Fate of Kyoto Protocol post Paris

Legal assistance paper

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Date produced: 20/09/2017

Can you provide an analysis under public international law, in particular the Vienna Convention on the Law of Treaties, of the relationship between the Kyoto Protocol and Paris Agreement? For example, does one prevail over the other in the case of conflicting norms? With the expiration of the first Kyoto Protocol commitment period and the non-entry into force of the Doha amendment to date, what are the implications for the Kyoto targets and mechanisms? Which commitments, if any, apply to parties to the Kyoto Protocol and the Paris Agreement? Which legal implications and consequences, if any, does this have for the mechanisms and institutions established under the Kyoto Protocol?

Advice

1. Relationship between the Kyoto Protocol and Paris Agreement

The Kyoto Protocol (KP) and the Paris Agreement (PA) are two legally autonomous regimes, both adopted “under” the UN Framework Convention on Climate Change (UNFCCC) by the Conference of the Parties, pursuant to Article 17 UNFCCC. Both instruments supplement the Framework Convention.

The KP was seen as an important first step towards a global emission reduction regime that would stabilize GHG emissions. It imposed legally binding mitigation targets on developed countries and created mechanisms to help them reduce the costs of complying with their targets. Subsequently, countries recognised that the ‘top down’, ‘time-bound commitment periods’ approach of Kyoto had its limitations, and adopted a more ‘bottom-up’ approach in the Paris Agreement, with voluntary targets for all countries, becoming progressively more ambitious over time, backed by a reporting and review framework.

On the relationship between both treaties Article 59 of the Vienna Convention on the Law of Treaties (VCLT) provides that:

“1. A treaty shall be considered as terminated if all the parties to it conclude a later treaty relating to the same subject-matter and:

(a) It appears from the later treaty or is otherwise established that the parties intended that the matter should be governed by that treaty; or (b) the provisions of the later treaty are so far incompatible with those of the earlier one that the two treaties are not capable of being applied at the same time.

  1. The earlier treaty shall be considered as only suspended in operation if it appears from the later treaty or is otherwise established that such was the intention of the parties.”

The PA’s mitigation provisions were designed to take over from the KP’s second commitment period, which is to last up until the end of 2020. However, there is no provision in the PA (or COP decision adopting it) indicating that it was meant to supersede the KP. In addition, not all parties to the Kyoto Protocol have signed the Paris Agreement (e.g. Nicaragua) and the provisions of both agreements do not conflict with each other to an extent that would make it impossible to apply both instruments at the same time.

The Kyoto Protocol will, therefore, continue to exist until such time as parties decide that it is formally terminated.  Similarly, the mechanisms existing thereunder will continue to legally exist.

In theory, however, the possibility of conflicting individual norms between the two instruments does arise. This could, for example, happen if the same institution had two different mandates under the two agreements. Care will have to be taken by the relevant governing bodies (CMP and CMA) to avoid such a situation.

In addition, conflicts between rules of international law should be resolved in accordance with the principle of harmonisation.[1] When several norms bear on a single issue they should, to the extent possible, be interpreted so as to give rise to a single set of compatible obligations. In the case of conflict between a superior norm and another norm, the latter should be interpreted in a manner consistent with the former.

A case in point is that of the Adaptation Fund, which was established to finance adaptation projects in developing countries that are Parties to the KP. In Paris, the Conference of the Parties envisaged that the Fund might be integrated in the financial governance structure of the PA[2]. This was further recognised in Marrakesh with the CMA stating that the Adaptation Fund should serve the Agreement.[3] How, procedurally and mechanically, will this integration take place is not yet clear and careful consideration will need to be given to ensure a smooth transition.[4]

Should a conflict nonetheless arise and in the absence of any specific provision in the PA on how conflicts will be dealt with, the rules of international law would apply. Both instruments are treaties under international law and specifically within the meaning of the VCLT.

Article 30 of the VCLT (Application of successive treaties relating to the same subject matter) provides as follows:

“(2) When a treaty specifies that it is subject to, or that it is not to be considered as incompatible with, an earlier or later treaty, the provisions of that other treaty prevail.

(3) When all the parties to the earlier treaty are parties also to the later treaty but the earlier treaty is not terminated or suspended in operation under article 59, the earlier treaty applies only to the extent that its provisions are compatible with those of the later treaty.

