Designing the Rules of the Paris Agreement: Creating a Workable Framework beyond Transparency

The Paris Agreement is now in the process of making specific rules, which are to be adopted as a package at COP24. Like the saying, “God is in the details”, the success of the Paris Agreement will depend on how these operational rules are designed. Nationally determined contributions (NDCs), which are the most significant feature of the Paris Agreement, should collectively contribute to the goal of limiting the global average temperature increase by 1.5–2°C above the pre-industrial level, by requiring all Parties—including developing countries—to set their reduction targets, which are expected to be strengthened every five years. However, the enhance­ment of NDC mitigation targets or ambitions alone will not ensure any changes are actually made. They will be meaningless unless they are followed by national domestic measures. Under the Paris Agreement, the Parties’ NDCs and policies and measures will be decided voluntarily; however their formulation and communication (every five years), and their reporting and review of progress (every two years) are mandatory. Therefore, whether this reporting and review system works effectively will be the key for the effectiveness of the Agreement. This Report will address this issue, especially on how the communication system of national reports can be designed so that each country can meet and strengthen its target(s). The UNFCCC has 24-years of experience of communications of national reports since their first submission. However, the author of this report, with 20-years experience of being involved in the review process, is concerned that the current system of pursuing transparency and completeness is not sufficient to promote the enhance­ment of countries’ domestic measures. The Report examined and analysed several schemes other than the UNFCCC and found that experience in Japan’s industrial sectors can be a good example of a similar type of voluntary-based scheme that has improved the validity of actions. These examples are Keidanren’s Voluntary Target and Action Plan, and the Energy Management System under the Energy Conservation Law. One of the characteristics of these schemes is to specify in detail, in their reporting templates, setting and monitoring of indicators to evaluate the effectiveness of actions, as well as the solution and progress assessment for the enhancement of the actions, so that report preparers can just fill in items in the templates. In other words, it is quite a rational process with more net benefit than burden. The Paris Agreement requires each Party to prepare and communicate its NDCs and national report biennially. This is quite a burdensome process but can provide an excellent “opportunity” for capacity building as well as for putting actions into the Plan-Do-Check-Act (PDCA)-cycle. The Paris Agreement reporting and review systems should be designed with such awareness. Being aware of such opportunities, this Report organises and summarises good practice concepts for rule-making, formulating five objectives and eight means to realise them. The Report also proposes a method for progress assessment of achieving the NDC mitigation targets, which is simple and easy to understand with broad applica­bility for various types of targets. It also proposes a method for a simple factor analysis that allows “self-analysis” on countries’ past state through to their future NDC targets. These methods allow appropriate quantitative analysis without requiring any statistical expertise. The latter is expected to be used broadly as a method to provide compara­bility between past and future conditions and among countries. As for the mitigation aspects of the NDC Guidance and the Transparency Framework Guidelines of the Paris Agreement Rulebook, the Report also proposes elements to materialise the eight means. The Report compares these proposals with the negotiation texts for the latest climate conference in May 2018. It also considers remaining concerns (e.g., whether such schemes can work well for almost 200 Parties) and makes proposals for addressing them. There will be two more negotiation processes, including COP24 in December 2018 when the rules are planned to be adopted. However, it is likely that various tools in the form of guidance and templates that are operational in developing countries will be needed even after the develop­ment of the Rulebook. The Report introduces rather new approaches that are practical and effective not only for developing countries disadvantaged in resources and capacity, but also for most developed countries. It is hoped this Report will be reflected in the Paris Rulebook.