Essential features of the Paris Agreement

The Paris Agreement is one of the first of a new generation of multilateral environmental agreements in that it combines a number of “top-down” and “bottom-up” elements. In this way, it allows for much more differentiation of policy action by its Parties.

Applicable to all Parties

The speed and near universality of the Paris Agreement ratifications demonstrates broad political support for its essential characteristics: it sets ambitious collective goals, allows each Party to determine its own targets and timetables and demands transparency and accountability from its Parties. It is the first international climate agreement that is “applicable to all” Parties. It provides flexibility for developing countries on the basis of differences in national capacity rather than the defined categories set under the UNFCCC and perpetuated under the Kyoto Protocol.

From 2020 onwards, the Paris Agreement will in effect replace the twin track approach of the Kyoto Protocol and voluntary pledges. It is a landmark agreement that will continue to have effect for decades to come. In principle, all Parties are now being dealt with in the same manner as regards their obligations on emissions reductions, but these reductions are defined through plans (“Nationally Determined Contributions” or “NDCs”) that each Party draws up for itself. The flexibility provided through this “bottom-up” element is an expression of the UNFCCC core principle of“common but differentiated responsibilities and respective capabilities,” taking account of each Party’s national circumstances and capacities.

While for Europeans the Paris Agreement is a firm expression of the multilateral approach they strongly prefer, a significant concession is made in accepting the major bottom-up element of Parties determining their own contributions and level of ambition. However, the Paris Agreement will allow for strong peer pressure on Parties through increased transparency and regular reviews.

The Paris “rulebook,” adopted in 2018 at COP24 in Katowice, Poland, set out detailed guidance on how the Agreement’s transparency and accountability framework and ambition cycle will operate. The outcome respected the careful balance struck in Paris, but by providing greater clarity and detail will enhance the “top-down” nature of the regime.

Ambitious collective goals

Building on the guidance offered by the International Panel on Climate Change (IPCC) and the Convention’s objective of limiting concentrations of greenhouse gases in the atmosphere to levels that would prevent dangerous climate change, the Paris Agreement clarifies that global average temperature rises as compared to pre-industrial levels must stay “well below 2°C” while “pursuing efforts to limit such a rise to 1.5°C.” These “temperature goals” help to define what the international community considers to be dangerous climate change and set an overall ambitious direction for the development of Parties’ individual and collective efforts.

The Paris Agreement also wants to achieve a balance between sources and sinks of emissions in the second half of this century. In other words, it describes as its purpose a profound and global transformation over the next decades from an economy primarily dependent on fossil fuels to one that has reached a steady state in which global emissions are at “net zero” and atmospheric concentrations of greenhouse gases have balanced out at levels consistent with the temperature goals.

The Paris Agreement goals address global emissions and thus have the potential to cover all sources of emissions that contribute to anthropogenic climate change, including those originating from international aviation and maritime operations.⁹ Both international transport sectors show rapidly increasing emissions and these will have to be addressed respectively in the context of the International Civil Aviation Organisation (ICAO) and the International Maritime Organisation (IMO) if the ambitious goals of the Paris Agreement are to be achieved.

Dynamic, five­year ambition cycles

Under the Paris Agreement, each Party commits to “prepare, communicate and maintain successive Nationally Determined Contributions that it intends to achieve”¹⁰ every five years. Each successive contribution will represent a progression over the previous one and shall be informed by a global stock take of Parties’ collective progress towards the Agreement’s long-term goals. In 2018, an initial Facilitative “Talanoa” Dialogue was held, taking into account the results of the IPCC Special Report on 1.5°C. It also prepared for 2020 when Parties with a 2025 commitment, such as the US," Brazil and South Africa are expected to communicate their post-2025 targets.

Formally, the first of these five-year ambition cycles will begin with a global stock take in 2023, with an expectation that Parties will communicate their post-2030 targets by 2025. This and future cycles will be essential to closing the gap between current and announced emissions targets and contributions. These reviews will also be necessary to reach the Paris Agreement’s goals of limiting temperature rise, peaking global emissions and achieving “net zero” emissions.

Although the ambition, form and content of Parties’ targets and contributions will remain nationally determined, the Paris Agreement puts in place rules and processes that will encourage their harmonisation, quantification and comparability over time. Parties agreed to continue negotiations on common features that will be applicable to future rounds of targets. Developed country Parties are expected to have and maintain the most robust form of target, namely economy-wide absolute emissions reduction targets like the EU’s. Developing countries are expected to move towards economy-wide emissions reduction or limitation targets over time, and future rounds of targets and contributions will be subject to common accounting rules that may also be applied to the first round of targets on a voluntary basis.

