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Client Update: The signing of the Paris Agreement and other developments

22 April 2016

In brief: With the Australian Government Minister for the Environment having touched down in New York, the world is gearing up for the signing of the Paris Agreement at a ceremony in New York at 11.50pm AEST tonight. Partner Andrew Mansour (view CV), Senior Associate Emily Gerrard and Lawyer Ellie Mulholland consider the significance of countries now signing the Paris Agreement and look at key developments since agreement was reached in Paris in December last year.

The signing of the Paris Agreement

As we reported in December 2015 (see Focus: COP21 and the Paris Agreement), the international community reached a landmark climate change agreement in Paris last year. Following the successful agreement on the text of the Paris outcome, the Paris Agreement opens for signature on Friday, 22 April 2016 in New York. At 11.50pm AEST on Friday, 22 April 2016, the UN Secretary-General Ban Ki-moon will convene a signing ceremony at which over 155 countries have confirmed their attendance1 (including approximately 60 heads of state).  

Signing the Paris Agreement is an important step towards each country's domestic implementation of its international commitments, including the process required to make the agreement legally binding on that country (ratification). Domestic ratification by countries is significant, as it will ultimately determine its entry into force.

The Paris Agreement will enter into force on the 30th day after the date on which at least 55 Parties to the UNFCCC (accounting for at least an estimated 55 per cent of total global greenhouse gas emissions) have deposited their instruments of ratification at the UN.2

The US and China are key players in bringing about the entry into force of the Paris Agreement, given their large share of global emissions (approximately 17.9 per cent and 20 per cent respectively).3 Late last month, President Barack Obama and China’s President Xi Jinping issued a joint statement that they would sign the agreement at the upcoming signing ceremony in New York, with a view to bring the Paris Agreement into force as early as possible.4 Australia has indicated that, following the signing ceremony, it will move immediately to begin the domestic process of ratifying the Paris Agreement and aims to have it ratified by the end of 2016.5

Australia's domestic process

The domestic ratification process for country parties to the Paris Agreement varies according to each country's constitutional or legislative procedures and may be lengthy and complex or fairly straightforward.

In Australia, the treaty (the Paris Agreement) must be tabled in Federal Parliament and considered by the Joint Standing Committee on Treaties, which will table a report with recommendations. The Federal Government can then move to ratify the agreement as an executive action.

Following the completion of the domestic process, each country then submits the instrument of ratification, acceptance, approval or accession (as determined by the particular domestic process) to the depositary under the UN Secretary-General in New York.

Once the Paris Agreement is in force, the substantive rights and obligations of the Parties will become legally effective and the institutional structures will become operational. It is not possible to predict exactly when the two key components required for commencement of the Paris Agreement will be met. However, this could be sooner rather than later as other large emitters such as India6 and Canada7 have echoed the sentiments of the US and China in seeking to bring the agreement into force as soon as possible.

A look at the ongoing momentum and developments since COP21 in Paris

Following last December's 21st Conference of the Parties to the UNFCCC (COP21) in Paris, we have seen a continuation of significant momentum from the international business community in relation to addressing climate change. This momentum includes the following developments:

  • The Carbon Pricing Leadership Coalition, officially launched at COP21 in Paris, held its inaugural high level assembly in Washington DC on 15 April 2016, welcoming the United Kingdom as a new member (joining existing members such as California, Canada, France and Germany) as well as various private sector companies. The World Bank-led initiative brings together national and sub-national governments, businesses and civil society to support action to implement carbon pricing around the world. Benefiting from the collaboration of leaders across government, the private sector and academia, the coalition aims to expand the evidence base for the most effective carbon pricing systems to pursue its long-term objective of a global carbon price.8
  • The We Mean Business coalition announced that 376 companies (including over a dozen ASX-listed companies) have pledged one or more of the six company pledges for a low carbon future, which include putting a price on carbon and adopting a science-based emissions target. A further 183 investors have pledged one or more of the four investor pledges, which include investing in low carbon assets and reporting climate change information in mainstream reports as a fiduciary duty.9
  • The next key date for the international business community is the Business & Climate Summit, to be held in London on 28 to 29 June 2016, where companies and investors look to take advantage of the opportunities presented in the transition to a low carbon economy. Building on the momentum of the Paris Agreement, this year's summit is expected to be busy.10

