Mandate of the Green Climate Fund

Legal assistance paper

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Date produced: 13/03/2020

Can the Green Climate Fund support activities or projects that are outside the UNFCCC mandate? E.g. If the activity clearly falls within the mandate of the International Maritime (emissions from shipping) or Civil Aviation Organizations (ICAO) ?

Summary:

1.             This advice provides an overview of how powers are delegated to international legal entities (I); sets out the constitutional framework of the Green Climate Fund (II); and considers whether the Fund can support activities or projects falling outside the UNFCCC mandate, focusing on shipping or aviation emissions (III).

2.             In summary, the advice concludes that there is a good argument that the GCF has the international mandate to consider projects for the reduction of emissions from international maritime and aviation activities. Ultimately, in determining whether an international organisation has the mandate to take a certain action, it is necessary to consider the constitutional framework of the organisation, which should be interpreted so it can fully realise its purposes.[1] Subject to further examination of the specific funding mechanisms within the GCF, it appears that there is no express restriction on funding being provided for projects to reduce international aviation or maritime emissions.  Ultimately, the Global Climate Fund (GCF) and the United Nations Framework Convention on Climate Change (UNFCCC) share the aim of reducing overall greenhouse gas emissions. Finally, while the Kyoto Protocol suggests that governance of international aviation and maritime emissions reductions is the mandate of the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO) respectively, it does not provide that this is an exclusive mandate and nor does it mandate those organizations to finance projects to reduce these emissions. Therefore it should not be read as limiting the mandate of the GCF to fund such projects.

Advice:

I.               General international law on the mandate of international organisations

3.             The delegation of powers to international legal entities is governed by their constitutive instruments. It is not necessary for those powers to be expressly stated – they may also be implied, but only if the implied powers fall broadly within the purposes of the organisation. In the Reparations for injuries suffered in the service of the United Nations advisory opinion, the International Court of Justice (ICJ) stated that “the Organization must be deemed to have those powers which, though not expressly provided in the Charter, are conferred upon it by necessary implication, as being essential to the performance of its duties.”[2]  This was repeated in the Court’s Legality of the use by a State of nuclear weapons in armed conflict advisory opinion, where the Court said:[3]

The powers conferred on international organizations are normally the subject of an express statement in their constituent instruments. Nevertheless, the necessities of international life may point to the need for organizations, in order to achieve their objectives, to possess subsidiary powers which are not expressly provided for in the basic instruments which govern their activities. It is generally accepted that international organizations can exercise such powers, known as “implied” powers.

4.             Such powers may only be implied when this is consistent with the purposes assigned to the organisation by its member States. In the Legality of the use by a State of nuclear weapons  opinion, the Court determined that it was not within the competence of the World Health Organisation (WHO) as a specialized organization to address the legality of the use of nuclear weapons,[4] since “questions concerning the use of force, the regulation of armaments and disarmaments are within the competence of the United Nations and lie outside that of the specialized agencies.”[5]  The Court emphasised that an international organization may not act beyond the terms of its Constitution.[6]  Furthermore, the Court reasoned that, as a specialized agency, the mandate of the WHO also had to be interpreted in light of the UN Charter and the broader UN system:

The Court need hardly point out that international organizations are subjects of international law which do not, unlike States, possess a general competence. International organizations are governed by the ‘principle of speciality’, that is to say, they are invested by the States which create them with powers, the limits of which are a function of the common interests whose promotion those States entrust to them.[7]

5.             Caution is thus required in interpreting the mandate of an international organisation in an overly broad manner where this would trespass on the mandate of other specialized agencies within the UN family.  Notably, the IHO and ICAO are both specialized agencies, while the UNFCCC is a part of the UN family.

6.             Nevertheless, the concept of the “principle of speciality” has been criticised by a number of commentators as unduly restricting the competence and powers of an international organisation. For instance, Dapo Akande argues that “[w]hat the Court has usually looked for is evidence that the power to be implied would enable the Organization to function to its full capacity as expressed in its objects and purposes”.[8]  He points to the prior Advisory Opinion of the Permanent Court of International Justice in the Jurisdiction of the European Commission of the Danube, where the Court held that an international organization “only has the functions bestowed upon it by the Definitive Statute with a view to the fulfilment of [its] purpose, but it has power to exercise those functions to their full extent, in so far as the Statute does not impose restrictions on it.”[9]

7.             Ultimately, the question of whether a matter falls within the constitution of an international organization is highly fact specific.  The touchstone will be whether the proposed activity or function falls within the purposes of the organization.

8.             Finally, in addition to considering the constitute framework of an international organisation, another relevant factor in determining the scope of an organization’s competence is to assess how it has considered and interpreted the scope of its mandate itself.[10]  For example, in the case of the UNFCCC, it is relevant to consider whether there have been resolutions passed by the Conference of the Parties (COP) relating to the scope of the Green Climate Fund, or setting its purpose or directions.