(4) When the parties to the later treaty do not include all the parties to the earlier one: (a) As between States parties to both treaties the same rule applies as in paragraph 3; (b) As between a State party to both treaties and a State party to only one of the treaties, the treaty to which both States are parties governs their mutual rights and obligations.”

In relation to paragraph (2), neither the PA nor the COP decision adopting it specifies any relationship of superiority or subordination (or any other kind of relationship) between the KP and the PA. If a complete ‘incompatibility’ between the two instruments were somehow to arise that could not be resolved through a harmonising interpretation, between parties to both treaties the later rule would prevail over the earlier one.

2. Pending entry into force of the Doha amendments

Parties to the KP adopted amendments to the KP by decision 1/CMP.8 in Doha, in December 2012. The Doha Amendment (DA) establishes the second commitment period of the KP, which began on 1 January 2013 and will end on 31 December 2020.

As at August 2017, only 79 states had deposited their DA instruments of acceptance, of which only 4 were deposited in 2017, compared with 16 in 2016 and 36 in 2015. At this rate, the DA will not enter into force during the course of the second commitment period. Therefore, the DA may never become binding under international law. From a legal point of view, the KP’s second commitment period will be a ‘commitment period’ in name only – not one defined by actual state commitments.[5] States’ actions pursuant to the DA are, and will remain, voluntary (unless they are separately required to be performed by the general terms of the Protocol or by the CMP’s decision adopting the DA).

The end-date of the emission-reduction targets in the KP’s Annex B is 31 December 2012. The DA is the only existing provision or instrument purporting to create new Protocol targets past that date. Its non-entry into force means that states parties to the KP no longer have binding emission-reduction targets pursuant to the Protocol.

The KP decision to which the DA is annexed notes that “Parties may provisionally apply the [Doha] amendment pending its entry into force in accordance with Articles 20 and 21 of the Kyoto Protocol”.[6] ‘Provisional application’ is a concept only briefly and vaguely set out in the VCLT (Art. 25). Its meaning is far from settled or uncontroversial:[7]

It can be read as meaning that the state may commit itself to passing domestic law binding it to implement the commitments in question (in this case, those in the DA). Under this reading, a state’s commitment to provisional application, even if it is followed through with the passage of relevant domestic law, does not create legal obligations in international law. Even if a less conservative reading were preferred, provisional application of the DA would be defeated by the VCLT’s provisions on delay (Art. 18): a state that has expressed its intent to be bound by a treaty will not be bound by that treaty if its entry into force is unduly delayed — an outcome virtually guaranteed for the DA.

The continuation of the KP’s three market mechanisms was defined by the CMP’s decision adopting the DA. The effect of that decision as a whole was not conditional upon the DA’s going into effect, however certain provisions of the decision only become effective upon the DA’s entry into force.

The current status of the Protocol’s three mechanisms may be summarized using the decision’s own words:

  • For non-Annex I Parties in relation to the Clean Development Mechanism (CDM): for the second commitment period, starting from 1 January 2013, Parties not included in Annex I continue to be able to participate in ongoing project activities under Article 12 of the Kyoto Protocol and in any project activities to be registered after 31 December 2012.[8]
  • For Annex I Parties in relation to the CDM: for the purposes of the second commitment period, from 1 January 2013 onwards, a Party included in Annex I may continue to participate in ongoing project activities under Article 12 and in any project activities to be registered after 31 December 2012, but only a Party with a quantified emission limitation and reduction commitment inscribed in the third column of Annex B as contained in annex I to this decision shall be eligible to transfer and acquire certified emission reductions [CERs].[9] Decides that [only a Party with a commitment inscribed in the DA] shall be eligible to use CERs to contribute to compliance with part of its commitment under Article 3 of the Kyoto Protocol for the second commitment period.[10]
  • For Joint Implementation and Emission Trading (Annex I Parties only): As of 1 January 2013, [only a Party with a commitment inscribed in the DA]… shall be eligible to transfer and acquire CERs, AAUs, ERUs and RMUs valid for the second commitment period under Article 17 of the Kyoto Protocol.[11]

To summarize the situation, Annex I Parties with an emission-reduction commitment inscribed in the DA may continue to trade in some of the ‘currency’ of the Kyoto Protocol’s CDM and Joint Implementation (JI) mechanisms, as well as RMUs, during the second commitment period.[12] The decision merely says ‘inscribed’ in the DA. It does not say that the DA must be in force.