Transparency and accountability

The Paris Agreement establishes a robust, legally binding transparency and accountability framework that is applicable to all Parties. Together with the “rulebook,” the Agreement sets out rules, institutions and procedures for the measurement, reporting and verification of information provided by Parties through national inventories of emissions and the policies they have put in place to achieve their targets. This will enable the tracking of progress of each Party towards its target, as well as an understanding of collective progress towards the Agreement’s goals. The previous split approach between developed and developing countries operating under the Convention and the Kyoto Protocol, which required very little of Parties classified as developing countries, will be phased out after the submission of reports regarding data for the year 2020.

The transparency framework makes it clear that all Parties must report, at least bi-annually, greenhouse gas inventories and information necessary to track progress with the mitigation contributions in accordance with agreed methodologies and common metrics. Only the Least Developed Countries (LDCs) and the Small Island Developing States (SIDS) enjoy flexibility with regard to the frequency of reporting.

The Agreement also includes an obligation on each Party to account for anthropogenic emissions and removals relating to their targets in a way that promotes environmental integrity, transparency, accuracy, completeness, comparability and consistency and to ensure that any double counting arising from the use of carbon markets is avoided. These common rules, known as the “rulebook,” are essential to ensure that targets are implemented and to promote trust in the international process. Each Party’s report shall undergo a technical expert review, and each Party shall participate in a facilitative multilateral consideration of its performance.

The rulebook elaborates on how the transparency system will provide flexibility for those developing countries that need it in light of their capacity. These flexibilities were negotiated on a case-by-case basis to allow, for example, developing countries to report their national inventories less frequently or with regard to fewer greenhouse gases. These countries must concisely clarify the capacity constraints they are facing and indicate estimated timeframes for overcoming these constraints.

The transparency system will be supported by a Committee on Implementation and Compliance, designed to both help and hold accountable countries experiencing challenges with the implementation of and compliance with the mandatory provisions of the Agreement and the rulebook. While this committee is facilitative, non-adversarial and non-punitive in nature, it can engage individual Parties regarding their performance and provide advice, recommendations to the Agreement’s finance institutions, assist in the development of implementation plans and in certain circumstances issue findings of fact. This will bring public and political attention to the challenge of implementation.

The EU’s new Energy Union Governance Regulation¹² meets the requirements of this transparency and accountability framework and a number of features were updated in light of the Paris outcome, namely the alignment with the overall Paris ambition cycle. While a work programme has been launched to develop common accounting rules, including for land, these will not apply to Parties’ first mitigation target under the Paris Agreement. The EU will work closely with other Parties to ensure any internationally agreed approaches including the accounting for emissions from land are consistent with EU approaches.

The framework will also provide for the transparency of the Agreement’s provisions on adaptation and on climate finance, capacity building and technology transfer, as discussed later.

Increasing resilience to and responding to the adverse effects of climate change

The Paris Agreement establishes, for the first time, a global goal on adaptation with the aim to enhance capacity, climate resilience and reduce climate vulnerability. Internationally, it encourages greater cooperation amongst Parties to share scientific knowledge on adaptation as well as information on practices and policies. As part of this international cooperation, developed country Parties must also continue to provide, as part of their commitments on climate finance, resources to developing country Parties to support their adaptation efforts.

All Parties’ efforts to promote adaptation must “represent a progression over time” and the five-year global stocktaking described earlier as part of the Agreement’s “ambition cycle” additionally applies to adaptation. It will review overall progress in achieving the Agreement’s adaptation goal including by reviewing the adequacy and effectiveness of the support provided for adaptation.

The Paris Agreement acknowledges that addressing “loss and damage” resulting from climate change is a specific aspect of increasing resilience to the adverse effects of climate change. Many vulnerable developing countries, especially low-lying and Small Island Developing States, are struggling with how to prepare for and manage loss and damage associated with extreme weather and the slow onset impacts associated with climate change. Nevertheless, the decisions taken in Paris clarify that the Paris Agreement provisions on loss and damage do not involve or provide a basis for any liability or compensation.

Fostering cooperation and financial flows

The Paris Agreement also fosters cooperation amongst Parties by encouraging the responsible use of international carbon markets and the mobilisation of support to developing countries. Implementing the emissions targets will require very substantial policy action and investments in clean technologies in the coming years in all countries. The Paris Agreement includes the aim of “making financial flows consistent with a pathway towards low greenhouse gas emissions and climate resilient development.” Shifting and rapidly scaling up private investment is essential to the transition to a low-emission and climate resilient economy and to avoid “locking-in” high emission infrastructure.

In Paris, the EU, its Member States and other developed country Parties committed to continuing, in the period from 2020 until 2025, the goal set in Copenhagen to mobilise US$100 billion annually from public and private sources by developing countries. Before 2025, the Parties to the Paris Agreement will set a new collective quantified goal from a floor of US$100 billion per year. This will provide an opportunity to broaden the donor base to include countries previously considered only as recipients of assistance.

Conclusion: The Paris Agreement is applicable to all Parties in a similar fashion: each Party determines its own target or contribution, and all Parties are ultimately subject to a common, transparent governance system. Flexibilities are provided for those developing countries that need it but based on gaps in their capacity.