Interpretation of flexibility in transparency framework

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Date produced: 11/09/2017

1. Can you provide an assessment of what might be the different approaches for interpreting the term “flexibility” in the context of Article 13 of the Paris Agreement which expressly envisages that flexibility will be provided in the implementation of its provisions to those developing country Parties that need it (Arts.13.1, 2 and 12 and paragraph 89 of COP Decision 1/CP21) under the VCLT?

2. On the basis of this assessment can you make specific recommendations for operationalizing it in the modalities, procedures and guidelines for the transparency of action and support to be adopted by the CMA?

Summary:

The Vienna Convention on the Law of Treaties provides a number of relevant principles for the interpretation for the Paris Agreement.[1] Terms of a treaty, in this case the term “flexibility”, are to be interpreted according to the ordinary meaning of the terms in their context and in light of the object and purpose of the Paris Agreement.

The term “flexibility” has been defined as a “willingness to change or compromise”, “the ability to be easily modified” and “the quality of being able to change or be changed easily according to the situation”. When read within the specific context of Article 13, which establishes a single enhanced transparency framework for action and support with common modalities, procedures and guidelines, as well as the object and purpose of the Paris Agreement and history of the negotiations – the concept of flexibility could reasonably be interpreted to indicate the need for the common modalities, procedures and guidelines for the enhanced transparency framework to be modified or adapted according to the Parties’ capacities and need. Essentially, having common guidelines does not mean Parties would all need to report the same content or be reviewed in the same manner. There is scope for modifying the requirements while at the same time encouraging countries to report to a certain level of detail and completeness and ensure all countries have the opportunity for some degree of review to ensure capacities are built and reporting is improved over time.

In addition to the flexibility already reflected in Article 13 itself and associated decision text (e.g. whether reporting is mandatory or voluntary), to further operationalize this concept of flexibility through the modalities, procedures and guidelines for Article 13, the following approaches could be considered:

  • Entirely self-differentiated, but clear encouragement towards a particular approach or model;
  • The use of tiers, similar to the approach taken for GHG inventories;
  • The information required could be based on the type of NDC commitments (e.g. economy wide, sectors, policies and measures);
  • The vehicle for communication (e.g. for information on climate change impacts and adaptation);
  • Least developed countries (LDCs) and small island developing states (SIDS) having particular discretion in the scope, frequency and level of detail of reporting.

Flexibility could also be considered with regard to the type of review process undertaken. For example, this could include the consideration of undertaking the review of a group of countries instead of individual ones; and/or using desk, centralized, or in-country reviews, based on the size and emission potential of the country and its former performance.

Advice:

1. Interpretation of “flexibility” under the Vienna Convention on the Law of Treaties

Article 31 of the Vienna Convention on the Law of Treaties[2]  states that “A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose”[3] but that “A special meaning shall be given to a term if it is established that the parties so intended”.[4] The negotiations leading up to the adoption of the Paris Agreement may also be referred to in order to confirm the meaning resulting from the application of Article 31, or to determine the meaning when the interpretation according to Article 31 either leaves the meaning ambiguous or obscure or leads to a result which is manifestly absurd or unreasonable.[5]

Based on the above, the starting point is the ordinary meaning of the word “flexibility”, which has been defined as the “willingness to change or compromise”, “the ability to be easily modified”[6] and “the quality of being able to change or be changed easily according to the situation”.[7]  Article 13.1 establishes “an enhanced transparency framework for action and support” with “built in flexibility’, which, as the Article notes, “takes into account Parties’ different capacities”. Further context for the notion of flexibility is provided in Article 13.2, which states that the transparency framework will “provide flexibility” in the implementation of Article 13 to “those developing country Parties that need it in the light of their capacities”.  Also relevant is Article 13.13 which provides that there will be “common modalities, procedures and guidelines” to elaborate this transparency framework.

The purpose of the enhanced transparency framework is to provide a clear understanding of climate change action and provide clarity on support provided and received by relevant individual Parties, and to inform the global stocktake[8] of collective progress towards the long-term goals of the Agreement.[9] The enhanced transparency framework is also to “build mutual trust and confidence and promote effective implementation”.[10]  The more complete and consistent information is from the widest set of Parties, including more standard reporting tools and formats and making information reported more easily available and accessible, the more complete the collective assessment of implementation and progress towards the long-terms of the Paris Agreement will be.