However, in practice, such trade may be to some extent pointless, because Annex I Parties will have no actual compliance obligations to use the traded currency against. As for AAUs, these would be issued to each country upon the DA’s going into force (which may not happen).

What will happen to the CDM and JI after 2020 is currently unclear. As they are mechanisms created by the KP and premised on the existence of commitment periods assigning quantified emission limitation and reduction obligations (QELROS) to developed countries, it seems difficult to see them continue to exist after 2020 since there will be no third commitment period under the Kyoto Protocol. However, the potential for them existing alongside the new market mechanism under the Paris Agreement does exist.

3. Paris Agreement’s effect on KP mechanisms and institutions

The PA, at Article 6(1)-(3) and at Article 6(4)-(7), calls for the creation of market-based approaches that in conception appear to be broadly similar to Emission Trading and Joint Implementation, on the one hand, and to the CDM, on the other. These approaches, however, have yet to be designed. It is, therefore, difficult to tell at the present time what they will look like and whether they possibly turn out to be ‘incompatible’, in the sense of VCLT Article 30(3), with the KP’s mechanisms (and institutions) assuming the latter continue to exist after 2020.

Whilst there are clearly similarities between Articles 6, 12 and 17 KP and Article 6 PA, such as voluntary participation and the requirement that the mechanisms ensure environmental integrity and promote sustainable development, there are also differences. The KP created three mechanisms whereas Article 6(4) creates just one mechanism.

Whilst the Art.6(4) mechanism appears to be equivalent to the CDM in conception, it is already clear that there will be differences between the two: the new Art.6(4) mechanism has as one of its key aims to deliver an overall mitigation in global emissions. How this will be implemented in practice is not yet determined, but it appears to mark a departure from the approach under the CDM in establishing a mechanism that will ensure absolute emission reductions.

Another difference lies in the fact that Article 6 PA makes no reference to the principle of supplementarity which, under Kyoto, prevents Annex I countries from achieving more than half of their QELROS with carbon units generated in host countries. More generally, the Article 6(4) ‘rulebook’ may turn out to be different to the CDM rulebook. For example, it is not yet clear if the former will be a broad framework mechanism allowing for a variety of possible mitigation approaches (project-based, sector-based, policy based etc) or if it will be more restricted. So the question of incompatibility may possibly arise in the future.

As we have seen, the scenario of having two mechanisms (CDM and Art.6(4)) operating in parallel is not beyond the realm of possibilities. It would be desirable to avoid this. So Parties will have to think about possible options for migrating the CDM to the Paris Agreement, both in terms of “what” (i.e. CDM activities, credits, institutions and rulebook) and “how”, i.e. procedural options for transitioning CDM activities, institutions and rules to the PA.

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[1] International Law Commission, Fragmentation of International Law: Difficulties Arising from the Diversification and Expansion of International Law, Report of the Study Group of the International Law Commission, A/CN.4/L.702 (July 18, 2006), 8.

[2] Decision 1/CP.2, para.59 states that the Adaptation Fund may serve the Agreement, subject to relevant decisions by the CMP and the CMA

[3] 1/CMA.1, para 11.

[4] On what steps will need to be taken to “move” the AF, see also Legal Response Initiative, Legal Advice, 07/10/16: Meaning of “Serve” and Adaptation Fund

[5] The ‘second commitment period’ exists as a name only because it was created by a Kyoto Protocol decision, to which the text of the DA was attached (Decision 1/CMP.8, FCCC/KP/CMP/2012/13/Add.1, para. 4). The DA text was supposed to add substance to the label, but it has remained a mere label.

[6] Decision 1/CMP.8, para. 5.

[7] See M. A. Rogoff and Barbara E. Gauditz, ‘The Provisional Application of International Agreements’, 39 Maine Law Review 29-81 (1987). See also Legal Response Initiative, 4 October 2010: Provisional Application: An Overview.

[8] Decision 1/CMP.8, para. 12.

[9] Decision 1/CMP.8, para. 13.

[10] Decision 1/CMP.8, para. 14.

[11] Decision 1/CMP.8, para. 15.

[12] See also Legal Response Initiative, Legal Advice, 03/09/2012: Can Kyoto Annex B Parties that do not take on QELRCs continue to participate in the mechanisms established under the Kyoto Protocol?