II.             Constitutional framework of the Green Climate Fund

9.             The GCF is an operating entity set up under the financial mechanism in Article 11 of the UNFCCC.[11]  It is governed by the Governing Instrument for the GCF (Governing Instrument), which was agreed at COP17 in 2011.

10.          The purpose of the Fund is to “make a significant and ambitious contribution to the global efforts towards attaining the goals set by the international community to combat climate change.”[12] Pursuant to its Objectives and Guiding Principles, the Fund is established to “contribute to the achievement of the ultimate objective of the [UNFCCC]”[13] and will be “guided by the principles and provisions of the Convention.”[14] Notably, however, it is not bound by these principles and provisions.

11.          The ultimate objective of the UNFCCC is “to achieve, in accordance with the relevant provisions of the Convention, stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.”[15]  This must also be read in light of the objectives set out in the Paris Agreement, which enhances the implementation of the Convention, including its objective to “mak[e] finance flows consistent with a pathway towards low greenhouse gas emission and climate-resilient development.”[16]

12.          Pursuant to Article 11(1) of the UNFCCC, the GCF functions “under the guidance of and [is] accountable to the Conference of the Parties, which shall decide on its policies, programme priorities and eligibility criteria related to this Convention.” Article 11(3) requires that the GCF put in place arrangements to ensure that “the funded projects to address climate change are in conformity with the policies, programme priorities and eligibility criteria established by the Conference of the Parties.” The COP has requested the Standing Committee on Finance to prepare draft guidance for the Board for consideration by the COP,[17] which is currently under preparation.[18]  To date, to the best of my knowledge, no guidance has been issued by the COP that would restrict the GCF’s mandate by explicitly excluding projects targeting the emissions of international civil aviation and shipping emissions.

III.            Mandate of the GCF to fund reductions of international civil aviation and shipping emissions

13.          The UNFCCC does not expressly exclude emissions from civil aviation or shipping from the scope of the Convention. After all, the objective in Article 2 is for the “stabilization of greenhouse gas concentrations in the atmosphere”. Thus it may be argued that the purpose of the UNFCCC is to reduce emissions irrespective of their source or geographical location.

14.          At the same time, the UNFCCC does not include any specific obligation to reduce emissions from international aviation and shipping.[19] Notably, the obligation to compile a “national inventory of anthropogenic emissions” excludes emissions from international aviation and shipping.[20] Unlike emissions from stationary sources in the territory of a State, GHG emissions from international aviation or shipping are not confined to the geography of a specific State,[21] making them difficult to attribute to a State part of its “national” emissions.

15.          The Kyoto Protocol then appeared to carve-out international emissions from aviation and shipping from its scope, clarifying that the “limitation or reduction” of international emissions from aviation and shipping are to be “work[ed] through” within ICAO and the IMO. Article 2(2) provides:

“the Parties included in Annex I [ie developed countries] 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.”

16.          Pursuant to the Kyoto Protocol, both ICAO and the IMO have taken steps to mitigate GHGs arising from international emissions.[22]  These measures involve all State parties, not only those listed in Annex I of the UNFCCC as stated in the Kyoto Protocol, although the applicability of the principle of “common but differentiated responsibilities” remains a live issue.[23]

17.          There is no mention of aviation or maritime emissions within the Paris Agreement.[24]  Some commentators have argued that this merely confirms the primacy of ICAO and the IMO in addressing international aviation and shipping emissions respectively.[25]

18.          Notwithstanding the apparent carve-out in the Kyoto Protocol, and the silence of the Paris Agreement, it is arguable the GCF has the mandate to fund a project to address aviation and/or shipping emissions for the reasons outlined below.

19.          First, such an interpretation would be in line with the purpose of the Fund[26] and the purpose of the UNFCCC. Pursuant to its Objectives and Guiding Principles, the Fund is established to “contribute to the achievement of the ultimate objective of the [UNFCCC]”[27] and will be “guided by the principles and provisions of the Convention.”[28]  The overall purpose of the UNFCCC is to reduce overall GHG in the atmosphere, which necessarily includes international aviation and shipping emissions. It would be consistent with this overall purpose for the GCF to fund a project to reduce such emissions.

20.          Second, it is necessary to distinguish between the mechanisms for the “limitation or reduction” of maritime and aviation emissions on the one hand (such as CORSIA within ICAO), and the financing of projects to reduce emissions on the other.  While the Kyoto Protocol may be read as mandating the IMO and ICAO to regulate international maritime and aviation emissions respectively, it is silent in respect of financing. Arguably, therefore, the funding of projects by the GCF is not excluded by the Kyoto Protocol.

