EU and 2nd KP commitment period

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Date produced: 05/05/2011

Can EU Member States commit individually to a second commitment period of the Kyoto Protocol, or does the EU have to agree to a second commitment as a party group?

Summary: According to EU law, Member States are free to take autonomous measures as long as the EU does not exert its competence in a way which precludes further autonomous external actions by its Member States. While there are good reasons to believe that in this case the EU Member States are allowed to commit individually to a second commitment period (for instance, if the EU decides not to commit as a party group), one might also imagine scenarios in which only the EU as a party group has to agree to a second commitment.

In general, it must be recognized that the EU’s external relations with third countries from the perspective of environmental actions are particularly complex in terms of identifying the Treaty competence for Union action as well as how that competence is put into practice. Therefore, in order to answer Q 223, it is useful to compare pre-Lisbon and current EU treaty law and Kyoto and post-Kyoto treaty practice by the EC/EU and its Member States.

Before the entry-into-force of the EU’s Lisbon Treaty (on 1 December 2009), climate change was part of the environment chapter of the EC Treaty and was considered a shared competence between the EU Member States and the European Community. Ex-Art 174 EC Treaty explicitly gave the EU Member States the competence to negotiate themselves in international bodies. Ex-Art 174 para 4 EC Treaty referred to ex-Art 300 EC Treaty, which stated that – with regard to Community policies – it was the Commission that would be authorised by the Council to negotiate international agreements with third countries. However, the last sentence of ex-Art 174 para 4 stipulated that “[t]he previous subparagraph shall be without prejudice to member states’ competence to negotiate in international bodies and to conclude international agreements.”

The Kyoto Protocol, signed in 1997 within the context of the United Nations Framework Convention on Climate Change (UNFCCC) entered into force in February 2005. It was ratified by the European Communities (EC) through Council Decision 2002/358/EC (OJ L 130/2002, 1), which is based on then Articles 175 (1), 300 (2) subpara 1(1) and 300 (3) subpara 1 EC Treaty. It was also ratified by the Member States of the EC/EU.

In the Lisbon Treaty, the categorization of international environmental agreements as shared competences still holds true. The environment policy chapter is renumbered Articles 191 to 193 Treaty on the Functioning of the EU (TFEU). Moreover, environmental legislation adopted as harmonisation measures of the internal market (also considered a shared competence), such as the emissions trading scheme, now fall under Article 114 TFEU. Under the new regime, measures to combat climate change are now expressly mentioned as an objective of EU international relations (Article 192, fourth indent). Article 191 para 4 TFEU provides that “[w]ithin their respective spheres of competence, the Union and the Member States shall co-operate with third countries and competent international organisations. The arrangement for Union co-operation may be the subject of agreements and the third parties concerned”. Again, this paragraph “shall be without prejudice to Member States’ competence to negotiate in international bodies and to conclude international agreements” (cf ex Art 174 para 4). Moreover, the principle that Member States may always take more stringent measures than Union actions (now provided for in Article 193 TFEU), is applicable to international agreements adopted under TFEU’s environment chapter. Therefore, as an interim result, it seems reasonable to state that for international agreements concerning measures to combat climate change, the EU and its Member States enjoy shared competences.

Therefore, in general, Member States are free to take autonomous measures as long as the EU does not exert its competence in a way which precludes further autonomous external actions by its Member States. This “effect of exclusion” is laid down in Art 2 para 2 TFEU: “The Member States shall exercise their competence to the extent that the Union has not exercised its competence.” However, the exclusionary effect ends as soon as the EU decides not to take action in an area of shared competences: “The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence.”

In the case of signing for a second commitment period of the Kyoto Protocol, one has to ask under which legal basis of the TFEU this action would fall. Generally, it seems plausible to argue that it falls under the same provisions the EU referred to when ratifying the Kyoto Protocol, i.e. Article 192 TFEU (ex Article 175). Even if the EU decided to exercise its competence by signing up to a second commitment period, it might be argued that the Member States – just as it was the case under the original Kyoto Protocol – are also competent to sign to a second commitment period. Even more, this must be true in case the EU decides to cease exercising its competence. Therefore, it might be reasonably assumed that the EU Member States may commit individually to a second commitment period of the Kyoto Protocol if the EU decides not to commit as a party group.

However, it might also be argued that the intended external action relates to other areas of competences in which there is sufficient secondary legislation so that it might be assumed that the exclusionary effect precludes autonomous actions by the Member States. For instance, it might be argued that EU secondary law on emission certificates under the respective emission trading scheme implementing the Kyoto Protocol should be qualified as measures of freedoms of capital or even goods; in such a case, it is possible to conclude that EU Member States may not be able to exercise their competence by signing up to a second commitment period individually. While there is legal literature discussing such effects, there is – to our knowledge – no relevant ECJ judgment which would, as in other cases (e.g. ECJ Opinion 2/2000 on the Cartagena Protocol on Biosafety), settle the issue.