In the project “The nature, design and feasibility of robust climate agreements,” researchers from the Centre for International Climate and Environmental Research - Oslo (Cicero) and Statistics Norway (SSB) posed the following question: What are the conditions for succeeding in achieving an international climate agreement that will substantially reduce global emissions of greenhouse gases?
The backdrop for the question is the extremely slow progress in the UN negotiations on a climate agreement. The world is actually further away from achieving an effective international climate agreement today than it was 15 years ago, when the Kyoto Protocol was adopted. Little basis for optimism exists.
Three conditions must be met
Professor Jon Hovi headed the project at Cicero in Oslo. The project was funded by the Research Council of Norway and was concluded in 2013.
Professor Hovi identifies three prerequisites for a robust international climate agreement:
- It must encompass all key countries, i.e., all major emitters of greenhouse gases.
- It must require each member country to cut its emissions substantially.
- The member countries must comply with their commitments.
How to avoid free riding?
A reduction in greenhouse gas emissions benefit all countries. In contrast, each country must bear the full costs of reducing its own emissions. Thus, each country faces a strong temptation to act as a free rider; i.e., to enjoy the benefits of emission cuts made by others and ignore its own commitments.
“Cutting emissions is expensive, and powerful interests in every country are proffering arguments as to why that particular country should be exempted from international regulation of greenhouse gas emissions,” Jon Hovi explains. “This inclines the authorities of all countries to take decisions that make them free riders,” he states.
Five types of free riding
The researchers have outlined five types of free riding:
- Some countries never ratified the Kyoto Protocol (e.g. USA).
- Some countries ratified but later withdrew from the agreement (e.g. Canada).
- The developing countries ratified the Kyoto Protocol, but without assuming any substantial commitments.
- The countries of Eastern Europe ratified the Kyoto Protocol, but at no cost as the transition from a centrally planned economy to a market economy inherently entailed drastic cuts in emissions.
- It is also conceivable that some of the countries which agreed to take on relatively deep commitments under the Kyoto Protocol failed to completely fulfil these commitments. The final figures for compliance are not yet available.
“In order to succeed in crafting an effective international climate agreement, we must eliminate free riding. Each and every country must be certain that the other countries are also doing their part. It’s the only viable option,” says Professor Hovi.
An effective compliance enforcement system is a must
Professor Hovi insists that the nations of the world must face consequences if they fail to fulfil their commitments under a climate treaty.
“Free riding must be met with concrete sanctions. This was not the case when the US refused to take part in the Kyoto Protocol, for example. Canada’s withdrawal from the treaty also entailed no repercussions. The question is what type of enforcement could conceivably work and, if such a system exists, would it be politically possible to implement it,” Dr Hovi states.
A system based on deposits
Hovi and his associates recommend a system based on deposits
- At ratification, each country deposits a significant amount of money.
- The deposits are administered by an international secretariat. Each party continues to make yearly deposits during the preparation stage prior to the commitment period. The total amount deposited by each country should correspond to the abatement costs associated with its commitments.
- At the end of the commitment period, those countries that meet their emissions limitation targets receive a full refund of their deposit (plus interest), while those that fail to do so forfeit part or all of it.
But even with a robust system of this type in place, a number of practical problems would arise, admits Professor Hovi. And even if these problems could be solved or if compliance could somehow be enforced without such practical problems, there is little chance that such measures would be adopted.
Why? Because strict enforcement of a climate agreement is not politically feasible, according to the Norwegian researchers.
Compliance enforcement systems: USA for, China against
The UN climate negotiations are based on consensus, which makes the issue even more difficult.
Certain countries – such as the US – support international systems of enforcement that can safeguard compliance with an agreement. When the US commits to an international agreement it typically complies with its commitments. The existence of a potent compliance enforcement system could convince the US that other key countries will comply with the agreement as well.
“At the same time, other key countries have stated a clear opposition to potent enforcement measures – either as a matter of principle or because they know that they will risk punishment,” Professor Hovi explains.
“For example, China opposes mechanisms that entail international intervention in domestic affairs as a matter of principle. China is not even prepared to accept international monitoring of its own emissions. The UN principle of full consensus allows countries opposed to enforcement measures to prevail by using their veto right during negotiations,” Professor Hovi says in conclusion.