Looked at from afar, negotiations at the Lima conference of the parties of the United Nations Framework Convention on Climate Change (UNFCC) earlier this year were chaotic and the outcome unclear.
But there are two important points to take away from this conference: firstly, there is a fundamental shift that has occurred in the international legal framework to deal with climate change and secondly, Australia's domestic policies will be influenced by that framework.
The expectations of many were high going into the conference held at a military base in the centre of Lima, known as Pentagonito. With the announcement by China and the United States of an agreement to cut carbon emissions after 2020, an outcome in Lima was seen as an important step along the way to making a new international agreement on climate change in Paris in 2015. The word "momentum" was frequently thrown around.
But while the meeting started with much goodwill, by the middle of the second week it appeared that any momentum going into the meeting had disappeared. There was concern among participants about whether an outcome could be achieved.
It soon became clear that one of the key dynamics of climate change negotiations over the last 20 years – the division between developing and developed countries - was again hampering the talks. To understand this issue, it is important to understand the history of the UNFCC.
The UNFCC created two main categories of countries based mostly on their material state of development in 1992 – Annex 1 largely for developed countries and Non-Annex 1 for developing. It was also reflected in the principle of "common but differentiated responsibilities" (CBDR) in article 3 of the UNFCC, which states that:
"The Parties should protect the climate system for the benefit of present and future generations of humankind, on the basis of equity and in accordance with their common but differentiated responsibilities and respective capabilities. Accordingly, the developed country Parties should take the lead in combating climate change and the adverse effects thereof."
In the Kyoto Protocol reached in 1997, this principle manifested itself in only developed countries taking on binding legal targets to cut emissions. Developing countries were exempted from such obligations. This exemption became politically controversial and subsequently the Clinton Administration stated that it would not submit the new agreement to the Senate for approval without "meaningful participation" from developing countries. In Australia, the Howard Government also refused to ratify the agreement on the same basis.
Since that time, many developed countries have sought to remove this firewall between developed and developing countries. As countries like China and some in Latin America experienced rapid economic growth, it became clear that there is no longer a bright line between developing and developed countries. The issue came to a head at the 2009 Copenhagen meeting when such was the disagreement among countries about how to resolve such issues that the conference failed to reach a final decision.
However, what was missed by many at the time of Copenhagen was the emergence of a new model of an international climate change agreement. Rather than countries agreeing to binding legal targets as part of a "top down agreement", under the new model, nations would put forward voluntary commitments to cut emissions. Such voluntary pledges to cut emissions by 2020 became the basis of an agreement the following year at the Cancun UN meeting. This is the model that countries are now working on as the basis of a Paris agreement – one in which countries unilaterally make pledges for post-2020, or as referred to in the lingo of the UN, Nationally Determined Contributions (NDCs).
Importantly, this so-called "bottom-up" model in which all countries make pledges sidesteps the problem of finding a resolution on to how to deal with the issue of differentiation in a new agreement. Instead, it is expected that countries will "self-differentiate" by making pledges based on their own economic circumstances leading to a patchwork of commitments that reflects differences between developing and developed countries.
Paradoxically, it is argued by proponents of this new model, that countries are more likely to be more ambitious in making these commitments as they are not concerned about the legal consequences of not meeting legally binding targets. However, transparency and the provision of information are central to the effectiveness of this new model. As a result, under the bottom up model, the focus shifts from agreeing on legally binding targets to developing accountability and transparency mechanisms to enable countries' voluntary commitments to be measured, compared and verified for reasons explained by US chief negotiator Todd Stern in October:
"Our reasoning was that, if countries know their intended NDCs will be open for all to see and comment on – including other countries, civil society, think tanks, analysts, the press – this will goad them into putting their best foot forward... Whatever our mitigation commitments are in terms of content and legal character... it is essential that others are able to understand clearly what they are and to track whether they are being implemented."
One of the main aims of Lima then was to agree on what information countries needed to provide when making their pledges next year before Paris and whether those commitments would subject to a formal process of review. At first blush, such an aim seems uncontroversial. But as the two weeks progressed in Lima, they became bogged down in old arguments about CBDRs. African countries and small island states argued that they should not be subject to the same obligations to provide upfront information as developed countries and China objected altogether to having their commitments subjected to formal review. Developing countries also wanted greater commitments from developed countries to provide financial assistance to support them in responding to climate change, paying for the damage caused by it and making deeper cuts to emissions. They linked those demands to giving agreement on other issues.
Eventually an agreement was reached, but not before colourful language from some countries' delegates was exchanged. One New Zealand negotiator claimed the compromises being made to reach an agreement was the equivalent of being asked to swallow a dead rat.
Under the final Lima agreement, reference to "common but differentiated responsibilities" was reinserted into the text of the Conference decision after being earlier removed. Provision for a formal review of countries' commitments was removed from the proposed decision. And it was agreed that to facilitate "clarity, transparency and understanding", countries have a discretion – but no obligation - to provide information to show how they consider that their nationally determined contributions, which they will make before Paris next year, are "fair and ambitious". However, importantly, given the scale of commitments required to keep global temperature increases below two degrees, countries agreed their new commitments would represent a "progression beyond their current undertakings".
While the final text of the decision was less than originally proposed, the agreement to provide upfront provision of information represented a step forward to achieving an agreement in Paris. It will provide a level of transparency to all countries about other nations' commitments next year.
This transparency has implications domestically. The Australian Government is now considering what its commitment will be to reduce emissions after 2020 and that transparency about what other countries are doing will assist this consideration. Equally, the effectiveness of the Australian Government's policy response to climate change – the Emission Reduction Fund and the proposed Safeguard Mechanism - will also come under scrutiny from other countries. Similarly, the Government's current proposal to reduce the level of the Renewable Energy Target will also be considered by other countries when they assess Australia's commitment to cut emissions after 2020.
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