Stakeholder Capitalism

What will the Paris Agreement mean for global governance?

This article is published in collaboration with ICTSD.
A visitor walks past the German pavilion during the World Climate Change Conference 2015 (COP21) at Le Bourget, near Paris, France, December 1, 2015.

Will the Paris agreement lead us to reform global governance in other areas? Image: REUTERS/Jacky Naegelen

Akihiko Tamura
Senior Fellow, RIETI
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On December 12, 2015, the 21st United Nations Conference on Climate Change (COP21), held in Paris under the tightest security, adopted the Paris Agreement, setting out initiatives for keeping a global temperature rise below 2 degrees Celsius. Unlike political agreements such as the Copenhagen Accord adopted in COP15 in 2009, this is a legal agreement. It is the successor to the also legally-binding Kyoto Protocol (adopted in COP3 in 1997), but is different in that member countries’ targets for the reduction of greenhouse gas emissions are not included in the legally-binding portion of the Agreement.

As I am not an expert on climate change, I wish to refrain from commenting on the validity of the Paris Agreement in the light of climate change policy. However, I would like to examine it as a person with keen interest in the issue of global governance.

Paris Agreement, the product of the U.S. government’s policy to avert congressional approval at all costs

More details about developments that occurred in and outside the COP21 conference will eventually become available. As far as media reports suggest to date, the U.S. government, under President Barack Obama’s commitment to climate change as one of his administrations’ top priority tasks, made maximum use of its political capital in negotiations with participating countries in an effort to make the wording of the Agreement ambitious yet acceptable to the United States. The U.S. government’s biggest impediment to accepting an international agreement is the U.S. Congress. This political structure has frequently reared its head in various aspects of U.S. diplomacy not limited to climate change, including trade (congressional standoff over Trade Promotion Authority laws required for signing the Trans-Pacific Partnership (TPP) Agreement and general contents of individual TPPs) and international finance (congressional opposition to International Monetary Fund (IMF) reforms, which would give emerging economies greater quota and voting rights). (Such a stance by the U.S. Congress may be understood as its inward response to the “multipolarisation” of international politics, as symbolised in the rise of China and other emerging economies.) The U.S. Congress (especially the Republican Party, which holds the majority) has kept a critical eye on COP21 from the viewpoint of securing the vested interests of relevant industries and balancing its obligation with that of emerging economies. Any agreement that imposes new legal obligations on the United States would require congressional approval. This is why the U.S. government insisted that responsibility on climate change be attributed to all member countries, not just developed ones, and that each country’s obligation on emission reduction and new funding be placed outside the legally-binding part of the Paris Agreement. Indeed, this assertion was eventually reflected in the final Paris Agreement.

Paris Agreement, a silver lining for global governance in chaos

From my perspective, the Paris Agreement is very interesting in three aspects. First, it has demonstrated the effectiveness of a traditional international agreement regime amid the phenomenon which international political academia has lately called “regime complex,” that is, various types of global governance regimes being created and run in parallel, causing ineffectiveness in the policy areas concerned. Researchers are increasingly focusing their attention on the success of non-traditional regimes, such as unofficial interstate arrangements and international frameworks of non-governmental organisations (NGOs) (including private enterprises and NGOs), amid the failure of intergovernmental organisations based on treaties in forging agreements or achievements. Nowadays, there is also a new approach called “organisational ecology,” which examines the dynamism in which international regimes are selected. The recent adoption of the legally-binding Paris Agreement has ensured that the UN Framework Convention on Climate Change, as an international legal framework, will continue to play the role of the central global governance regime concerning climate change. In this sense, the achievement in Paris may grant some comfort to some international law experts, who lament that “international law is stagnating.”

Second, the Paris Agreement stipulates that member states deliver a new national pledge to reduce emissions every five years, instead of committing them to legally-binding emission reduction targets, as a way of achieving long-term goals on temperature increase and emission mitigation. This has created a new mechanism of generating peer pressure among member countries in an effort to reduce emissions. As stated earlier, one of the reasons behind COP21’s decision to exclude specific national targets for emission reduction from the legally-binding portion of the agreement was the U.S. government’s motive to avert the approval procedure by the U.S. Congress. As a result, the Paris Agreement has ended up embracing the “soft law” approach, one of the elements constituting the pluralistic situation of global governance called “regime complex,” in contrast to the traditional governance approach of imposing legally-binding obligations on sovereign nations under international laws (“hard law”). A typical example of the “hard law” governance approach is the World Trade Organization (WTO). The WTO is a highly judicial international regime that adopts dispute resolution procedures, such as the two-tiered judicial system for examining illegality and the decision-enforcing mechanism including countermeasures. It may be considered as one perfected form of an international regime from the viewpoint of international law. Yet, amid the multipolarisation of international politics, there is speculation that this characteristic has to do with the adversity currently afflicting this institution where a new agreement among member countries is quite difficult to achieve. The approach embraced in the Paris Agreement can therefore provide an important prescription for resolving today’s issues surrounding international laws, as seen with the WTO, etc.

Third, the strong “ethical” nature of the theme of the conference – climate change – should be counted as one of the enablers of the Paris Agreement, especially in comparison to the field of international trade, although there were various other enablers, including the host nation France’s skilled leadership, advance agreement between the United States and China, and the spirit of compromise demonstrated by all participating countries. Although it may be that a complete consensus among all stakeholders on whether human activities are responsible for global warming has yet to be reached, COP21 was able to come to an agreement that sets out very ambitious long-term goals in terms of temperature and emissions thanks to the sense of urgency about climate change shared within the international community and the shared recognition that climate change is the human race’s common issue of a highly ethical nature, transcending the issue of economic gains. This is tremendously different from the current state of the international trade policy community. The current trade regime is built on a system of international laws based on the notion that, under the principle of comparative advantage, mutually liberalising trade should improve the economic welfare of all parties. Yet, a sense of ethics is not necessarily strong. Ethics play some part in international trade policy when it involves the interests of developing countries (especially least developed countries). In such a case, however, the North-South conflicts would intensify, making it difficult to create the sense of a common human issue. A new philosophy is necessary in the field of international trade policy that helps all member nations to share a common direction. (After I had finished and submitted this article, it was reported that that the WTO ministerial conference in Nairobi closed on December 19, 2015 with the adoption of a ministerial declaration that refers to members’ positions both for and against the continuation of the Doha Round, as the members could not reach consensus on the matter.)

Going forward, observing how the Paris Agreement’s sophisticated mechanism will function should give us very valuable implications for considering global governance in other fields. 2016 is the year of the U.S. presidential election. The country’s domestic politics will intensify its inward-looking tendency, as well as the conflict between Republicans and Democrats even further, dragging the heels of the U.S. government in its diplomatic policies. This could be a disturbance for global governance. With the increasing “multipolarisation” of external environments, it has already become difficult for the international community to take joint and stable action against a range of global-scale issues. The adoption of the Paris Agreement is a silver lining in this age with an uncertain outlook. In response to specific situations in other fields, we must exercise our policy creativity in building and running appropriate global governance.

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Related topics:
Stakeholder CapitalismGlobal CooperationClimate Action
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