleges that ANZ has not adhered to the standards of the OECD Guidelines relating to due diligence, disclosure, environment, and consumer interests. Specifically, the complainants argue that the Paris Agreement targets reflect the standard to which ANZ should be held under the OECD Guidelines. They point out that ANZ is therefore breaching its greenhouse gas reporting requirements, is failing to conduct adequate due dili-

130 Ceres, ‘Financing a Net-Zero Economy: Measuring and Addressing Climate Risk for Banks’ (Ceres 2020). https://​www​.ceres​.org/​resources/​reports/​financing​-net​-zero​-economy​-measuring​-and -addressing-climate-risk-banks?gclid=CjwKCAiA6aSABhApEiwA6Cbm_w6aTxCLst6GdbzaeFeTWa6NvsWYyiDDIiSFheULQGthEjwP2Oc1qRoCBqQQAvD_BwE. 131 ‘Court rules in favour of Queensland mega-mine’ New Scientist (London, 31 August 2016) https://​ www​.newscientist​.com/​article/​mg23130893​-300​-court​-rules​-in​-favour​-of​-queensland​-megamine/​ #ixzz6kBvZD9r5 last accessed 25 May 2022. 132 Friends of the Earth Australia, ‘Bushfire survivors launch claim against ANZ under international law for financing climate change’ (30 January 2020) https://​www​.foe​.org​.au/​bushfire​_survivors​_launch​ _claim​_against​_anz last accessed 25 May 2022.

Climate litigation in context of mitigation: evolving jurisprudence  335 gence regarding climate risks and is failing to prevent or mitigate environmental impacts as a major financer of fossil fuel energy. In November 2020 the OECD Independent Examiner conducted an initial assessment and found that the complaint warranted further consideration under the ‘good offices’ provision of the OECD Guidelines.133 The Examiner did note, however, that the OECD Guidelines do not require complete divestment of fossil fuels and declined to take up that issue. On 2 November 2020, the parties in McVeigh v REST reached a settlement under which the huge (AU$50 billion) Australian pension fund agreed to incorporate climate change financial risks in its investments and implement a net-zero by 2050 carbon footprint goal.134 The plaintiff McVeigh, a member of the pension fund, filed suit against the Retail Employees Superannuation Trust (REST) alleging that the fund violated the Australian Corporations Act 2001 by failing to provide information related to climate change business risks and any plans to address those risks. In January 2019 the court issued an order on plaintiff’s application for maximum costs, which is a mechanism to allow individuals bringing cases in the public interest to avoid legal costs. The court concluded that, ‘the case appears to raise a socially significant issue about the role of superannuation trusts and trustees in the current public controversy about climate change. It is legitimate to describe the Applicant’s litigation as being of a public interest nature.’ The day before trial the parties announced a settlement under which REST acknowledged that ‘Climate change is a material, direct and current financial risk to the superannuation fund across many risk categories, including investment, market, reputational, strategic, governance and third-party risks.’ To address this risk, REST agreed to implement a net-zero carbon footprint by 2050 goal, to monitor and report climate progress in line with the Task Force on Climate-Related Disclosures, to ensure investee climate disclosure, and to publicly disclose portfolio holdings, among other commitments.

4 CONCLUSION Climate litigation is not going to achieve the mitigation goals needed to stabilize the climate, let alone save the planet, all by itself. Nor are the courts likely to order the transformative societal changes needed to achieve net zero GHG emissions by 2050, let alone dictate how to remove carbon from the atmosphere to stabilize the climate system and restore the planet’s energy balance. But litigation does have a role to play in holding the government and private sector accountable for actions that are making the problem worse and for the sluggish response in the face of a deepening crisis. Litigation can keep the pressure on the responsible actors. It can keep the climate issue in the spotlight and illuminate both the dangers and the opportunities of this moment in time. It can force disclosure of the physical and financial risks of

133 Australian National Contact Point for the OECD Guidelines for Multinational Enterprises, ‘Initial Assessment. Complaint by Global Legal Action Network (GLAN) against Anglo American Plc, BHP Group Ltd and Glencore International’ (Australian National Contact Point, 10 January 2022) https://​ ausncp​.gov​.au/​sites/​default/​files/​2022​-01/​23​_initial​_assessment​_1​.pdf last accessed 26 May 2022. 134 McVeigh v Retail Employees Superannuation Pty Ltd, [2019] FCA 14. https://​www​.judgments​ .fedcourt​.gov​.au/​judgments/​Judgments/​fca/​single/​2019/​2019fca0014.

336  Research handbook on climate change mitigation law continued reliance on fossil fuels. It can mobilize public support and influence the outcome of elections. It can adjudicate claims for damages and require those responsible for concealing the dangers and profiting from their deception to pay their fair share of the costs of dealing with the consequences of their actions. It can keep fossil fuels in the ground and buy time for cleaner alternatives to catch up. In short courts faced with climate change cases can do what courts are expected to do in any other circumstance: dispense justice without fear or favor.

PART IV SECTORS

14. Regulatory and policy instruments to promote decarbonization in the energy sector Sirja-Leena Penttinen

1 INTRODUCTION Human influence on the climate has been the dominant cause of observed global warming since the mid 20th century.1 Energy production and use represent the largest source of greenhouse gas emissions globally. In 2018, driven by higher energy demand, global energy-related CO2 emissions rose to a historic high of 33.1 Gt CO2, and the power sector is responsible for two-thirds of energy sector emissions.2 In the European Union (EU), energy production and use are responsible for 80% of all greenhouse gas emissions. In the United States (US) roughly 80% of primary energy consumption relied on fossil fuels – i.e. petroleum, natural gas and coal – in 2019.3 By way of stating the obvious: in order to mitigate climate change, it is essential to reduce greenhouse gas emissions in the energy sector. Emission cuts in the energy sector have become a political priority in many countries. Regardless of the sector or region, these can be generally divided into three different policy areas: promoting energy derived from low-carbon energy sources, reducing energy consumption and increasing energy efficiency, and carbon pricing. The ‘green’ or ‘low-carbon’ energy transition – the transformation the energy system must undergo from one largely based on fossil fuels to one that enhances efficiency and is based on renewables – will be enabled by information technology, smart technology and supportive policy frameworks and market instruments. This chapter provides an overview on the policy, legislative and regulatory frameworks put in place to promote decarbonization in the energy sector. In particular, it focuses on the promotion of renewable energy and energy efficiency. Carbon pricing and carbon trading schemes are discussed in more detail in Chapter 12 and therefore fall outside the scope of this chapter. This chapter first discusses the policy context for the adoption of the measures, after which it focuses on the most dominant policy tools in more detail. The chapter first examines in more detail the drivers of growth and focuses on the most used policy instruments adopted within the field of renewable energy. In addition, examples of policy instruments employed to facilitate the integration of the mainstreaming – intermittent – renewable energy sources are briefly examined. In a similar manner, the policy context and in particular the role of energy efficiency in today’s policy discourse are touched upon before examining the specific policy instruments

IPCC Fifth Assessment Report, Summary for Policymakers. International Energy Agency (IEA), ‘Global Energy & CO2 Status Report 2019: The Latest Trends in Energy and Emissions in 2018’ (IEA/OECD 2019). 3 U.S. Energy Information Administration, Monthly Energy Review, Table 1.3 and 10.1, April 2020, preliminary data. 1 2

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Regulatory and policy instruments to promote decarbonization of energy  339 adopted to promote energy efficiency. Finally, the conclusion offers some remarks on the possible future directions of policy design in the discussed areas of law. Throughout the chapter examples are drawn from the EU and the US – two regulatory frameworks operating in developed markets – that provide interesting insight on the deployment of different policy instruments and governance models.

2

RENEWABLE ENERGY

2.1

Drivers of Growth

Renewable energy is at the heart of the low-carbon energy transition. It is energy derived from naturally occurring sources that can be constantly replenished and are therefore renewable energy sources, comprising wind, solar, geothermal, hydro and ocean as well as biomass. Although renewable energy is hailed as a key feature of the world’s low-carbon energy future, it is not a new technology: harnessing energy from wind or solar has long been used to sail ships, while burning wood has provided warmth and a means of cooking and so on. Today, energy derived from renewable sources is consumed in every sector. However, in both the US and the EU the biggest share of renewable energy is consumed in the electric power sector, which mostly relies on wind and hydroelectric power. While renewable resources are infinite because they are constantly replenished, many renewable energy sources (such as wind and solar) are, however, limited in terms of the amount of energy that is available per unit of time. This requires the introduction of additional tools that address, in particular, the constraints the power system faces due to increased power production from renewable energy sources. Because the power grid must be balanced at all times – i.e. supply must be equal to demand – policy and regulatory measures are adopted to facilitate the achievement of electricity supply–demand balance with high levels of intermittent, variable renewable energy generation fed into the grid. In 2019, US renewable energy consumption surpassed coal for the first time in over 130 years,4 representing 11% of total US energy consumption.5 In the EU renewable energy represented just below 20% of energy consumed in the EU-27. This development is not self-evident. Instead, renewable energy technologies have faced a number of barriers hindering their market entry. While some of these are inherent in all new technologies seeking to break into markets, others are the result of a skewed regulatory framework and marketplace. In overcoming these barriers, the growth of renewable energy has been especially spurred by broad policy directions within which renewable energy has been placed at the centre of national or state strategies in transitioning towards a more sustainable energy future. This has made it possible to ensure continuous demand and steady prospects for growth.

4 US Energy Information Administration (EIA), ‘Today in Energy: U.S. renewable energy consumption surpasses coal for the first time in over 130 years’ 28 May 2020, available at https://​www​.eia​ .gov/​todayinenergy/​detail​.php​?id​=​43895 accessed 23 February 2021. 5 EIA, ‘Today in Energy: The United States consumed a record amount of renewable energy in 2019’ 19 October 2020, available at https://​www​.eia​.gov/​todayinenergy/​detail​.php​?id​=​45516 accessed 23 February 2021.

340  Research handbook on climate change mitigation law In the EU, the ‘20-20-20’ targets, according to which the EU sought to increase the share of renewable energy to 20% of final energy consumption by the end of 2020, have provided the backbone of this development.6 While the latest data is still to be released, the preliminary data suggests that the EU was on track to meet its goal, with 19.4% of total energy consumed in the EU-27 in 2019 being derived from renewable energy sources.7 The EU-wide 2020 target for renewable energy was translated into Member State-specific binding targets, each of which was set to reflect Member States’ national capacities to reach the target in terms of natural resources and other factors. This policy choice has ensured continuous support for renewable energy in the EU. In 2014 the European Council adopted the EU’s Energy and Climate framework for 2030, which included a target of a 27% increase in renewable energy by 2030. This target was later revisited and raised to 32% to reflect the rising climate ambition. At the end of 2020 the European Council agreed to follow the EU Commission’s proposal to increase the EU’s emission-reduction target to 55% by 2030. Growing concerns over climate change together with the adoption of the Paris Agreement led to the adoption of more ambitious goals, which have recently culminated in the agreement on the European Green Deal,8 as well as in the adoption of Regulation (EU) 2021/1119 (the ‘Climate Law’),9 which lays down the goal of climate neutrality in binding EU legislation. Article 2(1) of the Climate Law provides that ‘Union-wide greenhouse gas emissions and removals regulated in Union law shall be balanced within the Union at the latest by 2050, thus reducing emissions to net zero by that date, and the Union shall aim to achieve negative emissions thereafter’. In 2021 the European Commission put forward a proposal for a ‘Fit for 55’ legislative package, which aims to provide rules for the EU to reach the ambitious greenhouse gas reduction targets. The package includes legislative proposals to revise the entire EU 2030 climate and energy framework to reach an intermediate target to cut emissions by at least 55% by 2030. The proposal for the amendment of the Renewable Energy Directive 2018 seeks to increase the share of renewable energy to 40% by 2030.10 The proposal for the amendment of the Energy Efficiency Directive in the Fit for 55 legislative package suggests increasing the target levels to 39% and 36% of energy efficiency savings in primary and final energy consumption respectively (representing a 9% reduction by

6 For an overview, see S.-L. Penttinen and K. Talus, ‘Development of the Sustainability Aspects of EU Energy Policy’ in G. Van Calster, W. Vandenberghe and L. Reins (eds), Research Handbook on Climate Change Mitigation Law (1st edn, Edward Elgar Publishing 2015), 33–35. 7 It should be noted, however, that the updated numbers for 2020 reflect the UK’s departure as well as the COVID-19 crisis. 8 Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions, ‘The European Green Deal’. COM(2019) 640 final. 9 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘Climate Law’), OJ L 243, 9.7.2021, p. 1–17. 10 European Commission, Proposal for a Directive of the European Parliament and of the Council amending Directive (EU) 2018/2001 of the European Parliament and of the Council, Regulation (EU) 2018/1999 of the European Parliament and of the Council and Directive 98/70/EC of the European Parliament and of the Council as regards the promotion of energy from renewable sources, and repealing Council Directive (EU) 2015/652, COM(2021) 557 final. See also S. Goldberg and J. Bille, ‘Fit for 55 – The RED II Proposal – Power Up’ (2022) 20(1) Oil, Gas and Energy Law, Special issue on ‘Fit for 55 Legislative Package’.

Regulatory and policy instruments to promote decarbonization of energy  341 2030 compared to the 2020 baseline scenario).11 If accepted, the Fit for 55 package will bring about further significant changes in the EU legislative framework for energy. While in Europe the EU has adopted a strong top-down policy and governance framework to promote and support the uptake of renewable energy, in the US the policy approach has been more turbulent. While President Obama’s administration was successful in increasing the share of renewable energy in the US, especially by adopting policies to drive down costs, the Trump administration attempted to roll back many of these policies12 – including withdrawing from the Paris Agreement.13 Despite this instability and lack of federal policy in terms of renewable energy, the drive to expand renewables development has been led by the states and other stakeholders adopting a bottom-up approach.14 The Biden administration, which took office in 2021, has indicated the aim of adopting a sweeping climate and decarbonization plan that calls for US$2 trillion of investment in clean energy initiatives. This would further displace fossil fuels and potentially spur more rapid deployment of solar and wind power.15 A democratic majority in both chambers of the US Congress is likely to provide legislative support for President Biden’s initiatives. The increase in renewable energy has led to escalating competition between conventional and renewable energy sources, and renewable energy resources now compete to replace retiring coal capacity and ageing gas and nuclear plants in some US states, such as Texas and California. Similarly, in the EU fossil fuel generated energy is increasingly being squeezed out of the market by renewable energy.16 In the US, some state regulators are directing utilities to seek alternatives to traditional centralized generation, as they are concerned that replacing ageing coal production facilities with gas-fired plants could result in stranded assets when customers demand changes and renewable energy costs decline.17 Furthermore, the EU also supports the green energy transition by allocating EU funds that are intended to help countries

11 European Commission, Proposal for a Directive of the European Parliament and of the Council on energy efficiency (recast), COM(2021)558 final. See also S.-L. Penttinen, K. Kallioharju and E. Nippala, ‘Energy Efficiency in the “Fit for 55” Framework: Increasingly Ambitious Targets Coupled with Hardening Governance’ (2022) 20(1) Oil, Gas and Energy Law, Special issue on ‘Fit for 55 Legislative Package’ 1–15. 12 See e.g. Coral Davenport and Alissa J. Rubin, ‘Trump signs Executive Order Unwinding Obama Climate Policies’ New York Times (28 March 2017) available at https://​www​.nytimes​.com/​2017/​03/​28/​ climate/​trump​-executive​-order​-climate​-change​.html accessed 17 February 2021. 13 M. R. Pompeo, ‘On the U.S. Withdrawal from the Paris Agreement’, Press Statement, 4 November 2019, available at https://​www​.state​.gov/​on​-the​-u​-s​-withdrawal​-from​-the​-paris​-agreement/​ accessed 17 February 2021. 14 See e.g. Joe Ryan, ‘Clean Power Lives on Even as Trump Ends Obama “Clean Power Plan”’ Bloomberg (28 March 2017) available at https://​www​.bloomberg​.com/​news/​articles/​2017​-03​-28/​trump​ -s​-order​-on​-emissions​-to​-have​-little​-impact​-on​-clean​-energy accessed 17 February 2021; T. A. Rule, ‘Still Growing: How America’s Renewable Energy Industry Is Surviving in the Trump Era’ (2019) 16(4) Oil, Gas and Energy Law; J. Jacobs and A. Herndon, Renewable Energy Law and Policy: 2018 Edition (LexisNexis 2018) s. 5-01. 15 S&P Global Market Intelligence, ‘The 2021 US Renewable Energy Outlook’ (January 2021, S&P Global Market Intelligence), 5. 16 Chloé Farand, ‘Renewables overtake fossil fuels in EU power generation’ Euractiv, (23 July 2020) available at https://​www​.euractiv​.com/​section/​energy/​news/​renewables​-overtake​-fossil​-fuels​-in​ -eu​-power​-generation/​accessed 23 February 2021. 17 G. Bade, ‘Indiana Regulators reject Vectren gas plant over stranded asset concerns’ UtilityDive (25 April 2019).

342  Research handbook on climate change mitigation law transition away from fossil fuels.18 The devastating Russian invasion of Ukraine has led to soaring energy prices in Europe and an urgent need to cut reliance on Russian fossil fuels. As a result, it has accelerated the policy level actions to transition increasingly towards renewable energy sources, a ‘domestic’ energy source.19 Consequently, general societal change and changes in the approach to renewables impact investment in this area. However, in certain regions, low natural gas prices have hampered progress in the use of renewables. This is the case, for example, in the PJM (Pennsylvania– Jersey–Maryland) grid territory, the largest regional electric grid in the US.20 The PJM is nevertheless unique in the sense that over a ten-year period, close to as much conventional generation capacity has been built in the PJM territory as in the territories of all the other regional transmission system operators in the US combined.21 In both the EU and the US broad policy directions have been implemented in reliance on more specific regulatory tools to support the uptake of renewable energy technologies. In addition to technological progress, falling technology costs have also contributed to an increase in the use of renewable energy technologies.22 Furthermore, particularly in the power sector, the improved measures adopted to support the integration of especially intermittent sources of renewable energy into the energy system have proven to be key to the increased use of renewable energy. For example, in the US, both federal and state-level policies have recently been introduced that specifically support battery storage solutions, both stand-alone and also hybrid models, which in turn spurs further growth in renewable energy generation. In the light of the above-mentioned considerations, this section examines the policy and legislative measures with regard to renewable energy from two different perspectives. It provides an overview of the measures adopted in order to increase the share of renewable energy in the energy mix. And it seeks to shed light on best practices in facilitating the integration of variable renewable energy in the power system. 2.2

Policy Instruments Adopted to Support the Deployment of Renewables

Price-based mechanisms Various policy instruments have been introduced globally to support energy production from renewable energy sources. These have proved to be the cornerstones of renewable energy growth, as renewable technologies have not been able to compete with conventional energy For an overview of the ‘Just Transition Mechanism’ see EU Commission, ‘The Just Transition Mechanism: making sure no one is left behind’, available at https://​ec​.europa​.eu/​info/​strategy/​priorities​ -2019​-2024/​european​-green​-deal/​actions​-being​-taken​-eu/​just​-transition​-mechanism​_en accessed 23 February 2021. See also, for example, Chloé Farand, ‘Poland bails out coal, yet wins access to EU climate funds’ Climate Change News (21 July 2020) available at https://​www​.climatechangenews​.com/​ 2020/​07/​21/​poland​-bails​-coal​-yet​-wins​-access​-eu​-climate​-funds/​ accessed 18 February 2021. 19 Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions, REPowerEU Plan, COM(2022) 230 final. 20 K. Scheider, ‘Shale gas boom slows progress on renewables in PJM grid territory’ Energy News Network (5 March 2019). 21 M. Farmer and A. Levin, ‘Comparing America’s grid operators on clean energy progress: PJM is headed for a climate disaster’ UtilityDive (2 July 2019). 22 See e.g. https://​www​.forbes​.com/​sites/​dominicdudley/​2018/​01/​13/​renewable​-energy​-cost​-effec tive-fossil-fuels-2020/?sh=5da2acb4ff2e accessed 18 February 2021. 18

Regulatory and policy instruments to promote decarbonization of energy  343 sources pricewise. Nevertheless, this situation has been improving in the last decade or so, as today solar and wind, in particular, have started to become more cost-competitive with conventional energy sources, thus requiring a redesign or even abolition of the subsidy schemes to avoid market distortions and windfall profits. The EU’s economic support policies for renewables have relied on the introduction of various feed-in tariffs. While the US initially pioneered the use of feed-in tariffs,23 their wider implementation has taken place especially in Germany and Japan. A feed-in tariff is a policy measure that is designed to support the development of renewable energy sources by providing a guaranteed, above-market price for producers. The term ‘feed-in’ denotes guaranteed access to the grid for renewable power generators in order to ensure viable sales. Feed-in tariffs are usually stable, long-term contracts, ranging from 15 to 25 years in duration. However, it is also possible to introduce a feed-in tariff scheme with a higher tariff paid in the first years of operation with the payment gradually decreasing over the remaining years. This type of ‘front-loaded’ feed-in tariff simultaneously facilitates the financing of capital-intensive projects but also exposes the producer more to market prices towards the end of the contract. Feed-in tariffs have proved to be successful instruments especially in promoting renewable energy technologies in the early stages of their development, both by sheltering producers from certain risks inherent in renewable energy production and by driving investments. However, due to their design, feed-in tariffs have also been criticized for their distorting effects on markets, being inefficient and costly support mechanisms that do not enable competitive pricing. Feed-in tariffs are administratively fixed-price levels, and not trading prices set by market forces. Consequently, regulators have faced the difficult task of setting the tariff at a level that both incentivizes renewable energy deployment and avoids generating windfall profits. Recent renewable energy financing trends have tended to favour support mechanisms that expose producers more to market signals and are considered more sustainable from a state budget perspective. Feed-in premiums and green certificate schemes are tools currently trending in the EU that support renewable energy uptake in a more cost-effective manner. Feed-in premiums operate in a similar manner to feed-in tariffs, but instead of a guaranteed, fixed price shielded from market signals, eligible renewable energy generators are paid a premium price on top of the wholesale market price. The premium paid can be either fixed or floating (also known as sliding). In the latter case, the premium is calculated on a continuous basis as the difference between market price and a predefined reference tariff level. If the market prices are higher than the predefined tariff level, no premium is paid. During recent years, the allocation of funding in the EU has relied more on tendering and/ or bidding procedures.24 This was driven by issuing the EU Commission Guidelines on state aid for the environment and energy sector in 2014,25 further spurred by the revised Renewable

W. Kenton, ‘What is a Feed-in Tariff (FIT)?’, Investopedia, available at https://​www​.investopedia​ .com/​terms/​f/​feed​-in​-tariff​.asp. 24 See also S.-L. Penttinen, ‘The First Examples of Designing the National Renewable Energy Support Schemes under the Revised EU State Aid Guidelines’ (2016) 37(2) European Competition Law Review 77–83. 25 European Commission, Communication from the Commission, ‘Guidelines on State aid for environmental protection and energy 2014–2020’ (2014/C 200/01), 28.6.2014. 23

344  Research handbook on climate change mitigation law Energy Directive of 2018.26 Article 4 of the Directive provides that the support should be granted in an open, transparent, competitive, non-discriminatory and cost-effective manner, i.e. through tendering or auctioning mechanisms.27 In the US, feed-in tariffs are also used, but to a relatively limited extent. Instead, growth, especially of distributed solar energy, has been spurred by metering and billing arrangements known as net metering programmes.28 Although the specific details of these programmes vary across jurisdictions – within the borders of the US but also globally – the main mechanism is the same: net metering programmes provide financial rewards to owners of small-scale rooftop solar systems ­– residential or commercial customers – for their excess generated power that is fed into the grid. Consequently, this policy tool is usually available to consumers that own small-scale renewable energy facilities, most often solar PV systems. If the system has generated excess electricity that has been fed into the grid, the system owner receives a credit on their electricity bill, usually for each kWh of excess power that the utility receives via the grid (which is then sold ‘normally’ at the applicable retail price by the utility to other consumers). With the credit, which reflects the retail electricity rate, the consumer that owns the system is able to offset charges for the electricity supplied by the grid that they use during those hours that their own system is not generating electricity (i.e. when the sun does not shine – night-time). Net metering programmes are widely implemented in the US. Currently, 41 states, in addition to Washington DC and the external territories of American Samoa, US Virgin Islands and Puerto Rico, have mandatory net metering policies in place.29 In addition to state-implemented mandatory policies, some utilities have offered voluntary net metering arrangements to their customers. Whereas net metering programmes have been successful in increasing the share of renewables while at the same time being relatively straightforward to administer, their impact on the system itself and on utilities’ finances, in particular, has prompted further recognition of the issues that need to be addressed in the context of their increasing prominence. The programmes have not been viewed with similar enthusiasm by the industry, which has led to increased lobbying against them. The vigorous penetration of distributed solar PV into the market can complicate the grid-balancing task that the responsible utility has to undertake, as well as intensifying its own ‘death spiral’ scenario.30 This discussion relates to the future shape

Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources [2018] OJ L328/82. 27 For a more comprehensive account on the impact of the guidelines on the drafting – and ultimately the adoption of – the revised Renewable Energy Directive of 2018, see S.-L. Penttinen, ‘The Gradual Hardening of Soft Law: The Renewable Energy Support Schemes and the Renewable Energy Directive under Revision’ (2018) 22(2) Utilities Law Review 61–67. 28 In 2019, solar accounted for nearly 40% of all new electricity generating capacity added in the US, the largest annual share in the industry’s history, see SEIA and Wood Mackenzie, ‘U.S. Solar Market Insight: Executive Summary: 2019 Year in review’ (March 2020) available at https://​www​.seia​.org/​ sites/​default/​files/​2020​-03/​USSMI​-2019​-YiR​%20ES​%20EMBARGOED​%20PRESS​.pdf accessed 18 February 2021. 29 See National Renewable Energy Laboratory, ‘Net Metering’, available at https://​www​.nrel​.gov/​ state​-local​-tribal/​basics​-net​-metering​.html accessed 18 February 2021. 30 See Elisabeth Graffy and Steven Kihm, ‘Does Disruptive Competition Mean a Death Spiral for Electric Utilities?’ (2014) 35 Energy Law Journal 1, 5. 26

Regulatory and policy instruments to promote decarbonization of energy  345 of the electric power sector and the status of legacy utilities,31 and more precisely to ‘fairness arguments’. 32 Whereas under the traditional power market business model the fixed costs associated with maintaining the grid infrastructure are recovered from the customers, utilities now argue that they can no longer adequately serve all their customers and are shouldering an unfair burden as well as asserting that solar users are receiving an unfair advantage in the form of cross-subsidization compared to other customers, as they are not paying their full share in relation to the value they receive from the grid.33 In order to address this ever-growing concern, several states have already initiated plans for successor tariffs that would alter net metering compensation.34 South Carolina, as a frontrunner, is currently considering a legislative proposal that would establish a link between a time-of-use rate and a more dynamic time-varying rate to address critical peaks with an upfront rebate for participation in the utility’s demand response and energy efficiency programmes.35 While net metering is a well-established policy tool adopted in the majority of US states, the EU lacks any harmonized framework applicable for net metering.36 However, some Member States have adopted national net metering programmes.37 In a similar manner to the discussion that has arisen in the US, the lack of a common approach in the EU can be explained by means of similar arguments concerning the avoidance of cross-subsidization of costs and arguments

Ibid., 2. See Troy A. Rule, ‘Solar Energy, Utilities, and Fairness’ (2015) 6 San Diego Journal of Climate & Energy Law 115–116. 33 L. L. Davies ‘Eulogizing Renewable Energy Policy’ (2018) 33(2) Journal of Land Use & Environmental Law 321–322. See also Jon Wellinghoff and James Tong, ‘Wellinghoff and Tong: A common confusion over net metering is undermining utilities and the grid’ UtilityDive (22 January 2015) available at https://​www​.utilitydive​.com/​news/​wellinghoff​-and​-tong​-a​-common​-confusion​-over​ -net​ -metering​ -is​ -undermining​ -u/​ 355388/​accessed 18 February 2021. For another perspective, see Andrew Sendy, ‘Do solar consumers create a cost-shift to non-solar users?’ PV Magazine (5 March 2018) available at https://​pv​-magazine​-usa​.com/​2018/​03/​05/​do​-solar​-consumers​-create​-a​-cost​-shift​-to​ -non​-solar​-users/​accessed 18 February 2021. 34 For an overview, see the North Carolina Clean Energy Technology Center (NCCETC) Q3 US solar policy update, available at https://​static1​.squarespace​.com/​static/​5ac51​43f9d5abb8​923a86849/​ t/​5f8f4​7d4b9163c3​af23b88cc/​1603225561979/​Q3​-20​_SolarExecSummary​_Final​.pdf accessed 18 February 2021. 35 Herman K. Trabish, ‘The search for the next net metering policy takes center stage in California’ UtilityDive (23 December 2020) available at https://​www​.utilitydive​.com/​news/​the​-search​-for​-the​-next​ -net​-metering​-policy​-takes​-center​-stage​-in​-californi/​589060/​ accessed 18 February 2021. 36 For a comprehensive discussion on the (lack of an) EU framework see Theodoros G. Iliopoulos, Matteo Fermeglia and Bernard Vanheusden, ‘The EU’s 2030 Climate and Energy Policy Framework: How Net Metering Slips through Its Net’ (2020) 29(2) Review of European, Comparative & International Environmental Law 1–12. 37 Such as Italy, Greece and Belgium, see ibid. 31 32

346  Research handbook on climate change mitigation law based on fairness.38 In this context, the protection of vulnerable consumers is also highlighted39 as a prevailing policy priority established in the Clean Energy Package.40 Quantity-based incentives facilitating the achievement of renewables targets In addition to feed-in premiums, quantity-based incentives, such as quota obligations and green certificate schemes, have been trending in the EU. Quota obligations combined with green certificate schemes rely on quotas defined by governments (national, regional, local – depending on the design of the scheme) that set a minimum share (‘quota’) of renewable energy in the energy mix of power utilities, electricity suppliers and, in some instances, also large electricity consumers. Tradable green certificates, also known as renewable energy certificates, are used to verify fulfilment of the quota to the quota-setting authority, usually annually. If the quota is not met, the obligated party will be liable to a hefty financial penalty. Certificates are usually issued for each unit of electricity produced from renewable energy sources. Selling the certificates to the obligated parties creates an additional revenue stream for renewable energy producers, which constitutes the ‘support’ element in the scheme. The revenues are dependent on the price levels of the certificates, which are traded on dedicated certificate markets. Quota obligations and green certificate markets are praised for their cost efficiency. They simultaneously facilitate the increase in renewable energy sources, especially thanks to the imposition of substantial sanctions in the event that the obligations are not met, but this is done in a cost-efficient manner as the certificate price is determined by market forces in the certificate markets. Furthermore, the growth in renewable energy installations is controlled if the quota and target have been set at an appropriate level. Nevertheless, given that this is a market-based scheme, it should also be borne in mind that the risks inherent in a quota obligation scheme relate not only to electricity prices (prices being too low) but also to the certificate prices (e.g. sudden drops in certificate prices). Several US states have established financial incentives to encourage the development of renewable energy, and state policies are the primary driver of renewable energy at utility level in the absence of federal targets. ‘State mandates’ have been enacted in 29 states, the District of Columbia and three US territories and comprise renewable portfolio standards (RPSs) and renewable energy credits (RECs) which are used to demonstrate that the utilities subject to relevant obligations have met those obligations.41 While the details of the applicable policies vary For example, European energy regulators (see ACER, ‘ACER-CEER White Paper on Renewables in the Wholesale Market’ 11 May 2017, 3) have taken the view in the aftermath of the publication of the proposals for the Clean Energy Package that ‘net metering’ should be avoided because it may involve participants not paying for their fair share. With increased active participation in the energy markets from prosumers and distributed generation alike, it is important that the signals of the time value of energy and network capacity are available to all. Net metering reduces consumers’ sensitivity to this system, which undermines efforts to enhance flexibility in the market. It can result in parties not paying their fair share of network or system costs and can dull the rewards of those capable of providing flexible response to the system. 39 ‘Otherwise, these costs would be borne by other, potentially more vulnerable/poorer, consumers.’ Ibid. 40 See EU Commission, ‘Energy Poverty’ available at https://​ec​.europa​.eu/​energy/​topics/​markets​ -and​-consumers/​energy​-consumer​-rights/​energy​-poverty​_en​?redir​=​1 accessed 18 February 2021. 41 Jacobs and Herndon (n. 14). 38

Regulatory and policy instruments to promote decarbonization of energy  347 from state to state, RPSs generally requires utilities to derive a specified percentage of their retail electricity sales from renewable energy in a given state. Utilities that do not comply with this obligation face financial penalties. Consequently, RPSs and RECs constitute a similar type of support mechanism to quota obligations coupled with green certificates on the other side of the Atlantic. Nevertheless, each state is competent to define what constitutes ‘renewable’ or ‘clean energy’. This essentially means that some states consider nuclear resources to fall under the scope of their definition of clean energy and have accordingly implemented finance mechanisms similar to those for renewable energy. In view of low natural gas prices, state support for nuclear power has proven critical to the survival of the nuclear industry.42 Fiscal incentives While growth in renewables in the US has been boosted by state policies on renewable energy standards, at federal level two primary taxation incentives – the investment tax credit (ITC) and the production tax credit (PTC) – have also been effective in this regard.43 The ITC allows residential and commercial customers to deduct 26% of the cost of a solar system from federal taxes.44 The commercial credit of the ITC can be applied to both customer-sited commercial solar systems and to large-scale utility solar farms.45 The ITC has been a highly successful policy instrument: there has been approximately 52% annual growth in solar in the US since it was adopted in 2006.46 Due to its success, in 2015 Congress passed a multi-year extension of the ITC, albeit with scheduled decreases in the value of the credit starting in 2020. The PTC is the primary tax incentive for wind. It provides a 2.3 cent per kWh incentive for the first ten years of a renewable energy facility’s operation for companies that generate electricity from wind. The credit was implemented in 1992, when installed wind capacity in the US amounted to less than 1.5 GW. Since its implementation the PTC has significantly contributed to the development of wind power in the US, and in September 2019 total installed capacity stood at 100,125 MW, making wind the largest source of renewable generating capacity in the US.47 The PTC has been renewed and expanded various times, and it has even expired multiple times before its renewal. For many years it was extended only for one- or two-year periods at a time. This inconsistent, short-term renewal of policy support has resulted in lack of certainty as well as a boom–bust effect for wind power48. A gradual phase-out of the PTC began in

See, e.g., Jonathan A. Lesser, ‘Is There a Future for Nuclear Power in the United States’ Manhattan Institute Report, July 2019, 5. 43 See also Teresa Haukkala, Hannele Holttinen, Juha Kiviluoma, Akihisa Mori, Sirja-Leena Penttinen et al., ‘How to Accelerate Renewable Energy Production?’ in P. Aalto (ed.), Electrification: Accelerated Transition to Climate Neutrality (Elsevier 2021). 44 Section 25D. 45 Section 48. 46 Solar Energy Industries Association, ‘Solar Investment Tax Credit (ITC)’ available at https://​www​ .seia​.org/​initiatives/​solar​-investment​-tax​-credit​-itc accessed 23 February 2021. 47 AWEA, American Wind Energy Association, ‘Wind Energy in the United States’ available at https://​www​.awea​.org/​wind​-101/​basics​-of​-wind​-energy/​wind​-facts​-at​-a​-glance accessed 18 February 2021. 48 EIA 2012, US Energy Information Administration, ‘Wind Energy tax credit set to expire at the end of 2012’ available at https://​www​.eia​.gov/​todayinenergy/​detail​.php​?id​=​8870 accessed 18 February 2021. 42

348  Research handbook on climate change mitigation law 2017, with the PTC recently extended by one additional year in addition to which a new 30% investment tax credit has been created for offshore wind projects.49 While the ITC and the PTC are mainly known as support mechanisms for solar and wind, other eligible technologies include closed- and open-loop biomass, geothermal, landfill gas, municipal solid waste-to-electricity, qualified hydropower, and marine and hydrokinetic renewable energy. An energy property that benefits from receipt of the ITC is not eligible for the PTC (and vice versa), but taxpayers are able to make an irrevocable election for certain qualified property to benefit from the ITC instead of the PTC. Furthermore, it should be added that the lack of any (at least any long-standing) federal policy on renewable energy has naturally also been reflected in the legislative framework at federal level. There have been efforts to establish a federal renewable energy portfolio standard,50 but these bills have not survived the scrutiny of both chambers.51 It therefore remains to be seen what the current Biden administration, which has ambitious clean energy goals, is able to achieve in the next four years. Corporate renewable power purchase agreements Corporate renewable power purchase agreements (‘PPAs’) are characteristically bilateral, long term, typically 15–20 years, electricity supply contracts, whereby the seller is an energy generator, and the buyer is usually an industrial energy consumer. This contract regulates the supply of a certain quantity of electricity at a defined price or equivalent financial compensation. PPAs are an increasingly promoted instrument for financing and operating power plants producing electricity from renewable energy sources and for supplying customers with green electricity. PPAs provide financial certainty for utility companies and project developers, thus removing a significant barrier to financing and building new renewable energy facilities. PPAs are established and well-known instruments in the US to support electricity produced from renewable energy sources. On the other side of the Atlantic, in the EU, PPAs have not traditionally been a part of the EU framework on renewable energy support. However, as with any other area, differences naturally remain between EU Member States, and some Member States have been the forerunners of the use of PPAs in the EU as well.52 The first agreements were signed in the UK in early 2010 after which the number of PPAs started growing at an exponential rate and across multiple EU Member States. Spain is the forerunner in employing solar PPAs, whereas the Nordic countries are especially focusing on PPAs in wind. Today, PPAs are increasingly gaining ground also in the policy discourse of the European Union. 49 Windpower Engineering & Development, ‘PTC extended for by one year, new offshore wind tax credit inserted in Congress bill’, 22 December 2020, available at https://​www​.​windpowere​ngineering​ .com/​ptc​-extended​-by​-one​-year​-new​-offshore​-wind​-tax​-credit​-inserted​-in​-congress​-bill/​ accessed 23 February 2021. 50 For an overview, see Jeff Postelwait, ‘A U.S. Federal Renewable Portfolio Standard: Potentials and Pitfalls’ Renewable Energy World (27 March 2009) available at https://​www​.​renewablee​nergyworld​ .com/​baseload/​a​-federal​-renewable​-portfolio​-standard​-potentials​-and​-pitfalls/​#gref accessed 18 February 2021. See also US President Obama, State of the Union Address on 25 January 2011, specifically calling for a ‘clean energy target’, available at https://​obamawhitehouse​.archives​.gov/​the​-press​ -office/​2011/​01/​25/​remarks​-president​-state​-union​-address accessed 18 February 2021. 51 Jacobs and Herndon (n. 14) s. 5-01. 52 L.-N. Harada and M. Coussi, ‘Power Purchase Agreements: An Emerging Tool at the Centre of the European Energy transition, A Focus on France’ (2020) 29(5) European Energy and Environmental Law Review 195.

Regulatory and policy instruments to promote decarbonization of energy  349 Given that renewable energy is becoming increasingly cost-competitive against conventional energy sources, the toolbox used to support renewable energy production increasingly favours PPAs. Whereas the feed-in tariffs have traditionally been the most used support mechanism in Europe, the increasing cost-competitiveness of renewable energy with conventional energy, together with market distortions that government subsidies have created, has led the Commission to support more market-based support mechanisms, with some EU Member States fully abandoning their national support mechanisms. PPAs are envisaged to fill in the gap left by traditional support mechanisms as they are at the same time providing certainty to both producers and buyers. PPAs are increasingly tying the private sector to the decarbonization efforts. As energy prices are currently soaring in Europe, companies are seeking a hedge against price shocks. In addition, with increasing worries over climate change, customers are increasingly interested in the impact their spending habits have on the environment and the climate. Similarly, governments and lawmakers are creating ways to support corporate decision-making towards a more sustainable energy future. These factors mean that companies are favouring corporate power purchase agreements to demonstrate the ‘green choice’ they have made, thereby fulfilling their environmental, social and governance requirements.53 2.3

Facilitating the Integration of Variable Renewable Energy in the Power System

Battery energy storage: drivers of growth As discussed earlier in this chapter, the intermittent nature of the two currently mainstreaming renewable energy technologies – wind and solar PV – continue to constrain their potential to obtain a larger share of the energy supply. In order to secure constant and reliable electricity supply, system operators and utilities rely on fossil fuel or nuclear-sourced electricity to cover the majority of baseload needs. Natural gas-fired plants, due to their capability to ramp up (or down) their production very fast, are used as ‘peaker plants’ to meet infrequent peaks and imbalances in electricity demand. However, as an alternative to fossil fuels – in particular to address the imbalances in the system – a wide range of innovations are emerging that provide system operators with flexibility. These focus on providing supply-side flexibility (various storage technologies) as well as demand-side flexibility (demand-side management programmes). To reap all the benefits of these measures, they are often coupled with smart grid systems.54 Nevertheless, reflective of the nascent yet developing array of these technologies and innovations, legislative frameworks have not yet fully caught up with development ambitions. Both in the US and the EU, however, there are examples of legislative innovations that have

53 See also P. Rövekamp, M. Schöpf, F. Wagon, M. Weibezahl and G. Fridgen, ‘Renewable Electricity Business Models in a Post Feed-In Tariff Era’ (2021) Energy 216; S. McFarlane, ‘Oil Majors Look to Fill Businesses’ Growing Appetite for Green Power’ Wall Street Journal (24 March 2021). 54 Smart grid systems and devices will be an essential component of tomorrow’s power grid by making it possible for grid operators to fully harness the benefits of load balancing tools. The term ‘smart grid’ refers to the digital technology that allows for two-way communication and information sharing between grid operators and their customers. It is an umbrella term covering all the controls, computers, automation and new emerging technology that facilitates managing the balance in an electricity grid.

350  Research handbook on climate change mitigation law been adopted in order to govern newcomers to the market.55 These are briefly examined in the following section, with particular focus on the US approach to the regulation of battery energy storage solutions given their frontrunner status in terms of deployment of the technology. In addition, measures adopted to level the playing field for demand-side management participating in the markets are briefly examined. The growth in US utility-scale battery storage capacity has been remarkable. Operating utility-scale battery storage power capacity more than quadrupled from the end of 2014 (214 MW) to March 2019 (899 MW). If currently planned capacity additions are completed and there are no reductions in capacity, capacity will be more than 2500 MW by 2023.56 The increase in battery storage capacity in the US has resulted from falling technology costs of lithium-ion batteries in particular57 as well as successful market and policy drivers. Battery storage technologies represent a relatively new type of technology and their capability to serve many applications has not been well defined in the existing market and regulatory frameworks.58 This situation has nevertheless gradually improved, especially thanks to wholesale market operators and state-level regulators, thus levelling the playing field for battery storage applications.59 While the uptake of new technologies relying on renewable energy sources in energy production has been supported by financial means and artificial markets, often leading to market distortions, the approach taken to levelling the playing field for energy storage applications seems to rely on methods described as offering a more sustainable and cost-effective path towards market growth and industry maturity,60 and therefore illustrates the role of successful policy design in promoting the uptake of battery energy storage solutions.61 These market and policy drivers, at both federal and state level, are outlined in the following section. Wholesale market rules that facilitate access to markets Order No. 841 issued in 2018 by the Federal Regulatory Energy Commission (FERC) is perhaps the most important federal-level measure addressing wholesale market rules.62 See also Juha Koskela, Sirja-Leena Penttinen et al., ‘The Role of Back-Up Solutions and Energy Storage for Management of a System with a High Amount of Intermittent Renewable Power’ in P. Aalto (ed.), Electrification: Accelerated Transition to Climate Neutrality (Elsevier 2021) and S.-L. Penttinen and L. Reins, ‘“Adapting the Current Market Rules to New Market Realities”: Renewable Energy Grid Integration in the EU’, in T. Oyewunmi et al. (eds), Decarbonisation and the Energy Industry: Law, Policy and Regulation in Low-Carbon Energy Markets (Hart Publishing 2020) 263–282. 56 US Energy Information Administration (EIA), ‘U.S. utility-scale battery storage power capacity to grow substantially by 2023’, 10 July 2019, available at https://​www​.eia​.gov/​todayinenergy/​detail​.php​ ?id​=​40072 accessed 18 February 2021. 57 Pippa Stevens, ‘The battery decade: How energy storage could revolutionize industries in the www​ .cnbc​ .com/​ 2019/​ 12/​ 30/​ battery​ next 10 years’ CNBC (30 December 2019) available at https://​ -developments​-in​-the​-last​-decade​-created​-a​-seismic​-shift​-that​-will​-play​-out​-in​-the​-next​-10​-years​.html accessed 18 February 2021. 58 Richard McMahon and Lola Infante, ‘Energy Storage in the United States’ in L. E. Jones (ed.), Renewable Energy Integration: Practical Management of Variability, Uncertainty and Flexibility in Power Grids (2nd edn, Academic Press 2017) 281–282. 59 EIA, U.S. Battery Storage Market Trends (US Department of Energy 2018). 60 McMahon and Infante (n. 58) 288–289. 61 See also Juha Koskela, Sirja-Leena Penttinen et al. (n. 55). 62 FERC Order No. 841 (2018) – Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent System Operators. 55

Regulatory and policy instruments to promote decarbonization of energy  351 It required independent system operators (ISOs) and regional transmission organizations (RTOs) to remove barriers to entry for stand-alone energy storage technologies. For example, it required each ISO/RTO to revise its tariffs to establish a participation model consisting of market rules that recognize the physical and operational characteristics of energy storage resources and facilitate their participation in ISO/RTO wholesale markets. Nevertheless, while the Order has been hailed as a landmark decision,63 it has also raised some controversies in terms of FERC’s jurisdiction. As the Order addresses all resources regardless of their location (i.e. an interstate transmission system, a distribution system, behind the meter), it has been the subject of litigation revolving around the question of whether FERC has authority to regulate wholesale market participation by energy storage resources located on the distribution grid or behind the meter, as FERC’s jurisdiction covers only interstate commerce and not ‘local’ distribution taking place within a state. In July 2020, the US Court of Appeals for the District of Columbia Circuit held that a federal storage order does not encroach on states’ authority over the distribution system.64 The decision is likely to encourage storage resources to seek access to the wholesale marketplace. Although battery energy storage solutions have been praised for their ability to provide multiple services – and benefits – to the grid, thus making them a lucrative business opportunity, the role that they play may nevertheless be more limited than initially thought or hoped. For example, regarding ancillary services the experiences gained from the PJM, CAISO (California Independent System Operator) and ERCOT (Electric Reliability Council of Texas) suggest that the need for ancillary services capacity has not materialized in markets that have experienced high levels of renewable energy penetration to the extent that was initially envisaged and hoped for.65 Federal policies Federal-level legislation currently offers a business investment tax credit (ITC) of up to 30% under IRC Section 48, based on the qualified tax basis of a qualified energy storage system that is paired with a solar energy generation resource (or certain other renewable resources). Stand-alone energy storage systems are not currently eligible for the ITC. However, in order for an owner of a solar-plus energy storage project to claim the full 30% ITC, the project must commence construction (as defined under IRS rules) in 2019, after which the amount of ITC significantly reduces.66 In January 2020, the US Department of Energy announced the launch of the Energy Storage Grand Challenge (ESGC). The ESGC is a comprehensive programme to accelerate the development, commercialization and utilization of energy storage technologies. The aim of this initiative is to create and sustain global leadership in energy storage utilization and exports

Peter Maloney, ‘Grid operators file plans with FERC on integrating storage into wholesale markets’ UtilityDive (4 December 2018) available at https://​www​.utilitydive​.com/​news/​grid​-operators​ -file​-plans​-with​-ferc​-on​-integrating​-storage​-into​-wholesale​-m/​543560/​ accessed 18 February 2021. 64 Nat’l Assoc. of Regulatory Comm. v. FERC, No. 19-1142 (D.C. Cir. July 10, 2020). 65 Derek Sackler, ‘New battery storage on shaky ground in ancillary service markets’ UtilityDive (14 November 2019) available at https://​www​.utilitydive​.com/​news/​new​-battery​-storage​-on​-shaky​-ground​ -in​-ancillary​-service​-markets/​567303/​ accessed 18 February 2021. 66 Shah et al., ‘The rapid maturation of the U.S. energy storage market’ PV Magazine (1 August 2019). 63

352  Research handbook on climate change mitigation law with a secure domestic manufacturing supply chain that is independent of foreign sources of critical materials by 2030.67 State-level policies Currently state programmes make up the bulk of regulation and policy driving the growth of energy storage in the market. The regulations are relatively new and are supported by a mix of effectuated policy, in-development policy, and proposed policy.68 For the purposes of promoting the expansion of energy storage resource usage in the market, many states have implemented or are in the process of implementing a combination of incentive programmes, grant programmes, energy storage procurement targets, cost–benefit studies, utility planning reforms, distribution interconnection policies and multiple use application frameworks.69 First, incentive programmes may take the form of tax credits or exemptions, rebates, and time-of-use rate plans. Currently, Arizona, California, Florida, Maryland, Nevada, New York and Wisconsin implement various forms of direct financial incentives. Arizona, California, Florida, Nevada and Hawaii offer tax incentives, rebates and/or time-of-use rate plans.70 Second, energy storage procurement targets typically spur energy storage market growth by requiring certain targets to be achieved by certain dates. For example, the following states have set goals for how much energy storage must be integrated into the grid: California: 1,825 MW by 2020; Massachusetts: 1,000 MW by 2025; New Jersey: 600 MW by 2021, 2,000 MW by 2030; New York: 1,500 MW by 2025, 3,000 MW by 2030; Oregon: 5 MW by 2020; and Arizona: 3,000 MW by 2030 (proposed). Additionally, the adoption of energy storage targets and other similar policies are pending or in process in a number of other states.71 Third, utility planning reform includes policies to ensure grid and market access by improving grid interconnection, processes, codes and standards, and multiple use functionality of storage. For example, Colorado passed legislation in 2018 calling for the state commission to review all utility planning rules to ensure consideration of energy storage procurement. The commission issued those rules in late 2018, incorporating storage into bulk system, transmission and distribution planning rules. Michigan, Arizona, Washington and New Mexico have issued orders or policy statements calling on the utilities to consider energy storage in their integrated resource plans. Arizona, Nevada, California, New York and Hawaii have all revised their distribution interconnection rules to better reflect the characteristics of energy storage systems.72 The successful battery storage uptake in the US is a result of a policy mix that seeks to unlock the potential of battery energy storage applications and the services they can provide in the market while simultaneously making them a viable business case by breaking, in particular, the barriers to market access the new technology is prone to face in the ‘traditional’ regulatory landscape. On the other hand, the policy instruments adopted at state level reflect Department of Energy, ‘Energy Storage Grand Challenge’ available at https://​www​.energy​.gov/​ energy​-storage​-grand​-challenge/​energy​-storage​-grand​-challenge. 68 Teresa Haukkala, Hannele Holttinen, Juha Kiviluoma, Akihisa Mori, Sirja-Leena Penttinen et al. (n. 43). 69 EIA, U.S. Battery Storage Market Trends (n. 59). 70 Shah et al. (n. 66). 71 Ibid. 72 Energy Storage Association, ‘States in the Spotlight’ available at https://​ energystorage​ .org/​ policies​-issues/​states/​states​-in​-the​-spotlight/​ accessed 23 February 2021. 67

Regulatory and policy instruments to promote decarbonization of energy  353 the pledges and targets of the forerunner states of green energy deployment, where battery energy storage applications are seen as a critical component of tomorrow’s greener grid. In this respect, hybrid installations, i.e. power generation methods such as solar or wind power that are coupled with energy storage, are starting to gain traction.73 While levelling the playing field for energy storage has thus far especially focused on stand-alone applications, hybrid projects have recently spurred further interest. Currently all US RTOs and ISOs have initiated discussions with stakeholders as to how to spur the participation of hybrid storage applications in the market, with five markets already actively developing new rules. At the federal level, it is envisaged that FERC will issue rules on hybrid installations.74 Demand-response programmes providing demand-side flexibility Demand-response programmes seek to encourage participants to make short-term reductions in energy demand in order to reduce demand during periods when wholesale prices are high or when the reliability of the electric grid is threatened. Load reductions are encouraged by means of price signals. Demand-response measures are usually activated for periods ranging from a couple of minutes to a couple of hours. Demand-response refers to any explicit action to reduce demand in response to short-term high prices or, in some instances depending on the market, in response to a control signal by the grid operator. Examples of such load reducing action are, for example, slowing down or stopping production at an industrial plant, dimming or shutting off lights or decreasing the temperature of the thermostat.75 Similarly to energy storage solutions, uptake of demand-response programmes has been hindered by ‘traditional’ market regulation and structures that have not recognized the potential of this tool as an equal player in the market along with traditional supply-side resources. This has, however, slowly started to change, with the (successful) demand-side response programme launches of, for example, PJM. Similarly, in the Clean Energy Package adopted in 2018, the EU addressed for the first time the role of demand-response programmes in the electricity markets.76 One of the political priorities of the Energy Union Strategy,77 which is the policy framework upon which the measures adopted in the Clean Energy Package are based, underlines the changing role of consumers – industrial, commercial and residential. Instead of being passive users, consumers should be provided with information and possibilities to play a more active Juha Koskela, Sirja-Leena Penttinen et al. (n. 55). Sharon Thomas, ‘Hybrid Resources Are Arriving as Policy Catches Up’ Energy Storage Association Blog (19 May 2020) available at https://​energystorage​.org/​hybrid​-resources​-are​-arriving​-as​ -policy​-catches​-up/​accessed 19 February 2021. 75 Andrew L. Ott, ‘Case Study: Demand-Response and Alternative Technologies in Electricity Markets’ in L. E. Jones (ed.), Renewable Energy Integration: Practical Management of Variability, Uncertainty and Flexibility in Power Grids (2nd edn, Academic Press 2017) 262. 76 It should, however, be noted that while demand-response programmes are perhaps most often associated with the power sector, developments are also taking place in the natural gas markets. See EIA, ‘Consolidated Edison gets approval for natural gas demand response pilot program’, 2 November 2018, available at https://​www​.eia​.gov/​todayinenergy/​detail​.php​?id​=​37412 accessed 18 February 2021. 77 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank, ‘A Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy’ COM(2015) 80 final. 73 74

354  Research handbook on climate change mitigation law role in the energy market as ‘active consumers’.78 Prior to the adoption of the Clean Energy Package, EU Member States’ regulatory frameworks were often not fully aligned to support different activities in the market that the consumers can introduce and benefit from. In order to address this gap, the Clean Energy Package introduced a harmonized level playing field to engage consumers as active participants in the energy markets. From the flexibility point of view, consumers are envisaged to trade their flexibility and self-generated electricity in the energy markets: Consumers have an essential role to play in achieving the flexibility necessary to adapt the electricity system to variable and distributed renewable electricity generation … By empowering consumers and providing them with the tools to participate more in the energy market, including participating in new ways, it is intended that citizens in the Union benefit from the internal market for electricity and that the Union’s renewable energy targets are attained.79

With the rules introduced in the Clean Energy Package, it is envisaged that consumers are provided with the possibility to participate directly in the market, either individually or through aggregators and/or other ‘community initiatives’ and either by selling self-generated electricity, through self-storage or by adjusting their consumption according to market signals, and in return benefit from lower electricity prices or other incentive payments. This in turn requires the installation and use of smart metering systems as well as dynamic electricity pricing that triggers the customer to respond to the load reduction need: real-time pricing is essential in encouraging consumers to react to price signals and for them to benefit from participating in demand-side responses.80 Given that the household loads are generally small, the Electricity Market Directive requires Member States to allow and foster participation of demand response through an intermediator between markets and consumers – namely, an aggregator. This essentially means pooling the smaller demand response resources together. Following an agreement between customers and an aggregator, the aggregator can temporarily reduce their electricity consumption when there is a high demand for electricity. The reduced consumption provides flexibility, which is the avoided consumption at a certain moment, which can, in turn, be sold in the market by the aggregator. While access to markets has typically been possible only for the largest industrial consumers, aggregation service providers enable consumer participation through demand response measures. Traditionally, demand response is either not accepted as a resource by some market segments or is still limited to specific areas within the ancillary services. The Electricity Market Directive provides that final customers must be allowed to participate alongside electricity generators (and storage applications) in all electricity markets as well as ancillary services and capacity markets in a non-discriminatory manner. This underlines the equal treatment of supply-side and demand-side resources in the markets.

78 See Electricity Market Directive Art. 2(8) for the definition of an ‘active customer’ as, inter alia, a final customer. 79 Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU [2019] OJ L158/125 (the ‘Electricity Market Directive’) recital 10. 80 See S.-L. Penttinen and L. Reins (n. 55).

Regulatory and policy instruments to promote decarbonization of energy  355 In a similar manner to the developments that have taken place at EU level, in the US the FERC has recently required the removal of all barriers to wholesale market participation by aggregated distributed energy resources.81 Order 2222 – which was adopted after the DC Circuit’s ruling on Order No. 841 confirming FERC’s jurisdiction – enables distributed energy resource aggregators to compete in all regional organized wholesale electric markets. The order is envisaged to empower new technologies to come online and compete on a level playing field, thus further enhancing competition, encouraging innovation and driving down costs for consumers. Distributed energy resources covered by the order include, but are not restricted to, electric storage and intermittent generation to distributed generation, demand response, energy efficiency, thermal storage and electric vehicles and their charging equipment.82

3

ENERGY EFFICIENCY

3.1

The Role of Energy Efficiency in Today’s Policy Discourse

Today, energy efficiency is characterized as a ‘first fuel’: the energy source (fuel) you do not have to use.83 Energy efficiency has recently been brought to the forefront in the efforts to mitigate climate change, in particular due to its ‘untapped potential’ and ‘multiple benefits’ that range from environmental benefits to broader social and economic impacts.84 While the environmental benefits – particularly in the form of reducing the need to generate fossil-fuel-based energy and thus reduce greenhouse gas emissions – are relatively well-known, energy efficiency retrofits in buildings (for example) contribute to occupants’ health and well-being while also leading to reduced energy bills. Reduced energy demand not only contributes to ensuring security of supply but can also delay or defer the need for system upgrades and infrastructure investments. Furthermore, while each country has a different potential for renewable energy sources, energy efficiency ‘is the one energy resource that every country possesses in abundance’.85 Energy efficiency policy often has an impact on several sectors due to the broad definition of the concept.86 It concerns not only the energy sector as such, but specific policy measures have been introduced and adopted globally in order to achieve efficiency gains in areas such as transport, buildings and products over the past decades. Whereas adopted energy efficiency FERC Order No. 2222 (2020) – Participation of Distributed Energy Resource Aggregations in Markets Operated by Regional Transmission Organizations and Independent System Operators. 82 Ibid. 83 IEA, ‘Capturing the Multiple Benefits of Energy Efficiency’ (OECD/IEA 2014) 18. Along similar lines, the European Commission has noted that ‘the cheapest and cleanest source of energy is the energy that does not need to be produced or used’, European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank, ‘Clean Energy for All Europeans’, Brussels, 30.11.2016, COM(2016) 860 final 4. 84 Ibid., 18–19. 85 IEA, ‘Energy Efficiency’, available at https://​www​.iea​.org/​topics/​energyefficiency/​accessed 19 February 2021. 86 S.-L. Penttinen et al., ‘Electrification and Energy Efficiency in Buildings: Policy Implications and Interactions’ in P. Aalto (ed.), Electrification: Accelerated Transition to Climate Neutrality (Elsevier 2021). 81

356  Research handbook on climate change mitigation law frameworks have traditionally relied on energy end-use reduction, nowadays a more integrated approach to energy efficiency is often promoted. For example, in the EU, energy efficiency plays ‘the protagonist role’,87 as ‘energy efficiency first’ is one of the key principles of the Energy Union, and is intended to ensure a secure, sustainable, competitive and affordable energy supply in the EU. The principle is defined in the Governance Regulation,88 according to which energy efficiency first means taking utmost account, in energy planning and in policy and investment decisions, of alternative cost-efficient energy efficiency measures to make energy demand and energy supply more efficient, in particular by means of cost-effective end-use energy savings, demand response initiatives and more efficient conversion, transmission and distribution of energy, whilst still achieving the objectives of those decisions.89

It is envisaged as the fundamental principle on which the EU’s energy system should be built. According to this principle, energy efficiency should be taken into account throughout the energy system, which means, inter alia, ‘actively managing demand so as to optimise energy consumption, reduce costs for consumers and import dependency, while treating investment in energy efficiency infrastructure as a cost-effective pathway towards low-carbon and circular economy’.90 To put it simply, energy efficiency should always be prioritized over any investment in new power generation, grids or pipelines, and fuel supplies in the event that efficiency improvements are shown to be most cost-effective or valuable. When considering any planning or new investments, the principle of energy efficiency prompts the question, ‘Would it be cheaper or more valuable to help customers invest directly in energy-saving actions and demand-side response, rather than paying more for supply-side networks, fuels, and infrastructure?’91 Embedding the energy efficiency first principle into the whole energy system requires a fundamental rethinking of energy efficiency and treating it as an energy source in its own right, representing the value of the energy saved. As a result, energy efficiency in today’s context refers not only to end-use efficiency and related savings, but also reflects the impact energy efficiency and related measures have across the entire energy system. This includes measures that lead to primary and/or final energy savings, taking into account both end-use and supply efficiency, but also system efficiency, such as demand-side management. Given the reach of 87 As described in Nikolaos Gkonis et al., ‘Multi-Perspective Design of Energy Efficiency Policies under the Framework of National Energy and Climate Action Plans’ (2020) 140 Energy Policy 111401. 88 Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No. 663/2009 and (EC) No. 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/ EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No. 525/2013 of the European Parliament and of the Council [2018] OJ L328/1 (the ‘Governance Regulation’). 89 Governance Regulation Art. 2(18). 90 European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank, ‘Clean Energy for All Europeans’, Brussels, 30.11.2016, COM(2016) 860 final 4. 91 Edith Bayer, ‘Energy Efficiency First: A Key Principle for Energy Union Governance’ (Regulatory Assistant Project 2018) available at http://​www​.raponline​.org/​wp​-content/​uploads/​2018/​04/​rap​-bayer​ -key​-principle​-for​-energy​-union​-governance​-2018​-april​-17​.pdf accessed 11 January 2021.

Regulatory and policy instruments to promote decarbonization of energy  357 the principle, it resonates not only in the legislation concerning energy efficiency, such as the Energy Efficiency Directive92 (EED) and the Energy Performance of Buildings Directive93 (EPBD 2010) but also in legislation on market design as well as certain product groups and related legislative instruments.94 Given the reach of the policy tool, it has been implemented by various legislative tools in several areas. Certain policy and regulatory measures have been adopted globally to stimulate energy efficiency and reduce energy demand. These measures vary from information-based policies to market-based incentives and binding regulations.95 Typical areas of action in the sphere of energy efficiency are buildings, appliances, equipment and lighting. With regard to these areas, building codes and minimum energy performance standards are the most important and widely adopted measures in order to increase energy performance. These are examined in more detail in the following sections. 3.2

Policy Instruments to Enhance Energy Efficiency

Market-based measures: energy efficiency obligations schemes Certain market-based measures that set a specific policy framework to be delivered by market actors are also employed in respect of energy efficiency. These instruments differ from other incentives, because instead of describing the means for delivering energy savings, they only dictate the outcome.96 Energy efficiency obligations and auctions are two of the main instruments used in this regard and cover either one, a combination or all end-use sectors: residential, commercial, public, industry and transport.97 In an obligation scheme market actors are required to deliver energy efficiency outcomes, i.e. they have to achieve a certain amount of energy savings. For example, a utility can be required to reduce its expected energy load growth by improving their customers’ energy efficiency. However, obligation schemes often leave it to the utilities to find the best methods to introduce savings.98 To provide an example, as a key element of the EU energy efficiency framework,99 Member States are required to introduce policy measures to achieve energy savings equivalent to an

92 Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/ EC and 2006/32/EC [2012] OJ L315/1. 93 Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings [2010] OJ L153/13 (‘EPBD 2010’). 94 See S.-L. Penttinen et al., ‘Electrification and Energy Efficiency in Buildings: Policy Implications and Interactions’ in P. Aalto (ed.), Electrification: Accelerated Transition to Climate Neutrality (Elsevier 2021). See also S.-L. Penttinen, ‘Energy Efficiency’, ‘Energy Performance of Buildings’ and ‘Ecodesign’, all in O. Woolley (ed.), Encyclopedia of European Union Law, Energy Law Volume (Oxford University Press, forthcoming 2022). 95 IEA, ‘Perspectives for the Energy Transition: The Role of Energy Efficiency’ (OECD/IEA 2018) 85. 96 Ibid., 15. 97 IEA, ‘Market-Based Instruments for Energy Efficiency – Policy Choice and Design’ (IEA/OECD 2017) 41. 98 Ibid., 15. 99 This obligation and the implementing alternatives are considered key to achievement of the EU’s energy and climate objective, as around half of the additional savings that are needed to achieve the

358  Research handbook on climate change mitigation law annual reduction of 1.5% in national energy sales. This obligation was extended in the 2018 recast to cover the period to 2030 with similar ambition levels. This obligation is implemented via dedicated energy efficiency obligations schemes.100 Member States may also introduce alternative policy measures to achieve this target,101 meaning that they continue to have flexibility as to how they implement the savings obligation, in a similar manner to that under the EED. These measures have given rise to greater end-use energy savings, attracted private investment in energy efficiency and supported the emergence of new market actors.102 Furthermore, the 2018 amendments also sought to strengthen the social aspects of energy efficiency by taking energy poverty into account in designing energy efficiency schemes and alternative measures. To put it simply, energy efficiency obligation schemes are legislative instruments that impose obligations on ‘obligated parties’ to meet quantitative energy savings targets across their customer portfolio. An ‘obligated party’ under the EED is an energy distributor or retail energy sales company that is bound by the national energy efficiency obligation schemes. The individual designs of the schemes within the general description vary greatly, with obligations being imposed on energy retailers, distributors or both, across different geographical scales, in relation to a variety of energy types, different sectors and/or customer groups and, naturally, with different ambition levels, targets and metrics. Moreover, these varying schemes have been introduced in different contexts, for example from the viewpoint of market structures and policy mixes.103 The design of energy efficiency obligation schemes can be coupled with trading mechanisms, the most well-known of which being ‘white certificate’ programmes. A white certificate (also known as an energy savings certificate) is issued by an authority or by an authorized body to show compliance with the energy efficiency obligations. One certificate typically represents one megawatt-hour of energy savings from efficiency projects. Similar to a green certificate in the renewable energy sphere, a white certificate is a tradable commodity. According to the IEA, there are around 46 energy efficiency obligations currently in force across the globe. For example, among the US states, Nevada has in place a certificate scheme known as the Energy Portfolio Standard.104 Auction mechanisms, such as tendering programmes and forward capacity auctions, are measures that allow market actors to put forward bids either in competitive tenders (lowest bid wins), or within a specific framework that sets the price per unit of energy savings and invites proposals to deliver savings at that price.105 Various criteria, including location, technology and quality, can be used to rank bids. Across the globe, the majority of market-based instru-

energy efficiency target are expected to result from extending the application of these provisions to the revised 2030 framework. 100 Directive 2012/27/EU Art. 7(a). 101 Ibid., Art. 7(b). 102 European Commission, Proposal for a Directive of the European Parliament and of the Council amending Directive 2012/27/EU on energy efficiency, COM(2016) 761 final 2. 103 Tina Fawcett, Jan Rosenow and Paolo Bertoldi, ‘Energy Efficiency Obligation Schemes: Their Future in the EU’ (2019) 12 Energy Efficiency 58. 104 For details of Nevada’s programme, see http://​programs​.dsireusa​.org/​system/​program/​detail/​1036 accessed 19 February 2021. 105 IEA, ‘Market-Based Instruments for Energy Efficiency – Policy Choice and Design’ (n. 97) 15.

Regulatory and policy instruments to promote decarbonization of energy  359 ments include electricity, and many also include gas. However, fewer schemes include other fuels, and transport fuels are particularly poorly represented.106 However, in a similar way to renewable energy tendering/auction schemes — and any other tendering/auction scheme for that matter — the key to delivering a cost-efficient end result is to design and implement the auction well: ‘The risk for policy makers is that, if designed or implemented poorly, the market will find ways to “game” the system or to focus delivery of the specified outcome in ways that policy markets would prefer to avoid.’107 Energy efficiency policies should be carefully tailored, paying close attention to the specific characteristics of each sector in order to ensure the most optimal outcomes. Mandatory energy performance standards Mandatory energy performance standards lay down the minimum level of energy performance that, for example, appliances and lighting must meet or exceed before they can be offered for sale or used for commercial purposes. These measures prevent inefficient appliances from entering the market while also incentivizing producers to increase the efficiency of their products through design. The measures adopted should reflect long-term policy commitments in order to encourage investment decisions, in particular those associated with making products more efficient.108 While building-related energy performance requirements, in particular, are often embedded in building codes and thus form part of binding legislation, minimum energy performance standards can be agreed on as voluntary agreements with product manufacturers or can be adopted as binding legislation. Energy labelling is probably the most well-known and widely used information-based policy tool for stimulating energy efficiency and is used in the form of both mandatory and voluntary schemes. Labelling is often considered to be one of the least expensive and least intrusive of energy efficiency policies. Its objective is to provide consumers with information on appliances’ energy consumption and raise awareness of energy efficient options. The European Union energy labelling scheme was recently revised with a view to simplifying and updating the energy efficiency labelling requirements for products sold in the EU.109 All products will be labelled on a new scale ranging from A (most efficient) to G (least efficient). The new labelling scale will gradually replace the previous system of A+++ to G labels. The previous system was confusing to consumers because of its ‘+’system, which was introduced as a result of the development of more energy efficient products in recent years, but which, in the end, did not enable consumers to distinguish between the most energy efficient items. The new scale is intended to help consumers make better informed purchasing choices. Fiscal incentives Fiscal incentives such as the possibility of making tax deductions are used to stimulate energy efficiency. These can be introduced, for example, to encourage customers to purchase Ibid., 40. IEA, ‘Perspectives for the Energy Transition: The Role of Energy Efficiency’ (n. 95) 113. 108 According to the IEA, the requirements to increase energy performance of products have not affected the product prices, as manufacturers have either found ways to increase efficiency at a lower cost or reduce other costs, or investments have been shifted from other features to efficiency. See IEA, ‘Perspectives for the Energy Transition: The Role of Energy Efficiency’ (n. 95) 86. 109 Regulation (EU) 2017/1369 of the European Parliament and of the Council of 4 July 2017 setting a framework for energy labelling and repealing Directive 2010/30/EU [2017] OJ L198/1. 106 107

360  Research handbook on climate change mitigation law lower-emitting or more fuel-efficient vehicles through vehicle registration taxes as well as differentiated taxes on vehicle use.110 Loans, grants and other types of financial measures are also used, in particular to encourage the purchase of more energy efficient equipment, buildings or plant, usually granted by private or government-run financial institutions.111 For example, in the US a deduction of the cost of installation of energy-efficient measures is available for commercial buildings.112 A tax deduction of up to US$1.80 per square foot is available for buildings that save at least 50% of the heating and cooling energy of a system or for buildings that meet certain minimum standards of energy efficient design.113 Partial deductions can be taken for measures that have an impact on, for example, the building envelope or lighting.

4

CONCLUDING THOUGHTS: THE WAY FORWARD?

This chapter has presented the most widely employed policy instruments that seek to introduce ‘sustainability’ into the energy sector. ‘Sustainability’ is often understood only in terms of ‘environmental sustainability’,114 and in this respect the concept resonates only with the need to reduce greenhouse gas emissions.115 In the early 1990s the first more holistic feed-in tariff schemes were introduced. Due to their relative success in pioneering states, government subsidies combined with priority grid access, especially feed-in tariffs, were considered a key driver of investment in the renewable energy sector. This era has been described as characterized by efficacy-oriented policymaking, where the prevailing aim was ‘to get as much steel in the ground (and solar panels on rooftops) as possible’.116 Feed-in tariffs have proved to be a successful policy tool, particularly in the EU, as they ensure continuous income flows for renewable energy producers, thus providing the stable investment environment that was vitally needed when the markets were still niche and not cost-competitive (which was considered particularly important at the time) with traditional energy supply technologies relying on fossil fuels.117 In this context, a general climate of

See IEA, ‘Perspectives for the Energy Transition: The Role of Energy Efficiency’ (n. 95) 86. Ibid., 109. 112 For an overview, see Office of Energy Efficiency & Renewable Energy, ‘179D Commercial Buildings Energy Efficiency Tax Deduction’ available at https://​www​.energy​.gov/​eere/​buildings/​179d​ -commercial​-buildings​-energy​-efficiency​-tax​-deduction. 113 Such as the ASHRAE standard 90.1.-2001 or 90.1-2007 depending on the year the buildings and systems were put into service. 114 See also discussion in S.-L. Penttinen, ‘Sustainability in the Energy Sector: Policy Directions and Implementing Measures’ (2018) 16(3) Oil, Gas and Energy Law, Special Issue in International Energy Law 2–3. 115 ‘Sustainability’ is often understood as a synonym for ‘sustainable development’, a concept that is associated with the UN Conference on the Human Environment, held in Stockholm in 1972. In today’s discourse sustainable development is seen to encompass three pillars that require the balancing of the objectives of economic growth, social justice and environmental protection. 116 As described in F. Mormann, ‘Clean Energy Equity’ (2019) 2(2) Utah Law Review 337. Following Mormann’s description, see also Davies (n. 33) 311–312. 117 See also Penttinen (n. 24) 77–78. 110 111

Regulatory and policy instruments to promote decarbonization of energy  361 suspicion as to whether nascent technologies developing in niche markets could compete in a mature industry such as electricity surrounded renewable energy development.118 Since the 2000s, wind and solar PV especially have gained a foothold in the market, thus proving their merit. These two renewable energy technologies, in particular, are today considered as ‘mainstream’, and over the years the need for heavy subsidy programmes increasingly began to be questioned. Gradually, regulators started to fine-tune policy mixes that would increasingly expose the production of renewable energy to market signals, to address growing concerns over the cost efficiency of the adopted policies, and especially in order to mitigate the financial burden on ratepayers and taxpayers.119 The introduction of feed-in premiums and quota-based obligations coupled with green certificates or renewable energy credits – the details naturally depending on the jurisdictions in question – and tendering as a cost-allocation method started to emerge as predominant support models. This development has been driven by a desire to improve efficiency,120 with a view to achieving the same, or even improved, results at a lower cost thus adding the ‘economic’ perspective into the sustainability approach. However, the policy instruments adopted in order to promote renewable energy sources have faced criticism for several decades, particularly as to their cost efficiency and the question of who is ultimately responsible for the costs involved in utilizing these sources. This discussion has received growing impetus alongside increased use of renewable energy. Recently, discussion has started to emerge concerning equity in the clean energy policy mix.121 It has been suggested that the disconnect between the allocation of costs and access to the economic benefits created by clean energy policies prioritizes environmental and economic outcomes at the expense of equity and social sustainability – the third pillar of sustainability.122 Lack of equity has been one of the drivers, for example, in refining policies in terms of net metering in the US and in the search for an ideal policy design that would share the costs – and benefits – more evenly. In a similar manner, recent initiatives addressing the supply chains of critical raw minerals needed for the thriving battery storage and electric vehicles sectors seek to strengthen the social sustainability of these sectors and balance the three pillars of sustainability more evenly.123 The calls for more evenly distributed costs and benefits are likely to increase in the coming years, during which distributed renewable energy systems are set to proliferate, and require not only policy fine-tuning, but policy reform and innovation to address the implications of the transition. The development trajectory for energy efficiency has been somewhat different. Whereas today the role of energy efficiency in the low-carbon energy transition is widely acknowledged in the policy discourse, which is in turn reflected in the adoption of policy mixes to enhance

Davies (n. 33) 311 and references therein. Mormann (n. 116) 337; Penttinen (n. 114). 120 Mormann (n. 116) 337. 121 Mormann (n. 116). See also Davies (n. 33) 309–330. 122 Mormann (n. 116). 123 European Commission, Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank on the Implementation of the Strategic Action Plan on Batteries, ‘Building a Strategic Battery Value Chain in Europe’, Brussels 9.4.2019, COM(2019) 176 final; Energy Storage Grand Challenge, Draft Roadmap (US Department of Energy, July 2020). See also S.-L. Penttinen, ‘Batteries and the Low-Carbon Energy Transition: Circularity and Secondary Supply Approach Highlighted in the EU’s Policy Discourse’ (2021) 30(5) European Energy and Environmental Law Review 229–239. 118 119

362  Research handbook on climate change mitigation law efficient energy use, the problem with regard to energy efficiency was that it was seen as the ‘nerdy tag-along brother’124 of renewable energy and insufficient attempts were made to realize its potential.125 Recent developments, however, suggest that the situation is gradually improving. In particular, synergies provided by energy efficiency in relation to various areas of action, such as electrification, have started to be acknowledged. Energy efficiency is not seen anymore only as a separate area of action, but instead it is resonating in other policy areas as well with a view to harnessing synergies between various policy measures. Furthermore, while ‘environmental sustainability’ has been the prevailing objective in the adoption of the energy efficiency policy framework, social justice and equity discussion has been acknowledged within the area of energy efficiency for some time.126 Recently social justice has been emphasized, for example, in the US Green New Deal resolution, which includes aspirations to reduce emissions and improve symptoms of energy inequality by linking energy efficiency with social justice.127 In a similar manner, in the EU Green Deal, ‘the biggest challenge will be to manage the energy transition in a way that does not deepen social inequalities’.128 It remains to be seen whether the next generation policy measures that will be introduced on both sides of the Atlantic are able to deliver the twofold aim of reducing greenhouse gas emissions in the energy sector while at the same time ensuring a ‘just transition’.

