The Paris Agreement emerged in December 2015 from the 21st annual conference of parties to the UN Framework Convention on Climate Change (COP21 for short). The Paris Agreement is the latest major international agreement directed at mitigating climate change. We set out the highlights of the Paris Agreement, along with its likely implications for Irish businesses.

The Paris Agreement sets up a framework within which the signatory governments can develop and communicate their respective efforts to limit increases in the global average temperature.  The credibility and potential effectiveness of the Agreement are enhanced by the fact that it has attracted the support of formerly reluctant states such as the United States, Canada, China and India. 

However, the Paris Agreement does not set individual, binding obligations and, other than in relation to the conservation of “carbon sinks”, including forests, it stops well short of providing guidance as to the precise policy measures that might be adopted by the signatory countries.  It seems inevitable that European, rather than global, initiatives will continue to play a dominant role in setting Ireland’s own environmental agenda.

From the grass-roots

Each party to the Paris Agreement is required to prepare, communicate and maintain the nationally determined contributions (NDCs) that it intends to make towards the Agreement’s purpose of holding the increase in the global average temperature to “well below 2°C above pre-industrial levels”.  In addition, parties are required to pursue efforts to limit the temperature increase to 1.5°C.

NDCs are required to be communicated every five years, and a periodic “global stocktake” is to be held in order to assess the implementation of the Paris Agreement and the progress towards its goals.  The first global stocktake will be held in 2023.  While a compliance mechanism is also to be established, this is intended to function in a “non-adversarial and non-punitive” manner.

This grass-roots approach appears to have been politically attractive to states such as the United States, Canada, China and India, who had not participated in previous agreements.  However, given the transboundary nature of environmental effects, it is difficult to see how such an approach is capable of delivering a global solution in a systematic manner.

A hierarchy of needs

It is worth pointing out that the Paris Agreement will only impose obligations upon its parties.  The parties will be the states and “regional economic integration organisations” (including the EU) that ratify the Agreement.  For the individuals and companies whose actions are responsible for greenhouse gas emissions, any climate change mitigation obligations will remain a matter of domestic law. 

The European Union is a global leader in climate change mitigation. Prior to COP21, Europe had, through its 2030 Climate and Energy Framework, set a target of reducing greenhouse gas emissions by 40% from 1990s levels.  This will form the basis for Europe’s own NDC under the Paris Agreement.

It is therefore inevitable that Ireland’s own domestic legal measures will continue to be shaped by European initiatives. These include the EU Emissions Trading Scheme (ETS), which facilitates the pricing, trading and surrender of carbon emissions allowances, and the Effort Sharing Decision relating to greenhouse gas emissions from economic sectors not covered by the ETS.

On 10 December 2015, two days before the Paris Agreement was finalised, Ireland passed the Climate Action and Low Carbon Development Act 2015.  This Act formalises the manner in which Irish climate change measures will be planned and assessed.  However, just like the Paris Agreement, it leaves the detail of such measures to be determined by future policymakers.  

The COP21, and the Paris Agreement that it produced, are for now being regarded as more successful than previous international climate change negotiations.  However, given the pre-eminence of Europe’s record on environmental initiatives, it is European measures (rather than global measures) that are likely to remain the drivers of Irish policy.