Within Australia, a number of state governments have progressed climate change mitigation and adaptation initiatives. These include:

Victoria

On 11 February 2016, the Victorian Minister for Environment Climate Change and Water, Lisa Neville, tabled the findings of an Independent Review of the Victorian Climate Change Act 2010. The independent review committee made 33 recommendations in its report which, if adopted, in the committee's view would:

  • set a long term target in legislation relevant to emissions reduction, implemented via interim five-year targets;
  • imbed a strategic and integrated response to climate change by adopting a strategy to promote consideration of climate change across all government decision making policies and programs;
  • imbed strong monitoring and reporting requirements; and
  • promote greater transparency and access to justice.

Key recommendations include the introduction of a long-term emissions reduction target (which could work in alignment with Paris Agreement requirements), mandating consideration of climate change policies by all government departments and authorities and the introduction of mitigation measures such as emissions limits under Environment Protection Authority licences. While the Victorian Government's response to the independent review has not yet been tabled, there has been a preliminary indication that it will not implement the report's recommendation of a state-based carbon-emissions trading scheme or a shadow carbon price.11 

South Australia

The South Australian Government sought expressions of interest for innovative proposals for 481 gigawatt hours per annum of low carbon electricity supply for government sites, using technologies such as wind, solar PV, solar thermal, batteries, hydrostorage and efficient gas or hybrid proposals. The South Australian Government aims to use government procurement levers to stimulate investment in low carbon technologies to contribute to its commitments to make South Australia a 'net zero emissions' State by 2050 and Adelaide the world's first carbon neutral city. The tender closed January 2016.12

New South Wales

The New South Wales Government tendered for 137GWh of renewable energy for Sydney Metro Northwest, seeking a shortlist of proponents that could meet the rail project's Large Generation Certificate requirements from a NSW-based renewable energy generating system. The tender closed March 2016.13

Finally, we will be watching the progress of the upcoming Bonn Climate Change Conference in May 2016. The conference combines the 44th session of the working groups of the UNFCCC and the Kyoto Protocol with the first session of the newly formed Ad Hoc Working Group on the Paris Agreement (the APA). The agenda for the APA will focus on accelerating the implementation of the Paris Agreement and includes:

  • further guidance relating to nationally determined contributions;
  • developing modalities, procedures and guidelines for the transparency framework for action and support under Article 13, which will be adopted at the first session of the Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement; and
  • matters relating to the 'global stocktake' under Article 14 of the Paris Agreement.

Appointed in February, the new Australian Ambassador for the Environment, Mr Patrick Suckling, will attend the conference as Australia's representative.

Footnotes
  1. List of Parties that have indicated their intentions to sign the Paris Agreement.
  2. Paris Agreement, Article 21, paragraph 1.
  3. UNFCCC, Report of the Conference of the Parties on its twenty-first session, held in Paris from 30 November to 13 December 2015 (FCCC/CP/2015/10), Annex 1
  4. U.S.-China Joint Presidential Statement on Climate Change. 
  5. See interview with Environment Mininster Greg Hunt on ABC's 'Lateline' program.
  6. 'India to ratify COP 21 climate agreement on April 22: Prakash Javadekar, The Economic Times (2 April 2016).
  7. Suzanne Goldenberg, 'Justin Trudeau to lobby for quick approval of Paris climate deal', The Guardian (Australia) (19 April 2016).
  8. Co-Chairs’ Communiqué Carbon Pricing Leadership Coalition Inaugural High Level Assembly
  9. We Mean Business coalition. 
  10. Business & Climate Summit 2016
  11. Tom Arup, 'Victorian climate laws face massive overhaul including new emissions targets', The Age (12 February 2016).
  12. SA Tenders and Contracts.
  13. NSW eTendering.

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