E. Wood, ‘Energy Efficiency, the Nerdy Brother of Renewables’ Renewable Energy World (18 April 18 2011), available at https://​www​.​renewablee​nergyworld​.com/​ugc/​articles/​2011/​04/​energy​ -efficiency​-the​-nerdy​-brother​-of​-renewables​.html. 125 Penttinen (n. 114) 15. 126 See, for example, T. G. Reames, ‘A Community-Based Approach to Low-Income Residential Energy Efficiency Participation Barriers’ (2016) 21(12) Local Environment 1449–1466; N. Simcock and C. Mullen, ‘Energy Demand for Everyday Mobility and Domestic Life: Exploring the Justice Implications’ (2016) 18 Energy Research and Social Science 1–6. 127 See, for example, Ray Galvin and Noel Healy, ‘The Green New Deal in the United States: What It Is and How to Pay for It’ (2020) 67 Energy Research & Social Science. 128 Frédéric Simon, ‘Biggest challenge in energy transition is social justice, EU official says’ Euractiv (1 December 2020) available at https://​www​.euractiv​.com/​section/​energy​-environment/​news/​biggest​ -challenge​-in​-energy​-transition​-is​-social​-justice​-eu​-official​-says/​ accessed 23 February 2021. 124

15 Transportation’s trinity and climate change mitigation Tanveer Ahmad, Paul Fitzgerald and Jeffrey J. Smith

INTRODUCTION Transportation is one of the significant sources of emissions contributing to climate change. Currently, direct emissions from transportation account for 14% of anthropogenic generation of global greenhouse gases.1 The COVID-19 pandemic that continued through 2022 revealed the social and economic importance of transportation to humanity, a world in which the movement of people and goods has become essential.2 While transportation can be accorded no greater importance over other activities that generate greenhouse gas emissions (GHGs), it can be said this sector is axial, the basis by which the others are realized. In other words, it is by transport – the carriage of people and goods – through which other GHG-contributing activities are made possible. Complicating matters, some forms of transportation, especially aviation and shipping into a foreseeable future, are not amenable to alternative and sustainable fuel sources. The need for petroleum-based fuel will not be overcome for many years and only with considerable capital cost. By contrast, the revolution in the powering of terrestrial transportation is underway.3 The transportation sector is fragmented in nature: socially and jurisdictionally defined in what is the significantly local character of terrestrial transport, while continuing with modest regulation in its aviation and shipping dimensions. This may arguably entail a better design of governance and measures across the industry as a whole, the terrestrial being assigned to the competence of states and regional organizations, with aviation and shipping falling to their respective international organizations for negotiated coordinated action between the states that participate in them. This fragmentation is more than the operational or behavioural dimensions across the three sectors: it is a matter of technologies distinct to each, including substitute forms of powering and energy sources. 1 See IPCC, “Summary for policymakers” in Ottmar Edenhofer et al. (eds), Climate Change 2014: Mitigation of Climate Change: Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2014) 1 at 8. 2 See Diego Maria Barbieri et al., “Impact of COVID-19 pandemic on mobility in ten countries and associated perceived risk for all transport modes” (2021) 16 PLoS ONE e0245886. See also Dominic Loske, “The impact of COVID-19 on transport volume and freight capacity dynamics: an empirical analysis in German food retail logistics” (2020) 6 Transportation Research Interdisciplinary Perspectives 100165. And see Corinne Le Quéré et al., “Fossil fuel CO2 emissions in the post-COVID-19 era” (2021) 11 Nature Climate Change 197: “The drop in CO2 emissions [7.6% in 2020 from 2019] from responses to COVID-19 highlights the scale of actions and international adherence needed to tackle climate change.” 3 See, for example, Bingjie Xu et al., “Have electric vehicles effectively addressed CO2 emissions? Analysis of eight leading countries using quantile-on-quantile regression approach” (2021) Sustainable Production and Consumption 1205. And see Jiang Kejun, “Transport scenarios for China and the role of electric vehicles under global 2 °C/1.5 °C targets” (2021) Energy Economics 105172.

363

364  Research handbook on climate change mitigation law However, for an evolving international law of climate change, common factors across each transportation sector offer useful lessons. The regulation of vehicle design is a starting point to examine the making of more effective law, entailing needed shifts in norms to direct behaviours and efficiencies in compliance. Consumer and operator behaviour is a second. The extent to which the law can address fuel efficiency in present carbon-intense modes of transportation, while effecting a normative shift to alternative, sustainable energy sources is a feature of the three sectors, which need urgent appreciation. In addition, the slow progress to fashioning the relevant international law towards economic incentives that change behaviour for demand and use of aviation and shipping can benefit from progressive advances in terrestrial transport. There is also, crucially, the role of regional governance in getting to better law, with the promise of evolving beyond what remains a state-oriented climate regime for all modes of transportation. This includes aviation and shipping where states have been able to combine in the sectors’ respective international organizations to avoid much restriction of globally operating industries.4 At its foundation, the challenge to address and reverse greenhouse gas emissions from transportation must confront the ideals of human progress. Faster and less expensive transportation in all modes is intrinsic to economic and, arguably, emancipatory progress in all societies. The assured access to reliable transportation is a defining feature of modern life, increasingly common to all peoples. Securing an equitable result across societies in applying the law in order to move away from fossil fuels as energy sources is the defining objective.

1

INTERNATIONAL LAW CONTEXT

When discussing the development and role of international law for GHG emissions reductions in the transportation industry, two fundamentals are usefully recalled. First, progress of governance and regulation in each of the aviation, terrestrial, and shipping sectors can be traced to efforts to reduce air pollution as a human health hazard. Consider the place for GHG emissions measures in global shipping, namely, as part of the rule-set developed over the past half century for air quality in coastal settings of human habitation. This experience of mitigating deleterious impacts to human health offers continuing lessons in understanding how the law can be applied to the global air pollutant par excellence, GHG emissions. Second, the international treaty regime for climate change and GHGs has, uniquely, avoided obligations for mitigating measures and reductions in aviation and shipping. This arguably is the result of a collective failure to regulate, which presents enormous difficulties to overcome. International environmental law for the protection of the atmosphere focuses on three concerns, namely, transboundary air pollution, ozone depletion, and climate change, all rel States have only recently accepted that they must create amongst themselves technical, operating, and economic rules to address the threshold problem of reducing fuel consumption in the global transportation industry, whether by negotiation in the settings of the ICAO and IMO or otherwise. For economic and political reasons many states are unwilling to restrain the growth of their aviation and shipping industries. See generally Harro van Asselt, The Fragmentation of Global Climate Governance: Consequences and Management of Regime Interactions (Edward Elgar Publishing 2014). On improving the individual contributions of actors such as states in complex decision-making settings, see I. van de Poel, L. Royakkers and S. D. Zwart, Moral Responsibility and the Problem of Many Hands (Routledge 2015). 4

Transportation’s trinity and climate change mitigation  365 atively new in the development of international environmental law.5 The development of the law occurred in three stages.6 During the first period before the 1972 United Nations (UN) Conference on the Human Environment,7 environmental benefits were viewed as incidental to substantial economic concerns, such as the exploitation of living natural resources.8 During the second stage, a significant rise in the number of treaties directed to pollution abatement and to species and habitat conservation, yet largely reactive and piecemeal in nature, can be observed.9 This period commenced with the creation of international institutions from 1945 and culminated in the 1992 UN Conference on the Environment and Development (UNCED).10 The third stage, which characterizes existing international environmental law, includes, if imperfectly, “a precautionary approach to environmental problems of global magnitude such as biodiversity conservation and climate change”.11 It is a period which features “[treaty] instruments adopting a holistic approach to environmental protection and seeks to marry such protection with economic development, embraced in the concept of sustainable development”.12 This was a theme of UNCED that, in addition to producing the Rio Declaration and Agenda 21,13 witnessed the conclusion of two major treaties, namely, the Convention on Biological Diversity,14 and the United Nations Framework Convention on Climate Change (UNFCCC),15 under the auspices of the UN.16 It is the UNFCCC, the Convention’s Kyoto Protocol,17 and the Paris Agreement18 which are the international agreements prescribing global measures to arrest climate change by reducing greenhouse gas emissions.

5 See Catherine Redgwell, “International environmental law” in Malcolm D. Evans (ed.), International Law (3rd edn, Oxford University Press 2010) 687 at 687–92 and at 701. See also Ian H. Rowlands, “Atmosphere and outer space” in Daniel Bodansky, Jutta Brunnée and Ellen Hey (eds), The Oxford Handbook of International Environmental Law (Oxford University Press 2007) 315 at 316ff. And see Patricia Birnie, Alan Boyle and Catherine Redgwell, International Law and the Environment (3rd edn, Oxford University Press 2009) at 335ff. 6 Redgwell (n. 5) at 687, 690. 7 This was the first global environmental conference. See Günther Handl, “Declaration of the United Nations Conference on the Human Environment (Stockholm Declaration), 1972 and the Rio Declaration on Environment and Development, 1992”, United Nations Audiovisual Library of International Law (2012) at 1 https://​legal​.un​.org/​avl//////​pdf/​ha/​dunche/​dunche​_e​.pdf accessed 9 May 2021. 8 Redgwell (n. 5) at 687, 690. 9 Ibid. 10 Ibid. at 690. 11 Ibid. at 687. 12 Ibid. at 691. 13 Rio Declaration on Environment and Development, UN Doc. A/CONF.151/5/Rev.1 (1992), 31 ILM 874 www​.unep​.org/​Documents​.Multilingual/​Default​.asp​?documentid​=​78​&​articleid​=​1163 accessed 9 May 2021 (Rio Declaration); “Agenda 21” in Report of the United Nations Conference on Environment and Development, vol. 1, Resolutions adopted by the Conference, Annex II, UN Doc. A/CONF.151/26/Rev.1 (1993) 12 www​.unep​.org/​Documents​.Multilingual/​Default​.asp​?documentid​=​52 accessed 9 May 2021 (Agenda 21). 14 Convention on Biological Diversity, 5 June 1992, 1760 UNTS 79 (in force 29 December 1993). 15 United Nations Framework Convention on Climate Change, 9 May 1992, 1771 UNTS 107 (in force 21 March 1994) (UNFCCC). 16 Redgwell (n. 5) at 691. 17 Kyoto Protocol to the United Nations Framework Convention on Climate Change, 11 December 1997, 2303 UNTS 162 (in force 16 February 2005) (Kyoto Protocol). 18 Paris Agreement, 12 December 2015 (in force 4 December 2016) I-54113-0800000280458f37.pdf accessed 9 May 2021.

366  Research handbook on climate change mitigation law All parties to the Kyoto Protocol are required to discharge certain obligations “taking into account their common but differentiated responsibilities and their specific national and regional development priorities, objectives and circumstances, without introducing any new commitments” for non-Annex I parties, “but reaffirming existing commitments” under Article 4(1) of the UNFCCC, and “continuing to advance the implementation of these commitments in order to achieve sustainable development, taking into account” Article 4(3), (5) and (7) of the Convention.19 While under the UNFCCC countries must meet their targets primarily through national measures, the Kyoto Protocol “offers them an additional means of meeting their targets by way of three market-based mechanisms”,20 namely, joint implementation,21 the clean development mechanism,22 and emissions trading.23 All these market-based measures are supplemental to, and not a replacement of, the national measures to reach the emissions target under the Protocol.24 These mechanisms are often referred to as flexibility mechanisms.25 Some commentators regard these mechanisms as innovative feature of the Protocol.26 The Protocol also contains provision for taking decisions regarding second and subsequent commitment periods, i.e. beyond 2012.27 At COP 18, states made good use of this provision. States agreed to a second commitment period from 1 January 2013 to 31 December 2020 while also agreeing to a firm timetable to adopt a universal climate agreement by 2015, and a path to raise necessary ambition to respond to climate change.28 Furthermore, the Kyoto Protocol was amended to continue from 1 January 2013.29 Among others, a new list of greenhouse gases would replace the existing list in Annex A to the Protocol,30 and Annex I states must face the new obligation to ensure, individually or jointly, their aggregate anthropogenic CO2 equivalent Kyoto Protocol (n. 17) Art. 10. See UNFCCC, “Kyoto Protocol” https://​unfccc​.int/​kyoto​_protocol/​items/​2830​.php accessed 9 May 2021. 21 See UNFCCC, “Joint Implementation (JI)” https://​unfccc​.int/​kyoto​_protocol/​mechanisms/​joint​ _implementation/​items/​1674​.php accessed 9 May 2021. 22 See UNFCCC, “Clean Development Mechanism (CDM)” https://​ unfccc​ .int/​ kyoto​ _protocol/​ mechanisms/​clean​_development​_mechanism/​items/​2718​.php accessed 9 May 2021. 23 See UNFCCC, “International Emissions Trading” https://​unfccc​.int/​kyoto​_protocol/​mechanisms/​ emissions​_trading/​items/​2731​.php accessed 9 May 2021. 24 See David M. Ong, “International legal efforts to address human-induced global climate change” in Malgosia Fitzmaurice, David M. Ong and Panos Merkouris (eds), Research Handbook on International Environmental Law (Edward Elgar Publishing 2010) 450 at 457. 25 See Rowlands (n. 5) at 330ff. See also Birnie, Boyle and Redgwell (n. 5) at 361ff. See further Ong (n. 24) at 456. 26 See Rowlands (n. 5). And see Birnie, Boyle and Redgwell (n. 5). 27 See Kyoto Protocol (n. 17) Art. 3(4), (9). 28 United Nations Climate Change Secretariat, Press Release, “At UN Climate Change Conference in Doha, governments take next essential step in global response to climate change” (8 December 2012) https://​unfccc​.int/​files/​press/​press​_releases​_advisories/​application/​pdf/​pr20120812​_cop18​_close​.pdf accessed 9 May 2021 (“At UN Climate Change Conference”). See also Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol, Agenda item 4: Report of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol, UNFCCC CMPOR, 8th Sess., Doc. FCCC/KP/CMP/2012/L.9 (2012) https://​unfccc​.int/​resource/​docs/​2012/​cmp8/​eng/​l09​.pdf accessed 9 May 2021. 29 See “At UN Climate Change Conference” (n. 28). 30 See Article 1(B) of the Doha amendment to the Kyoto Protocol, 8 December 2012, C.N.718.2012. TREATIES-XXVII.7.c https://​treaties​.un​.org/​doc/​Publication/​CN/​2012/​CN​.718​.2012​-Eng​.pdf accessed 9 May 2021 (Doha amendment). See Annex A to the Kyoto Protocol, which includes carbon dioxide 19 20

Transportation’s trinity and climate change mitigation  367 emissions of the greenhouse gases listed in Annex A do not exceed their assigned amounts with a view to reducing their overall emissions of greenhouse gases by at least 18% below 1990 levels in the second commitment period from 2013 to 2020.31 The Kyoto Protocol identified the transportation industry as one where measures related to emissions reductions can be implemented.32 Nevertheless, the Protocol requires Annex I states to pursue the limitation or reduction of emissions of greenhouse gases from aviation and shipping by working through the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO), respectively.33 The Protocol thus assigns the original mandate for the two international organizations to be the authoritative bodies for aviation and maritime environmental issues related to climate change.34 However, as will be discussed, this delegation of responsibility has allowed binding measures in aviation and shipping to be avoided. In practice, the two organizations consider themselves to be the appropriate body to deal with environmental protection measures in their industry. This is their greatest similarity and arguably a challenge for reaching political consensus among states for their industries’ impact on the atmosphere. The stance taken by states in the ICAO is illustrative: all members agreed at the ICAO Assembly’s 39th session in 2016 “to continue to pursue all aviation matters related to the environment and also maintain the initiative in developing policy guidance on these matters, and not leave such initiatives to other organizations”.35 The Assembly has recognized that the “ICAO is the appropriate forum to address emissions from international aviation”.36 The position of states expressed through the IMO is essentially the same – a preference for the organization to be at the fore of greenhouse gas regulation of the shipping industry and a wholesale assignment to it of rule-making for “ordinary” air pollution.37 The role of both (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3). 31 Ibid. Art. 1(C). 32 See Kyoto Protocol (n. 17) Art. 2(1)(a)(vii). 33 See Kyoto Protocol (n.17) Art. 2(2): “The Parties included in Annex I shall pursue limitation or reduction of emissions of greenhouse gases not controlled by the Montreal Protocol from aviation and marine bunker fuels, working through the International Civil Aviation Organization and the International Maritime Organization, respectively.” See Montreal Protocol on Substances that Deplete the Ozone Layer, 1 January 1989, 1522 UNTS 3 (in force 1 January 1989). And see Vienna Convention for the Protection of the Ozone Layer, 22 March 1985, 1513 UNTS 93 (in force 27 September 1988). 34 See also Md Tanveer Ahmad, “Environmental law: emissions” in P. S. Dempsey and R. S. Jakhu (eds), Routledge Handbook of Public Aviation Law (Routledge 2017) 208 at 217 (Ahmad, “Emissions”). The Paris Agreement supersedes the Kyoto Protocol in various ways, but not in the requirement to monitor, regulate or reduce greenhouse gas emissions from aviation and shipping, about which matters the Agreement is silent. Such matters remain for generalized prescription in the Kyoto Protocol. 35 Consolidated statement of continuing ICAO policies and associated practices related specifically to environmental protection: General provisions, noise and local air quality, ICAO Assembly Res. A39-1, 39th Sess., ICAO Doc. 10075 (2017) I-58 at I-59 (ICAO Res. A39-1). 36 Consolidated statement of continuing ICAO policies and practices related to environmental protection: Global Market-Based Measure (MBM) scheme, ICAO Assembly Res. A39-3, 39th Sess., ICAO Doc. 10075 (2017) I-80 at I-80 (ICAO Res. A39-3). 37 [The] IMO is regarded as the sole competent international organization with a global mandate to regulate all non-commercial aspects of international shipping, including reduction or limitation of GHG emissions. As shipping is a global industry and ships are competing in a single global market, it must be regulated at the global level for any control regime to be environmentally effec tive and to maintain a level playing field for all ships irrespective of flag or ownership. IMO’s

368  Research handbook on climate change mitigation law organizations to regulate all aspects of air emissions – air pollution and greenhouse gases alike – continued unchanged after the near-universal commitment of states to reduce greenhouse gases under the Paris Agreement. States adopted the Paris Agreement in pursuit of UNFCCC objectives, guided by the norms of the Convention, “including the principle of equity and common but differentiated responsibilities and respective capabilities”.38 Hence, parties to the Paris Agreement are required to implement this instrument “to reflect equity and the principle of common but differentiated responsibilities and respective capabilities”.39 As with the UNFCCC, states acknowledged in the Paris Agreement that “climate change is a common concern of humankind”.40 Furthermore, they recognized, inter alia, “the need for an effective and progressive response to the urgent threat of climate change on the basis of the best available scientific knowledge”, and “the specific needs and special circumstances of developing country Parties”.41 The two instruments provided for the specific needs and special situations of least developed states with respect “to funding and transfer of technology”.42 In order to enhance implementation of the UNFCCC, the Paris Agreement “aims to strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty”.43 The parties to the Agreement are to achieve this purpose by limiting increase of the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels, recognizing that such results significantly reduce the risks and impacts of climate change.44 Unlike the UNFCCC and the Kyoto Protocol, the Paris Agreement does not address emissions from the aviation and shipping sectors that contribute to climate change.

2 AVIATION Aviation is responsible for approximately 2% of total global carbon dioxide (CO2) emissions45 and 12% of total CO2 emissions from the transportation sector.46 Concern over aviation’s contribution to climate change has resulted from perceptions of the rapid growth of this transportation sector. The ICAO forecasted that, at the global level, revenue passenger-kilometres

vision is to eliminate all adverse environmental impact from ships by developing robust and effec tive regulations that apply universally to all ships. Submission by the International Maritime Organization, “Control of Greenhouse Gas Emissions from unfccc​ .int/​ Ships Engaged in International Trade” (December 2009), UNFCCC Secretariat https://​ resource/​docs/​2009/​smsn/​igo/​067​.pdf accessed 9 May 2021 (IMO, “Control of Greenhouse Gas”). 38 Paris Agreement (n. 18) Preamble. 39 Ibid. Art. 2(2). 40 Ibid. Preamble. 41 Ibid. 42 Ibid. 43 Ibid. Art. 2(1). 44 Ibid. 45 See Air Transport Action Group, “Facts & Figures” https://​ www​ .atag​ .org/​ facts​ -figures​ .html accessed 9 May 2021 (ATAG, “Facts & Figures”). And see ICAO Secretariat, “Climate change outlook” in ICAO, “ICAO Environmental Report 2010: Aviation and Climate Change” (ICAO 2010) 31 at 31 (ICAO Secretariat, “Climate change outlook”). 46 See ATAG, “Facts & Figures” (n. 45).

Transportation’s trinity and climate change mitigation  369 would “increase at an average annual rate of 4.7% between 2010 and 2030”.47 The respective average annual fleet growth rate for passenger aircraft is 3.1%, and 2.7% for cargo aircraft.48 To mitigate climate change, anthropogenic emissions that contribute to such change have to be significantly reduced through joint efforts from all the industry’s sectors. 2.1

Emissions from Aviation

Aviation entails many supporting activities in addition to aircraft and their operation. Hence, there exist a variety of sources of emissions in aviation. Sources of emissions in aviation include: aircraft engines, aircraft auxiliary power units (APUs),49 airports and airport-associated activities, e.g., ground support equipment, motor vehicles (including airport vehicles, landside road traffic, ground access vehicles, and airside vehicle traffic50), construction and airport maintenance, airport-owned power plants for heat, cooling and electricity production, emergency electricity generation, off-site electricity generation, airport fire training facility, waste disposed of both on site and off site, food preparation, aircraft and engine maintenance, de-icing, and fuel storage facilities.51 The scope of this chapter is limited to the international civil aviation regulatory regime, owing to the pronouncedly global nature of civil aviation and the difficulty of limiting transnational emissions. Emissions from airports and airport-associated activities are more local than international and, hence, are not discussed here. Emissions from aircraft engines and APUs, as “aviation emissions”, are the only sources that fall within the jurisdiction of the ICAO,52 and, thus, are addressed here. 2.2

Impacts of Aviation Emissions on Climate Change

As noted, aviation is a small but significant contributor to climate change.53 Concern over aviation is mounting due to the fact that the aviation industry and related activities are growing ICAO, “Global and Regional 20-year Forecasts: Pilots • Maintenance Personnel • Air Traffic Controllers”, ICAO Doc. 9956 (2011) at 18 (ICAO, “Global”). See also ICAO, “Future of Aviation”, https://​www​.icao​.int/​Meetings/​FutureOfAviation/​Pages/​default​.aspx accessed 9 May 2021 (ICAO, “Future”). 48 See ICAO, “Global” (n. 47) at 22. See also ICAO, “Future” (n. 47). 49 An aircraft APU is “essentially a small turbine engine” which “generates electricity and compressed air to operate the aircraft’s instruments, lights, ventilation, and other equipment and for starting the aircraft main engines”. See Energy and Environmental Analysis, Inc., “Technical Data to Support FAA’s Advisory Circular on Reducing Emissions from Commercial Aviation”, prepared for the US Environmental Protection Agency in cooperation with Federal Aviation Administration, US Department of Transportation (29 September 1995) at 29 www​.epa​.gov/​otaq/​regs/​nonroad/​aviation/​faa​-ac​.pdf accessed 9 May 2021. 50 Airports Council International, Guidance Manual: Airport Greenhouse Gas Emissions Management (1st edn, ACI World Environment Standing Committee 2009) at 16 (ACI, Guidance). 51 See ICAO, Airport Air Quality Manual (1st edn, ICAO Doc. 9889 (2011) at 3-4–3-5, www​.icao​ .int/​publications/​Documents/​9889​_cons​_en​.pdf accessed 9 May 2021 (ICAO, Airport Manual). See also ICAO, “Contaminants” www​.icao​.int/​environmental​-protection/​Pages/​Contaminants​.aspx accessed 9 May 2021 (ICAO, “Contaminants”). And see ACI, Guidance (n. 50) at 16–17. 52 See ICAO, “Contaminants” (n. 51). 53 See Md Tanveer Ahmad, “Environmental effectiveness of ICAO’s basket of mitigation measures to arrest emissions from international civil aviation” (2014) 39 Annals of Air and Space Law 75 at 88 47

370  Research handbook on climate change mitigation law rapidly, outpacing technological innovation in this field towards reducing emissions.54 It is expected that passenger traffic will grow “at an average rate of 4.8% per year through the year 2036”.55 Like an automobile engine, an aircraft’s turbine or piston engine is an internal combustion machine in which “fuel and an oxidizer combust (or burn) and the products of that combustion are exhausted through a narrow opening at high speed”.56 Kerosene, a fossil fuel, is the primary energy source for international civil aviation.57 Aircraft engines burning kerosene produce the same exhaust gases, e.g., carbon dioxide and water vapor, as those of other industries that consume petroleum fuels.58 Aircraft-emitted gases and compounds have deleterious effects on human health and the environment.59 However, in line with the theme of this book, this chapter focuses on the impacts of aviation emissions on climate change. (Ahmad, “Environmental”). See also D. S. Lee, L. L. Lim and B. Owen, “Mitigating future aviation CO2 emissions – ‘timing is everything’” (27 August 2013) at 2 www​.cate​.mmu​.ac​.uk/​docs/​mitigating​-future​ -aviation​-co2​-emissions​.pdf accessed 9 May 2021. 54 See e.g. Consolidated statement of continuing ICAO policies and practices related to environmental protection – Climate change, ICAO Assembly Res. A40-18, 40th Sess., ICAO Doc. 10140, I-72 at I-72–I-74 www​.icao​.int/​publications/​Documents/​10140​_en​.pdf accessed 9 May 2021 (ICAO Res. A40-18). See also Consolidated statement of continuing ICAO policies and practices related to environmental protection — Climate change, ICAO Assembly Res. A37-19, 37th Sess., ICAO Doc. 9958, I-67, www​.icao​.int/​publications/​Documents/​9958​_en​.pdf accessed 9 May 2021(ICAO Res. A37-19). And see ICAO Secretariat, “Aviation outlook overview” in ICAO, “ICAO Environmental Report 2010: Aviation and Climate Change” (ICAO 2010) 18 at 18 (ICAO Secretariat, “Aviation outlook”). See notably David H. Lister et al., “Summary for policymakers: aviation and the global atmosphere” in Joyce E. Penner et al. (eds), Aviation and the Global Atmosphere: A Special Report of IPCC Working Groups I and III in collaboration with the Scientific Assessment Panel to the Montreal Protocol on Substances that Deplete the Ozone Layer (Cambridge University Press 1999). And see further World Bank, “Air Transport and Energy Efficiency”, Transport Papers, TP–38 (February 2012) at 31 https://​documents1​.worldbank​.org/​ curated/​en/​746271468184153529/​pdf/​68010​0NWP0Box30​ial0Use0On​ly0900TP38​.pdf accessed 9 May 2021 (World Bank, “Air Transport”). 55 ICAO Secretariat, “Aviation outlook” (n. 54) at 18. 56 NASA Glenn Research Center, “NASA Facts: Safeguarding Our Atmosphere: Glenn Research Reduces Harmful Aircraft Emissions”, FS-2000-04-010-GRC (March 2000), www​.nasa​.gov/​centers/​ glenn/​pdf/​84797main​_fs10grc​.pdf accessed 9 May 2021. 57 See Ahmad, “Environmental” (n. 53). See also US Environmental Protection Agency, “Toxic Emissions from Aircraft Engines: A Search of Available Literature”, EPA-453/R-93-028, prepared for Air Risk Information Support Center (Air RISC), US Environmental Protection Agency, co-sponsored by Office of Air Quality Planning & Standards, Office of Air & Radiation, Environmental Criteria & Assessment Office, Office of Health & Environmental Assessment, and Office of Research & Development (July 1993) at 1 www​.areco​.org/​airemiss​.pdf accessed 9 May 2021 (US EPA, “Toxic”). 58 See CloseTheAirport.com, “Jet Pollution” www​ .closetheairport​ .com/​ jet​ -pollution/​accessed 9 May 2021 (CloseTheAirport.com). 59 To learn about health impacts of aviation emissions, see US EPA, “Toxic” (n. 57). See also Wolfram Schlenker and W. Reed Walker, “Airports, Air Pollution, and Contemporaneous Health”, Working Paper 17684, National Bureau of Economic Research (December 2011) www​ .nber​ .org/​ papers/​w17684​.pdf accessed 9 May 2021. Mason Inman, “Plane Exhaust Kills More People Than Plane Crashes”, National Geographic News (10 October 2010) https://​www​.nationalgeographic​.com/​science/​ article/​ 101005​ -planes​ -pollution​ -deaths​ -science​ -environment accessed 9 May 2021. See also ICAO, “Contaminants” (n. 51). And see CloseTheAirport.com (n. 58). See further Christopher J. Sequeira, “An Assessment of the Health Implications of Aviation Emissions Regulations” (MSc Thesis, Massachusetts Institute of Technology Department of Aeronautics and Astronautics and the Engineering Systems Division, 2008) (unpublished).

Transportation’s trinity and climate change mitigation  371 Aircraft emissions acquire changing characteristics at different flight stages.60 While major emissions from aircraft occur at higher altitudes, approximately 10% of all aircraft emissions, except hydrocarbons and carbon monoxide (CO), occur during airport ground level operations and during take-off and landing.61 Aircraft emit gases and particles directly into the upper troposphere (the only human enterprise to do so62) and the lower stratosphere, which affects atmospheric composition by, inter alia, altering the concentration of atmospheric greenhouse gases, prompting formation of condensation trails, called contrails,63 and increasing cirrus cloudiness.64 Like thin high clouds, “contrails tend to warm the Earth’s surface”.65 All these effects of emissions from aircraft contribute to climate change.66 Carbon dioxide and water vapor are greenhouse gases. As one of the long-lived greenhouse gases,67 carbon dioxide is chemically stable, has a long atmospheric residence time and, consequently, it admixes throughout the atmosphere much faster than it is removed.68 Carbon dioxide is considered to be the most important anthropogenic greenhouse gas.69 At present, civil aviation accounts for about 2% of total global CO2 emissions,70 such contribution being projected to grow around 3–4% annually.71 As noted, aviation contributes 12% of total CO2 emissions from the transportation sector, compared to 74% from road transport,72 and CO2 emissions from aviation are projected to grow to 23% by 2050 unless effective measures to curb such emissions are initiated.73 Aviation would be the 17th largest emitter of CO2 if the industry ranked as a country.74

World Bank, “Air Transport” (n. 54) at 32. See ibid. See also Travis M. Norton, “Aircraft Greenhouse Gas Emissions during the Landing and Takeoff Cycle at Bay Area Airports” (Master’s Project, University of San Francisco, 2014) at 11 (unpublished). 62 According to the Intergovernmental Panel on Climate Change, aviation emissions are “the predominant anthropogenic emissions deposited directly into the upper troposphere and lower stratosphere”, Lister et al. (n. 54) at 3 (emphasis in original). 63 “Contrails are triggered from the water vapor emitted by aircraft”. Ibid. at 7. 64 See ibid. at 3. 65 Ibid. 7. 66 See ibid. at 3. 67 See Susan Solomon et al., “Technical summary” in Susan Solomon et al. (eds), Climate Change 2007: The Physical Science Basis: Working Group I Contribution to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2007) 19 at 23–24 (Solomon, “Technical”). 68 Ibid. See also Lister et al. (n. 54) at 3. And see Drew Shindell, “Simultaneously mitigating near-term climate change and improving human health and food security” (2012) 335 Science 183 at 184. 69 See e.g. IPCC, “Summary for policymakers” in Susan Solomon et al. (eds), Climate Change 2007: The Physical Science Basis: Working Group I Contribution to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2007) 1 at 2. 70 See ICAO Res. A40-18 (n. 54) at I-72. And see ATAG, “Facts & Figures” (n. 45). See also ICAO Secretariat, “Climate change outlook” (n. 45) at 31. 71 ICAO Secretariat, “Climate change outlook” (n. 45) at 31. 72 See ATAG, “Facts & Figures” (n. 45). 73 See World Bank, “Air Transport” (n. 54) at 31. 74 The comparative figure is for 2010. See Lee, Lim and Owen (n. 53) at 2. See also International Coalition for Sustainable Aviation, “Effective Market-Based Measures to Address Greenhouse Gas Emissions from International Aviation”, ICAO Assembly, 38th Sess., Agenda Item 17, Working Paper No 288, Doc. A38-WP/288/Ex/100 (12 September 2013) at 2 www​.icao​.int/​Meetings/​a38/​Documents/​ WP/​wp288​_en​.pdf accessed 9 May 2021 (ICSA, “Effective”). 60 61

372  Research handbook on climate change mitigation law The other gases and particles emitted by aircraft have shorter atmospheric residence times and remain concentrated near flight routes.75 Nevertheless, “the overall climate impact of aviation is much greater than the impact of CO2 alone”.76 The effects of aircraft-emitted nitrogen oxides (NOx) and other gases “are estimated to be about two to four times greater than those of aviation’s CO2 alone, even without considering the potential impact of cirrus cloud enhancement”.77 These emissions can lead to radiative forcing occurring regionally near flight routes for some components, e.g., ozone (O3) and contrails,78 in contrast to emissions that are globally mixed, e.g., carbon dioxide (CO2) and methane (CH4).79 Aircraft-emitted nitrogen oxides (NOx), i.e. nitric oxide (NO) and nitrogen dioxide (NO2), combine to accelerate climate change.80 Ozone is a greenhouse gas and common air pollutant.81 Aircraft-emitted NOx more effectively produces ozone in the upper troposphere than do an equivalent amount of emissions at the surface.82 In response to NOx increases, ozone in the upper troposphere and lower stratosphere – the flying zone of subsonic aircraft – is expected to increase, and methane (CH4),83 one of the long-lived greenhouse gases,84 is expected to decrease.85 Furthermore, aircraft emit water vapor, sulphur oxides that form sulphate particles, and soot, which play a collective role in ozone chemistry.86 Sulphur and water emissions from aircraft “in the stratosphere tend to deplete ozone, partially offsetting the NOx-induced ozone increases”.87 Nevertheless, science has not developed an ability to quantify the degree of such increases and depletions of ozone and, hence, the impact of subsonic aircraft emissions on stratospheric ozone needs further evaluation.88 Although aviation is a small contributor to climate change, several factors necessitate immediate and firm action from the air transport sector towards halting aviation emissions that contribute to climate change. The factors include: the rapid growth of aviation industry and aviation-related activities outpacing technological reductions in emissions, the fact that aviation is the only human enterprise to emit pollutants directly into the upper troposphere and lower stratosphere,89 disruption of air transport facilities due to natural disasters caused by

See Lister et al. (n. 54) at 3. Terry Barker et al., “Technical summary” in Bert Metz et al. (eds), Climate Change 2007: Mitigation: Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2007) 25 at 49. 77 Ibid. 78 See World Bank, “Air Transport” (n. 54) at 31–32. 79 See Lister et al. (n. 54) at 3. 80 See ibid. See also Solomon, “Technical” (n. 67) at 24. 81 See Piers Forster et al., “Changes in atmospheric constituents and in radiative forcing” in Susan Solomon et al. (eds), Climate Change 2007: The Physical Science Basis: Working Group I Contribution to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2007) 129 at 135. 82 See Lister et al. (n. 54) at 6. 83 See Forster et al. (n. 81) at 135. 84 See Solomon, “Technical” (n. 67) at 23–24. 85 See Lister et al. (n. 54) at 3. 86 See ibid. at 4. 87 Ibid. at 6. 88 See ibid. 89 See ibid. at 3. 75 76

Transportation’s trinity and climate change mitigation  373 climate change, the proverb “prevention is better than cure”,90 and the need to combat global environmental problems globally, simultaneously, and collectively by all the sectors. 2.3

The International Framework for Aviation Emissions

It is Article 2(2) of the Kyoto Protocol that first required Annex I-listed developed states, in the setting of the ICAO,91 to limit and reduce GHG emissions otherwise outside the scope of the Montreal Protocol.92 This assured “a clear mandate … to be the authoritative body” for the ICAO in international civil aviation to deal with climate change issues, which the Organization welcomed.93 Arguably, however, emissions from international aviation were kept outside the purview of the Kyoto Protocol.94 Article 2(2) refers to “aviation” conducted by (or, within) states, and not “international civil aviation” specifically.95 It follows that the Kyoto Protocol governs emissions from domestic civil aviation requiring their regulation by Annex I developed state parties, but excludes emissions from international civil aviation, leaving such responsibility to the ICAO.96 According to the Guidelines of the Intergovernmental Panel on Climate Change (the IPCC) and the UNFCCC,97 emissions from both national and international aviation should be calculated as part of the national greenhouse gas inventories of parties, but emissions from international aviation “should be excluded from national totals and reported separately”.98 Such exclusion has resulted from disagreement among states on how emissions from international aviation can be allocated to a specific country or divided between states.99 As noted earlier, in contrast to the UNFCCC and the Kyoto Protocol, the Paris Agreement does not address emissions from the transport sector, including aviation, that contribute to 90 See Paul Stephen Dempsey, Public International Air Law (McGill University, Institute and Center for Research in Air & Space Law 2008) at 411. 91 Kyoto Protocol (n. 17) Art. 2(2). 92 Montreal Protocol (n. 33). 93 Dempsey (n. 90) at 450. 94 See ibid. See also UNFCCC, “Emissions from fuel used for international aviation and maritime transport (international bunker fuels)” unfccc​.int/​methods/​emissions​_from​_intl​_transport/​items/​1057​ .php accessed 9 May 2021 (UNFCCC, “Emissions from fuel used”). 95 See Dempsey (n. 90) at 450. 96 See Michael Milde, “The EU Emissions Trading Scheme: confrontation or compromise? A unilateral action outside the framework of ICAO” (2012) 61 Zeitschrift für Luft- und Weltraumrecht 173 at 175 (Milde, “The EU Emissions”). And see Jane Barton, “Including aviation in the EU Emissions Trading Scheme: prepare for take-off” (2008) 5 Journal for European Environmental & Planning Law 183 at 184 (Barton, “Including aviation”). See also Matthew D. Kasper, “The Air Transport Association’s challenge to the European Union’s extension of its Emissions Trading Scheme to international aviation: a legal analysis” (2010) 10 Issues in Aviation Law & Policy 145 at 153–154. See additionally Jane Barton, “Tackling aviation emissions: the challenges ahead” (2006) 3 Journal for European Environmental & Planning Law 316 at 317 (Barton, “Tackling aviation”). See additionally Daniel B. Reagan, “Putting international aviation into the European Union Emissions Trading Scheme: can Europe do it flying solo?” (2008) 35 Boston College Environmental Affairs Law Review 349 at 364. 97 Simon Eggleston et al. (eds), 2006 IPCC Guidelines for National Greenhouse Gas Inventories (Institute for Global Environmental Strategies 2006) (Eggleston, 2006 IPCC Guidelines). 98 UNFCCC, “Emissions from fuel used” (n. 94). See also Amit Garg et al., “Volume 2: Energy” in Eggleston, 2006 IPCC Guidelines (n. 97) at 3.57. And see Ahmad, “Environmental” (n. 53) at 80–81. 99 Milde, “The EU Emissions” (n. 96) 175; Barton, “Including aviation” (n. 96) at 184; Barton, “Tackling aviation” (n. 96) at 317; Dempsey (n. 90) at 450. See also Garg et al. (n. 98) at 3.58–3.59.

374  Research handbook on climate change mitigation law climate change. Nevertheless, states can regulate emissions from domestic aviation by including such emissions in the respective state’s nationally determined contributions (NDCs) under the Paris Agreement.100 Parties to the Paris Agreement have an obligation to pursue domestic mitigation measures in order to achieve the objectives of their NDCs. Hence, states can voluntarily mitigate the effects of emissions from domestic aviation on climate change through domestic mitigation measures. However, the Paris Agreement does not contain any provision for emissions from international aviation. It must be underlined that, because the ICAO is not a party to the UNFCCC, the Kyoto Protocol, or the Paris Agreement, these three instruments cannot bind the Organization. Rather, the Kyoto Protocol requires Annex I-listed developed states (but not all parties to the Protocol in recognition of the principle of common but differentiated responsibility) to act to limit and reduce greenhouse gas emissions from international aviation working through the ICAO. The provision does not grant states authority to establish or implement any measure, whether legal or economic, to curb emissions from international aviation individually. Cooperation between the ICAO and those states with regard to international aviation has been mandated. At present, emissions from international aviation are reported under the UNFCCC and the Kyoto Protocol but excluded from the total national emissions and, hence, they are not counted towards Annex I emissions targets under the Protocol.101 Thus, only Annex I developed states have an obligation to reduce emissions from domestic aviation when meeting their emissions targets under the Protocol. However, the Paris Agreement allows states to decide how to reduce their domestic emissions in a post-2020 environment. 2.4

ICAO Regulation of Aviation Emissions

The Chicago Convention of 1944 is the primary legal instrument which governs international civil aviation.102 The Convention established the ICAO103 as the global forum for cooperation among its 193 member states in all fields of civil aviation.104 The Convention is the primary source of public international air law,105 often regarded as the “Constitution”106 of international 100 Paris Agreement (n. 18) Art. 4(2). The Paris Agreement requests each country to outline and communicate its post-2020 climate actions, known as nationally determined contributions (NDCs). See UN Climate Change, “The Paris Agreement: Nationally Determined Contributions (NDCs)” https://​unfccc​ .int/​process​-and​-meetings/​the​-paris​-agreement/​nationally​-determined​-contributions​-ndcs/​nationally​ -determined​-contributions​-ndcs accessed 9 May 2021. 101 See Kati Kulovesi, “Addressing sectoral emissions outside the United Nations Framework Convention on Climate Change: what roles for multilateralism, minilateralism and unilateralism?” (2012) 21 Review of European, Comparative & International Environmental Law 193 at 196. And see UNFCCC, “Emissions from fuel used” (n. 94). See further Garg et al. (n. 98) at 3.57. 102 Convention on International Civil Aviation, 7 December 1944, 15 UNTS 295, ICAO Doc. 7300/9 (in force 4 April 1947) (Chicago Convention). 103 See ibid. Art. 43. 104 See ICAO, “Vision & Mission” www​.icao​.int/​about​-icao/​Pages/​vision​-and​-mission​.aspx accessed 9 May 2021. 105 See generally Michael Milde, “International Air Law and ICAO” in Marietta Benkö (ed.), Essential Air and Space Law, vol. 4 (Eleven International Publishing 2008) at 17. See also Elmar M. Giemulla, “Chicago system: genesis and main characteristics” in Elmar M. Giemulla and Ludwig Weber (eds), International and EU Aviation Law: Selected Issues (Kluwer Law International 2011) 3 at 5. 106 See Dempsey (n. 90) at 69. See also Pablo Mendes de Leon, “Enforcement of the EU ETS: the EU’s convulsive efforts to export its environmental values” (2012) 37 Air & Space Law 287 at 289.

Transportation’s trinity and climate change mitigation  375 civil aviation. The Convention was signed on 7 December 1944 at a time when environmental costs and benefits were regarded as incidental to mainly economic concerns.107 Because of this there are no explicit provisions on environmental protection in the Convention.108 However, the Convention tacitly confers responsibility on the ICAO to address aviation environmental issues.109 According to Article 44 of the Convention, one of the aims and objectives of the ICAO is “to develop the principles and techniques of international air navigation and to foster the planning and development of international air transport so as to … promote generally the development of all aspects of international civil aeronautics”.110 Since reducing environmental impacts of aviation to ensure protection of the environment is one of the aspects of international civil aeronautics,111 it follows that the ICAO has a duty to regulate emissions from international civil aviation.112 The Chicago Convention facilitates the adoption of international standards and recommended practices (SARPs), in the form of Annexes to the Convention promulgated by the ICAO Council under Article 90.113 This allows a certain flexibility of response to emerging matters in the industry.114 The ICAO Council is bound to adopt SARPs in accordance with the provisions of Chapter VI of the Convention,115 i.e. Articles 37–42. Among these provisions, Article 37 provides guidelines regarding such adoption: each contracting state “undertakes to collaborate in securing the highest practicable degree of uniformity in regulations, standards, procedures, and organization in relation to aircraft, personnel, airways and auxiliary services in all matters in which such uniformity will facilitate and improve air navigation”.116 To this end, the ICAO must “adopt and amend from time to time, as may be necessary, international standards and recommended practices and procedures”.117 The ICAO Council made use of this authority by adopting Annex 16 to the Chicago Convention in order to address aviation environmental issues.118 The SARPs are designated as Annexes to the Chicago Convention for convenience,119 and do not actually become a de jure

Redgwell (n. 5) at 687, 690. See ICAO, The Convention on International Civil Aviation: Annexes 1 to 18 www​.icao​.int/​safety/​ airnavigation/​NationalityMarks/​annexes​_booklet​_en​.pdf accessed 9 May 2021 (ICAO, Annexes 1 to 18). 109 See Ahmad, “Environmental” (n. 53) at 82. 110 Chicago Convention (n. 102) Art. 44(i). 111 Environmental protection was identified as a strategic objective of the ICAO for the 2014–2016 triennium. See ICAO, “ICAO Strategic Objectives 2014–2016” www​.icao​.int/​about​-icao/​Pages/​Strategic​ -Objectives​.aspx accessed 9 May 2021. 112 See Armand de Mestral and Md Tanveer Ahmad, “A pre-analysis of Canada–EU Aviation Relations post-ICAO Assembly Meeting Concerning Emissions Trading System” (April 2013) produced for the Canada–Europe Transatlantic Dialogue (Carleton University: Centre for European Studies, Ottawa) at 7 https://​carleton​.ca/​canadaeurope/​2013/​a​-pre​-analysis​-of​-canada​-eu​-aviation​-relations​-post​ -icao​-assembly​-meeting​-concerning​-emissions​-trading​-system/​ accessed 9 May 2021. 113 Chicago Convention (n. 102) Art. 90. 114 See ibid. Art. 37. 115 Ibid. Art. 54(l). 116 Ibid. Art. 37. 117 Ibid. 118 For a brief discussion on Annex 16, see (n. 108) ICAO, Annexes 1 to 18. 119 Chicago Convention (n. 102) Art. 54(l). 107 108

376  Research handbook on climate change mitigation law part of the Convention.120 Annex 16, divided into four volumes, addresses aviation environmental issues: (a) Volume I of Annex 16 deals with aircraft noise;121 (b) Volume II is devoted to the issue of aircraft engine emissions;122 (c) Volume III deals with the CO2 emissions certification standard for new aircraft types;123 and (d) Volume IV deals with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).124 A Annex 16, Volume II Volume II of Annex 16 addresses liquid fuel venting, smoke, and the main gaseous exhaust emissions from jet engines, namely, hydrocarbons (HC), carbon monoxide (CO), and nitrogen oxides (NOx).125 The aircraft engine certification process under Volume II is based on the Landing and Take-off (LTO) cycle.126 Part II of Volume II contains standards relating to vented fuel with regard to all turbine engine powered aircraft intended for operation in international air navigation manufactured after 18 February 1982.127 This Part requires that design and construction of aircraft must prevent intentional discharge into the atmosphere of liquid fuel from the fuel nozzle manifolds resulting from the process of engine shutdown following normal flight or ground operations.128 Part III of Volume II contains standards relating to emissions certification applicable to the types of aircraft engines specified in the individual chapters of the Part, “where such engines are fitted to aircraft engaged in international civil aviation”.129 Emissions certification is granted on the basis of satisfactory evidence that the engine complies with the minimum requirements set by the provisions of Volume II of Annex 16.130 B Annex 16, Volume III Part II of Volume III prescribes standards for the certification of aircraft CO2 emissions based on consumption of fuel applicable to the classification of aircraft specified in Volume III

120 See Dempsey (n. 90) at 75. And see Michael Milde, “Aviation safety oversight: audits and the law” (2001) 26 Annals of Air and Space Law 165 at 168 (Milde, “Aviation”). 121 ICAO (2014) 7 International Standards and Recommended Practices: Annex 16 to the Convention on International Civil Aviation: Volume 1, Aircraft Noise. 122 ICAO (2008) 3 International Standards and Recommended Practices: Annex 16 to the Convention on International Civil Aviation: Volume II, Aircraft Engine Emissions (Annex 16: Volume II). 123 ICAO (2017) 1 International Standards and Recommended Practices: Annex 16 to the Convention on International Civil Aviation: Volume III, Aeroplane CO2 Emissions (Annex 16: Volume III). 124 ICAO (2018) 1 International Standards and Recommended Practices: Annex 16 to the Convention on International Civil Aviation: Volume IV, Carbon Offsetting and Reduction Scheme for International Aviation (Annex 16: Volume IV). 125 ICAO, “Local Air Quality Technology Standards” ICAO www​.icao​.int/​environmental​-protection/​ Pages/​LAQ​_TechnologyStandards​.aspx accessed 9 May 2021. 126 See ibid. 127 Annex 16: Volume II (n. 122) at ix, II-1-1. 128 Ibid. at II-2-1. 129 Ibid. at ix. 130 Ibid. at III-1-1.

Transportation’s trinity and climate change mitigation  377 where such aircraft are engaged in international air navigation.131 CO2 emissions certification of an aircraft shall be granted or validated by the state of registry on the basis of satisfactory evidence that the aircraft complies with minimum requirements specified in this Volume.132 The certificating authority has an obligation to publish the certified CO2 emissions evaluation metric value, which is granted or validated by the authority.133 The maximum permitted CO2 emissions evaluation metric value for specific aircraft types is provided in Chapter 2 of Part II.134 C Annex 16, Volume IV Volume IV of Annex 16 provides for standards and recommended practices related to CORSIA,135 a global market-based measure only for the aviation sector. Part II, Chapter 2 of Volume IV contains Standards, Recommended Practices, and guidelines for monitoring, reporting, and verification (MRV) of an airline’s CO2 emissions. Part II, Chapter 3 contains Standards, Recommended Practices, and guidelines on an airline’s CO2 offsetting requirements under CORSIA, which can be reconciled using Emissions Units generated by eligible programmes under Chapter 4.136 CORSIA applies from 1 January 2019 to an airline annually producing more than 10,000 tonnes of CO2 emissions from the use of an aircraft with a maximum certificated take-off mass greater than 5,700 kg conducting international flights, with the exception of humanitarian, medical, and firefighting flights.137 The MRV requirements under CORSIA became effective from 1 January 2019.138 Airlines are required to comply with MRV requirements whether or not the states to which they are attributed have elected to voluntarily participate in CORSIA. However, CO2 offsetting requirements under CORSIA apply to flights between states participating in the scheme from 1 January 2021 to 31 December 2035,139 in the following three phases: (a) Pilot phase: effective from 1 January 2021 to 31 December 2023; (b) First phase: effective from 1 January 2024 to 31 December 2026; and (c) Second phase: effective from 1 January 2027 to 31 December 2035.140 The pilot and first phases are voluntary. Airlines are required to comply with the offsetting requirements during these phases only if the states to which they are attributed have volunteered to participate in CORSIA.141 However, the second phase is mandatory and applies to

Annex 16: Volume III (n. 123) at vii. Ibid. at II-1-1. 133 Ibid. at II-1-2. 134 See ibid. at II-2-3. 135 See Annex 16: Volume IV (n. 124). 136 See ibid. at (viii). 137 See ibid. at II-2-1. 138 See ibid. 139 See ibid. at II-3-1. 140 See Consolidated statement of continuing ICAO policies and practices related to environmental protection – Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), ICAO Assembly Res. A40-19, 40th Sess., ICAO Doc. 10140, I-80 at I-82 www​.icao​.int/​publications/​ Documents/​10140​_en​.pdf accessed 9 May 2021 (ICAO Res. A40-19). 141 See ibid. 131 132

378  Research handbook on climate change mitigation law all states, which have an individual share of international aviation activities in revenue tonne kilometres (RTKs) in the year 2018 above 0.5% of total RTKs, or whose cumulative share in the list of states from the highest to the lowest amount of RTKs reaches 90% of total RTKs, except least developed countries (LDCs), small island developing states (SIDS), and landlocked developing countries (LLDCs), unless they volunteer to participate in this phase.142 2.5

Annex 16 and Climate Change Mitigation

Annex 16 cannot effectively regulate limiting or reduction of aviation emissions because Annexes to the Chicago Convention are not part of the Convention and are therefore not mandatory.143 In fact, neither their adoption nor their legal force is “subject to the general international law of treaties”.144 Indeed, Articles 37 and 38145 of the Convention weaken the binding nature of the Annexes. Both Articles allow any contracting state to the Convention to avoid implementing the Annexes.146 Although Article 37 invites all contracting states “to collaborate in securing the highest practicable degree of uniformity in regulations, standards, procedures, and organization”,147 any state can refrain from doing everything that is possible since the phrase “highest practicable degree of uniformity”148 has not been defined.149 Article 38 allows deviation from any standard or procedure of any Annexes by any contracting state.150 According to Article 38, if any state finds it “impracticable to comply in all respects” with any of those standards or procedures, it merely has to notify the ICAO of the discrepancy between its own practice and the respective standard or procedure.151 Unfortunately the Convention does not define the term “impracticable”.152 Again, although the deviating contracting state must give “immediate notification”153 to the ICAO of such “differences between its own practice and that established by the international standard”,154 the concerned state can avoid notifying since no defined time limit is set for that purpose.155 In fact, “States have notified ICAO of impracticality of compliance with SARPs at any time, or indeed not at all, thereby violating the plain meaning of the phrase ‘immediate notification’”.156 The overwhelming majority of states do not discharge their obligation to notify See ibid. See Milde, “Aviation” (n. 120) at 168. See also New Zealand Airline Pilots’ Association v Attorney General, [1997] 3 NZLR 269 (CA). 144 Milde, “Aviation”, ibid. at 168. And see International Law Commission, First Report on the Protection of the Atmosphere, UNGAOR, 2014, UN Doc. A/CN.4/667 at 19 https://​digitallibrary​.un​.org/​ record/​770132​?ln​=​en accessed 9 May 2021. 145 Chicago Convention (n. 102) Arts 37, 38. 146 See Md Tanveer Ahmad, “Achieving global safety in civil aviation: a critical analysis of contemporary safety oversight mechanisms” (2012) 37 Annals of Air and Space Law 81 at 86 (Ahmad, “Achieving”). 147 Chicago Convention (n. 102) Art. 37 (emphasis added). 148 Ibid. 149 See Ahmad, “Achieving” (n. 146) at 86; Milde, “Aviation” (n. 120) at 168–169. 150 See ibid. And see Chicago Convention (n. 102) Art. 38. 151 See Chicago Convention, ibid. 152 Ahmad, “Achieving” (n. 146) at 86. 153 Chicago Convention (n. 102) Art. 38. 154 See ibid. 155 See ibid. And see Ahmad, “Achieving” (n. 146) at 86. 156 Dempsey (n. 90) at 77 (footnote omitted). 142 143

Transportation’s trinity and climate change mitigation  379 the ICAO of differences between the SARPs set forth in the Annexes and their domestic legislation.157 The ICAO itself admitted this unexpected fact.158 Most importantly, “There is no explicit sanction in the Convention for failing to notify.”159 Since the Chicago Convention and Annex 16 to the Convention cannot effectively mitigate climate change from the aviation sector, the ICAO has conceived several initiatives. In 2010 at its 37th session, the ICAO Assembly defined a basket of measures to achieve the ICAO’s environmental goals.160 The measures include: market-based measures, technology improvements, operational improvements, and sustainable alternative fuels.161 The ICAO Assembly continues to emphasize the measures to achieve the ICAO’s global aspirational goals, something affirmed in the Assembly’s latest session in 2019.162 As a result of Assembly Resolution A37-19,163 market-based measures “became a part of a basket of measures that states can use to address CO2 emissions from international [civil] aviation”.164 In early 2012, six potential options for a global market-based measure were identified and, in June 2012, the ICAO Council narrowed these options to three.165 At the 38th session of the ICAO Assembly in 2013, an agreement to develop a global market-based measure was reached,166 and, at the 39th session in 2016, the Assembly decided to implement a global market-based measure in the form of CORSIA.167 In response, Volume IV to Annex 16 was developed to implement CORSIA.168 At its 40th session in 2019, the ICAO Assembly determined that CORSIA should be the only global market-based measure applying to CO2 emissions from international aviation so as to avoid a possible patchwork of duplicative state or regional market-based measures, thus ensuring that international aviation CO2 emissions should be accounted for only once.169 See Dempsey, ibid. at 78. See Milde, “Aviation” (n. 120) at 170. 159 Dempsey (n. 90) at 79 (footnote omitted). 160 See ICAO Res. A37-19 (n. 54). See also Jane Hupe, “Towards environmental sustainability” in ICAO, “ICAO Environmental Report 2013: Aviation and Climate Change” (ICAO 2013) 11 at 11. 161 See ibid. 162 ICAO Res. A40-19 (n. 140) at I-80, I-81. 163 See ICAO Res. A37-19 (n. 54). 164 ICAO, Report of the Assessment of Market-Based Measures (1st edn, ICAO Doc. 10018 2013) at (vii) www​.icao​.int/​Meetings/​a38/​Documents/​10018​_en​.pdf accessed 9 May 2021 (Report on Market-Based Measures). 165 See ICAO Council, Market-Based Measures (MBMs), ICAO Assembly, 38th Sess., Agenda Item 17, Working Paper No 29, Doc. A38-WP/29/Ex/24 (4 September 2013) at 2 www​.icao​.int/​Meetings/​a38/​ Documents/​WP/​wp029​_en​.pdf accessed 9 May 2021. And see Report on Market-Based Measures (n. 164) at (vii). 166 See Consolidated statement of continuing ICAO policies and practices related to environmental protection – Climate change, ICAO Assembly Res. A38-18, 38th Sess., ICAO Doc. 10022, I-68 at I-72 www​.icao​.int/​publications/​Documents/​10022​_en​.pdf accessed 9 May 2021 (ICAO Res. A38-18). See also ICAO, Press Release, “Dramatic MBM Agreement and Solid Global Plan Endorsements Help .icao​ .int/​ Newsroom/​ Pages/​ mbm​ Deliver Landmark ICAO 38th Assembly” (4 October 2013) www​ -agreement​-solid​-global​-plan​-endoresements​.aspx accessed 9 May 2021. 167 See Consolidated statement of continuing ICAO policies and practices related to environmental protection – Global Market-Based Measure (MBM) scheme, ICAO Assembly Res. A39-3, 39th Sess., ICAO Doc. 10075, I-80 at I-81 www​.icao​.int/​publications/​Documents/​10075​_en​.pdf accessed 9 May 2021 (ICAO Res. A39-3). 168 See Annex 16: Volume IV (n. 124) at (vii). 169 ICAO Res. A40-19 (n. 140) at I-84. 157 158

380  Research handbook on climate change mitigation law Since market-based measures can only restrict or reduce emissions to a certain level, CORSIA alone cannot provide a long-term or permanent solution.170 Only proven technology and policy implementation which guarantee zero emissions or, at least, zero growth in emissions, can offer a lasting solution to these problems.171 This is also recognized by states. At its 40th session, the ICAO Assembly affirmed “the preference for the use of aircraft technologies, operational improvements and sustainable aviation fuels that provide the environmental benefits within the aviation sector”.172 However, technological improvement, which is a very expensive and time-consuming process, has yet to attain that objective.173 The other two mitigation measures, namely operational improvements and sustainable alternative fuels, cannot provide a near-term solution in their current state: operational improvements cannot reduce aviation emissions to the extent necessary to significantly lessen aviation’s contribution to climate change; and the use of alternative fuels has not become commercially viable yet.174 Therefore, market-based measures are considered “an important gap filler”175 to complement technology, operational and infrastructure measures.176 It is well understood that, without effective global market-based measures, the ICAO’s goal of achieving carbon neutral growth from 2020 remains a dream.177 The forecasts by the ICAO Committee on Aviation Environmental Protection demonstrate that, even after the implementation of technology and operational improvements and assuming 3% use of alternative fuels,

See e.g. Ahmad, “Environmental” (n. 53) at 95. See ibid. 172 ICAO Res. A40-19 (n. 140) at I-81. 173 See generally Ahmad, “Environmental” (n. 53) at 84–86. 174 See generally ibid. at 86–92. See also IPCC, “Summary for policymakers” in Bert Metz et al. (eds), Climate Change 2007: Mitigation: Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2007) 1 at 13. 175 ICAO Secretariat, “Overview – Market-Based Measures” (2013) www​.icao​.int/​Meetings/​GLADs​ -2015/​ Documents/​ ENV​ _Report​ _MBMs​ _2013​ .pdf accessed 9 May 2021 at 138. See also ICSA, “Effective” (n. 74). And see Airports Council International et al., Addressing CO2 Emissions from Aviation, ICAO Assembly, 38th Sess., Agenda Item 17, Working Paper No 68, Doc. A38-WP/68/ Revision no 3/Ex/33 (17 September 2013) www​.icao​.int/​Meetings/​a38/​Documents/​WP/​wp068​_rev3​_en​ .pdf accessed 9 March 2021. 176 International Air Transport Association, Press Release, 34, “Historic Agreement on Carbon-Neutral Growth” (3 June 2013) www​.iata​.org/​pressroom/​pr/​Pages/​2013​-06​-03​-05​.aspx accessed 9 March 2021. See also ICSA, “Effective” (n. 74). And see Paul Steele, “Aviation – Benefits Beyond Borders – ICAO Destination Green” (Presentation delivered at the ICAO Symposium on Aviation and Climate Change, “Destination Green”, Montreal, 14–16 May 2013) (unpublished). See further Annie Petsonk, “A Global MBM for Aviation and Climate Change: The Time is Now!” (Presentation delivered at the ICAO Symposium on Aviation and Climate Change, “Destination Green”, Montreal, 14–16 May 2013) (unpublished). 177 See Ahmad, “Environmental” (n. 53) at 96. See also ICAO Secretariat, “Overview – Market-Based Measures” (n. 175). See further Sam Brand, “An Introduction to Market-Based Measures” (Presentation delivered at the ICAO Symposium on Aviation and Climate Change, “Destination Green”, Montreal, 14–16 May 2013) (unpublished). See additionally Andreas Hardeman, “Reframing aviation climate politics and policies” (2011) 36 Annals of Air and Space Law 1 at 16. See finally ICAO, “Environment: Market-Based Measures and Climate Change” (August 2013) cfapp​.icao​.int/​tools/​38thAssyikit/​story​ _content/​external​_files/​Flyer​_US​-Letter​_ENV​_MBMs​_2013​-08​-30​.pdf accessed 9 March 2021. 170 171

Transportation’s trinity and climate change mitigation  381

Source: ICAO, “Environment: Market-Based Measures and Climate Change” (August 2013) cfapp​.icao​.int/​tools/​ 38thAssyikit/​story​_content/​external​_files/​Flyer​_US​-Letter​_ENV​_MBMs​_2013​-08​-30​.pdf.

Figure 15.1

Contribution of measures for reducing international civil aviation net CO2 emissions

“the emissions gap from carbon neutral growth in 2020 would be on the order of 500 Mt by 2040”.178 See Figure 15.1. 2.6

The Prospects for International Commercial Aviation

As a market-based measure, CORSIA would offer the most cost-effective and near-term mechanism for addressing climate change from the aviation sector.179 To effectively contribute to global climate change mitigation efforts and in order for CORSIA to achieve its goal, states must agree to implement CORSIA from the voluntary pilot phase, above, scheduled to end 31 December 2023. Volume IV of Annex 16 cannot achieve this goal because SARPs will not be binding at least until the commencement of the second phase on 1 January 2027. Arguably, therefore, work in the areas of technological improvement, operational improvements, and sustainable alternative fuels needs to be ramped up, so that meaningful improvements can be reached before the expiry of CORSIA on 31 December 2035. At the national and regional level, the European Union, a few European states, and operators of few European airports have attempted to regulate aircraft engine emissions through market-based measures. From an environmental perspective, these efforts deserve admiration. However, these unilateral attempts have come under attack from non-European states and the airline industry, thereby blunting their effectiveness. ICAO, “Environment: Market-Based Measures and Climate Change”, ibid. See also Ahmad, “Environmental” (n. 53) at 97.

178 179

382  Research handbook on climate change mitigation law A clean environment is beneficial to the entire globe. Since environmental problems are global problems, and emissions occurring anywhere can intensify these problems, we need a global solution. Furthermore, participation from all sectors is necessitated so that emissions reductions achieved in one sector are not frustrated by inaction from another sector. The ICAO’s contracting states must continue to adopt collective measures to reduce aviation’s environmental impacts.

3

TERRESTRIAL TRANSPORT

While it is impressive that the 196 parties to the Paris Agreement180 outnumber the 193 members of the United Nations, there is almost no manner in which the terrestrial transport system can meet the goals set. In the short term, to the extent that nations meet the essential targets of Paris, the progress will come from other sectors of the economy. Over the medium term, the kind of force that turns carbon to diamonds, and the innovation and leadership that spurred the lunar landing in 1969, will be necessary to drive real GHG emissions from the terrestrial transport sector. The terrestrial transport sector represents the largest single source of GHG emissions in many jurisdictions. It is thus impossible for any state to achieve its GHG targets without exacting a significant GHG reduction from terrestrial transportation. However, meaningful reductions from the terrestrial mode require significant government investment in things, such as electrifying rail networks, using modal shift strategies to coax drivers from their cars, and to ensure that the eventual embrace of electric cars happens in the greenest way possible. The problem is complex, expensive, and slow to be resolved. It is in many ways akin to humanity’s 1960s era campaign to reach the moon. That endeavour fostered many new technologies, from toothpaste to computers, it resulted in closer government–industry cooperation and it showed that when a nation pulls together even miracles can happen. Reducing GHGs from the terrestrial transport sector has the complexity, timeline, and cost of that first moonshot. However, this time there is no choice; it is not national pride but the sustainability of our planet that is at stake. 3.1

The Unique Challenge with Respect to Terrestrial Transport

Of all modes of transport, the terrestrial mode is the most difficult in which to make serious gains in reducing GHG emissions. This is because, by definition, a “gain” must be measured against the status quo. Therefore, the status quo includes the electrically powered, high-speed trains in countries such as France, Japan and China,181 and efficient urban transit systems

Paris Agreement (n. 18). See A. Kotelnikov and A. Glonti, “World trends in the development of railway electrification” (2021) 32 Rail International 26–35. See also, International Railway Research Board, A Global Vision for Railway Development (International Union of Railways 2015) https://​uic​.org/​IMG/​pdf/​global​_vision​ _for​_railway​_development​.pdf accessed 9 May 2021. 180 181

Transportation’s trinity and climate change mitigation  383 in many of the world’s largest cities.182 It includes the high concentration of electric cars in countries like Norway,183 and it includes the millions of bicycle riders in the Netherlands.184 The challenges in further reducing GHGs from the terrestrial transportation sector are varied and complex: Transport is consistently deemed to be the most difficult and expensive sector in which to reduce energy demand and greenhouse gas emissions. Typically, the diffusion of advanced vehicle technologies is perceived as the central means to decarbonize transport. Since many of these technologies are still relatively expensive, are perceived to perform poorly when compared to incumbent technologies, and require major infrastructure investment, this focus has reinforced the notion that the transport sector can only make a limited contribution to total carbon dioxide (CO2) emissions reduction, particularly in the short to medium term.185

We have enthusiastically embraced mass urban transport; countries around the world have opened 75 new municipal transit (metro) systems since 2000,186 we have seen widespread adoption of “green” transport in some countries and continent-wide electric railway lines,187 yet achieving GHG targets remains elusive. In order to make real and substantial progress in reducing GHGs in this sector, we must properly measure the current situation and then develop concrete plans for building on the status quo to achieve our GHG targets. Unfortunately, in practical terms then, much of the proverbial “low hanging fruit” has been harvested. Real progress means tough choices. It involves electrifying existing rail operations and making sure that all new-build rail is electric. It means a far greater use of “green” transportation and a rapid abandonment, in most parts of the world, of traditional fossil fuel-powered vehicles. It will also, in the short-term at least, involve a “modal shift” where car drivers forgo personal transport for public transit. Last, but not least, there must be widespread adoption of vehicle technologies whose propulsion does not depend on internal combustion. To the extent that any would-be low hanging fruit remains, it must be ensured in all scenarios where transportation is provided by electrically driven vehicles – cars, intercity trains, and urban transport – that the source of its electrical power is “green”. This is because, if the electrical power for a rail system is generated by a coal-fired plant, the train itself is really

182 See Dorina Pojani and Dominic Stead, “Sustainable urban transport in the developing world: beyond megacities” (2015) 7 Sustainability 7784–7805. 183 See S. Deuten, J. J. Gómez Vilchez and C. Thiel, “Analysis and testing of electric car incentive scenarios in the Netherlands and Norway” (2020) 151 Technological Forecasting & Social Change 119847. 184 See S.-Y. Tjong Tjin Tai, F. Veraart and M. Davids, “How the Netherlands became a bicycle nation: users, firms and intermediaries, 1860–1940” (2015) 57 Business History 265–289. See also R. Kager, L. Bertolini and M. Te Brömmelstroet, “Characterisation of and reflections on the synergy of bicycles and public transport” (2016) 85 Transportation Research 208–219. 185 C. Brand, J. Anable and M. Tran, “Accelerating the transformation to a low carbon passenger transport system: the role of car purchase taxes, feebates, road taxes and scrappage incentives in the UK” (2013) 49 Transportation Research Part A: Policy and Practice 132–148 at 133. 186 Union Internationale des Transports Publics (UITP) “Statistics Brief: World Metro Figures 2018”, September 2018, https://​cms​.uitp​.org/​wp/​wp​-content/​uploads/​2020/​06/​Statistics​-Brief​-World​-metro​ -figures​-2018V3​_WEB​.pdf. 187 Electrification of the 9,288 km Moscow to Vladivostok “Trans-Siberian Railway” was completed in 2002. See Railpage, “Russia’s Trans-Siberia Railway Fully Electrified”, 6 November 2015, https://​ www​.railpage​.com​.au/​news/​s/​russia​-s​-transsiberian​-railway​-fully​-electrified accessed 9 May 2021.

384  Research handbook on climate change mitigation law a coal-powered mode of transport. Surprisingly, there are a number of jurisdictions where the electricity for electric trains and electric cars is generated from coal or other hydro-carbon sources. In such a scenario, progress towards achieving GHG targets can be made by changing the means of power generation to a system less dependent on carbon-based fuels.188 Here, an adoption of a power generation system less dependent on fossil fuels would have a dramatic impact on reducing the GHGs of the electrically driven transportation system. China, which has been heavily dependent on electricity generated by coal-fired plants, is making impressive progress in switching to “greener” electricity.189 Such initiatives are expensive, but they have the advantage of very high and immediate returns on investment; the moment the Shanghai Maglev train190 is no longer powered by coal-fired electricity but is fuelled by “green” electricity, it goes from being a train of the past to being a train of the future. 3.2

Abandoning the Motor Car

At present, there is no realistic prospect of meeting GHG targets in ground transportation and even the more general national GHG targets if consumer dependence on fossil fuel-powered vehicles is retained.191 While many jurisdictions around the world are discussing the implementation of policies to phase out fossil fuel-powered cars, so far only Norway, France, and Great Britain have announced a ban on such vehicles. China and India are expected to announce similar bans. The legal status, such as deadlines and enforceability of the bans, varies significantly from one jurisdiction to the other and at the time of writing, no state had adopted legislation banning fossil fuel-powered cars.192 In the absence of a ban on internal combustion engine vehicles, all other attempts to separate consumers from their current hydrocarbon-powered vehicles have come in the forms of incentives, taxes on gasoline, automobile purchase tax based on engine size, and emissions regulations. Many jurisdictions have adopted a form of fuel tax as a means of driving up the price of fuel and thereby modifying consumer behaviour. In many cases, the tax is less than US$0.022/ litre, and thus well within the normal margin of price fluctuation for fuel.193 Where the tax is invisible, included in the price, it may raise government revenues, but it will have a marginal impact on consumer behaviour.194 Indeed a US$0.011/litre tax, if visible to the consumer, would reduce fuel consumption by 0.86%, roughly three times more than if the same increase were included in the advertised price of fuel.195 A low fuel tax will have less effect than 188 It is beyond the scope of this chapter to explore the implications of different sources of fuel for power generation. 189 See M. Yang, D. Patiño-Echeverri and F. Yang, “Wind power generation in China: understanding the mismatch between capacity and generation” (2012) 41 Renewable Energy 145–151. 190 See Philip Holmer, “Faster than a speeding bullet train: China is throttling up a 430-km/h magnetically levitated train to link Shanghai and its airport” IEEE Spectrum (August 2003) 30–34. 191 See Adrian Rinscheid, Silvia Pianta and Elke U. Weber, “Fast track or SloMo? Public support and temporal preferences for phasing out fossil fuel cars in the United States” (2020) 21 Climate Policy 30–45. 192 Ibid. 193 Shanjun Li, Joshua Linn and Erich Muehlegger, “Gasoline taxes and consumer behavior” (2014) 6 American Economic Journal: Economic Policy 302–342. 194 Ibid. 195 Ibid.