To consider the concept of “flexibility” in light of the object and purpose of the Paris Agreement, requires reference to Article 2 of the Paris Agreement. The object and purpose of the Paris Agreement is to implement the ultimate objective of the United Nations Framework Convention on Climate Change (UNFCCC) and manage the global risks associated with climate change. It does so by combining into one the interrelated objectives of limiting climate change, of increasing the ability to adapt to climate change and of making global finance flows consistent with a low-emission and climate resilient development path.[11] Article 2.2 lays out the context for implementing the Paris Agreement, which is also relevant to any interpretation of its provisions (including Article 13 and the term “flexibility”). Its language was carefully chosen and reflects a long history of negotiation. It underlines the shift away from the bifurcated differentiation between developed and developing country Parties (under the UNFCCC and the Kyoto Protocol) towards a more nuanced self-differentiated model. The reference in Article 13.2 to flexibility being provided to “those developing country Parties that need it in the light of their capacities” is an example of this shift. As a result of this new approach under the Paris Agreement, there is no longer a strict “firewall” (in terms of obligations) between developed and developing countries.[12]

In terms of drawing on the negotiating history of this provision, as allowed for under Article 32 of the Vienna Convention, in the lead-up to Paris, and until the end of the conference, many developing Parties, in particular the Like Minded Developing Countries (LMDCs), argued for a bifurcated system that placed differing transparency requirements on developed and developing countries. By contrast, the Umbrella Group and the EU pushed for a single framework that would be applicable to all.[13] Hence that concept of “built in flexibility” was explicitly included in Article 13 to ensure that a common approach still reflected countries’ different starting points and capacities and did not cause undue burden.

In summary, the Paris Agreement establishes a regime that has a clear objective for all Parties to work towards and moves away from any strict bifurcation in application. To achieve this objective and purpose, Article 13 establishes an enhanced transparency framework for action and support that places legal obligations on all Parties and will be implemented and elaborated through a common set of modalities, guidelines and procedures. To reconcile this common approach to transparency with Article 2.2 and the need to implement the Paris Agreement in a manner that reflects equity and different national circumstances, the concept of “built in flexibility” would indicate an intention that the framework itself must be able to change or modify according to Parties’ circumstances. Those circumstances, according to Article 13.1 are Parties’ different capacities and the concept of “need” as brought in by Article 13.2.

2. Recommendations for operationalizing flexibility

Based on the above interpretation, Parties have a number of options for operationalizing flexibility for reporting under Article 13 of the Paris Agreement. Paragraph 89 of decision 1/CP.21 specifically identifies some of these options. It states that developing country Parties “shall be provided flexibility in the implementation of the provisions of that Article [Article 13], including in the scope, frequency and level of detail of reporting, and in the scope of review, and that the scope of review could provide for in-country reviews to be optional”.[Emphasis added]

For the purpose of operationalizing “flexibility”, it is helpful to distinguish between the two pillars of Article 13, reporting and review.

In terms of reporting, Parties have obligations under Articles 13.7, 8, 9, 10 and 11. Flexibility has already been operationalized to some extent through the legal nature of these obligations:

  • Under the framework for transparency of action, each Party shall regularly provide: a national greenhouse gas inventory, prepared using methodologies approved by the Intergovernmental Panel on Climate Change (IPCC) and agreed by the CMA; and information necessary to track progress made in implementing and achieving its NDC (Article 13.7).
  • Each Party should also provide information related to climate change impacts and adaptation, as appropriate (Article 13.8). Not only is it voluntary whether to report, but what is reported. “Climate change impacts and adaptation” is incredibly broad and enables Parties to potentially self-select what information they communicate.
  • Developed countries shall and others providing support should provide information on support provided on finance, technology and capacity building (Article 13.9). Developing countries, meanwhile, should provide information on support needed and received (Article 13.10). Reporting arrangements for support now include three sets of countries: “developed”, “developing” and “other countries” providing resources. The distinction is based on the role of Parties in either providing or receiving finance. This can allow countries to decide which reporting provisions best apply to them. Countries may choose to apply reporting provisions differently, in a way that matches their capacities – applying the most detailed guidelines in areas where they have sufficient capacity, and reporting in a less complete way in other areas.
  • All Parties, except LDCs and SIDS, will have to submit the information set out in Articles 13.7 to 13.9, as appropriate, no less frequently than on a biennial basis (para 90 of decision 1.CP/21). LDCs and SIDS may submit this information at their discretion (para 90 of decision 1.CP/21). Paragraph 90 already provides some degree of flexibility for Parties to choose how often to report. Noting that those Parties who are currently required to report on an annual basis must continue to do so (refer to para 92 of decision 1/CP.21). There could also be flexibility about when reports are due to the Secretariat (slightly different to frequency). Essentially how stringent the modalities, procedures and guidelines are about a set date for submission by all or some Parties.

Further options for operationalizing flexibility through the modalities, procedures and guidelines for reporting include (but are not limited to):

National inventory report (Article 13.7(a)):