21.          Third, aspects of aviation and shipping emissions remain within the remit of the UNFCCC and therefore within the mandate of the GCF. Although the Kyoto Protocol refers generally to “emissions […] from aviation and marine bunker fuels”, it is generally understood that this must be read as a reference to international emissions, since domestic emissions remain the responsibility of the specific State.[29]  Furthermore, ICAO does not have a mandate to deal with emissions from State aircraft, including Government or military aircraft.[30] Thus, a proposal for the GCF to finance research or development into reducing such emissions could be justified by reference to domestic emissions (and emissions from State aircraft) which arguably remain within the scope of the UNFCCC.

22.          Fourth, it is not clear that the Kyoto Protocol was intended to grant an exclusive mandate to the IMO and ICAO, such that no other action on these issues is possible by any other organisation, including within the UNFCCC. The language of the Kyoto Protocol is not exclusionary, it reads merely “shall pursue”, not “shall pursue only”.  This issue has played out in the context of the EU’s proposal to include international aviation within its Emissions Trading Scheme.  Thus, for instance, Petersen has argued that the Kyoto Protocol “does not lend particular weight to the view that the mandate for the ICAO is exclusive … [t]he formulation ‘working through’ merely implies that the parties included in Annex I of the UNFCCC intend to cooperate with the ICAO.”[31]  If the provision in the Kyoto Protocol were intended to be exclusive, then it would have been clearer in the language used, as is the case in other treaties, which clearly carve-out the right of State parties to take other measures in parallel.[32] This has not prevented some States arguing that the Kyoto Protocol grants ICAO and the IMO an exclusive mandate.[33] As Valdes has noted, however, such an interpretation “runs counter to the UNFCCC’s objective.”[34]  It is difficult to account for the role of the non-Annex I States or non-Parties to the Kyoto Protocol if Article 2(2) is read as being an exclusive mandate.

23.          In conclusion, applying a purposive interpretation of the GCF,[35] there is a good argument that the GCF has the mandate to consider projects for the reduction of such emissions, such as funding the development of biofuel as a replacement for bunker oil.  While the Kyoto Protocol suggests that governance of aviation and maritime emissions reductions is the mandate of ICAO and the IMO respectively, it does not provide that this is an exclusive mandate and nor does it deal with financing of projects to reduce such emissions. This is the gap that the GCF could fill.   Were it possible to obtain a decision or resolution of the COP determining that the GCF has a specific mandate to fund projects for the mitigation of emissions from international maritime and aviation activities, this would significantly strengthen the argument as it would constitute relevant subsequent practice.[36]

IV.           Other resources

24.          It should be noted that there are a number of other resources, to which the author did not have access, which may be of assistance in exploring this issue further.  These include:

(i)              Beatriz Martinez Romera, ‘Regime Interaction and climate change: the case of international aviation and maritime transport’ (2018)

(ii)            Kati Kulovesi and Joanna Dafoe, ‘ICAO and IMO: International Sectoral Approaches to Greenhouse Gas Reductions in Transport’ (2016) 1 Elgar encyclopedia of environmental law 274.

(iii)           Jeffrey J. Smith and Ahmad M. Tanveer, ‘Globalization’s Vehicle: The Evolution and Future of Emission Regulation in the ICAO and IMO in Comparative Assessment’ (2018) 1 Climate Law 70.