Transportation’s trinity and climate change mitigation  385 a higher fuel tax. In 2009, the average fuel tax in the United States, including federal and state amounts, was US$0.101/litre. The similar rate in the United Kingdom was over seven times as high at US$0.748/litre.196 The dramatic increase in the market price of gasoline and diesel fuels after February 2022 is expected to outstrip the impact of taxation measures in recent years on consumer and industry automotive use behaviours. Many jurisdictions, particularly in Europe, also impose an automobile purchase tax that increases in proportion to the engine size of the vehicle.197 These taxes are aimed at encouraging consumers to buy more fuel-efficient vehicles.198 Economists, who have studied these taxes, argue that a tax on fuel consumption is more efficient as it discourages the consumption of fuel, whereas the engine tax merely discourages the purchase of a specific vehicle, which may or may not be driven frequently.199 Smog in Los Angeles prompted California to set the world’s first emissions standards in 1966.200 Those standards focused on nitrogen oxide, non-methane hydrocarbons, and oxidants.201 A decade later, in the aftermath of the 1973 OPEC oil embargo, the US government adopted the corporate average fuel economy standard as a way of forcing vehicle manufacturers to produce more fuel-efficient vehicles.202 A more recent focus, especially given the intensity of California’s forest fires, has been on meeting defined “hard” GHG reduction targets for the transportation sector of 80% of 1990s levels by 2050. As of 2009, meeting those targets was possible if a number of fairly aggressive measures were pursued, including reducing travel demand, new technology vehicles, and “greener” sources of fuel.203 The challenge at the national level for American policymakers can best be expressed as needing to understand the effect of uncertainty. Understanding the probability of achieving certain targets is essential as policymakers and regulatory bodies will be making decisions and setting standards that shape the future of light-duty vehicles over the next several decades, while facing notable uncertainties in technology and market characteristics in the mid to long term.204

The geography of the United States and the relatively light population density of certain states make luring people from their cars a particular challenge. Until a relatively long-range electric vehicle, charged with “green” electricity, is a reality in most homes between the Rocky Ibid. Brand, Anable and Tran (n. 185) at 132–148. 198 L. Grigolon, M. Reynaert and F. Verboven, “Consumer valuation of fuel costs and tax policy: evidence from the European car market” (2018) 10 American Economic Journal: Economic Policy 193–225. 199 Ibid. 200 D. S. Barth, “Federal motor vehicle emission goals for CO, HC and NOx based on desired air quality levels” (1970) 20 Journal of the Air Pollution Control Association 519–523. 201 Ibid. 202 R. W. Crandall, “Policy Watch: Corporate average fuel economy standards” (1992) 6 Journal of Economic Perspectives 171–180. 203 C. Yang, D. McCollum, R. McCarthy and W. Leighty, “Meeting an 80% reduction in greenhouse gas emissions from transportation by 2050: a case study in California” (2009) 14 Transportation Research Part D: Transport and Environment 147–156. 204 P. Bastani, J. B. Heywood and C. Hope, “The effect of uncertainty on US transport-related GHG emissions and fuel consumption out to 2050” (2012) 46 Transportation Research Part A: Policy and Practice 517–548. 196 197

386  Research handbook on climate change mitigation law Mountains and the Missouri River, it will be extraordinarily difficult for the United States to meet any GHG target it might set. Around the world, roughly 145 million people commute daily between home and work on public transit.205 To meet our GHG targets, even more people will need to abandon their cars. When compared to a single occupant vehicle, even a partly loaded bus powered by fossil fuels will emit fewer GHGs per passenger. This reality provokes the need to shift the car driver to public transit, wherever possible. The idea of getting a driver to abandon his or her private vehicle for a seat on a bus or commuter train is called a “modal shift” and it is a science in itself.206 The increasing efforts being used to attract car drivers range from internet-based apps letting a person know where the bus is, to trip planners to allow commuters to shorten the trip, to deals with workplaces and universities to have discounted or free transit passes included as a benefit of being with that workplace or studying at the university. In most of the Global North, especially in moderately densely populated areas, using public transit may be cheaper than using a car and avoids parking, provided the commuter proceeds directly between home and work/study. Where additional trips must be made, such as to drop off or pick up children, there may come a point at which the modal shift may not be attractive. The last kilometre challenge describes the reality of the distance between the last public transit service point and the passenger’s point of origin or destination. In many jurisdictions, there will be a free or subsidized carpark or bicycle park, where public transit commuters can arrive in the morning, travel to work and back and depart in the evening. Some public transit systems allow passengers to travel with bicycles. Some jurisdictions may arrange for a subsidized taxi or ride-sharing service instead of or in addition to the parking area. In practical terms, a commuter who lives far from the last public transit service point may need a vehicle to travel between home and the transit point. Here, if a person has driven to the car park, if the transit service to his or her destination would take dramatically longer than driving, the passenger may decide not to take public transit and the modal shift concept fails. 3.3

Alternative Modes of Transport

If the modal shift cannot convince a commuter to switch to public transit, other factors must be pursued. Depending on the distance and the weather, walking may be the best form of transportation. This is especially true in the heart of cities like Hong Kong, London, Montreal, New York or Paris, where parking can be both challenging and very expensive. However, unless distances are shorter than 2 kilometres, many people will seek an alternative to walking. Bicycles are everywhere in Amsterdam and much of northern Europe and they are used by commuters in Japan and China, but few cyclists ride more than 3 km in any direction. Thus, cycling is practical where the weather is good and the commuting distance is less than 3 km. It also often requires, for safety reasons, dedicated cycle paths or bicycle-only separated lanes on public roadways. In countries where cycling has not previously been a means of commuting,

205 R. Florida, “The Global Mass Transit Revolution” Bloomberg (20 September 2018) https://​www​ .bloomberg​.com/​news/​articles/​2018​-09​-20/​the​-global​-mass​-transit​-revolution accessed 9 May 2021. 206 See N. Cass and J. Faulconbridge, “Commuting practices: new insights into modal shift from theories of social practice” (2016) 45 Transport Policy 1–14.

Transportation’s trinity and climate change mitigation  387 establishing new safe cycling corridors for commuters in cities with heavy traffic can be quite a challenge. From the perspective of the car owner, the technology that is most likely to maintain individual driver independence while reducing GHGs is electric and hybrid cars. If electric cars with 500 km ranges and powered by “green” electricity were in every driveway, we would be closer to achieving our GHG targets. Unfortunately, such a scenario is far away as there are obstacles to owning and driving an electric car, partly due to the tremendous range of cars powered by the internal combustion engine. But it wasn’t always this way; at the turn of the 20th century, before the invention of the electric starter in 1911 eliminated the need for hand-crank starts, most vehicles sold in North America were electric.207 However, soon after the invention of the electric starter, the car powered by fossil fuels eclipsed the electric car and never looked back.208 The realization that the car driver values independence above all else has forced officials focused on meeting GHG targets to give electric cars another chance. Of course, there are the long-standing challenges of range that will diminish as battery technology improves and more charging stations become available. Already communities are making significant investments to create “community charging stations” on streets, in public car parks, near government buildings and places of employment.209 Environmentalists are promoting public consideration of electric cars as a replacement for their gas guzzlers210 but there is also debate between hybrid cars, where a fossil fuel-powered engine generates electricity when needed, and fully electric vehicles.211 After 2014, Toyota did not sell an electric car in the United States, for an unusual reason: a shortage of batteries.212 Toyota has enough batteries to make 28,000 fully electric cars or 1.5 million hybrid cars.213 Toyota argues that 1.5 million hybrid cars will reduce GHG emissions 66% more than 28,000 pure electric cars.214 Toyota’s argument about using limited resources in a responsible manner in an effort to reduce GHGs as much as possible raises another issue; the life cycle of cars. While it is obvious that the future of the planet cannot be populated with cars propelled by fossil fuels, the environmental cost of recycling the cars of today into the green vehicles of tomorrow is not yet fully appreciated. Scrappage schemes are found to save little carbon, particularly when direct and indirect impacts are considered and may even increase emissions on a life-cycle basis.215 Thus, even Roland Matthé and Ulrich Eberle, “The Voltec system – energy storage and electric propulsion”, in Gianfranco Pistoia (ed.), Lithium-Ion Batteries: Advances and Applications (Elsevier 2014) 151 at 152. 208 Ibid. 209 J. McMahon, “Raising the Image of Electric Vehicles” Energy-in-Demand (17 August 2019) https://​energyindemand​.com/​2019/​08/​17/​raising​-the​-image​-of​-electric​-vehicles/​ accessed 9 May 2021. 210 EnergySage, “Pros and cons of electric cars” 17 January 2019. See also Elisabeth Fevang et al., “Who goes electric? The anatomy of electric car ownership in Norway” (2021) 92 Transportation Research Part D: Transport and Environment 102727. 211 Christopher Elliott, “Should I Buy an Electric Car or Hybrid Now?” Forbes (7 August 2020). 212 Alexander Stoklosa, “Toyota Has a Curious Justification for Not Selling Any EVs (Yet)” Car and Driver (6 March 2019). 213 Ibid. 214 Ibid. 215 Brand, Anable and Tran (n. 185) at 146. 207

388  Research handbook on climate change mitigation law the wholesale switch from fossil fuel cars to the green vehicles of tomorrow is not without its transition costs; in the quest to reduce GHGs from terrestrial transportation there is no “silver bullet”. 3.4

The Road Ahead

Certain industries have it easy; a large factory in a Middle East country can cut its electrical consumption in half by quickly putting solar panels on the roof.216 However, a similarly drastic cut in GHGs from the terrestrial transportation sector is unimaginable. Whether it be the heavy investment needed to electrify non-rail networks, the planning and investment needed to coax car drivers onto public transit or calculating the greenest way to transition to electric vehicles, the resolution of issues connected to reducing GHGs from terrestrial transportation is complex, expensive, and slow. Of course, the challenge is made more difficult by factors not discussed herein, such as population growth and urban sprawl. Given the percentage of GHGs represented by terrestrial transportation, it is impossible to reach any global GHG target without a strong and meaningful reduction of terrestrial transport GHGs. Just as a nation’s industries pulled together to create the miracle of a moon landing in 1969, the greening of power grids, the electrification of rail, the modal shift to public transport and the introduction of electric cars is possible, given the right political leadership and effective management.

4

COMMERCIAL SHIPPING

In the decades since the UNFCCC, through the Kyoto Protocol and to the Paris Agreement, measures to reduce GHGs in global commercial shipping have been the responsibility of the International Maritime Organization (IMO). States generally and those with particular interests in shipping have preferred the IMO as the setting to negotiate a collective response to GHG reductions for the industry.217 What is a continuing agency approach to GHG reductions is the result of double delegation: in the first instance from responsibilities conferred on states by the UNFCCC–Kyoto–Paris agreements, and then carried into the setting of the IMO for negotiation. This partly explains why no quantifiable GHG reduction targets were arrived at until the era of the Paris Agreement. A second, and persisting, reason is the near-total reliance on petroleum fuel for global ocean shipping. The industry’s dependence on petroleum fuels – historically coal and, later, heavy fuel oil and refined distillates together more recently with liquefied natural gas (LNG) – results in four economic problems which impede reductions in their use. A first is that there has been no comparative cost alternate fuel for transoceanic voyages. Fuels with sufficient “energy

“United Foods Company to Enhance Sustainability Efforts with 2-Megawatt Solar Power Plant” Utilities Middle East (19 October 2020). 217 Government ships, including naval fleets, are mostly exempt from civil regulations developed by the IMO and marine classification societies, including analogue measures and regulations adopted by states for shipping registered (“flagged”) to them, on the principle of sovereign immunity. However, government fleets routinely comply in part with IMO air pollution and GHG reduction measures, for example in creating ship energy efficiency management plans (SEEMPs) for new naval construction. 216

Transportation’s trinity and climate change mitigation  389 density” entailing relatively compact stowage in a ship are not yet available. Related to this is the second problem of a present global shipping fleet economically premised on the availability of relatively low-cost fuel used in compression ignition propulsion prime movers. A third problem is the difficulty of introducing replacement energy sources that are widely available ashore to supply ships, e.g., electricity and hydrogen. Such facilities are costly to build and would necessarily rely on a step change in industry usage, including a near-worldwide adoption of them in order to succeed. A fourth economic hurdle to reducing fossil fuel use is recalled, which was until 2022 the relatively low cost of fuel oil and distillates.218 Progress towards measures and regulations – including IMO-created rules – has resulted from four events in recent decades: (a)

the adoption of the UNFCCC as the basis for normative conduct by states and, to a lesser extent, the shipping industry; (b) the perceived necessity to develop measures at a time of adverse perceptions before the 2009 UNFCCC Conference of the Parties (CoP) at Copenhagen; (c) the relatively high cost of fuel until 2014; and (d) the 2015 Paris Agreement. These events would combine to offer states a basis to negotiate in the setting of the IMO, something that resulted in an ambitious – if not yet with formal rules to achieve it – industry GHG reduction target of 50% by 2050.219 The feasibility of this goal in light of the problem of reliance on fossil fuel described above is considered in the closing discussion of this section, “The portents are clear. …”. In useful respects, measures and regulation in the industry to reduce GHG emissions are grafted onto an earlier-developed regime to control air pollution. The “place” or textual home of soft or indirect measures together with binding rules imposed on the industry by flag state adoption as legislation and presently, if minimally, by verification in port states is Annex VI of the IMO’s signature maritime pollution prevention treaty, MARPOL.220 A single comprehensive code for all emissions provides clarity and promotes confidence in the efficacy of rules out of the perceived success of earlier measures. The origins of the Annex VI MARPOL regulation for the shipping sector are similar to those in civil aviation, emerging out of the growth of an industry operating in populated coastal areas and from better understanding of the human health impacts of using petroleum fuel.221

218 As a general rule, the cost of fuel is at least half the operating expense of an ocean-going commercial ship. Commercial charterparty agreements routinely include figures for the expected fuel consumption of a ship, e.g. averaging, in 200-metre Panamax size bulk carriers, about 30 metric tonnes/day. 219 See the discussion of the IMO’s 2018 Strategy below. 220 International Convention for the Prevention of Pollution from Ships, 2 November 1973, 1340 UNTS 184, as amended by the Protocol of 1978 Relating to the International Convention for the Prevention of Pollution from Ships, 17 February 1978, 1340 UNTS 61 (in force 2 October 1983) (MARPOL). 221 See V. Matthias et al., “The contribution of ship emissions to air pollution in the North Sea regions” (2010) 158 Environmental Pollution 2241. And see J. J. Corbett et al., “Mortality from ship emissions: a global assessment” (2007) 41 Environmental Science Technology 8512: The marine transport sector contributes significantly to air pollution, particularly in coastal areas. Annually, ocean-going ships are estimated to emit 1.2–1.6 million metric tons (Tg) of particulate matter (PM) with aerodynamic diameters of 10 μm or less (PM), 4.7–6.5 Tg of sulfur oxides (SOx

390  Research handbook on climate change mitigation law When states collectively agree through the IMO to regulate shipping, they do so through IMO-administered treaties that prescribe technical and performance standards adopted into the domestic legislation of member states. Because commercial ocean-going shipping must operate globally, there are few outlier states to IMO rules. As with aviation under the Chicago Convention, this regime can be understood as significantly universalist. The success of it turns on four instrumental parts: (a) the IMO Convention;222 (b) a wide-ranging Safety of Life at Sea Convention (SOLAS) framework;223 (c) MARPOL; and (d) decree-like measures prescribed by the IMO’s Marine Environmental Protection Committee (MEPC).224 MARPOL is almost exclusively the instrument for regulation of air pollution as a whole. It provides for technical design standards, record-keeping, and assessment of source emissions from ocean-going commercial and domestically trading ships. Global commercial shipping has grown to be vast in scope and continues to experience increased technical complexity. Because of this, states increasingly prefer, together with industry actors and marine classification societies, to delegate to the IMO (while often retaining strong influence) the creation of environmental protection standards for shipping.225 Along such a governance path, MARPOL was expanded in the 1990s to include regulations to address gaseous emissions from ships in order to protect human health in coastal settings. Annex VI as a then new addition to MARPOL resulted in the International Air Pollution Prevention scheme, which included measures to document compliance under Regulation 4 of the Annex. Control of ozone-depleting substances (which now has a useful if minor role in GHG reduction) was defined by Regulation 12. Inspired by the trend in European Union rules to improve air quality, the focus of the time was to reduce emissions of nitrogen and sulphur

as S), and 5–6.9 Tg of nitrogen oxides (NOx as N). Recent studies have estimated around 15% of global NOx and 5–8% of global SOx emissions are attributable to ocean-going ships … Our results indicate that shipping-related PM emissions are responsible for approximately 60,000 cardiopulmonary and lung cancer deaths annually, with most deaths occurring near coastlines in Europe, East Asia, and South Asia. 222 Convention on the Intergovernmental Maritime Consultative Organization, 6 March 1948, amended and renamed as Convention on the International Maritime Organization, 289 UNTS 3 (in force 17 March 1958). 223 International Convention for the Safety of Life at Sea 1974, 1 November 1974, 1184 UNTS 278 (in force 25 May 1980) (SOLAS). 224 MARPOL (n. 220) has six operative annexes. Annex VI, Air Pollution from Ships (in force 19 May 2005), regulates air pollution and GHG emissions. The IMO Code for Ships Operating in Polar Waters (in force from 1 January 2017) restricts ship fuel types in the Arctic and Antarctic. The MEPC has wide-ranging membership across IMO states, while allowing industry organizations including classification societies and non-governmental organizations to observe and comment on its proceedings. 225 What can be called the “SOLAS effect” is the participation of states in the development of standards knowing that implementation will eventually be mandatory, i.e. without allowable reservation. Reinforcing this environmental protection and safety regulation is the now-extensive system of port state control inspection of commercial ships. A consensus for environmental protection can be seen in the IMO schemes for “particularly sensitive sea areas” and “emission control areas” requiring greater control of pollutant discharges from ships. The problem of under-regulated shipping in so-called flag-of-convenience states remains, notably those Global South states that register cargo and tanker vessels. The enforcement of IMO environmental standards for such shipping is partly achieved through the requirements of insurers, and port state control inspections.

Transportation’s trinity and climate change mitigation  391 compounds – NOx and SOx – that result from combustion of fuel.226 Somewhat like aviation prime movers – principally the turbofan jet engine – these polluting compounds result from compression ignition of fuels in widely used marine diesel engines. Nitrogen compounds degrade air quality in coastal areas and sulphur compounds are responsible for particulate matter (PM), an established cause of respiratory problems in humans and animals. A reduction of NOx and SOx pollutants has been partly achieved through Regulations 13 and 14 of Annex VI. Regulation 14 established geographic restrictions on the use of high-sulphur fuels – designated as fuels with more than 1% sulphur by volume – under the concept of Emission Control Areas. Regulation 18, Fuel Oil Availability and Quality, adopted in 2008, required progressive elimination of sulphur from marine fuels, initially to a maximum of 4.5% of fuel by mass as of 1 January 2012, 3.5% in the eight years following, and 0.5% after 1 January 2020.227 Meanwhile, the reduction of NOx compounds from exhaust emissions to be brought about by the better design and technical additions to engines was to be accomplished in stages by 2016.228 The post-1990s trend of rising cost of fuels, which continued until 2014 and then returned dramatically in early 2022, was an impetus for improved design and operating efficiency. This may have contributed to good air-quality results arguably approaching effective compliance with air-pollution regulation, although the causal evidence is not clear. Annex VI measures are now a comprehensive scheme of atmospheric pollutant reduction, made functional by engine-design criteria, the quality testing of fuel to be used, record-keeping, and routine inspection by national and port-state authorities.229 However, a reduction of air pollutants will need more than improvements to fuel quality and must continue to be pursued through the design, effective use, and maintenance of marine prime movers. As such, the regulation towards reducing GHGs faces two challenges: inherent limits in the efficient conversion of petroleum energy to motive power in compression-ignition engines, and the entry capital cost to construct ships with efficient engines.230 The same chal-

See the policy statements and directives of the European Environmental Agency and the European Commission. European Environmental Agency, “Air Pollution” www​.eea​.europa​.eu/​themes/​ air; European Commission, “Environment: Air Quality Standards” https://​ec​.europa​.eu/​environment/​air/​ quality/​standards​.htm accessed 9 May 2021. 227 Nothing in Regulations 13, 14, and 18 is directed to reducing GHG emissions. In pursuing the implementation of Regulation 14, the IMO asked the International Organization for Standardization (ISO) to revise ISO standard 8217, the marine fuel oil specification. In 2016 the IMO MEPC reviewed the pending 0.5% sulphur limit concluding it could come into effect in 2020, and not 2025. See IMO, “Marine Environment” www​.imo​.org/​en/​OurWork/​Environment/​Pages/​Default​.aspx accessed 9 May 2021. 228 The stages consist of a Tier I for ships constructed after 1 January 2000; for example, regulating NOx emissions at 9.8 grams per kilowatt hour (g/kwh) when engine speed exceeds 2000 rpm, followed by a Tier II 7.7 g/kwh limit after 1 January 2011. (Comparable stepped reductions apply for engine speeds below 2000 rpm and below 130 rpm.) Tier III requirements, in effect from 1 January 2016, put the general requirement at 2.0 g/kwh. Tier III standards apply in designated coastal areas such as the Baltic Sea and North Sea Emission Control Areas. 229 The vast majority of marine engines in commercial service are compression-ignition diesel engines, comparatively (to steam propulsion and gas turbines) economic in their capital and life-cycle (fuel and maintenance) costs. Diesel engines can be precisely calibrated and their emissions analysed with specificity. For a useful history see Vaclav Smil, “The two prime movers of globalization: history and impact of diesel engines and gas turbines” (2007) 2 Journal of Global History 373. 230 Commercial ships on average have a working life of about 25 years. There are a considerable number of global trading ships that are less fuel efficient and will remain in service for decades to come. 226

392  Research handbook on climate change mitigation law lenges have been manifest in the control of greenhouse gas emissions from ships, which for the past 20 years has been the responsibility of the IMO under the Kyoto Protocol.231 The year 2009 marked the moment when the industry accepted that GHG reduction measures were necessary. This was a step beyond the settled NOx and SOx regime, if agreed among IMO states more than a decade later and not entirely as binding rules. The negotiation of measures to reduce GHG emissions in the industry had been due since the 2005 entry into force of the Kyoto Protocol and was given impetus by the perception of the pivotal 2009 UNFCCC CoP at Copenhagen. A consensus among IMO member states led to the MEPC establishing its GHG Working Group, which would develop the Energy Efficiency Design Index (EEDI) for mandatory application in the design of new ships, and the Ship Energy Efficiency Management Plan (SEEMP) for all vessels.232 These measures, adopted in 2011, are regulations in a new Chapter 4 to Annex VI. They became effective in a relatively short period of time – as progress is measured in the IMO – on 1 January 2013.233 The EEDI (Regulation 21) is presently the most tangible regulation, if indirectly, towards GHG reduction. The objective is an eventual 30% improvement in the energy efficiency of listed types of ships propelled by diesel engines. Regulation 21 does not yet extend to “non-conventional propulsion”, such as diesel-electric and gas turbine plants. EEDI ships include bulk carriers, tankers and gas carriers, container ships, general cargo ships, refrigerated container ships, and combination carriers. Cruise ships, usually operated with regard for fuel costs and therefore efficiency, are presently only required to demonstrate so-called “attained” energy efficiency. Efficiency improvements are to be achieved over three periods for ships built in each: (a) 10% (2015–19); (b) 20% (2020–24); and (c) 30% (from 1 January 2025).234 Calculating the EEDI includes numerous factors of ship speed, capacity, fuel type, It is not usually cost-effective to retrofit a commercial vessel with a more efficient propulsion engine, even with reduced life-cycle fuel costs, as the present slow conversion to “dual fuels” (distillate and liquefied natural gas) in the industry demonstrates. Capital costs of procuring and installing the new engine, together with reduced revenues while the ship is out of service for conversion, in a present era of low shipping construction and hire (charter) costs in recent years, work against retrofitting. 231 See Kyoto Protocol (n. 17) Art. 2(2). 232 The EEDI and SEEMP were developed in 2010 and 2012 inter-sessions of the Working Group on Energy Efficiency Measures for Ships. States and technical organizations such as the International Association of Classification Societies (IACS) made proposals including for the establishment of baseline standards across various ship types including ice-classed ships, car carriers, chemical tankers, container vessels, ro-ro passenger ships, and cruise passenger ships. 233 See Amendments to the Annex of the Protocol of 1997 to Amend the International Convention for the Prevention of Pollution from Ships, 1973, as Modified by the Protocol of 1978 Relating Thereto, Resolution MEPC.203(62), IMO, 62th Sess., Annex 19 (2011) 1, www​.imo​.org/​blast/​blastDataHelper​ .asp​?data​_id​=​30762​&​filename​=​203(62)​.pdf accessed 9 May 2021. 234 Efficiency is referred to as the level of energy required per capacity mile to be travelled by a ship, e.g. a tonne mile. The approach of IMO is to evaluate and limit the mass of CO2 that is theoretically emitted by a new ship related to the mass transported and the miles sailed by it (mass CO2 per transport work). This ratio, which is determined under defined (theoretical) operational conditions of the ship is called the Energy Efficiency Design Index (EEDI). During the building process of each new ship this EEDI has to be evaluated and if applicable, it has to been shown that the attained EEDI does not exceed the limits prescribed by IMO (required EEDI). Det Norske Veritas-Germanischer Lloyd, “Process of EEDI – Certification with DNV GL: Information for Shipyards”, rev 2 (26 November 2014) at 1, https://​production​.presstogo​.com/​fileroot7/​gallery/​ DNVGL/​files/​original/​83​eb2baebc92​4d858c0c0a​0ab909ea47​.pdf accessed 9 May 2021.

Transportation’s trinity and climate change mitigation  393 and “weather”, although there are so many variables that any figure is only approximate.235 Finally, ships must maintain an “International Energy Efficiency Certificate”, which is subject to being checked by third-party states under the port state control regime.236 Two economic factors threaten to limit the success of the Regulation 21 EEDI approach for new ships, namely: (a) fluctuations in the market price of fuels; and (b) the cost of replacing existing ships. When it comes to building more efficient ships, shipyard capacity remains high, including in China, Japan and the Republic of Korea, which collectively build the majority of the global fleet subject to the Regulation 21 design standard. Combined with the cost of capital funding for construction, which continues to be low in historical terms, there is now an oversupply of ships, which suggests that new construction (which has steadily increased since 2000) must decline.237 Regulations 22 for SEEMP and 23 for technology transfer and cooperation complete the current scheme to reduce GHG emissions under Annex VI.238 The SEEMP is a soft measure intended to “establish a mechanism for a company and/or a ship to improve the energy efficiency of a ship’s operation”.239 Its goal is “to improve a ship’s efficiency through four steps: planning, implementation, monitoring, and self-evaluation and improvement”.240 As with aircraft, ship speed is the primary determinant of fuel consumption and, therefore, efficiency, on a unit basis of tonnage moved over distance; hence, tangible measures are geared to better voyage planning; more direct passages and lower average speeds. The cost of fuel, once anticipated to return to pre-2014 highs as heavy fuel oils are eliminated in compliance with the sulphur content restrictions of Regulations 14 and 18, caused commercial shipping operators to consider such approaches, although informally.241 However, after the global onset of the COVID-19 pandemic in 2020, the continuing low cost of more refined fuels diminished the utility of practical operating measures until a pronounced increase in cost after February 2022.242

235 See IMO “2014 Guidelines on the Method of Calculation of the Attained Energy Design Index (EEDI) for New Ships” (adopted 4 April 2014), MEPC Doc. 66/21/Add.1, Annex 5, www​.imo​.org accessed 9 May 2021. And see “2018 Guidelines on the Calculation of the Attained Energy Efficiency Design Index (EEDI) for New Ships” (adopted 28 October 2018), MEPC Doc. 73/308, Annex 5. 236 Such ships do not need to be constructed or later converted to the Regulation 21 EEDI standard. Instead, they must demonstrate an “attained” EEDI pursuant to Regulation 20. At present, ships operating only in national waters are exempt from the EEDI scheme together with ships in government service. 237 See the reports of the OECD Workshop on Shipbuilding and the Offshore Industry held on 24 November 2014. OECD, “Workshop on Shipbuilding and the Offshore Industry” www​.oecd​.org/​sti/​ ind/​work​shoponship​buildingan​dtheoffsho​reindustry​.htm accessed 9 May 2021. The Baltic Dry Index is a leading measure of market demand for commercial bulk shipping, and therefore prospective future construction. Since 2014, the Index has ranged between 1,000 and 2,000, falling to less than 300 in the first quarter of 2016, and recovering to more than 1,100 in the first quarter of 2018. 238 MARPOL (n. 220) Annex VI. 239 2012 Guidelines for the Development of a Ship Energy Efficiency Management Plan (SEEMP), Resolution MEPC.213(63), IMO, 63rd Sess., Annex 9 (2012) 1 at para. 3.2. 240 Ibid. at para. 3.6. 241 See e.g. Dariusz Bernacki, “Assessing the link between vessel size and maritime supply chain sustainable performance” (2021) 14 Energies 2979. 242 See e.g. Costas Paris, “Big bets on ship exhaust systems cast a cloud over vessel owners: cargo operators who bought pricey scrubber systems made the wrong move” Wall Street Journal (30 October 2020).

394  Research handbook on climate change mitigation law The case for market-based measures for both GHGs and classic air pollutants has resisted taking root among states interested in shipping, being successfully contested by industry operators. The MEPC considered MBMs as early as 2009, with Denmark proposing a fund for technology development. An emission trading scheme was then recommended by France, Germany and Norway.243 Other suggested measures included a port state levy on fuel, quota trading schemes, and an excise rebate mechanism for developing states.244 However, a sufficient number of IMO member states and industry operators resisted monetizing carbon – by taxation or otherwise – to ensure that a balance of the interests of IMO member states – regulating the environmental effects of shipping while ensuring the cost-effectiveness of the industry – has yet to find expression as MBMs.245 This was a retreat from the IMO Assembly asserting that “a market-based mechanism would serve two main purposes: off-setting growing ship emissions and providing a fiscal incentive for the shipping industry to invest in more fuel efficient ships and technologies and to operate ships in a more energy efficient manner by setting a price on CO2 emissions”.246 This would equally seem to put beyond reach a similar tool to regulate NOx and SOx pollutants.247 The Paris Agreement’s 2016 entry into force was the catalyst for IMO states to accept that a fresh approach was needed towards collective reduction of GHGs. Within months the MEPC agreed to a “roadmap” for an initial strategy to reduce GHGs.248 This resulted in the April

Scrubbers [of SOx emissions] make financial sense if the price spread between heavy oil and the cleaner [low-sulphur] fuels is more than $100 per ton. With oil prices at historic lows on falling demand from the Covid-19 pandemic and the world oversupplied with crude, the difference is now hovering at around $60 per ton. 243 Denmark’s proposal was a levy on fuel, to be directed, consistent with UNFCCC practice, to climate change mitigations in affected developing states and next, the improvement of marine technology. It was estimated that pricing shipping GHG emissions at US$45 per tonne and imposing a levy of that amount would lead to a one-third reduction in emissions by 2050, or an 11% reduction if set at US$15 per tonne. For a review of the proposed measures of the time, see H. N. Psaraftis, “Market-based measures for greenhouse gas emissions from ships: a review” (2012) 11 World Maritime University Journal of Maritime Affairs 211. 244 A proposal advanced by Germany, France, and Norway would create an emission-volume auction scheme for an overall global system, with allowable trading of purchased quotas and the resulting realized monies to be used for a fund for climate change mitigation and adaptation in affected countries. 245 Before finally deciding on [a market-based measure] for international shipping, a cost/benefit analysis should be completed paying particular attention to the impact on the industry, the global supply chain and developing countries. These are fundamental conditions, in line with BIMCO’s objectives of promoting fair business practices and defending free trade as well as open access to markets. Baltic and International Maritime Council (BIMCO), “GHG and Market Based Measures (MBMs)”, www​.bimco​.org/​en/​About/​Viewpoint/​04​_Greenhouse​_Gases​_and​%20Market​_Based​_Measures​.aspx accessed 9 May 2021. BIMCO represents some 2,300 shipping companies and organizations with about 65% of the world’s shipping tonnage. See “About BIMCO” www​.bimco​.org/​en/​About/​About​_BIMCO​ .aspx accessed 9 May 2021. 246 IMO, “Control of Greenhouse Gas” n. 37) at 8. 247 See IMO, “Market-Based Measures”, www​.imo​.org/​OurWork/​Environment/​PollutionPrevention/​ AirPollution/​Pages/​Market​-Based​-Measures​.aspx accessed 9 May 2021. 248 IMO MEPC ISWG, “Further Development of the Structure and Identification of Core Elements of the Draft Initial IMO Strategy on Reduction of GHG Emissions from Ships”, IMO Doc. ISWG-GHG 2/2/X (7 September 2017), at paras 7 and 15.

Transportation’s trinity and climate change mitigation  395 2018 “Initial IMO Strategy on Reduction of GHG Emissions from Ships”.249 No tangible rules were prescribed in the 2018 Strategy and it is not due to be revisited until 2023.250 Consistent with a post-Paris approach of substantial, although decades-long GHG reductions, IMO states settled on a twofold goal of: (a) reducing emissions by “transport work, as an average across international shipping by at least 40% by 2030” with 2008 as the reference baseline and (b) “peaking” the industry’s emissions as soon as possible while reducing total annual CO2 emissions “by at least 50% by 2050”, again compared to 2008.251 However, the 2018 Strategy signalled more nuanced, if continuing soft rule approaches to reducing GHGs in the industry. They are described as short-, mid-, and long-term “candidate measures”, respectively, for design and possible adoption by 2023 (the presumptive date of a further strategy as envisioned in the roadmap), between 2023 and 2030, and beyond 2030. Short-term measures are arguably easily fulfilled in the industry and at least among port states in the Global North: better energy efficiency design of ships, an “Existing Fleet Improvement Programme”, encouragement of national action plans, technical cooperation, research into alternative low-carbon and zero-carbon fuels, and improvements to port infrastructure.252 Only after 2023 will MBMs be contemplated “to incentivize GHG emission reduction”.253 After 2030, IMO states have agreed to “consider” the industry’s decarbonization “in the second half of the century”.254 The enormous challenge of a near-total shift from using petroleum fuels gained impetus from outside the ordinary UNFCCC commitment frame of states in the September 2020 “Leaders’ Pledge for Nature”. In this aspirational statement issued before a biodiversity summit, the European Union and 64 heads of state and government agreed to an “objective of Net Zero greenhouse gas emissions by mid-century”.255 From the 2018 Strategy, discrete projects have emerged for the MEPC. An evolving and more inclusive (of ship and propulsion type) EEDI is at the forefront of these measures. The EEDI, recalling its application to the design of ships yet to be built, will be complemented by a new Energy Efficiency Existing Ship Index (EEXI) coupled with a “carbon intensity

249 IMO, “Initial IMO Strategy on Reduction of GHG Emissions from Ships” (adopted 13 April 2018), MEPC Doc. 73/304, Annex 11 (the “2018 Strategy”). 250 For initial commentaries about the strategy, see Tae-Hwan Joung et al., “The IMO initial strategy for reducing greenhouse gas (GHG) emissions, and its follow-up actions towards 2050” (2020) 4 Journal of International Maritime Safety, Environmental Affairs, and Shipping 1, and Beatriz Garcia, Anita Foerster and Jolene Lin, “Net zero for the international shipping sector? An analysis of the implementation and regulatory challenges of the IMO strategy on reduction of GHG emissions” (2020) 33(1) Journal of Environmental Law 85–112. 251 See IMO, 2018 Strategy (n. 249) at Art. 3.1 “Levels of Ambition”. These goals include “pursuing efforts” to phase out CO2 emissions “as a point on a pathway of CO2 emissions reduction consistent with the Paris Agreement temperature goals”. “Further phases” of the EEDI are to also contribute to a declining “carbon intensity” of the ship. 252 Ibid. at Art. 4.7, “Candidate short-term measures”. 253 Ibid. at Art. 4.8, “Candidate mid-term measures”. The post-2023 envisioned plans include “effective uptake” of low-carbon and zero-carbon fuels, something that will require technical and safety regulations received from the IMO or otherwise legislated for by states. 254 Ibid. at Art. 4.8, “Candidate long-term measures”. 255 “Leaders’ Pledge for Nature: United to Reverse Biodiversity Loss by 2020 for Sustainable Development” (27 September 2030), paragraph 5 https://​www​.le​aderspledg​efornature​.org accessed 9 May 2021.

396  Research handbook on climate change mitigation law indicator” (CII) based upon reported annual fuel consumption.256 These initiatives may appear minor; however, an incremental approach is crucial given the goal of a 40% reduction in emissions by 2030 across the existing global fleet. The CII rating, intended to foster continuing improvement by greater energy efficiency, has five increments from “major superior” to “minor inferior” to be annually determined for ships.257 The needed formula to assess CII as a rule in Annex VI Chapter 4 Regulations is easy to envision. But what will be required as a corrective to overly carbon-intensive ships in operation, i.e. to improve their performance – by reducing GHG emissions – relative to EEDI performance indices is another.258 The present concept is that poorly performing ships will be asked for a corrective plan, and port authorities would offer amenities to better-operated ones established as less carbon intensive in terms of design. Only for NOx and SOx have IMO states accepted quantifiable mitigating rules, including strict emissions limits, as part of a MARPOL codification. That is set to continue through to at least 2023.259 The portents are clear. A first is that MARPOL is set to continue as the instrumental-regulatory vehicle for process and reporting requirements in matters such as the continuing extension of the EEDI and, now, the EEXI scheme. We should recall that the rules in Annex VI to ensure emission quality – reducing pollution that impairs human health – have started to work by a combination of factors, including strong normative consensus, long introduction periods, the effect of high fuel prices through to 2014 (and, expectedly after early 2022), a continuing trend of new shipbuilding, adoption and local enforcement of air-quality standards by states, the supporting role of marine-classification societies, and the international nature of enforcement for shipping by a port state control inspection regime that covers many areas of the world. Equally, however, the rules to eliminate NOx and SOx pollution have been successful because they imposed quantifiable restrictions of emissions. There is no such prospect yet for GHGs. A second portent is that, while the goal of a 40% reduction in GHGs (again, relative to 2008) by 2030 may be achievable, the problem of an economic and widely available low-carbon (or zero-carbon) energy source for ocean-going shipping remains, in practical terms, out of reach. An effective realization of net zero by 2050 will demand an entirely new conception of the industry. Global trade and the relatively low cost of operating a currently petroleum-based commercial shipping industry will be an impediment to a transformational shift at least through the 2020s.

The “attained” EEXI in intended to detail the energy efficiency of a ship relative to a baseline. A “required” EEXI, meanwhile, is the step change towards better comparative performance, i.e. reduced emissions. 257 On such incremental developments under the 2018 Strategy, see the IMO press release report of a working group in October 2020 and the results of the first 2021 meeting of the MEPC (MEPC 76) https://​www​.imo/​org/​en/​MediaCentre/​PressBriefings/​pages/​36​-ISWG​-GHG​-7​.aspx accessed 9 May 2021. The MEPC is also to assess the impact on states of the 2018 candidate measures including with regard to differentiated burden-sharing. 258 The CII is proposed to apply to ships over 5,000 gross registered tonnes (GRT). This seems sensible given the scale of the monitoring and regulatory task and that smaller ships have a lower capacity for steady-state operation. Moreover, small vessel operators would experience a disproportionate technical and administrative compliance burden. 259 There is ordinarily a lag time or waiting period for MEPC-adopted amendments to MARPOL to enter into effect for member states. Post-2018 Strategy rules will not become binding until 2023 at earliest. 256

Transportation’s trinity and climate change mitigation  397 However, a third portent offers promise, and that is the growing consensus towards action in many states and industrial sectors to eliminating fossil fuel use. The gains may be incremental, by which states both regulate and offer incentives for a change in fuels and marine propulsion technology, and civil societies appreciate the effectiveness of gains in things more a part of their ordinary experience. The goal of large-scale GHG reduction in shipping may not arrive by 2050 or soon thereafter. But it can be seen on a perceivable horizon.

5 CONCLUSION The adaptive challenge for climate change mitigation law to address global transportation should be straightforward. After all, GHG emissions are not much different than other successfully regulated atmospheric pollutants. The proven approaches towards recovery of the ozone layer, to reducing long-range pollution from land-based sources including industrial and thermal power emissions and assuring human health protection from aviation and shipping emissions offer confidence from which to proceed. However, the scale of GHG emissions and the difficulties with alternative technologies – both of motive power and energy sources – reveal limits in the law’s design and what can be demanded of it. Moreover, modest and growing efforts to mitigate transportation emissions are at risk of being outpaced by the overall increase in the industry’s activity. It seems that a continuing creation and application of the law must be directed to the underlying factors, while pursuing incremental improvements in every aspect of transportation: mass movement in preference to individual, relentless effort to achieve efficiency, the modifying of user expectations and uses, and the exceptional problem of moving away from fossil fuel energy sources. The common features of the law’s application across the three modes of transportation – aviation, the terrestrial, and shipping – reveal the possibility of success. For example, the pricing of energy to alter user behaviour in terrestrial transport has implications for analogous measures in aviation and shipping that, because of the agency delegation in the ICAO and IMO created by the Kyoto Protocol, have resisted creation and implementation. The uniformity through which two decades of initial measures resulted in the ICAO and IMO offers the lesson of consistency and therefore more ready acceptance. As to how the law can offer incentives for the adoption of technology, there is much each of the three sectors can derive from the others. An age of significantly decarbonized or net zero GHG emissions for terrestrial transportation is on the horizon. The mixture of means to accomplish this, to which the law must be directed, are readily understood, and include the mass development and distribution of alternate primary energy sources – especially sustainable electricity and hydrogen-based fuels – changes in urban and highway design, a reshaping of user preferences, and a wholesale shift in capitalizing transportation from its traditional petroleum foundation. For aviation and shipping, the journey will be longer because no effective primary energy source is yet available for the distances to be spanned. Aviation and shipping will come to occupy an increasing portion of all transportation GHG emissions. Complicating matters is a prediction that the two sectors will remain – at least in their international dimensions – beyond the direct regulation of states. The task for the law must therefore be to encourage collective action, as much as it continues to be directed to efficiency and changes in the technology of ships and aircraft.

16. Cities and climate change mitigation law from a polycentric and comparative perspective Cathrin Zengerling, Debora Sotto and Oliver Fuo

INTRODUCTION Over the last decade, cities have become an increasingly prominent actor in global climate governance. Within and also beyond their legal scope of competence, they have the potential to significantly contribute to climate change mitigation efforts. Our aim in this chapter is twofold: firstly, to show how international cities are integrated into the inter- and transnational architecture of climate governance and secondly, to provide a comparative overview of current urban climate governance in São Paulo, Hamburg and Cape Town and its embeddedness in national legal frameworks. While cities are highly vulnerable to climate change and thus play a crucial role in adaptation efforts, our focus here is on mitigation only.1 Climate change mitigation is concerned with limiting the causes of human-induced climate change. It refers to ‘the collection of actions that prevent greenhouse gases from entering the atmosphere, remove greenhouse gases from entering the atmosphere or reduce the sources or enhance the sinks of these gases’.2 Since cities account for 75% of global energy consumption3 and considering that this share is likely to rise even further with a growing urban populations,4 they are a relevant actor in mitigation efforts. Studies on the amount and sources of GHG emissions in international cities show that there are immense differences in the total amount of cities’ GHG emissions as well as in the sources.5 This highlights that there are no ‘one-size-fits-all’ solutions but that effective urban climate change mitigation efforts need to be based on and tailored to the results of robust local GHG inventories.

1 For a comparative study including adaptation and with a focus on the building sector, see Oliver Fuo, Cathrin Zengerling and Debora Sotto, ‘A Comparative Legal Analysis of Urban Climate Mitigation and Adaptation in the Building Sector in Brazil, Germany, and South Africa’ (2022) 12(1) Climate Law 32–97, https://​doi​.org/​10​.1163/​18786561​-12010002 accessed 20 June 2022. 2 Anel A. Du Plessis and Louis J. Kotze, ‘The Heat Is On: Local Government and Climate Change Governance in South Africa’ (2014) 58 J Afr L 145, 152. 3 Mark Swilling and others, ‘City-Level Decoupling: Urban Resource Flows and the Governance of Infrastructure Transitions – Working Group on Cities of the International Resource Panel Report’ (United Nations Environment Programme 2013). 4 According to UNDESA, by 2050 two-thirds of the global population will live in cities (United Nations Department of Economic and Social Affairs, ‘World Urbanization Prospects: The 2018 Revision’ (ST/ESA/SER.A/420) (United Nations 2019)). 5 Christopher Kennedy, Nadine Ibrahim and Daniel Hoornweg, ‘Low-Carbon Infrastructure Strategies for Cities’ (2014) 4 Nat Clim Change 343.

398

Cities and climate change mitigation law  399 In addition to this factual relevance, there are also several political mandates for urban climate change mitigation.6 Since the beginning of the UNFCCC, local authorities have been represented in climate change deliberations and recognised as important role players for diverse reasons: they are ideally positioned to tailor climate change mitigation strategies to suit their specific local contexts; they play a key role in addressing GHG emissions related to urbanisation; and local authorities are well situated to promote partnerships between a variety of public and private stakeholders.7 Consequently, the preamble of the Paris Agreement highlights the importance of all levels of government to contribute to climate governance. In addition, the 2016 Marrakesh Partnership and the NAZCA platform for Global Climate Action established under the Paris regime aim to incentivise cities’ mitigation efforts. Furthermore, the New Urban Agenda (NUA) and Sustainable Development Goal 11 (SDG 11) politically mandate cities to contribute to climate mitigation efforts. Although we have used the term ‘city’ in a seemingly straightforward way, we want to highlight that, at least from an interdisciplinary perspective, there is neither a universally accepted definition of, nor an easy answer to what actually constitutes a city. Definitions turn to be different across countries and often depend on a host of factors such as population size, spatial dimensions and the status of infrastructure.8 For the purpose of this chapter, we understand cities as legally protected municipal governments exercising administrative, executive and legislative powers within clearly defined geographic boundaries.9 This definition is not oblivious to the diverse features and spatial dimensions of cities but is concerned with their governing authority as specific local public authorities protected in statutes or a constitution. A part of the complexity of the matter can be underlined by the three case studies at issue: Cape Town is one of eight metropolitan municipalities designated under the South African Constitution, which entails that the administrative boundaries of the city encompass the whole metropolitan area of the city. The City of São Paulo only captures a part of the Metropolitan Region of São Paulo, which has its own constitutional and legislative status. The City of Hamburg doubles as a municipality and a federal state of Germany. It is surrounded by the metropolitan region of Hamburg, which is about three times larger than the City of Hamburg but has no legal identity of its own under German law. In the following sections we concisely present the role of cities in international climate change law and transnational climate governance (section 1) and delve deeper into a comparative analysis of climate change mitigation efforts in international cities, exemplified in the case studies of Cape Town, São Paulo and Hamburg and their respective national jurisdictions. Consistent with a basic principle in comparative legal studies, we compare the similarities and differences10 of climate governance in our three cities, taking into account their embeddedness in three different national legal frameworks, in order to establish the extent to which they are positioned, in terms of their legal scope of action, to contribute towards achieving the interna Cathrin Zengerling, ‘Action on Climate Change Mitigation in German and Chinese Cities – A Search for Emerging Patterns of Accountability’ (2018) 75 Habitat Int 147. 7 Du Plessis and Kotze (n. 2) 149. 8 Angela Van der Berg, ‘Municipal Planning Law and Policy for Sustainable Cities in South Africa’ (PhD thesis, Tilburg University 2019) 29–30. 9 Helmut Philipp Aust and Anel A. Du Plessis, ‘Introduction’ in Helmut Philipp Aust and Anel A. Du Plessis (eds), The Globalization of Urban Governance: Legal Perspectives on Sustainable Development Goal 11 (Routledge 2019) 3, 7. 10 See John C. Reitz, ‘How to Do Comparative Law’ (1998) 46 Am J Comp L 617, 620–23. 6

400  Research handbook on climate change mitigation law tional ideal of climate change mitigation as envisaged in the Paris Agreement, SDG 11 and the NUA. The comparative method may help bring to light the unique natures of the legal systems within which the three cities operate as well as their commonalities and differences in approach to urban climate governance. In order to go beyond the minimum goal of a comparative study, we analyse the significance of the similarities and differences in advancing the global ideal of climate change mitigation.11 The aim is to draw conclusions about the distinctive characteristics and commonalities of climate change mitigation efforts across the case studies.

1

CITIES AND INTERNATIONAL CLIMATE CHANGE LAW

With the 2015 Paris Agreement the regulatory approach of international climate change law changed from the top-down system established under the Kyoto Protocol using binding emission reduction targets to a ‘pledge and review’ system building on voluntary nationally determined contributions (NDCs) and legally binding reporting and transparency rules.12 Although addressees of the Paris Agreements are still only states, cities may become part of the broader ‘Paris regime’ via two routes. On the one hand, some states – such as China and Brazil – explicitly mention cities and the local level in their NDCs.13 On the other hand, a growing number of cities voluntarily join the NAZCA platform (non-state actor zone for climate action) strengthened via the 2016 Marrakesh Partnership.14 Non- and sub-state actors such as companies, investors, organisations, cities and regions can voluntarily register their climate change mitigation and adaptation activities. Currently, NAZCA enlists ‘actions’ of about 11,350 cities. This includes 161 cities from Brazil, 92 from Germany and 13 from South Africa with São Paulo, Hamburg and Cape Town among them.15 However, what looks like an impressive transnational outreach of an international legal regime still comes with several weaknesses. Firstly, so far NAZCA mainly communicates pledges and has only recently started to include categories on specific measures, transparent sources and information on impact. It does not yet comprehensively assess achievements or failures and arguably does not even yet create a database which would enable future assessments. Secondly, it is important to know that NAZCA has a strong regional bias. More than 6700 of the total of 11,350 city members are Spanish and Italian cities accumulated via a broad membership of city network aggregators in these countries, namely in this case the city network Global Covenant of Mayors for Climate and Energy.16

Ibid. 626–7. Van Asselt, Mehling and Kulovesi (Chapter 2 of this book). 13 Even though Brazil’s first NDC, presented in 2016, explicitly mentioned cities, the following updates, presented in 2020 and 2021, no longer refer to cities’ climate action. 14 NAZCA, ‘Cities’, Global Climate Action (2022) https://​climateaction​.unfccc​.int/​accessed 20 June 2022; United Nations Climate Change, ‘Marrakesh Partnership for Global Climate Action’ (2016) https://​unfccc​.int/​files/​paris​_agreement/​application/​pdf/​marrakech​_partnership​_for​_global​_climate​ _action​.pdf accessed 20 June 2022. 15 See NAZCA (n. 14). 16 Cathrin Zengerling, ‘Städte im Polyzentrischen Klimaschutzregime’ (2020) 31 ZUR 3. 11 12

Cities and climate change mitigation law  401 The last decade showed a growth in international city networks engaged with climate change mitigation action and their membership.17 For example, the Global Covenant of Mayors for Climate and Energy, C40 Cities Climate Leadership Group, and ICLEI are among these international city networks. A growing field of research grapples with the dynamics, politics and effects of city networks.18 City networks have the potential to catalyse transnational climate mitigation efforts in international cities. One potential strength is the link between city networks and the Paris regime. Several city networks function as aggregators under the NAZCA platform and could thus contribute to an enlarged membership, ambitious GHG emission reduction targets, more streamlined reporting and accounting as well as potential future assessment.19 However, being a member of a city network does not imply that a city has committed to specific GHG emission reduction targets. Only subsidiary programmes within the city networks, such as ‘Deadline 2020’ of C40 or the initiative ‘Under2MoU’, go along with ambitious targets aligned with the well-below 2 °C goal of the Paris Agreement.20 A study of a sample of 12 member cities of the C40 network could not establish that the measures proposed by those cities significantly go beyond the status quo and thus will most likely not unfold transformative changes in urban GHG emissions.21 In addition, cities’ GHG inventories and accounting methods are very different and it does not seem feasible to calculate aggregated progress in cities’ or city networks’ mitigation efforts on a reliable data basis as of now.22 Another challenge is the strong regional bias towards Global North cities.23

2

CLIMATE CHANGE MITIGATION IN INTERNATIONAL CITIES

In the discussion that follows, we present how urban climate change mitigation efforts are governed within the legal framework of national jurisdictions. We start with an introduction into key institutional, strategic, instrumental and sectoral climate mitigation approaches as found in many cities (2.1), followed by a comparative review of the legal scope of action for urban climate governance in the countries of our case studies – Brazil, South Africa and

Kathryn Davidson and others, ‘Reconfiguring Urban Governance in an Age of Rising City Networks: A Research Agenda’ (2019) 56 Urban Stud 3540, 3541. 18 Ibid.; David J. Gordon and Craig A. Johnson, ‘City-Networks, Global Climate Governance, and the Road to 1.5 °C’ (2018) 30 Curr Opin Env Sust 35; Milja Heikkinen, Tuomas Ylä-Anttila and Sirkku Juhola, ‘Incremental, Reformistic or Transformational: What Kind of Change Do C40 Cities Advocate to Deal with Climate Change?’ (2018) 21 J Environ Policy Plan 1; Kristine Kern, ‘Cities as Leaders in EU Multilevel Climate Governance: Embedded Upscaling of Local Experiments in Europe’ (2019) 28 Environ Politics 125; Taedong Lee and Ha Yoon Jung, ‘Mapping City-to-City Networks for Climate Change Action: Geographic Bases, Link Modalities, Functions, and Activity’ (2018) 182 J Clean Prod 96; Zengerling (n. 16). 19 Zengerling (n. 16); Gordon and Johnson (n. 18). 20 Ibid. 21 Heikkinen, Ylä-Anttila and Juhola (n. 18). 22 Zengerling (n. 16); Gordon and Johnson (n. 18). 23 Milja Heikkinen and others, ‘Transnational Municipal Networks and Climate Change Adaptation: A Study of 377 Cities’ (2020) 257 J Clean Prod https://​doi​.org/​10​.1016/​j​.jclepro​.2020​.120474 accessed 20 June 2022; Zengerling (n. 16). 17

402  Research handbook on climate change mitigation law Germany (2.2). At the local scale, we scrutinise urban climate mitigation action in Cape Town, São Paulo and Hamburg (2.3). Finally, we discuss our findings from a comparative perspective (2.4). 2.1

Institutional, Strategic, Instrumental and Sectoral Approaches

In cities, structured climate action usually starts with the appointment of a local institution in charge of climate issues,24 either exclusively or in combination with other scopes fairly connected with climate change, such as environmental protection, local energy management, urban planning or local sustainable development. Such local climate institutions are commonly designed in the form of climate commissions: collective, participatory bodies, integrated by members of the local administration, the private sector, academia, and civil society. The powers given to these local climate commissions present a wide variation by jurisdiction, ranging from merely advisory functions to planning, implementation and control attributions. However, it is possible to envisage a certain pattern, in which local climate commissions play a central role in the local climate policy set up, especially in the establishment of policy guidelines and goals and, eventually, in the drafting of local climate action plans. In this context, strategic climate action planning in cities also varies greatly, in content as well as in format. A comprehensive framework would ideally encompass both mitigation and adaptation goals and strategies,25 grounded on the findings of GHG inventories and local climate risks and vulnerabilities assessments,26 as well as implementation, control, and monitoring tools, gathered and organised in a specific climate action plan. Regarding mitigation and its effectiveness at the local scale, it is crucial that the city’s strategies and goals are coherent with the GHG inventory findings.27 Cities’ carbon footprints can vary greatly, due to various factors, such as location, size, and morphology, as well as demographic, environmental and economic traits.28 In this regard, it is important to note that local GHG inventories can basically follow two different methodologies: traditional source-based or cutting-edge consumption-based emissions accounting. Source-based inventories measure GHG emissions produced by key sources, or sectors, located within a city’s boundaries.29 Currently, the most widespread sector-based method is the Global Protocol for Community-Scale GHG Emissions Inventory – GPC.30 Roughly, GPC inventories measure 24 Jan Corfee-Morlot and others, ‘Cities, Climate Change and Multilevel Governance’ (2009) OECD Environment Working Papers https://​www​.oecd​.org/​env/​cc/​44242293​.pdf accessed 20 June 2022. 25 Isabelle Anguelovski and JoAnn Carmin, ‘Something Borrowed, Everything New: Innovation and Institutionalization in Urban Climate Governance’ (2011) 3 Curr Opin Environ Sustain 169. 26 Ingrid Baker and others, ‘Local Government Response to the Impacts of Climate Change: An Evaluation of Local Climate Adaptation Plans’ (2012) 107 Landsc Urban Plan 127. 27 Michael R. Boswell, Adrienne I. Greve and Tammy L. Seale, ‘An Assessment of the Link between Greenhouse Gas Emissions Inventories and Climate Action Plans’ (2010) 76 JAPA 451. 28 David Dodman, ‘Blaming Cities for Climate Change? An Analysis of Urban Greenhouse Gas Emissions Inventories’ (2009) 21 Environ Urban 185; Kennedy, Ibrahim and Hoornweg (n. 5). 29 Alexander D’Avignon and others, ‘Emission Inventory: An Urban Public Policy Instrument and Benchmark’ (2010) 38 Energy Policy 4838. 30 World Resources Institute, C40 Cities Climate Leadership Group and ICLEI – Local Governments for Sustainability, ‘Greenhouse Gas Protocol. Global Protocol for Community-Scale Greenhouse Gas Emissions Inventories. An Accounting and Reporting for Cities’ (2014) https://​ghgprotocol​.org/​sites/​ default/​files/​standards/​GHGP​_GPC​_0​.pdf accessed 20 June 2022. The GPC provides for a methodology

Cities and climate change mitigation law  403 GHG emissions distributed amongst four sectors: transportation, stationary energy use, waste management and agriculture, forestry, and other land use. Consumption-based inventories, on the other hand, focus on the emissions attributable to the consumption of goods and services by city residents.31 Through this method, GHG emissions are sorted by consumption category and not by emission source, allowing for the accounting of all emissions imputable to consumption sectors located within the city’s boundaries, i.e. food and drink, clothing, construction, etc., even if the correspondent emission sources are located outside the city’s borders. A study32 investigating the consumption-based GHG emissions from 79 cities found that 63 of the investigated cities, mostly located in Europe, North America and Oceania, qualified as ‘consumer’ cities, with larger consumption-based than sector-based GHG emissions, whereas the remaining 16, located mostly in Asia and Africa, qualified as ‘producer’ cities, presenting larger sector-based than consumption-based GHG emissions. The study, however, does not advocate replacing the sector-based with the consumption-based method, but rather points out their mutual complementarity.33 It suffices to highlight, at this point, that GHG emissions inventories provide cities with a road map to identify mitigation opportunities stemming from various policy sectors within the local jurisdiction, such as mobility, waste management, energy supply and efficiency, housing, nutrition and land use management. In short, the emissions inventories must set the ground for the local climate plan to unfold the detected mitigation opportunities into intersectoral strategies and goals, appointing the tools to be used in the implementation, control, and assessment of those goals. As the IPCC34 underlines, urban planning must play a leading role in the set-up of 1.5 °C consistent pathways, through measures ranging from urban expansion control to sustainable building options and compact, pedestrianised cities. In this sense, land use plans, regulations and tools must also interconnect with the local climate plans to operate as mitigation drivers, rather than emissions boosters.

to account for scope 1 (within a city’s boundaries), scope 2 (outside a city’s boudaries but relevant for, e.g. urban energy provision) and scope 3 (potentially global upstream GHG emissions). Scope 3 has an overlap with consumption-based accounting. However, the vast majority of cities applying the GPC method only account for scope 1 and scope 2 emissions. For a recent study on the importance of including scope 3 emissions, see Thomas Wiedmann and others, ‘Three‐Scope Carbon Emission Inventories of Global Cities’ (2020) J Ind Ecol https://​onlinelibrary​.wiley​.com/​doi/​abs/​10​.1111/​jiec​.13063 accessed 20 June 2022. 31 Hogne Nersund Larsen and Edgar G. Hertwich, ‘The Case for Consumption-Based Accounting of Greenhouse Gas Emissions to Promote Local Climate Action’ (2009) 12 Environ Sci Policy 791. 32 C40 Cities, ‘Consumption-Based GHG Emissions of C40 Cities’ (2018) https://​www​.c40​.org/​ researches/​consumption​-based​-emissions accessed 20 June 2022. 33 See also Wiedmann and others (n. 30); and P.-P. Pichler and others, ‘Reducing Urban Greenhouse Gas Footprints’ (2017) 7 Sci Rep 1. 34 Amir Bazaz and others, Summary for Urban Policymakers – What the IPCC Special Report on 1.5C Means for Cities (Indian Institute for Human Settlements 2018) https://​doi​.org/​10​.24943/​SCPM​ .2018 accessed 20 June 2022.

404  Research handbook on climate change mitigation law 2.2

Scope of Action in Different National Jurisdictions

Cities’ climate mitigation efforts are significantly shaped by the cities’ legal scope of action as defined in national and federal state jurisdictions. In a comparative review we present some key elements of these legal conditions: the constitutional frame (A), selected national legislation equipping municipal action (B) and financing of cities (C). Finally, we highlight that there is plenty of room for urban mitigation efforts beyond this legal scope of action, mostly depending on political will and financial capacities (D). A Constitutional framework According to the 1988 Constitution,35 Brazil is a federation on three levels, integrated as the Federal Union, the federative states, and municipalities. Cities, more specifically, are under the jurisdiction of municipalities. There are 26 federative states and 5570 municipalities, of which only 49 are cities with a population over 500,000 inhabitants, according to estimates for the year 2020. All federative entities are given specific powers, or competences, by the Constitution. These competences encompass both shared and exclusive powers as well as legislative and executive attributions.36 As federative entities, municipalities are granted political, administrative, executive and fiscal autonomy, which means they can adopt laws, set up and manage their own administrative structure, exercise the legislative and executive powers granted by the Constitution and manage their own budget, including the creation and enforcement of local taxes. Within the constitutional distribution of powers framework, Brazilian municipalities have the powers to act on environmental protection and preservation at the local level – including climate change – and to supplement national environmental laws as per their particular (local) interests. Urban planning is essentially a municipal issue, with municipalities being exclusively competent to amend their master plans and to promote adequate territorial planning and land use management, drafting their own zoning laws, land use regulations and building codes. However, the Federal Union has the powers to set urban planning guidelines through the adoption of national laws, such as the 2001 Brazilian Statute of the City. Key sectoral urban policies, such as housing, mobility and sanitation, are shared competences, allowing for all federative entities to act, accordingly to their particular interest (national, state and local). In Germany, the federal state system has two levels, the federal union (‘Bund’) and 16 federal states (‘Länder’), including three city-states (Berlin, Bremen and Hamburg). Municipalities are not the third level of this system but a regional authority of the federal state to which their territory belongs. According to article 28 section 2 of the German Constitution (‘Grundgesetz’) they have a right to local self-government (‘Recht der kommunalen Selbstverwaltung’) which empowers them to regulate and manage local affairs under their own responsibility. This includes legislative as well as administrative functions, including the power to enact – within the limits of law – municipal ordinances and to raise and spend local taxes. In addition to local self-government, they fulfil state functions in certain areas defined by the Constitution, national and state legislation. Currently, there are about 10,750 municipalities in Germany, 14 of them with more than 500,000 inhabitants. Constitution of the Federative Republic of Brazil 1988. Fabio Konder Comparato, ‘The Economic Order in the Brazilian Constitution of 1988’ (1990) 38 Am J Comp L 753. 35 36

Cities and climate change mitigation law  405 The right to local self-government as provided for in the German Constitution is limited to ‘local affairs’. Typical examples of this local scope of action are the administration of municipal companies, management of local traffic, water and energy supply, safety of nutrition, housing supply, local police, fire protection, education, health, etc.37 The terminology of ‘local affairs’ requires a genuine local link of a specific theme that goes beyond a mere political interest. Since climate change is a global challenge, there was some dispute over whether municipalities can engage in climate mitigation, especially via instruments of land use planning – one of their key areas of competence. This dispute was settled via court rulings and the 2011 Climate Amendment to the Federal Building Code in favour of municipalities. In line with these decisions, municipalities enjoy a degree of competence over climate change. Municipalities may, within the limits of higher-ranking law, utilise land use plans and other instruments to protect the climate, for example. To strategically steer such efforts, many German municipalities enacted climate action plans. Since the constitutional reform of 2006, the German federal union may not transfer new tasks to municipalities. Thus, today only the federal states can assign new responsibilities to municipalities via parliamentary laws and only if an assignment goes along with appropriate funding. Within the last decade, more than half of the German federal states have enacted state climate protection laws and most of them in one way or another support and task municipal climate change mitigation efforts within their territory. South Africa has a federal system of government. There are three spheres of government (national, provincial and local) recognised in the Constitution.38 The entire Chapter 7 of the Constitution is dedicated to protecting different aspects of local government.39 A significant feature of post-apartheid constitutional reform is the recognition of local government as a distinct sphere of government. Unlike the past, when local government was subject to very stringent control by national and provincial government, local government, made up of 257 municipalities, enjoys a certain degree of autonomy under the Constitution. Local government enjoys legislative and executive authority that is exercised through democratically elected municipal councils. Each municipality has the right to govern, on its own initiative, the local government affairs of its community, subject to national and provincial legislation that complies with the Constitution. Although national and provincial governments have powers to supervise and regulate how municipalities discharge their constitutional duties, they are forbidden from compromising or impeding the ability or right of a municipality to exercise its powers or perform its functions.40 In addition, local government has a broader developmental role entrenched in the Constitution. In terms of this, municipalities must provide services to communities in a sustainable manner, promote a safe and healthy environment, promote socio-economic development, encourage community participation in local governance, and contribute towards realising the variety of rights in the Bill of Rights, including the section 24 environmental right.41 Furthermore, each municipality has the power to structure and manage its administration, budgeting and planning processes in a manner that promotes

39 40 41 37 38

See, for example, the list in art. 83 of the Constitution of the Free State of Bavaria, 1946. Section 40(1) of the Constitution of the Republic of South Africa 1996. Sections 151 to 164. Joint reading of ss. 151, 154, 100 and 139. See ss. 7(2), 8(1) and 152.

406  Research handbook on climate change mitigation law socio-economic development and is responsive to basic local needs, according to section 153. This speaks to the administrative autonomy of municipalities. In line with its legislative, executive and administrative powers, Schedules 4B and 5B of the Constitution contains a list of matters that fall within the competences of municipalities. In terms of section 156 of the Constitution, each municipality has executive and legislative authority in respect of, and has the right to administer, the local government matters listed in Schedules 4B and 5B of the Constitution and any other matter assigned to it by national or provincial legislation.42 The listed areas of competences include: environmental health; air pollution; town planning; building regulations; the provision of water and sanitation services; municipal public transport; harbours; beaches and amusement facilities; storm water management systems in built-up areas; refuse removal, refuse dumps and solid-waste disposal; and emergency services. These are areas where municipalities have exclusive executive and legislative powers and confirm the distinctive nature of local government. Other spheres of government can regulate how municipalities exercise these powers and functions by developing broad overarching guidelines through legislation and executive policies. Any regulation that intrudes on the autonomy of local government is unconstitutional. The powers and functions bestowed on municipalities can only be taken away through an amendment of the Constitution. The self-governing powers of municipalities in relation to these areas show that they can adopt and implement a variety of governance tools such as by-laws, policies and strategic plans to further climate change mitigation-related goals in these areas. The duties emanating from the Bill of Rights have profound implications on the powers and functions of municipalities as they have been purposefully interpreted to give local government the leeway required to take local action that it deems necessary to address local problems, provided that they do not contradict efforts of national and provincial governments – where such action falls into constitutionally defined areas of competence of these higher spheres of government.43 This has played out well in the context of the environmental right. In terms of section 24 of the Constitution, everyone has the right to an environment that is not harmful to their health or well-being; and the state is obliged to protect the environment, for the benefit of present and future generations, through adopting and implementing legislation and other measures that: prevent pollution and ecological degradation; promote conservation; and secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social development.44 In Le Sueur and Another v eThekwini Municipality and Others,45 the applicants argued that the City of eThekwini lacked constitutional competence to amend its town planning scheme in a manner that sought to promote biodiversity conservation within its jurisdiction on the ground that the ‘environment’ was an area of competence of national and provincial government in Schedule 4A of the Constitution. The applicants urged the Court to declare the city’s action illegal and unconstitutional. The Court rejected the applicants’ argument for being unduly narrow and incorrect. The Court reasoned that as an organ of state, the municipality was obliged to respect, protect, promote and fulfil the section 24 con-

Section 156(1) and (2). Oliver Fuo, ‘The Courts and Local Government in South Africa’ in Yonatan T. Fessha and Karl Kössler (eds), Federalism and the Courts in Africa: Design and Impact in Comparative Perspectives (Routledge 2020) 108–10. 44 See ss. 24(a) and (b)(i)–(iii). 45 (9714/11) [2013] ZAKZPHC 6 (30 January 2013). 42 43

Cities and climate change mitigation law  407 stitutional environmental right. The Court reasoned that the obligation imposed by section 24 of the Constitution includes biodiversity conservation. The Court indicated that a joint reading of several constitutional provisions46 show that Schedules 4 and 5 are not the only source of governmental responsibilities and functions. These provisions show that municipalities can legislate and adopt and implement policies to give effect to section 24 of the Constitution to the extent that this complements, and does not conflict with, the efforts of national and provincial government.47 Therefore, local government has wide powers in terms of section 24 of the Constitution and its broad developmental mandate that gives cities the leeway to do anything they deem reasonable in order to mitigate the effects of climate change provided that they do not violate the Constitution. Thus, cities have a direct constitutional obligation to respond to the causes of, and challenges posed by climate change.48 They could be held accountable for failing to adopt and implement measures to mitigate climate change.49 The comparative overview shows that the constitutions of Brazil, Germany and South Africa establish municipalities as local governmental units with their own legislative, executive and administrative powers and a rather broad field of competences. Under all constitutions, municipalities may engage in climate change mitigation. Whereas this engagement is voluntary in Brazil and Germany, in South Africa there is a constitutional duty of municipalities to mitigate climate change. In addition, municipalities in all three countries are subject to regulation by ‘higher’ levels of government. B Key national and state legislation equipping municipal action Municipal climate change mitigation significantly depends on the ‘toolbox’ provided for mostly by national and state laws. In the paragraphs that follow, we aim to give a concise overview of the key instruments that municipalities may use to reduce their GHG emissions. In Brazil, the National Environmental Policy Law,50 enacted in 1981, sets general guidelines and regulates all the essential environmental tools, such as environmental licensing and impact studies, to be further implemented by municipalities at the local level. In terms of urban planning, as previously mentioned, national laws are responsible for setting the basic guidelines for local action by municipalities. The pivotal legislation in Brazilian planning law is the Statute of the City,51 enacted in 2001. This National Urban Policy Law sets guidelines and standards for urban planning, imposes minimum requirements for local master plans, outlines the basic framework for popular participation and regulates the fundamental land use tools to be applied by municipalities.52 Other national laws also set sectoral policy guidelines, to be further complemented by municipalities at the local level, such as

Sections 7(2), 24, 152(d), 40(1) and 41. Oliver Fuo, ‘Role of Courts in Interpreting Local Government’s Environmental Powers in South Africa’ (2015) CJLG 17, 26–33. 48 Du Plessis and Kotze (n. 2) 152. 49 Based on joint reading of ss. 7(2), 8(1), 24 and 152(d). 50 Brazil, ‘Lei nº 6.938, de 31 de Agosto de 1981’ (1981) http://​www​.planalto​.gov​.br/​ccivil​_03/​leis/​ l6938​.htm accessed 20 June 2022. 51 Brazil, ‘Lei nº 10.257, de 10 de Julho de 2001’ (2001) http://​www​.planalto​.gov​.br/​ccivil​_03/​leis/​ leis​_2001/​l10257​.htm accessed 20 June 2022. 52 Nir Mualam and Debora Sotto, ‘From Progressive Property to Progressive Cities: Can Socially Sustainable Interpretations of Property Contribute toward Just and Inclusive City-Planning? Global Lessons’ (2020) 12 Sustainability 4472. 46 47

408  Research handbook on climate change mitigation law the 2007 National Sanitation Policy,53 the 2010 National Policy on Waste Management54 and the 2012 National Urban Mobility Policy.55 Municipalities must follow the guidelines set by national legislation when they adopt their own local master plans, sectoral plans, zoning laws and building codes. According to the Brazilian Constitution, master plans are mandatory for all municipalities with a minimum population of 20,000 inhabitants. The same municipalities are legally obligated to draft urban mobility plans. The drafting of sanitation and waste management plans is also legally mandatory for all municipalities, who must comply with this obligation to access federal funding for infrastructure projects in these areas. In relation to climate change, a National Climate Change Policy Law56 was enacted in 2009. This national law sets guidelines, strategies and goals that are valid nationwide, providing the legal grounds for states and municipalities to draft their own regional and local climate policies and plans.57 The National Climate Change Policy Law provides the legal basis for Brazil’s NDC58 as well as for the country’s 2016 National Adaptation Plan.59 Brazilian municipalities have the powers to set their own climate policy laws and climate action Plans, but are not legally or constitutionally obligated to do so.60 In this context, Brazilian municipalities’ engagement on climate action is largely dependent on the political will of the city mayors and on the cities’ membership of international networks and decentralised cooperation initiatives, such as ICLEI and the C40 Group.61 Although local government in South Africa is subject to extensive regulation through national legislation, there are few statutes that directly provide for a substantive environmental role that is relevant to climate change mitigation.62 The Local Government: Municipal Systems Act 32 of 2000, which provides for the general duties and governance principles of local 53 Brazil, ‘Lei nº 11.445, de 5 de Janeiro de 2007’ (2007) http://​www​.planalto​.gov​.br/​ccivil​_03/​ _ato2007​-2010/​2007/​lei/​l11445​.htm accessed 20 June 2022. 54 Brazil, ‘Lei nº 12.305, de 2 de Agosto de 2010’ (2010) http://​www​.planalto​.gov​.br/​ccivil​_03/​ _ato2007​-2010/​2010/​lei/​l12305​.htm accessed 20 June 2022. 55 Brazil, ‘Lei nº 12.587, de 3 de Janeiro de 2012’ (2012) http://​www​.planalto​.gov​.br/​ccivil​_03/​ _ato2011​-2014/​2012/​lei/​l12587​.htm accessed 20 June 2022. 56 Brazil, ‘Lei nº 12.187, de 29 de dezembro de 2009’ (2009) http://​www​.planalto​.gov​.br/​ccivil​_03/​ _ato2007​-2010/​2009/​lei/​l12187​.htm accessed 20 June 2022. 57 Viviane Romeiro and Virginia Parente, ‘Climate Change Regulation in Brazil and the Role of Subnational Governments’ in Ronaldo Seroa Da Motta and others (eds), Climate Change in Brazil – Economic, Social and Regulatory Aspects (Ipea 2011). 58 Ministério do Meio Ambiente, ‘NDC do Brasil’ (2016) https://​ www​ .mma​ .gov​ .br/​ seguranca​ -quimica/​convencao​-de​-estocolmo/​item/​10984​-ndc​-do​-brasil accessed 20 June 2022. 59 Ministério do Meio Ambiente, ‘Plano Nacional de Adaptação’ (2016) https://​www​.mma​.gov​.br/​ clima/​adaptacao/​plano​-nacional​-de​-adaptacao accessed 20 June 2022. 60 See, for instance, Eduardo Baltar de Souza Leão and others, ‘Carbon Accounting Approaches and Reporting Gaps in Urban Emissions: An Analysis of the Greenhouse Gas Inventories and Climate Action Plans in Brazilian Cities’ (2020) 245 J Clean Prod https://​doi​.org/​10​.1016/​j​.jclepro​.2019​.118930 accessed 20 June 2022. 61 Debora Sotto and others, ‘Aligning Urban Policy with Climate Action in the Global South: Are Brazilian Cities Considering Climate Emergency in Local Planning Practice?’ (2019) 12 Energies 3418; Laura Silvia Valente de Macedo and Pedro Roberto Jacobi, ‘Subnational Politics of the Urban Age: Evidence from Brazil on Integrating Global Climate Goals in the Municipal Agenda’ (2019) 5 Palgrave Commun 1. 62 South Africa is in the process of adopting climate change legislation that will provide a direct role for municipalities in climate change mitigation. See section 2 of the Climate Change Bill 2021.

