October 2016
October 2016

As of 5 October 2016, 73 party countries had ratified the Paris Agreement covering over 56% of global GHG emissions[1]. As a result, the Agreement will come into force on 4 November 2016, less than a year after 197 countries signed up to deliver the most comprehensive international climate change agreement ever achieved. Signatories and ratifying nations have effectively signed up to:

  • Hold the increase in global warming temperature to ‘well below 2oC above pre-industrial levels’[2]
  • Pursue efforts to limit the temperature increase to 1.5oC above pre-industrial levels.

The effective period of operation of the Paris Agreement is from 2020 onwards, as it follows the conclusion of the Kyoto agreement. All work done by signatory countries between 4 November 2016 and 2020 – particularly planning on how nationally determined contributions (NDCs) will be met – will feed into meeting these longer term targets.

As the Paris Agreement takes effect, Australian business should note the significance of the enhanced transparency framework. The framework requires signatory nations to complete a review every five years of the progress being made towards limiting warming to 2oC, and to submit a national GHG emissions inventory: effectively ‘naming and shaming’ poor performers on a global scale.   

This article discusses the features of the Paris Agreement in more detail. Our second, companion story Australia’s emissions reduction targets and the Paris Agreement – how are we positioned?, discusses the gap between our nation’s current NDC and the requirement under the Paris Agreement to limit warming to within 2oC. 

Legal and political ramifications for Australia

As an international legal instrument with a combination of binding and non-binding elements, signatory and ratifying nations will need to start thinking about the long-term legal and political ramifications of the Paris Agreement. Australia is yet to ratify the Paris Agreement, although the Government has committed to do so by the end of the year[3].

So which elements of the Paris Agreement are legally binding and which are not?

Ratifying the Paris Agreement does not mean that party countries are legally bound to meet the targets established in their NDC, however parties ARE legally bound by the procedural requirements of the Paris Agreement. Specifically they must “prepare, maintain and communicate successive NDCs”[4] and demonstrate progress.

In effect this means that Australia has no binding obligations under international law to deliver our promised emissions mitigation target of 26 - 28% below 2005 levels by 2030.

Political accountability on an international stage

The Paris Agreement has established an ‘enhanced transparency framework’ to allow for frequent and continuous monitoring of progress towards meeting individual and collective goals. Key elements include[5]:

  • The requirement for parties to submit national emissions inventory reports and information on the progress towards implementing and achieving NDC targets. These will form part of an ongoing, periodic stocktake of global GHG emissions performance and provide an understanding of the global scale of effort required.
  • Five yearly NDC review cycles, with a requirement for an increase in the level of ambition with each successive NDC.
  • Qualitative and quantitative information on the support given and climate finance allocated to developing nations.
  • Development of a low-emissions development plan in the context of sustainability and poverty eradication, to be communicated to the United Nations Framework Convention on Climate Change (UNFCCC) by 2020.

The first stocktake of progress against targets will occur in 2023, though parties will be required to start the initial five-year review process in 2018 with a ‘facilitative dialogue’ on collective progress. In effect, this means that party nations will be required to review their NDC and consider future targets and opportunities from growth, before the effective period of the Paris Agreement even commences. This will also be supported by a 2018 report by the International Panel on Climate Change (IPCC) on pathway approaches for meeting the 1.5oC limit to increase in warming.

So while there may be limited legal ramifications under the Paris Agreement, parties to the Agreement will be held more politically accountable than ever before when it comes to delivering deep and sustainable reductions in emissions. For Australian business responsible for significant greenhouse emissions, early and consistent action to reduce emissions will avoid greater future costs should urgent action be required to drive deeper cuts in time for reviews. 

Part 2: Australia’s emissions reduction targets and the Paris Agreement: how are we positioned?


Related insights