6.3.5.2 Compliance
The bulk of environmental agreements cannot operate the financial “carrots”
and/or trade restriction “sticks” illustrated by the ozone regime
(Wiser, 1999a). The key question therefore becomes: how can compliance by all
Parties be secured, given the consensual basis of international law and the
reluctance of Parties to endow international bodies with legal authority to
enforce the international commitments Parties have (freely) undertaken against
them? The UNFCCC has near universal participation based on the traditional consensual
approach buttressed by provisions that aim to facilitate developing country
participation through the provision of financial and technological resources.
The general nature of the commitments contained in the Convention would, in
any case, prove difficult to enforce. These factors explain why Parties have
not endowed the supreme body of the Convention, the CoP, with the authority
to impose legally binding consequences on a Party in the event of non-compliance.
Thus at present, no legal body exists to enforce compliance in the climate change
context.
The quantified, legally binding commitments of the Kyoto Protocol pose a different
challenge (Werksman, 1998). In the period after Kyoto, the majority of Parties
signalled a clear desire to move towards a compliance system based on legally
binding consequences, even though the compliance provisions of the Kyoto Protocol
provide that legally binding consequences can only be adopted by means of a
formal amendment to the Protocol. Be that as it may, UNFCCC negotiations on
the institutions and procedures of a compliance system for the Protocol are
well advanced.
Various suggestions have been put forward in the literature and by Parties
for the kind of legally binding consequences deemed appropriate in the climate
regime (Corfee Morlot, 1998; Wiser and Goldberg, 2000). These include the following
(Grubb et al., 1998; UNFCCC, 2000):
- allowing a “true-up” or grace period with opportunity to buy quotas;
- payment into a national or international compliance fund that would invest
in quotas;
- issuing cautions and/or reports to motivate public pressure;
- suspending treaty privileges (such as voting or the right to nominate members
for office);
- exclusion from access to the Kyoto mechanisms; and
- financial penalties and implementing trade sanctions.
As a result of the difficulties in agreeing any of these consequences, and
their future enforceability, more attention has been paid to policy tools that
prevent non-compliance. Again, suggestions in the literature and from the Parties
focused on ensuring that emissions trading must be transparent at both the Party
and entity level78, and that emissions data, such as inventories, are publicly
available. The idea being that Parties and/or firms may fear the reputation
consequences of being identified as polluters. Furthermore, trading could be
authorized only for eligible Parties or entities, namely those meeting some
minimum standards on monitoring and reporting. Non-eligible Parties and/or entities
could be suspended from the trading system.
Parties also could require that insurance be obtained for traded tonnes of
emissions reductions. An extra quota reserve held for the premium payer could
then be claimed if the traded tonnes fail to be verified as emission reductions.
A similar proposal is to establish a “true-up” period or grace period
(of some several months or years) after 2012; a party that is able to come into
compliance at the end of this true-up period would be deemed to have complied
with the agreement. Several other possibilities have been mentioned to enforce
compliance with the Kyoto targets in a situation with IET.
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