Cities and climate change mitigation law  409 government, requires municipalities to provide services in an environmentally and financially sustainable manner.63 In addition, the Act obliges municipalities to contribute towards the realisation of the constitutional environmental right.64 Chapter 5 of the Act prescribes the use of strategic planning as the main tool for realising the developmental mandate of local government. Each municipal council must adopt an integrated development plan (IDP) for the development of the municipality within a prescribed period shortly after the start of its elected term.65 In terms of the Systems Act, an IDP must contain the following core components: the municipal council’s vision for long-term development of the municipality, with an emphasis on the municipality’s most critical development and internal transformation needs; an assessment of the existing level of development in the municipality, which includes an identification of the communities that do not have access to basic services; the council’s development priorities and objectives for its elected term; the council’s development strategies; a spatial development framework (SDF) which must include the provision of basic guidelines for a land use management system for the municipality in terms of the Spatial Planning and Land Use Management Act 16 of 2013 (SPLUMA); a disaster management plan uner the terms of the Disaster Management Act 57 of 2002; a financial plan under the terms of the Local Government: Municipal Finance Management Act 56 of 2003; an integrated energy plan (IEP) under the terms of the White Paper on the Energy Policy of South Africa;66 a water services development plan (WSDP) under the terms of section 3(3) of the Water Services Act 108 of 1997; a waste management plan (WMPs) under the terms of section 11(4) of the National Environmental Management: Waste Act 59 of 2008; and air quality management plans (AQMPs) under the terms of section 15(2) of the National Environmental: Air Quality Act 39 of 2004; as well as key performance indicators and performance targets.67 Once the IDP is adopted by a municipal council, it serves as an operational guideline to the legislative and executive ‘branches’ of a municipality. As a strategic plan, the IDP should, thus, serve as the blueprint of a municipality in making legislative and executive decisions that are in line with its developmental mandate. The multi-sectoral nature of the IDP suggests that it has some potential as a tool that can be used to address climate change-related concerns.68 All environmental legislation in South Africa must be interpreted, administered and implemented in line with the principles contained in the National Environmental Management Act 107 of 1998 (NEMA), which remains the country’s overarching environmental framework legislation. The NEMA also binds municipalities and applies to all actions that may significantly affect the environment.69 The NEMA prescribes that environmental management must place people and their needs at the forefront of its concerns and serve their physical, psychological, developmental, cultural and social interests equitably.70 It further prescribes that development must be socially, environmentally and economically sustainable based on a consideration of all Sections 73(2)(c) and (d) of the Local Government: Municipal Systems Act 32 of 2000. Section 4(2)(j). 65 Section 25. 66 Department of Minerals and Energy, ‘White Paper on the Energy Policy of the Republic of South Africa’ (1998) http://​www​.energy​.gov​.za/​files/​policies/​whitepaper​_energypolicy​_1998​.pdf accessed 20 June 2022, 72-3. 67 See generally s. 26 of the Systems Act. 68 Du Plessis and Kotze (n. 2) 158. 69 Section 2 of the National Environmental Management Act 107 of 1998. 70 Section 2(2). 63 64

410  Research handbook on climate change mitigation law relevant factors.71 The Act further stresses that environmental management must be integrated, acknowledging that all aspects of the environment are linked and interrelated, and must take into account the effects of decisions on all aspects of the environment and all people in the environment by pursuing the selection of the best practicable environmental option.72 The NEMA prescribes that the social, economic and environmental impacts of activities, including disadvantages and benefits, must be considered, assessed and evaluated, and decisions must be appropriate in the light of such consideration and assessment.73 In terms of equality, the NEMA provides for the principles of environmental justice, public participation, transparent access to information, environmental education, the polluter-pays principle, and the public trusteeship doctrine. The NEMA enjoins municipalities to give special attention to sensitive, vulnerable, highly dynamic or stressed ecosystems such as coastal shores, estuaries, wetlands and similar systems in planning and management procedures.74 From this diverse set of principles, it appears that although the NEMA is specifically silent on climate change, significant guidance is given to municipalities in executing their environmental functions to address climate change-related concerns. Thus, the principles remain useful in guiding the climate change mitigation efforts of municipalities. The National Building Regulations and Building Standards Act 103 of 1977 (NBR Act) is a pre-constitutional era law but relevant to the extent that it regulates approval of building plans. In terms of the NBR Act, it is a criminal offence to erect a building without municipal approval of a relevant building plan and specifications. Due to the constitutional competence of local government over building regulations,75 municipalities can impose climate change-related considerations that must be met before building plans are approved. These municipal powers are further complemented by their town planning powers. In terms of the Spatial Planning and Land Use Management Act 16 of 2013 (SPLUMA), municipalities have a duty to take into account climate change considerations in spatial planning and land use management.76 The National Environmental Management: Air Quality Act 39 of 2004 (NEMAQA) regulates air quality management in South Africa. It obliges industries whose operations involve activities listed in a government gazette in terms of section 21 of the Act to apply for atmospheric emission licences before conducting such activities. In terms of NEMAQA, municipalities are responsible for ensuring compliance with air quality standards and each municipality must adopt and implement an air quality management plan. The listing of activities in terms of the NEMAQA ensures that municipalities are aware of all significant sources of identified atmospheric emissions, including GHG emissions. There are several sector-specific laws that can inform climate change mitigation measures at the local government level that cannot be discussed in this chapter due to its limited scope.77 For details of relevant factors, see ss. 2(3) and (2)(4)(a). Section 2(4)(b). 73 Section 2(4)(b)(i). 74 Section 2(4)(b)(i). 75 Schedule 4B of the South African Constitution. 76 Sections 6 and 7 of the Spatial Planning and Land Use Management Act 16 of 2013. 77 See, for example, the National Environmental Management: Biodiversity Act 10 of 2004; National Environmental Management: Integrated Coastal Management Act 24 of 2008; National Environmental Management: Protected Areas Act 57 of 2003; and National Environmental Management: Waste Act 59 of 2008. 71 72

Cities and climate change mitigation law  411 Although the Department of Environmental Affairs (DEA) has adopted several climate change policies in South Africa, since 2004, in line with regulatory developments at the international level,78 the most comprehensive policy is the National Climate Change Response Policy (NCCRP) of 2011 (also known as the White Paper). One of the government’s objectives expressed in the White Paper is to ‘Make a fair contribution to the global effort to stabilise GHG concentrations in the atmosphere at a level that avoids dangerous anthropogenic interference with the climate system within a timeframe that enables economic, social and environmental development to proceed in a sustainable manner’. Embedded in this objective is the country’s commitment to address concerns of climate change mitigation in line with the objectives of Article 2 of the UNFCCC.79 As the country’s overarching policy framework on climate change, the direction given by the White Paper guides municipalities in their formulation of context-suited mitigation policies. Due to the failure of several attempts at a unification, Germany has no overarching national environmental law but a broad range of sectoral environmental laws, for example, in the fields of air pollution, water, nature protection, waste, etc., which partly also frame municipal tasks. An example is the Federal Emission Protection Law (‘Bundesimmissionsschutzgesetz’) implementing the EU Air Quality Directive. It requires municipalities to set up air quality plans if the concentration of certain air pollutants in their territorial scope is not in line with the limit values. For the field of climate change there is no such direct regulation. The 2019 Federal Climate Protection Law mentions municipalities only with regard to consultation processes. Considering that the constitution prohibits the federal union from prescribing new municipal tasks it is not possible, for example, to oblige German municipalities to come up with climate action plans in line with the German, EU and Paris Agreement targets via a national law. Nevertheless several state climate laws explicitly support and task municipal climate change mitigation.80 One of the most central municipal powers is their planning autonomy, exercised via land use planning. Key instruments and legal requirements of land use planning are regulated in the Federal Building Code (FBC). According to section 1(5) of the Building Code, land use plans shall ensure sustainable urban development and contribute to climate change mitigation and adaptation. To strategically steer their climate-related efforts many German municipalities enacted climate action plans. They are not legally binding but have to be considered in the balancing process of actual land use planning.81 In addition to structural82 and land use plans,83 municipalities may use urban development contracts84 or specific instruments tailored to urban renewal85 to lower their local GHG emissions. In practice, and limited to land owned

78 See A. Gilder and E. Swanepoel, ‘Climate Change’ in N.D. King, H.A. Strydom and F.P. Retief (eds), Fuggle & Rabie’s Environmental Management in South Africa (3rd edn, Juta 2018) 761–2. 79 Ibid. 762. Other national policies include: the National Climate Change Adaptation Strategy (2019); and South Africa’s Low Emission Development Strategy (2020). 80 Zengerling (n. 16). 81 Section 1(6) Nr. 7(g) of the German Federal Building Code, available at https://​www​.gesetze​ -im​-internet​.de/​bbaug/​; English translation available at: https://​germanlawarchive​.iuscomp​.org/​?p​=​649 accessed 20 June 2022. 82 Section 5. 83 Section 9. 84 Section 12. 85 Section 136f.

412  Research handbook on climate change mitigation law by municipalities, private property purchase agreements are a flexible and important tool to ensure low-carbon urban development.86 Further examples of instruments provided by national and state legislation are municipal orders of compulsory connection and usage of heating grids (e.g. via state-level municipal codes) and municipal options to privilege e-mobility in local traffic (via the Federal E-Mobility Law). Although this overview shows heterogeneous approaches to equip municipal climate mitigation efforts via national and state legislation it becomes clear that in all three countries the ‘climate protection toolbox’ for municipalities has been enhanced over the last decade and offers manifold instruments for local low carbon development. None of the countries obliges municipalities to enact climate action plans or reach certain GHG emission reduction targets. The level of ambition is left to local political will. C Financing of cities’ climate mitigation action In addition to legal competences and instruments, the factual municipal scope of action to mitigate climate change is significantly shaped and limited by the respective local financial capacities. Due to long catalogues of responsibilities and few sources of income, many municipalities struggle to finance effective climate change mitigation and are – arguably – dependent on new, external, funding sources earmarked for municipal GHG emission reduction efforts. Brazilian municipalities have the powers to create and enforce their own taxes, within the limits set by the Brazilian Constitution. Property tax and services tax are the main sources of taxation revenue. However, with the exception of a few large cities, Brazilian municipalities are overall largely dependent on the breakdown of federal and state tax collection proceeds, as the resources levied by local taxes are insufficient to provide for local services and infrastructure. This situation is a direct by-product of the Brazilian federalism, in which social services are highly decentralised, whereas taxation revenues are strongly concentrated in the Federal Union.87 Municipalities also have the powers to manoeuvre other financial tools to levy resources, either as compensation for environmental damage or as payment for the granting of special development rights. In this case, the resources are directed to special funds, separate from the general budget, and dedicated to environmental upgrading and urban infrastructure. Municipalities also have access to federal and state transfers, some determined by the Constitution, others conditioned by the adherence to special investment programmes. The latter is the case for the National Climate Fund, created by the National Climate Change Policy to finance mitigation and adaptation projects through refundable and non-refundable grants. According to the National Bank for Economic and Social Development (BNDES88) 86 See for example, regarding e-mobility at HafenCity Hamburg, the largest inner-city urban development project in Europe: Cathrin Zengerling, ‘E-Quartier Hamburg – Elektromobilität in Urbanen Wohnquartieren, Rechtsgutachten (Projekt der Modellregion Hamburg, gefördert durch das BMVBS)’ (HafenCity Universität, November 2017) http://​edoc​.sub​.uni​-hamburg​.de/​hcu/​volltexte/​2018/​ 423/​accessed 20 June 2022. 87 Marcelo Piancastelli, ‘Fiscal Federalism and Fiscal Effort in Brazil: The Dilemma of the Tax on Urban Territorial Ownership (IPTU)’ in Constantino Cronemberger Mendes, Diana Chebenova and Ana Carolina Lorena (eds), 30 Years of the Brazilian Federal Constitution: Perspectives for Brazilian Federalism (Ipea 2019) 95–108. 88 Banco Nacional de Desenvolvimento Econômico e Social, ‘Relatórios’ (2020) https://​www​.bndes​ .gov​.br/​wps/​portal/​site/​home/​transparencia/​fundos​-governamentais/​fundo​-nacional​-sobre​-mudan​%C3​ %A7a​-do​-clima​-fnmc/​relatorios​-fnmc accessed 20 June 2022.

Cities and climate change mitigation law  413 the National Climate Fund’s average portfolio from 2013 to the first half of 2020 was around R$218.6 million, approximately €33 million. The German Constitution guarantees fiscal autonomy to the municipalities. Overall, there are mainly four sources of revenue.89 The most important one is a municipal share of taxes raised at the national and state levels. The second source of income is local taxes and other charges raised by the municipalities themselves, including local business and land taxes. The third source of income is the so-called municipal financial compensation based on state tax income shared among states and municipalities in a complex compensation mechanism. Finally, there is a variety of other funding sources ranging from local traffic fines to national investment programmes. German national climate policies for municipalities are limited to financial incentive programmes. At the heart of these programmes is the National Climate Initiative (‘Nationale Klimaschutzinitiative’)90 which offered two key instruments directed at municipal climate mitigation action: (1) the ‘Municipality Guideline’ (‘Kommunalrichtlinie’) which – inter alia – financially supports municipalities in developing integrated climate action plans; and (2) the ‘Master Plan Guideline’ (‘Masterplan-Richtlinie’) which financially supported municipalities who committed themselves to reducing their GHG emissions by 95% by 2050 and their final energy consumption by 50% compared to 1990 levels. More than 41 German municipalities signed up to these ambitious reduction targets, including some ‘larger’ cities such as Frankfurt am Main and Stuttgart. At state level, and often included in state climate protection laws, there are also various programmes to fund municipal low carbon development. In South Africa, the fiscal autonomy of cities is guaranteed in the Constitution. Section 229 of the Constitution accords municipalities the power to generate money by imposing rates on property, surcharges on fees for services provided by or on behalf of the municipality and any other taxes, levies and fees that are authorised by national legislation. In addition, municipalities have powers to borrow money from banks and other institutions, subject to any requirements set out in national legislation, and mainly for capital expenditure.91 Another major constitutionally protected source of revenue for municipalities is the national annual equitable transfer from national government.92 Besides the sources of funding expressly guaranteed in the Constitution, municipalities can utilise their initiative to generate additional revenue by engaging in public–private partnerships or by soliciting donations from national and international partners.93 Climate change-related funds established as part of the Clean Development Mechanism (CDM) created under the Kyoto Protocol and the Paris Agreement can be potentially accessed by South African cities in order to assist with the implementation of mitigation measures. However, the extreme fragmentation of CDM funds and the complex nature of project assessments limit the ability of most city governments in developing countries to access such funds.94 Most municipalities in the country cannot generate the revenue

See Max-Emanuel Geis, Kommunalrecht (Beck 2016), at 158 et seq. For recent information on the National Climate Initiative see https://​www​.klimaschutz​.de/​de accessed 20 June 2022. 91 Sections 160(2)(d) and 230A of the South African Constitution. 92 See s. 214(1). 93 Fuo (n. 43) 101–2. 94 Ibid. 94–5. 89 90

414  Research handbook on climate change mitigation law needed to deliver on their core mandates. This precarious financial situation is exacerbated by high levels of corruption and the looting of municipal resources. In all three countries, only municipalities which have good revenue bases with prosperous businesses within their municipal borders can generate significant income via taxation. Otherwise, municipalities often financially struggle to fulfil their core tasks, such as providing public services. While mitigating climate change can in some cases be economically efficient, in many cases it is more costly than business as usual or may even require significant investment (e.g. decarbonisation of energy supply and public transport). In section 2.2(B) above we presented the legal scope of competence for municipal climate change mitigation at constitutional, national and state scale as well as key conditions for its financing. Nevertheless, we want to highlight that there is significant scope for action beyond these legal competences and partly even beyond financial constraints. In their extensive research into city-level action on climate change, Bulkeley et al. identified six main modes of urban climate governance: self-governance, provision, regulation, enabling, partnership and experimenting.95 ‘Only’ the regulatory mode of urban climate governance, which refers to all instruments for exerting local authority, such as local law-making and planning, is directly dependent on the legal scope of competences outlined above. All other modes of urban climate governance mainly depend on political will and financial resources. Self-governance encompasses all the municipal scope of action to govern its own activities; provision refers to municipalities’ influence on service and resource supply, for example, in the fields of energy and transport; via the enabling mode of governance, municipalities can support, coordinate or incentivise activities with or of private businesses, NGOs, local communities and citizens; via partnerships, local governments may cooperate with other stakeholders in mitigating GHG emissions; finally, municipalities may use experiments to temporarily test new forms of urban climate governance or changes in urban infrastructure and lifestyles and make them more permanent if proven successful.96 In the following case studies, we present and discuss cities’ climate mitigation efforts based on their legal scope of competence as well as key activities within the mentioned six modes of urban climate governance. 2.3

Case Studies on São Paulo, Hamburg and Cape Town

In the following case studies we briefly present key elements of ongoing climate change mitigation efforts in São Paulo, Hamburg and Cape Town. We give insights into the key strategic climate planning tools, their legal form and the institutions in charge. In addition, we cover basic information on GHG emission accounting and their GHG emissions. To highlight efforts in the key areas of municipal competences as well as in the sectors most relevant for urban GHG emissions we include tailored information on land use planning, buildings and energy, mobility, air quality and nutrition. Since the COVID-19 pandemic severely affects

95 Harriet Bulkeley and Kristine Kern, ‘Local Government and the Governing of Climate Change in Germany and the UK’ (2006) 43 Urban Stud 2237, 2242; Harriet Bulkeley and others, ‘Cities and Climate Change: The Role of Institutions, Governance, and Urban Planning for Mitigation and Adaptation – Report Prepared for the World Bank Symposium on Climate Change’ (2011) https://​www​ .eci​.ox​.ac​.uk/​publications/​downloads/​bulkeley​-schroeder​-janda09​.pdf accessed 20 June 2022. 96 Bulkeley and Kern (n. 95) 2242, Bulkeley and others (n. 95).

Cities and climate change mitigation law  415 climate action planning, we also pinpoint related hurdles. Finally, we identify key challenges in mitigation efforts that should be considered in order to strengthen the cities’ contributions to lowering GHG emissions. São Paulo A São Paulo, the largest and richest city in Brazil, with approximately 12 million inhabitants, was the first Brazilian city to approve a municipal law on climate change,97 in 2009, a few years after the publication of its first emissions inventory in 2005.98 Climate action was introduced in São Paulo’s political agenda through its engagement with transnational cities networks, such as ICLEI and C40.99 The 2009 Municipal Law on Climate Change was approved after a two-year long formulation process.100 It regulates local climate mitigation and adaptation, setting out principles, tools and targets. It has also created a municipal institution in charge of climate change issues, the Climate Change Committee, a collective and participatory body with advisory attributions, presided over by the Municipal Environmental Secretary. At first very active and influential, the Municipal Climate Change Committee issued detailed mitigation and adaptation policy guidelines in 2011,101 which have had a great impact on the drafting of the city’s latest master plan,102 approved in 2014 after an intensive participatory process. Climate mitigation and adaptation actions are outlined by the 2009 Climate Change Municipal Law and further detailed in other municipal policies, laws and regulations, such as the 2014 Master Plan, the 2015 Urban Mobility Plan,103 the 2016 Zoning Law,104 the 2017 Building Code105 and the 2016 Food Security Plan.106 In 2021, São Paulo launched its local Prefeitura de São Paulo, ‘Lei nº 14.933, de 5 de Junho de 2009’ (2009) http://​legislacao​.prefeitura​ .sp​.gov​.br/​leis/​lei​-14933​-de​-05​-de​-junho​-de​-2009 accessed 20 June 2022. 98 Gabriella Marques Di Giulio and others, ‘Mainstreaming Climate Adaptation in the Megacity of São Paulo, Brazil’ (2018) 72 Cities 237. 99 De Macedo and Jacobi (n. 61); Ana Mauad and Michele Betsill, ‘A Changing Role in Global Climate Governance: São Paulo Mixing its Climate and International Policies’ (2019) 62 Rev Bras Polít Int https://​doi​.org/​10​.1590/​0034​-7329201900209 accessed 20 June 2022; Laura Silvia Valente de Macedo, Joana Setzer and Fernando Rei, ‘Transnational Action Fostering Climate Protection in the City of São Paulo and Beyond’ (2016) 52 disP – The Planning Review 35. 100 T.T.P. Cortese, ‘The Leading Role of Local Authorities in Achieving a Sustainable City’ (5th Academic International Workshop Advances in Cleaner Production, 2015) http://​www​.advance​ sincleaner​production​.net/​fifth/​files/​sessoes/​6A/​3/​cortese​_ttp​_abstract​.pdf accessed 20 June 2022; De Macedo and Jacobi (n. 61). 101 Companhia Ambiental do Estado de São Paulo, ‘Diretrizes’ (2014) https://​ cetesb​ .sp​ .gov​ .br/​ inventario​-gee​-sp/​wp content/uploads/sites/34/2014/04/saopaulo_diretrizes.pdf accessed 20 June 2022. 102 Prefeitura de São Paulo, ‘Lei nº 16.050, de 31 de Julho de 2014’ (2014) http://​legislacao​.prefeitura​ .sp​.gov​.br/​leis/​lei​-16050​-de​-31​-de​-julho​-de​-2014 accessed 20 June 2022. 103 Prefeitura de São Paulo, ‘Plano de Mobilidade de São Paulo – Plan/Mob SP’ (2015) https://​www​ .prefeitura​.sp​.gov​.br/​cidade/​secretarias/​upload/​chamadas/​planmobsp​_v072​_​_1455546429​.pdf accessed 20 June 2022. 104 Prefeitura de São Paulo, ‘Lei nº 16.402, de 22 de Março de 2016’ (2016) http://​legislacao​ .prefeitura​.sp​.gov​.br/​leis/​lei​-16402​-de​-22​-de​-marco​-de​-2016 accessed 20 June 2022. 105 Prefeitura de São Paulo, ‘Lei nº 16.642, de 9 de Maio de 2017’ (2017) http://​legislacao​.prefeitura​ .sp​.gov​.br/​leis/​lei​-16642​-de​-09​-de​-maio​-de​-2017 accessed 20 June 2022. 106 Prefeitura de São Paulo, ‘1º Plano Municipal de Segurança Alimentar e Nutrição de São Paulo/SP - PLAMSAN SP’ (2016) https://​www​.prefeitura​.sp​.gov​.br/​cidade/​secretarias/​upload/​trabalho/​PLAMSA​ NVERSAOFIN​ALcompleta​.pdf accessed 20 June 2022. 97

416  Research handbook on climate change mitigation law climate action plan, “PlanClimaSP”, encompassing both mitigation and adaptation objectives and targets. Regarding mitigation, PlanClimaSP aims to reach local carbon neutrality by 2050, with intermediate targets for 2030 and 2040. In general terms, the plan builds on the provisions made by the city’s pre-existing legislation. It proposes to reduce GHG emissions by promoting active mobility, replacing fossil fuels with renewable energy sources in the transportation and building sectors, improving energy efficiency in buildings, and reducing waste generation in the city.107 Land use planning In line with the need to reduce fossil fuel consumption in the transportation sector, as it is the main source of carbon emissions in the city, the 2014 Master Plan was set on fostering active mobility and discouraging the use of individual vehicles.108 Accordingly, the 2016 Zoning Law contains several provisions aimed at adapting land uses to non-motorised means of transportation, especially bicycles. Also, the perimeters of the city’s main routes, where the subway stations and bus corridors are located, have been delimited as ‘urban transformation axes’. These axes’ main objectives are to balance land uses with the offer of public transportation, through regulations such as limited parking spaces per building, incentives for mixed uses, and the mandatory widening of pavements to foster walkability. Another noteworthy innovation brought about by the Zoning Law is the environmental quota, a land use parameter which operates both as a building restriction and an incentive. The quota’s main objectives are to foster microdrainage as well as to promote biodiversity and microclimate protection. The quota is applicable to new constructions and renovations in plots with a minimum area of 500 m2 located outside the city centre. The environmental quota is calculated by a mathematical formula that combines vegetation cover and drainage with weighting factors that vary according to the location’s rates of soil permeability and vegetation cover. The construction or renovation project must obtain a minimum score, manoeuvring preset construction and landscape solutions to comply with soil permeability, vegetation and drainage indicators. If the minimum score is achieved, the developer can apply for a discount on the purchase of development rights. Buildings and energy Stationary energy consumption is the second most important emissions source in São Paulo. However, Brazilian municipalities’ powers in the matter are quite limited, as energy production and distribution are subject to federal and state regulations. In this context, São Paulo’s 2014 Master Plan set out the possibility of partially exempting the payment of development rights for sustainable building projects and energy efficient buildings, but this provision still lacks the regulations to become effective. In addition, the 2017 Building Code has set some incentives for energy efficiency and the use of alternative energy sources in new developments and renovations.

Prefeitura de São Paulo, ‘PlanClimaSP: Plano Climático de São Paulo’ (2021) https://​www​ .prefeitura​.sp​.gov​.br/​cidade/​secretarias/​upload/​governo/​secretaria​_executiva​_de​_mudancas​_climaticas/​ arquivos/​planclimasp/​PlanClimaSP​_BaixaResolucao​.pdf accessed July 2022. 108 Thiago Hérick de Sá and others, ‘Right to the City and Human Mobility Transition: The Case of São Paulo’ (2019) 87 Cities 60. 107

Cities and climate change mitigation law  417 Mobility and air quality The 2015 Urban Mobility Plan aims to implement an integrated public transportation system, comprising a structured network with exclusive bus lanes and corridors, full integration between transportation modes, bicycles included, and the application of new technologies. To tackle fossil fuel consumption, the Urban Mobility Plan aims to foster active mobility and the use of public transportation, while imposing traffic restrictions on 20% of the individual vehicle fleet every weekday. The plan also sets targets to reduce diesel consumption per bus and to substitute fossil fuels with clean energy sources and technologies in the long run, as well as to control air pollution, which is a huge public health issue in the city.109 However, targets for the substitution of fossil fuels in the municipal fleet are falling short due to high operating costs and impacts on tariffs. Yielding to public transportation concessionaires’ pressure, a 2018 Municipal Law has postponed the public transportation system’s total transition to non-fossil fuels to 2038. The pandemic may have compromised the target even further, as the public transportation sector has been heavily impacted by isolation and social distancing measures. Nutrition Lastly, regarding food security and its linkages with climate mitigation, as waste is the third most important emissions source in the city, the 2016 Municipal Food Security Plan has set some local incentives for organic food production and distribution. The diversion of tree pruning waste and public markets’ food waste to municipal composting facilities also contributes to carbon sequestration. The ‘Connect the Dots’ project,110 aimed at fostering organic food production on the southern border of the city,111 was granted the Bloomberg Philanthropies Mayors Challenge first prize in 2016. Pandemic Following the publishing of a National Public Health Emergency Declaration by the Federal Union in early February 2020, Brazilian municipalities, São Paulo included, issued their respective public emergency decrees to organise the local public services’ response to the pandemic. Besides joining the states and the Federal Union in health care provision and epidemic monitoring measures, municipalities were responsible overall for determining and enforcing the closing of public gathering spaces, such as restaurants, malls, schools, churches, cinemas, theatres and public parks. Reflecting the Federal Union’s lack of leadership in coordinating the epidemic response, municipalities aligned their courses of action with the respective states, with great diversity in the intensity and duration of isolation measures across the country. As a result, as of July 2022, Brazil had the third-greatest number of COVID-19 cases of any country in the world.112 São Paulo was the epidemic’s epicentre in Brazil, with more than 2

109 Barboza Chiquetto and others, ‘The Impact of Different Urban Land Use Types on Air Pollution in the Megacity of São Paulo’ (2020) 7 Revista Presença Geográfica http://​portal​.amelica​.org/​ameli/​ jatsRepo/​274/​2741159007/​2741159007​.pdf accessed 20 June 2022. 110 More information available at https://​ligueospontos​.prefeitura​.sp​.gov​.br/​. 111 A.H. Hearn and others, ‘Digging Up the Past: Urban Agriculture Narratives in Melbourne and São Paulo’ (2020) 13 J Urban 1. 112 Our World in Data, ‘COVID-19 Data Explorer’ (2022) https://​ ourworldindata​ .org/​ explorers/​ coronavirus​-data​-explorer accessed July 2022.

418  Research handbook on climate change mitigation law million confirmed cases and 43,000 confirmed deaths by July 2022.113 All budgetary provisions were rearranged to organise the pandemic response. The partial lockdown and mobility restrictions introduced in the city contributed to the improvement of air quality.114 However, as consequence of the city’s social-spatial inequities, the coronavirus took a heavy toll in the poorest neighbourhoods on the city’s periphery, which showed death rates far higher than the richer neighbourhoods in the city centre.115 Greatest challenge From 2009 to 2014, São Paulo was in the frontline of local climate action in Brazil, alongside other cities such as Rio de Janeiro, Curitiba, and Salvador, all members of the C40 Group. For instance, São Paulo was one of the first cities in the country to instal methane capture plants in municipal landfills and to auction the associated carbon emission credits on the open market, raising around R$70 million in the years 2007 and 2008.116 However, from 2014 on, the city’s administration put climate change action on hold, insofar as environmental policies were no longer rendered a priority due to the escalation of social and economic pressures in the country as a whole. Fortunately, the Municipal Climate Change Committee was not discontinued. Thanks to the persistent efforts of its members, São Paulo commissioned its third emissions inventory in 2018, following the GPC Method, and its preliminary findings were published in 2019.117 In the same year, the city’s administration announced that a comprehensive Climate Action Plan for Mitigation and Adaptation would be launched in 2020. Due to the pandemic, São Paulo’s Climate Action Plan, “PlanClimaSP”, was published a year later, in 2021. Developed without the participation of the general public, PlanClimaSP was designed by technicians appointed by the City Hall, with the support of the C40 Group and selected members of academia and civil society. In the same year of 2021, an Executive Climate Change Secretariat was created to supervise the implementation of PlanClimaSP, taking over the coordination of the Municipal Climate Change Committee. It is uncertain whether this resumption of the city’s climate change policy will thrive, given the many difficulties still caused by the pandemic.118

113 Prefeitura de São Paulo, ‘Boletim Diário COVID-19 Edição 837’ (2022) https://​www​.prefeitura​.sp​ .gov​.br/​cidade/​secretarias/​upload/​saude/​20220711​_boletim​_covid19​_diario​.pdf accessed July 2022. 114 Edmilson Dias Freitas and others, ‘Mobility Restrictions and Air Quality under COVID-19 Pandemic in São Paulo, Brazil’ (2020) Preprints https://​www​.preprints​.org/​manuscript/​202004​.0515/​v1 accessed 20 June 2022. 115 Rodrigo Custodio Urban and Liane Yuri Kondo Nakada, ‘GIS-Based Spatial Modelling of COVID-19 Death Incidence in São Paulo, Brazil’ (2020) Environ Urban https://​doi​.org/​10​.1177/​ 0956247820963962 accessed 20 June 2022. 116 Prefeitura de São Paulo, ‘São Paulo e a Mudança do Clima. São Paulo: Secretaria do Verde e do Meio Ambiente’ (2011) https://​www​.prefeitura​.sp​.gov​.br/​cidade/​secretarias/​upload/​sp​_mudanca​ _1259242799​.pdf accessed 20 June 2022. 117 Prefeitura de São Paulo, ‘Secretaria do Verde e do Meio Ambiente. Mudanças Climáticas: Inventário de Emissões e Remoções Antrópicas de Gases de Efeito Estufa do Município de São Paulo’ (2019) https://​tinyurl​.com/​4e499fk4 accessed 20 June 2022. 118 São Paulo’s Climate Action Plan – PlanClimaSP – was published in 2021, after the completion of this chapter. The Plan aspires to reach net zero emissions by 2050, with intermediate mitigation targets for 2030 and 2040. More information available at: https://​tinyurl​.com/​5n6ht7a5 accessed 20 June 2022. See also Oliver Fuo, Cathrin Zengerling and Debora Sotto (n. 1).

Cities and climate change mitigation law  419 B Hamburg Hamburg is the second largest city in Germany with currently about 1.8 million inhabitants. Since 2007 the city has strategically steered its climate mitigation efforts via a series of climate action plans.119 The institution in charge is the Hamburg Climate Commission (‘Leitstelle Klima’), situated at the Hamburg Ministry of Environment and Energy. Compared to its predecessors, the current 2019 Hamburg Climate Plan sets more ambitious overall, and for the first time, also sectoral, CO2 emission reduction targets. The city pledges a 55% CO2 emission reduction by 2030 and climate neutrality by 2050, both compared to 1990 levels and measured via final energy consumption. These overall targets are broken down to sectoral CO2 emission reduction targets for the sectors of mobility, industry, trade and services, as well as private households.120 The Hamburg Climate Plan was developed by the Hamburg executive and coordinated by the Hamburg Climate Commission. It used to be an informal plan since there was no legislative guidance as to its content or procedural development. This changed in February 2020 with the new Hamburg Climate Protection Law, enacted by the state of Hamburg.121 For the first time this climate law adopts the overall and sectoral CO2 emission reduction targets of the Hamburg Climate Plan and thus makes them legally binding.122 Furthermore, it formalises the Climate Action Plan as the key steering tool, renders it legally binding for the executive and judiciary and prescribes procedural requirements such as public participation, progress reports from the senate to the parliament every two years and a renewal of the climate plan every four years.123 Between the base year 1990 and 2017 Hamburg’s final energy consumption was reduced by about 20%, lowering per capita CO2 emissions from 12.5 tonnes in 1990 to 9 tonnes in 2017.124 However, it is important to note that production-based accounting revealed an increase in CO2 emissions due to the installation of a new coal-fired power plant in 2015.125 Due to the national coal phase-out, which entailed that the new power plant went off-grid in 2021, and the pandemic, production-based CO2 emissions declined again recently.126 Several of the seven Hamburg districts (‘Bezirke’) have passed or are in the process of developing local climate action plans.

119 For an overview and assessment of past climate mitigation efforts, see Hamburg, ‘Hamburg hat seine Klimaziele Erreicht’ (2020) https://​www​.hamburg​.de/​masterplan​-klimaschutz/​3959612/​ fortschreibung​-klimaschutzkonzept​.html accessed 20 June 2022. 120 For an overview of current climate mitigation planning in Hamburg, including links to the 2019 Hamburg Climate Plan in German and English, see Hamburg, ‘Hamburger Klimaplan’ (2019) https://​ www​.hamburg​.de/​klimaplan/​ accessed 20 June 2022. 121 So far the 2020 Hamburg Climate Law is only available in German: http://​www​.landesrecht​-hambu rg​.de/​jportal/​portal/​page/​bshaprod​.psml​?showdoccase​=​1​&​doc​.id​=​jlr​-K​limaSchGHA2020rahmen. See also Martin Wickel, ‘Das neue Hamburgische Klimaschutzgesetz’ (2020) 4 NordÖR 157. 122 Section 4 of the Hamburg Climate Protection Law. 123 Section 6 of the Hamburg Climate Protection Law. See also Wickel (n. 121). 124 Hamburg CO2 inventory follows the methodology agreed upon between German federal states and is available at Hamburg, ‘CO2-Emissionen in Hamburg’ (undated) https://​www​.hamburg​.de/​co2​-bilanz​ -hh/​accessed 20 June 2022. 125 Ibid. 126 Ibid.

420  Research handbook on climate change mitigation law Land use planning The 2011 reform of the German Building Code explicitly allowed and required municipalities to consider climate change mitigation and adaptation in their land use planning. However, empirical studies show that municipalities do not yet effectively use this new scope of action for climate mitigation or adaptation in their land use plans (‘Bebauungsplan’).127 The 2019 Hamburg Climate Plan operates on a strategic level only and does not explicitly link to land use planning. The 2020 Hamburg Climate Law tasks the executive with planning for heating and cooling in line with the CO2 emission reduction targets and highlights the need for close cooperation with urban development and land use planning.128 Results of respective energy plans have to be considered in urban planning. Examples for climate mitigation measures that may be ordered via a land use plan are the construction of renewable-energy-compatible buildings, green roofs, compulsory connection to and usage of a heating grid (e.g. with a high share of renewable heat) and the provision of charging infrastructure for e‑mobility. In addition to land use planning, and arguably more flexible, the city of Hamburg uses urban development contracts as well as property purchase agreements to mitigate climate change in urban development. In recent urban development projects innovative planning procedures aim to include climate responsive planning from the very beginning (e.g. in concept developments and all bidding procedures).129 Buildings and energy In order to reach the sectoral CO2 emission reduction targets for private households as well as trade and services, the 2019 Hamburg Climate Plan establishes a transformation pathway ‘heat and buildings’, fleshed out in greater detail in annex 2 of the plan. Since about a quarter of Hamburg’s CO2 emissions stem from space and water heating, the ‘heat transition’ is a key, challenging, and long-neglected component of the German energy transition at all scales. Key measures include a sharp reduction of oil heating in private households, a rise in district heating, gas heating and heat pumps as well as energetic restoration of building envelopes. The 2020 Hamburg Climate Protection Law supports this transformation pathway in several ways. It empowers the Hamburg senate to establish compulsory connection to and usage of heating grids for designated areas in the city.130 In addition, the city of Hamburg and energy suppliers owned by the city pledge to phase out coal-based CHP heat by 2030 at the latest.131 Finally, all heat suppliers need to submit decarbonisation plans up to 2024 in line with the target of an almost climate neutral heat supply by 2050 and have to publish on the internet, from mid 2020 onwards, the CO2 factor, renewable energy share and primary energy factor of their heating grids.132 All this information feeds into a city-wide ‘heat registry’.133 Sections 11–19 of the Hamburg Climate Protection Law are dedicated to renewable energies and buildings 127 Christoph Diepes and Nikolas Müller, ‘Klimarelevante Handlungsfelder in der Verbindlichen Bauleitplanung – Nutzen Deutsche Großstädte den ihnen zur Verfügung Stehenden Handlungsspielraum für Klimaschutz und Anpassung aus?’ (2018) 3 ZfU 288. 128 Section 25 of the Hamburg Climate Protection Law 2020. 129 See, for example, current planning in the Grasbrook quarter; information is available at https://​ www​.grasbrook​.de/​en/​. 130 Section 8 of the Hamburg Climate Protection Law. 131 Section 9 of the Hamburg Climate Protection Law. 132 Section 10 of the Hamburg Climate Protection Law. 133 Section 26 of the Hamburg Climate Protection Law.

Cities and climate change mitigation law  421 and encompass a range of specific measures134 including the financial support of low carbon building materials, energy efficiency requirements, an obligation on property owners to instal solar energy systems on their rooftops on new buildings from 2023 onwards, or on existing buildings, in case of a roof renewal, from 2025 onwards, as well as an obligation on property owners to cover 15% of the annual thermal energy demand from renewables from mid 2021 onwards in the event of a renewal of their heating system. Mobility The mobility sector accounts for almost 30% of final energy consumption in Hamburg. The 2019 Hamburg Climate Plan sets a sectoral CO2 emission reduction goal of about 30% from 2017 until 2030. Specific measures to reach the target encompass an increase in the share of public transport from 22% to 30% by 2030, plus electrification of the fleet (cars, trucks, etc.), a share of 25% of cycling in the modal split by 2030, as well as more e‑mobility charging stations, both public and private. With regard to the CO2 emission-intense Hamburg harbour and airport, the plan refers to rather vague goals but still a range of mitigation initiatives (e.g. for research into synthetic kerosene etc.). The Hamburg Airport company pledged a carbon neutral airport operation (not accounting for the flights) from 2021 onwards. Aviation emissions as such fall under the EU Emissions Trading System. Nutrition Neither the 2019 Hamburg Climate Plan nor the 2020 Hamburg Climate Protection Law refers to climate friendly nutrition. This might partly be due to the methodological limitations of the emissions accounting. Since it only covers CO2 and not all GHG emissions (including methane) and does not cover upstream emissions, it does not display nutrition-based emissions. Since consumption-based urban GHG inventories identify nutrition as the third most important contributor to urban GHG emissions,135 this is a significant shortcoming and should be addressed in future reforms. COVID-19 pandemic Since the new Climate Plan as well as the Climate Protection Law entered into force shortly prior to or at the very beginning of the COVID-19 pandemic, the latter had no influence on its content. However, the pandemic caused a loss in tax income of the city as well as greater expenditures due to Coronavirus aid funds established by the city. It thereby required adjustments to the budgetary planning of the city, which originally provided about €13 billion for each of the years 2021 and 2022, of which €2–3 billion were earmarked for climate change mitigation efforts. In 2020 the Hamburg government announced that climate change mitigation continues to be a priority and that there will be no savings in climate protection measures. Biggest challenges The processes of heat and mobility transitions are just beginning and it remains to be seen if the currently adopted measures suffice to reach the ambitious goals. Among the other 134 Sections 11–13 of the Hamburg Climate Protection Law were mere placeholders, since the planned regulations – including a prohibition of electric heating and new oil heating – require a notification procedure under EU law; see Wickel (n. 121) 163. 135 Pichler and others (n. 33).

422  Research handbook on climate change mitigation law key challenges are the decarbonisation of the building stock via energy efficiency measures and renewable electricity and heat supply. Many measures only address new buildings. Considering the German building rate of only 1%, these measures leave out the vast majority of buildings, i.e. existing buildings. Finally, emissions accounting should be improved to cover all greenhouse gases and production-based as well as consumption-based emissions to make the carbon footprint of urban infrastructures and lifestyles visible and to include them more holistically in enhanced climate mitigation planning.136 With regard to increasing shares in renewable energy, although the city re-municipalised electricity, gas and heating grids after a successful local referendum, it has only very limited influence on privately owned large-scale electricity and heat production, which is mainly regulated via national law and the EU Emissions Trading System. C Cape Town The City of Cape Town is a metropolitan (or Category A) municipality in South Africa. This status signifies that it is a conurbation featuring areas of high population density; an intense movement of people, goods and services; extensive development; and multiple business districts and industrial areas. This status also means that the municipality is a centre of economic activity with a complex and diverse economy; and having strong interdependent social and economic linkages between its constituent units.137 The municipality has exclusive municipal legislative and executive authority in its area of jurisdiction.138 The municipality can adopt and implement any governance instrument to mitigate climate change to the extent that they do not violate the Constitution or national and provincial legislation that is constitutionally compliant. The city adopted an Environmental Strategy of the City of Cape Town in 2017 which is supposed to be complemented by a number of proposed and existing tools such as by-laws, policies, planning tools and strategies. The city’s Climate Change Policy139 is one of the tools identified to support the 2017 Environmental Strategy.140 The Climate Change Policy ‘provides the overarching framework for climate change work in the City’ and stands ‘alongside rather than as a sub-component of the Environmental Strategy’.141 The Climate Policy recognises the need for, and provides the platform for a balanced approach to, climate change mitigation and adaptation. The city’s response to climate change focuses on contributing to the global effort to reduce GHG emissions, amongst others. It aspires to use strategic planning, development approvals, budgeting operations, tariffs and rates (pricing) and by-law development and enforcement as levers to achieve the goal of reducing GHG emissions. The city further aspires to achieve this goal by changing its own operation and service delivery approach; by

For related research on accounting options see Pichler and others (n. 33) and Wiedmann and others (n. 30). 137 Section 2 of the Local Government: Municipal Structures Act 117 of 1998. 138 Section 155(1) of the South African Constitution. 139 City of Cape Town, ‘Climate Change Policy (Policy Number 46824), approved by Council on 27 July 2017’ (2017) https://​savingelectricity​.org​.za/​wp​-content/​uploads/​2018/​01/​climate​_change​_policy​ .pdf accessed 20 June 2022. 140 City of Cape Town, ‘Environmental Strategy for the City of Cape Town (Policy Number 46612), approved by Council on 24 August 2017’ (2017) http://​ resource​ .capetown​ .gov​ .za/​ documentcentre/​ Documents/​Bylaws​%20and​%20policies/​Environmental​%20Strategy​.pdf accessed 20 June 2022. 141 City of Cape Town Climate Change Policy (n. 139) 9. 136

Cities and climate change mitigation law  423 raising awareness, design and development of integrated human settlements; by protecting, maintaining, rehabilitating and restoring natural systems and resources; and by establishing and strengthening key partnerships.142 The city plans to finalise a Climate Change Action Plan by the end of 2020 with the bold aspiration to be climate neutral by 2050.143 Five-Year City of Cape Town Integrated Development Plan 2017–2022 (2017) This is the main planning instrument prescribed by law that sets out the strategic direction of the city over a period of five years. Some of the priority areas outlined in the IDP include climate change mitigation measures such as the implementation of energy efficiency measures, the development of dense and transit-oriented settlements, and the implementation of an efficient and integrated transport system.144 Land use planning The Climate Change Policy expresses the city’s commitment to adopt by-laws and policies that include requirements for resource efficiency and climate impact considerations in spatial planning, land use and building development approvals as well as ensuring effective enforcement of relevant by-laws.It is envisaged that the city will use soft tools such as incentives to encourage developments that promote climate change mitigation principles.145 The vision, direction and strategies for spatial transformation are set out in detail in the city’s Municipal Spatial Development Framework (2018).146 Building and energy The Climate Change Policy further expresses commitment to promote energy conservation and efficient practices, technology and infrastructure in all residential, commercial and public buildings. The Policy also commits the city to explore, promote and enable cleaner, cost-effective, diversified and localised low-carbon energy production across all sectors of the economy and across all income groups.147 In addition, there is commitment to facilitate developments in locations that promote a compact city rather than urban sprawl and to encourage energy-efficiency in the design and construction of all new buildings, in renovations, and in the operation of existing buildings across the public and private sectors. The city further seeks to promote greater density in urban development that will allow low-carbon travel alterna-

Ibid. 10. City of Cape Town, ‘Comment Period for Climate Change Strategy Extended by a Month’ (2020) http://​www​.capetown​.gov​.za/​Media​-and​-news/​Comment​%20period​%20for​%20Climate​%20Change​ %20Strategy​%20extended​%20by​%20a​%20month accessed 20 June 2022. 144 City of Cape Town, ‘Five-Year Integrated Development Plan 2017–2022’ (2017) http://​ resource ​ . capetown ​ . gov ​ . za/ ​ d ocumentcentre/ ​ D ocuments/ ​ C ity ​ % 20strategies ​ % 2C ​ % 20plans ​ % 20and​ %20frameworks/​IDP​%202017​-2022​.pdf accessed 20 June 2022, 35–9. 145 City of Cape Town Climate Change Policy (n. 139) 24–5. 146 City of Cape Town, ‘Municipal Spatial Development Framework’ (2018) https://​ resource​ .capetown​.gov​.za/​documentcentre/​Documents/​City​%20strategies​,​%20plans​%20and​%20frameworks/​ Cape ​ % 20Town ​ % 20Metropolitan ​ % 20Spatial ​ % 20Development ​ % 20Framework ​ _ 2018 ​ - 04 ​ - 25 ​ . pdf accessed 20 June 2022. 147 City of Cape Town Climate Change Policy (n. 139) 21. 142 143

424  Research handbook on climate change mitigation law tives.148 As of 2017, the city indicated that its energy efficiency measures had resulted in total savings of 75,964 MWh of electricity and 75,204 tonnes of carbon.149 Mobility and air quality In terms of mobility, the city is committed to improving the accessibility, affordability, reliability and safety of public transport through the roll-out of its Integrated Public Transport Network Plan. The details of the city’s vision, objectives and strategies are set out in its Comprehensive Integrated Transport Plan 2018–2023 (2018). The vision of the Comprehensive Integrated Transport Plan (CITP) is to develop and implement an efficient and integrated transport system for all, implemented sustainably. However, none of the stated objectives expressly speaks to climate change mitigation. In relation to air quality, generally, it should be noted that pursuant to the requirements of NEMAQA, the City of Cape Town has an Air Quality Plan.150 The plan pre-dates the Climate Change Policy of the city and there is a designated Air Quality Officer to monitor compliance. Nutrition In the area of nutrition, the Climate Change Policy of the city commits to promoting regional food sourcing and the reduced consumption of highly carbon intensive agricultural products.151 The food policy of the city is solely directed towards addressing poverty and food insecurity.152 COVID-19 pandemic All municipalities in South Africa were affected by the COVID-19 pandemic. After a state of disaster was declared by the President in March 2020, municipalities had to review and reprioritise their budgets in order to respond to local needs. At the peak of the pandemic, emergency procurement provision in national legislation was activated by the National Treasury in order to ease the process of procuring personal protective equipment (PPE) by all spheres of government and organs of state. In many instances, this led to wide-scale looting of public funds, including at the local government level. Following revelations of corruption and fraud in the procurement of PPE across the country, the National Treasury halted the emergency procurement regime in August 2020. A lot of money had already been wasted. The City of Cape Town was one of the municipalities hard hit by the COVID-19 pandemic. Apart from high infection and death rates, the city suffered significant loss of revenue due to the severe lockdown regulations that allowed only the operation of essential services. The city lost income from bus fares, rental of facilities, traffic fines, impoundment fees, building fees and lower payment ratios by consumers. All non-essential service facilities of the city

Ibid. City of Cape Town Five-Year IDP (n. 144) 35. 150 City of Cape Town, ‘Air Quality Management Plan for the City of Cape Town, Approved by Special Mayoral Committee: 28 September 2005, SMC 04/09/05’ (2005) https://​resource​.capetown​.gov​ .za/​documentcentre/​Documents/​Bylaws​%20and​%20policies/​Air​%20quality​%20management​%20plan​ %20for​ % 20the​ % 20City​ % 20of​ % 20Cape​ % 20Town​ % 20Policy ​ % 20 ​ - ​ % 20approved ​ % 20on ​ % 2028​ %20September​%202005​.pdf accessed 20 June 2022. 151 City of Cape Town Climate Change Policy (n. 139) 21. 152 City of Cape Town, ‘Food Gardens Policy in Support of Poverty Alleviation and Reduction (Policy Number 12399C), approved 4 December 2013’ (2013) http://​resource​.capetown​.gov​.za/​documentcentre/​ Documents/​Bylaws​%20and​%20policies/​Policy​_Food​_Gardens​.pdf accessed 20 June 2022. 148 149

Cities and climate change mitigation law  425 were closed for several months during the height of the pandemic.153 The city is committed to maintaining a proactive approach to climate change mitigation because it sees this as a tool that can also assist it to recover from the effects of the COVID-19 pandemic by exploiting new opportunities presented by the green economy. Biggest challenge The generation of electricity is done on a national scale by ESKOM, South Africa’s electricity public utility. Municipalities are in charge of electricity reticulation. They buy from ESKOM and sell to consumers in their jurisdictions. In City of Cape Town v National Energy Regulator of South Africa [nersa]and Minister of Energy (2020) Case No 51765/17 (11 August 2020), the City of Cape Town wanted to purchase more renewable energy from independent power producers without first seeking the consent of the Minister of Mineral Resources and Energy, as required by section 34 of the Energy Regulation Act 4 of 2006 (ERA). The National Energy Regulator of South Africa (NERSA) argued that section 34 of the ERA did not permit it to license a new power plant to generate and sell electricity to the city without ministerial approval. The High Court dismissed the case on the ground that the city failed to use mechanisms created by law for resolving intergovernmental disputes to reach a settlement with the Minister of Energy. However, on 16 October 2020, the Minister of Energy introduced changes to the ERA that allow municipalities to apply to the Minister for approval to establish new generation capacity. When approval is granted, this allows cities to produce up to 100 MW of electricity from renewable sources either by themselves or through public–private partnership arrangements. Although the majority of cities across the country are in bad financial shape and will not be able to take advantage of this legal reform, a well-resourced city such as Cape Town sees this as an opportunity to enhance its drive towards decarbonisation.154 2.4

Discussion from a Comparative Perspective

The enigma that usually confronts legal comparatists is determining the scope of the comparative analysis: ‘What is going to be compared with what?’155 This can be difficult because there are usually elements in each legal system that are roughly the functional equivalents of elements in the other legal systems.156 This means that legal comparatists are ‘always in some sense comparing apples and oranges’.157 We address this challenge in two ways. First, by clearly identifying a common point of departure for the comparison, the ideal of climate change mitigation (tertium comparationis) and then questioning how the legal systems in our three countries enable municipalities to respond to it. Secondly, we carefully probe how similarities and differences in each legal system under investigation enable our selected cities

153 City of Cape Town, ‘COVID-19 Alert Level 1: Operations and Service Notifications’ (2020) http://​resource​.capetown​.gov​.za/​documentcentre/​Documents/​Forms​,​%20notices​,​%20tariffs​%20and​ %20lists/​COVID​-19​_Lockdown​_Operations​_Service​_Notifications​.pdf accessed 20 June 2022. 154 See https://​www​.capetown​.gov​.za/​Work​%20and​%20business/​Greener​-business/​Cape​-Towns​-gr een-future/independent-power-producers. 155 Reitz (n. 10) 620. 156 Ibid. 620–21. 157 Ibid. 621.

Constitution and legislation.

carbon buildings, low carbon vehicles and divestmentb

13,798,051 to 16,130,962 tCO2e between 2010 Ambition Alliance to achieve net zero CO2

and 2017)

Global Covenant of Mayors for Climate and Energy

Energy Climate Alliance

Climate and Energy; RegionsAdapt; Climate

Ambition Alliance; Under2Coalition

branches: Biodiversity Management Branch;

body, integrated by representatives of the public administrative body established under the

Official data unavailable; about 2 t/c/yc

CO2e

Covered GHG emissions

Per capita GHG emissions

2021 PlanClimaSP

Only CO2

9 t/c/y (2017), only CO2

Protection Law

strengthened via the 2020 Hamburg Climate

2019 Hamburg Climate Plan, significantly

with advisory functions and a rather small staff Compliance Branch; Environmental and

with advisory functions only

5.55 t/c/y (2017)

CO2e

2017 City of Cape Town Climate Policy

and Sustainability Branch

Heritage Branch; and Environmental Planning

Hamburg ministry for environment and energy

sector (state and municipal) and civil society,

Coastal Management Branch; Environmental

Environmental Management Department. Has

Climate Committee: collective and consultative Climate Commission (‘Leitstelle Klima’):

Mistra Urban Futures

C40 Climate Leadership Group

Global Parliament of Mayors

Global Covenant of Mayors for Climate and

C40; ICLEI; Global Covenant of Mayors for

emissions by 2050a

2050; further pledges in the fields of net zero

achieved – total emissions have increased from levels); announced that joining the Climate

Climate action plan

Institutional setting

City networks

of CO2 emissions by 2050 compared to 1990

2020 compared to 2010 levels (possibly not

Alliance to achieve net zero CO2 emissions by

Climate neutral by 2050 (at least 95% reduction Announced that joining the Climate Ambition

4 million

Reduce total city-wide emissions by 30% by

state of Hamburg and the neighbour states

the creation of a governing institution)

Pledges at NAZCA

Metropolitan municipality in terms of the

5 million

21.5 million

Metropolitan Region of São Paulo (still pending No, just cooperation agreements between the

Inhabitants metropolitan area

Cape Town 4 million

Legal entity of metropolitan area

Hamburg 1.6 million

São Paulo

12.1 million

Info / City

Comparison of key elements relevant for climate change mitigation in case study cities

Inhabitants

Table 16.1

426  Research handbook on climate change mitigation law

2050, compared to 1990 levels and measured via final energy consumption

Conditional targets: to reduce emissions

by 50% by 2030 and to achieve carbon

Industry: 4,589,000 t CO2 Commercial: 3,587,000 t CO2 Private households: 3,581,000 t CO2

Stationary Energy: 5,297,164 tCO2e

Waste: 1,257,135 tCO2e

Year 2017d

New quarters: HafenCity Hamburg (more than half built), Kleiner Grasbrook (in planning

Bike Lanes System

Connect the Dots Project

‘Lighthouse projects’

electricity supply (low), heat supply (medium), electricity generation (low), mobility (medium), mobility (medium), air pollution (medium), nutrition (low)

electricity supply (low), heat supply (low),

mobility (medium), air pollution (medium),

nutrition (low)

medium, low) according to legal scope of

competences

air pollution (medium), nutrition (low)

Land use planning (high), housing (medium),

Land use planning (high), housing (high),

Transit-oriented, and compact development

Consumption-based, production-based

Year 2017

(Total CO2e: 21,282,238f

2%; Agriculture 1%

22%; Industrial 11%; Losses 5%; Government

Transport 33%; Commercial 26%; Residential

 

Reduction target of 37 % by 2040

Cape Town

Estimated influence on specific sectors (high, Land use planning (high), housing (high),

process)

specific bottom-up measurement

not used for target setting; innovative project

(‘Quellenbilanz’) but this type of measuring is

states; production-based/primary energy use

on accounting methodology of German

End-energy use (‘Verursacherbilanz’) based

Production-based, following the GPC method

GHG inventories

Year 2017

Transport: 4,641,000 t CO2

Transport: 9,576,663 tCO2e

per capita Sectoral GHG emissions

e

6 t/c/y by 2030 and 2 t/c/y by 2050 (only CO2)

No available data

GHG emission reduction goals 2030/2050

out)

of the Municipality of São Paulo are carried

decarbonization and that are not in the control

neutrality by 2050 (in case actions that imply

neutrality (= 95% CO2 emission reduction) by

20% by 2030, compared to 2017 emissions.

in total

Hamburg 55% CO2 emission reduction by 2030; climate

São Paulo

Unconditional target: to reduce emissions by

Info / City

GHG emission reduction goals 2030/2050

Cities and climate change mitigation law  427

Hamburg

Cape Town

climate mitigation efforts remain a priority and

constrained by COVID-19 regulations

Notes: t/c/y: metric tons per capita per year. a NAZCA, ‘Hamburg’ (UNFCC, undated) https://​climateaction​.unfccc​.int/​views/​stakeholder​-details​.html​?id​=​12954 accessed 20 June 2022. b NAZCA, ‘Cape Town’ (UNFCC, undated) https://​climateaction​.unfccc​.int/​views/​stakeholder​-details​.html​?id​=​10528 accessed 20 June 2022. c Kennedy, Ibrahim and Hoornweg (n. 5). d Prefeitura de São Paulo, ‘Secretaria do Verde e do Meio Ambiente. Mudanças Climáticas: Inventário de Emissões e Remoções Antrópicas de Gases de Efeito Estufa do Município de São Paulo’ (2019) https://​www​.prefeitura​.sp​.gov​.br/​cidade/​secretarias/​meio​_ambiente/​comite​_do​_clima/​index​.php​?p​ =​284393 accessed 30 October 2020. e All data retrieved from 2019 Hamburg Climate Plan (n. 119) 17. f City of Cape Town Climate Change Policy (n. 138) 13.

funds will not be cut

might be affected, political announcement that

adaptation

emissions inventory and the approval of the

city’s Climate Action Plan for mitigation and

finalised prior to the pandemic; implementation economic development. Operational capacity

publication of the complete data of the latest

planning

sees it as a viable pathway for stimulating local

Hamburg Climate Protection Law were

All initiatives were interrupted, including the

Effects of pandemic on climate action

electricity for commercial use Climate action still remains a priority. The city

Municipalities do not have powers to generate 2019 Hamburg Climate Plan and 2020

consumption which is coal power generated.

Very high carbon emission from electricity

transport system (postponed until 2038)

Building stock, renewable heat, mobility

non-fossil fuels in the municipal public

São Paulo

Mobility, more specifically, transition to

Info / City

Biggest challenges for decarbonisation

428  Research handbook on climate change mitigation law

Cities and climate change mitigation law  429 to respond to the ideal.158 This approach ensures that there are three lenses to our comparative analysis: international commitments; national standards; and city-level action. At the international level, the Paris Agreement on Climate Change is anchored on the commitment to keep global temperature rise this century well below 2 degrees. The Agreement requires countries to demonstrate their commitment through nationally determined contributions. Brazil’s 2022 updated NDC is to reduce greenhouse gas emissions by 37% below 2005 levels by 2025, and by 50% by 2030. Differently from the original NDC, which acknowledged municipalities with regard to climate change adaptation, Brazil’s updated NDC no longer mentions municipalities.159 Germany’s NDC pledge through the European Union, to reduce greenhouse gas emission by at least 40% by 2030 compared to 1990, does not mention municipalities.160 South Africa has pledged to peak its emissions that can cause climate change between 2020 and 2025, plateau them for a decade and thereafter start to reduce them in absolute terms.161 Just as for Brazil and Germany, South Africa’s NDC does not mention municipalities’ contribution to climate change mitigation. As non-party stakeholders, cities are not directly responsible for ensuring compliance with the ‘well below 2 degrees goal’ emanating from the Paris Agreement. NAZCA therefore remains a voluntary global platform that some cities have joined, including our three cities. As members of this platform, they are expected to report on the mitigation activities at least once every two years. In addition, the three cities are members of different city networks that can be used to catalyse climate change action within their jurisdiction. However, it is beyond the scope of this chapter to assess the extent to which these networks have informed climate change mitigation measures on the ground in all three city jurisdictions. The extent to which cities can contribute towards climate change mitigation is largely informed by the nature of their powers and functions as defined in national constitutions, legislation and policies. This second level of comparison therefore comments on the scope of legal action enjoyed by cities in the three jurisdictions vis-à-vis climate change action. As evident from the discussion in section 2.2 above, all three cities operate within federal systems of government which automatically allow higher levels of government to regulate the exercise of the powers and functions of municipalities through legislation. While Hamburg is part of a two-level federal system of government, Cape Town and São Paulo operate in a three-level federal system of government. While municipalities in Brazil and South Africa are a level of government, municipalities in Germany are not a level of government but regional authorities of federal states. Despite this difference, municipalities enjoy constitutional protection in all three countries. Their legislative, administrative and fiscal powers are constitutionally protected.

Ibid. 621–2. Federative Republic of Brazil. ‘Paris Agreement. Nationally Determined Contribution (NDC)’ (2022) https://​unfccc​.int/​sites/​default/​files/​NDC/​2022​-06/​Updated​%20​-​%20First​%20NDC​%20​-​%20​ %20FINAL​%20​-​%20PDF​.pdf accessed July 2022. 160 Latvian Presidency of the Council of the European Union, ‘Intended National Determined Contribution of the EU and its Member States’ (UNFCC, 2015) https://​www4​.unfccc​.int/​sites/​ndcstaging/​ PublishedDocuments/​Germany​%20First/​LV​-03​-06​-EU​%20INDC​.pdf accessed 20 June 2022. 161 Republic of South Africa, ‘South Africa’s Intended Nationally Determined Contribution (INDC)’ (UNFCC, undated) https://​www4​.unfccc​.int/​sites/​ndcstaging/​PublishedDocuments/​South​%20Africa​ %20First/​South​%20Africa​.pdf accessed 20 June 2022. 158 159

430  Research handbook on climate change mitigation law Unlike municipalities in South Africa which are under a constitutionally enforceable duty to contribute towards climate change mitigation, there is no enforceable duty on municipalities in Brazil and Germany to address climate change. However, municipalities in the latter countries have powers to respond to climate change. This suggests that, municipalities in Brazil and Germany largely depend on local political will for municipal climate change-related action. This notwithstanding, the functional areas of competence of municipalities in all three countries in terms of national constitutions and legislation put them in a position where they can contribute towards climate change mitigation. In these countries, municipalities are responsible for urban and land use planning, building regulations, waste management, air pollution control, supply of water and energy, and traffic control, for example. These areas of competence are directly relevant to climate change. Besides, in terms of the constitutions of these countries, municipalities have competence over environmental protection and climate change. Apart from Germany, Brazil and South Africa have overarching national environmental legislation. Despite this difference in approach, the discussion in part 2 shows that the three countries have sector specific legislation in the fields of environmental protection, urban planning, waste management, building regulations and air pollution for example. These sector specific legislation can be described as framework legislation162 because they generally set out principles, guidelines, standards and tools that should be implemented by municipalities. This means that the prescripts of framework legislation must be taken into consideration by municipalities in developing and implementing their own climate change mitigation policies, plans, strategies and local laws. In addition to these sector specific legislation, Brazil and Germany have adopted climate change framework legislation. While the Brazilian legislation provides principles directly applicable to municipalities, the German legislation does not provide a role for municipalities. It is worth noting that, in addition to powers and functions expressly conferred by constitutions and legislation, additional responsibilities can be assigned to municipalities in the three countries subject to the allocation of adequate resources to execute assigned functions. This ensures that, where desirable, municipalities can be enabled to play a bigger role towards climate change mitigation. Lastly, although fiscal autonomy is constitutionally guaranteed for municipalities in the three countries, most municipalities rely on financial transfers from higher levels of government to deliver on their core mandates. Without the requisite finances, the ability of municipalities to adopt and implement climate change mitigation measures is severely constrained. The COVID-19 pandemic has generally further strained the revenue generation capacity of municipalities as traditional sources of rates and taxes were affected by various lock-down measures. As indicated above, the third level of comparison zooms into how cities have responded to their legal climate mandates. As evident from the discussion in section 1 above and Table 16.1, Cape Town, Hamburg and São Paulo are members of the NAZCA platform and several city networks that are committed to contributing towards realising the international ideal of climate change mitigation couched in the Paris Agreement on Climate Change. Additional research may be necessary to assess the effects of the international framework on urban climate change mitigation in these cities. Apart from their soft duties emanating from the international framework, the discussion in section 2.3 shows that the constitutional, legislative and policy frameworks in the three 162 See JG Nel and Willemien du Plessis, ‘An Evaluation of NEMA Based on a Generic Framework for Environmental Framework Legislation’ (2001) 8 SAJELP 1, 1–3.

Cities and climate change mitigation law  431 national or state jurisdictions require the cities of Cape Town, Hamburg and São Paulo to contribute towards climate change mitigation and provide them with the instrumentation required to pursue climate change-related objectives. Although the nature of the legal duty differs across jurisdictions, there is significant leeway for innovation on the part of cities. In this regard, as is evident from section 2.3 and Table 16.1 above, all three cities have plans, policies and at times, by-laws, that speak directly to functional areas and sectors critical to climate change mitigation. In addition, they have clearly defined climate change mitigation targets. All three cities aspire carbon neutrality by 2050.163 The discussion also shows that the three cities have spatial planning powers that can be used to promote climate change mitigation measures within their jurisdictions. The cities of Cape Town and São Paulo have adopted legally binding spatial planning instruments which do not have clear-cut climate change mitigation objectives. On the other hand, the City of Hamburg uses enabling tools such as urban development contracts and property purchase agreements to mitigate climate change in urban areas. Despite the ambitious goals and achievements recorded by the three cities, especially in using their regulatory powers to set and enforce local standards, there are limits on the powers of municipalities in Brazil, Germany and South Africa to aggressively curb emissions. For example, in Brazil and Germany, municipalities have no powers over commercialised electricity production which affects their ability to significantly limit CO2 emissions in this sector. The regulation of electricity production happens either at the state or federal level or at both levels. However, from 16 October 2020, it became possible for cities in South Africa to apply to the Minister of Energy to produce up to 100 MW of electricity from renewable sources. If the City of Cape Town takes full advantage of this change in policy direction, it will enhance its decarbonisation efforts in the medium to long term. In addition, political will and adequate funding are required to sustain achievements already made and to realise long-term goals. The precarious financial positions of Cape Town and São Paulo have been made worse by the impact of the COVID-19 pandemic. Municipal electoral cycles and the political changes they potentially herald may in some instances increase political uncertainty. The COVID-19 pandemic led to a disruption of socio-economic life and a general decline in revenue collection for cities. This led to budgetary disruptions, reprioritisations and reallocations. Despite these, climate change mitigation remains a priority area of action for the cites of Cape Town and Hamburg. By contrast, the pandemic has temporarily led to the freezing of climate change-related priorities in the City of São Paulo.

3 CONCLUSIONS In this chapter we scrutinised the role of cities in climate change mitigation efforts from an international and a comparative legal perspective. Firstly, we highlighted the increasingly important role of cities in the architecture of inter- and transnational climate governance (section 1). None of the national NDCs expressly requires municipalities to contribute towards realising national mitigation targets. However, all three case study cities voluntarily registered with the NAZCA platform and are members in transnational city networks. A severe challenge

See discussion in 2.3 above.

163

432  Research handbook on climate change mitigation law in assessing cities’ contributions to close the overall mitigation gap under the Paris Agreement are lack of transparency and large differences in measuring and reporting frameworks. Neither the NAZCA platform nor city networks do yet provide robust and comparable accounting frameworks which could be used to quantify the (potential) role of urban GHG mitigation. Secondly, we introduced the institutional, strategic, instrumental and sectoral approaches that many cities rely on in their climate change mitigation efforts (section 2.1). It also showed that municipalities have a meaningful scope of action and instrumental ‘tool box’ to address climate change in the different jurisdictions of our three case studies (section 2.2). The comparative analysis revealed that the cities of Cape Town, Hamburg and São Paulo have a wide range of powers and functions guaranteed in national constitutions and legislation that can be utilised to contribute towards climate change mitigation within their jurisdictions. They are legally positioned to be able to use a variety of regulatory tools and incentives to promote climate change mitigation within their jurisdictions. Thus we argue on the one hand that there is still scope for legal action that can be used by cities to improve their climate mitigation efforts. On the other hand, levels of government above the local level, such as federal states, nation states, supranational or international entities, could also still widen cities’ scope for legal and financial action in order to strengthen their potential role in climate change mitigation. Since the financial capacity of many municipalities is limited, we argue that for municipalities to become an effective partner in climate change mitigation, we need further accessible funding mechanisms at state, national, supra- and international scales, ideally combined with the requirement of reaching GHG emission reduction targets in line with the Paris Agreement. We also want to highlight that, based on political will and financial capacities, cities can adapt and implement a variety of innovative measures in modes of urban climate governance beyond their scope of legal action. Our case studies on São Paulo, Hamburg and Cape Town highlighted a broad range of mitigation efforts but also several challenges (section 2.3). The comparative study showed that the cities have limited powers over electricity generation and nutrition which constitute major sources of GHG emissions in all three countries. This limits their ability to act in these sectors within their scopes of legal competence and underlines the importance of considering other modes of urban climate governance in these areas. However, all three cities have a rather high influence over land use planning and housing as well as a medium influence over mobility, heat supply and air pollution. The COVID-19 pandemic has generally affected the operational functions of cities and their traditional sources of revenue. It has interrupted the implementation of ambitious climate change mitigation projects in São Paulo. However, in Cape Town and Hamburg, the implementation of climate change mitigation measures still remains a priority for diverse reasons. Another central finding was that current territorial source-based emission accounting schemes should be complemented by consumption-based accounting. This would enable urban policymakers to address all GHG emissions rooted in urban infrastructures and lifestyles and not just a part of them. Future development of climate change mitigation law and policy at all levels should strengthen cities’ efforts towards a low carbon transformation in line with the goals of the Paris Agreement.

17. Agriculture, forestry and other land use (AFOLU) Jonathan Verschuuren

INTRODUCTION In climate change law and policy, ‘agriculture, forestry and other land use’, abbreviated as AFOLU, are often treated together. This sector covers all activities that make use of the soil in a way that either leads to greenhouse gas emissions, or to the uptake of greenhouse gases through sequestration in soils or in vegetation on soils, for example emissions from grazing cattle, the impact of deforestation or peatland drainage, and carbon sequestration by agricultural soils or forests. To some extent, AFOLU has replaced reference to land use, land use change, and forestry (LULUCF). LULUCF covers everything that falls under AFOLU, except non-CO2 emissions from agriculture. Those emissions, however, are closely related to removals by agricultural soils. Grazing cattle on grassland, for example, emits methane but can, depending on the grazing practices applied, also induce increased carbon uptake by grassland. That is why the Intergovernmental Panel on Climate Change (IPCC) decided to merge agriculture with LULUCF into AFOLU. However, from a legal point of view, the differences between AFOLU and LULUCF are still important because the reporting requirements under the UNFCCC still distinguish between agricultural emissions and LULUCF emissions. In this chapter,1 I will first have a close look at what emissions are included in AFOLU, so as to establish the activities that need to be regulated in order achieve a net reduction of GHG emissions in this sector (section 1). Then, in section 2, I will focus on international law: how do the UNFCCC, the Kyoto Protocol and the Paris Agreement address AFOLU? In this section, I will first focus on more general policy and reporting requirements, before turning to sector-specific mitigation commitments and mitigation instruments. Here, I will discuss the legal instruments that are applied to the AFOLU sector, such as carbon pricing, the clean development mechanism and REDD+. Section 2 will also discuss the requirements on technology transfer, as far as relevant for the AFOLU sector. Throughout this section, reference is made to the implementation of the AFOLU mitigation commitments in domestic law and in the European Union. Section 3 will discuss a range of topics that are receiving and will receive increasing attention in scholarship that focuses on AFOLU law and policy. The AFOLU sector is facing many challenges related to climate change. It is clear that these challenges will have to be addressed in future legal scholarship. Topics discussed here include the role of law in

1 This chapter uses some updated and amended parts of Jonathan Verschuuren, ‘Climate Change and Agriculture under the United Nations Framework Convention on Climate Change and Related Documents’ in Mary Jane Angelo, Anél DuPlessis (eds), Research Handbook on Climate Change and Agricultural Law (Edward Elgar Publishing 2017) 21–46 and Jonathan Verschuuren, ‘Agriculture, Climate Disasters and the Law’ in Rosemary Lyster, Robert R.M. Verchick (eds), Research Handbook on Climate Disaster Law: Barriers and Opportunities (Edward Elgar Publishing 2018) 297–312.

433

434  Research handbook on climate change mitigation law safeguarding food security under climate change mitigation policies, advancing climate smart agriculture and agroforestry, steering consumer preferences to plant-based food products and away from meat and increasing the role of forests. Section 4 concludes.