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[1]           See: Jurisdiction of the European Commission of the Danube, Advisory Opinion, PCIJ Ser. B, No. 14, 64 (European Commission of the Danube).
[2]           Reparations for injuries suffered in the Service of the United Nations, Advisory Opinion, I.C.J. Reports 1949, pp 182-183 (Reparations Opinion).
[3]           Nuclear Weapons, p 70, para. 25.
[4]           Ibid.
[5]           Ibid, p 80, para. 26.
[6]           Ibid, p 81, para. 27.
[7] [8]           Dapo Akande, ‘The Competence of International Organizations and the Advisory Jurisdiction of the ICJ’, (1998) 9 EJIL 437, 445.
[9]           Ibid; European Commission of the Danube, p 64.
[10]          Nuclear Weapons, p 81, para 27.
[11]          Governing Instrument for the Green Climate Fund, Document C/CP17, annexed to FCCC/CP/2011/9/Add.1, 11 December 2011, para 4 (Governing Instrument).
[12]          Ibid, para I(1).
[13]          Ibid, para 2.
[14]          Ibid, para 3.
[15]          United Nations Framework Convention on Climate Change (UNFCCC), Art 2;
[16]          Paris Agreement, Article 2(1)(c).
[17]          COP23, Decision X/CP24, Report of the GCF to the COP and guidance to the GCF, para 10.
[18]          See: UNFCCC website, Standing Committee on Finance (SCF) (“Parties have mandated the Standing Committee on Finance to provide to the COP draft guidance for the operating entities of the Financial Mechanism of the Convention, with a view to improving the consistency and practicality of such guidance, taking into account the annual reports of the operating entities as well as submissions from Parties. More information to be provided shortly.”).
[19]          Jeffrey J. Smith, ‘Inspirations from Sustainable Maritime Development’, in Armand L.C. de Mestral et al, Sustainable Development, International Aviation, and Treaty Implementation, (2018, CUP) (“The 1992 UN Framework Convention on Climate Change contained no provision for the control of GHGs from shipping or the maritime industry.”).
[20]          UNFCCC, Article 12(1)(a).
[21]          Alejandro Piera Valdes, ‘Greenhouse Gas Emissions from International Aviation: Legal and Policy Challenges’ (2015, Eleven), Chapter 2; see also Chris Lyle, ‘Rio, Kyoto, Brussels and Chicago: Reconciling principles related to international air transport emissions’ (2012) Green Air Online http://www.greenaironline.com/photos/Rio_Kyoto_Brussels_and_Chicago_Chris_Lyle_July_2012.pdf  (“International aviation, along with shipping, was isolated out from other sectors in Kyoto essentially because its operational nature would not readily fit in with national GHG inventories and commitments.”).
[22]          See for example, ICAO Assembly Resolution A36-22, Appendix J and K, whereby ICAO shall “demonstrate leadership in mitigating the negative effects of greenhouse gas emissions by aviation”; International Maritime Organization (IMO) Assembly adopted resolution A.963(23) on IMO Policies and Practices Related to the Reduction of Greenhouse Gas Emissions from Ships.
[23]          Alejandro Piera Valdes, ‘Greenhouse Gas Emissions from International Aviation: Legal and Policy Challenges’ (2015, Eleven), Part 2.1.3.
[24]          See Ralph Bodle at al, ‘The Paris Agreement: Analysis, Assessment and Outlook’ (2016) 1 CCLR 5, 14-15 (noting that “Text requesting parties to work through the International Maritime Organization (IMO) and International Civil Aviation Organization (ICAO) on measures to reduce these emissions, mainly supported by the EU, EIG and LDCs, disappeared in the final stages of the negotiations – inter alia due to resistance by India and China.”).
[25]          Harro van Asselt and Stefan Bossner, ‘The Shape of Things to Come: Global Climate Governance after Paris’ (2016) 1 CCLR 46, 49-50.
[26]          Governing Instrument, para I(1).
[27]          Ibid, para 2.
[28]          Ibid, para 3.
[29]          See Paul Stephen Dempsey, ‘Public International Air Law (Montréal, Institute and Center for Research in Air and Space Law, 2008), p 450; see also ICAO, A33-7, ‘Consolidated Statement of Continuing ICAO Policies and Practices related to Environmental Protection’ (noting that “domestic aviation emissions are included in national targets”, at Appendix H, preambular clauses).
[30]          Convention on International Civil Aviation (1948) 15 UNTS 295 (entry into force 4 April 1947), Article 3(a) (“This Convention shall be applicable only to civil aircraft, and shall not be applicable to state aircraft”).
[31]          Malte Petersen, ‘The Legality of the EU’s Stand-Alone Approach to the Climate Impact of Aviation: The Express Role Given to the ICAO by the Kyoto Protocol’ 17(2) RECIEL 196, 202.
[32]          See, e.g. the Vienna Convention on the Protection of the Ozone Layer (1987) 1513 UNTS 323, (entry into force 22 March 1985), Art 2(3).
[33]          Alejandro Piera Valdes, ‘Greenhouse Gas Emissions from International Aviation: Legal and Policy Challenges’ (2015, Eleven), Part 6.1 (“States opposing the EU ETS are of the view that Europe’s unilateral approach infringes the implicit mandate that the Kyoto Protocol bestowed upon ICAO. For these States, the mandate implies a sense of exclusivity in favor of ICAO.”); see also, Heather L. Miller, ‘Civil Aircraft Emissions and International Treaty Law’ (1997) 63 J Air L Com 697, 722.
[34]          Valdes, supra n 36, Part 6.1.1; citing also the Opinion of Advocate General Kokott in the ATA Decision, at I-51, noting that the scope of the mandate given to ICAO should not be construed in such a way as to defy the very purpose underlying the constituting instrument; a position upheld by the Court, see Air Transport Association of America et al v. Secretary of State for Energy and Climate Change Judgment, Case C-366/10, 21 December 2011 (CJEU, Grand Chamber). Furthermore, the ICAO Assembly also seems to have acknowledged that its mandate is not exclusive (see Resolution A38-18, para 16).
[35]          See: Jurisdiction of the European Commission of the Danube, Advisory Opinion, PCIJ Ser. B, No. 14, 64.
[36]          Nuclear Weapons, p 81, para 27.