  • Flexibility could be provided in terms of which gases countries are required to report on. Developed countries would be required to uphold the current level of reporting, which is to report all seven Kyoto Protocol GHG gases,[14] and developing countries would continue to report carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O) as a minimum but could also be required to report on the GHG gases covered by their NDC.
  • Parties could also be given flexibility on the timeframes or time periods that they report against. Currently, developed countries report their national greenhouse gas inventory annually. Many developing countries though still face challenges in terms of data availability and accordingly be given flexibility in terms of which year they report on. However, given the importance of a consistent time series of inventory data, Parties should strive to report a consistent time series from the base year of the NDC to a recent year. During a recent UNFCCC workshop on transparency, Parties called for the national GHG inventory report to, at a minimum, cover the calendar year no more than two years prior to the date of submission for developed country Parties and no more than four years prior to the date of submission for developing country Parties.[15]
  • Flexibility in terms of the IPCC methodology. All Parties could be encouraged to use the latest IPCC methodology, allowing for self-differentiation in terms of capacity.
  • The level of detail required might not be the same for all Parties. Specific groups of Parties (LDCs and SIDS) could have discretion as to whether to fill out certain rows and columns in common reporting tables or provide less detail. Alternatively, flexibility could be determined by virtue of the level of emissions or NDC type. For instance, the requirement for more stringent, frequent and detailed information for countries planning to make use of market mechanisms, in order to preserve environmental integrity.

Information necessary to track progress made in implementing and achieving NDCs (Article 13.7(b)):

  • Given the importance of this information to enable accurate assessments of collective progress for the global stocktake, all Parties should have to report some common information. Recognizing the discretion that LDCs and SIDS have under para 90 of decision 1/CP.21.
  • Additional and more specific information could then be based around the type of mitigation commitment Parties have made in their NDC (which is also a form of “built in flexibility”).

Information related to climate change impacts and adaptation (Article 13.8):

  • As identified above, there is already significant flexibility built into this reporting stream. Parties could be left to communicate any information that is relevant to their national circumstances, or could have categories of information that align with adaptation communications under Article 7 (thereby creating a single set of guidelines to reduce undue burden). Within any such guidelines, flexibility could be further operationalized by allowing more or less discretion for certain Parties.
  • Under Article 7, Parties will retain the flexibility to choose the vehicle (such as National Communications, National Adaptation Plans, or Nationally Determined Contributions) to report adaptation communications and therefore retain some flexibility as to when information to fulfill reporting under Article 13 will be submitted.

Information on financial, technology transfer and capacity building support provided and received (Articles 13.9 and 10).

  • For ex-ante reporting on finance provided and mobilized a legal capabilities-based approach could be a practical option to provide flexibility for countries with budget processes that restrict their ability to project finance forward over multiple years. Countries whose national budgets allow this can report quantified projections for the next two years or beyond, while countries with restrictions would only report the next year, but compensate by providing more comprehensive qualitative information, and must report on an annual basis instead.
  • In terms of reporting on support received, Parties could adopt a tiered system to ensure adequate flexibility. Parties with greater capacity could report more detailed information, and others progress to more detailed reporting over time. Parties should report on any support received from multilateral climate funds, other multilateral institutions, and all Parties that provide support. As part of the tiered approach, they could prioritize reporting on support received by developed country Parties and the operating entities of the financial mechanism of the Agreement, and include other sources over time. They could also voluntarily report on finance from domestic budgets for implementing the Paris Agreement and NDCs which would help in assessing progress towards the overall goals of the Agreement for the purposes of the global stocktake, including Article 2.1(c).

In terms of review, information submitted by each Party under Article 13.7 and 13.9 will undergo a technical expert review. [16] For those developing country Parties that need it in the light of their capacities, the review process shall include assistance in identifying capacity-building needs. In addition, each Party shall participate in a facilitative, multilateral consideration of progress with respect to efforts under Article 9. In terms of the technical expert review, flexibility could be operationalized through the ability to be reviewed as a group or individually and the type of review. This level of detail is not explicit in Article 13 and must be therefore operationalized through the modalities, procedures and guidelines. Options for review include desk review, centralized or in country review and could be guided by emission levels, past performance or specific groups of Parties (e.g. SIDS and LDCs).

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[1] Note that the Paris Agreement is a “treaty” for the purpose and application of the Vienna Convention on the Law of Treaties.

[2] Note that the Paris Agreement is a “treaty” for the purpose and application of the Vienna Convention on the Law of Treaties.

[3] Vienna Convention on the Law of Treaties, Article 31.1

[4] Vienna Convention on the Law of Treaties, Article 31.4

[5] Vienna Convention on the Law of Treaties, Article 32.

[6] https://en.oxforddictionaries.com/definition/flexibility

[7] http://dictionary.cambridge.org/dictionary/english/flexibility

[8] Paris Agreement, Article 14

[9] Paris Agreement, Articles 13.5 and 6.

[10] Paris Agreement, Article 13.1

[11] Paris Agreement, Article 2.1

[12] Sharma et al, European Capacity Building Initiative, “Pocket Guide to the Paris Agreement” (2016), accessible at http://www.eurocapacity.org/downloads/PocketGuide-Digital.pdf

[13] Rajamani, L. (2016). Ambition and Differentiation in the 2015 Paris Agreement: Interpretative Possibilities and Underlying Politics. International and Comparative Law Quarterly, 65(2), 493-514. Doi:10.1017/S0020589316000130

[14] Carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), perfluorocarbons (PFCs), hydrofluorocarbons (HFCs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3).

[15] FCCC/APA/2017/INF.2

[16] Paris Agreement, Article 13.11 and 12.