1

AFOLU EMISSIONS

The AFOLU sector is the second largest emitter of greenhouse gases after the energy sector. In 2014, 24% of GHG emissions were from AFOLU, 35% from energy supply, 21% from industry, 14% from transport and 6% from buildings.2 AFOLU emissions are hard to project as land is simultaneously a source and a sink of CO2 due to both anthropogenic and natural drivers.3 The IPCC’s special report on land concludes that global population growth and changes in per capita consumption of food, feed, fibre, timber and energy have contributed to increasing net GHG emissions, loss of natural ecosystems (e.g., forests, savannahs, natural grasslands and wetlands) and declining biodiversity. This loss of ecosystems has led to GHG emissions as well as a reduction in the capacity of land to act as a sink. Whereas the conversion of a natural forest into agricultural land will lead to a single emissions event (for instance when the forest is burned), its sink capacity is lost forever. The agricultural crops and the soil they grow on do take up some atmospheric CO2 but not in the quantities of natural vegetation like a forest.4 According to the IPCC’s special report on land, CO2 removals by vegetation and soils are expected to increase due to enhanced plant growth caused by increased CO2 concentrations in the atmosphere and longer growing seasons.5 It is uncertain what the balance between these processes is. Major emissions from land that are expected to increase are soil emissions from the thawing of permafrost,6 and to a lesser extent, emissions from wildfires.7 Fires not only lead to CO2 emissions: regrowth takes up CO2 from the atmosphere and smoke and black carbon particles reduce the amount of sunlight and thus limit warming.8

G. Blanco et al., ‘2014: Drivers, Trends and Mitigation’ in O. Edenhofer et al. (eds), Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2014) 354. 3 IPCC, ‘2019: Summary for Policymakers’ in P.R. Shukla et al. (eds), Climate Change and Land: An IPCC Special Report on Climate Change, Desertification, Land Degradation, Sustainable Land Management, Food Security, and Greenhouse Gas Fluxes in Terrestrial Ecosystems (Cambridge University Press 2019) 10. 4 To get an idea of how the accounting is being done for such changes in land use, see Peter Iversen, Donna Lee and Marcelo Rocha, Understanding Land Use in the UNFCCC (Climate and Land Use Alliance 2014). 5 Ibid. 6 Ibid. 7 G. Jia et al., ‘2019: Land–Climate Interactions’ in P.R. Sukla et al. (eds), Climate Change and Land: An IPCC Special Report on Climate Change, Desertification, Land Degradation, Sustainable Land Management, Food Security, and Greenhouse Gas Fluxes in Terrestrial Ecosystems (Cambridge University Press 2019) 149. 8 Ibid. 2

Agriculture, forestry and other land use (AFOLU)  435 The largest contributors to the net emissions from AFOLU are (in decreasing order of relevance):9 ● ● ● ● ● ● ● ● ● ●

deforestation enteric fermentation drained peat and peat fires manure on pasture synthetic fertilizers rice cultivation manure management crop residues and savannah burning crop residues cultivated organic soils.

Most of these emissions are in one way or another associated with the food system. In its special report on land, the IPCC finds that if emissions associated with pre- and post-production activities in the global food system are included, the emissions are estimated to be 21–37% of total net anthropogenic GHG emissions. The majority of these emissions (14.5%) are associated with livestock:10 ● CO2 emissions through the clearing of forests and other natural vegetation to make room for grazing pastures and for the production of soybean, or other ingredients of fodder for livestock; ● CH4 (methane) emissions from enteric fermentation by ruminant livestock, mostly beef cattle; ● CH4 and N2O (nitrous oxide) emissions from manure on soils, as well as from livestock kept in buildings, such as in piggeries or poultry farming. Methane, which is also emitted through rice cultivation, and nitrous oxide, which is also emitted through the use of synthetic fertilizers, are called non-CO2 emissions. They make up the majority of GHG emissions from agriculture. In the EU, 37% of all agricultural GHG emissions are methane emissions from enteric fermentation, and 31% are direct nitrous oxide emissions from managed soils.11 Current levels of these non-CO2 emissions can be fairly easily calculated or estimated at global, regional or national levels, for instance by measuring methane emissions per animal or nitrous oxide emissions per unit of arable land,12 provided

9 Pete Smith et al., ‘Agriculture, Forestry and Other Land Use (AFOLU)’ in O. Edenhofer et al., Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2014), 820. This is based upon data from 2000–2009. 10 P.J. Gerber et al., Tackling Climate Change through Livestock – A Global Assessment of Emissions and Mitigation Opportunities (Food and Agriculture Organization (FAO) 2013) 15. 11 European Environment Agency (EEA), Annual European Union Greenhouse Gas Inventory 1990–2018 and Inventory Report 2020 (EEA 2020) 561. 12 Peter Wehrheim and Asger Strange Oleson, ‘Land Use, Land Use Change and Forestry – How to Enter the Climate Impact of Managing Biospheres and Wood into the EU’s Greenhouse Accounting’ in G. van Calster et al. (eds), Research Handbook on Climate Change Mitigation Law (Edward Elgar Publishing 2015) 304.

436  Research handbook on climate change mitigation law uniform emission factors are used.13 At the individual farm level these emissions are much more difficult to measure since a variety of factors determine the amount of emissions, such as the diet of individual animals, soil composition, weather systems of individual regions, the way in which fertilizer is applied, etc.14 CO2 emissions from agriculture are even more difficult to estimate because, as already stated above, for CO2, in addition to emissions, removals are relevant as well since crops and other vegetation absorb CO2 from the air. For practical and political reasons, therefore, consideration of agricultural emissions under the UNFCCC only includes methane and nitrous oxide emissions from agricultural activities.15 These are called non-land emissions. Emissions from agricultural soils are included only insofar as emissions associated with the application of fertilizer and manure on soils are concerned.16 CO2 emissions and removals or other greenhouse gas emissions from soils through, for instance, tillage, cropland and grazing land management, and the conversion of land into agricultural land, are, at least as far as the UNFCCC process is concerned, not considered to be part of the agricultural sector but, instead, are considered in the LULUCF sector.17 Because this approach bears the risk of having a fragmented and confusing view on the contribution of agriculture to climate change, with double counting and inconsistencies, the IPCC in its 2006 guidelines decided to integrate its assessments of emissions from agriculture and LULUCF.18 The IPCC now, with some additional changes adopted in 201919 under AFOLU, reports on emissions from grassland, cropland, forest land, settlements, wetlands, other land, harvested wood products, livestock and manure managements, N2O emissions from managed soils, CO2 emissions from lime and urea application, CH4 emissions from rice cultivation, emissions from fires and biomass burning, rice cultivation and other agricultural activities. The above very short and simplified description of AFOLU emissions already indicates that regulating these emissions is a daunting task. Yet, the large contribution of AFOLU to climate change makes it inevitable that regulatory intervention is needed, not just to address climate change, but for various other environmental threats as well. An assessment of agricultural activities against the planetary boundaries shows that these activities are the main cause of two of the boundaries that have been transgressed already (biosphere integrity and biochemical flows/nitrates and phosphates) and greatly contribute to the transgression of two more (climate change and land system change).20 In addition to decreasing the emissions, regulation should also focus on increasing sequestration, as the land sector has the potential to store considerable amounts of atmospheric carbon. Carbon dioxide removal (CDR) by the AFOLU sector needs

Andrew Macintosh and Lauren Waugh, ‘An Introduction to the Carbon Farming Initiative: Key Principles and Concepts’ (ANU: CCLP Working Paper Series 2012/1) 15. 14 Hugh Saddler and Helen King, ‘Agriculture and Emissions Trading: The Impossible Dream?’ (The Australia Institute Discussion Paper 2008) 102. 15 Ibid. at 307. 16 Ibid. 17 Ibid. 18 H.S. Eggleston et al. (eds), 2006 IPCC Guidelines for National Greenhouse Gas Inventories (IGES 2006). 19 E. Calvo Buendia et al. (eds), 2019 Refinement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume 4: Agriculture, Forestry and Other Land Use (IPCC 2019). 20 Bruce Campbell et al., ‘Agricultural Production as a Major Driver of the Earth System Exceeding Planetary Boundaries’ (2017) 22 Ecology and Society 8. 13

Agriculture, forestry and other land use (AFOLU)  437 to be an important instrument in policies aimed at remaining within a 1.5 °C global average temperature rise: In many of the 1.5 °C-consistent pathways, AFOLU CO2 emissions reach zero at or before mid-century and then turn to negative values. This means human changes to the land lead to atmospheric carbon being stored in plants and soils. This needs to be distinguished from the natural CO2 uptake by land, which is not accounted for in the anthropogenic AFOLU CO2 emissions reported in the pathways.21

Folke et al. also stress the need to develop new policies and practices to utilize the potential of ‘nature-based solutions on land (from agriculture to reforestation and afforestation) [that] have the potential to provide over 30% of the emission reductions needed by 2050 to keep global temperature increases to 1.5 and not more than 2 degrees Celsius’.22 It should be stressed here that the AFOLU sector, especially agriculture, not only contributes to climate change. It is hit hard by climate change impacts too. The IPCC’s Fifth Assessment Report indicates that climate change is already impacting food security across the world.23 Water shortages in droughts and heatwaves have a negative impact on crops as well as livestock.24 A surplus of water with excessive precipitation, floods and inundation, increased and changing occurrence of pests, weeds and diseases,25 are but a few examples of the other impacts of climate change that negatively affect agriculture. Extreme weather events generally hit rural areas hard with a profound negative impact on rural communities and food production. The IPCC refers to the 2010 Pakistan floods as an example, where it was found that 88% of the affected households reported income losses of up to 50%, with significantly higher rates in rural than urban areas, and to the 2010 Russian heatwave and subsequent export ban that contributed to the more than doubling of global wheat prices by the end of the year.26 Developing countries are particularly vulnerable to climate disasters that hit the agricultural sector. In a paper published by the World Meteorological Organization, Sivakumar shows that the poorer the country, the larger the share of agriculture in terms of gross domestic product, total employment, and exports. Rural poverty, thus, is one of the key factors that shapes the risk of natural disasters: low agricultural productivity combined with extreme poverty makes the populations living in least developed countries the most vulnerable to natural disasters.27 21 J. Rogelj et al., ‘2018: Mitigation Pathways Compatible with 1.5 °C in the Context of Sustainable Development’ in V. Masson-Delmotte et al. (eds), Global Warming of 1.5 °C. An IPCC Special Report on the Impacts of Global Warming of 1.5 °C above Pre-industrial Levels and Related Global Greenhouse Gas Emission Pathways, in the Context of Strengthening the Global Response to the Threat of Climate Change, Sustainable Development, and Efforts to Eradicate Poverty (Cambridge University Press 2018) 114. 22 Carl Folke et al., ‘Our Future in the Anthropocene Biosphere: Global Sustainability and Resilient Societies’ (2000) Beijer Discussion Paper Series No 272, 41. 23 J.R. Porter et al., ‘Food Security and Food Production Systems’ in C.B. Field et al. (eds), Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part A: Global and Sectoral Aspects. Contribution of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2014) 485–533. 24 For example: high temperatures tend to reduce animal feeding and growth rates, milk yields will be reduced and mortality increased because of heat stress, etc., Porter et al., above note 23 at 508. 25 Ibid. at 506–7. 26 Ibid. at 503. 27 M.V.K. Sivakumar, ‘Natural Disasters and their Mitigation for Sustainable Agricultural Development’ (World Meteorological Organization paper, 2006) 175.

438  Research handbook on climate change mitigation law Sivakumar adds that climate disasters in poor countries lead to disruption of economic activity and to the diversion of government funds to prepare for and recover from natural disasters away from the rural sector.28 Within poor countries, it is the poorest that are most at risk, as the poorest in the rural areas occupy the most marginal lands that are most prone to natural disasters.29 Rural communities in developed countries are vulnerable to climate change impacts too. The IPCC refers to the social impact of the prolonged drought in Australia during the early 2000s which led to ‘farm closures, increased poverty, increased off-farm work, and, hence, involuntary separation of families, increased social isolation, rising stress and associated health impacts, including suicide (especially of male farmers), accelerated rural depopulation, and closure of key services’.30 Generally, the IPCC concludes that with ineffective global mitigation, Australia will face an increase in flood risk, water scarcity, heatwaves, and wildfires, coastal damage from sea level rise, and loss of agricultural production from severe drying, to such an extent that the associated impacts would so severely challenge adaptive capacity, including transformational changes, that they constitute important risks.31 There is high confidence that positive impacts of climate change, such as a longer growing season which may benefit crop productivity, will be outweighed by the impacts of enhanced climate extremes, together with non-climate factors such as nutrient limitation and soil health.32 Such a net reduction in food production due to climate change is especially worrying given the fact that global food production needs to increase by 40% to meet growing demand. Food demand is mainly increasing because of population growth (the world’s population will grow from 7 billion today to 9 or 10 billion in 2050) and because of a rise in global calorie intake by 60% due to greater affluence, particularly in countries like China and India.33 The IPCC concludes that ‘each additional decade of climate change is expected to reduce mean yields by roughly 1%, which is a small but nontrivial fraction of the anticipated roughly 14% increase in productivity per decade needed to keep pace with demand’.34 All of this leads the IPCC to conclude that agriculture and the food system are key to global climate change responses.35

Ibid. Ibid. at 176. 30 Andy Reisinger et al., ‘Australasia’ in Vincente R. Barros et al. (eds), Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part B: Regional Aspects. Contributions of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2014) at 1398. 31 Ibid. at 1412. 32 Jia, above note 7 at 143. 33 Bruce Campbell, Wendy Mann, Ricardo Meléndez-Ortiz, Charlotte Streck and Timm Tennigkeit, Agriculture and Climate Change: A Scoping Report (Meridian Institute 2011). 34 Porter et al., above note 23 at 505. 35 C. Mbow et al., ‘2019: Food Security’ in P.R. Shukla et al. (eds), Climate Change and Land: An IPCC Special Report on Climate Change, Desertification, Land Degradation, Sustainable Land Management, Food Security, and Greenhouse Gas Fluxes in Terrestrial Ecosystems (Cambridge University Press 2019) 440. 28 29

Agriculture, forestry and other land use (AFOLU)  439

2

ADDRESSING AFOLU EMISSIONS UNDER THE UNFCCC, THE KYOTO PROTOCOL AND THE PARIS AGREEMENT

2.1

Adopt AFOLU Mitigation Policies and Reporting Requirements

The basic commitments in the UNFCCC, for all parties to have and report to the COP national inventories of anthropogenic greenhouse gas emissions and policies addressing emissions by sources and removals by sinks of all greenhouse gases not controlled by the Montreal Protocol, are not restricted to specific sectors and therefore apply to AFOLU sectors.36 The commitment to sustainably manage, conserve and enhance sinks and reservoirs specifically mentions biomass.37 For Annex I parties, more stringent formulations apply. These states have to adopt national policies and measures on limiting greenhouse gas emissions and protecting sinks and reservoirs,38 and they have to report detailed information on its policies and measures … as well as on its resulting projected anthropogenic emissions by sources and removals by sinks of greenhouse gases … with the aim of returning individually or jointly to their 1990 levels these anthropogenic emissions of carbon dioxide and other greenhouse gases not controlled by the Montreal Protocol.39

In the Kyoto Protocol, the reporting obligation for Annex I parties was further expanded to also enable an estimate to be made of the changes in carbon stocks since 1990.40 Later changes in greenhouse gas emissions by sources and removals by sinks in agricultural soils and land use change and forestry were added.41 The reports that are submitted annually under these provisions provide a wealth of information on current trends in emissions from agriculture, as well as on policies that are in place to address these emissions in the Annex I countries. Tens of thousands of pages are produced every year. It is impossible to give a full survey of the content of these reports, so this section will only briefly summarize the most important ones and give some examples from their content, focusing on Annex I countries since the most detailed requirements apply to them. The most important reports are national inventory submissions and national communications. National inventory submissions consist of the national inventory report (NIR) and the common reporting format (CRF). The NIRs contain detailed descriptive and numerical information and the CRFs contain summary, sectoral and trend tables for all greenhouse gas emissions and removals.42 Individual chapters are devoted to agriculture and to LULUCF and are (partly) submitted separately because of the specific methodology for these categories, developed and adopted after the Kyoto Protocol was signed. The EU’s 2020 NIR (dealing with emissions from 1990–2018) has 230 pages on agriculture and LULUCF (more than on

Art. 4(1)(a) and (b) UNFCCC. Art. 4(1)(d) UNFCCC. 38 Art. 4(2)(a) UNFCCC. 39 Art. 4(2)(b) UNFCCC. 40 Art. 3(4) Kyoto Protocol. 41 Art. 3(4) Kyoto Protocol. 42 All reports are available online through the UNFCCC secretariat’s website: https://​unfccc​.int/​ghg​ -inventories​-annex​-i​-parties/​2020 accessed 3 September 2020. 36 37

440  Research handbook on climate change mitigation law any other sector, except energy).43 The report shows that reductions occurred with regard to N2O from direct soil emissions and indirect emissions, as well as from CH4 from cattle, caused by the decreasing use of both synthetic and organic fertilizers and declining cattle numbers in most EU Member States, among others due to environmental rules (especially legislation aimed at reducing nitrates in soil and water).44 To give another example, Australia reports that emissions from agriculture decreased by 10.8% between 1990 and 2018.45 The report indicates that this decrease was not caused by legislation but by changing climatic conditions and drought conditions which led to a fall or limited growth of livestock numbers and reduced use of fertilizers.46 National communications (NC) detail the policies and measures adopted and their mitigation impact.47 The Annex I countries’ seventh NCs, submitted in 2018, are in striking contrast to the NIRs as far as information on the agricultural sector is concerned. For each of the Annex I states, extremely detailed information is reported on all AFOLU sources of emissions in the NIRs. Policies and measures in the NCs, however, receive only little attention or are almost absent. The Netherlands report, for example, refers to voluntary action to be taken by the sector,48 largely repeating what was in the sixth NC (except for the sentence in the sixth NC, ‘Until 2020, no sectoral reduction targets will be imposed on agriculture.’49). As is explained in section 1 above, we live in a world that is increasingly food insecure. Both the UNFCCC and the Paris Agreement require states to take food security into account when developing mitigation policies. The Paris Agreement states as one of its objectives: ‘Increasing the ability to … foster climate resilience and low greenhouse gas emissions development, in a manner that does not threaten food production’,50 whereas one of the preambular paragraphs refers to ‘the fundamental priority of safeguarding food security and ending hunger’. The UNFCCC states that the objective of the Convention and any related legal instruments that the Conference of the Parties may adopt to prevent dangerous anthropogenic interference with the climate system has to be ‘achieved within a time-frame sufficient … to ensure that food production is not threatened’.51 Another general requirement in the UNFCCC that applies to AFOLU mitigation policies is the obligation that mitigation measures should not constitute a means of arbitrary or unjus-

43 European Environment Agency (EEA), Annual European Union Greenhouse Gas Inventory 1990–2018 and Inventory Report 2020 (EEA 2020). 44 From the various legal instruments that apply to livestock keeping, the Nitrates Directive (Council Directive 91/676/EEC of 12 December 1991 concerning the protection of waters against pollution caused by nitrates from agricultural sources (1991) OJ L 375/1) is considered to have had the largest impact on greenhouse gas emissions from agriculture. This Directive aims to reduce water pollution caused by nitrates from agricultural sources. Ibid. at 556 and 560. 45 Department of the Environment, National Inventory Report 2020: Volume 1 (Commonwealth of Australia 2020) 283. 46 Ibid. at 283–285. 47 All communications are available online through the UNFCCC secretariat’s website: https://​ unfccc​.int/​NC7 accessed 3 September 2020. 48 Ministry of Economic Affairs and Climate Policy, Seventh Netherlands National Communication under the United Nations Framework Convention on Climate Change (Min EZK 2018) 80. 49 Ministry of Infrastructure and the Environment, Sixth Netherlands National Communication under the United Nations Framework Convention on Climate Change (Min I&M 2013) 72. 50 Art. 2(1)(b) Paris Agreement. 51 Art. 2 UNFCCC.

Agriculture, forestry and other land use (AFOLU)  441 tifiable discrimination or a disguised restriction on international trade.52 Similarly, the Kyoto Protocol states that Annex I parties, in their mitigation policies, should minimize adverse effects on international trade.53 Note that in both instances, ‘should’ is used, rendering these provisions a rather weak legal status. Nevertheless, these provisions are relevant for agriculture as well as for forestry, as the markets for food and wood products are global markets that, as just discussed, are severely affected by climate change. The food market is a market that is heavily influenced by the provision of trade-distorting subsidies in developed countries.54 This is important for mitigation as current income support schemes for farmers may influence the level of their greenhouse gas emissions. A singular focus on production is likely to lead to increased use of fertilizers, for example, and may constrain climate smart agriculture by not financially rewarding farmers for switching to agricultural practices that are aimed at climate change mitigation and adaptation.55 Under the WTO, reducing market distortions caused by income support to farmers has been discussed for years now, albeit without significant progress towards the liberalization of trade in agricultural products.56 The global trade in biofuels also caused a number of trade disputes, because of subsidies and non-tariff barriers.57 Generally, it can be concluded that the relationship between the UNFCCC and the WTO is troublesome. Adler describes it as a chicken and egg problem: the UNFCCC and the Kyoto Protocol prohibit climate policies that restrict international trade, using WTO terminology, while within the WTO, officials and negotiators wait for a comprehensive agreement to replace the Kyoto Protocol before addressing the relationship between the climate change regime and trade law.58 Campbell et al. conclude that, on the one hand, climate change mitigation policies and measures related to agricultural trade remain ungoverned by the UNFCCC, while international trade law, on the other hand, may support mitigation measures, but has not been designed for that.59 They too think that it is important that a new international climate change agreement is reached, so that countries do not have an excuse to apply unilateral or plurilateral measures which may lead to trade disputes because these measures, by other countries, are considered to be discriminatory and, therefore, are not covered by the general exception under Article XX of the WTO’s Global Agreement on Tariffs and Trade.60 The Paris Agreement, however, simply does not refer to international trade at all. It only, indirectly, refers to the rela-

Art. 3(5) UNFCCC. Art. 2(3) Kyoto Protocol. 54 Robert W. Adler, ‘Climate Change Adaptation and Agricultural and Forestry Law’ in Jonathan Verschuuren (ed.), Research Handbook on Climate Change Adaptation Law (Edward Elgar Publishing 2013) 239. 55 Ibid. at 240. 56 See Campbell et al., above note 33 at 38. 57 Smith et al., above note 9 at 867. See extensively Markus W. Gehring, Marie-Claire Cordonier Segger and Jarrod Hepburn, ‘Climate Change and International Trade and Investment Law’ in Rosemary Rayfuse and Shirley V. Scott, International Law in the Era of Climate Change (Edward Elgar Publishing 2012) 84–117. 58 Adler, above note 54 at 239. See on the relationship of the Kyoto Protocol and the WTO, Robert Howse and Antonia L. Eliason, ‘Domestic and International Strategies to Address Climate Change: An Overview of the WTO Legal Issues’ in Thomas Cottier, Olga Nartova and Sadeq Z. Bigdeli (eds), International Trade Regulation and the Mitigation of Climate Change. World Trade Forum (Cambridge University Press 2009) 48–93. 59 Campbell et al., above note 33 at 44. 60 Ibid. 52 53

442  Research handbook on climate change mitigation law tionship between climate change policies and international trade by stating in its preambular paragraphs that parties may be affected by measures in response to climate change and that there exists an intrinsic relationship between climate change actions and equitable access to sustainable development and eradication of poverty.61 It is clear that the Paris Agreement did not bring the necessary changes to existing trade and investment laws, which are considered necessary to reduce emissions from agriculture without compromising food security.62 2.2

Sector-Specific Mitigation Commitments and Mitigation Instruments

Comparing the reports on emissions from agriculture with those on policies to reduce emissions from agriculture already shows that under the Kyoto Protocol no sector-specific commitments were adopted, nor was LULUCF fully included under the general emission reduction commitment of Article 3(1).63 Annex A to the Kyoto Protocol lists greenhouse gases that are particularly relevant for agriculture, i.e. methane and nitrous oxide. Agriculture is also listed under the sectors and source categories to which the protocol applies (‘enteric fermentation, manure management, rice cultivation, agricultural soils, prescribed burning of savannas, field burning of agricultural residues and other’).64 Taking mitigation measures specifically targeting the agricultural sector, however, is left to the discretion of the Annex I parties to the Protocol. The Protocol explicitly mentions ‘promotion of sustainable forms of agriculture in light of climate change considerations’ as an element of national mitigation policies in Annex I countries that need to be ‘implemented and/or further elaborated’.65 Promoting sustainable forms of agriculture, however, is a rather general aim that does not necessarily have to lead to a large reduction of greenhouse gas emissions. For non-Annex I states, Article 10 of the Kyoto Protocol ‘reaffirms existing commitments’ under Article 4(1) UNFCCC by stating that they shall ‘Formulate, implement, publish and regularly update national and, where appropriate, regional programmes containing measures to mitigate climate change … (i) Such programmes would, inter alia, concern … agriculture …’.66 The Paris Agreement does not impose specific commitments or devise specific instruments for the AFOLU sector either. The most relevant provision for the sector is Article 5, which states that ‘Parties should take action to conserve and enhance, as appropriate, sinks and reservoirs of greenhouse gases … including forests.’ Use of the word ‘should’, indicates that this is a rather weak provision. Agriculture is not specifically mentioned, despite proposals in the run-up to the adoption of the Agreement to do otherwise.67 It is generally thought, though, that

See in more detail Charles E. Di Leva and Xiaoxin Shi, ‘The Paris Agreement and the International Trade Regime: Considerations for Harmonization’ (2016) 17(1) Sustainable Development Law & Policy 20–29. 62 See Christian Häberli, ‘Adaptation of Agricultural Trade and Investment Rules to Climate Change’ in Mary Jane Angelo and Anél Du Plessis (eds), Research Handbook on Climate Change and Agricultural Law (Edward Elgar Publishing 2017) 274, at 313. 63 Wehrheim and Oleson, above note 12 at 307 and 309 respectively. 64 Annex A Kyoto Protocol. 65 Art. 2(1)(a)(iii) Kyoto Protocol. 66 Art. 10(b)(i) Kyoto Protocol. 67 Verschuuren, above note 1 (2017) at 43–45; Jonathan Verschuuren, ‘The Paris Agreement on Climate Change: Agriculture and Food Security’ (2016) 7(1) European Journal of Risk Regulation 54, at 55–57. 61

Agriculture, forestry and other land use (AFOLU)  443 the AFOLU sector is important for the realization of the Paris Agreement goal of achieving a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century, as required by Article 4(1) of the Paris Agreement.68 It is not surprising, therefore, that states do pay attention to the AFOLU sector in their nationally determined contributions. In a 2017 report, the United Nations Environment Programme (UNEP) found that agriculture and LULUCF are included in approximately 75% of the (I) NDCs of developing countries.69 In most countries, however, AFOLU was not included in binding mitigation schemes. The EU Emissions Trading System (ETS), for instance, does not include AFOLU emissions.70 In fact, none of the various ETSs that are operational across the globe directly include emissions from farms as regulated entities.71 Including farming in an ETS is considered to be difficult because of the measuring problem mentioned above. Using uniform emission criteria to overcome the measuring problems at individual farms has the disadvantage that these diminish the incentives to change behaviour of individual farmers.72 Some ETSs do allow regulated entities to buy carbon credits generated by farmers to offset their own emissions. California’s Cap-and-Trade Regulation (2012), for example, includes avoidance of methane emissions from installations of anaerobic digesters on farms and carbon sequestration in rural forestry as projects that are eligible to generate carbon credits.73 Industries and other regulated entities in the Californian ETS can use these credits to partly offset their own emissions. This offset model is or was also used in other countries, such as China and some Canadian provinces. Australia’s Carbon Farming Initiative Act (2011) enables farmers and other landowners to obtain tradable carbon credits for a range of projects that lead to a reduction of AFOLU emissions, including increasing soil carbon, reducing livestock emissions, expanding opportunities for environmental and carbon sink plantings, and reforestation.74 The Australian system is different from the Californian system in that it is a stand-alone programme, not connected to an ETS.

Joeri Rogelj et al., ‘Paris Agreement Climate Proposals Need a Boost to Keep Warming Well Below 2 °C’ (2016) 534 Nature 631; Verschuuren, above note 67 (2016) at 54–57. 69 Marco C. Schletz et al., Taking Stock of the (I)NDCs of Developing Countries: Regional (I)NDC Coverage of Mitigation Sectors and Measures (UNEP 2017) 9. 70 Wehrheim and Oleson, above note 12 at 313. Emissions from agriculture have been included in the Effort Sharing Decision (Decision 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020, (2009) OJ L 140/136), which means that agricultural emissions, together with emissions from other non-ETS sectors, are subject to an overall reduction target for each Member State. Individual Member States are free to choose how and where they achieve this overall target. As a consequence, the extent to which agricultural emissions are cut following domestic policies and measures varies significantly among the Member States. 71 Alexia Brunet Marks, ‘(Carbon) Farming Our Way out of Climate Change’ (2020) 97(3) Denver Law Review 497, 547. 72 Andrew Macintosh and Lauren Waugh, ‘An Introduction to the Carbon Farming Initiative: Key Principles and Concepts’ (ANU: CCLP Working Paper Series 2012/1) 15. 73 Smith et al., above note 9 at 865. 74 Jonathan Verschuuren, ‘Towards a Regulatory Design for Reducing Emissions from Agriculture: Lessons from Australia’s Carbon Farming Initiative’ (2017) 7(1) Climate Law 1–51. 68

444  Research handbook on climate change mitigation law In the EU, AFOLU emissions are partly regulated under the 2018 LULUCF Regulation.75 As of 2021, emissions and removals in land use and forestry sectors, including agricultural land use for arable crops and grassland, must be balanced.76 A large part of the LULUCF Regulation consists of accounting rules for a wide variety of AFOLU sectors: afforested land and deforested land,77 managed cropland, managed grassland and managed wetland,78 managed forest land,79 and harvested wood products.80 Member States are allowed to take the impact of natural disturbances on the emissions from afforested land and managed forest land into account to some extent.81 This means, for example, that additional emissions due to wildfires do not have to be balanced. Agricultural emissions that do not fall under the LULUCF Regulation, such as emissions from livestock, are only regulated under the Effort Sharing Regulation, together with all other non-ETS emissions.82 It is, therefore, up to each Member State to decide how they will achieve the reduction targets for these non-ETS sectors. The EU’s Effort Sharing Regulation, however, does stimulate Member States to go beyond compliance with the LULUCF Regulation: Member States that achieve a surplus rather than a balance can use these extra emission reductions to cover the target set by the Effort Sharing Regulation to a certain extent.83 The EU’s Common Agricultural Policy (CAP) does have a strong focus on climate change mitigation, but this instrument is voluntary: farmers who do not apply for financial support under the CAP are not bound by its rules. Research indicates that the impact of the CAP on agricultural emissions so far has been limited and calls for drastic revisions.84 The Kyoto Protocol’s Clean Development Mechanism (CDM)85 accepts AFOLU projects, especially afforestation, reforestation and agricultural projects.86 The number of AFOLU projects, however, is very small compared to those in the energy sector. Of the more than 7800 CDM projects, 67 are afforestation and reforestation projects and 135 are agricultural projects.87 Most afforestation and reforestation projects are projects on degraded pasture lands with extensive grazing and burning of biomass. Restoring these degraded pastures to

Regulation 2018/841/EU on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry in the 2030 climate and energy framework, (1998) OJ L 156, 1, Article 4. 76 Article 4 LULUCF Regulation. 77 Article 6 LULUCF Regulation. 78 Article 7 LULUCF Regulation. 79 Article 8 and Annex IV LULUCF Regulation. 80 Article 9 and Annex V LULUCF Regulation. 81 Article 10 and Annex VI LULUCF Regulation. 82 Regulation 2018/842/EU on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement, (2018) OJ L 156, 26. 83 Article 7 Effort Sharing Regulation. 84 D. Blandford and K. Hassapoyannes, ‘The Common Agricultural Policy in 2020: Responding to Climate Change’ in J.A. McMahon and M.N. Cardwell (eds), Research Handbook on EU Agriculture Law (Edward Elgar Publishing 2015) 170–202; Jonathan Verschuuren, ‘Towards an EU Regulatory Framework for Climate Smart Agriculture: The Example of Soil Carbon Sequestration’ (2018) 7(2) Transnational Environmental Law 301–322. 85 Article 12 Kyoto Protocol. 86 See Donald F. Larson, Ariel Dinar and J. Aapris Frisbie, Agriculture and the Clean Development Mechanism (Policy Research Working Paper 5621, World Bank 2011). 87 Search in CDM project database https://​cdm​.unfccc​.int/​Projects/​projsearch​.html on 2 September 2020. 75

Agriculture, forestry and other land use (AFOLU)  445 forested land not only serves mitigation purposes, but also aims at soil improvement. In 2005, simplified modalities and procedures for small-scale afforestation and reforestation project activities were adopted, especially aimed at small, rural community-based projects in developing countries.88 In agriculture, only projects aimed at methane avoidance, biogas projects and agricultural residues for biomass are accepted under the CDM. As a consequence, the IPCC concluded that finance streams coming from agricultural projects are marginal from the global perspective.89 Another relevant international financial mechanism developed under UNFCCC umbrella is Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD+), which specifically targets the AFOLU sector.90 Although REDD+ is still being developed on the foundations laid down in 2013 with the adoption of the Warsaw Framework for REDD-plus,91 it is (very) slowly gaining ground.92 The mechanism stimulates developing countries to avoid deforestation, to sustainably manage their forests and to conserve and enhance their forest carbon stocks. The Paris Agreement has provided a basis to the REDD+ mechanism in Article 5(2), in which Parties are encouraged to take action to implement and support, including through results-based payments, the existing framework as set out in related guidance and decisions already agreed under the Convention for: policy approaches and positive incentives for activities relating to reducing emissions from deforestation and forest degradation, and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries; and alternative policy approaches, such as joint mitigation and adaptation approaches for the integral and sustainable management of forests, while reaffirming the importance of incentivizing, as appropriate, non-carbon benefits associated with such approaches.

The Warsaw Framework for REDD+ has provided the rules that help to achieve effective results-based finance: (1) an agreement on the definition of results; (2) an understanding of what needs to be in place in order to trigger potential payments; (3) a significant degree of discretion left to implementing developing country parties’ national strategies or action plans, based on commonly agreed parameters: (4) a well-designed monitoring, reporting and verification system that can give reasonable confidence that results have been achieved.93 Many countries developed and started to implement national strategies and action plans after the adoption of the Warsaw Framework, and are now approaching the phase in which payments are sought for the results achieved. The Green Climate Fund is running a REDD+ 88 Decision 6/CMP.1, Simplified modalities and procedures for small-scale afforestation and reforestation project activities under the clean development mechanism in the first commitment period of the Kyoto Protocol and measures to facilitate their implementation, FCCC/KP/CMP/2005/8/Add.1, 81. 89 Smith et al., above note 9 at 864. 90 See extensively, Christina Voigt (ed.), Research Handbook on REDD+ and International Law (Edward Elgar Publishing 2016). 91 Several decisions adopted at COP 19 in Warsaw. For an overview, see https://​unfccc​.int/​topics/​ land​-use/​resources/​warsaw​-framework​-for​-redd​-plus. See further, Christina Voigt and Felipe Ferreira, ‘The Warsaw Framework for REDD+: Implications for National Implementation and Results-Based Finance’ in Christina Voigt (ed.), Research Handbook on REDD+ and International Law (Edward Elgar Publishing 2016) 30–59. 92 The REDD+ information hub keeps track of the amount of emissions financed under the mechanism, see https://​redd​.unfccc​.int/​info​-hub​.html accessed 22 September 2020. 93 Voigt and Ferreira, above note 91 at 54–55.

446  Research handbook on climate change mitigation law Results-Based Payments Pilot from 2017 until 2022 aimed at distributing US$500 million for 100 million tCO2e of reduced emissions.94 Most of the finance comes from international public sources, but the aim is also to scale up funding through private funding, for example from forestry offsets in voluntary carbon markets.95 The REDD+ mechanism interacts with many other instruments. Much of the legal scholarship discusses the complexities caused by the interactions between REDD+ and other international and domestic instruments.96 Most of the attention is focused on: ● tropical timber laws, both international instruments, such as International Tropical Timber Organization, Forest Stewardship Council, and domestic instruments, such as the US Lacey Act, the Australian Illegal Logging Prohibition Act, and the EU’s Timber Regulation;97 ● biodiversity law, for example, the Convention on Biological Diversity and the Convention on Trade in Endangered Species;98 ● human rights law, such as the ILO’s Convention 169 on Indigenous and Tribal Peoples in Independent Countries;99 ● international trade and investment law, including World Trade Organization agreements, such as the General Agreement on Tariffs and Trade.100 2.3

Technology Transfer for Mitigation in the AFOLU sector

Under the UNFCCC, states are required to promote and cooperate in the development, application and diffusion, including transfer, of technologies, practices and processes that control, reduce or prevent anthropogenic emissions of greenhouse gases in agriculture and forestry.101 Developed country parties, particularly Annex II states, are even required to ‘take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to,

For an overview of current projects in Colombia, Indonesia, Paraguay, Brazil, Ecuador and Chile, see the Green Climate Fund’s website, https://​www​.greenclimate​.fund/​redd accessed 22 September 2020. 95 See Charlotte Streck, ‘The Financial Aspects of REDD+: Assessing Costs, Mobilising and Disbursing Funds’ in Rosemary Lyster, Catherine MacKenzie and Constance McDermott (eds), Law, Tropical Forests and Carbon. The Case of REDD+ (Cambridge University Press 2013) 105–127. 96 For example: Harro van Asselt and Constance L. McDermott, ‘The Institutional Complex for REDD+: A “Benevolent Jigsaw”?’ in Christina Voigt (ed.), Research Handbook on REDD+ and International Law (Edward Elgar Publishing 2016) 63–88; Margaret A. Young, ‘REDD+ and Interacting Legal Regimes’ in Christina Voigt (ed.), Research Handbook on REDD+ and International Law (Edward Elgar Publishing 2016) 89–125. 97 Ibid. 98 Andrew Long, ‘The Convention on Biological Diversity and REDD+’ in Christina Voigt (ed.), Research Handbook on REDD+ and International Law (Edward Elgar Publishing 2016) 186–209. 99 Sébastien Jdoin, ‘The Human Rights of Indigenous Peoples and Forest-Dependent Communities in the Complex Legal Framework for REDD+’ in Christina Voigt (ed.), Research Handbook on REDD+ and International Law (Edward Elgar Publishing 2016) 157–185; Kirsty Gover, ‘REDD+ Tenure and Indigenous Property: The Promise and Peril of a ‘Human Rights-Based Approach’ in Christina Voigt (ed), Research Handbook on REDD+ and International Law (Edward Elgar Publishing 2016) 249–288. 100 Marie-Claire Cordonier Segger, Markus Gehring and Andrew Wardell, ‘REDD+ Instruments, International Investment Rules and Sustainable Landscapes’ in Christina Voigt (ed.), Research Handbook on REDD+ and International Law (Edward Elgar Publishing 2016) 347–387. 101 Art. 4(1)(c) UNFCCC. See also Art. 10(c) Kyoto Protocol. 94

Agriculture, forestry and other land use (AFOLU)  447 environmentally sound technologies and knowhow to other Parties, particularly developing country Parties’.102 The Paris Agreement pays ample attention to technology transfer in its Article 10. This provision, however, contrary to the UNFCCC, was drafted using very weak legal language. It refers to the technology framework and the Technology Mechanism, established under the UNFCCC, as means to foster technology transfer in general, without specific attention to agriculture and forestry. Developing countries still have difficulty in attracting clean technologies from developed countries. There are a variety of reasons for this, such as the less attractive international investment conditions in most developing countries and the lack of technical capacity and training systems.103 Much debate also focuses on intellectual property rights, as the protection of intellectual property rights is potentially a barrier to technology transfer.104 A polarized debate between some developed and some developing countries prevented a meaningful discussion based on evidence rather than rhetoric from taking place under the UNFCCC.105 It is thought, however, that the WTO’s intellectual property rights law, as laid down in the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), actually favours access to agricultural technologies and practices, as the TRIPS agreement protects IPRs while at the same time favouring technology transfer to developing countries,106 although the latter – in practice – is still problematic.107

3

FUTURE CHALLENGES FOR SCHOLARSHIP ON AFOLU MITIGATION LAW AND POLICY

This section will discuss a range of topics that are receiving and will increasingly receive attention in law and policy-related scholarship. The AFOLU sector is facing many challenges related to climate change. It is clear that these challenges will have to be addressed in future scholarship. 3.1

The Role of Law in Safeguarding Food Security under Climate Change Mitigation Policies

Emissions from the AFOLU sector cannot be regulated without taking food security into consideration. Strict mitigation policies could negatively affect food production. The IPCC noted that, although feedbacks between greenhouse gas reduction and food security are not

Art. 4(5) UNFCCC. Smith et al., above note 9 at 1236. 104 Matthew Rimmer, Intellectual Property and Climate Change. Inventing Clean Technologies (Edward Elgar Publishing 2011) 39–82; Gehring et al., above note 57 at 98. 105 Campbell et al., above note 33 at 39. 106 Article 7 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, 15 April 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex IC (1994) 33 ILM 1197. 107 Adler, above note 54 at 242–243. Rimmer, however, argues that the flexibilities of the TRIPS Agreement that are thought to enable access to agricultural technologies and practices are overrated; Matthew Rimmer, Intellectual Property and Climate Change. Inventing Clean Technologies (Edward Elgar Publishing 2011) 87. 102 103

448  Research handbook on climate change mitigation law completely understood,108 large-scale biomass supply for energy or carbon sequestration in the AFOLU sector provide important mitigation measures, but at the same time have potential implications for food security.109 Research indicates that the large-scale use of bioenergy is threatening food security in Africa because productive lands for sustainable food production are being used to produce biofuels.110 The 2008 global food price spikes are believed to have been partially caused by the rise in biofuel production.111 Such price spikes have devastating impacts on societies at large. The 2008 food price spike caused around 100 million people to fall into poverty,112 and the 2010–2011 food price spike has been estimated to have pushed 44 million people below the basic needs poverty line across 28 countries.113 The IPCC notes that food prices and food availability also affect socio-political stability and, in the case of the 2008–2009 and 2010–2011 food price spikes, have been associated with food riots.114 It concludes: ‘There is robust evidence that food security affects basic-needs elements of human security and, in some circumstances, is associated with political stability and climate stresses.’115 Research shows that mitigation policies using a global carbon price that does not account for food production implications will hurt crop and livestock production.116 The loss of production that may occur in this way may even be larger than the loss through climate change itself. Modelling shows that large-scale afforestation and substantial carbon sequestration up to 2100 will lead to food price increases of about 80% by 2050 and 400% by 2100.117 Conventional agriculture will also face price increases from emission caps or pricing mechanisms placed upon the use of fuels and fertilizers, as agriculture is a heavily energy-dependent sector not only in the developed world, but also increasingly in Latin America and Asia.118 To avoid such negative impacts, carbon pricing policies should be developed thoughtfully.119 Kreidenweis et al. make a number of recommendations: afforestation should be restricted to the tropics so as to achieve the highest possible sequestration with the lowest impact on food production; agricultural trade should be liberalized so as to dampen price effects in tropical regions; the carbon pricing mechanism should allow for monetary flows to go to the tropical regions so as to compensate for some of the disadvantages for these regions, to avoid established forests Smith et al., above note 9 at 837. Ibid. at 816. 110 Ibid. at 854. 111 ICTSD–IPC Platform on Climate Change, Agriculture and Trade: Considerations for Policymakers (International Centre for Trade and Sustainable Development 2009) 2. 112 Ibid. 113 Neil Adger et al., ‘Human Security’ in C.B. Field et al. (eds), Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part A: Global and Sectoral Aspects. Contribution of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press 2014) 755, 763. 114 Ibid. 115 Ibid. 116 Stephane Hallegatte et al., Shock Waves. Managing the Impacts of Climate Change on Poverty (World Bank 2016) 56. 117 Ulrich Kreidenweis, Florian Humpenöder, Miodrag Stevanovic, Benjamin Luon Bodirsky, Elmar Kriegler, Hermann Lotze-Campen and Alexander Popp, ‘Afforestation to Mitigate Climate Change: Impacts on Food Prices under Consideration of Albedo Effects’ (2016) 11 Environmental Research Letters 1. 118 Ibid. 119 Ibid. at 9. 108 109

Agriculture, forestry and other land use (AFOLU)  449 being cut down again; and that technologies and practices aimed at yield increases should be developed.120 Regulatory interventions should aim for adaptation and food production co-benefits (see further section 3.2 below). Such conditions on mitigation policies that may have an impact on food security follow from the right to food as laid down in Article 11 of the International Covenant on Economic, Social and Cultural Rights.121 General Comment No 12 on the right to food specifically stipulates that states have the obligation to respect existing access to adequate food and thus are required not to take any measures that result in preventing such access.122 A helpful normative framework to design law aimed at addressing environmental problems caused by agriculture that does not harm food security was developed by Johnson.123 Johnson’s framework gives criteria for international law that have to be met to achieve a realization of the right to food through sustainable agriculture. These criteria, however, are also very suitable for domestic laws and regulations. The framework contains following four criteria:124 1. Objectives and provisions compatible with the realization of the right to food, for example by facilitating fair and equal distribution of food, protection against interferences with natural resources used for agriculture, and mechanisms to strengthen public and private investments in agriculture compatible with the progressive realization of the right to food. 2. Special treatment, support and protection for the currently food insecure as well as for vulnerable groups and countries. 3. Procedures in the design, negotiation, and implementation that (a) reflect human rights principles, such as participation, accountability, non-discrimination and transparency, (b) ensure greater coherence across relevant regulatory instruments, and (c) seek to build an enabling environment by aligning regulatory instruments, financial investments, and institutional arrangements. 4. Mechanisms, instruments and provisions that promote a holistic approach towards the sustainable use of the natural resources and the ecosystem services relevant for agriculture, such as by regulatory interventions effectively reducing environmental harms caused by industrial agriculture, by facilitating the uptake of agroecological farming methods, and by facilitating community participation in relevant planning, policies, and laws. 3.2

Advancing Climate Smart Agriculture and Agroforestry

A key concept in the debate on the relationship between climate change, agriculture and food security is the concept of climate smart agriculture. It aims to integrate mitigation considerations into farming practices and technologies, while at the same time also taking into account adaptation and food security. Climate smart agriculture is an approach to developing the technical, policy and investment conditions to achieve sustainable agricultural development Kreidenweis et al., above note 117. International Covenant on Economic, Social and Cultural Rights, 16 December 1966, 6 ILM 360 (1967). 122 CESCR General Comment No 12: The Right to Adequate Food (Art. 11), 12 May 1999, E/C.12/1999/5 (1999), para. 15. 123 Hope Johnson, International Agricultural Law and Policy: A Rights-Based Approach to Food Security (Edward Elgar Publishing 2018). 124 Ibid. at 56–57. 120 121

450  Research handbook on climate change mitigation law for food security under climate change.125 Climate smart agriculture focuses on three targets at the same time: sustainably increasing agricultural productivity and incomes, adapting and building resilience to climate change and reducing and/or removing greenhouse gas emissions where possible.126 Increased resilience can be a side-effect of carbon-offset projects in agriculture, particularly of those projects aimed at increased carbon sequestration in soils and planting vegetation on agricultural lands, as these lead to more fertile soils and better moisture retention and thus to increased production, better water management, and reduced fertilizer use.127 A literature review found that increasing soil carbon can have profound effects on soil quality and agro-ecosystem productivity. Soil carbon plays an important role in maintaining soil structure, improving soil-water retention, fostering healthy soil microbial communities, and providing fertility for crops.128 Furthermore, soil-carbon projects are often part of the introduction of wider regenerative practices that focus on soils, water, and biodiversity.129 Research also found that farmers practising sustainable agriculture are better able to cope with extreme weather events than conventional farmers.130 Gonzalez refers to surveys following Hurricane Mitch in Central America, which showed that the land of sustainable farmers had 40% more topsoil, greater levels of moisture, more vegetation, and less soil erosion than the lands of conventional farmers.131 UN-led model projects in drought-prone areas in the Horn of Africa showed that small-scale adaptation measures aimed at improving the sustainability of agro-ecosystems led to increased food production and decreased use of chemical fertilizer and pesticides, saving farmers money, reducing pollution and allowing depleted soils to recover.132 Another example of mitigation measures that have a positive impact on adaptation and food security is the introduction of agroforestry. Agroforestry is defined as an efficient and integrated land use management system involving the raising of certain agricultural crops, forest tree species and or animals simultaneously or sequentially on the same unit of land with appropriate management practices which result in an overall increase in production as, besides crops and animals, products from the trees can be harvested as well (nuts, fruit, timber, rubber, etc.).133 The increased presence of trees on agricultural land obviously mitigates climate change FAO, Climate Smart Agriculture Sourcebook (FAO 2013) at ix. Ibid. 127 Ibid. at 11, 42 and 44. 128 Daniel Kane, Carbon Sequestration Potential on Agricultural Lands: A Review of Current Science and Available Practices (National Sustainable Agriculture Coalition, 2015) 18. See also, among many others, Rattan Lal, ‘Societal Value of Soil Carbon’ (2014) 69(6) Journal of Soil and Water Conservation 186A–192A; F. Alliaume et al., ‘Changes in Soil Quality and Plant Available Water Capacity Following Systems Re-design on Commercial Vegetable Farms’ (2013) 46 European Journal of Agronomy 10–19. 129 In Australia, for example, there is growing support for such programmes as ‘soils for life’ and ‘healthy soils’. Case studies show remarkable results of reduced carbon emissions, better growing conditions, more water availability, and more biodiversity, see http://​www​.soilsforlife​.org​.au and http://​www​ .healthysoils​.com​.au. 130 Carmen G. Gonzalez, ‘Climate Change, Food Security, and Agrobiodiversity: Toward a Just, Resilient, and Sustainable Food System’ (2011) 22 Fordham Environmental Law Review 493, 514. 131 Ibid. at 514–15. 132 Richard Munang and Johnson N. Nkem, ‘Using Small-Scale Adaptation Actions to Address the Food Crisis in the Horn of Africa: Going beyond Food Aid and Cash Transfers’ (2011) 3 Sustainability 1510, 1514–15. 133 Pratap Toppo and Abhishek Raj, ‘Role of Agroforestry in Climate Change Mitigation’ (2018) 7(2) Journal of Pharmacognosy and Phytochemistry 241. 125 126

Agriculture, forestry and other land use (AFOLU)  451 through creating and enhancing carbon sinks, both in the trees and in the soil.134 A study in the USA shows that agroforestry also increases resilience to climate change by: ● modifying the microclimate in ways that can improve crop yields by 6–56% depending on crop type; ● reducing soil erosion from water and wind, and improving soil physical condition and fertility, thereby protecting future soil productivity; ● modifying the microclimate in ways that protect livestock productivity and well-being; ● protecting riverbanks and infrastructure, moderating water pollution, and ameliorating high river temperatures, thus protecting water quality and aquatic ecosystems; ● creating habitat refugia and connectivity across highly fragmented agricultural landscapes, protecting biodiversity, including pollinators and beneficial insects; ● generating innovative food-producing systems that diversify farm portfolios and increase economic stability for the landowner.135 Although originally seen as a mitigation measure for tropical regions,136 agroforestry now is also promoted under climate change mitigation policies in developed countries at higher latitudes.137 Most countries around the globe do not have comprehensive and effective legal instruments in place that stimulate farmers to adopt climate smart practices and technologies.138 As discussed above, in some countries, climate smart agriculture is stimulated through allowing farms to generate tradable credits for on-farm emission reduction projects under an offset scheme connected to the ETS or under a stand-alone scheme (see section 2.2). To address the threefold challenge of reducing GHG emissions, making the agricultural sector more resilient to climate change impacts and increasing food production, it is essential that law and policymakers around the world rapidly start developing policies and laws so that climate smart agricultural practices are soon commonplace.139 Financial instruments, such as subsidies or offset mechanisms under carbon pricing programmes, can be used to achieve this goal, but also insurance and forward contracting may play a role.140 Such policies have to be developed with an eye on compatibility with international trade law.141

134 A. Albrecht and S.T. Kandji, ‘Carbon Sequestration in Tropical Agroforestry Systems’ (2003) 99 Agriculture, Ecosystems and Environment 15–27. 135 Michele M. Schoeneberger, Gary Bentrup and Toral Patel-Weynand (eds), Agroforestry: Enhancing Resiliency in U.S. Agricultural Landscapes Under Changing Conditions (US Department of Agriculture, Forest Service 2017) vi. 136 See, for example, S. Reppin et al., ‘Contribution of Agroforestry to Climate Change Mitigation and Livelihoods in Western Kenya’ (2020) 94 Agroforestry Systems 203–220. 137 Such as the Northeast region of the USA, see Schoeneberger et al., above note 135 at 184, and the EU, see the European Innovation Partnership on ‘Agricultural Productivity and Sustainability’, Focus Group Agroforestry, ‘Agroforestry: introducing woody vegetation into specialised crop and livestock systems. Final Report’ (EIP-AGRI 2017). 138 Verschuuren, above note 74, at 6–10. 139 Ibid. at 51. 140 Marks, above note 71. 141 Jonathan Verschuuren, ‘Stimulating Climate Smart Agriculture within the Boundaries of International Trade Law’ (2016) 10(4) Carbon and Climate Law Review 177, 178–180.

452  Research handbook on climate change mitigation law The EU’s Common Agricultural Policy in theory already focuses a lot of attention on climate smart practices and policies. In practice, however, this policy does not deliver the results that are needed due to five flaws:142 ● The accounting rules do not require farm-level quantification of the amount of carbon sequestered linked to the payment, so it cannot be assessed and verified whether and how far an increase in soil carbon levels is real and additional. ● Payments are based on the number of hectares per year, not on the amount of CO2 sequestered, and only cover additional costs and income forgone resulting from the commitments made. Hence, these payments do not stimulate farmers to sequester as much carbon as possible. ● Projects financed under the CAP are characterized by a short lifespan, from one to seven years maximum, and are thus not suited to achieving long-term climate change mitigation goals. ● The EU has a relatively low amount of money available for climate measures under the CAP (25 billion euros over seven years for 28 countries, including the UK), and the funds that are actually handed out for climate friendly projects such are much lower than was earmarked due to inertia in the sector. ● The CAP relies heavily on command-and-control style provisions and does not display flexibility for farmers as to how to achieve the policy targets, which makes it difficult to tailor projects at farm level, taking into account local environmental factors as well as the characteristics of the individual farm. The proposals for a revised CAP, the so called Green Deal policy, and the Farm to Fork Strategy all aim at intensified climate change measures but, at the time of writing (November 2021), do not seem to address the above flaws as the new plans give more room to Member States to develop their own plans and largely keep on relying on voluntary actions by farmers.143 The 2021 European Climate Law Regulation does introduce an ambitious overall target for the EU’s mitigation policy as it requires the Member States to have emissions and removals of greenhouse gases balanced at the level of the EU at the latest by 2050,144 and to pursue a new 2030 target of 55% emission reductions compared to 1990.145 Although the AFOLU sector is not specifically mentioned in the European Climate Law Regulation, it is impossible to achieve such targets without a drastic reduction of emissions from this sector. It comes as no surprise, therefore, that the EU 2030 Climate Target Plan, presented in September 2020, does pay ample attention both to agriculture and to LULUCF.146 The 2030 Climate Target Plan states that new measures are being considered for the 2030–2050 period, including an

Verschuuren, above note 84, at 319–320. For an overview of both the post-2020 CAP proposals and the Green Deal policy and how these two influence each other, see European Commission, ‘Analysis of links between CAP Reform and Green Deal Brussels’, Commission Staff Working Document, 20 May 2020 SWD(2020) 93 final. 144 Regulation (EU) 2021/1119 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’), OJ L 243, 1, Article 2(1). 145 Ibid. at Article 2(3) and 2(4). 146 European Commission, Communication, ‘Stepping up Europe’s 2030 climate ambition. Investing in a climate-neutral future for the benefit of our people’, COM(2020) 562 final, 16–17. 142 143

Agriculture, forestry and other land use (AFOLU)  453 expansion of the LULUCF Regulation to also cover non-CO2 emissions from agriculture.147 The European Commission does not mention the option to integrate agricultural emissions into the EU ETS, such as is the case in some other countries (see above section 2.2). Instead, In due course, the Commission clearly sees merit in the creation of an Agriculture, Forestry and Land Use sector with its own specific policy framework covering all emissions and removals of these sectors and to become the first sector to deliver net zero greenhouse gas emissions. Subsequently, this sector would generate carbon removals to balance remaining emissions in other sectors induced by a robust carbon removal certification system.148

In the coming years, legislative proposals will need to be developed to achieve this goal, aligned with the EU’s revised/new CAP, Forest Strategy and Biodiversity Strategy. 3.3

Steering Consumers’ Dietary Choices

Besides changing farming practices, regulatory interventions aimed at mitigation in the AFOLU sector will also have to focus on changing consumption patterns. Consumer preferences have to be steered towards plant-based food products and away from meat, with a simultaneously increasing supply of plant- or insect-based protein-rich food and in-vitro cultured meat products. In its report on Climate Change and Land, the IPCC concludes that ‘Consumption of healthy and sustainable diets presents major opportunities for reducing GHG emissions from food systems and improving health outcomes.’149 It has been generally accepted that current diets in most countries are unhealthy due to excessive food and nutrients, especially sugar and red meat. The need to transition to healthier foods can go hand-in-hand with climate change mitigation: ‘limiting the consumption of animal-source foods is a climate change mitigation option that is also a component of a healthy lifestyle’.150 Reducing food waste is also a measure that needs to be part of policies aimed at climate change mitigation through demand side measures, as roughly 20% more food for human consumption is produced than is consumed.151 Policies to achieve such a fundamental transition in food demand do not yet exist, apart from some attempts to introduce a meat tax in Denmark, Sweden and Germany.152 Current consumer policies with regard to food are solely aimed at food safety and increasingly also at human health (instruments aimed at reducing the intake of sugar, for example). Integrating climate change considerations into consumer policies is a novel approach that requires us to rethink the aims of consumer policies in general. Steering consumer behaviour towards healthier foods, in an attempt to combat obesity or towards reduction of food waste, has received Proposal for a Regulation amending Regulation (EU) 2018/841 as regards the scope, simplifying the compliance rules, setting out the targets of the Member States for 2030 and committing to the collective achievement of climate neutrality by 2035 in the land use, forestry and agriculture sector …, COM(2021) 554. 148 Ibid. at 17. 149 Mbow, above note 35, at 440. 150 Pajal Pradhan and Jürgen P. Kropp, ‘Interplay between Health, Diets, and Climate Change’ (2020) 12 Sustainability 3878, 11. 151 Ibid. at 5 (based on data from 2010). 152 C.C. Bähr, ‘Greenhouse Gas Taxes on Meat Products: A Legal Perspective’ (2015) 4(1) Transnational Environmental Law 153–179. 147

454  Research handbook on climate change mitigation law increasing attention over the past three years or so. The approaches researched have been very broad, not just aiming at a sugar tax, but also, and much more so, on the use of ‘low agency’ and non-regulatory instruments such as awareness-raising campaigns using social media,153 in-store communications,154 food labelling,155 and social influencing, for instance through the use of role models.156 A broader look into possible regulatory mechanisms other than taxes, such as subsidizing plant- or insect-based food products, or tighter environmental regulations of domestic meat production coupled with import restrictions on foreign-produced meat, is completely absent in the literature. The European Commission’s 2020 Farm to Fork Strategy might change this as one of its targets is to stimulate consumers to reduce the intake of energy, red meat, sugars, salt and fats, and to increase consumption of wholegrain cereals, fruit and vegetables, legumes and nuts.157 The instruments proposed by the Commission to achieve such a shift towards more sustainable consumption, however, are all rather weak and primarily focus on awareness raising.158 Commentators have already pointed out this mismatch between policy objectives and legal actions.159 3.4

Increasing the Role of Forests

As was indicated above, deforestation is the biggest contributor to GHG emissions from the AFOLU sector. Halting deforestation, therefore, is the most important goal that laws and policies have to aim for. Increased sequestration through reforestation, afforestation, and improved forest management are important measures too. Like regulating emissions from agriculture, regulating forestry emissions is a daunting task because of the various intersections between forestry policy on the one hand and energy policy (biomass production), agriculture policy (agroforestry), biodiversity policy (preserving forest ecosystems) and development policy (in many, especially developing, countries, forests provide livelihoods and shelter to people, including indigenous peoples).

153 W. Young, S.V. Russell, C.A. Robinson and R. Barkemeyer, ‘Can Social Media Be a Tool for Reducing Consumers’ Food Waste? A Behaviour Change Experiment by a UK Retailer’ (2017) 117 Resources, Conservation and Recycling 195–203. 154 J. Sihvonen and H. Luomala, ‘Hear What I Appreciate: Activation of Consumption Motives for Healthier Food Choices across Different Value Segments’ (2017) 27(5) The International Review of Retail, Distribution and Consumer Research 502–514. 155 M. Cecchini and L. Warin, ‘Impact of Food Labelling Systems on Food Choices and Eating Behaviours: A Systematic Review and Meta‐Analysis of Randomized Studies’ (2016) 17(3) Obesity Reviews 201–210. 156 S. Higgs and J. Thomas, ‘Social Influences on Eating’ (2016) 9 Current Opinion in Behavioral Sciences 1–6. 157 European Commission, Communication, ‘Farm to Fork Strategy for a fair, healthy and environmentally-friendly food system’, COM(2020) 381 final, 13. 158 Ibid. at 20. 159 Hanna Schebesta and Jeroen J.L. Candel, ‘Game-Changing Potential of the EU’s Farm to Fork Strategy’ (2020) 1 Nature Food 586, 587.

Agriculture, forestry and other land use (AFOLU)  455 Most attention in the literature is focused on tropical forests. The reasons for that are manifold. Tropical forests:160 ● are gigantic carbon sinks which hold 250 g C (one petrogram of carbon is one billion metric tons), not only in biomass but also in the soil; ● are being deforested at an alarming rate (tropical forests are lost at a rate of about 92,000 km2 per year); ● are large emitters due to deforestation (1.1 Pg over the period 2000–2009, roughly 13% of total anthropogenic emissions); ● contain more than half of Earth’s biodiversity; ● regulate local and downstream rainfall and offer other water-related climate services (such as surface cooling and cloud reflection). The main instrument to address emissions from deforestation is REDD+, which was already discussed above (section 2.2). A new EU Forest Strategy 2030 was adopted in 2021. It primarily focuses on effective afforestation, forest preservation and restoration in the EU so as to increase the potential of forests to absorb and store CO2.161 Large-scale planting of trees also forms the basis of several types of carbon dioxide removal (CDR) climate engineering measures, in particular afforestation and reforestation, and bioenergy with carbon capture and storage (BECCS).162 Most attention is focused on the latter.163 Under BECCS, large-scale afforestation would be needed, sequestering carbon from the atmosphere. The wood and other products from these forests are then harvested and converted into energy. Any emissions generated in the conversion process would have to be captured and stored in underground former oil, gas or coal beds, saline formations, or in the ocean floor. BECCS has the dual aim of reducing atmospheric CO2 levels and replacing fossil fuel as an energy source. At first glance, and from a climate change mitigation perspective, this form of carbon dioxide removal looks promising. However, there can be serious implications for food security. For BECCS to be really contributing to global mitigation efforts, large land areas are needed. This means that agricultural land will have to be converted into forest. Given the current rise in food demand, as discussed above, such space simply is not available without endangering food security.164

The below data are taken from Yadvincer Malhi and Toby R. Marthews, ‘Tropical Forests: Carbon, Climate and Biodiversity’ in Rosemary Lyster, Catherine MacKenzie and Constance McDermott (eds), Law, Tropical Forests and Carbon. The Case of REDD+ (Cambridge University Press 2013) 26, at 28–36. 161 European Commission, Communication, ‘New EU Forest Strategy for 2030’, COM(2021) 572. 162 See extensively, Albert Lin, ‘Carbon Dioxide Removal after Paris’ (2019) 45(3) Ecology Law Quarterly 533–582. 163 Ibid. at 537. See further Will Burns and Simon Nicholson, ‘Bioenergy and Carbon Capture with Storage (BECCS): The Prospects and Challenges of an Emerging Climate Policy Response’ (2017) 7 Journal of Environmental Studies and Sciences 527–534. 164 Burns and Nicholson, above note 163 at 529. 160

456  Research handbook on climate change mitigation law

4 CONCLUSION This chapter focused on mitigation law for the AFOLU sector. Although emissions from AFOLU are a large contributor to climate change, and although this sector has the potential to sequester large quantities of atmospheric CO2, there are few legal and policy instruments in place that specifically target these emissions and this sequestration potential. At the international level, the most relevant instrument is REDD+, which, however, is still being developed. Although the legal infrastructure for this instrument is gradually reaching maturity, it seems rather far removed from large-scale, global implementation. At the regional level, the EU’s LULUCF Regulation and its CAP offer some first legal measures aimed at reducing AFOLU emissions. These measures, however, have many shortcomings and are not fully geared towards achieving ambitious long-term mitigation goals. In 2020, however, the European Commission has embarked on an ambitious legislative process covering a European Climate Law and associated 2030 Climate Target Plan, a revised CAP, a Farm to Fork Strategy aimed at sustainable food production and consumption, and a new Forest Strategy, which together will have an impact on the AFOLU sector post 2030. The legal instruments to achieve ambitious targets for this sector have yet to be developed, but it is clear that the coming years will see extensive debates on what instruments need to be used and how these are linked across policy areas. Hopefully, the EU will develop robust AFOLU mitigation laws that can then serve as an example for other countries around the world. We will not be able to achieve the Paris Agreement goals without reducing emissions from agriculture and land use nor without fully utilizing the sequestration capacity of agriculture, forestry and other land use.

18. Carbon majors, social choice, and anticommons: addressing climate change mitigation policy formation in the industrial sector Roy Andrew Partain

1 INTRODUCTION This chapter provides a novel argument on why certain legal frameworks may be more effective for inducing changes in corporate behavior on greenhouse gas emissions and this novel argument also provides new insights into legal design to achieve more efficacious and efficient results in preventing and terminating greenhouse gas emissions. The question of how to best use legal tools to reduce and prevent greenhouse emissions, in order to reverse, prevent, or mitigate anthropogenic climate change,1 has a long history that antedates the United Nations Framework Convention on Climate Change. Unfortunately, despite the introduction of many innovative legal measures, corporate behavior has continued to support growing volumes of greenhouse gas emissions.2 As Benjamin put it: The law as it stands does not do enough to incentivize carbon major companies to implement the deep emissions cuts that are necessary. Despite recent regulatory innovations in an arguably progressive jurisdiction on climate change, an examination of national legislation and transnational mechanisms employed by or imposed on five carbon majors reveals both the weakness of regulatory measures and CSR3 and the relative inactivity of the companies themselves.4

The key question is why; why do corporations continue to not align their activities with the goals of mitigating climate change, even when the trend of political agenda, of scientific consensus, and of public sentiment calls for such changes? This chapter puts forth a novel argument for this lack of decisive action by corporations on climate change mitigation. The claim is not an exclusive claim, that this is the only reason, but rather a complementary argument to the others presented in this book. Yet, this argument does present new reasons for specific modalities of regulation and also provides arguments 1 In this chapter, the phrase ‘anthropogenic climate change’ is always meant when the phrase ‘climate change’ is used after this first instance. This chapter presents no policy recommendations for events of natural climate change, for which very different modes of legal accommodation might be sought. 2 Benjamin provides a strong survey of the frustrations that have arisen in relying on more traditional means of liability, corporate governance, and modes of ‘soft law’ for corporations such as corporate social responsibility. Lisa Benjamin, ‘The Responsibilities of Carbon Major Companies: Are They (and Is the Law) Doing Enough?’ (2016) Transnational Environmental Law 353. 3 CSR herein means ‘corporate social responsibility’. 4 Benjamin (n. 2), 376–377.

457

458  Research handbook on climate change mitigation law contrary to some well-received arguments well established in the literature. In short, it presents an argument for more specific forms of regulatory guidance and less reliance on methods that require corporations to decide internally how to best sort the many issues engaged by strategic planning for climate change mitigation actions. In preview, corporations face decision-making processes that engage the preferences and/or approvals of multiple actors, and as such are plagued by well-known issues from social choice theory and the theory of regulatory anticommons; this results in errant decisions and potentially irrational decisions even if the corporation has attempted to act in good faith on climate change mitigation strategy choices. Thus, strategic legal frameworks to achieve the goals of climate change mitigation should be built with guardrails for corporations, to keep them on course to follow the desired policy pathways. The argument presented in this chapter diverges, yet complementarily, from the expected arguments from the Law & Economics literature. The argument is presented as an application of mathematical methods previously applied in other literatures, albeit not in an explicit mathematical form in this chapter, to ensure that the readers remain comfortable within a legal mode of literature.5 The social choice theory argument further makes the assumption that all of the actors involved are positively inclined to facilitate the broader menu of policy goals related to preventing climate change, to enabling diverse climate change mitigation strategies, and to be even more broadly pro-compliance with regard to all climate change, environmental law, and other related governance frameworks. Point being that the actors are in no way counter to the policymakers’ goals nor do they harbor any ill will to those policy goals. This is, of course, not necessarily the view of many environmental scholars writing on the impacts of corporations on the environment and on climate change more specifically. But there is a reason to this ‘pure heart’ assumption, and it is explicitly made without any claim to empirical foundation or accuracy. It is to frame an ideal case, a case that will still be modeled to result in frustration and give greater weight to the consideration of what happens when the actors do not in fact possess this ‘pure heart’ intent to comply with the imposed governance frameworks. Then, the argument based on the theory of anticommons decision structures cuts a different tack, that there are indeed actors whose will may run contrary to the group and that these particular actors have veto or veto-like authority over the decision process. This engages the concepts of legal anticommons and regulatory anticommons and brings the risk of indecision to the overall effort to enable decisions on climate change mitigation strategies. While not strictly an ‘envelope argument’, it is hoped that these two different methods of examining socially determined decision-making will jointly highlight the potential frustrations that human corporate actors may face in achieving success in obtaining corporate decisions to support corporate actions on climate change. The result is thus not a hard road end, but rather a guide to what kind of regulatory frameworks might be most effective in enabling corporations to overcome internal frustrations in achieving policy goals that would enable an end to anthropogenic climate change. In summary, this chapter explores an original logic of why corporations are having difficulty delivering decisions on corporate policies that could enable climate change mitigation 5 The cited authorities for the sections on social choice theory and the theory of anticommons decision structures do provide the rigorous mathematical models from which the arguments are founded.

Carbon majors, social choice, and anticommons  459 and/or prevention. It demonstrates that even well-intended corporate actors will fail to achieve the green policies that they might individually support. And this is due to structural decision-making issues previously spoken of as social choice theory. Then, if there are hold-outs or actors with great resistance to fighting climate change, or actors with ultra-green agendas, then other structural decision-making problems emerge and the tragedy of the anti-commons plays a role in frustrating corporate decision-making on climate change mitigation policies. Thus, the chapter will find that the artificial legal person is likely to be a ‘befuddled’ artificial person somewhat incapable of aligning its intents with policy goals and in need of support from regulatory frameworks and legal institutions.

2

CARBON EMISSION POLICIES NEED TO BE MORE EFFECTIVE

It has long been acknowledged by the great majority of states that effective action needs to be taken to control greenhouse gas emissions so that the injuries of anthropogenic climate change can be prevented or at least mitigated. While many might cite to the Rio Conference of 1992 and its UNFCCC,6 UNCCD,7 and the Rio Declarations,8 the preparation for that event began decades earlier.9 The concern was, in fact, first raised a long time ago,10 so we can say that

United Nations Framework Convention on Climate Change 1992; 1771 U.N.T.S. 107, 165; S. Treaty Doc. No. 102-38 (1992); UN Doc. A/AC.237/18 (Part II)/Add.1; 31 ILM 849 (1992); see also Kyoto Protocol to the United Nations Framework Convention on Climate Change, 37 ILM 22 (1998); 2303 U.N.T.S. 148; UN Doc. FCCC/CP/1997/7/Add.1. 7 UN General Assembly, ‘Implementation of the United Nations Convention to Combat Desertification in those Countries Experiencing Serious Drought and/or Desertification, particularly in Africa’ A/RES/53/191 (UN General Assembly 1999). 8 UN General Assembly, ‘Rio Declaration on Environment and Development’ (UN General Assembly 1992); United Nations Conference on Environment and Development, ‘Rio Declaration on Environment and Development’ 31 ILM 874 (1992). 9 Arguably, the UN Scientific Conference was the first ‘Earth Conference’, and was held in Stockholm, Sweden from 5 to 16 June 1972. While a variety of atmospheric and air pollution issues were worked after that conference, it was in 1988 when the UN Environmental Programme and its World Meteorological Organization launched the Intergovernmental Panel on Climate Change (IPCC), a forum for the examination of greenhouse gases. 10 Arguably, Nobel Prize winner Svante Arrhenius was the first physicist to highlight the issues of changes in atmospheric carbon; Svante Arrhenius, ‘IV. Calculation of the Variation of the Temperature that would ensure in consequence of a given Variation of the Carbonic Acid in the Air’ Philosophical Magazine (London, 1896), 263. And then further: We may now enquire how great must the variation of the carbonic acid in the atmosphere be to cause a given change of the temperature. … If the quantity of carbonic acid decreases from 1 to 0.67, the fall of the temperature is nearly the same as the increase of the temperature if this quantity augments to 1.5. And to get a new increase of this order of magnitude (3 to 4 degrees) it will be necessary to alter the quantity of carbonic acid till it reaches a value nearly midway between two and 2.5. Thus if the quantity of carbonic acid increases in geometric progression augmentation of the temperature will increase nearly in arithmetic progression. Ibid. 265–267 (emphasis added). He went on to ask: ‘Is it probable that such great variations in the quantity of the carbonic acid as our theory requires have occurred in relatively short geological times?’ Ibid. 269. Arrhenius said that Högbom’s article of 1894 provided an affirmative answer, reporting that ‘it 6

460  Research handbook on climate change mitigation law our policymakers, our politicians, and our legislators have had sufficient time to achieve those goals. But the very event of the Glasgow Conference makes it very easy to evidence that we have not yet achieved those goals and that greenhouse gas emissions continued to be produced at rates higher than those recommended by the scientific consensus.11 We can conclude that greenhouse emissions are not controlled as desired and that the various international conventions and domestic legislative enactments have not had the desired outcomes. In short, the legal tool sets have not worked and that we need new options to achieve the vision of the Rio Conference from 30 years ago. A

Previous Efforts Haven’t Worked; Emissions Continue to Increase

That greenhouse gases remain at excessive levels against recommendations and that corporations remain the main producers of those gas emissions has been established in scientific research. And it’s no secret that a variety of legal tools have been developed since 1992, if we allow such a late date as the beginning of global climate change awareness. Basically, scholars have applied a variety of legal theories and approaches to driving behavior towards reducing greenhouse gas emitting activities. Yet, greenhouse gas emissions appear to still be increasing, from publicly available data, and certainly not achieving the levels of emissions targeted by the Paris Agreement to ensure a future free from climate change. The present chapter lacks space to elaborate in detail, but the history of UN reports on the science of climate change and ‘progress’ on UNFCCC carbon reduction goals has provided ample evidence of a clear lack of progress in attaining those goals. A quick review of recent evidence is delivered below. The World Meteorological Organization’s report, ‘United in Science 2021’, provides a survey of their findings on the status of climate change. Currently, the three main greenhouse gases of carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) continue to increase their levels in the atmosphere, respectively at 148%, 260% and 123% of pre-industrial levels in 1750.12 Carbon dioxide reached 410 ppm in 2020 and surpassed 415 ppm in 2021, despite the industrial shutdowns and impacts of COVID-19 in the same time period.13 These data follow the evidence that ‘In 2019, atmospheric CO2 concentrations were higher than at any time in at least 2 million years and concentrations of CH4 and N2O were higher than at any time in at least 800 000 years.’14 In conclusion, the WMO’s report, summary as it was, provided a range of evidence that carbon levels and levels of other greenhouse gases continue to increase in

seems therefore probable that the quantity of carbonic acid in the air has undergone nearly simultaneous variations, or at the least that this factor has had an important influence (on global temperatures)’ (ibid. 273, citing A. Högbom, ‘Om sannolikheten för sekulära förändringar i atmosfärens kolsyrehalt’ (1894) 6 Svensk Kemisk Tidskrift 169–77). 11 ‘Scientific consensus’ in this case refers to the research projects reflected in the sequence of IPCC reports since 1988, found here: https://​www​.ipcc​.ch/​reports/​. 12 World Meteorological Organization (WMO), ‘United in Science 2021’ (WMO 2021) 6. See also Intergovernmental Panel on Climate Change (IPCC), Climate Change 2021: The Physical Science Basis (Cambridge University Press 2021) SPM-5, A.1.1. 13 WMO (n. 12) 6. The impact of COVID-19 appears to have been a temporary reduction at the scale of 0.2 ppm, which appears to have been overcome by other increases in emissions; ibid. 7. 14 WMO (n. 12) 16. See also IPCC (n. 12) SPM-9, A.2.1.

Carbon majors, social choice, and anticommons  461 the atmosphere and that even the economic impacts of COVID-19 barely made a dent in the overall level of greenhouse gases in the atmosphere. The IEA’s ‘World Energy Outlook 2021’ provides similar evidence. They report that 2021 saw the second largest ever increase in carbon emissions.15 The report forecasts that market demand for fossil fuels will continue to increase until at least the 2030s.16 It provides data and charts that reveal that the status quo leaves the world with 14.6 Gt of carbon emissions above the net-zero emission targets and 2.6 Gt above the Paris Agreement targets.17 The advanced economies have reduced their carbon emissions by 3.5 Gt but the emerging markets and developing economies have increased their emissions by 2.5 Gt; thus, the world faces mixed challenges.18 The issuance of the 2021 Nationally Determined Contributions Synthesis Report revealed that overall carbon emissions, even if all 191 Paris Agreement NDCs were fully attained, would continue to rise, i.e. there will be an increase of 16% from greenhouse gas emissions from 2010 to 2030.19 The IPCC’s Climate Change 2021: The Physical Science Basis, part of the Sixth Assessment Report of the Intergovernmental Panel on Climate Change, provides 3,949 pages of scientific data and evidentiary arguments on the existence of climate change, and making its first finding that ‘it is unequivocal that human influence has warmed the atmosphere, ocean and land. Widespread and rapid changes in the atmosphere, ocean, cryosphere and biosphere have occurred.’20 They report that from 1850–2019, about 2,500 Gt of anthropogenic carbon dioxide (CO2) was released into the atmosphere.21 There are many potential records and authorities stating that carbon emissions and greenhouse gas emissions remain problematic, increasing over time, and that insufficient efforts have been made by a multitude of parties, including those actors who emit greenhouse gases at industrial scales. B

Corporate Actors Are Major Sources of Carbon Emissions

It is a truism that we all have our parts to play, in climate change strategies and all other aspects of public life and policy. But it is equally true that the vast majority of carbon emissions are either enabled by production or directly emitted by a group of corporations and corporate actors. And this does not require a list of thousands of corporations, for even a reasonably small group size captures the majority of greenhouse gas emissions. If effective legal rules could be provided to mitigate the climate change impacts of these corporations, that would achieve the bulk of the challenges of reducing carbon and other greenhouse gas emissions. While carbon emissions have occurred for millennia and the early Industrial Revolution began using large volumes of coal centuries ago, and while the crude oil industry was created International Energy Agency (IEA) ‘World Energy Outlook 2021’ (IEA 2021) 15. Ibid. 28. 17 Ibid. 33. 18 Ibid. 33. 19 UN Climate Change, ‘Full NDC Synthesis Report: Some Progress, but Still a Big Concern’ (2021) https://​unfccc​.int/​news/​full​-ndc​-synthesis​-report​-some​-progress​-but​-still​-a​-big​-concern last accessed 27 May 2022. 20 IPCC (n. 12) SPM-5. 21 IPCC (n. 12) SPM-38. 15 16

462  Research handbook on climate change mitigation law in the last quarter of the 19th century, it comes as a surprise to some that about half of all historical anthropological emissions have occurred since 1988.22 A total of 820 Gt of carbon were emitted in the 231 years from 1751 till 1988, while 833 Gt of carbon were emitted in the 27 years from 1988 till 2015.23 Given that the largest years of emissions occurred after 2015,24 the ratio is ever more tilted to the recent generation of emissions. The recent nature of that volume of carbon emissions suggests that many of those producers-cum-emitters are still operational or are likely to remain solvent corporations. This concept of certain key corporations leading so dominantly in enabling carbon emissions is known as the ‘carbon majors’ concept.25 As Savaresi and Hartmann wrote: Even though conventionally greenhouse emissions are attributed to states, it is non-state actors that are largely responsible for causing emissions. Recent studies suggest that a group of global corporations are historically responsible for the lion’s share of global greenhouse gas emissions.26

Griffin found that the top 25 independent energy corporations (aka IOCs, independent oil companies) and state-owned or publicly held energy corporations (aka NOCs, national oil companies) accounted for over 50% of the carbon volumes emitted since 1988, and that the top 100 such firms account for over 70% of the emissions.27 And while almost all of these entities are indeed registered and operated as corporations, 9% of those emissions were held by privately owned IOCs (e.g. Koch), 32% of those by publicly held IOCs (e.g. Chevron), and 59% by the NOCs (e.g. Saudi Aramco).28 That analysis can be extended to state-owned, part of the government (‘Nation-State’), and firms held by private individuals, whether it be private or publicly traded corporations; the split is almost a third for each category.29 Based on these records, a very substantial proportion of all emissions have been produced or enabled by a relatively small number of corporations within the last three decades and with

Paul Griffin, The Carbon Majors Database: CDP Carbon Majors Report 2017 (CDP UK 2017) 7. Ibid. 7. 24 IEA (n. 15) 15. 25 See Jeremy Moss and Persephone Fraser, Practical Justice Initiative: Australia’s Carbon Majors (University of New South Wales 2019) applying this concept to Australian firms. See also Benjamin (n. 2) 354, wherein she explains the weak incentives to change carbon majors’ behaviors: ‘company law and theory, as well as commercial norms such as shareholder wealth maximization, foster an environment in which companies are not compelled to significantly reduce their GHG emissions’. Both Moss and Fraser, and Benjamin, cite Heede, who is the scholar behind Griffin (n. 22), although they cite Heede’s 2014 article (Richard Heede, ‘Tracing Anthropogenic Carbon Dioxide and Methane Emissions to Fossil Fuel and Cement Producers, 1854–2010’ (2014) Climatic Change 229). 26 Annalisa Savaresi and Jacques Hartmann, ‘Using Human Rights Law to Address the Impacts of Climate Change: Early Reflections on the Carbon Majors Inquiry’ in Jolene Lin and Douglas A. Kysar (eds), Climate Change Litigation in the Asia Pacific (Cambridge University Press 2020). 27 Griffin (n. 22) 8. See Heede (n. 25) 231–234, for a methodological explanation for how the data was assembled and parsed. 28 For additional depth on the implications of these state/public energy corporations on liability and other issues of corporate governance, see Randall Morck and Lloyd Steier, ‘The Global History of Corporate Governance: An Introduction’ in Randall Morck (ed.), A History of Corporate Governance around the World: Family Business Groups to Professional Managers (University of Chicago Press 2005). 29 Heede (n. 25) 236. 22 23

Carbon majors, social choice, and anticommons  463 the vast majority of those firms still being viable firms.30 Further, a majority of the emissions have not been in private hands, but rather in public or state hands. Finally, while the UNFCCC assumed responsibility lay primarily with Annex I nations, this form of analysis reveals that a substantial amount of emissions can be traced back to non-private firms from non-Annex I nations.31 Thus, two observations. First, if a large portion of corporations responsible for emissions are not in private hands, then corporate social responsibility or modes of influence via other modes of corporate governance or liability might not work as expected. Second, as emissions from non-Annex I states have been found to be increasing while emissions from Annex I states were decreasing, the analysis of carbon majors located in non-Annex I states takes on new importance.

3

POTENTIALLY FRUSTRATED DECISION-MAKING OF WELL-INTENDED ACTORS

The decisions and business risks to pursue policies that might reduce climate change are not simple, they are complex and numerous. It can be very difficult to identify all the issues, but we can certainly ascertain that firms do not render their decisions in a vacuum, but rather they are engaged in a complicated network of obligations and duties, all of which must be respected in some sense. Social choice theory anticipates this condition, of multiple actors attempting to sort and decide between three or more choices. Social choice theory has provided multiple mathematical proofs and illustrative literature that reveal that these conditions will always result in some sort of defective decision-making, if minor rules of rationality are retained in the procedural aspects. In this section, we review the complexity of the corporate legal risks that need to be analyzed, prioritized, and sorted and ranked for corporate planning on climate change mitigation. Then we consider the various stakeholders and decision-makers engaged in this process for each corporation. Then finally we evaluate the implications of social choice theory on corporate decision-making for the context of climate change mitigation. A

Cautionary Statements Reveal Numerous Issues to Evaluate, Rank, and Prioritize

While there are a variety of legal frameworks and modalities of corporate social responsibility for the carbon majors to become and be more transparent on their awareness of their carbon and climate change issues, it is rare to find a carbon major that significantly details their legal

Griffin (n. 22) 14 and 15; see Appendices I and II. Heede’s seminal research has been replicated, examined, and found reliable. See Peter Frumhoff, Richard Heede and Naomi Oreskes, ‘The Climate Responsibilities of Industrial Carbon Producers’ (2015) 132 Climatic Change 157. See also Brenda Ekwurzel, James Boneham, Mark W. Dalton, Richard Heede, Roberto J. Mera, Myles R. Allen and Peter C. Frumhoff, ‘The Rise in Global Atmospheric CO2, Surface Temperature, and Sea Level from Emissions Traced to Major Carbon Producers’ (2017) 144 Climatic Change 579. 31 Heede (n. 25) 236. 30

464  Research handbook on climate change mitigation law concerns, as that could pose risks for their strategic business planning. For the following logical point, we don’t need a complete listing, but we do need a sense of the complexity and numerousness of the issues that they must sort through in their decisions on corporate strategies on climate change prevention, avoidance, and mitigation. Fortunately, there is such a window of transparency that is open to gain that type of data; we can gain listings of what the carbon majors view as legal or other economic concerns without learning their decision outcomes. Due to the legal frameworks of the US Securities and Exchange Commission (SEC), when firms look forward to state how they foresee their future trends and projections, they must issue a ‘cautionary statement’ on their self-issued forward-looking statements. And while not exhaustive, and while not fully transparent, these statements do provide evidence that corporations are facing a wide array of legal risks that they include in their decision-making activities. Below, the origins and legal rules of these cautionary statements are explored. From the very beginning of the anti-fraud rules for the US stock market, the centrality of reliable communications between investors and corporations were of paramount importance. ‘There cannot be honest markets without honest publicity. Manipulation and dishonest practices of the market place thrive upon mystery and secrecy.’32 The 1934 Act is concerned with two major issues. First, with preventing modalities of manipulation and control that could allow the stocks and securities floated on those markets to have fake pricing,33 especially ‘excessive speculation, resulting in sudden and unreasonable fluctuations in the prices’ of those stocks and securities.34 The 1934 Act is concerned that such acts can cause unreasonable expansions and unreasonable contractions of the volume of credit available to the market based on fake prices.35 Second, the SEC is concerned with protecting those same prices for determining taxable incomes and derivative revenues for federal and state fiscal functions.36 In the 1934 Act, one can find that the US Securities Exchange Commission places a watch on the various communications made by officers, directors, and principal security holders of corporations, because those stocks are commonly sold in retail markets to the general public.37 This regulation is undertaken to ‘to remove impediments to and perfect the mechanisms of

HR 2nd Sess. 1934, 73d Cong., 2d Sess., 11 (emphasis added). 15 U.S. Code § 78b(3). 34 15 U.S. Code § 78b(3), ‘resulting in sudden and unreasonable fluctuations in the prices of securities’ and at § 78b (3)(a) ‘cause alternately unreasonable expansion and unreasonable contraction of the volume of credit available for trade, transportation, and industry in interstate commerce’ (emphasis added). 35 15 U.S. Code § 78b(3)(a). 36 15 U.S. Code § 78b(3)(b), ‘hinder the proper appraisal of the value of securities and thus prevent a fair calculation of taxes owing to the United States and to the several States’ (emphasis added). 37 15 U.S. Code § 78b – Necessity for regulation: transactions in securities as commonly conducted upon securities exchanges and over-the-counter markets are effected with a national public interest which makes it necessary to provide for regulation and control of such transactions and of practices and matters related thereto, including transactions by officers, directors, and principal security holders, to require appropriate reports, to remove impediments to and perfect the mechanisms of a national market system for securities and a national system for the clearance and settlement of securities transactions and the safeguarding of securities and funds … (emphasis added ) 32 33

Carbon majors, social choice, and anticommons  465 a national market system’.38 The 1934 Act provides a listing of regulatory reasons that the information provided by firms to the market must be kept reliable and accurate, those goals include both supporting the stock markets and their associated markets in securities but also to protect a much wider array of governmental activities: to remove impediments to and perfect the mechanisms of a national market system for securities and a national system for the clearance and settlement of securities transactions and the safeguarding of securities and funds related thereto, and to impose requirements necessary to make such regulation and control reasonably complete and effective, in order to protect interstate commerce, the national credit, the Federal taxing power, to protect and make more effective the national banking system and Federal Reserve System, and to insure the maintenance of fair and honest markets in such transactions …39

Given the importance of accurate data to both the state and the market, who is to be held liable for corporate statements that mislead the state and the market? Well, the 1934 Act starts with filings, including statements, reports, or any documents, submitted to comply in any way with the regulatory requirements of the 1934 Act, so long as the contents of those filings are in any way ‘false or misleading with respect to any material fact’.40 The concept of false or misleading is determined in light of the time and circumstances when the information was issued.41 Victims, those who ‘in reliance’ on that misinformation ‘have purchased or sold a security at a price which was affected by such statement’, can sue the respondent corporation for damages.42 A defense is allowed to the corporation for the filing of market distorting information only if the corporate actor ‘acted in good faith and had no knowledge that such statement was false or misleading’. But the liability is not limited to just the person, the single human, who made the error; instead, the Act provides that said person’s whole management team is liable.43 That’s every single direct and indirect line of management over the actor, from boss to CEO to the Corporate Board, that is potentially liable.44 Further, that extended liability is joint and several across all parties and to the same extent as the original single human actor.45 There is also a provision that clarifies that one person cannot structurally avoid liability by having a second party deliver or file information on behalf of the first person; the first party will remain fully liable as if they had done it themselves.46

15 U.S. Code § 78b – Necessity for regulation. 15 U.S. Code § 78b – Necessity for regulation. 40 15 U.S. Code § 78r(a), ‘Any person who shall make or cause to be made any statement in any application, report, or document filed pursuant to this chapter or any rule or regulation thereunder or any undertaking contained in a registration statement as provided in subsection (d) of section 78o of this title’ (emphasis added). 41 15 U.S. Code § 78r(a), ‘at the time and in the light of the circumstances under which it was made’. 42 15 U.S. Code § 78r(a). There is no reason, prima facie, why this would not also apply to climate change mitigation issues for the shareholder. 43 15 U.S. Code § 78t(a), ‘Every person who, directly or indirectly, controls any person liable under any provision of this chapter or of any rule or regulation thereunder shall also be liable’ (emphasis added). 44 15 U.S. Code § 78t(a). 45 15 U.S. Code § 78t(a), ‘shall also be liable jointly and severally with and to the same extent as such controlled person’ (emphasis added). 46 15 U.S. Code § 78t(b). 38 39

466  Research handbook on climate change mitigation law In 1995, to reflect the needs of emerging industries such as Silicon Valley,47 the 1934 Act was updated to permit a more open mode of corporate communications,48 that of a ‘forward-looking statement’ (FLS):49 (1) Forward-looking statement: The term ‘forward-looking statement’ means— (A) a statement containing a projection of revenues, income (including income loss), earnings (including earnings loss) per share, capital expenditures, dividends, capital structure, or other financial items; (B) a statement of the plans and objectives of management for future operations, including plans or objectives relating to the products or services of the issuer; (C) a statement of future economic performance, including any such statement contained in a discussion and analysis of financial condition by the management or in the results of operations included pursuant to the rules and regulations of the Commission; (D) any statement of the assumptions underlying or relating to any statement described in subparagraph (A), (B), or (C); … (F) a statement containing a projection or estimate of such other items as may be specified by rule or regulation of the Commission.

Clearly, these types of communications on future plans and strategies could be used by carbon majors to communicate about corporate plans for climate change mitigation and other strategies to move forward. To avoid liability for these more open forms of communication, the FLS must be labelled as a forward-looking statement, and the FLS must be ‘accompanied by meaningful cautionary statements identifying important factors’,50 and if those cautionary statements enabled the recipient to identify which ‘factors … could cause actual results to differ materially from those in the forward-looking statement’, then the FLS is made without liability to the shareholders.51 However, subsequent case law has revealed that the cautionary statements need to be directly relevant to the issuance of the FLS and not boilerplate or standardized language.52 So, the issues raised in the cautionary statements must closely commute with the issues or strategies discussed in the forward-looking statements. B

Cautionary Statements on Climate Change Mitigation

Carbon majors, as well as many other corporations, often share news with the public about future investments, strategic plans, and other events that might affect their share price or regulation. When they do make such statements, there is a risk that the communication may be

The concern raised at the time was that these innovative industries did not have meaningful past records to guide investors and that it would be useful for the firms to explain to the public how they saw their future incomes, market share, and other future events, in contrast to the more conservative rules already in place under the 1934 Act. 48 The Private Securities Litigation Reform Act of 1995, Pub. L. 104-67, 109 Stat. 737. 49 15 U.S. Code § 78u–5(i)(1)(A) through (F). 50 15 U.S. Code § 78u–5(c)(1)(A)(i) (emphasis added). 51 15 U.S. Code § 78u–5(c)(1)(A)(i). 52 See In re: Harman International Industries, Inc. Securities Litigation, Arkansas Public Employees Retirement System, Individually and on Behalf of all Others Similarly Situated, Appellant Cheolan Kim and City of Boca Raton General Employees Pension Plan, on Behalf of Itself and All Others Similarly Situated – (CA-0702175), Appellees v Harman International Industries Inc., et al., Appellees [2015] United States Court of Appeals for the District of Columbia Circuit 14-7017, [2015] WL 3852089. 47

Carbon majors, social choice, and anticommons  467 construed as a forward-looking statement and thus it is standard to find cautionary statements issued alongside those news releases. Below, such a cautionary statement from ExxonMobil is presented; the cautionary statement was issued in respect of ExxonMobil’s announcement that it was increasing its investment in carbon capture and storage (‘CCS’) research in Scotland.53 Note how the cautionary statement lists so many issues in play as they contemplate future engagement in CCS activities: Cautionary Statement: Statements of future events, investment opportunities or conditions in this release are forward-looking statements. Actual future results, including project plans, timing, volumes, and costs; future relative reductions in emissions and emissions intensity; carbon capture, hydrogen, and biofuel deployment and results; and the impact of operational and technology efforts could vary depending on the results of future study and research efforts, including the ability to scale projects and technologies on a commercially competitive basis; any changes in plans or objectives upon final project approvals; the ability to execute operational objectives on a timely and successful basis; the ability to obtain and timing of required governmental and other third party consents; the development and pace of supportive market conditions and national, regional and local policies relating to carbon capture, hydrogen, biofuels, and emission reductions; changes in laws and regulations including laws and regulations regarding greenhouse gas emissions, carbon costs, and taxes; the outcome of commercial negotiations; the effectiveness of cooperative efforts to develop technologies and projects; trade patterns and the development and enforcement of local, national and international mandates and treaties; unforeseen technical or operational difficulties; changes in supply and demand and other market factors affecting future prices of oil, gas, and petrochemical products; and other factors discussed in this release and under the heading ‘Factors Affecting Future Results’ on the Investors page of ExxonMobil’s website at exxonmobil.com.

Due to the multiply tiered clauses and complex grammar style, it is difficult to put a precise count on the number of decisions that ExxonMobil holds out that it needs to ‘get right’ in order to achieve the hopes reported by them in their efforts to reduce carbon emissions, by this one instance of applied CCS technology, but the number is surely in the multiple dozens. This is by no means unique; other carbon major firms list similar legal risks and concerns.54 But then the last sentence reveals that there is yet more to be worried about, if one follows the provided link to a more complete listing.55 At that link, one finds a 3,000-word essay on a wide variety of issues that have to reach successful outcomes to enable the corporation’s success in its ventures.56 The key issues are identified as (i) supply and demand, (ii) economic 53 ExxonMobil Newsroom, ‘ExxonMobil increases participation in Scotland carbon capture and storage project’ (2021) https://​corporate​.exxonmobil​.com/​News/​Newsroom/​News​-releases/​2021/​1006​ _ExxonMobil​-increases​-participation​-in​-Scotland​-carbon​-capture​-and​-storage​-project last accessed 27 May 2022. 54 See Chevron’s cautionary statement on CCS investments here: Chevron, ‘Chevron invests in carbon capture and utilization startup’ (2021) https://​www​.chevron​.com/​stories/​chevron​-invests​-in​ -carbon​-capture​-and​-utilization​-startup last accessed 27 May 2022. See also Shell’s cautionary note on CCS legal risks and issues: Shell Canada, ‘Quest CCS Facility Captures and Stores Five Million Tonnes of CO2 Ahead of Fifth Anniversary’ (section titled ‘Cautionary Note’ (July 2020) https://​www​.shell​.ca/​ en​_ca/​media/​news​-and​-media​-releases/​news​-releases​-2020/​quest​-ccs​-facility​-captures​-and​-stores​-five​ -million​-tonnes​.html last accessed 11 June 2022. 55 Investor Relations, ‘Factors affecting future results (revised February 2021)’ (2021) https://​ corporate​.exxonmobil​.com/​-/​media/​Global/​Files/​investor​-relations/​Factors​-affecting​-future​-results​.pdf​ ?la​=​en​&​hash​=​12CA14842B​0D2F96418281816328C3E794193A46 last accessed 27 May 2022. 56 Again, other carbon majors have similar webpages and disclosures, ExxonMobil is by no means unique in this regard. See Chevron, ‘Chevron Announces Second Quarter 2021 Results’ (2021)

468  Research handbook on climate change mitigation law conditions, (iii) other demand factors, (iv) other supply-related factors, (v) other market factors, (vi) a nested collection of ‘government and political factors’ (including (1) access limitations, (2) restrictions on doing business, (3) lack of legal certainty, (4) regulatory and litigation risks (they list eight categories), (5) security concerns, (6) climate change and greenhouse gas restrictions, and (7) alternative energy), (vii) exploration and development program, (viii) project and portfolio management, (ix) operational efficiency, (x) research and development and technological change, (xi) safety, business controls, and environmental risk, (xii) cybersecurity, (xiii) preparedness, (xiv) insurance limitations, (xv) competition, and (xvi) reputation. That’s a total of 23 zones of complicated issues, all of which need to be navigated by the corporation as it seeks to achieve its goals. And each of those complicated issues will create multiple decision options for the firm, and the better solution to one issue may be dependent on the outcomes or character of some of the other issues and the group needs to decide which solutions get higher priority from an operational perspective; ergo, rankings upon rankings. So, a group-based decision process would need to ascertain and rank preferred solutions to many different issues, and do this quickly and repeated; so iterative, stochastic rankings upon rankings of preferred policy decisions and of operational prioritizations. It is clear that a firm facing dozens upon dozens of complex decisions, all of which need to be successfully coordinated with each other while each issue might yet still be in play and changing during the decision-making process, is going to be challenged to achieve that goal. Stated differently, and as highlighted by other scholars,57 corporations are challenged by a large set of issues to consider in their daily, quarterly, annual, and long-run decisions. These issues have to be reviewed and evaluated and ranked for priority against a complicated set of metrics. To enable this process, firms engage a large set of actors with various expertise and knowledge perspectives and then establish some form of social decision-making process to integrate that broader awareness of all the actors into a single set of corporate plans and policies, including those on green energy decisions and corporate approaches to climate change mitigation. Given that corporations are the key actors in enabling carbon production and emissions and given the complexity of the legal issues when they engage in climate change mitigation efforts, one would hope that models of socially integrated decision-making would facilitate these decisions of gravitas. Yet the following sections will evidence that such is not the case and that there are substantial hurdles that hinder corporate decision-making on strategic climate change matters. C

Corporations Are Groups with Multi-Actor Social Decision-Making Structures

Corporations are not monolithic creatures, soulless profit-optimizing machines that process inputs, create products, and earn (hopefully) revenues and profits. No, a ‘corporation’ is in reality a legal wrapper placed over many numerous groups and sets of human actors; corporate

https://​chevroncorp​.gcs​-web​.com/​static​-files/​68f28eed​-fe16​-4f7a​-a3b7​-18ce2dee9261 last accessed 27 May 2022. See also Shell’s cautionary note on their sustainability strategies: Shell, ‘Definitions and Cautionary note’ (2019) https://​reports​.shell​.com/​sustainability​-report/​2019/​servicepages/​about​.html last accessed 27 May 2022. 57 See Benjamin (n. 2) 353; Roy A. Partain, Coordinating Public and Private Sustainability Green Energy Policy, International Trade Law, and Economic Mechanisms (Routledge 2019).

Carbon majors, social choice, and anticommons  469 law establishes a legal wrapper that enables the legal fiction of artificial legal personality and supports the notion of limited liability to not find liability beyond the market value of the shares of the corporation, to not look to the human shareholders for additional liability. But in reality, corporations are people; many groups upon groups of humans acting in some form of coordination to achieve corporate goals. Coase’s ‘Theory of the Firm’ posited the idea that firms exist,58 as opposed to ‘production on the market’, precisely because they contractually enabled pre-commitments in labor, resources, and other factors that then enabled them to be more responsive to the market; the Coasean network of contracts is the corporation. Firms also have advanced contracting with clients and customers, and with the large fossil fuel energy firms; delivery contracts often range in the decades for fuel deliveries; for example, a contract may provide for deliveries over 30 years. For energy firms, leases for access to hydrocarbons yet in the ground may extend many decades longer, for there are leases over a century old still in production. And of course, the contracts with shareholders; in exchange for capital, the firms agree to a variety of measures including modalities of return of capital and return on capital, of matters of management and oversight, and ultimately, on the jurisdiction of both the firm itself and of the stock market that trades its shares. Corporate codes are what enable the majority of incorporations today.59 Looking to the corporate codes, we can see that we expect to find shareholders, perhaps of multiple classes and of diverse rights, to communicate on decision-making,60 and there are the notions of preferred shares versus ordinary shares as well, again allocating diverse decision-making rights to the shareholders. Most corporate codes allow each corporation to offer shares as they please, offering whatever economic benefits and voting rights as best meet the needs of the corporation and the markets on which those shares are placed. The corporate codes also expect that there will be a team of board members, that a group will be selected by the shareholders to represent the shareholder interests in the decision-making of the corporation. The corporate codes also expect a class of corporate officers, who will also be making decisions for the corporation. Generally, the officers will be expected to be available

58 Ronald H. Coase, ‘The Nature of the Firm’ (1937) 4 Economica 386. Beyond Coase, our received ideas of a ‘firm as a bundle of contracts’ were greatly influenced by other scholars too, notably: Armen A. Alchian and Harold Demsetz, ‘Production, Information Costs, and Economic Organization’ (1972) 62 The American Economic Review 777; Sanford J. Grossman and Oliver D. Hart, ‘The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration’ (1986) 94 Journal of Political Economy 691; Bengt R. Holmstrom and Jean Tirole, ‘The Theory of the Firm’ in Richard Schmalensee and Robert Willig (eds), Handbook of Industrial Organization (Elsevier B.V. 1989); Oliver E. Williamson and Sidney G. Winter, The Nature of the Firm: Origins, Evolution, and Development (Oxford University Press 1993). 59 Prior to the emergence of the modern corporate codes, or codes of business associations, the primary method of incorporation was enactment by legislative bodies, often for a specific or limited purpose. While this can sometimes still occur, the global trend has long been to provide corporate codes of an increasing similar character, see Henry Hansmann and Reinier Kraakman, ‘The End of History for Corporate Law’ (2000) SSRN 1 https://​ssrn​.com/​abstract​=​204528 last accessed 27 May 2022. Even if local customs remain in some divergence, see Morck and Steier (n. 28) 2–3. 60 A great example of this diversity is the Google (‘Alphabet’) shares structure: A Class (GOOG), B Class, and C Class (GOOGL). A Class shareholders get one vote per share, B Class get 10 votes per share, and C Class get no votes at all, despite offering similar economic benefits to A Class shares.

470  Research handbook on climate change mitigation law for routine operational decision making while the board members would be available less often, reserving their presence for decisions of greater gravitas. But corporations also have employees, making decisions constantly. Some of those decisions are delegated to the individual employee, some decisions are delegated to be taken by group leaders in some mode of being informed by a wider array of other employees.61 Sometimes the decision-making process is informal and resulting from the needs of the moment, sometimes the decision-making process is highly structured by protocols operated by a special class of accountants known as controllers, who ensure that decision-making procedures follow established corporate policies. And the limits of humans do not only comprise employees, for certain high-value clients and closely associated suppliers and subcontractors also often feed into key decision processes. And even when a corporation has many incrementally small customers, the firm might seek customer surveys and similar data collection efforts to better inform the decision-making of the corporation. Many of the decisions are made at group levels, requiring multiple employees, officers, and or board members to vote or otherwise feed into a decision-making process. A show of hands, a round of consent around a meeting table, or a leader seeking to integrate the views, opinions, and recommendations of their group or committee; the process might be formal or informal, but the process remains the same; a group of people feed their preferences into a process that results in a single result, the decision. The goal here has been to simply highlight the fact, often ignored, that corporations are composed of many humans, that those humans are engaged in decision-making, and those decision processes require the engagement of multiple people at the same time. That is to say, that the legal fiction of an artificial legal person, however useful for other legal purposes,62 does not overwrite the reality that every corporation is a cluster of individuals coordinating on activities and decisions about those activities. And in the most basic version of this, corporations have two or more persons evaluating three or more strategic decisions; these are the Arrovian assumptions of social choice theory.

4

IMPACT OF SOCIAL CHOICE THEORY ON CORPORATE DECISION-MAKING

Given the results of the prior section, of multiple actors facing multiple options, the decision-making processes of corporations will have the defects anticipated by the social choice models. Here we examine what those defective outcomes are and how they might be strategically used by policymakers. For an empirical study of how and when decision-making authority is delegated across firms, see Massimo G. Colombo and Marco Delmastro, ‘Delegation of Authority in Business Organizations: An Empirical Test’ (2004) Journal of Industrial Economics 52, 53. For a comparative study that brought new light to the functional variations of the Revelation Principle, and on where there is a functional equivalence to hierarchical and decentralized modes of delegating authority over decision-making, see Dilip Mookherjee, ‘Decentralization, Hierarchies, and Incentives: A Mechanism Design Perspective’ (2006) 44 Journal of Economic Literature 367. 62 The reference is the speech delivered in Parliament in 1856 by Robert Lowe, 1st Viscount Sherbrooke: HC Deb 1 February 1856 vol. 140 cols 111–145. 61

Carbon majors, social choice, and anticommons  471 A

Arrow’s (Im)Possibility Theorem in a Corporate Setting

Arrow’s (Im)Possibility Theorem holds that if there are at least two actors and three ranked choices, it is impossible to combine the rankings from both actors into a single ranking that respects four simple rules of logic.63 Arrow’s theorem holds for larger sets of actors and for larger sets of ranked choices; the previous sections have evidenced how the facts of corporate decision-making align with Arrow’s initial conditions. The theorem itself has been reworked from a variety of initial assumptions and also in parallel proofs of ordinal Arrow models and cardinal Gibbard and Satterthwaite models,64,65 but here the chapter will avoid mathematical intricacies to focus on the broader points afforded by those models. Imagine if a cluster of people working for the corporation has to consider multiple issues and decide a priority listing, perhaps for liability ranking, perhaps for regulatory compliance rankings, or perhaps for best paths to achieve a corporate goal; each person will each have their own personal ideas of which issues are more pressing or which paths will be more successful. So, they meet to create a common, agreed upon, set of plans to move forward as a team. But this is exactly Arrow’s dilemma; two people or more and three ranked choices or more. Thus, the Possibility Theorem holds for a boardroom full of directors, a meeting of executive officers, and it holds for a meeting of accountants if they are facing decisions involving three or more ranked choices. They won’t be able to come to a decision that respects the inputs from all involved; thus, the decision will be ‘defective’ in one of several identified manners. Is there something pernicious in Arrow’s four simple rules of logic and ‘fairness’ that is obviously counter to corporate function and thus renders Arrow’s Theorem inappropriate for this type of application? We’ll examine each of the four requirements in turn and find them in alignment with basic norms of corporate decision-making. The first rule is ‘no dictatorship’, which is a bit of a dramatic way of saying that every present party is needed for the decision-making process and that no one person’s personal preferences are identical to the preferences as seen in the final decided set.66 The dictator of the ‘no dictator’ is not a routine dictator who rules by force; no, Arrow’s dictator is merely an 63 The seminal paper was Kenneth J. Arrow, ‘A Difficulty in the Concept of Social Welfare’ (1950) 58 Journal of Political Economy 328. But most papers cite the follow-up monograph (Kenneth J. Arrow, Social Choice and Individual Values (Yale University Press 1951). It is an interesting bit of history and linguistic shifts that while Arrow originally called his theorem the ‘Possibility Theorem for Social Welfare Functions’ (Arrow, ‘A Difficulty in the Concept of Social Welfare’ 336), most writers today will speak of the ‘Impossibility Theorem’, although they all refer to the same mathematical theorem. 64 See Alan Gibbard, ‘Manipulation of Voting Schemes: A General Result’ (1977) 41 Econometrica 587; Mark A. Satterthwaite, ‘Strategy-Proofness and Arrow’s Conditions: Existence and Correspondence Theorems for Voting Procedures and Social Welfare Functions’ (1975) 10 Journal of Economic Theory 187; Philip J. Reny, ‘Arrow’s Theorem and the Gibbard-Satterthwaite Theorem: A Unified Approach’ (2001) 70 Economics Letters 99. These are an elegant demonstration that the theorems of Arrow, Satterthwaite and Gibbard are functionally similar and can be derived from a single theorem. For a textbook treatment of these models and of broader social choice theory, see Walter D. Wallis, The Mathematics of Elections and Voting (Springer 2014) and Wulf Gaertner, A Primer in Social Choice Theory (Oxford University Press 2009). 65 Ordinality means that only order or sequence is meaningful, whereas in cardinality, the position on the number line is important. An example of ordinality is a > b > c, but we have no idea what the measure of these numbers are. An example of cardinality is a = 11, b = 4, and c = 3, but we lack clarity of their relative value, as some preferences are non-linear in reaction. 66 Wallis (n. 64) 48; Gaertner (n. 64) 20.

472  Research handbook on climate change mitigation law actor whose personal preference for the choice rankings is identical to the final determination; in essence, the presence of such an actor means that the sum engagement of all the other actors is as naught in the decision-making process. It is in essence a requirement that every actor’s voice is included in the decision-making process and that more than one voice is included to satisfy the more obvious issue of analyzing socially constructed choices; for it is a kind of null case of social choice to study the decisions of a single player; that is already the role of microeconomics and other models. Thus, no dictatorship means that the question of corporate governance is not the null set of one person owning the whole corporation and being the only employee or a corporation being a 100% owned subsidiary fully controlled by such a single person corporation; Arrow’s Theorem would require that there are multiple women and men, at least two, involved in making the operational and executive decisions for a corporation and more than one person’s voice and opinion are meaningfully factored into a joint decision-making process. For most businesses, that’s a realistic description. It would even hold for a simple partnership of two people. The next requirement is ‘universality’,67 which means that all of the initial choices are included in the final single set of ranked choices. This means that the decision-makers can’t simplify the decision-making by removing ideas and options once one of the decision-makers includes them in her list of ranked preferences. There is no requirement to include any and all options, just those included by any of the decision-makers, so the decision-makers are at liberty to discard ideas prior to presenting their list of ranked preferences. In many ways, this is closely related to ‘no dictatorship’, in that it requires all of a decision-maker’s preferences to be fully integrated into the final unified ranked decision. ‘Unanimity’ requires the simplest of comparative logics to hold,68 that if all of the decision-makers prefer choice A over choice B, then that same A > B is preserved and seen in the final ranked preferences. So, if every single person on the board prefers solar power to buying carbon credits, as part of a plan to decarbonize, then the final decision should also prefer solar power over buying carbon credits. The desirability of this result would appear, prima facie, to not need further support. But this concept is supported within voting systems, such as Borda counts, that enable ranked voting preferences to be recorded and integrated in the final results. So it does align with other established models of decision-making as a rational outcome. Finally, ‘Independence of Irrelevant Alternatives’ (‘IIA’),69 builds on ‘unanimity’, that once a pair relationship is established between any two choices, as seen in ‘unanimity’, then that relationship will hold to the final unified ranked preference no matter how the decision-makers rank or opine on other choices. In the corporate setting, once the board has revealed a preference for solar cells over carbon credits for decarbonization, IIA would require that disparate opinions on sourcing nuclear power would have no effect on the preferred preference of solar cells over carbon credits. And again, we can see this structure borne out in other forms such as in Borda counts.

Gaertner (n. 64) 20. Wallis (n. 64) 49; Gaertner (n. 64) 20. 69 Wallis (n. 64) 48; Gaertner (n. 64) 20. 67 68

Carbon majors, social choice, and anticommons  473 None of these requirements are contrary in any form to the legal requirements under corporate codes and would seem very much in line with the design of boards and of other internal committees to render decisions that take advantage of their diverse views and expertise. But this is the required set-up for Arrow’s problematic discovery. If we have two or more actors making decisions in the corporation, and if we have three or more policy choices to evaluate, then the decisions made by the group of corporate decision-makers will be defective in one of four ways: dictatorship/convention, incompleteness, logical nonsense, or an inferior ‘rule’. This is not to say that corporate decisions are doomed, random, erratic, or dysfunctional. What it means is that they will not reach their optimal decision even if each individual actor was willing and able. Thus, even a corporation fully stocked with decision-makers seeking to achieve green energy decisions and to take actions that reduce their impact on climate change will reach inferior decisions than their individual preferences would otherwise suggest. The final outcome will not be rational against the original recommendations of the participants; thus, legal rules that assume a rational individual are not well matched for those outcomes determined by Arrovian social choices. B

From Lemons to Lemonade – Making the Best of Frustration

To wit, it’s not enough that every corporate employee, executive, and board member is aligned with green policies and climate change mitigation; the decisions made with socially coordinated methods will fail to achieve their private goals at the group level, perhaps not massively so, but that is also possible. Thus, well-informed and well-intended corporate actors might not suffice to achieve strategies of climate change mitigation, and approaches such as corporate social responsibility may be limited in their ability to deliver on improved results. First, dictatorship or convention.70 Either one actor will have had the same preferences as reflected in the final decision, or a social convention can become a decision dictator. If so, then the law can be implemented as a dictator or convention-setting tool. The law can ex ante set out that certain options are to be prioritized, that certain options are better than other options, and the law can speak specifically to particular outcomes, and that other outcomes are to be discouraged. If policymakers seek to ensure that corporate decision-making processes result in climate change mitigating decisions, then creating a legal framework that sets the desired carbon reducing strategies as legally binding conventions could be effective. Incompleteness means that some decision options are excluded from being included on the final ranked list of corporate policies. While that might be problematic for Arrow, that could again be a signal for legal tools to be employed. Law has a long history of creating legal rules that exclude certain assets or activities from contemplation. So here too, law could be engaged to remove certain concepts from corporate decision-makers; even if they had included such an option in their original set of ranked preferences for a given corporate decision, the legal rule could exclude that option and enable incompleteness. Inferior rule means that an option that was less preferred by all in the decision-making team becomes a highly ranked preference in the final outcome. Well, if the goal is to get corporations to undertake executive decisions on mitigating climate change that they haven’t

Gaertner (n. 64) 22.

70

474  Research handbook on climate change mitigation law previously undertaken, then perhaps that less-preferred action on climate change could be raised to a priority action by legal and regulatory frameworks. The fourth potential outcome is logical nonsense,71 that the group’s decision in no way matches the preferences of its actors. It is unclear how this might map in any useful way into policy space. One might wonder if it makes any difference; do the corporate actors really need to sort and sequence their preferences? What if they simply picked one, single, most preferred option? What if they simply did that, vote on the most-needed strategy to enable their firm to address and achieve some measure of climate change mitigation? And then maybe they could vote several more times to create a shortlist of most preferred policies, wouldn’t that be easier? Well, it might be easier, but it is mathematically the same process and results, even if not at first obvious. Gibbard and Satterthwaite examined this scenario,72 wherein the deciders are given any finite number of ballots for the voting process. And it’s not an assumption that everyone gets the same number of ballots, just that each decider gets a finite amount of any size. And they assumed more than two choices in the voting pool.73 They found that when the game is reduced to voting for one choice from many, there are only three results, and like Arrow, none of them are squarely rational. Their three outcomes are dictatorship (just like Arrow’s term), irrelevant options (following Arrow’s incompleteness, some choices will never be selected and are merely deadweight), or the decision will be rigged by tactical voting. And our society has long known of Pliny’s strategic methods for setting up choices to force strategic tactical voting to a specific outcome.74 In essence, Gibbard and Satterthwaite leave us with an outcome identical to Arrow, but one that reveals a bit more of the roles of strategy and option engineering, e.g. tactical voting or vote-swapping. So, in consideration of better enabling corporate decision-makers to reach decisions supporting climate change mitigation activities, we have a policy choice to allow actors within the corporation to set up the voting convention, to eliminate some choices from contention, or to set the platform to tactically tilt to one pre-selected choice; or, policymakers can set these terms and outcomes with regulatory frameworks. Following the logic from earlier in this section, the better choice may be to use regulatory powers to predetermine the limits of that Gibbard and Satterthwaite election process, to ensure that it meets the needs of our times. In summary, law and legal rules can be used to work with these outcomes to enable better decisions. Approaches like corporate social responsibility and public regulatory measures,

Gaertner (n. 64) 25. Satterthwaite (n. 64); Gibbard (n. 64). 73 There is a special case called ‘May’s Theorem’ for two choices and only two choices. The result is that all decision methods fail except for ‘simple majority’ elections. Otherwise, you get the set of problems known from Pliny to Borda and on to Arrow. See Kenneth O. May, ‘A Set of Independent, Necessary and Sufficient Conditions for Simple Majority Decision’ (1952) 20 Econometrica 680. 74 Pliny the Younger, i.e. Gaius Plinius Caecilius Secundus, writes of the case against the freedmen of the consul Afranius Dexter, who had allegedly killed him, and the case concerned whether to free the freedmen, to banish them to an island, or to put them to death. In his letter, he reveals a strategy to eliminate one of the three options and thus force the voters to choose a specific option; he also shows this could be done in several ways to gain any particular outcome. As far we know, this was the earliest exposition of plank manipulation in a voting context. See Pliny the Younger, ‘Book 8’ (Letter to Ariston) in The Younger Pliny (Betty Radice trs.), The Letters of Pliny the Younger (Penguin Classics 2003). 71 72

Carbon majors, social choice, and anticommons  475 if sufficiently binding as to override the corporate decision-making process, could mitigate this problem. CSR and regulatory approaches could set conventions that leverage the dictator outcome, they could remove choices from contemplation and leverage incompleteness, or if the firm is reluctant to undertake climate change mitigation strategies, then the inferior rule would see that undesired policy turned into a higher corporate priority. And certainly, we see this in the broader fields of corporate regulation; command and control rules, fees for exceeding permitted tolerances, and criminal punishments for exceeding socially acceptable norms of behavior, these too are complementary to the idea presented in this section. If drafted carefully, the regulatory frameworks can enable corporate actors to achieve their private goals of supporting choices and decisions to progress climate change mitigation.

5

TRAGIC COMPETITION OF DECISION-MAKERS

In the previous section, we examined a scenario that assumed all parties sought to coordinate their private preferences for fighting climate change via social decision-making within the firm. And that argument assumed optimism to better illustrate the origin of policy formation frustration, that it did not need to begin with opposition to mitigating climate change, but rather the simple fact of integrating private thoughts into a collective decision is fraught with problematic outcomes that are most likely unavoidable. Here, we come from the other side of corporate life, we begin with the assumption that some actors do have veto or veto-like powers to frustrate and drive strategic reactions from their fellow decision-makers. In a scenario wherein there are multiple decision-makers, each with some form of authority to either withhold approval, ‘supply’, consent, or to threaten the decision process with a veto, there is an increased probability that no joint decision can be reached, that the process to enable a rational outcome will fail. In our present context, that could be a corporate actor who refuses to yield on climate change mitigation measures or equally a green actor who refuses to accept certain green options as not green enough. It could also be actors with authority to resist decisions for other rationales, such as costs, strategic goals, or risk management concerns. At the very core, the theory begins with actors with authority to withhold approval of a decision or of a process. This process has been spotted repeatedly in the literature under different names. Cournot first identified a model of ‘competing monopolies’ in the 1830s.75 George Tsebelis found a ‘veto player’ structure that he used to formally model political science in the early 1990s.76 Heller reintroduced the concept as the ‘Tragedy of the Anticommons’ in 1998,77 and Buchanan

75 Michael Heller, ‘The Tragedy of the Anticommons: A Concise Introduction and Lexicon’, (2013) 76 Modern Law Review 6, 20, with reference to Cournot (Antonin A. Cournot, Recherches sur les Principes Mathematiques de la Theorie des Richesses (Hachette 1838). 76 For the seminal article, see George Tsebelis, ‘Decision Making in Political Systems: Veto Players in Presidentialism, Parliamentarism, Multicameralism and Multipartyism’ (1995) 25 British Journal of Political Science 289. 77 M.A. Heller, ‘The Tragedy of the Anticommons: Property in the Transition from Marx to Markets’ (1998) 111 Harvard Law Review 621.

476  Research handbook on climate change mitigation law and Yoon established a formal model of Heller’s approach,78 which enabled multiple studies in anticommons in the early 2000s.79 Despite the different origins, from economics, from political science, and from law, the underlying mechanisms remain the same. For the purposes of this chapter, the term ‘anticommons’ will be used for all of the similar concepts referenced by Cournot, Tsebelis, Heller, Buchanan and others. Anticommons decision structure, generally understood as game theoretic structures that connect economic logic to legal reasoning,80 enable legal theorists to examine how a particular decision process impacts on a collection of legal rules; does it aid or frustrate the attainment of the policy goals of the legislators who created those rules? A recent definition of an anticommons structure holds: The core prerequisites are merely that each actor knows that there are several necessary complementary inputs, that she controls at least one of them, and that successful bundling of all inputs will generate positive benefits available for allocation, giving rise to a non-cooperative strategic game.81

An anticommons decision structure arises in the basic case, in property law, when an asset held in common is controlled by more than one owner, each of whom exercises at least one exclusionary right to the use of the common asset. In a physical context, if a water well is controlled by the five farms that surround that well, and if each farm can exclude anyone else from using that well, then the well is located in an anticommons structure. Another example is when multiple family members are co-owners of a field, each holding an exclusionary right over how the field can be used. Decisions on how to utilize that field will be hampered by the presence of a simultaneous anticommons of co-owners. We can also see this in competing monopolies, as originally demonstrated by Cournot in the early 1800s,82 in his example of a copper monopolist and a zinc monopolist selling to a bronze manufacturer. When a single process, bronze making, or a single resource, a water well, are controlled by an anticommons structure then the overall use of that process or resource will be reduced below what competitive markets would have provided; this reduction in economic rents from a process or resource is called the ‘Tragedy of the Anticommons’.83

James Buchanan and Yong J. Yoon, ‘Symmetric Tragedies: Commons and Anticommons’, (2000) 43 Journal of Law and Economics 1. 79 See the listing of anticommons literature found through the next subsection; see also Roy A. Partain, ‘Anticommons in Public International Law: Consideration of a New Approach for Legal Research’ (2020) 13 Gacheon Law Review 211, which provides an in-depth review of the literature. 80 For a broader introduction to anticommons and recent research in the field, see Partain (n. 79). That article was based on a speech delivered at the University of Tokyo’s International Law Colloquium in summer 2019. See also Heller (2013) and Ivan Major, Ronald F. King and Cosmin G. Marian, ‘Anticommons, the Coase Theorem and the Problem of Bundling Inefficiency’ (2016) 10 International Journal of the Commons 244. 81 Major, King and Marian (n. 80) 151. 82 Heller (n. 75) 20, with reference to Cournot (n. 75). 83 See Heller (n. 77) for the seminal definition of this term. 78

Carbon majors, social choice, and anticommons  477 A

Introduction to Legal Anticommons Decision Structures

In a more intangible setting, scholars have written of legal anticommons or regulatory anticommons.84 This legal structure occurs when a legal policy goal or a regulatory goal is controlled via legal rules that require decision-making wherein each decision-maker is allocated exclusionary rights to deny or reject the legal or regulatory process. This is often seen in regulatory processes wherein multiple approvals are required from different agencies to gain an effective regulatory approval of a single policy outcome. This mode of distributed decision-making is commonly found within corporations. And it was at the very core of Heller’s original observations of post-Soviet approvals for stores and restaurants.85 The idea of distributed decision-making leading to less effective outcomes was the original ‘anticommons’ and thus is well applied here to corporate decision-making on matters of climate change activities. Hereunder we explore the fundamental theoretical backgrounds to this distributed decision-making process with ‘veto holders’ in play. 1 Bellantuono’s regulatory anticommons Bellantuono raised an alarm that legal or regulatory anticommons may be worse than those found in physical property anticommons; that they may be more commonly found and more difficult to solve.86 Second, he further found that the basic design of modern democracies avoids centralization of power, establishing a variety of power fragmentations across both vertical and horizontal modes of governance.87 Third, Bellantuono noted that efforts to consolidate the number of exclusionary right holders to a smaller number can be frustrated as such a task often merely reduces the anticommons structure to a smaller number of more powerful decision-makers; ergo, it is very unclear if the results will be better for the specific legal policy goal.88 Finally, Bellantuono raised an argument that many regulatory decisions are not made truly unilaterally, but rather are made in committees composed of actors from across vertical and horizontal elements of the government, and that many such committees might possess their own ‘franchise’ of exclusionary rights-cum-approval powers.89 Arguendo, those committees

84 See Jie Gao and Jian-Pei Wang, ‘The Tragedy of the Anticommons in Government Public Management and the Establishment of the System of “Super Ministry” in China’ (International Conference on Management Science & Engineering, California, USA, September 2008) 1754, 1756. On the other hand, when the government agencies involved in the provision of such goods or services enjoy the right to veto but not the full right to use, such goods or services then enter the sphere of the anticommons. Unless permission and cooperation [are] available from other involved agencies, such goods and service will not materialize, leading to the insufficient supply of public goods or services, the tragedy of the anticommons in public management. Ibid. 1756. See also Lea Kosnik, ‘The Anticommons and the Environment’ (2012) 101 Journal of Environmental Management 206, 209, for a formal model of a legal anticommons structure. 85 See Heller (n. 77). 86 Giuseppe Bellantuono, ‘The Regulatory Anticommons of Green Infrastructures’ (2014) 37 European Journal of Law and Economics 325, 332. 87 Ibid. 331. 88 Ibid. 331. 89 Ibid. 332.

478  Research handbook on climate change mitigation law might be informally constructed, much as the early cabinets of Franklin Delano Roosevelt were, but remain sufficiently empowered to create functional anticommons of control. Simultaneous and sequential legal anticommons 2 There are two well-defined classes of anticommons structures based on how the decisions on exclusionary rights are taken, simultaneously or sequentially. Parisi, Schulz and Depoorter established the basic paradigms for both models.90 An example of a simultaneous anticommons structure could include a committee vote requiring a super-majority of unanimity from independently rendered votes.91 An example of a sequential anticommons could be regulatory processes which require decisions to be made one after another, requiring previous approvals to reach the next node of approbation. Parisi, Schulz and Depoorter go on to state that the classes need not be exclusive of each other; instead, a scenario might have both simultaneous and sequential classes of anticommons in the same set of circumstances. For example, land usage might require solving an anticommons over what to plant in the field in any given year, but also require solving a multi-year use problem to balance yields and recovery periods; these types of circumstances might even have different actors across the years of the problem set, to further complicate the conditions of the tragedy in play.92 The sequential anticommons problem thus reveals the cost of sequential fragmentation of use and exclusion rights, as manifested in the deadweight loss resulting from the uncoordinated action of the two sequential right holders.93 In this manner, the ‘Tragedy of the Anticommons’ can be played out over time across a sequence of steps and stages, resulting in significant reductions in agricultural activity, in the above example, or in reduced policy attainment in the face of a legal anticommons. 3 Intentional anticommons structures for legal policy Fennell warns that some scholars might, like Macbeth, see too much in the blowing leaves of the trees. The presence of anticommons might be intentional, representing the community’s desire to resist the use of a certain policy or process. Sometimes, says Fennell, it won’t be transaction costs that prevent a re-bundling of the dis-bundled rights, but perhaps that some rights holders will actually value their rights so highly that it is not Pareto or even Kaldor-Hicks improving to achieve that re-bundling of rights.94

90 See Francesco Parisi, Norbert Schulz and Ben Depoorter, ‘Simultaneous and Sequential Anticommons’ (2004) 17 European Journal of Law and Economics 175. 91 Ibid. 177. 92 See Hanoch Dagan and Michael A. Heller, ‘The Liberal Commons’ (2000) 110 Yale Law Journal 549 on land use and its nexus with the ‘Tragedy of the anticommons’ across multigenerational family holdings. See also Julius J. Zschau, Ulysses Clayborn and Andrew M. O’Malley, ‘Using Land Trusts to Prevent Small Farmer Land Loss’ (2009) 44(3) Real Property, Trust and Estate Law Journal 521–583 https://​www​.jstor​.org/​stable/​20785683 last accessed 14 June 2022. 93 Parisi, Schulz and Depoorter (n. 90) 182. 94 Lee A. Fennell, ‘Common Interest Tragedies’ (2004) 98 Northwestern University Law Review 907, 931. Fennell refers to a Parchomovsky and Siegelman’s ‘holding’ strategy, wherein a party prefers to hold an asset separately rather than sell to achieve a bundled portfolio (ibid. 931).

Carbon majors, social choice, and anticommons  479 Further, not all divisions of exclusionary rights are tragic; again, Fennell notes how by fragmenting control over the permission to drive a car that a driver might be kept safe from drinking and driving.95 This builds on her analogy of a series of locked doors,96 that all the door-owners have to unlock simultaneously to provide access, and that sometimes it’s in the group’s welfare to restrain that access. ‘Fragmentation is sometimes important for the very purpose of relinquishing power over a given resource without granting power over the resource to anyone else, perhaps as a form of pre-commitment.’97 Partain has noted that constitutional law often engages in anticommons structures in designing the rules of constitutional amendment or of calling constitutional conventions; and does so to better enable a conservation of the constitutional rules once agreed to by the community.98 Thus, it is quite possible that the existence of an anticommons structure is intentional in the design of a set of legal rules, to prevent the use of a resource (e.g. in conservation of it), to limit the use of a process (e.g. to avoid conflict with our rights or social goals), or to potentially prevent change to the rule set, in jurisprudential conservatism. B

Observations of Competitive Decision-Making on Climate Change Mitigation

Given the above explication of the anticommons model of decision-making and of the frustration that it can bring to a decision process, it is clear how that might work out in a corporate context once the issues of climate change are raised for deliberation. This approach does not require the set theory formalism of the social choice theory models;99 rather it has an almost intuitive feel to the problem. Obstructionism, whether due to strategic intent to block corporate support for climate change measures, strategic intent to force an even greener solution, or due to other concerns having naught to do with climate change mitigation at all, can result in lost opportunities at a greater scale and rate of incidence than previously understood. And again, albeit for different strands of logic, the private preferences of corporate decision-makers might fail to result in policies that they would have privately preferred as a whole, due to certain powerful decision-makers who can enable this anticommons to emerge in the decision process. As seen in the previous section, a regulatory approach could be implemented to require certain decision outcomes, to override those with obstructive voting or decision-making powers; much as current regulatory frameworks prevent certain decision gridlocks by removing certain options and denying the platform to certain decision-makers or by requiring activities and decisions within certain time frames.

95 Ibid. 970. The reference is to a driver handing her keys to a trusted friend who will exercise independent judgment on the ‘driver-readiness’ of the car owner-cum-driver (ibid. 970). 96 Ibid. 929. 97 Ibid. 970. 98 Partain (n. 79) 250–252. 99 But as noted in earlier footnotes, there most certainly are sophisticated economic models of anticommons structures and the same could be said the models of the commons. The fundamental concept is something we experience in life often enough, but it has now been illuminated with formal models.

480  Research handbook on climate change mitigation law

6 CONCLUSION This chapter has attempted to provide novel explanations and insights into why any corporation, but particularly why carbon majors, might have trouble in taking the initiative to make those decisions that would enable more proactive choices and strategies to reduce their impact on climate change. First, the chapter explored the failure of previous policies to impact those corporations that are most able to reduce the global risk from climate change. Evidence of the scientific consensus on increasing emissions was reviewed, evidence of the existence and role of the carbon majors was presented. A firm conclusion was reached that previous policy efforts to regulate or incentivize those key corporations had not been effective, so research was undertaken to determine if other factors might be at play. Second, this chapter examined the idea of the problem-space facing carbon majors and other heavy-duty enablers of anthropogenic climate change. By using the US 1934 Securities Act and understanding that its forward-looking statements required the issuance of cautionary notes, we were able to look under the hood to see the statements put out by carbon majors as to the primary risks and legal concerns that they were concerned about; we were able to examine both some examples of climate change mitigation projects, namely their plans for carbon capture and storage, and examples from their broader sustainability planning cautionary notes. It is questionable if there are sufficient numbers of these cautionary statements on carbon majors’ plans to mitigate climate change to enable the empirical and statistical tools that rely on the ‘law of large numbers’ to become reliable instruments, but the small sample was similar across the carbon majors and reflected long lists of concerns held in common. And there were numerous complex concerns documented in those cautionary notes. Then the analysis turned to examining what two different models of social decision-making can inform us about groups of actors facing multiple complicated decisions, and for us, complicated decisions on climate change mitigation policies and activities for corporations and particularly for carbon major corporations. We examined social choice theory models and anticommons decision structures to understand if either model might help to explain the lack of decisive actions to reduce their contributions to anthropogenic climate change. The social choice models were examined from a simplistic question of whether well-intended corporate decision-makers could work together to enable an effective group decision for the firm that could reflect their private preferences for policies and activities in support of climate change mitigation? After the analysis was completed, we found that no, such a group of green corporate actors would be frustrated in their attempts to achieve a decision that truly reflected their private goals, that the corporation would likely set corporate goals on climate change that fell short of their own hopes. Not to say catastrophic, but not accurately reflecting their intents. It was not necessary to examine what might happen if the corporate actors were not so green in their intents, for that would register even less support for climate change-avoiding policies and actions. And, our second piece of analysis would begin from the other extreme. The anticommons decision structures were introduced and the particular models on regulatory anticommons and on legal anticommons were presented and explained. That enabled an understanding of the hazard of the ‘Tragedy of the Anticommons’, that a lack of sufficient support from those voters with veto or veto-like powers could fully prevent any decisions or actions being undertaken. And this model also did not need anti-green voters to be effective; rather, it merely needed actors who could veto or shut down an active decision-making

Carbon majors, social choice, and anticommons  481 process. The grounds for that resistance could be anti-green in character, but they could also be from a stance to require higher standards of green activities, or they could be for wholly other reasons not connected to climate change at all, such as cost accounting or political risk management. The rationale for the resistance doesn’t really matter, only the impact on the frustrated decision-making process. Perhaps the most pernicious result is that the why of the resistance doesn’t matter. Again, as in the social choice theory context, the decision-making process to understand and adopt climate change mitigation policies and actions will be thwarted. In both cases, regulatory frameworks were encouraged as a potential solution to the impediments in corporate decision-making. Well-designed regulations could help to overcome the specific problems discussed and illuminated in this chapter. Further research might enquire about the role of civil liability when a corporation is unable to accurately process information and render fully rational decisions on those inputs; it is possible that in such a case a rule of negligence might be more preferable than the more commonly encouraged rule of strict liability. Furthermore, research on how tax measures might impact these decision-making problems could be investigated, as taxes are sometimes seen as complementary to the role of public regulatory goals. The potential for private regulatory mechanisms to enhance the outcomes from these defective decision-making processes should also be investigated. And finally, the potential integration and ‘smart’ mixing of these approaches should be investigated. Given the findings of the previous section, we can draw two major results. First, even well-meaning actors within corporations seeking to achieve climate change mitigation goals will find themselves facing the frustrations identified by social choice theory and anticommons theories of decision structures. Their results will rarely if ever actually achieve their goals when they rely naively on normal modes of socially integrated decision-making. Second, these dysfunctional results mean that the decision-making processes will not be reliably rational, from the perspective of their data mapping into their goals. The decision-making process will result in what might appear to be inconsistent or irrational decisions, as the ability to integrate the views and recommendations of the various persons will suffer the problems identified by social choice theory. For legal theories that depend on a rational actor, an actor capable of understanding the consequences of their choices, this will not avail. It is not that any particular person within the firm cannot see the outcomes and results of the decisions rendered, but rather, the mathematical looms of social choice theory and anticommons theory that prevents those insights from being reliably passed on rationally into the final decisions. With the closing of this chapter, it is hoped that this investigation into the applicability of social choice theory and anticommons decision structures can encourage more research into the how and why of the decisions made by carbon majors and other corporations, the decisions that historically have not reached the outcomes necessary to avoid climate change. And if those processes are better understood, then perhaps law can build better regulatory frameworks and other legal rules and institutions to support and guide corporations to achieve successful carbon emission reductions and climate change mitigation strategies.

19. Waste management Geert Van Calster and Luna Aristei

INTRODUCTION This chapter reviews the EU’s waste management regime as it applies in the specific context of climate mitigation. We select, among the rather extensive amount of international and European Union waste laws,1 those with the most immediate impact on climate mitigation. Especially given the pervasive nature of climate change in EU environmental law, any selection may of course show some gaps, such as, in this case, the life-cycle analysis of the climate impact of waste management activities, including energy use during transport, etc. It is not only the omnipresent nature of climate change in EU environmental law which explains a role for waste management in the climate debate. Technical parameters, too, suggest a strong link between waste management and climate change mitigation. The regulation of waste landfills is the most obvious example in this regard. In particular, reduction of biodegradable waste from landfill (in favour of fermentation or composting) reduces methane emissions. The obvious technical link between waste management and climate change led to a 2001 study by AEA Technology, for the European Commission. The study2 looked at municipal solid waste (MSW) management ‘only’. Overall, this study found that source-segregation of various waste components from MSW, followed by recycling or composting or AD3 of putrescibles offers the lowest net flux of greenhouse gases under assumed baseline conditions. Improved gas management at landfills can do much to reduce the greenhouse gas flux from the landfilling of bulk MSW, but this option remains essentially an ‘end of pipe’ solution. Incineration with energy recovery (especially as combined heat and power – CHP) provides a net saving in greenhouse gas emissions from bulk MSW incineration, but the robustness of this option depends crucially on the energy source replaced. MBT4 offers significant advantages over landfilling of bulk MSW or contaminated putrescible wastes in terms of net greenhouse gas flux.5

The 2001 study already indicated hesitation vis-à-vis unqualified support for the incineration of waste, an issue that will be revisited later in the chapter. In addition to this study, in 2012 a World Bank report on waste management and climate change6 estimated that waste man Geert Van Calster, EU Waste Law (Oxford University Press 2015) 432. AEA Technology, Waste Management Options and Climate Change (Office for Official Publications of the European Communities 2001) http://​ www​ .napoliassise​ .it/​ Waste​ _management​ _options​_and​_climate​_change​.pdf accessed 30 November 2020. 3 Anaerobic digestion: which produces a compost residue from source-segregated putrescible wastes for use in agriculture or horticulture. 4 Mechanical biological treatment. 5 AEA Technology (n. 2) 11. 6 Dan Hoornweg and Perinaz Bhada-Tata, ‘What a Waste: A Global Review of Solid Waste Management’, Urban Development Series, Knowledge Papers No 15 (World Bank 2012) https://​ openknowledge​.worldbank​.org/​handle/​10986/​17388 last accessed 30 May 2022. 1 2

482

Waste management  483 agement methods at the time, in particular landfill, produced almost 5 per cent of total global greenhouse gas emissions and 12 per cent of the world’s emissions of methane (CH4), a greenhouse gas with more than 20 times the impact of carbon dioxide (CO2). It is possible to reduce these emissions with different techniques such as composting, which is aerobic and emits carbon dioxide. Since in landfill it is the organic material that produces methane, composting can remove greenhouse gas emissions and reduce overall GHGs from solid waste. One ounce of prevention is worth a pound of cure, of course, which has not escaped the attention of the European Commission (EC) either. Hence the EC has now firmly played the card of what was at first called sustainable materials management,7 and is now more broadly conceptualized as the circular economy,8 and of the EU as a resources society (the latter with coinciding with issues under international trade law9). At the policy formulation level, there is no shortage of EU appreciation of the importance of waste and resources strategies to assist with the circular economy. Regarding sustainable materials management, already at the end of June 2013, the EU institutions adopted the Seventh Environmental Action Programme (EAP – European Union’s General Environment Action Programme to 2020, ‘Living well, within the limits of our planet’).10 On 14 October 2020, the Plan was adjourned by the Eighth Environment Action Programme to 2030, which, along with the Europe 2020 Strategy,11 provides the EU’s objectives and targets in terms of resource efficiency and waste strategy. The Programme supports the aims of the European Green Deal, providing the opportunity to reaffirm EU commitment to 2050 of the Seventh EAP to ensure prosperity while remaining within planetary limits. The Eighth EAP also contributes to achieving the 2030 UN Agenda and its Sustainable Development Goals. To reduce greenhouse gas emissions and to fight climate change, the EU has set three different dates (2020,12 203013 and 205014) for the achievement of ambitious targets. The final aim is to reduce EU emissions by 80–95 per cent by 2050, thanks also to the European Green Deal,15 which aims to achieve climate neutrality in 2050. To reach these targets, all sectors should be involved, including waste management, which has to become greener and more circular, Geert Van Calster, ‘Opportunities and pitfalls for sustainable materials management in EU waste law’ in Ioannis K. Panoussis amd Harry G. Post (eds), Waste Management in European Law: The Example of Naples and Campania (Eleven International Publishing 2014). 8 The CE Package consisted, among others, of an Action Plan (Commission, ‘Closing the loop – An EU action plan for the Circular Economy’ COM(2015) 0614 final) and four legislative proposals to change a variety of EU Waste Directives. 9 Commission, ‘Critical Raw Materials Resilience: Charting a Path towards Greater Security and Sustainability’ COM(2020) 474 final. See also Geert Van Calster, ‘China, Minerals Export, Raw Materials and Rare Earth Materials: A Perfect Storm for World Trade Organization Dispute Settlement’ (2013) 22(1) Review of European Community and International Environmental Law (RECIEL) 117. 10 The Programme pays attention to the transformation of waste into a resource, promoting prevention, reuse and recycling and renouncing inefficient and harmful methods, such as landfills. It also identified three priority areas where more action is needed to protect nature: strengthen ecological resilience; promote low-carbon and resource-efficient growth; reduce threats to public health and well-being from pollution, chemicals and the effects of climate change. 11 Commission, ‘A strategy for smart, sustainable and inclusive growth’ COM(2010) 2020 final, 119. 12 Commission, ‘20 20 by 2020 – Europe’s climate change opportunity’ COM(2008) 19 final. 13 Council, ‘2030 Climate and Energy Policy Framework’ EUCO (2014) 169/14. 14 Commission, ‘A Clean Planet for all. A European strategic long-term vision for a prosperous, modern, competitive and climate neutral economy’ COM(2018) 773 final. 15 Commission, ‘The European Green Deal’ COM(2019) 640 final. 7

484  Research handbook on climate change mitigation law aiming to reuse and recycle as many products as possible to reduce emissions caused by the production of new goods. To transform the EU Green Deal’s objectives into law, the European Commission proposed a Regulation, which also increases the 2030 emission reduction aim to 55 per cent;16 the same target is also included in the 2030 Climate Target Plan.17 In addition, with Decision 6320/2020, the EU approved a climate action related to waste and raw materials in the context of Horizon 2020. In detail, since waste produces 2 per cent of EU greenhouse gas emissions, the EU is investing to improve the circular economy.18 In general, all documents mentioned above consider waste as a commodity and as an important source of energy, aiming to create a more competitive environment for recycling and recovery in the EU to reduce the use of raw resources. While in the past, in order to protect the environment, the trend was to widen as much as possible the notion of waste by including in it every kind of product, progressively the opposite trend has been emerging. This has led, on the one hand, to exclude from the category of waste, under particular conditions, various substances and objects with economic value directly reusable (the so-called by-products) and, on the other hand, to remove from the category of waste substances that had previously been qualified as such (so-called end of waste or secondary raw materials).19 First, we review the impact of international waste law on the move towards the circular economy. We then focus on those parts of EU waste law with the most immediate and direct impact on the issue: waste incineration, and carbon capture and storage. The aim of this contribution is not to provide an overall A to Z of how waste law impacts the circular economy, for arguably all parts of that body of law do so.

Commission ‘Proposal for a regulation of the European Parliament and of the Council establishing the framework for achieving climate neutrality and amending Regulation (EL) 2018/1999 (European Climate Law)’ COM(2020) 80 final. 17 Commission, ‘Stepping up Europe’s 2030 ambition. Investing in a climate-neutral future for the benefit of our people’ COM(2020) 562 final. 18 Commission, ‘Commission Implementing Decision amending Implementing Decision C(2017)7124 as regards the work programme for 2018–2020 within the framework of the Specific Programme Implementing Horizon 2020 – the Framework Programme for Research and Innovation (2014–2020) and the financing of the work programme for 2020 in support of the European Green Deal’ COM(2020) 6320 final. 19 Council Directive 2018/851 of 30 May 2018 amending Directive 2008/98/EC on waste [2018] OJ L150/109. By-products are defined by Article 5 of Directive 2008/98 (amended by Directive 2018/851) as ‘a substance or object resulting from a production process the primary aim of which is not the production of that substance or object’ (ibid. 121). End of waste is defined by Article 6 of Directive 2008/9 (amended by Directive 2018/851) as waste which has undergone a recycling or other recovery operation is considered to have ceased to be waste if it complies with the following conditions: (a) the substance or object is to be used for specific purposes; (b) a market or demand exists for such a substance or object; (c) the substance or object fulfils the technical requirements for the specific purposes and meets the existing legislation and standards applicable to products; and (d) the use of the substance or object will not lead to overall adverse environmental or human health impacts. (Ibid. 122.) 16

Waste management  485

1

INTERNATIONAL WASTE LAW OF RELEVANCE TO CLIMATE AND THE CIRCULAR ECONOMY

There is no global legal framework for waste management and no unitary system for assigning waste responsibility. This has led to fragmented regulation of the field. The importance of waste recycling has nevertheless been underlined at international level by the United Nations Sustainable Development Goals (SDGs).20 SDG 12 aims to manage chemicals and all waste ecologically, as well as aiming for a substantial reduction of waste production through the efficient and sustainable use of natural resources and through measures such as prevention, reduction, recycling and reuse Disposal of hazardous and radioactive waste at sea is regulated by several regional or global instruments,21 while disposal into rivers and lakes is regulated or prohibited by bilateral or multilateral treaties, including the 1992 Convention on the Protection and Use of Transboundary Watercourses and International Lakes22 (and in the EU by Directive 1991/271.23 In the early 1970s the first international legal regulation that prohibited disposal at sea of certain types of waste was adopted. The 1972 London Convention defined wastes in a broad way as material or substance of any form, kind or description.24 In 1989 the Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (Basel Convention) left much of the actual regulatory and definitional issues to the adhering States.25 The 1992 OSPAR Convention26 defined what is not waste and the 1996 Protocol to the 1972 United Nations General Assembly, ‘Transforming our world: the 2030 Agenda for Sustainable Development A/RES/70/1’ (September 2015) https://​www​.un​.org/​en/​development/​desa/​population/​ migration/​generalassembly/​docs/​globalcompact/​A​_RES​_70​_1​_E​.pdf last accessed 30 May 2022. 21 Such as the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management (International Atomic Energy Agency (IAEA), ‘Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management’ (IAEA, 1997)); the Convention to Ban the Importation into Forum islands Countries of Hazardous and Radioactive Wastes (Waigani Convention, ‘Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management’ (UN 1995)); the Convention on the Ban of Imports into Africa and the Control of Transboundary Movement and Management of Hazardous Wastes within Africa (Bamako Convention, ‘Ban of Imports into Africa and the Control of Transboundary Movement and Management of Hazardous Wastes within Africa’ [1991], 30 ILM 773 1551; the IAEA Code of Practice on the International Transboundary Movement of Radioactive Waste (IAEA, IAEA Code of Practice on the International Transboundary Movement of Radioactive Waste (IAEA 1990)); the 1989 Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (Basel Convention, ‘1989 Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal’ [1989] 28 ILM 657 1); the 1986 Mexico–United States Hazardous Waste Agreement (Mexico and United States, ‘1986 Mexico–United States Hazardous Waste Agreement’, [1986] 26 ILM 25 1). 22 UN Watercourses Convention, ‘Convention on the Protection and Use of Transboundary Watercourses’ [1992], 31 ILM 1312 1. 23 Council Directive 91/271/EEC of 21 May 1991 concerning urban waste-water treatment [2002] OJ L135/40. 24 London Convention, ‘Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter 1972’ [1972] 11 ILM 1294 3 Art. III(4). 25 Basel Convention, ‘1989 Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal’ [1989] 28 ILM 657 Art. 2(1). 26 OSPAR Convention, ‘Convention for the Protection of the Marine Environment of the North-East Atlantic’ [1992] 32 ILM 1228 1. 20

486  Research handbook on climate change mitigation law London Convention27 defines waste as any material or substance regardless of the type, form or description. Prevention of waste generation is pushed without much bite, however, in Resolutions of the Consultative Meeting of the 1972 London Convention,28 the 1989 Basel Convention, the 1991 Bamako Convention and the 2001 Stockholm Convention on Persistent Organic Pollutants.29 The Basel Convention, for instance, encourages cooperation to develop low-waste technologies.30 Its 1999 Conference of the Parties31 set prevention, minimization, recycling and recovery goals for hazardous waste, without any oversight or enforcement mechanism. The Bamako Convention limits and prevents hazardous waste generation in Africa by asking parties to adopt preventive and precautionary approaches as well as to promoting clean production methods in product life cycles, including the reintroduction of a product into industrial systems or nature once it loses its useful function.32 Finally, the 2001 Stockholm Convention rules production, use and transboundary movement of those hazardous chemical known as POPs (persistent organic pollutants), which remain intact for long periods in the environment with consequences for organisms, land and human health. On landfill, no international regulation exists. In addition to EU Directives further discussed below, there is the 1991 Espoo Convention that subjects toxic and dangerous waste landfill that can cause negative transboundary effects to an environmental impact assessment.33 In the Antarctic area, radioactive waste disposal is prohibited by the 1959 Antarctic Treaty,34 the 1991 Environmental Protection Protocol35 prohibits waste disposal in ice-free areas, and waste removed from the Antarctic Treaty area should be stored to prevent its atmospheric dispersion. The 1986 Noumea Convention36 is one of the few treaties that set norms for the storage of hazardous and toxic waste and bans storage of radioactive waste to prevent radioactive pollution; and the 2001 POPs Convention asks States to dispose of waste containing POP contaminants by destroying them.37

27 London Convention, ‘Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter 1972’ [1972] 11 ILM 1294 1. 28 Resolution LDC.39(13), ‘Status of Incineration of Noxious Liquid Wastes at Sea. (London Convention 1972). 29 Stockholm Convention, ‘Convention on Persistent Organic Pollutants’ [2001] 40 ILM 532 1. 30 Ibid. Art. 10(2)(c). 31 Basel Convention, ‘Decision V/33 on Environmentally Sound Management, Report of the Fifth Meeting of the Conference of the Parties to the Basel Convention UNEP/CHW.5/29’ (Basel Convention 1989). 32 Bamako Convention 5–6, Art. 4(3)(f–g). 33 Espoo Convention, ‘Convention on Environmental Impact Assessment in a Transboundary Context’ [1991] 30 ILM 802 2–6, Arts 2(2), 3(1) and 5. 34 Antarctic Treaty (signed on 1 December 1959, entered into force 23 June 1961) 402 UNTS 71. 35 The 1991 Protocol on the Environmental Protection to the Antarctic Treaty (signed on 4 October 1991, entered into force 14 January 1998) 30 ILM 1461. 36 SPREP Convention, ‘Convention for the Protection of the Natural Resources and Environment of the South Pacific Region and Related Protocols’ [1986] 26 ILM 38 1. 37 Stockholm Convention 8, Art. 6(d)(ii–iii).

Waste management  487

2

WASTE MANAGEMENT AND THE LANDFILL OF WASTE IN THE EU

The basic principle of EU waste law is that the generation of waste is to be avoided, but if waste is produced, it has to be recovered. When recovery is technically and economically impossible, waste is disposed of in the best possible environment-friendly way. Waste has a direct (as in the case of soil and air pollution) and indirect impact, as anything that is not recycled or recovered from waste represents a loss of raw materials. Since there is an increase in the quantity of goods consumed, there is an ever-increasing quantity of waste, which includes a wide range of beneficial and hazardous materials in the varieties of materials treated. If proper waste recycling takes place and secondary materials are used, fewer goods will be produced or extracted from the ground, with health and environmental benefits. Every year around 5190 kg per capita of waste are produced in the EU.38 On average, only 47 per cent of municipal waste (which is around 492 kg per capita39) is reused or recycled while a huge amount goes to landfill (24 per cent). Some Member States (i.e. Belgium, Denmark, Germany) landfill less than 3 per cent of their municipal waste while, on the other hand, other Member States landfill more than 75 per cent of that waste.40 Obviously, the EU needs to unify Member States’ different approaches; and to turn waste into a resource, EU waste legislation needs to be implemented across the EU, based on a strict application of the waste hierarchy. Once the red economy (the traditional economy that borrows from nature, humanity and common goods without worrying about the future) has been definitively set aside, we ought not just to have graduated to a green economy, which requires companies to invest more and consumers to spend more to preserve the environment (but which sees the environment as a cost), but in fact we ought to have moved to a blue economy41 (or circular economy), according to which the environment is a real driver of economic and institutional development.42 The blue economy is an economic model that aims to create a sustainable ecosystem by transforming previously wasted substances into profitable goods. It is a development of the green economy: while the latter envisages a reduction of CO2 within an acceptable limit, the blue economy envisages zero CO2 emissions. The blue economy’s objective is to use substances 38 Eurostat, ‘Waste Generation 2018’ (Eurostat, April 2021) https://​ec​.europa​.eu/​eurostat/​statistics​ -explained/​index​.php/​Waste​_statistics last accessed 30 May 2022. 39 Eurostat. ‘Municipal waste statistics’ (Eurostat, December 2021) https://​ec​.europa​.eu/​eurostat/​ statistics​-explained/​index​.php/​Municipal​_waste​_statistics​#Municipal​_waste​_generation last accessed 30 May 2022. 40 Ibid. 41 Gunter Pauli proposed the blue economy model in The Blue Economy: 10 Years, 100 Innovations, 100 Million Jobs (Paradigm Publications 2010). 42 According to the Ellen MacArthur Foundation, ‘circular economy’ is a generic term for an economy designed to regenerate itself. See Ellen MacArthur Foundation, ‘Towards the circular economy Vol. 1: an economic and business rationale for an accelerated transition’ (Ellen MacArthur Foundation 2012). The circular economy is a system in which all activities, starting with extraction and production, are organized in such a way that someone’s waste becomes a resource for someone else (zero waste). In the linear economy, on the other hand, once consumption has ended, the cycle of the product that becomes waste also ends, forcing the economic chain to continuously resume the same pattern: extraction, production, consumption, disposal.

488  Research handbook on climate change mitigation law already present in nature, to make fewer investments, to create more jobs and to achieve greater revenue. Within the circularity, a good is produced and used, and when it has ceased its function, it is returned to the biosphere, if biological, or repurposed, if of mineral origins. In the waste management cycle, landfill is where solid urban waste and all other waste (including wet waste) resulting from human activities (such as construction debris or industrial waste) is sent either for mechanical-biological treatment to produce energy through cold bio-oxidation, or to be burnt and used as fuel in incinerators, if it cannot be recycled. The management of solid waste in landfills also contributes to greenhouse gas (CO2, CH4 and NO2) emissions (and therefore to global warming) as well as to the production of leachates that may contaminate surface or groundwater.43 Avoiding landfill emissions counts as one of the most important means to address the climate impact of waste management.44 The reduction of these emissions is possible thanks to the encouragement to use waste management alternatives and options such as anaerobic digestion, which offers the additional advantage of biogas production; composting, which ensures carbon sequestration, soil improvement and biogenic CO2 emission; or incineration, which offers the advantage of energy recovery. By combining these various options, more benefits are gained.45 In many European countries (especially those with high levels of seismicity, population density and underground watercourses),46 precise and decisive choices have already been made to minimize the amount of landfill waste and to create funded programs to clean up filled landfill sites. A modern management system must ensure that only waste remaining from other treatment operations is sent to landfills.47 In the EU, in the first Waste Directive, Directive 75/442,48 which set the general definition of waste management, disposal was already considered the last possible solution. In 1990 the Court of Justice of the European Union (CJEU)49 clarified the definition of waste as not excluding objects or substances that are capable of economic reutilization. Regarding disposal and landfill, the Landfill of Waste Directive50 establishes duties, which include the types of waste that may be accepted at the site, for three classes of landfills: those for hazardous, non-hazardous, and inert wastes.51 Directive 2018/850 added a paragraph to Article 5 of Directive 1999/31 which states that

43 Chengliang Zhang, Tong Xu, Hualiang Fenhg and Shaohua Chen, ‘Greenhouse Gas Emissions from Landfill: A Review and Bibliometrical Analysis’ (2019) 11 Sustainability 2282 https://​www​.mdpi​ .com/​2071​-1050/​11/​8/​2282 last accessed 30 May 2022. 44 See United Nations Environment Programme (UNEP), ‘Waste and Climate Change’ (UNEP 2010). 45 Chidozie C. Nnaji and Joseph T. Utsev, ‘Climate Change and Waste Management: A Balanced Assessment’ (2012) 13 Journal of Sustainable Development in Africa 17. 46 Such as Italy, Spain and Portugal. 47 See also Jean Boger and others, ‘Waste Management’ in Bert Metz, Ogunlade Davidson, Peter Bosch, Rutu Dave and Leo Meyer (eds), AR4 Climate Change 2007: Mitigation of Climate Change (Cambridge University Press 2007); and United States Environmental Protection Agency, ‘Climate Change and Municipal Solid Waste (MSW)’ (United States Environmental Protection Agency 2016) https://​archive​.epa​.gov/​wastes/​conserve/​tools/​payt/​web/​html/​factfin​.html last accessed 30 May 2022. 48 Council Directive 75/442/EEC of 15 July 1975 on waste [1975] OJ L194/39. 49 Case C-206 Venasso and Zanetti [1990] ECR I-1461; Case C-207/88 Venasso and Zanetti [1990] ECR I-1461. See also Case C-359/88 Zanetti and Others [1990] ECR I-1509. 50 Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste [1999] OJ L182/1. 51 Ibid. 3–5, Arts 2(c–e) and 4.

Waste management  489 Member States shall take the necessary measures to ensure that by 2035 the amount of municipal waste landfilled is reduced to 10 per cent or less of the total amount of municipal waste generated (by weight).

There is the possibility to postpone this deadline up to five years in which case Member States shall take the necessary measures to reduce by 2035 the amount of municipal waste landfilled to 25 per cent or less of the total amount of municipal waste generated (by weight).52

Directive 2008/98 amended the Waste Framework Directive and urged Member States, in recital 29, not to support the landfill of recyclable material. After the 2008 Directive, the European Commission in 2014 presented a Communication entitled ‘Towards a circular economy: programme for a zero waste Europe’,53 accompanied by a proposal to amend certain Directives on waste, with strict targets. The EU was asked to set itself the target of recycling 70 per cent of municipal waste and 80 per cent of packaging waste by 2030, banning recyclable waste landfill from 2025 and promoting economic instruments to discourage landfilling. The Circular Economy Package was adopted on 2 December 2015. It includes Directive 2018/851,54 which aims to strengthen Directive 2008/98’s circular economy objectives by improving resource efficiency and ensuring that waste is considered to be a resource. Indeed, the new drafting of Article 1 of Directive 2008/98 acknowledges the centrality of an innovative regulation on waste to the transition to a circular economy and to guarantee the Union’s long-term competitiveness. Indeed, while the previous version of the Article tended only to prevent or reduce the negative impacts of waste generation and management, the new one also aims to avoid or minimize waste generation as such. The new text of the Article also aims to reduce the general effects of the use of resources by improving the efficiency of reuse and recycling. Its first two recitals emphasize the link between waste management and greenhouse gas emissions (and climate change): a more efficient use of resources is said to bring substantial net savings for European Union businesses, public authorities and consumers, while reducing total annual greenhouse gas emissions. Municipal waste represents between 7 and 10 per cent of all waste generated in the EU.55 Although it is not a high share, it is one of the most complex waste streams to manage due to its mixed composition, immediate proximity to citizens, high public visibility and impact on the environment and human health.56 Indeed, it should be collected separately to avoid contamination which can reduce the quality of recycled materials. In this respect, specific

Council Directive PE/10/2018/REV/2 of 30 May 2018 amending Directive 1999/31/EC on the landfill of waste [2018] OJ L150/100, Art. 1(4)(d). 53 Commission, ‘Towards a circular economy: A zero waste programme for Europe’ COM(2014) 398 final. 54 Council Directive PE/11/2018/REV/2 of 30 May 2018 amending Directive 2008/98/EC on waste [2018] OJ L150/109. 55 Ibid. 110(6). 56 [M]unicipal waste means: (a) mixed waste and separately collected waste from households, includ ing paper and cardboard, glass, metals, plastics, bio-waste, wood, textiles, packaging, waste elec trical and electronic equipment, waste batteries and accumulators, and bulky waste, including mattresses and furniture; (b) mixed waste and separately collected waste from other sources, where such waste is similar in nature and composition to waste from households. Ibid. 150, Art. 1 (3)(2b)). 52

490  Research handbook on climate change mitigation law collection obligations already exist for electrical and electronic equipment waste and batteries and accumulators from private households.57 However, the Directive stresses that there are still shortcomings in the European management of hazardous waste.58 It is therefore necessary to strengthen data recording and traceability mechanisms through the introduction of electronic registers of hazardous waste in the Member States. Article 1(1)(4) Directive 2018/851, introduced paragraph 3 into Article 4 of Directive 2008/98 on waste hierarchy, which states that Member States shall use economic instruments and other measures to promote the application of that hierarchy, such as those listed in Annex IVa. This Annex contains a non-exhaustive list of measures to encourage circular economy implementation, such as taxes or restrictions on landfill placement and waste incineration to promote waste prevention and recycling and to leave landfilling as the least preferable waste management option. The Annex includes also pay-as-you-throw schemes that charge waste producers for the actual amount of waste generated and provide incentives for source separation of recyclable waste and the reduction of undifferentiated waste. It also introduces: tax incentives for product donations, particularly food donations, to encourage waste hierarchy application; extended producer responsibility regimes for various types of waste and measures to increase their effectiveness, cost efficiency, and governance; awareness-raising public campaigns, in particular on separate collection, prevention of waste production and reducing waste dispersion; and coordination systems, including through digital tools, between all relevant public authorities that intervene in waste management. Also, to reduce products’ environmental impacts, the new Directive states that Member States ‘should’ rather than ‘may’ invest in product design, giving it a stronger legal standing.59 To those of us who have been around in EU waste law a little longer than recent memory, this call upon a broad range of policy instruments unfortunately does not sound very novel: the EU has been trying for years to expand the range of regulatory instruments to tackle waste and it is now doing the same for the circular economy. Article 10 on recovery has been replaced in its entirety by Article 1(1)(12)(a) of Directive 2018/851. It requires Member States to take the necessary measures to ensure that waste is prepared for reuse, recycling or other recovery operations in accordance with the waste hierarchy, and to protect health and the environment. In some cases States may admit derogations when joint collection of certain waste does not jeopardize their potential for the operation set out in Article 4, or when separate collection is not technically feasible, involves disproportionate costs or does not produce the best environmental results. Indeed, this has also been mentioned in the EU Communication COM/2017/34,60 in relation to achieving the best environmental result based on the precautionary and sustainability principles.

Council Directive 2006/66/EC of 6 September 2006 on batteries and waste batteries and accumulators and repealing Directive 91/157/EEC OJ L266/1; amending Directives 2000/53/EC on end-of-life vehicles, 2006/66/EC on batteries and accumulators and waste batteries and accumulators, and 2012/19/ EU on waste electrical and electronic equipment OJ L150) (Council Directive 2012/19/EU of 4 July 2012 on waste and electronic equipment (WEEE) [2012] OJ L197/38. 58 Council Directive PE/11/2018/REV/2 of 30 May 2018 amending Directive 2008/98/EC on waste [2018] OJ L150/109, 118 (58). 59 The development, production and marketing of products and product components suitable for multiple use, containing recycled materials technically durable and easily repairable and suitable to be prepared for reuse and recycling after becoming waste according to the waste hierarchy. 60 Commission, ‘The role of waste-to-energy in the circular economy’ COM(2017) 34 final. 57

Waste management  491 Article 1(12) of Directive 2018/851 has then changed the heading of Article 11 of Directive 2008/98 from ‘re-use and recycling’ to ‘preparation for re-use and recycling’. Compared to the previous version, this Directive introduces more obligations on Member States, such as the promotion of preparation for reuse. This should be done by facilitating access to waste that can be prepared for reuse and that has already been sent to collection systems or infrastructure. Also, according to the new Article 11, Member States shall take measures to promote high-quality recyclingthat is able to remove and safely manage hazardous substances. To do that, they have to establish separate waste collection for paper, metal, plastic and glass and, by 1 January 2025, for textiles. Also, by 2020 Member States had to achieve a level of 50 per cent of waste being prepared for reuse and recycling. Several Member States have reached this target (such as the Netherlands, Belgium and Germany) while others are far from it (such as Romania or Croatia),61 making the European average 47.6 per cent.62 This target increases to 55 per cent by 2025, 60 per cent by 2030 and 65 per cent by 2035. To the realistic eye therefore, in all honesty, these provisions largely look like much of the same as has been tried before, with tightened targets for recycling etc., and with little enforceable detail in the way of waste prevention targets. Arguably the proof of this particular pudding will be in the Member States’ genuine engagement with the waste reduction targets and the incentives they will roll out for industry to take recourse to circular economy materials over and above virgin materials. A lack of, for instance, an EU-wide plastics tax, makes it very difficult to speak of a forceful EU policy in the area. Another Directive that should be mentioned is Directive 2018/850, which amends Directive 1999/31 on the landfill of waste. Directive 2018/850/EU aims to ensure a gradual reduction in waste landfilling, in particular waste suitable for recycling or other recovery. The main objective is to landfill only 10 per cent of municipal waste and to provide, through stringent operational and technical requirements for waste and landfills, for measures, procedures and guidelines designed to prevent or reduce as far as possible negative effects on the environment and human health. To implement such landfill restrictions, the technical, environmental and economic feasibility of recycling and recovering residual waste resulting from separate collection has to be considered. With the reduction of landfilled waste, the Directive again aims to support the EU transition to a circular economy. Also, the increase of reuse and recycling ideally will make EU more independent, with a reduction in imported raw materials and resources. Particular attention should be given to limiting biodegradable waste landfilling, which has significant negative environmental effects in respect of the reduction of greenhouse gas emissions, and the reduction in pollution of surface water, groundwater, soil and air. However, the restrictions set by Directives 1999/31 and 2018/850 will not apply when it can be demonstrated that waste is not suitable for recycling (or other recovery) and that landfilling would ensure the best overall environmental outcome, in line with the waste hierarchy.

61 European Environment Agency (EPA), ‘Briefing. Recycling of Municipal Waste’ (EPA 2021) https://​www​.eea​.europa​.eu/​airs/​2018/​resource​-efficiency ​-and ​-low ​-carbon ​-economy/​recycling ​-of​ -municipal​-waste last accessed 30 May 2022. See also EPA, ‘The EPA’s role in waste statistics’ (EPA 2022). https://​www​.epa​.ie/​nati​onalwastes​tatistics/​targets/​ last accessed 30 May 2022. 62 Eurostat, ‘Recycling rate of municipal waste’ (Eurostat 2022) https://​ ec​ .europa​ .eu/​ eurostat/​ databrowser/​view/​t2020​_rt120/​default/​bar​?lang​=​en last accessed 30 May 2022.

492  Research handbook on climate change mitigation law Regarding recycling and the reduction of EU waste, in 2019 the Disposable Plastic Directive63 laid down stricter rules for the types of packaging and polluting products most found on EU beaches64 and for which there are valid alternatives. It also aims to reduce the impact of both production and the dispersion of plastics on the environment, particularly in the form of waste, by setting quality and composition standards.65 On 11 March 2020, the European Commission published a Communication on a new Circular Economy Action Plan.66 To promote a circular economy, the plan encourages the imposition of tax on landfill and waste incinerators to reduce their use and increase reuse and recycling. This circular economy action aims to accelerate the profound change required by the European Green Deal to reach climate neutrality, based on the circular economy actions implemented since 2015. This plan will provide for the rationalization of the regulatory framework, making it suitable for a sustainable future, ensuring the optimization of new opportunities arising from the transition and minimizing the burden on people and businesses. The plan contains initiatives to establish a product policy framework in which sustainable products, services and business models will be the norm and waste will have to be avoided.67 To do that, the Commission will propose a legislative initiative for a Sustainable Products Strategy extending the Ecodesign Directive68 and rapidly adopting and implementing a new working plan on eco-design and energy labelling for 2020–2024 for individual product groups. In short, there is no lack of rhetoric, yet whether the Member States will give the EC the necessary means to give the regulatory framework a sense of urgency is a different matter. The CJEU for its part has for the first time employed the concept of the circular economy for the interpretation of EU waste law, in Sappi Austria,69 where it linked the concept of recovery and that of the circular economy (at 68): [I]t is particularly relevant that the heat generated during the incineration of the sewage sludge is re-used in a paper and pulp production process and that such a process provides a significant benefit to the environment because of the use of recovered material in order to preserve natural resources and to enable the development of a circular economy.

63 EU Directive PE/11/2019/REV/1 of 5 June 2019 on the reduction of the impact of certain plastic products on the environment [2019] OJ L155/1. 64 Such as cigarettes, plastic bottles, plastic bags, plastic caps, straws and food containers. 65 Kristian Syberg, Marie B. Nielsen, Lauge P.W. Clausen, Geert van Calster, Annemarie van Wezel, Chelsea Rochman, Albert A. Koelmans, Richard Cronin, Sabine Pahl and Steffen F. Hansen, ‘Regulation of Plastic from a Circular Economy Perspective’ (2019) 29 Current Opinion in Green and Sustainable Chemistry 1. 66 Commission, ‘A new Circular Economy Action Plan for a cleaner and more competitive Europe’ COM(2020) 98 final. 67 This will be ensured through the production of durable goods, giving consumers the opportunity to make informed and conscious choices about the product’s life cycle and through the circularity of production processes. 68 Council Directive 2009/125/ EC of 21 October 2019 establishing a framework for the setting of ecodesign requirements for energy-related products [2009] OJ L285/10. 69 Case C‑629/19 Sappi Austria Produktions-GmbH & Co. KG and Wasserverband ‘Region Gratkorn-Gratwein’ v Landeshauptmann von Steiermark [2020] Common Law Market Reports (CLMR).

Waste management  493 Investment in technology,70 sustainable solid waste treatment processes, and a clear and robust legal framework are what is needed.71 Recycling markets are perceived as uncertain and difficult to predict by waste management operators. Some market instruments, such as waste intermediation stock exchange markets, have been tested to promote recycling at the socially optimal level, although with limited success. Instead, the extension of producer responsibility is considered much more powerful and effective to increase the recycling rate, since it shifts responsibility for achieving recycling targets to producers and retailers.72

3

THE APPLICATION OF THE WASTE FRAMEWORK DIRECTIVE TO WASTE INCINERATION WITH ENERGY RECOVERY

3.1

Court of Justice Case Law

Incineration of waste with energy recovery was for some time considered to be an optimal solution to addressing both the environmental concerns associated with municipal and industrial waste, and to help address the geopolitical concerns related to security of supply in Europe’s energy policy. The CJEU considered the qualification of waste incineration as ‘recovery’ under the Waste Framework Directive on different occasions. In Case C-228/00 Commission v Germany,73 the EC had received complaints, in particular from Belgian cement kilns, that Germany’s criteria for distinguishing disposal from recovery in the case of incineration of waste (no precise criteria had been laid down at Union level) were unacceptable. The Court did not in principle oppose this right of the Member States, provided these criteria do not infringe upon the meaning of ‘recovery’ within the Framework Directive. In casu, the Court held that the use of waste as fuel in cement kilns was a recovery operation, on the basis inter alia of the abstract concept of ‘recovery’ of waste which it had defined in ASA74 as meaning that the essential characteristic of a waste recovery operation is that the waste serves a useful purpose in replacing other materials which would have had to be used for that purpose, thereby conserving natural resources. The CJEU put forward three cumulative conditions for the incineration of waste to be classified as a recovery operation. The main purpose of the operation concerned is to enable the waste to be used as a means of generating energy. This implies: ● condition 1: the energy generated by, and recovered from, combustion of the waste is greater than the amount of energy consumed during the combustion process;

Such as digital technologies (i.e., blockchain), for asset traceability, location and mapping. Antonio Massarutto, ‘Municipal Waste Management as a Local Utility: Options for Competition in an Environmentally-Regulated Industry’ (2007) 15 Utilities Policy 9, 13. 72 Ibid. 13. 73 Case C-228/00 Commission v Germany [2003] ECR I-1439. 74 Case C-6/00 Abfall Service AG (ASA) v Bundesminster fur Umwelt, Jugend und Familie [2002] ECR I-1961. 70 71

494  Research handbook on climate change mitigation law ● condition 2: part of the surplus energy generated during combustion should effectively be used, either immediately in the form of the heat produced by incineration or, after processing, in the form of electricity; ● condition 3: the waste must be used principally as a fuel or other means of generating energy, which means that the greater part of the waste must be consumed during the operation and the greater part of the energy generated must be recovered and used. Further, the CJEU dismissed the relevance of other criteria, in particular the calorific value of the waste, the amount of harmful substances contained in the incinerated waste, and whether or not the waste has been mixed. These were all criteria, which Germany had put forward, but which were not relied on by the Court. They were, however, later inserted in the amended Waste Framework Directive (see below). A similar issue with respect to the calorific value of wastes was explored in Commission v The Netherlands,75 in which the Commission took issue with the Dutch practice of systematically opposing shipments where the value of recovery in the receiving state was lower than in the state of dispatch. The Court sided with the Commission. In Case C-116/01 SITA EcoService Nederland (previously Verol Recycling Limburg) v VROM,76 the waste at issue was to be used by the Belgian cement industry as fuel in cement kilns and as raw material in the production of clinker by cement factories. In that CHP process, the energy produced from the waste replaces energy produced by raw materials, and ash from incinerated waste, in turn, replaces raw materials. The Court of Justice emphasized a point which it had already made in Commission v Germany, namely that calorific value is not relevant for the purpose of establishing recovery. Next, it held that to be considered as being used principally as a fuel or other means to generate energy, within the meaning of point R1 of Annex II B to the Directive, it is both necessary and sufficient that the combustion of waste meets the three conditions set out in paragraphs 41 to 43 of Commission v Germany. In Case C-458/00 Commission v Luxembourg,77 waste, which came from two waste producers in Luxembourg, was to be recovered by incineration in the Municipality of Strasbourg. The Court stated that The shipment of waste in order for it to be incinerated in a processing plant designed to dispose of waste cannot be regarded as having the recovery [of] waste as its principal objective, even if when that waste is incinerated[,] all or part of the heat produced by the combustion is reclaimed … Where the reclamation of the heat generated by the combustion constitutes only a secondary effect of an operation whose principal objective is the disposal of waste, it cannot affect the classification of that operation as a disposal operation [even if] such reclamation of energy is in accordance with the Directive’s objective of conserving natural resources.

To the extent that municipal waste incineration facilities have been purposely built merely to incinerate waste, and that they would not be employing another source of energy were it not for the domestic waste, the activities carried out by such facilities are disposal operations, not recovery operations.

Case C-113/02 Commission v The Netherlands [2004] ECR I-9707. Case C-116/01 SITA EcoService Nederland v Minister van Volkshuisvesting, Ruimtelijke Ordening en Milieubeheer [2003] ECR I-2969. 77 Case C-458/00 Commission v Luxembourg [2003] ECR I-1553. 75 76

Waste management  495 The core of the Court’s decision in Commission v Germany is that the use of waste as a fuel in a cement kiln is a recovery operation. The core of the Court’s decision in Commission v Luxembourg is that the incineration of household waste may constitute ‘recovery’, provided the incineration fulfils the ASA test. In particular, the Court found that the Commission had failed to show that the waste at issue replaced the use of a source of primary energy, which would have been used to fulfil the function. To the extent that municipal waste incineration facilities have been purposely built merely to incinerate waste, and that they would not be employing another source of energy were it not for the domestic waste, the activities carried out by such facilities are disposal operations, not recovery operations. The judgments do not say that waste incineration is a disposal operation, regardless of whether energy is recovered: Commission v Germany is a case in point. Neither do they say that municipal or household waste destined for incineration is automatically to be regarded as a disposal operation (as opposed to incineration of non-municipal waste). It is noteworthy that in Gävle Kraftvärme,78 the Court, within the more specific context of the Waste Incineration Directive, sought to downplay the relevance of the original purpose for which a plant is built, with a view to deciding whether it is an incineration or a co-incineration plant (which is relevant for the obligations under the Waste Incineration Directive). In Lahti Energia Oy79 the CJEU further decided on the criteria for the qualification of a plant as being an ‘incineration’ or a ‘co-incineration’ unit. It held that in the case of a power plant which uses as an additional fuel, in substitution for fossil fuels used for the most part in its production activities, gas obtained in a gas plant following thermal treatment of waste must be regarded, jointly with that gas plant, as a ‘co-incineration plant’, when the gas in question has not been purified within the gas plant. The Court instructed the national authorities to take account of the specific circumstances of the plants in question, in particular the volume of energy generated or material products produced in relation to the quantity of waste incinerated in the plant in question and the stability or continuity of that production. The Court pronounced again on the Lahti case in Case C-209/09.80 When the gas obtained by thermal treatment of waste in the gasification plant is no longer purified within that plant, but is brought as such to the power plant as an additional fuel spource, the process is not a simple disposal procedure that would enable such a plant to be classified as an ‘incineration plant’. In the hypothesis of the main case, the gasification plant and the power plant can be perceived as a single entity, aimed no longer at obtaining a product, but at producing energy. In fact, in the gasification plant waste is thermally treated and in the power plant there is the combustion of gaseous substances generated by the thermal treatment of waste. So, a power plant that uses, in addition to fossil fuels mainly used in its production activity, a gas obtained in a plant at the end of the thermal treatment of waste, must be considered, together with this gasification plant, as a ‘co-incineration plant’ when the said gas has not been purified within the said gasification plant. According to Case 145/15, Città Metropolitana di Bari,81 a waste recovery operation’s main objective is that waste can perform a useful function, replacing other materials which

Case C-251/07 Gävle Kraftvärme AB v Länsstyrelsen i Gävleborgs län [2008] ECR I-7047. Case C-317/07 Lahti Energia Oy [2010] ECR I-1429. 80 Case C-209/09 Lahti Energia Oy [2010] ECR I-1429. 81 Case C-147/15 Città Metropolitana di Bari, formerly Provincia di Bari v Edilizia Mastrodonato Srl [2016] CLMR. 78 79

496  Research handbook on climate change mitigation law would have been used to perform that function, with a saving in natural resources. Otherwise, when the saving of raw materials is a secondary effect of an operation which aims to dispose of waste, this operation is disposal. Any waste treatment operation must be capable of being qualified as ‘disposal’ or ‘recovery’ but not both at the same time and when a waste treatment operation cannot be traced back to only one of the operations, it must be qualified on a case-by-case basis. Regarding this case, on the use of waste other than extractive waste for the filling of a quarry, it follows from Directive 1999/31 that non-inert waste as well as hazardous waste is not appropriate for the purposes of extension/construction and filling work or for construction purposes since it could cause harmful effects for the environment. Therefore, such use of non-inert or hazardous waste cannot be regarded as recovery and therefore falls within the scope of the above-mentioned Directive. Indeed, an activity cannot be classified as recovery if that classification does not correspond to the actual environmental impact of the operation, an impact which, by virtue of the waste hierarchy, is presumed to be lesser in the case of recovery than in the case of waste disposal. In Cases C-487/17 and C-489/17 Verlezza,82 the CJEU examined issues related to the classification of ‘hazardous’ waste in accordance with Directive 2008/98 Annex III. In this case law, the precautionary principle imposes both the classification of potentially negative consequences for the environment and an overall assessment of environmental risk, based on the most reliable scientific data available and the most recent results of international research. The waste holder is responsible for its management. Therefore, if the waste can be classified with ‘mirror’ codes (and, therefore, depending on the case, as hazardous or non-hazardous), and its composition is not immediately known, the holder must search for dangerous substances that can be reasonably contained in the waste, to attribute the appropriate code to it. If the holder carries out a risk assessment as completely as possible but he is unable to practically determine the presence of dangerous substances and to evaluate the hazard characteristics of the waste, it has to be classified as hazardous. In Case C-305/18 Verdi Ambiente,83 the Court states that the principle of waste hierarchy does not preclude national legislation which classifies waste incineration plants as strategic infrastructure and installations of overriding national interest even if it deviates from the waste hierarchy. The Italian government’s qualification of waste incineration plants as ‘infrastructure and strategic installations of overriding national interest’ is intended to streamline and facilitate the conduct of the authorization procedure in order to remedy the lack of an adequate national waste management network. 3.2

Recovery Operations: The R1 Formula

The CJEU’s case law led to intensive debate in the run-up to the Waste Framework Directive 2008/98. Annex II (Recovery operations) includes category R1: ‘Use principally as a fuel or other means to generate energy’. This category presents a footnote which contains a formula that specifies energy efficiency that incinerators have to have for the application of R1. The

C-487/17 and C-489/17 Criminal proceedings against Alfonso Verlezza and Others [2019] CLMR. 83 C-305/18 Associazione ‘Verdi Ambiente e Società – Aps Onlus’ (VAS) and ‘Movimento Legge Rifiuti Zero per l’Economia Circolare’ Aps v Presidente del Consiglio dei Ministri and Others [2019] CLMR. 82

Waste management  497 Commission issued a guidance document84 for the interpretation of this formula which, inter alia, provides that it is not only an expression of efficiency in physics, but also a performance indicator for the level of recovery of energy from waste in a plant dedicated to the incineration of municipal solid waste. Directive 2015/1127 modifies this Annex by affirming that operation R1 shall apply to waste used to produce energy. Incineration plants for the treatment of urban solid waste fall within this energy efficiency formula if their energy efficiency reaches the threshold determined. In particular, technical tests have shown that local climatic conditions in the EU affect the amount of energy which can technically be used or produced in the form of electricity, heating, cooling or industrial steam from incinerators of municipal solid waste. Also, in order to achieve a level playing field in the EU, it is reasonable to provide compensation for incineration plants that are affected by the impact of local climatic conditions with a climate correction factor (CCF) applicable to the formula for R1. This factor should be based on the best available techniques for waste incineration.85 With the application of a CCF some incineration plants would reach the threshold for R1 and would therefore automatically become incineration plants. Nevertheless, the application of such a correction factor must remain an incentive for incineration plants to achieve a high level of efficiency in the production of energy from waste, in line with the objectives and the waste hierarchy set out in Directive 2008/98. Then, Directive 2018/851 modifies Article 38 of Directive 2008/98 by giving the Commission the power to adopt delegated acts to amend the application of the R1 formula for incineration facilities. Local climatic conditions, such as the severity of the cold and the need for heating, may be taken into account when they influence the amounts of energy that can technically be used or produced in the form of electricity, heating, cooling or processing steam.

4

WASTE INCINERATION AND THE SECTORAL REGIMES

As already noted, a landfill alternative is waste-to-energy incinerating, i.e. solid municipal waste incinerators used as heat or electricity generation plants. Heat treatments equipped with energy recovery systems generate energy (electricity or heat) that can replace a fossil fuel-based energy source, with a reduction of greenhouse gas emissions.86 The incineration of municipal waste generates climate-relevant emissions such as CO2 (carbon dioxide), N2O (nitrous oxide), NOx (oxides of nitrogen) and NH3 (ammonia).87 In

84 European Commission, ‘Guidelines on the interpretation of the R1 energy efficiency formula for incineration facilities dedicated to the processing of municipal solid waste according to Annex II of Directive 2008/98’ (November 2008) https://​ec​.europa​.eu/​environment/​pdf/​waste/​framework/​guidance​ .pdf last accessed 30 May 2022. 85 Commission Directive 2015/1127 of 10 July 2015 amending Annex II to Directive 2008/98/EC of the European Parliament and of the Council on waste and repealing certain Directives) [2015] OJ L184/13, 13(4). 86 United Nations Environment Programme (UNEP), ‘Waste and Climate Change: Global trends and strategy framework’ (UNEP 2010) 79. 87 Bernt Johnke, ‘Emissions from Waste Incineration’ in Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories (May 2000) https://​www​.ipcc​-nggip​.iges​.or​.jp/​ public/​gp/​bgp/​5​_3​_Waste​_Incineration​.pdf last accessed 30 May 2022.

498  Research handbook on climate change mitigation law addition, some of these countries have introduced legislation prohibiting the future disposal of combustible waste in landfills.88 Waste-to-energy recovery brings to several advantages, such as: the reduction of the amount of waste and therefore landfill volumes; the destruction of various contaminants that may be present in the waste or their immobilization to allow reuse and/or safe disposal; the recovery of metals (ferrous and non-ferrous) contained in the bottom ash. What started off as a proposal to integrate the two existing regimes on the incineration of waste89 was subsequently redrafted to integrate the Directive on the incineration of hazardous waste too.90 Directive 2000/7691 eventually replaced the previous Directives. It is fair to say that climate mitigation was not the most pressing concern in the negotiation of the Directive. However, in the meantime, the climate impact of waste incineration facilities has become clearer. This Directive applied to incineration and co-incineration alike – including waste co-incineration facilities. Cement kilns which use waste for co-incineration are subject to stricter rules than originally envisaged by the Member States. The Directive has been replaced by Directive 2010/7592 which does not bring any substantial change and climate change considerations do not feature much in its drafting. The relevant part of the current Directive has been inserted in Chapter VI, titled ‘Special provisions for waste incineration plants and waste co-incineration plants’, while the Annexes were consolidated in Annex VI of the new Directive. The legal texts were rearranged in a more logical way, some explanations of the old provisions were provided in greater detail and the definitions were brought in line with the newly adopted legislation on waste and hazardous waste. With the Implementing Decision (EU) 2019/2010,93 the Commission approved the best available techniques (BAT) conclusions for the incineration of waste. They serve as a reference for setting permit conditions for installations covered by Chapter II of Directive 2010/75 on industrial emissions. Competent authorities should therefore set emission limit values that ensure that, under normal operating conditions, the emission levels associated with the best available techniques set out in the BAT conclusions are not exceeded.

Hoornweg and Bhada-Tata (n. 6). European Commission, ‘Proposal of 7 October 1998 for a Council Directive on the incineration of waste’ COM(98) 558 final; doing away with the two existing regimes on the incineration of municipal waste, one for new, and one for old plants. 90 Council Directive 94/67/EC of 16 December 1994 on the incineration of hazardous waste [1994] OJ L365/34. 91 Council Directive 2000/76/EC of 4 December 2000 on the incineration of waste [2000] OJ L332/91. 92 Council Directive 2010/75/EU of 24 November 2010 on industrial emissions (integrated pollution prevention and control) [2010] OJ L334/17. 93 European Commission Implementing Decision (EU) 2019/2010 of 12 November 2019 establishing the best available techniques (BAT) conclusions, under Directive 2010/75/EU of the European Parliament and of the Council, for waste incineration (notified under document C(2019) 7987) [2019] OJ L312/55. 88 89

Waste management  499

5

CARBON CAPTURE AND STORAGE AND EUROPEAN WASTE LAW

Directive 2009/31 on the geological storage of carbon dioxide94 amended the Waste Framework Directive (then Directive 2006/1295) as well as the Waste Shipments Regulation.96 The aim was to exempt CCS from the ordinary waste management regime. This exemption was justified since the CCS Directive ensures a high level of protection of the environment and human health from the risks posed by the geological storage of CO2.97 The Directive includes in its CO2 stream acceptance criteria, the requirement (Article 12) that 1. A CO2 stream shall consist overwhelmingly of carbon dioxide. To this end, no waste or other matter may be added for the purpose of disposing of that waste or other matter. However, a CO2 stream may contain incidental associated substances from the source, capture or injection process and trace substances added to assist in monitoring and verifying CO2 migration. Concentrations of all incidental and added substances shall be below levels that would: (a) adversely affect the integrity of the storage site or the relevant transport infrastructure; (b) pose a significant risk to the environment or human health; or (c) breach the requirements of applicable Community legislation. 2. The Commission shall, if appropriate, adopt guidelines to help identify the conditions applicable on a case-by-case basis for respecting the criteria laid down in paragraph 1.

A register needs to be kept of the quantities and properties of the CO2 streams delivered and injected, including the composition of those streams. Member States have to take the appropriate risk management measures. The facility’s permit needs to detail requirements on storage of the CO2 concerned. The European Commission has published three reports on CCS Directive implementation based on Member States’ own reports. The last one was published in 2019, establishing the correct application of the Directive’s provisions across the EU.98 Directive 2008/98 simply reiterates the previously applicable exception with respect to air emissions: ‘(a) gaseous effluents emitted into the atmosphere’. This is because the preparatory European Union, ‘Official Journal of the European Union’ [2009] 140 OJ L 1, 114. Council Directive 2006/12/EC of 5 April 2006 on waste [2006] OJ L114/9, 2. The amendment changed Article 2(1)(a) of the Waste Framework Directive as follows: [The following shall be excluded from the scope of this Directive]: (a) gaseous effluents emitted into the atmosphere and carbon dioxide captured and transported for the purposes of geological storage and geologically stored in accordance with Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of carbon dioxide … or excluded from the scope of that Directive pursuant to its Article 2(2). Ibid. 10 (the underlined text is new). 96 Commission Regulation 1013/200 of 14 June 2006 on shipments of waste [2006] OJ L190/1, 3: [The following shall be excluded from the scope of this Regulation]: (h) shipments of CO2 for the purposes of geological storage in accordance with Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of carbon dioxide. The underlined text is new. 97 Directive 2009/31, recital 46. 98 Commission, ‘Implementation of Directive 2009/31/EC on the Geological Storage of Carbon Dioxide’ COM(2019) 566 final. 94 95

500  Research handbook on climate change mitigation law works of the Waste Framework Directive reveal no trace of discussions on CCS. It is quite tempting to suggest that this is simply a slip of the editorial process and a result of the more or less simultaneous treatment of the CCS Directive and of the Waste Framework Directive in the EU Institutions.99 However, it would be far preferable to amend Directive 2008/98 to solidify the exemption. Of note is that in the face of this uncertainty, one could argue that the CCS Directive is a Directive within the meaning of Article 2(4) of the Waste Framework Directive: 4. Specific rules for particular instances, or supplementing those of this Directive, on the management of particular categories of waste, may be laid down by means of individual Directives.

This route, however, does not exempt the substances regulated in such a specific Directive from the overall Framework Directive. It simply provides for lex specialis and leaves the remainder of the Directive untouched. CCS is also fundamental in the EU 2030 long-term goal of emissions reduction. Indeed, it can help in reducing industrial processes’ direct emission and in increasing variable renewable energy. Despite the numerous European funding opportunities,100 the carbon capture and storage sector is still far from the expected improvement. Indeed, nowadays CCS costs are too high and companies are not incentivized to invest. In order to make CCS sufficiently developed in the EU, the European Commission manages the CCS Project Network in order to make this practice more widespread, thanks to knowledge sharing and public awareness-raising. Indeed, the European Commission101 also addresses the importance of carbon storage enhancement in the new Circular Economy Action Plan.

6 CONCLUSION There are several specific anchors in waste management law with an important impact on climate change mitigation. As so often in environmental law, however, the main drivers for (lack of) progress on climate change law lie elsewhere: in resources management; waste prevention; internalization of environmental costs in all sources of energy and transport, etc. The analysis carried out shows that the EU has developed, in principle at least, waste management regulation in an efficient way, albeit with a lack of teeth for the measures aimed at reducing 99 The CCS Directive was adopted on 23 April 2009 (Commission Directive 2009/31/EC of 23 April 2009 on the geological storage of carbon dioxide and amending Council Directive 85/337/ EEC, European Parliament and Council Directives 2000/60/EC, 2001/80/EC, 2004/35/EC, 2006/12/ EC, 2008/1/EC and Regulation (EC) No 1013/2006 [2009] OJ L140/114), the new Waste Framework Directive in November 2008 (Commission Directive 2008/98/EC of 19 November 2008 on waste and repealing certain Directives [2008] OJL 312/3). 100 Such as the NER 300 Programme (European Commission, ‘NER 300 programme’ (2022) https://​ec​ .europa​.eu/​clima/​eu​-action/​funding​-climate​-action/​ner​-300​-programme​_en last accessed 30 May 2022) which is aimed at investing in environmentally safe CCS technologies both pre- and post-combustion, industrial application and oxyfuel. It was intended to become operative by June 2021 at the latest. 101 Commission, ‘A new Circular Economy Action Plan for a cleaner and more competitive Europe’ COM(2020) 98 final.

Waste management  501 waste production, and that a common approach at the international level is missing. Addressing climate change is not the main target of waste management laws, yet clearly a more sustainable resources strategy, including waste, will undoubtedly reduce greenhouse gas production.

20. Greenhouse gas removal Tracy Hester and Kirsten Williams

1 INTRODUCTION This Research Handbook focuses on the daunting challenge of mitigating ongoing and future greenhouse gas (GHG) emissions to combat climate disruption. This monumental task will require a comprehensive revamping of the ways that modern civilization creates and handles energy, products, materials, housing, food, transport, and waste management. Each one of these areas will demand an unprecedented commitment to international and domestic actions to tackle a global environmental danger that can wreak enormous damage on humans and ecosystems alike. But this challenge is only the first, albeit indispensable, step. Because of the long retention of some GHGs—in particular, carbon dioxide (CO2), which can persist in the ambient atmosphere for centuries—successful strategies to prevent dangerous anthropogenic climate change will almost certainly require both the capture and sequestration of any unavoidable GHG emissions during the transition to carbon-free systems as well as the removal of a historical reservoir of anthropogenic GHGs. This chapter outlines the sweeping scope of this grand challenge and its legal consequences. It outlines the need for GHG removal from the ambient atmosphere, overviews the strictures of international law that will shape the pace and scale of GHG removal at the transnational and domestic levels, and compares the approaches of two leading jurisdictions to implement effective GHG removal policies.

2

THE NEED FOR GREENHOUSE GAS REMOVAL

As described earlier in this Research Handbook, the international community has agreed in the Paris Agreement to limit disruptive anthropogenic climate change.1 In particular, almost all nations have committed (albeit without enforceable limits) to prevent total global warming from exceeding 2 °Celsius (C) over preindustrial levels.2 They have also agreed to seek an aspirational target of limiting global climate mean temperature increases to under 1.5 °C.3 Given that global temperature mean increases have already exceeded 1 °C since 1880 (two-thirds of which occurred since 1975),4 attaining the 2 °C target—much less the 1.5 °C target—will require aggressive reductions in current and future anthropogenic GHG emissions. The United

Paris Agreement (adopted 12 December 2015) UN Doc. FCCC/CP/2015/L.9/Rev.1. Ibid., Art. 2(1)(a); see United Nations Framework Convention on Climate Change (UNFCCC), “Paris Agreement—Status of Ratification” (UNFCCC, 2022) https://​ unfccc​ .int/​ process/​ the​ -paris​ -agreement/​status​-of​-ratification accessed 2 October 2021. 3 Paris Agreement (n. 1) Art. 2(1)(a). 4 NASA Earth Observatory, “World of Change: Global Temperatures” (NASA Earth Observatory, 2019) https://​earthobservatory​.nasa​.gov/​world​-of​-change/​global​-temperatures accessed 2 October 2021. 1 2

502

Greenhouse gas removal  503 Nations IPCC Gap Report concluded in 2020 that “postponing ambitious climate action, thereby delaying the path towards reaching net-zero emissions, will make it impossible to achieve the [1.5 °C target].” The report further concludes that this escalated climate action needs to occur by 2030 to make the 1.5 °C target feasible.5 In its latest Emissions Gap Report 2021, the UN Environment Programme underscored its prior warnings and added that the cumulative effects of new mitigation pledges for 2030 showed progress, but “their aggregate effect on global emissions is insufficient.”6 Two other aspects of some GHGs, including CO2, make the task much more daunting. First, some of the most potent GHGs remain in the ambient atmosphere long after they were emitted. The retention time for CO2, for example, can exceed 50–200 years, unless otherwise removed by carbon sinks or other processes. As a result, even if current anthropogenic emission rates of CO2 drop precipitously, cumulative levels of ambient CO2 will likely continue to rise as long as the cumulative amount of those contemporaneous emissions remains substantially more than zero. Even when contempo­raneous industrial GHG emissions have dropped dramatically due to international economic and political disruption (such as during the COVID-19 pandemic or the great recession of 20087), cumulative levels in the ambient atmosphere have consequently increased.8 Current ambient global CO2 concentrations, as a result, recently reached 419 ppm—a level not seen since the Pliocene Climatic Optimum 4.1–4.5 million years ago9 and a concentration associated with much hotter global temperatures and elevated sea levels. Second, the effects of emitted GHGs manifest themselves over extended periods of time. As a result of time lags in the carbon cycle and climate system, only two-thirds of the warming caused by that concentration has yet occurred. Given this pre-commitment effect, ambient concentrations of CO2 will likely need to remain below 450 ppm to prevent more than 2 °C of warming.10 In light of this constraint, Article 4 of the Paris Agreement concludes that net increases of CO2 in the ambient atmosphere will need to halt “in the second half of this century.”11 Given the deep entrenchment of fossil fuels in the global economy and current consumption and land management practices, attaining these targets poses one of the most daunting economic, political, and technical challenges that humanity has faced. United Nations Environment Programme (UNEP), Emissions Gaps Report 2020 (UNEP 2020) 34. Ibid., v. 7 Valerie Volcovici, “Coronavirus causes largest U.S. greenhouse gas emissions drop since World War Two—report” Reuters (London, 12 January 2021) https://​www​.reuters​.com/​business/​environment/​ coronavirus​-causes​-largest​-us​-greenhouse​-gas​-emissions​-drop​-since​-world​-war​-two​-2021​-01​-12/​ last accessed 30 May 2022; Alister Doyle, “Industrialized nations’ CO2 falls 2.2 pct in 2008” Reuters (London, 21 April 2010) https://​www​.reuters​.com/​article/​us​-climate​-emissions/​industrialized​-nations​ -co2​-falls​-2​-2​-pct​-in​-2008​-i​dUSTRE63K2V920100421 last accessed 30 May 2022. 8 World Meteorological Organization (WMO), “Carbon dioxide levels continue at record levels, despite COVID-19 lockdown” (WMO, 23 November 2020) https://​ public​ .wmo​ .int/​ en/​ media/​ press​ -release/​carbon​-dioxide​-levels​-continue​-record​-levels​-despite​-covid​-19​-lockdown last accessed 30 May 2022. 9 Cooperative Institute for Research in Environmental Sciences at the University of Colorado Boulder (CIRES), “NOAA Carbon Dioxide Peaks Near 420 Parts Per Million at Mauna Loa Observatory” (CIRES, 7 June 2021) https://​cires​.colorado​.edu/​news/​noaa​-carbon​-dioxide​-peaks​-near​ -420​-ppm​-mauna​-loa​-observatory​#:​~:​text​=​Atmospheric​%20carbon​%20dioxide​%20measured​%20at​ ,Oceanography​%20at​%20the​%20University​%20of last accessed 30 May 2022. 10 National Research Council, Climate Intervention: Carbon Dioxide Removal and Reliable Sequestration (National Academies Press 2015) 100 (2). 11 Paris Agreement (n. 1) Art. 4(1). 5 6

504  Research handbook on climate change mitigation law Reaching these targets will require enormous efforts on two levels. First, we need to turn off the tap: ongoing emissions of GHGs will need to cumulatively reach zero. While some reductions will result from energy efficiency, electrification with clean power sources, and industrial redesign, many industrial sectors will need to capture and sequester unavoidable emissions (even if on an interim basis). This economic imperative has led to a large-scale commitment of resources to develop carbon capture, utilization, and sequestration (CCUS) technologies for use in the electrical power generation and fuel production sectors. In fact, the United States’ Infrastructure Investment and Jobs Act, which became law in November 2021, notes that CCUS technologies are “necessary for reducing hard-to-abate emissions from the industrial sector” and are critical on a large scale “for achieving mid-century climate goals.”12 On a global scale, international agreements likely recognize—albeit implicitly—the use of CCUS technologies because the technologies act as carbons “sinks” and “reservoirs.”13 CCUS technologies will likely play a key role in economic sectors that will prove hard to entirely decarbonize (e.g. aviation, chemicals and fertilizer production, cement, and steel). But, critically, GHG removal via CCUS is a component of mitigation rather than adaptation or remediation. CCUS will serve as a key partner during transitions to decarbonized economic systems, but commentators have forcefully emphasized that CCUS and other point source capture strategies can only serve as partners to the ultimate longer-term goal of decarbonizing the means of production overall.14 2.1

Carbon Dioxide Removal and Negative Emissions Technologies

While CCUS and other point source strategies could ultimately reduce or effectively halt the addition of new GHG emissions, the long residence time of GHGs and the large reservoir of historical emissions will likely catalyze the development and deployment of carbon dioxide removal (CDR) strategies to reduce the stockpile of GHGs already in the ambient atmosphere. The Intergovernmental Panel on Climate Change (IPCC) breaks CDR methods into two types: (1) those “enhancing existing natural processes that remove carbon from the atmosphere,” such as afforestation, reforestation, and other carbon sinks, or (2) those using chemical processes to capture CO2 directly and store it elsewhere.15 In practice, there are many methods that fall between these two categories, including methods to mineralize carbon, change the ocean environment, or use technology to speed up natural processes. Collectively, the suite of technologies that remove ambient GHGs at large scales is called negative emission technologies (NETs). While numerous technologies can help withdraw GHGs through a variety of physical processes, they all share a similar concept: each NET

H.R.3684 Public Law No: 117-58 (11/15/2021) Infrastructure Investment and Jobs Act. In an effort to spur the use of CCUS technologies, the Act provides for more than US$12 billion in CCUS funding (Jeff Brady, “The infrastructure bill could boost the industry removing carbon dioxide from the air”, National Public Radio (Washington DC, 17 November 2021) https://​www​.npr​.org/​2021/​11/​ 17/​1056646775/​the​-infrastructure​-bill​-could​-boost​-the​-industry​-removing​-carbon​-dioxide​-from​-th. last accessed 30 May 2022). 13 See below, section 3. 14 Brady (n. 12) notes that some environmentalists oppose carbon capture because it can result in power plants running longer instead of keeping fossil fuels in the ground. 15 Intergovernmental Panel on Climate Change (IPCC), “Global Warming of 1.5 °C” (2018) https://​ www​.ipcc​.ch/​sr15/​ accessed 2 October 2021, Ch. 4. 12

Greenhouse gas removal  505 either directly removes a GHG from the ambient atmosphere or enhances natural carbon sinks so that they remove much larger volumes of GHGs at policy-relevant timescales. Under this broad rubric, NETs include a broad swath of potential technological strategies to remove GHGs from the atmosphere and can be divided into four categories: (1) land-use change NETs, (2) chemical NETs, (3) marine NETs, and (4) regenerative NETs. Notably, this survey of NETs, by definition, excludes technologies that attempt to alter the global climate through solar radiation management via stratospheric aerosol injection, cirrus cloud stripping, marine cloud brightening, and surface albedo adjustments. The following sections describe an array of NETs, and the end of this section discusses the viability of embracing NETs, individually or collectively, as a method to reduce GHG emissions at levels necessary to attain the 2 °C or 1.5 °C targets. 2.1.1

Land-use change NETs

Afforestation and reforestation Trees play an integral role in the carbon cycle, and, unsurprisingly, forestation has emerged as a key strategy to reduce atmosphere CO2. As a tree grows, CO2 is captured and stored in living biomass, dead organic matter, and soil.16 The two NETs employed to enhance and restore this natural process are afforestation and reforestation. Afforestation is the planting of trees on land that was not previously a forest. Reforestation, on the other hand, is the “re-establishment” of forests through the planting of trees on land that used to be a forest. In contrast to many other NETs, both afforestation and reforestation have already been widely implemented on a global level, in part because of their integration into countries’ climate policies through the Kyoto Protocol’s Clean Development Mechanism.17 The act of establishing new, young forests has a significant impact on CDR. Sawzy et al. note that “Depending on tree species, once forests are established CO2 uptake may span 20–100 years until trees reach maturity and then sequestration rates slow down significantly.”18 While afforestation and reforestation are more widely accepted than other NETs, they are not devoid of risk—particularly with afforestation. From a biodiversity lens, afforestation “by definition” introduces non-native species—both intentionally and unintentionally—which can threaten natural biodiversity in an area. Further, the introduction of forests on grasslands can deplete soil nutrients and burden local water resources, and the conversion of grassland to prepare for afforestation can release naturally stored carbon in soil.19 Biological energy carbon capture and storage Biological energy carbon capture and storage (BECCS) combines two different methods to reduce CO2 emissions: capture of ambient CO2 through the growth of trees or crops to use as feedstock for thermal or electrical power production, and the subsequent capture and reuse or sequestration of CO2 from the energy combustion process. Because each of these approaches

16 Samer Fawzy, Ahmed I. Osman, John Doran and David W. Rooney, “Strategies for Mitigation of Climate Change: A Review” (2020) 18 Environmental Chemistry Letters 18 2069, 2079. 17 Ibid., 2079. 18 Ibid., 2079. 19 Kate Dooley, Ellycia Harrould-Kolieb and Anita Talberg, “Carbon-Dioxide Removal and Biodiversity: A Threat Identification Framework” (2021) 12 Global Policy 34, 37.

506  Research handbook on climate change mitigation law relies on familiar technologies, BECCS presumably will capture CO2 at a lower cost than other less developed approaches. As a result, current planning and integrated assessment models (IAMs) tend to rely heavily on BECCS as a leading step to reduce ambient CO2 levels to attain either the 2 °C or 1.5 °C targets. For example, the Fifth Assessment Report from the IPCC concluded that the overwhelming majority of IAM scenarios that attained the 2 °C target relied on BECCS as the least expensive option. Fuss et al. estimate that BECCs will cost US$100–200 per ton of CO2 by 2050.20 The International Energy Agency has pointed to models that would require removal of 2 gigatons (Gt) of CO2 or its equivalent in other greenhouse gases (CO2e) by 2050 to meet the 2 °C target. This amount of dry biomass is nearly one-sixth of the annual emissions from the United States. The projected use of BECCS to attain climate targets, however, has raised concerns over its possible economic and social impacts. Because BECCS relies on crop production to generate fuel for energy generation, it will compete with other feedstock crops for arable land, water, and fertilizer. Given the enormous scale of fuel crops envisioned by some climate models, full-throated implementation of BECCS could lead to food insecurity, biodiversity loss, water stress, and soil depletion. One model, for example, forecast that relying primarily on BECCS to reach the 2 °C goal would demand an amount of arable farmland equal to the size of India.21 Biochar In addition to afforestation and reforestation, biochar is a leading nature-based NET. Biochar involves the burying of pyrolyzed charcoal in soil. The pyrolysis process thermo­chemically converts biomass (e.g. crops, agricultural residues, and forestry residues) into biochar. The biochar resulting from this conversion process can store carbon more reliably than soil organic carbon, and it is more resistant to decomposition. Biochar could sequester 0.6–11.9 Gt CO2 per year, depending on the amount of biomass available to produce biochar.22 The lower range of this estimate results from only using stover (the leaves and stalks from field crops left after harvesting) as a feedstock for biochar.23 The upper range of the estimate assumes the conversion of more than 80% of all currently harvested biomass into biochar.24 Fuss et al. conclude that a plausible application of biochar would sequester 0.3–2 Gt CO2 per year by 2050, “given the limited availability of biomass realistically available for the production of biochar.”25 Cost estimates of biochar implementation are equally variable. Fuss et al. indicate the mean range of biochar costs is between US$90 and US$120.26

Sabine Fuss et al., “Negative Emissions—Part 2: Costs, Potentials and Side Effects” (2018) 13(6) Environmental Research Letters 14. Others estimate costs as low as US$15 or US$30 per ton of CO2, but these estimates assume use of the “most suitable plants with easy access to abundant biomass and short distances to storage sites.” (Ibid., 12). 21 Duncan Brack and Richard King, “Managing Land-Based CDR: BECCS, Forest and Carbon Sequestration” (2020) 12 Global Policy 45, 49. 22 Fuss et al. (n. 20) 25. 23 Ibid., 25. 24 Ibid., 25. 25 Ibid., 26. 26 Ibid., 26. 20

Greenhouse gas removal  507 2.1.2

Chemical NETs

Direct air capture Direct air capture (DAC) technologies remove CO2 and other GHGs directly from the ambient atmosphere through mechanical or chemical means. This scrubbing process typically results in either a pure or highly concentrated CO2 stream suitable for sequestration or as a feedstock, or (in less concentrated versions) a CO2-enriched airstream that can enhance plant growth or other agricultural activities. While the technology remains at an early stage and is not currently economically viable—even the most optimistic cost estimates for current versions of the technology place the price of recovered CO2 at US$100–300 per ton,27 far above the projected costs of BECCS—the small footprint and large scalability of DACs enable it to theoretically remove large amounts of CO2. DAC processes currently under development rely on two approaches: (i) highly caustic chemicals that directly fix ambient CO2 into a precipitate that, when energized, releases the CO2 as a pure stream, or (ii) membranes or solid catalysts that physically trap CO2 gas onto their solid surfaces. These solid capture matrices can then release the impregnated CO2 upon immersion in water or another medium. These chemical conversion processes typically require substantial energy inputs either to capture or liberate the entrained CO2, and the total life-cycle CO2 reduction from DAC may depend heavily on whether the process uses clean energy or other carbon-free production materials. A DAC process that relies on other reuses of CO2 to bolster its economic viability—for example, by using captured CO2 for enhanced oil recovery, liquid fuel production, or chemical production processes that inherently emit substantial CO2—may also substantially dilute the amount of CO2 that they actually remove over their total life cycle. Enhanced weathering Enhanced weathering involves accelerating natural rock weathering by pulverizing minerals that consume CO2 and spreading them onto land or sea surfaces. More specifically, the process entails “(i) selectively exposing (ultra)mafic source rocks that are enriched in silicate materials with high dissolution rates; (ii) increasing the reactive surface area—and thus the dissolution rate—by pulverizing the source rock into small particles; and (iii) distributing the mineral particles in locations with high weathering rates.”28 The best regions for land-based enhanced weathering are tropical areas with high humidity, rainfall and temperature, and preferably acidic soils.29 Particles distributed onto such land surfaces make their way to the ocean via land surface runoff. The US National Resources Council estimates ocean-based enhanced weathering could remove 1 Gt CO2 per year, while land-based enhanced weathering could remove 4 Gt CO2 per year.30 For enhanced weathering to have a substantial effect on the ocean’s alkalinity, hundreds of cubic kilometers of carbonate and silicate minerals will need

Felix Creutzig et al., “The Mutual Dependence of Negative Emission Technologies and Energy Systems” (2019) Energy & Environmental Science 1805, 1811. 28 Filip J.R. Meysman and Francesc Montserrat, “Negative CO2 Emissions via Enhanced Silicate Weathering in Coastal Environments” (2017) 13 Biology Letters 1, 1–2. 29 Ibid., 2. 30 National Research Council, Climate Intervention: Carbon Dioxide Removal and Reliable Sequestration (National Academies Press 2015). 27

508  Research handbook on climate change mitigation law to be mined and crushed—an amount “several times greater” than, for example, worldwide coal production in 2011.31 The costs associated with this implementation are estimated to be between US$60 and US$600 trillion.32 2.1.3

Marine NETs

Oceanic direct carbon removal The ocean holds much more CO2 than does the air. Tellingly, the oceans “are about 175 times greater than the atmosphere as a total carbon reservoir.”33 Thus, if CO2 is removed from the ocean, the ocean will absorb more CO2 from the air in order to maintain a state of equilibrium.34 A range of methods have been proposed to reach this result, known as oceanic direct carbon removal (ODCR). One approach proposes to turn CO2 from the ocean into rocks; this involves sending ocean water through an electrically charged mesh, using electrolysis to initiate the chemical reactions that form carbonate rocks.35 Costs of CO2 mineralization are estimated at US$145 per ton of mineralized CO2.36 The potential effects of ODCR on ocean chemistry have not been widely studied, but scientists question whether the reduction of calcium and magnesium—which precipitate CO2—in seawater may change the pH of seawater, in effect changing the ocean’s carbon storage capacity.37 Ocean alkalinity enhancement The ocean naturally absorbs approximately 25% of atmospheric CO2 annually38 due to the differences of CO2 partial pressure between the atmosphere and the ocean.39 When CO2 reacts with water, carbonic acid forms. Carbonic acid dissolves into bicarbonate and carbonate ions, which store dissolved inorganic carbons.40 Notably, increasing ocean alkalinity has been shown to decrease the surface ocean partial pressure and in effect allow the ocean to uptake more CO2. The increased alkalinity results in more carbonic acid conversion to bicarbonate and carbonate ions—leading to more carbon storage.41 While ocean alkalinity enhancement (OAE) is less controversial than other marine CDR methods, it is not free from potential consequences. When ocean alkalinity increases, so does the saturation state of carbonate minerals.

Ibid., 51. Phil Williamson, “Emissions Reduction: Scrutinize CO2 Removal Methods” (2016) 530 Nature 153, 155. 33 Heather D. Willauer et al., “Feasibility of CO2 Extraction from Seawater and Simultaneous Hydrogen Gas Generation Using a Novel and Robust Electrolytic Cation Exchange Module Based on Continuous Electrodeionization Technology” (2014) 53(31) Industrial & Engineering Chemistry Research 12192. 34 Ibid. 35 Erika Callagon La Plante et al., “Saline Water-Based Mineralization Pathway for Gigatonne-Scale CO2 Management” (2021) 9 ACS Sustainable Chemistry & Engineering 1073, 1073–74. 36 Ibid., 1078. 37 Ibid., 1078. 38 National Oceanic and Atmospheric Administration (NOAA), “Ocean Acidification: The Other Carbon Dioxide Problem” (NOAA, 2021) https://​www​.pmel​.noaa​.gov/​co2/​story/​Ocean+​Acidification accessed 30 October 2021. 39 Fawzy et al. (n. 16) 2084. 40 Hydrogen ions are also released, which increases the acidity of oceans. See discussion below. 41 Fawzy et al. (n. 16) 2084. 31 32

Greenhouse gas removal  509 This saturation state, if too low, can negatively impact carbonate-producing organisms such as shellfish and coral.42 Enhanced weathering, discussed above in section 2.1.2, is the most prominent method proposed to achieve OAE. An important, positive side effect of increasing ocean alkalinity is the reduction of ocean acidity.43 While the ocean’s natural absorption of CO2 is beneficial, it has also led to problems as the amount of atmospheric CO2—and, as a result, the amount of CO2 absorbed by the ocean—has increased since the Industrial Revolution. This increased absorption of CO2 has reduced seawater pH, resulting in ocean acidification—dubbed the “evil twin” of global warming.44 This rapid acidification has not allowed marine life time to adapt. Ocean iron fertilization Ocean iron fertilization (OIF) involves adding iron to high nitrate, low chlorophyll (HNLC) regions of the ocean, where iron nutrients are limited. The addition of iron to HNLC regions can stimulate the growth of phytoplankton, which absorb carbon dioxide. When phytoplankton die, they sink to the deep ocean, effectively sequestering carbon dioxide.45 The overall effectiveness of OIF remains unknown, with some studies showing significant net export of carbon to the deep ocean while others produced more ambiguous results.46 Moreover, OIF can result in changes to the population of the phytoplankton community, such as the production of toxin-producing phytoplankton.47 The Atlantic Ocean downwind of the Sahara desert provides a useful benchmark to estimate the amount of iron dust necessary to reduce the amount of carbon dioxide in the atmosphere. As this region is replete with iron, it can be used as an upper boundary in estimating the amount of iron-derived dust required to fertilize the 33% of the world’s ocean considered to be iron-limited.48 The United States’ National Oceanic and Atmospheric Administration estimates this amount at 2,822,243 tons annually.49 Macroalgae cultivation Macroalgae cultivation, more commonly known as seaweed or kelp farming, is the practice of cultivating and harvesting seaweed. Seaweed has a range of benefits, one being that it is a natural carbon sink: it uptakes CO2 through photosynthesis and when it dies, it sinks to the middle or deep ocean, in effect sequestering CO2. Macroalgae cultivation involves spraying seaweed spores onto ropes that are attached to structures in the ocean, such as buoys. The effectiveness of macroalgae cultivation as a CDR method depends on the scale of farming operations. The larger the operation, however, the larger the potential adverse environmental impact. The escalation in number of these seaweed ropes could lead to species entanglement;

Phil Renforth and Gideon Henderson, “Assessing Ocean Alkalinity for Carbon Sequestration” (2017) 55 Review of Geophysics 636, 649–52. 43 Fawzy et al. (n. 16) 2084. 44 Guangxu Liu, Ocean Acidification and Marine Wildlife (Academic Press 2021) 1–2. 45 David Emerson, “Biogenic Iron Dust: A Novel Approach to Ocean Iron Fertilization as a Means of Large Scale Removal of Carbon Dioxide from the Atmosphere” (2019) 6(22) Frontiers in Marine Science 2. 46 Ibid., 2. 47 Ibid., 2. 48 Ibid., 3–4. 49 Ibid., 4. 42

510  Research handbook on climate change mitigation law interference with shipping channels and other sea area uses; introduction of invasive species that ride on buoys and drift into coastal areas; and a restructuring of ecosystems due to the seaweed being a better “sushi bar” for some species than others. It is estimated that to uptake 10 Gt of CO2 per year, roughly 5 million square kilometers of the ocean (approximately 1.4% of the global ocean) would need to be dedicated to ocean-grown seaweed.50 Artificial ocean upwelling Artificial ocean upwelling involves stimulating the production of phytoplankton by artificially drawing nutrient-rich deep ocean water to the surface. Natural upwelling occurs because of wind and the Earth’s rotation. Artificial upwelling techniques could include gigantic sea pumps powered by wind farms or waves, where plastic tubes hundreds of meters long are submerged into the ocean. As of 2015, no studies conducted were large or long enough to determine whether artificial upwelling had a positive or negative contribution to carbon sequestration.51 Model-based estimates demonstrated uncertainty as to whether net CO2 drawdown is possible using artificial upwelling. In short, the risks of artificial upwelling seem to substantially outweigh any rewards. Risks include exacerbating ocean acidification because of the low pH value of deep ocean water mixing with surface water; substantially restructuring ocean ecosystems by favoring larger phytoplankton; and changing ocean temperatures at too quick a rate for species to adapt.52 2.1.4

Regenerative NETs

Soil carbon management Soil carbon sequestration is the natural process where atmospheric CO2 is absorbed and stored in the soil carbon pool. Plants, through photosynthesis, are the primary drivers of soil carbon sequestration and store carbon as organic carbons. Soil carbon can also be stored in inorganic forms such as secondary carbonates but at lower levels due to a lower formation rate.53 As natural ecosystems are converted to agricultural uses, soil organic carbon levels decrease because of “reductions in the amount of plant roots and residues returned to the soil, increased decomposition from soil tillage, and increased soil erosion.” To counter this deficit, various land management practices are encouraged that promote soil carbon sequestration. These practices include reduced or zero tillage; erosion control; addition of organic matter such as compost, manure, and crop residues; use of cover or double crops; and replacing annual crops with perennial crops.54 A 2018 study estimates the global potential of carbon soil management at 2–5 Gt CO2 per year by 2050 at a cost of US$0–100 per ton of CO2.55 Thus, carbon soil management is

50 Brijesh K. Tiwari and Declan J. Troy, Seaweed Sustainability: Food and Non-Food Applications (Academic Press 2015) 47. 51 Pan YiWen et al., “Research Progress in Artificial Upwelling and Its Potential Environmental Effects” (2016) 59 Science China Earth Sciences 242. 52 Ibid., 242–43. 53 Todd A. Ontl and Lisa A. Schulte, “Soil Carbon Storage” (2012) 3(10) Nature Education 35. 54 Fawzy et al. (n. 16) 2081. 55 Fuss et al. (n. 20) 28.

Greenhouse gas removal  511 a relatively inexpensive CDR strategy, and many of its land practice management methods are already well known by farmers. The primary limitation of this CDR method is permanence. Saturated soil can no longer sequester carbon; the time taken to reach saturation varies from 10 to 100 years, depending on soil type and climate.56 Further, saturated soil requires continual maintenance to prevent reversal, which means the costs of soil carbon management practices outlive the benefits.57 2.2 Considerations The ability of any NET, by itself or in conjunction with other NETs, to reduce atmospheric CO2 in amounts that would help reach the 1.5 °C or 2 °C targets remains unknown. Cost and the availability of land and resources are just two of the many variables that must be considered before implementing NETs on a large scale. Another important consideration is the side effects—both positive and negative—that may accompany the implementation of NETs.58 Scholars have assessed the potential impact of NETs both on people and on biodiversity. Dooley et al. concluded that “on the whole, reliance on CDR does not represent a nature-friendly mitigation strategy” because “Many CDR options drive the same processes that contribute to climate change and environmental degradation: land-use change and intensive agriculture for bioenergy crops; mining and resource extraction for DAC; pollution including greenhouse gases from ocean fertilization and upwelling.”59 Additionally, many NETs still have a long way to go before being ready for deployment. Biogenic-based sequestration techniques (e.g. forestation and soil carbon management) are mature NETs and may be deployed more readily than, for example, artificial ocean upwelling.

3

INTERNATIONAL LAW CONTEXT

Emissions mitigation alone will not be enough to reach the 1.5 °C or 2 °C targets of the Paris Agreement. Accordingly, climate scenarios modeled to attain the goals of the Paris Agreement envision an outsized role for CDR, with some showing CDR techniques removing as much as several gigatons of carbon each year post-2050.60 Currently, CDR technology is not ready to play the role many of these scenarios envision for it. Even if it were, the current lack of understanding of CDR’s effects on terrestrial and marine ecosystems would make its large-scale Fawzy et al. (n. 16) 2081. Ibid., 2081. 58 Multiple provisions of the Paris Agreement explicitly call for the consideration of the effects of climate change mitigation on vulnerable populations. See Paris Agreement (Preamble); and see supra section 2. 59 Dooley et al. (n. 19) 41–42. 60 Some studies project that the United States—one of the largest emitters of CO2, second only to China—must remove 2 Gt of CO2 annually to reach net-zero emissions by 2050 (James Mulligan et al., “CarbonShot: Federal Policy Options for Carbon Removal in the United States” (World Resources Institute 2020) 8). This equates to more than 30% of the United States’ total 2017 GHG emissions. Ibid. Globally, some studies project that 10 Gt of CO2 need to be removed from the atmosphere annually by 2050 and 20 Gt annually by 2100; National Academies of Sciences, Engineering, and Medicine, Negative Emissions Technologies and Reliable Sequestration: A Research Agenda (National Academies Press 2019) 9. 56 57

512  Research handbook on climate change mitigation law deployment unethical.61 Yet, the spotlight has recently focused on CDR as it has become clear that these techniques are integral to countries reaching their carbon neutrality targets. While CDR and NETs play a prominent role in the CO2 reduction debate, they are largely absent from the body of international law. Even so, various international laws implicitly encourage CDR, including the Paris Agreement. Other international laws, even if not implicitly referencing CDR, contain provisions that may be interpreted to provide boundaries and impose conditions on CDR techniques. The following discussion highlights some of these international frameworks, with the majority of the discussion devoted to the implications of the Paris Agreement on CDR. 3.1

Paris Agreement

Although the Paris Agreement (PA) does not explicitly mention CDR, it is unlikely that the PA’s ambitious temperature goals could be met without the implementation of CDR techniques on a mass scale. Analyzing each article of the PA helps to shed light on the role NETs could play while remaining within the PA’s bounds. As an initial matter, the PA differs from other international treaties in that it employs a “bottom-up” architecture; that is, states create successive nationally determined contributions (NDCs) that state their plan for attaining the goals of the PA.62 States are mandated to update their NDC every five years,63 but the substance of the NDCs is left to the discretion of the states. In effect, the PA appears to be individualistic in nature. There is, however, a necessary element of trust between states built into the PA, which is supported by Article 13’s transparency requirement.64 Thus, while countries plan their own NDCs, Article 13’s information-sharing requirement—which would likely include CDR methodologies—facilitates a collaborative approach to achieving the PA’s temperature goals. Preamble While preambles to international treaties generally have no legal effect, they serve as a helpful interpretation tool to the binding provisions of the treaty.65 The PA’s Preamble emphasizes the importance of a thoughtful approach to climate change mitigation practices in order to preserve and respect “Mother Earth” and all the people inhabiting it. Notably, the PA’s Preamble states that parties “should, when taking action to address climate change, respect, promote and consider their respective obligations on human rights.”66 Taken in conjunction with the rest of the PA, the “action” referred to in the Preamble could include CDR techniques. States that seek to implement CDR techniques must, therefore, account for CDR’s potential effects on vulnerable populations. Given the novelty of CDR techniques, their 61 It is possible that even when these effects are known, it will be infeasible to deploy both safe and economical levels of CDR because of factors such as politics, human behavior, logistical shortages, and organizational capacity (National Academies of Sciences, Engineering, and Medicine (n. 60) 7). 62 Paris Agreement (n. 1) Art. 4(2). In contrast, parties to the Kyoto Protocol committed collectively to reduce GHGs. See also Kyoto Protocol to the United Nations Framework Convention on Climate Change, Kyoto, 11 December 1997. 63 Paris Agreement (n. 1) Art. 4(9). 64 Paris Agreement (n. 1) Art. 13(1). 65 Vienna Convention on the Law of Treaties, Vienna, 23 March 1969, Art. 31(2). 66 Paris Agreement (Preamble).

Greenhouse gas removal  513 potential side effects are not yet well known. Yet, some predict that the amount of land and sea required for effective implementation of some CDR techniques could have adverse effects on global food prices. For example, using BECCS to capture 3.3 Gt of CO2 by 2100 would require approximately 380–700 hectares of land.67 This level of emissions removal equates to 21% of total current human appropriated net primary productivity.68 Devoting this amount of land to energy crops as a means to combat global warming would compete with the need for land for food production, leading to “cascading” effects on food security.69 Parties, therefore, would need to account for how CDR can coexist with sufficient food production without threatening the food security of vulnerable populations.70 Article 2 Article 2 provides the temperature goals of the PA. As mentioned earlier in this chapter, CDR techniques appear critical to reaching the temperature goals set out in the PA. Notably, 101 of the 116 scenarios in the IPCC’s Fifth Assessment Report that limit global warming to 2 °C require net negative emissions in the second half of the century.71 Thus, “The scale of projected net negative emissions is in the order of 10–20 Gt CO2 annually by the end of the century, an amount approximately equal to 25%–50% of current CO2 emissions.”72 This large scale implicates the concerns regarding unintended effects of CDR raised in other parts of the PA. Article 3 Article 3 of the PA directs each state to develop NDCs that account for mitigation efforts (Article 4), adaptation efforts (Article 7), financing (Article 9), technology development and transfer (Article 10), capacity-building (Article 11), and transparency (Article 13)—all as a means to accomplish the temperature goals set out in Article 2. This article appears to implicitly allow individual states to incorporate CDR techniques into their NDC, so long as they comport with the aforementioned articles. Article 4 To achieve the temperature goal of Article 2, Article 4 requests that states “aim to reach global peaking of greenhouse gas emissions as soon as possible,” followed by “rapid reductions” in order to “achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.” These domestic mitigation measures are to be included in each state’s NDC. Article 4 directs states to use the “best available science” when reducing GHGs. This phrase is not defined in the PA, but in the environmental context the phrase generally refers to accurate and reliable information.73 CDR techniques have yet to be proven accurate and reliable, 67 Pete Smith et al., “Biophysical and Economic Limits to Negative CO2 Emissions” (2015) 6(1) Nature Climate Change 42. 68 Ibid. 69 IPCC, “Special Report on Climate Change and Land” (IPCC 2019) 449. 70 For suggestions of how to adapt food production methods, see ibid., 507–14. 71 Fuss et al., “Betting on Negative Emissions” (2014) 4 Nature Climate Change 850. 72 A. Neil Craik and William C.G. Burns, “Climate Engineering Under the Paris Agreement” Special Report (Centre for International Governance Innovation 2016). 73 Bryce E. Esch et al., “Using Best Available Science Information: Determining Best and Available” (2018) 116 Journal of Forestry 473, 474.

514  Research handbook on climate change mitigation law especially on the scale necessary to have a significant impact on reducing atmospheric CO2. While using unproven technology expressly contravenes the precautionary principle of the United Nations Framework Convention on Climate Change (UNFCCC),74 there is no similarly apparent violation of a provision in the PA. Article 5 Article 5 directs states to “take action to conserve and enhance, as appropriate, sinks and reservoirs of greenhouse gases as referred to in Article 4.” Tools of treaty interpretation are useful in determining the reach of the PA’s use of the terms “sinks” and “reservoirs.” The UNFCCC, which is referenced in the PA’s Preamble,75 defines “sink” as “any process, activity or mechanism which removes a greenhouse gas, an aerosol or a precursor of a greenhouse gas from the atmosphere.”76 It defines “reservoir” as “a component or components of the climate system where a greenhouse gas or a precursor of a greenhouse gas is stored.”77 The appropriateness of using CDR to “conserve and enhance” sinks and reservoirs is unclear. Yet, the UNFCCC’s broad definition of “sink” that encompasses any process that removes a GHG from the atmosphere seems to cover CDR techniques. Craik and Burns posit that the use of CDR aligns with the objectives of both the UNFCCC and the PA, “given that the overarching objective of both treaties is to stabilize atmospheric concentration of GHG emissions at a level that prevents ‘dangerous anthropogenic interference with the climate system.’”78 Additionally, the Vienna Convention provides that subsequent practices of the parties when applying treaties can be a useful aid in treaty interpretation. As evidence of the apparent embrace of some CDR techniques, Craik and Burns point to the 2011 agreement by the parties to the UNFCCC to include carbon capture and sequestration in the Clean Development Mechanism of the Kyoto Protocol.79 Article 6 Article 6—the most complex article of the PA—recognizes the use of market mechanisms for emissions trading, which it refers to as “internationally transferred mitigation outcomes.” Article 6(4) addresses more specifically what is sometimes referred to as a sustainable development mechanism: states can trade credits from emissions reductions resulting from sustainable projects. The World Resources Institute provides the example of State A paying State B

“The Parties should take precautionary measures to anticipate, prevent or minimize the causes of climate change and mitigate its adverse effects. Where there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing such measures” (United Nations Framework Convention on Climate Change (UNFCCC) (adopted 9 May 1992, entered into force 21 March 1994) 1771 U.N.T.S. 107, Art. 3(3)). 75 “Recognizing the importance of the conservation and enhancement, as appropriate, of sinks and reservoirs of the greenhouse gases referred to in the Convention.” (Paris Agreement (n. 1) Preamble, emphasis omitted). 76 UNFCCC (n. 74) Art. 1(8). 77 Ibid., Art. 1(7). 78 Craik and Burns (n. 72) 11122 (quoting UNFCCC (n. 74) Art. 2). 79 Craik and Burns (n. 72) 11122; see United Nations Climate Change, “Modalities and Procedures for Carbon Dioxide Capture and Storage in Geological Formations as Clean Development Mechanism Project Activities” (United Nations Climate Change, 8 December 2011) https://​unfccc​.int/​documents/​ 7064 last accessed 30 May 2022. 74

Greenhouse gas removal  515 to build a wind farm instead of a coal plant. In effect, emissions are reduced, State B produces clean energy, and State A receives credit for the emissions reductions.80 Given the steep price of CDR technologies, market mechanisms will likely play a large role in the development of CDR. Moreover, private-sector involvement could be critical to employ CDR on the scale necessary to reach net zero emissions. Craik and Burns suggest the need for “clear signaling” with regard to whether CDR technologies should be incorporated into global carbon markets.81 This suggestion arises from the 2012 controversy where the Haida Salmon Restoration Corporation (HSRC) dumped 100 tons of iron sulphate into the Pacific Ocean on the west coast of Canada.82 The resulting algal bloom covered an area of approximately 10,000 km2.83 HSRC characterized the project as one aimed at increasing salmon stocks, but it also planned to sell carbon credits on international markets for the CO2 it hoped would be sequestered.84 While HSRC consulted Environment Canada (EC) at the project development stage, it never consulted EC for approval before implementing the project.85 Craik and Burns concluded that this incident demonstrated the importance of clarifying “expectations for private actors … [g]iven the potential environmental and social concerns associated with CDR implementation.”86 This conclusion is bolstered by Article 6’s multiple references to promoting “sustainable development” and ensuring “environmental integrity.” Notably, Article 6 also calls for nonmarket approaches to sustainable development.87 Craik and Burns hypothesize that these approaches will require public-sector support, given the “experimental nature” of CDR technologies that require “concerted research and development efforts.”88 Article 9 Article 9 directs developed country parties to “provide financial resources to assist developing country parties with respect to both mitigation and adaptation.”89 Developed countries are further directed to continue to “take the lead” in securing climate finance “from a wide variety of sources.”90 These financial resources must account for the “priorities and needs” of developing countries, “especially those that are particularly vulnerable to the adverse effects of climate change and have significant capacity constraints, such as the least developed countries and small island developing States.”91

80 Kelley Kizzier, Kelly Levin and Mandy Rambharos, “What You Need to Know About Article 6 of the Paris Agreement” (World Resources Institute, 2 December 2019) https://​www​.wri​.org/​insights/​what​ -you​-need​-know​-about​-article​-6​-paris​-agreement last accessed 30 May 2022. 81 Craik and Burns (n. 72) 11124. 82 Neil Craik, Jason Blackstock and Anna-Maria Hubert, “Regulating Geoengineering Research Through Domestic Environmental Protection Frameworks: Reflections on the Recent Canadian Ocean Fertilization Case” (2013) 7 Carbon & Climate Law Review 117. 83 Ibid., 117. 84 Ibid., 117–18. 85 Ibid., 118. 86 Craik and Burns (n. 72) 11124. 87 Paris Agreement (n. 1) Art. 6(8)–(9). 88 Craik and Burns (n. 72) 11124. 89 Paris Agreement (n. 1) Art. 9(1). 90 Ibid., Art. 9(3). 91 Ibid., Art. 9(4).

516  Research handbook on climate change mitigation law Thus, if developed country parties plan to incorporate CDR techniques into their NDCs, the “priorities and needs” of developing countries must be determined. Craik and Burns note that the environmental and development impacts of CDR may take it out of the realm of the priorities and needs of developing countries. Alternatively, some developing countries may “consider such investments salutary if they believe that they could prevent serious climatic impacts, many of which will disproportionately affect such States.”92 Article 10 Article 10 addresses the “importance of fully realizing technology development and transfer in order to improve resilience to climate change and to reduce greenhouse gas emissions.”93 This provision, along with subsequent provisions encouraging cooperative action and creating a “Technology Mechanism,”94 may support CDR techniques. Article 12 Article 12 asks parties to cooperate in educating the public about climate change and notes the importance of this task as a means of “enhancing actions” under the PA.95 Public participation and access to information is critical to garnering public support for climate policies and effectively implementing provisions of the PA. Given the nascent nature of CDR technologies, public education on these technologies will be crucial to facilitating their development and incorporation into parties’ NDCs. Article 13 Article 13 creates a “transparency framework” intended to “build mutual trust and confidence and to promote effective implementation.”96 It requires parties to “regularly” provide inventory reports including, among other things, anthropogenic emissions removals by sinks.97 The transparency requirements, therefore, would extend to CDR techniques, assuming they are included in the definition of “sinks.” 3.2

United Nations Framework Convention on Climate Change

The United Nations Framework Convention on Climate Change (UNFCCC), adopted in 1992, was the first international agreement dedicated to combatting climate change. With 197 parties and 165 signatories, it aims “to achieve stabilization of greenhouse gas concentrations in the atmosphere at a level that would avoid dangerous anthropogenic interference with the climate system.” 98 The drafters of the UNFCCC likely had emissions mitigation in mind when referring to the “stabilization” of GHG concentrations. However, the UNFCCC itself does not prohibit the use of alternative strategies to stabilize GHG concentrations in the atmosphere.99

94 95 96 97 98 99 92 93

Craik and Burns (n. 72) 11126. Paris Agreement (n. 1) Art. 10(1). Ibid., Art. 10(2)–(3). Ibid., Art. 12. Ibid., Art. 13(1). Ibid., Art. 13(7)(a). UNFCCC (n. 74) Art. 2. Albert Lin, “Carbon Dioxide Removal After Paris” (2018) 45 Ecology Law Quarterly 533, 546.

Greenhouse gas removal  517 Moreover, the UNFCCC mentions “sinks” and “reservoirs” in multiple provisions. As in the PA, these terms may be interpreted to encompass CDR techniques. For example, the Preamble to the UNFCCC states, in part, that the UNFCCC’s parties are “Aware of the role and importance in terrestrial and marine ecosystems of sinks and reservoirs of greenhouse gases.” Later, the UNFCCC defines “sink” as “any process, activity or mechanism which removes a greenhouse gas … from the atmosphere.”100 It defines “reservoir” as “a component or components of the climate system where a greenhouse gas … is stored.”101 Neither of these definitions limits applications to only natural processes—leaving the door open to the potential use of CDR techniques. Further, Article 4, which contains the main commitments of the UNFCCC, mentions sinks and reservoirs multiple times. For example, it states that parties to the UNFCCC shall create and implement “programmes containing measures to mitigate climate change by addressing anthropogenic emissions by sources and removals by sinks” and shall “Promote sustainable management, and promote and cooperate in the conservation and enhancement, as appropriate, of sinks and reservoirs … including biomass, forests and oceans as well as other terrestrial, coastal and marine ecosystems.”102 These provisions can arguably extend to CDR techniques, which act as sinks or reservoirs by taking GHG from the atmosphere and storing it elsewhere.103 3.3

Convention on Biological Diversity

The goal of the Convention on Biological Diversity (CBD), adopted in 1992, is to promote “the conservation of biological diversity, [and] the sustainable use of its components.”104 To do so, the CBD requires parties to monitor projects affecting the conservation of biological diversity and to communicate with countries affected by projects, especially in the event of a transboundary disaster. For example, Article 7 of the CBD requires parties to, “as far as possible and as appropriate,” identify projects that “have or are likely to have significant adverse impacts on the conservation and sustainable use of biological diversity, and monitor their effects.”105 The projects identified under Article 7 must have environmental impact assessments, “with a view to avoiding or minimizing adverse effects.”106 At the time of writing, 195 countries, as well as the European Union, have ratified or otherwise adopted the CBD.107 While the articles of the CBD itself do not seem to prevent countries from engaging in CDR projects, a series of non-binding decisions adopted by the Conference of Parties to the CBD encourage parties to ensure CDR techniques are supported by science. The first decision, adopted in 2008, pertains to ocean fertilization. In part, the decision:

UNFCCC (n. 74) Art. 1(8). Ibid., Art. 1(7). 102 UNFCCC (n. 74) Art. 4(1)(b) and (d). 103 Lin (n. 99) 547. 104 Convention on Biological Diversity (CBD) (adopted 5 June 1992, entered into force 29 December 1993) 1760 U.N.T.S. 79. 105 CBD (n. 104) Art. 7(c). 106 CBD (n. 104) Art. 14(1)(a). 107 CBD, “List of Parties” (Convention on Biological Diversity 2021) https://​www​.cbd​.int/​ information/​parties​.shtml accessed 8 October 2021; the United States has signed but not ratified the CBD (ibid.). 100 101

518  Research handbook on climate change mitigation law Requests Parties and urges other Governments, in accordance with the precautionary approach, to ensure that ocean fertilization activities do not take place until there is an adequate scientific basis on which to justify such activities … and a global, transparent and effective control and regulatory mechanism is in place for these activities.108

The second decision, adopted in 2010, applies more broadly to “geoengineering activities,” defined as “any technologies that deliberately reduce solar insolation or increase carbon sequestration on a large scale that may affect biodiversity.”109 The decision urged parties to consider its specified guidelines while engaging in “climate change mitigation and adaptation.”110 Similar to the 2008 decision, the guidelines of the 2010 decision suggest that “no climate-related geo-engineering activities that may affect biodiversity take place” until they are sufficiently supported by science that accounts for not only biodiversity but also “associated social, economic, and cultural impacts.”111 Notably, neither the 2008 nor the 2010 decision applied to “small scale research studies within studies” conducted in controlled settings.”112 Still, both decisions encouraged parties to conduct such studies only if necessary to “gather specific scientific data” and ensure that the potential environmental impacts of such studies have been thoroughly assessed. The 2008 decision further prohibits such studies from being “used for generating and selling carbon offsets or any other commercial purposes.”113 Generally, the CBD is considered toothless and half-hearted because of its non-binding resolutions and the invitation to countries to merely consider its provided guidelines. While there certainly is cause for concern over the impacts of CDR on biodiversity,114 the consequences of the CBD on the future of CDR implementation may be minimal.

108 CBD, “Decision Adopted by the Conference of the Parties to the Convention on Biological Diversity at its Ninth Meeting” (CBD 2008) 1. 109 CBD, “Report of the Tenth Meeting to the Conference of the Parties to the Convention on Biological Diversity” (October 2010) Art. 8(w) https://​www​.cbd​.int/​doc/​decisions/​cop​-10/​cop​ -10​ -dec​ -33​ -en​ .pdf last accessed 30 May 2022. The Secretariat of the CBD subsequently suggested expanding this definition to encompass any “Deliberate intervention in the planetary environment of a nature and scale intended to counteract anthropogenic climate change and its impacts” (Secretariat to the Convention on Biological Diversity, Geoengineering in Relation to the Convention on Biological Diversity: Technical and Regulatory Matters, CDB Technical Series No. 66 (CBD 2012) 23). The Conference of the Parties agreed to this definition in its 2012 decision (CBD, “Report of the Eleventh Meeting to the Conference of the Parties to the Convention on Biological Diversity” (October 2012) Arts 6–9 https://​www​.cbd​.int/​doc/​decisions/​cop​-11/​cop​-11​-dec​-20​-en​.pdf last accessed 30 May 2022. 110 CBD, “Report of the Tenth Meeting to the Conference of the Parties to the Convention on Biological Diversity” (n. 109), Art. 8. 111 Ibid., Art. 8(w). 112 CBD 2008 (n. 108) Art. C(4); CBD, “Report of the Tenth Meeting to the Conference of the Parties to the Convention on Biological Diversity” (n. 109) Art. 8(w). 113 CBD 2008 (n. 108) Art. C(4). 114 See generally Dooley et al. (n. 19).

Greenhouse gas removal  519 3.4

Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter

The Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter (commonly referred to as the London Convention) was adopted in 1972 and was one of the first global conventions to protect the marine environment.115 The London Protocol, adopted in 1996, modernized and replaced the London Convention.116 The objective of both the London Convention and its successor is to promote the effective control of all sources of marine pollution by implementing measures to prevent marine pollution caused by dumping.117 The London Protocol regulated marine dumping much more stringently than the London Convention, employing a “precautionary approach”118 and prohibiting the dumping of all wastes except for those on the so-called “reverse list” in Annex 1.119 The waste on the reverse list includes, in part, dredged material, sewage sludge, fish waste, inorganic geological material, organic material of natural origin, and “carbon dioxide streams from carbon dioxide capture processes for sequestration.”120 If an entity wants to dump a material on the reverse list, it must obtain a permit issued by a party in accordance with its individually adopted regulations.121 The main potential effect of the London Protocol on CDR came in 2013, when the parties to the London Protocol negotiated amendment LP.4(8), which governs marine geoengineering activities.122 The amendment’s definition of marine geoengineering specifically targets CDR techniques.123 Accordingly, LP.4(8) largely prohibits any marine geoengineering activities listed in Annex 4, which currently lists only ocean iron fertilization (OIF).124 OIF may be excepted from this prohibition, however, if the activity is “assessed as constituting legitimate scientific research.”125 The parties to the London Protocol may in the future add other geoengineering activities to Annex 4.126

See London Convention, “Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter 1972” [1972] 11 ILM 1294 1. 116 London Protocol, “Protocol to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter” [1996] 1046 ILM 120. 117 London Convention (n. 115) Arts I–II; London Protocol (n. 116) Art. 2. 118 London Protocol (n. 116) Art. 3. 119 Ibid., Annex 1. 120 Ibid. 121 Ibid. Art. 4(1)(1). 122 Amendment to the London Protocol, “Amendment to the London Protocol to Regulate the Placement of Matter for Ocean Fertilization and Other Marine Geoengineering Activities” [2013] 4 ILM 8 1. 123 Article 1 defines marine geoengineering as a “deliberate intervention in the marine environment to manipulate natural processes, including to counteract anthropogenic climate change and/or its impacts, and that has the potential to result in deleterious effects, especially where those effects may be widespread, long lasting or severe.” Amendment to the London Protocol, Art. 1. 124 Amendment to the London Protocol (n. 122) Art. 6bis and Annex 4. The definition of OIF is broad and extends to prohibiting the use of OIF both for combatting climate change and stimulating marine productivity, the latter of which would prohibit experiments like the Haida Salmon project; see Craik and Burns (n. 72) 11124, Craik, Blackstock and Hubert (n. 82), 117; along with accompanying text. 125 Amendment to the London Protocol (n. 122) (Annex 4(1.3)). 126 London Protocol (n. 116) Art. 21(1); Kerryn Brent, Wil Burns and Jeffrey McGee, “Governance of Marine Geoengineering” Special Report (Centre for International Governance Innovation 2019) 44. 115

520  Research handbook on climate change mitigation law The current effects of the amendment, however, are very limited. Most importantly, the amendment has not yet entered into force because it has not been adopted by two-thirds of the contracting parties.127 Further, there are only 53 parties to the London Protocol that have ratified the treaty.128 The United States—one of the largest CDR users—is a signatory to the London Protocol but has not ratified it. 3.5

United Nations Convention on the Law of the Sea

The United Nations Convention on the Law of the Sea (UNCLOS) establishes a legal framework for marine and maritime activities. It was adopted in 1982 and has 168 parties.129 The Convention is long and far-reaching, but some of its articles could regulate the use of CDR in marine waters. For example, Article 238 establishes the right to conduct marine scientific research.130 This right is limited to a state’s own territorial sea and in their exclusive economic zone and continental shelf, unless a state has consent to operate in another state’s territory131 or if the research is conducted beyond the exclusive economic zone.132 Further, Article 194 establishes measures to prevent, reduce, and control pollution of the marine environment.133 It specifically requires parties to account for measures “necessary to protect and preserve rare or fragile ecosystems as well as the habitat of depleted, threatened or endangered species and other forms of marine life.”134 3.6 Summary While the bodies of international law governing climate change mitigation and biodiversity and ecosystem protection generally only reference CDR implicitly, their effect on the implementation of CDR is vast. The PA in particular will likely be interpreted to allow CDR, but not to the detriment of developing countries and vulnerable populations. Further, if the 2013 amendment to the London Protocol ever enters into force, the use of marine NETs may diminish drastically. It is also worth noting that a treaty to establish protected marine areas is currently being negotiated and may limit where marine CDR can take place (or even limit marine CDR itself).135

See London Protocol (n. 116), Art. 21(2). United States Environmental Protection Agency (USEPA), “Ocean Dumping: International Treaties” (USEPA, 2021) https://​www​.epa​.gov/​ocean​-dumping/​ocean​-dumping​-international​-treaties accessed 30 October 2021. 129 United Nations Convention on the Law of the Sea (UNCLOS) (adopted 10 December 1982, entered into force 16 November 1994) 1833 U.N.T.S. 3. 130 UNCLOS (n. 129) Art. 238. 131 Ibid., Arts 245–46. 132 Ibid., Art. 257. 133 Ibid., Art. 194. 134 Ibid., Art. 194(5). 135 United Nations, “Intergovernmental Conference on Marine Biodiversity of Areas Beyond National Jurisdiction” (United Nations, 2022) https://​www​.un​.org/​bbnj/​accessed 30 October 2021. The fourth session of the General Assembly to consider the text of this treaty will likely occur in early 2022. 127 128

Greenhouse gas removal  521

4

COMPARATIVE APPROACHES: UNITED STATES AND INDIA

The United States and India share several common challenges that will likely require them to explore greenhouse gas removal strategies and legal policies. Both nations are among the top emitters in the global community: the United States is the second largest current emitter (and the undisputed largest historical cumulative emitter), and India currently is the third largest emitter (and likely largest emitter after 2040).136 Both have made large commitments to decarbonize their economies as reflected in their nationally determined contributions under the Paris Agreement, and both nations will likely rely on the passage of statutes and judicial enforcement mechanisms that arise from their shared common roots in the British legal system. Despite these similarities, the two nations have identified vastly different legal strategies to seek greenhouse gas removal from the ambient atmosphere (as described below). These disparate pathways likely reflect the different economic and legal challenges that each nation faces. India, for example, continues to rely heavily on its domestic coal resources to generate nearly 70% of its electricity,137 and the nation has not committed to abandoning those resources entirely despite its promise to attain net zero emissions by 2070.138 The majority of India’s population uses only 40% of the global average energy per capita,139 and economic development remains a critical priority for India’s domestic agenda. By contrast, the United States has adopted oscillating policies towards climate change as a result of domestic electoral political elections, but carbon capture and greenhouse gas removal strategies offer a rare area of bipartisan agreement in the US Congress.140 These differing economic and political realities reflect starkly in the two nations’ submissions to the 26th Conference of Parties to the Paris Agreement in Glasgow, Scotland in 2021. The United States’ nationally determined contribution submission commits to an economy-wide reduction of its net greenhouse gas emissions by 50–52% below 2005 levels in 2030, the rapid adoption of 100% “carbon pollution-free” electricity by 2035 and support on research, commercialization, and deployment of low-carbon or zero-carbon industrial processes and products. The NDC’s descriptive report includes numerous references to anthropogenic greenhouse gas removals and how the United States intends to account for them.141 International Energy Association (IEA), “India” (IEA, 2021) http://​iea​.org/​countries/​india last accessed 30 May 2022. 137 Sudarshan Varadhan, “India’s electricity demand picks up in Oct as coal shortage lingers” Reuters (London, 16 October 2021) https://​www​.reuters​.com/​business/​energy/​indias​-electricity​-demand​-picks​ -up​-oct​-coal​-shortage​-lingers​-2021​-10​-16/​ last accessed 30 May 2022. 138 Prime Minister Modi’s National Statement at the COP 26 Summit in Glasgow only committed India to meeting 50% of its energy requirements from renewable energy by 2030 and to achieving “the target of Net Zero” by 2070. Press Information Bureau, Government of India, “National Statement by Prime Minister Shri Narendra Modi at COP26 Summit in Glasgow” (2021) https://​pib​.gov​.in/​ PressReleseDetail​.aspx​?PRID​=​1768712 last accessed 30 May 2022. As of November 2021, India has not yet submitted an updated nationally determined contribution under the Paris Agreement. 139 IEA (n. 136) 1. 140 Karin Rives, “Bipartisan bill seeks $4.9 billion for CCS infrastructure” (IHS Markit, 23 March 2011) https://​ihsmarkit​.com/​research​-analysis/​bipartisan​-bill​-seeks​-49​-billion​-for​-ccs​-infrastructure​ .html last accessed 30 May 2022. 141 The US NDC includes nearly 20 references to anthropogenic greenhouse gas removal, albeit typically in conjunction with anthropogenic emissions. See the United States of America Nationally 136

522  Research handbook on climate change mitigation law By contrast, India’s climate commitment at COP 26 lists five targets that either reflected targets for non-fossil energy capacity, production or reductions in the carbon intensity of its economy, and an undefined “Net Zero” target by 2070.142 India has not yet provided a detailed plan for its attainment of these goals, and it has not submitted an updated NDC as required by the Paris Agreement. As a result, it is difficult to predict how these goals will commit India to policy initiatives that support greenhouse gas removal to attain its climate commitments. Notably, India’s national statement did not repeat or reaffirm its prior commitment in its first NDC to “create an additional carbon sink of 2.5 to 3 billion tons of CO2 equivalent through additional forest and tree cover by 2030.” India’s rate of afforestation, however, has struggled to meet this ambitious goal.143 4.1

US Law on Greenhouse Gas Removal

The United States’ legal policies towards greenhouse gas removal remain at an early stage. Most of its domestic environmental laws do not directly regulate the removal of a gas from the atmosphere (even if that gas is considered a pollutant). It instead regulates the emission of those gases from stationary industrial facilities under its federal Clean Air Act as well as analogous state laws. For example, a large stationary source under the Clean Air Act’s Prevention of Significant Deterioration (PSD) Program might face requirements to control greenhouse gas emissions as part of its selected best available control technology under a permit to control emissions of a different pollutant.144 The US Environmental Protection Agency has also promulgated limits on greenhouse gas emissions as part of its authority under the Clean Air Act’s program for new source performance standards (NSPS) and existing source performance standards (ESPS). For example, the agency has imposed greenhouse gas limits on new coal-fired power plants (although the impact of those rules remains limited because no new coal-fired power plants have been constructed in the United States since the rules took effect).145 The full extent of the federal government’s power to use the federal Clean Air Act to regulate existing large sources that emit solely greenhouse gases, however, remains muddled after the US Supreme Court stayed an ambitious regulatory program to limit greenhouse gas emissions from existing coal

Determined Contribution, “Reducing Greenhouse Gases in the United States: A 2030 Emissions Target” (April 2021) https://​www4​.unfccc​.int/​sites/​ndcstaging/​PublishedDocuments/​United​%20States​%20of​ %20America​%20First/​United​%20States​%20NDC​%20April​%2021​%202021​%20Final​.pdf last accessed 30 May 2022. 142 “National Statement by Prime Minister Shri Narendra Modi at COP26 Summit in Glasgow” (n. 139) 3. 143 Ishan Kukreti, “India unlikely to meet carbon sink commitment” Down to Earth (18 June 2019) https://​www​.downtoearth​.org​.in/​news/​forests/​india​-unlikely​-to​-meet​-carbon​-sink​-commitment​-65144 last accessed 30 May 2022. 144 Utility Air Regulatory Group v EPA, 573 US 302 (2014) (approving EPA regulation that allowed imposition of CO2 emission controls as part of selection of best available control technology requirements for “PSD-anyway” sources). 145 Environmental Protection Agency, “Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Unit; Final Rule” Federal Register (23 October 2015).

Greenhouse gas removal  523 fired-utilities in 2016.146 This initiative, named the Clean Power Plan, was subsequently withdrawn and replaced, but the DC Circuit Court of Appeals rejected the rationale offered by the Trump administration to justify its withdrawal of the Clean Power Plan.147 The US Supreme Court has recently decided to review the DC Circuit Court of Appeals’ decision, which may bring finality to the interpretive struggle over the proper scope of GHG regulations under the federal Clean Air Act.148 While awaiting the Court’s review, the US federal government has proceeded with efforts to promote GHG removal technologies and CO2 sequestration. Most of the current work centers on the regulatory requirements for permanent storage of captured CO2 under the federal Safe Drinking Water Act and its Underground Injection Control regulatory program. This program sets out comprehensive standards for the permanent geologic sequestration in underground injection wells designated as Class VI wells. The program also allows the storage of CO2 in wells as part of enhanced oil recovery injection systems, which are designated as Class II wells. The Biden administration has recently announced a new regulatory initiative to ensure that these programs have sufficient regulatory rigor and resources to effectively oversee the potential storage of vast amounts of CO2 from point sources and ambient air capture.149 In addition to these regulatory initiatives, the United States has deployed financial incentives to encourage the capture and sequestration of CO2. Beyond direct grants from the US Depart­ment of Energy to financially support carbon capture and sequestration demonstration projects, the most notable regulatory incentive is the 45Q program under the Internal Revenue Code. This law provides a tax credit for every ton of captured CO2 that is permanently sequestered in either a Class II or Class VI injection well. These credits range in value based on the method and duration of storage. For example, CO2 used to enhance the production of oil and gas in a Class II well receives up to US$35 per metric ton, and CO2 geologically sequestered for permanent storage can receive up to US$50 per ton. Congress recently expanded the eligibility criteria for participating in the program, and proposed legislation may substantially enlarge the size and scope of the tax credit for greenhouse gas capture and direct air capture.150 Notably, the US Congress recently dramatically expanded federal financial support for research and deployment of greenhouse gas removals via direct air capture and other emerging technologies. In the recently passed bipartisan Infrastructure Investment and Jobs Act, the federal government will provide more than US$65 billion investments in clean energy and

146 Order in Pending Case, West Virginia, et al. v EPA, et al., No. 15A773, 577 U.S. 1126 (9 February 2016). 147 American Lung Association v Environmental Protection Agency, No. 19-1140 (D.C. Cir. 2021). 148 Order to Grant Certiorari, West Virginia, et al. v. EPA, et al., No. 20-1530 and associated cases (29 October 2021) https://​www​.supremecourt​.gov/​orders/​courtorders/​102921zr1​_dafi​.pdf last accessed 30 May 2022. 149 White House Council on Environmental Quality (CEQ), “Report to Congress on Carbon Capture, Utilization, and Sequestration” (CEQ 2021) 7–8 https://​www​.whitehouse​.gov/​wp​-content/​uploads/​2021/​ 06/​CEQ​-CCUS​-Permitting​-Report​.pdf last accessed 30 May 2022. 150 Nat Eng and Peter Lawrence, “House-passed $1.7 Trillion Build Back Better Reconciliation Legislation: Includes $325 Billion in Green Energy Tax Incentives and More Than $92 billion in Spending to Address Robust Climate Change Goals” (2021) https://​ www​ .novoco​ .com/​ notes​ -from​ -novogradac/​house​-passed​-17​-trillion​-build​-back​-better​-reconciliation​-legislation​-includes​-325​-billion​ -green last accessed 30 May 2022.

524  Research handbook on climate change mitigation law transmission upgrades to US power infrastructure.151 The Act also supplies US$3.5 billion over five years to create four new hubs that will research and expand direct air capture technologies to remove CO2 from the ambient atmos­phere.152 4.2

Greenhouse Gas Removal Law and Policy in India

While the United States has pursued regulatory strategies and financial incentives that emphasize expensive technological development and economically valuable awards, the federal government of India has, by necessity, followed a different (and less costly) path. From the largest perspective, India has committed to achieve net neutrality in its greenhouse gas emissions by 2070. As noted above, India’s latest national commitment provides targets for increased carbon-free energy production, reductions in carbon intensity for its economic production, and an overall goal of “Net Zero” by 2070. As the concept of net neutrality implies, this regulatory strategy will likely require the widespread transition to renewable and carbon-free energy sources in combination with large-scale greenhouse gas remo­vals, but the current strategy contains no explicit legal policy or obligation to incentivize removal activities. While India has undertaken research demonstration projects to explore the suitability of point source carbon capture with geological sequestration, it will likely rely heavily on carbon reduction credits from biological sources. In its prior submittal under the Paris Agreement and its responses under the Kyoto Protocol, India relied predominantly on afforestation as an anthropogenic carbon sink that could satisfy its commitments.153 India also has sizable geological resources for enhanced soil weathering and mineralization projects, which could, theoretically, absorb large volumes of ambient CO2 for relatively low costs.154 The nation’s coastal mangrove resources may also offer a financially sustainable reservoir for storage of CO2 as blue carbon projects.155 All of these approaches, however, will likely carry risks of unanticipated or undesired effects on social justice and sustain­ability. Beyond its commitments under the UNFCCC, the Paris Agreement, and its statutory efforts, other features of the Indian legal system offer possibilities for powerful legal action to encourage GHG removal. In contrast to the United States, India has recognized a constitutional right to a clean and safe environment as implicitly guaranteed under Article 21’s due process mandates. This constitutional right may provide a basis for legal action against governmental failures to undertake needed mitigation steps, which can theoretically include GHG removal efforts. Only one case to date, however, has invoked the Public Trust Doctrine and India’s existing environmental laws (including its Environment Protection Act of 1986) to

151 The White House, Briefing Room, “Fact Sheet: The Bipartisan Infrastructure Deal” (2021) https://​www​.whitehouse​.gov/​briefing​-room/​statements​-releases/​2021/​11/​06/​fact​-sheet​-the​-bipartisan​ -infrastructure​-deal/​last accessed 30 May 2022. 152 Sam Wenger, “Let’s Get Excited About DAC Hubs” (Bipartisan Policy Center, 15 September 2021) https://​bipartisanpolicy​.org/​blog/​dac​-hubs/​ last accessed 30 May 2022. 153 Kaushik Deb and Mahak Agrawal, “Evaluating India’s COP26 Climate Commitments” (Columbia SIPA Center on Global Energy Policy, 17 November 2021) https://​tinyurl​.com/​2hcxbfub last accessed 30 May 2022. 154 Jessica Strefler et al., “Potential and Costs of Carbon Dioxide Removal by Enhanced Weathering of Rocks” (2018) 13(3) Environmental Research Letters 1. 155 Yiwen Zeng et al., “Global Potential and Limits of Mangrove Blue Carbon for Climate Change Mitigation” (2021) 31 Current Biology 1737.

Greenhouse gas removal  525 seek relief from India’s National Green Tribunal. In Pandey v India, a nine-year-old plaintiff brought an action under the National Green Tribunal Act’s provision that allows “a substantial question relating to the environment.” Pandey alleged that India’s national government had failed to take sufficient action to avoid severe climatic change, and he asked the Tribunal to order the government to expand climate consideration in environmental impact statements, prepare a national carbon budget, and create a national greenhouse gas emissions inventory. The National Green Tribunal, however, dismissed Pandey’s claim by finding that the Environmental Protection Act of 1986 already mandated that environmental impact statements include climate change risks and that the government had already incorporated those concerns in its other decision-making.156 India’s laws pair this substantive constitutional right to a clean environment with procedural innovations that allow easier judicial enforcement by affected parties. Under its public interest litigation model, India’s courts can hear lawsuits complaining of constitutional violations brought on behalf of disaffected persons and groups who otherwise might lack the ability to seek judicial relief. This flexible legal device relaxes standing requirements and empowers the courts to proactively order broad and sweeping injunctive relief.157 Notably, Pandey v India did not explicitly invoke public interest litigation doctrines in its pleading,158 and no other filed case in India has sought to raise a public interest litigation challenge to India’s federal or state governments for failing to take aggressive climate action that presumably would require greenhouse gas removals. Other actions seeking more aggressive governmental mitigation efforts may also expand to seek this relief in the future.159

5 CONCLUSION Current climate change law, on both the international and domestic levels, has begun to focus on the need for greenhouse gas removal from the ambient atmosphere as a critical complement to mitigation of current emissions. The need for clear, consistent, and productive legal policy on greenhouse gas removals will only grow in urgency if current efforts fail to yield enough emission reductions to prevent catastrophic climate damage to vulnerable populations and nations. The similarities and differences between India’s and the United States’ legal strategies offer instructive guideposts for other international and domestic legal efforts to

Pandey v Union of India, [2017] App. No. 187/2017 (Order of Dismissal). Tracy Hester, “Private Claims for a Global Climate: U.S. and Indian Litigation Approaches to Climate Change and Environmental Harm” (International Seminar on Global Environment and Disaster Management: Law Society, 23 July 2011, New Delhi, India) https://​www​.law​.uh​.edu/​faculty/​thester/​ Private​%20Claims​,​%20Global​%20Climate​%20​-​%20ILI​%20Paper​.pdf last accessed 30 May 2022. 158 Pandey’s original application relied on the explicit grant of jurisdiction provided under section 14 of the National Green Tribunal Act to hear cases involving substantial questions of environmental law. Pandey v Union of India, [2017] App. No. 198/2017 (Original Application) 2–3, 48–51. 159 See Hanuman Laxman Aroskar v Union of India, [2019] M.A. No. 965 of 2019 in Civ. Appeal No. 12251 (Judgment). The Supreme Court, after suspending environmental clearances to construct an airport in Goa because of deficiencies in its environmental impact information, lifted the suspension after the government submitted additional information and committed to make the airport a zero carbon operation; the Court then appointed the National Environmental Engineering Research Institute to oversee compliance and presumably retains jurisdiction for further review. 156 157

526  Research handbook on climate change mitigation law encourage greenhouse gas removal at the scale needed to protect human societies and imperiled ecosystems.

Index

Aarhus Convention 86 Article 9(3) of 95, 97 active consumers 354 adaptability vs. mitigation 6–7 national framework laws on climate change 36 Adaptation Committee 24, 28 Adaptation Fund 267 Administrative Procedure Act 318, 320 Affordable Clean Energy (ACE) 123 afforestation 6, 505 African climate change mitigation law 9, 240–61 carbon pricing 248–9 Kenya and Uganda’s framework 253–60 climate change mechanisms 257 financing 259–60 governance 253–5 incentives 258 information and reporting 258–9 institutions 253–5 mitigation obligations 256–8 National Action Plans and Mitigation 255–6 private sector 256–7 public sector 257–8 legal and policy developments 245–7 legislation 249–53 framework climate change laws 251–3 sectoral climate change legislation 250–51 market mechanisms 248–9 Paris Agreement implementation 241–5 barriers to NDC 244–5 initial nationally determined contributions 241–2 nationally determined contributions review 242–3 African Development Bank (AFDB) 243, 245 agriculture, forestry and other land use (AFOLU) 11–12, 15, 433–56 climate smart agriculture 449–53 definition of 449–50 EU’s Common Agricultural Policy 452–3 resilience 450–51 soil carbon 450 consumers’ dietary choices 453–4 emissions with livestock 435

forests and tropical forests 454–5 mitigation policies and reporting requirements 439–42 national communications 439–40 national inventory submissions 439–40 net emissions 434–6 overview of 433–4 rural poverty 437–8 safeguarding food security 447–9 sector-specific mitigation commitments and instruments 442–6 technology transfer 446–7 agroforestry 449–53 definition of 450 EU’s Common Agricultural Policy 452–3 resilience to climate change 451 aircraft emissions 371 aircraft-emitted nitrogen oxides 372 air pollutants 119, 124 allowance prices 288–9 allowance revenue 273–5 Amazonas Sustainable Foundation 148 ambiguity 52 American Clean Energy and Security Act 108 Andes Action initiative 147 Antarctic Treaty (1959) 486 anticipatory model 44, 46 anticommons decision structure 475–9 Bellantuono’s regulatory anticommons 477–8 competing monopolies model 475–6 competitive decision-making observations 479 definition of 476 intentional anticommons structures 478–9 sequential legal anticommons 478 simultaneous legal anticommons 478 Arrow’s (Im)Possibility Theorem 471–3 independence of irrelevant alternatives 472 no dictatorship 471–2 unanimity 472 universality 472 artificial ocean upwelling 510 Asia-Pacific climate change mitigation law 8–9, 156–78 greenhouse gas emissions 159–64 per capita in selected countries 159–60 top ten per-capita emitters 162 trends in selected countries 162–3

527

528  Research handbook on climate change mitigation law information sources 157–8 law and policy 169–78 coal as energy source 175–6 development and economic growth plans 170–71 individuals and companies illegal activitiees 176–7 livestock emissions 177 mitigation policy maturity 169–70 mitigation-supporting regulation 169–70 permanent MRV systems 171–2 regional cooperation 172–3 region-specific mitigation challenges 178 renewable energy expansion 173–5 rice cultivation 178 sink preservation in developing countries 176–7 transportation emissions 177 mitigation targets 164–9 BAU emissions 167 greenhouse gas emissions allowances 168 internationally declared 165–6 international market existence 168 multilateral environmental agreements 168–9 not environmentally friendly 168–9 not straightforwardly comparable 167 provision of international support 167–8 overview of 156–7 assimilative approach 44 associated petroleum gas (APG) 229–30 auctioned allowances 273–4 Australia assessment and climate risk disclosure 323–5 climate litigation 323–5 transportation emissions 177 aviation transportation 11, 368–82 Annex 16 378–81 Assembly Resolution A37-19 379 highest practicable degree of uniformity 378 market-based measures 379–80 climate change impacts 369–73 emissions from 369 ICAO 374–8 Volume III of Annex 16 376–7 Volume II of Annex 16 376 Volume IV of Annex 16 377–8 international commercial aviation 381–2 international framework 373 Bamako Convention (1991) 486 Basel Convention (1989) 485

battery energy storage 349–50 Bellantuono’s regulatory anticommons 477–8 Belt and Road Green Cooling Initiative 224 Belt and Road Initiative (BRI) 224 best available control technology (BACT) 118, 121–2 bilateral cooperation 59 Bill of Rights 234, 405–6 biochar 506 biological energy carbon capture and storage (BECCS) 11, 455, 505–6 border carbon adjustment (BCA) 298–305 legal challenges 302–5 practical issues 300–302 rationale 298–300 Brazilian climate change mitigation law 149–54, 197–204 comparative studies with Mexico and Colombia 149–54 domestic policies 201–4 current projections policy 202 greenhouse gas emissions 204 reality 202 solutions 202–3 international legal framework 199–201 intended nationally determined contributions 200–201 Kyoto Protocol 199–200 Paris Agreement 199–200 legal structure 198 Brazilian Federal Constitution (1988) 198 BRICS climate change mitigation law 9, 196–239 in Brazil 197–204 in China 216–26 in India 204–16 in Russia 226–31 in South Africa 231–9 business-as-usual (BAU) approach 45, 46, 141, 145 business-as-usual (BAU) emissions 167 Canadian climate change mitigation law 8, 103–37 commitments to international efforts 109–14 constitutional and federal legal frameworks 114–17, 129–31 national emissions profiles 105–7 overview of 103–4 policy contexts 107–9 subnational legal frameworks 131–6 Canadian Environmental Protection Act (CEPA) 129–30 Canadian Net-Zero Emissions Accountability Act (CNZEAA) 113

Index  529 Cancún Agreements (2010) 23, 25, 28, 158, 164, 268–9 Cap and Trade Cancellation Act 132 cap-and-trade system 284–5 Cape Town, South Africa 422–5 buildings and energy 423–4 constitutional framework 404–7 COVID-19 pandemic 424–5 financing 412–14 five-year integrated development plan 423 greatest challenge 425 land use planning 423 mobility and air quality 424 national legislation equipping municipal action 407–12 nutrition 424 overview of 422–3 state legislation equipping municipal action 407–12 carbon border adjustment mechanism (CBAM) 299–300, 302 carbon budgets concept 36 carbon capture and storage (CCS) 467, 499–500 carbon capture, utilization, and sequestration (CCUS) 504 carbon dioxide 371 carbon dioxide removal (CDR) 504–5 carbon finance 263–4 carbon intensity indicator (CII) 395–6 carbon majors concept 462 carbon-neutral beef certification 153 Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) 377, 379, 381 carbon pricing Africa 248–9 China 219–20 Carbon Pricing Leadership Coalition 27 carbon sinks 329–30 carbon taxes 272–3 carbon trading 283–306 border carbon adjustment 298–305 legal challenges 302–5 practical issues 300–302 rationale 298–300 China 292–8 climate change policy 292–3 national ETS 294–8 EU law 287–92 allowance prices 288–9 energy-intensive and trade-exposed (EITE) installations 290 free allocation 288 learning by doing phase 287 legislative reform 288–9

linear reduction factor 291–2 market stability reserve 290 incentivizing abatement 284–5 international law 286 overview of 283–4 cattle farming 152–3 cautionary statements 463–8 on climate change mitigation 466–8 evaluating/ranking/prioritizing 463–6 Central American climate change mitigation law 8, 138–55 business as usual (BAU) scenario 141, 145 comparative approach 149–54 Brazil 149–54 Colombia 149–54 Mexico 149–54 compliance with NDCs 141–3 international law context 139–43 overview of 138–9 regional issues 143–8 economic challenges 145–6 institutional challenges 145–6 international cooperation 143–5 land-use sector 146–8 chemical NETs direct air capture 507 enhanced weathering 507–8 Chicago Convention (1944) 374–5, 378–9, 390 Chinese climate change mitigation law 10, 216–26 carbon trading 292–8 climate change policy 292–3 national ETS 294–8 domestic policies carbon pricing 219–20 energy efficiency 220 fossil fuels 221–2 renewable energy 220–21 greenhouse gas (GHG) emissions 216–17 international negotiations 217–19 Kyoto Protocol 217–19 sustainable climate change trajectory 223 trade ambitions 224–6 cities and climate change mitigation law 398–432 Cape Town cae study 422–5 comparative perspectives 425–31 constitutional framework 404–7 consumption-based inventories 403 definition of 399 financing 412–14 Hamburg cae study 419–22 India 209 institutional approach 402–3 instrumental approach 402–3

530  Research handbook on climate change mitigation law national legislation equipping municipal action 407–12 non-state actor zone for climate action 400–401 overview of 398–400 São Paulo cae study 415–18 sectoral approach 402–3 state legislation equipping municipal action 407–12 strategic approach 402–3 claims against financial institutions 334–5 Clean Air Act (CAA) 118–25, 317–18 Clean Air Law 193 Clean Development Mechanism (CDM) 3, 161, 199, 248, 267, 413, 444 Clean Energy Package 353–4 Clean Power Plan (CPP) 123 Climate Action Tracker (CAT) analysis 202, 223, 231 Climate and Clean Air Coalition 27 climate change mitigation law definition of 2 history of 3–4 see also country specific Climate, Community and Biodiversity (CCB) Standards 148 climate correction factor (CCF) 497 climate finance 10, 13, 25, 34, 242, 244, 259, 263–82, 299, 515 allowance revenue 273–5 auctioned allowances 273–4 before/after Paris Agreement 264–70 carbon taxes 272–3 green bonds 275–8 Green Climate Fund 278–82 quasi-subsidies 270–72 revenue streams 274–5 subsidies 270–72 Climate Leadership and Community Protection Act 133 climate litigation 307–36 assessment and disclosure of climate risks Australia 323–5 France 326 Norway 326 South Africa 325 United Kingdom 325–6 United States 322–3 carbon sinks 329–30 courtroom climate science 308–12 constitutional rights to life 311–12 equitable powers 312 judicial acceptance 308–10 standing requirements 310–11 European Union 90–98

in adopted laws 90 at Member State level 94–7 against in Strasbourg 98 target for 2030 91–4 fossil fuels 319–22 future directions 330–35 claims against financial institutions 334–5 human rights claims 332–3 oil companies the Netherlands 329 United States cases 327–8 overview of 307–8 spurring ambitious state action Ashgar Leghari v Pakistan 316 Ireland climate case 314–15 Juliana v United States 318–19 Massachusetts v EPA 317–18 Urgenda climate case 313–14 super wicked problem 313 climate optimism 243 climate policy instruments 33–4 climate smart agriculture 449–53 definition of 449–50 EU’s Common Agricultural Policy 452–3 resilience 450–51 soil carbon 450 climate summit (2021) 104 coal as energy source 175–6 Colombia 149–54 command-and-control instruments 33 commercial shipping 388–97 Committee of the International Law Association 66 common but differentiated responsibilities and respective capabilities (CBDRRC) principle 23–4, 30, 218 Compact Clause 134–5 competing monopolies model 475–6 competitive decision-making observations 479 Conference of the Parties (COP) 22, 139, 179, 185, 198, 200, 263, 285, 286, 389, 440, 486, 517, 521 Convention on Biological Diversity (CBD) 26, 148, 517–18 Copenhagen Accord (2009) 23, 25, 29 corporate decision-making Arrow’s (Im)Possibility Theorem 471–3 cautionary statements on climate change mitigation 466–8 evaluating/ranking/prioritizing 463–6 dictatorship 473 incompleteness 473 inferior rule 473–4 logical nonsense 474

Index  531 multi-actor social decision-making structures 468–70 corporate renewable power purchase agreements (PPAs) 348–9 Council on Environmental Quality (CEQ) 126 Court of Justice of the EU (CJEU) 63, 92–3 courtroom climate science 308–12 constitutional rights to life 311–12 equitable powers 312 judicial acceptance 308–10 standing requirements 310–11 cross-border electricity trade 213–15 Declaration of Legal Principles Relating to Climate Change 66 deformalisation 28–30 demand-response programmes 353–5 demand-side flexibility 349, 353–5 demand-side management 271 dictatorship 473 differentiation 30–32 direct air capture (DAC) 507 Disposable Plastic Directive 492 distributed decision-making 477 domestic energy source 342 do no harm principle 72–5, 82 dormant Commerce Clause 134–5 durability of legislation 35–6 Ecodesign Directive 492 Economic Commission for Latin America and the Caribbean (ECLAC) 141, 143–4, 146, 148 economic instruments 34 The Economics of Welfare (Pigou) 284 Effort Sharing Regulation 61, 62, 81, 95, 99, 102, 444 Electricity Market Directive 354 electric vehicles 211 energy efficiency 14, 355–60 China 220 development trajectory for 361–2 in Governance Regulation 356 Islamic Republic of Iran 191–2 Paris Agreement and INDC 192–3 policy discourse 355–7 policy instruments 357–60 fiscal incentives 359–60 mandatory energy performance standards 359 market-based measures 357–9 obligations schemes 357–9 as protagonist role 356 Energy Efficiency Design Index (EEDI) 392–3 Energy Efficiency Directive (EED) 340, 357

energy-intensive and trade-exposed (EITE) installations 290 energy labelling 359 Energy Performance of Buildings Directive (EPBD) 357 Energy Policy and Conservation Act 120 energy savings certificate 358 energy sector 11, 14, 338–62 efficiency see energy efficiency overview of 338–9 renewable see renewable energy Energy Storage Grand Challenge (ESGC) 351–2 energy transition 14 green/low-carbon 338 Energy Union Strategy 353 enhanced weathering 507–8 environmental impact assessments (EIA) 55 environmentally sustainable’ investments 86–90 Environmental Protection Agency (EPA) 119, 130 Environmental Protection Protocol (1991) 486 environmental right 234 environmental sustainability 360, 362 epistemological uncertainty 51–2 equity sustainability 361 Espoo Convention (2001) 486 EU Emissions Trading Directive 72 Euratom Treaty 79, 80 European Citizens’ Initiative 91–2 European Climate Change Programme 287 European Climate Law Regulation 452 European Coal and Steel Community 78, 79 European Convention on Human Rights (ECHR) 313–14 European Council 4, 64, 72, 74, 79, 85, 98, 100, 340 European Court of Human Rights (ECHR) 98 European Court of Human Rights (ECtHR) 314, 319, 326, 333 European Economic Community 78, 79 European Emissions Trading System (EU ETS) 3, 10, 61, 283–92 allowance prices 288–9 energy-intensive and trade-exposed installations 290 free allocation 288 learning by doing phase 287 legislative reform 288–9 linear reduction factor 291–2 market stability reserve 290 European Environment Agency 74 European Green Deal 13, 60, 75, 99, 274, 291, 299, 302, 340, 362, 452, 483–4, 492 European Neighbourhood Policy 62 European Parliament (EP) 76–7

532  Research handbook on climate change mitigation law European Union climate law 8, 13, 15, 35, 59–102 climate law instruments 77–90 environmentally sustainable’ investments 86–90 financial laws 83–5 limited competence 77–81 regulating emission reduction 81–3 Taxonomy Regulation 86–90 climate litigation 90–98 in adopted laws 90 at Member State level 94–7 against in Strasbourg 98 target for 2030 91–4 climate neutrality 63–77 do no harm principle 72–5 European Parliament issues 76–7 international approaches 63–6 objective 72 political support 66–72 proposed legal framework 72–5 rule-based approach 72 limited competence 77–81 overview of climate change 59–62 post scriptum 101 second post scriptum 102 European Union energy labelling scheme 359 European Waste Law 499–500 Europe Beyond Coal 320 external integration principle 85 false negative vs. false positive 45–7 Federal Climate Change Act 101 federal policies 351–2 Federal Regulatory Energy Commission (FERC) 350–51 feed-in premiums 343 feed-in tariffs (FIT) 221, 343–4, 360 finance flow principle 83 firewall approach 23, 31 fiscal incentives energy efficiency 359–60 renewable energy 347–8 forward-looking statement (FLS) 466 fossil fuels China 221–2 climate litigation 319–22 Russia 230–31 fragmentation 26–8, 363 France assessment and climate risk disclosure 326 climate litigation 326 gasoline tax 272 Gas Tax Fund (GTF) 133

global climate law 7, 17–42 characteristics of 18 definition of 18–22 deformalisation 28–30 differentiation 30–32 fragmentation 26–8 instrumentation 32–5 international climate regime 22–5 law and legal frameworks 17 legislation 35–6 litigation 37–9 overview of 17–18 privatisation 39–42 super-wicked problem 21 Global Climate Risk Index 231 Global Covenant of Mayors for Climate and Energy 40 Global Forest Watch (2019) 148 Global Warming Solutions Act 133 Green Bench 316, 331 green bonds 275–8 green certificate schemes 346 Green Climate Fund 10, 25, 28, 264, 266–8, 278–82 country-driven approaches 279 Gender Action Plan 281–2 gender-sensitive approach 281 as project-funding mechanism 279 Results Management Framework 281 vulnerable groups 281 green electricity 384–5, 387 greenhouse gas (GHG) emissions 2–13 Asia-Pacific regions 159–64 allowances 168 per capita in selected countries 159–60 permanent MRV systems 171–2 top ten per-capita emitters 162 trends in selected countries 162–3 China 216–17 EU climate legislation 69–70 Latin America and the Caribbean (LAC) region 140 Russia 226 terrestrial transportation 388 Greenhouse Gas Pollution Pricing Act (GGPPA) 112, 115, 130–31, 137 greenhouse gas (GHG) removal 502–26 carbon dioxide removal 504–5 Convention on Biological Diversity 517–18 India 524–5 international law context 511–20 London Convention 519–20 negative emission technologies chemical 507–8 land-use change 505–6

Index  533 marine 508–10 regenerative 510–11 overview of 502 Paris Agreement 512–16 Article 2 513 Article 3 513 Article 4 513–14 Article 5 514 Article 6 514–15 Article 9 515–16 Article 10 516 Article 12 516 Article 13 516 preamble 512–13 UNCLOS 520 UNFCCC 516–17 in United States 522–4 Greenhouse Gas Reporting Program 125 greenwashing 86, 158 Hamburg, Germany 419–22 buildings and energy 420–21 constitutional framework 404–7 COVID-19 pandemic 421 financing 412–14 greatest challenge 421–2 land use planning 420 mobility 421 national legislation equipping municipal action 407–12 nutrition 421 overview of 419 state legislation equipping municipal action 407–12 ‘holy grail’case 39 human rights claims 332–3 hydropower potential 211–15 incommensurability 52 incompleteness 473 inconclusiveness 52 independence of irrelevant alternatives (IIA) 472 independent system operators (ISOs) 351 indeterminacy 52 Indian climate change mitigation law 204–16 dilemma, development vs. climate change mitigation 205–7 per capita consumption of electricity 206 utilities gross electricity generation 207 utilities installed capacity 205 domestic policies 209–15 cities and climate change 209 electric vehicles 211 hydropower potential 211–15

non-state actors 209–10 solar power 210 greenhouse gas removal 524–5 international legal framework historical position 208 nationally determined contributions 208–9 National Action Plan on Climate Change 208 national and regional context 204 Industrial Revolution 43, 47, 283 industrial sector climate change mitigation 12, 457–81 anticommons decision structure 475–9 Bellantuono’s regulatory anticommons 477–8 competing monopolies model 475–6 competitive decision-making observations 479 definition of 476 intentional anticommons structures 478–9 sequential legal anticommons 478 simultaneous legal anticommons 478 carbon emission policies 459–63 carbon majors concept 462 sources 461–3 envelope argument 458 overview of 457–9 pure heart assumption 458 social choice theory 463–75 Arrow’s (Im)Possibility Theorem 471–3 carbon capture and storage 467 cautionary statements 463–8 dictatorship 473 forward-looking statement 466 incompleteness 473 inferior rule 473–4 logical nonsense 474 multi-actor social decision-making structures 468–70 inferior rule 473–4 instrumentation 32–5 integration principle 78 intended nationally determined contributions (INDCs) 110, 185 Brazil 200–201 China 217, 223 India 209 Paris Agreement energy efficiency 192–3 gas flare reduction 192 renewable energy 193 Russia 231 intentional anticommons structures 478–9

534  Research handbook on climate change mitigation law Inter-American Commission on Human Rights (IACHR) 332 Intergovernmental Panel on Climate Change (IPCC) 3–4, 17, 46, 64, 189, 309, 329, 373, 433, 504 International Civil Aviation Organization (ICAO) 11, 26, 367, 374–8 International Climate Change Board 188 international climate treaties 29 International Covenant on Civil and Political Rights (ICCPR) 333 International Covenant on Economic, Social and Cultural Rights 449 International Energy Agency (IEA) 2, 5, 106, 209, 221, 506 International Maritime Organization (IMO) 26, 367, 388 International Union for the Conservation of Nature (IUCN) 147–8 international waste law 485–6 investment tax credit (ITC) 347–8 Ireland climate case 314–15 Islamic Republic of Iran 9, 180, 187–93 carbon dioxide emission reduction 190–91 energy efficiency 191–2 government policies and strategies 187–8 maximum pressure campaign 195 national working group 188–9 Paris Agreement and INDC energy efficiency 192–3 gas flare reduction 192 renewable energy 193 Statistics Center of Iran 189 strategies concerning mitigation by sub-sector 189–90 Joint Crediting Mechanism (JCM) 172–3 Joint Implementation 3 judicial acceptance 308–10 Juma Sustainable Development Reserve Project 148 jurisprudence. see climate litigation Just Transition Fund 85 Just Transition Mechanism 85, 274–5 Katowice Rulebook (2018) 28, 30 Kenyan Climate Change Act 9 Kenya’s climate change laws 253–60 financing 259–60 governance 253–5 incentives 258 information and reporting 258–9 institutions 253–5 mitigation obligations 256–8 National Action Plans and Mitigation 255–6

private sector 256–7 public sector 257–8 kerosene 370 Kigali Amendment (2016) 82 Kyoto Protocol 3–4, 22, 23 bottom-up approach 30 Brazil 199–200 China 217–19 Russia 226–8 top-down approach 29 Landfill of Waste Directive 488 land-use change NETs afforestation 505 biochar 506 biological energy carbon capture and storage 505–6 reforestation 505 Land Use, Land Use Change, and Forestry (LULUCF) 12, 61, 99 Asia-Pacific countries 159–64 in Brazil 200, 202 in Central and South America 146–8 large-scale adverse effects 47–8 Least Developed Country Fund 267 legislation 35–6 linear reduction factor 291–2 Lisbon Treaty 78, 80 litigation 37–9 livestock emissions 177 logical nonsense 474 London Convention (1972) 485–6, 519–20 macroalgae cultivation 509–10 Make in India, government initiative 215 mandatory energy performance standards 359 marine NETs artificial ocean upwelling 510 macroalgae cultivation 509–10 ocean alkalinity enhancement 508–9 oceanic direct carbon removal 508 ocean iron fertilization 509 market-based energy measures 357–9 market-based instruments 7 market-based mechanism (MBM) 394 market stability reserve (MSR) 290 MARPOL 389–90, 396 Marrakesh Accords (2001) 28 maximum pressure campaign 195 Mexico 149–54 Middle East climate change mitigation law 9, 179–95 climate change impacts 180–82 international legal regimes 182–7 Islamic Republic of Iran 9, 180, 187–93

Index  535 carbon dioxide emission reduction 190–91 energy efficiency 191–2 government policies and strategies 187–8 maximum pressure campaign 195 national working group 188–9 Paris Agreement and INDC 192–3 Statistics Center of Iran 189 strategies concerning mitigation by sub-sector 189–90 overview of 179–80 State of Qatar 9, 180, 193–4 mitigation adaptation vs. 6–7 IPCC definition of 2 see also climate change mitigation law monitoring, reporting, and verification (MRV) systems 169, 171–2 Montreal Protocol 26, 82, 373 multi-actor social decision-making structures 468–70 Multiannual Financial Framework (MFF) 85 multilateral environmental agreements (MEAs) 168–9 municipal solid waste (MSW) 482 National Action Plan on Climate Change (NAPCC) 208 national ambient air quality standards (NAAQS) 124 National Climate Change Council, Kenya 253 National Communication (NC) 157–8 national communications 439–40 National Environmental Policy Act (NEPA) 125–9, 320 National Highway Traffic Safety Administration 120 National Inventory Reports (NIRs) 157 national inventory submissions 439–40 Nationally Appropriate Mitigation Actions (NAMAs) 241 nationally determined contributions (NDCs) 4, 9, 13–14, 24, 30 in Central and South America 141–3 India 208–9 Paris Agreement in Africa barriers 244–5 initial 241–2 review 242–3 National Policy for the Control of Deforestation and the Sustainable Use of Forests 153 negative emission technologies (NETs) 10–11 chemical 507–8 direct air capture 507

enhanced weathering 507–8 land-use change 505–6 afforestation 505 biochar 506 biological energy carbon capture and storage 505–6 reforestation 505 marine 508–10 artificial ocean upwelling 510 macroalgae cultivation 509–10 ocean alkalinity enhancement 508–9 oceanic direct carbon removal 508 ocean iron fertilization 509 regenerative 510–11 soil carbon management 510–11 The Netherlands, oil companies 329 net metering programmes 344–5 New Generation EU 85 New York City’s Climate Mobilization Act 134 New York State Climate Action Council 133 New Zealand, transportation emissions 177 non-party stakeholders 41 non-regression principle 62 non-state actors (NSAs) 204, 209–10 non-state actor zone for climate action (NAZCA) 400–401, 429 Norway assessment and climate risk disclosure 326 climate litigation 326 Noumea Convention (1986) 486 obstructionism 479 ocean alkalinity enhancement (OAE) 508–9 oceanic direct carbon removal (ODCR) 508 ocean iron fertilization (OIF) 509 ordered liberty 311 Organisation for Economic Co-operation and Development (OECD) 143, 222, 244 OSPAR Convention (1992) 485 ozone-depleting substances 26, 82 Paris Agreement 25 ambition/ratcheting mechanism 24, 30 Article 2 513 Article 2(1)(c) of 86 Article 2(1)(a) of 10 Article 3 of 180, 513 Article 4 of 4, 66–7, 513–14 Article 5 514 Article 6 of 168, 514–15 Article 7 of 74 Article 9 515–16 Article 9(1) of 143 Article 10 516 Article 12 516

536  Research handbook on climate change mitigation law Article 13 516 Article 14 of 71 in Brazil 199–200 climate finance before/after 264–70 climate neutrality in EU 63–77 do no harm principle 72–5 European Parliament issues 76–7 international approaches 63–6 political support 66–72 proposed legal framework 72–5 emissions gap problem 24 greenhouse gas removal 512–16 implementation in Africa 241–5 barriers to NDC 244–5 initial nationally determined contributions 241–2 nationally determined contributions review 242–3 and INDC energy efficiency 192–3 gas flare reduction 192 renewable energy 193 international climate regime 22 on nationally determined contributions 30 preamble 512–13 Paris Rulebook 25, 32 persistent organic pollutants (POPs) 486 physical risks 334 Pollution, Property and Prices (Dales) 284 precautionary principle 7, 43–57 anticipatory model 44, 46 assimilative approach 44 business-as-usual approach 45, 46 environmental impact assessments 55 false negative vs. false positive 45–7 large-scale adverse effects 47–8 mitigation measures 54–6 overview of 43–5 resource exploitation 43 specificity of risk 48–50 strategic environmental assessments 55 uncertainties 46, 50–54 wait-and-see approach 45, 46 Prevention of Significant Deterioration (PSD) program 118, 121–2 price-based mechanisms 342–6 pricing controls 34 private capital 263 private finance 263–4 privatisation 39–42 production tax credit (PTC) 347–8 public finance 263 quantity-based incentives 346–7 quasi-subsidies 270–72

quota obligations 346 Recovery and Resilience Facility (RRF) 75, 90 Reduction of Emissions from Deforestation and Degradation of Forests (REDD+) 28, 147, 150, 445–6 reforestation 505 regenerative NETs 510–11 regional cooperation 59 Regional Greenhouse Gas Initiative (RGGI) 133, 273–4 regional transmission organizations (RTOs) 351 regulatory risks 334 renewable energy 339–55 Asia-Pacific climate change mitigation 173–5 China 220–21 growth drivers 339–42 Paris Agreement and INDC 193 policy instruments 342–9 corporate renewable power purchase agreements 348–9 feed-in premiums 343 feed-in tariffs 343–4 fiscal incentives 347–8 green certificate schemes 346 investment tax credit 347–8 price-based mechanisms 342–6 production tax credit 347–8 quantity-based incentives 346–7 quota obligations 346 in power system 349–55 battery energy storage 349–50 demand-response programmes 353–5 federal policies 351–2 state-level policies 352–3 wholesale market rules 350–51 renewable energy credits (RECs) 346–7 Renewable Energy Directive 90, 340 renewable portfolio standards (RPSs) 346–7 reputational risks 334 resource exploitation 43 results-based climate finance (RBCF) 248–9, 445 revenue streams 274–5 rice cultivation 178 rights-based claims 10 Rio Conference 459–60 rule-based approach 72 rural poverty 437–8 Russian climate change mitigation law 226–31 domestic policies 229–31 carbon emission reduction measures 229–30 fossil fuels 230–31 greenhouse gas (GHG) emissions 226

Index  537 intended nationally determined contributions 231 international negotiations 226–8 Kyoto Protocol 226–8 sustainable climate change trajectory 231 Rwanda 250–51 safeguarding food security 447–9 São Paulo, Brazil 415–18 buildings and energy 416 constitutional framework 404–7 COVID-19 pandemic 417–18 financing 412–14 greatest challenge 418 land use planning 416 mobility and air quality 417 national legislation equipping municipal action 407–12 nutrition 417 overview of 415–16 state legislation equipping municipal action 407–12 scientific uncertainty 50 seaweed/kelp farming 509–10 sequential legal anticommons 478 Ship Energy Efficiency Management Plan (SEEMP) 392–3 shipping transportation 11, 388–97 carbon intensity indicator 395–6 market-based mechanism 394 MARPOL 389–90, 396 measures and regulations 389 Silk Road Economic Belt 224 simultaneous legal anticommons 478 Single European Act 66 Skill India, government initiative 215 social choice theory 463–75 Arrow’s (Im)Possibility Theorem 471–3 carbon capture and storage 467 cautionary statements 463–8 dictatorship 473 forward-looking statement 466 incompleteness 473 inferior rule 473–4 logical nonsense 474 multi-actor social decision-making structures 468–70 social cost of carbon (SCC) 323 social sustainability 361 soft law instruments 28 soil carbon 450 soil carbon management 510–11 solar power 210 South African climate change mitigation law 231–9

assessment and climate risk disclosure 325 Cape Town climate mitigation see Cape Town, South Africa challenges 231–2 climate litigation 325 commitments 232 domestic law framework 233–7 governance framework 232–3 institutional framework 232–3 legal framework 239 policy framework 237–8 South American climate change mitigation law 8, 138–55 business as usual (BAU) scenario 141, 145 comparative approach 149–54 Brazil 149–54 Colombia 149–54 Mexico 149–54 compliance with NDCs 141–3 international law context 139–43 overview of 138–9 regional issues 143–8 economic challenges 145–6 institutional challenges 145–6 international cooperation 143–5 land-use sector 146–8 South Asia, hydropower projects 211–15 Special Climate Change Fund 267 specificity of risk 48–50 standards and recommended practices (SARPs) 375–6 Standing Committee on Climate Finance 25, 28 state-level policies 352–3 State of Qatar 9, 180, 193–4 Statistics Center of Iran 189 Stockholm Convention (2001) 486 strategic environmental assessments 55 subsidies 270–72 supply-side flexibility 349 Supremacy Clause 134 sustainability environmental 360, 362 equity 361 social 361 Sustainable Cities Index (2018) 173 sustainable climate change trajectory China 223 Russia 231 sustainable development 86–7 tailpipe emission standards 119–21 taxation incentives 347 Taxonomy Regulation 8, 86–90, 100 Technology Executive Committee 28 technology transfer 446–7

538  Research handbook on climate change mitigation law terrestrial transportation 11, 382–8 alternative modes of transport 386–8 challenges 382–4 green electricity 384–5, 387 greenhouse gases 388 motor car abandoning 384–6 top-down approach 24, 29 Trade and Cooperation Agreement 65 transnational climate governance 40–41 transportation sector climate change mitigation 11, 14, 363–97 aviation 11, 368–82 Annex 16 378–81 climate change impacts 369–73 emissions from 369 ICAO 374–8 international commercial aviation 381–2 international framework 373 shipping 11, 388–97 carbon intensity indicator 395–6 market-based mechanism 394 MARPOL 389–90, 396 measures and regulations 389 terrestrial 11, 382–8 alternative modes of transport 386–8 challenges 382–4 green electricity 384–5, 387 greenhouse gases 388 motor car abandoning 384–6 tropical forests 455 21st Century Maritime Silk Road 224 Ugandan Bill 252, 254–60 Ugandan Climate Change Bill 9 Uganda’s climate change laws 253–60 financing 259–60 governance 253–5 incentives 258 information and reporting 258–9 institutions 253–5 mitigation obligations 256–8 National Action Plans and Mitigation 255–6 private sector 256–7 public sector 257–8 UK Climate Change Act 35–6 unanimity 472 uncertainties 46, 50–54 UN climate regime 28–9 UN Convention on Climate Change 194 United Kingdom assessment and climate risk disclosure 325–6 climate litigation 325–6 United Nations Convention on the Law of the Sea (UNCLOS) 520

United Nations Convention on the Rights of the Child 319 United Nations Environment Programme (UNEP) 3, 265, 443 United Nations Framework Convention on Climate Change (UNFCCC) 3–4, 22–3, 27, 29, 285, 365, 514 in Brazil 199 European Community 79 greenhouse gas removal 516–17 international level 17 national inventory reports 157 Paris Agreement 139, 263, 286 precautionary measures 44, 46 United Nations’ General Assembly 3 United Nations Human Rights Committee 333 United States climate change mitigation law 8, 103–37 assessment and climate risk disclosure 322–3 climate litigation 322–3 commitments to international efforts 109–14 constitutional and federal legal frameworks 114–29 Clean Air Act 118, 125 deterioration program prevention 121–2 federal securities laws 125–9 national ambient air quality standards 124 National Environmental Policy Act 125–9 new source performance standards 122–4 section 111(d) 122–4 section 115 124 tailpipe emission standards 119–21 greenhouse gas removal 522–4 national emissions profiles 105–7 oil companies 327–8 overview of 103–4 policy contexts 107–9 subnational legal frameworks 131–6 United States’ Infrastructure Investment and Jobs Act 504 universality 472 urban climate governance 11 Urgenda climate case 313–14 US Energy Information Administration 320 US Environmental Protection Agency 37 US National Academy of Sciences 3 US Securities Exchange Commission 464 voluntary carbon offset standards 41 vulnerable groups 281 wait-and-see approach 45, 46

Index  539 Warsaw International Mechanism for Loss and Damage (2013) 24 Waste Framework Directive 489, 493–7, 499–500 waste incineration with energy recovery 493–8 Court of Justice Case Law 493–6 R1 formula 496–7 recovery operations 496–7 sectoral regimes 497–8 waste management 12, 482–501 carbon capture and storage 499–500 definition of waste 485 European Waste Law 499–500 incineration see waste incineration international waste law 485–6

in landfills 487–93 overview of 482–4 Waste Shipments Regulation 499 water vapor 371 Werksman, Jacob 110 Western Climate Initiative (WCI) 132 white certificate programmes 358 wholesale market rules 350–51 World Meteorological Organization (WMO) 3, 311, 437, 460 World Resources Institute Brazil’s greenhouse gas emissions 197 CAIT Climate Data Explorer 140 Zoning Law 416