The Role of the UNFCCC

The UNFCCC has a number of bodies and entities which are involved in the implementation of climate change adaptation and mitigation mechanisms, and other aspects of the climate change agreements, such as reporting and technical assistance.⁴⁸⁵ The specific institutions which would be involved in the implementation or facilitation of supply side policies under Article 6.8 would largely depend on the rules, procedures and institutional arrangements agreed upon in the final work programme under the framework for non-market approaches referred to in Article 6. Despite this uncertainty, the UNFCCC offers many benefits which make it a good choice for implementing supply side policies via Article 6.8. Firstly, there is no regulatory body currently involved in climate change regulation which would be better placed to implement such measures. In addition, this would address the current lack of international attention on fossil fuels in general and, more specifically, NMAs and supply side policies. Secondly, it has an appropriately broad membership to deal with fossil fuels, the regulation of which could have dramatic impact on all levels of society. Thirdly, it can be used to develop norms in international climate change law. Finally, the UNFCCC has experience with the reporting and accounting of GHG emissions. Literature supports the finding that the UNFCCC is well placed to address these issues,⁴⁸⁶ which are addressed in more detail below.

482 Ibid.

483 Ibid.

484 Ibid, p. 286.

485 UNFCCC 2020, n.p.

486 Piggot et al. 2018; SEI et al. 2019, p. 49.

The UNFCCC is the most appropriate international body to regulate the supply of fossil fuels. Despite the myriad of international agreements and organisations, there is no central body or instrument regulating fossil fuel production and most attempts to do so are indirect, lacking in impact and fragmented.⁴⁸⁷ Furthermore, bodies such as the International Energy Agency or the Organization of the Petroleum Exporting Countries (OPEC), while involved with fossil fuels, are arguably not well-suited to this role, as they are pursuing objectives which are not necessarily consistent with the UNFCCC and have smaller memberships. For example, while the literature is not unanimous, Fæhn et al. describe the OPEC as “strategic player” seeking to obtain maximum returns from oil production.⁴⁸⁸ Notably, in recent commentary, OPEC rejected the claim that the fossil fuel industry was a main source of pollution and should not be “discriminated against”.⁴⁸⁹ By contrast, the UNFCCC would have an agenda developed focused on integrated climate goals and national priorities rather than being dominated by economic considerations.⁴⁹⁰ The current vacuum also means that the UNFCCC can introduce supply side NMAs without duplicating existing work or infringing on the mandates of existing organisations. Moreover, implementing supply side policies under Article 6.8 would help to shine light on previously understated mechanisms for achieving GHG emission reductions. As discussed in previous sections, it is evident that there is a gap in relation to the use of NMAs in international climate change policy.

Similarly, there is a gap relating to regulation of fossil fuels, which are not mentioned in the Paris Agreement.⁴⁹¹ UNFCCC regulation could therefore address both gaps.

There have already been preliminary efforts to have supply side regulation in the UNFCCC beyond the Yasuní ITT proposal and Article 6.8 negotiations. For example, at the Talanoa Dialogues at COP 23, 47 of the LDCs called for a transition away from fossil fuels.⁴⁹² The UNFCCC also has the option to draw on expertise from countries involved in relevant coalitions, such as the Powering Past Coal Alliance, launched in 2017.⁴⁹³ Another cooperative approach was headed by the former President of Kiribati, who pushed for a

487 van Asselt 2014, p. 5.

488 Fæhn et al. 2017, p. 79.

489 OPEC 2019, n.p.

490 van Asselt 2014, p. 9.

491 SEI et al. 2019, p. 49.

492 Billon and Kristoffersen 2019, p. 4; Gerasimchuk et al. 2018, p. 1-2.

493 Green 2018, The logic of fossil fuel bans, p. 450; SEI et al. 2019, p. 52–53; Gerasimchuk et al. 2018, p. 2.

prohibition on new coal mines and was supported by other Pacific Island nations.⁴⁹⁴ Building on these models, the UNFCCC could be used to catalyse new coalitions based on supply side regulation of fossil fuels and broaden participation through Article 6.8.

Any regulation of fossil fuels could have profound impacts across the globe and cause

“major disruptions and financial losses”, particularly for producing countries with undiversified economies.⁴⁹⁵ As demonstrated with reference to the Yasuní ITT proposal and the negotiation of NMAs in the UNFCCC, debates around responsibility for GHG emissions and compensation for avoided emissions raise difficult legal and political questions.⁴⁹⁶ Accordingly, it is critical that any regulation thereof comes out of an accessible forum with broad membership to best ensure a smooth and equitable transition. As the UNFCCC is a near universal forum which gives voice to Parties, Observers and Non-Member Observer States, it arguably fulfils this requirement.⁴⁹⁷ While it is not a perfect forum, decision-making within the UNFCCC would create an opportunity for transitioning away from fossil fuels with a focus on equality and the needs of different countries.⁴⁹⁸ The broad membership of the UNFCCC also provides a benefit in terms of the potential effectiveness of any international supply side policy. Adopting supply side policy to assist in the implementation of NDCs would be most effective when embraced by a large number of countries.⁴⁹⁹ If only a small number of countries adopted supply side policies, the risk of leakage would rise as production may simply shift to countries where there is less regulation.⁵⁰⁰ Furthermore, without international collaboration, less countries may be willing to take the first steps and implement supply side regulation due to fear of economic disadvantages.⁵⁰¹ In addition, Green states that supply side fossil fuel policies are well-suited to international cooperation, as they are readily observable and do not require strict or binding commitments.⁵⁰²

494 SEI et al. 2019, p. 52.

495 Gaulin and Le Billon 2020, p. 2; Le Billon and Kristoffersen 2019, p. 4.

496 See i.e Kartha et al 2018.

497 van Asselt 2014, p. 10.

498 Kartha et al. 2018, p. 118-120; Carlarne et al. 2016, p. 6.

499 Green and Denniss 2018, p. 83; Asheim et al. 2019, p. 325.

500 Gaulin and Le Billon 2020, p. 2; Lazarus and van Asselt 2018.

501 Gaulin and Le Billon 2020, p. 2.

502 Green 2018, The logic of fossil fuel bans, p. 450; SEI et al. 2019, p. 52–53.

International cooperation thus highlights another synergy between Article 6.8 and supply side policy as it is, at least to some extent, a required element under Article 6.8.

Another benefit of using the UNFCCC to implement supply side regulation, is that it may have impacts beyond direct policy implications. The UNFCCC, with its wide membership and global coverage, occupies a role as the “focal point for the development of the norms and principles of international climate change law”.⁵⁰³ Consequently, by promoting supply side NMAs under Article 6.8, the UNFCCC would be setting the groundwork for the development of an international norm, which Green refers to as an “anti-fossil fuel norm”.⁵⁰⁴ This would be an important development, as historically the norm related to fossil fuel permits has been very lax and permissive.⁵⁰⁵ There is, according to Green, precedence for this approach in the work of the UN with regard to nuclear weapon free zones, a process which also involved non-state actors, state actors and civil society.⁵⁰⁶ States implementing strict and unambiguous supply side policy, such as banning fossil fuel production, send a clear message about acceptable moral behaviour in the time of the climate crisis.⁵⁰⁷ Moreover, it sends a message to investors, general financial markets and industry that investments in fossil fuels have a limited and capped future.⁵⁰⁸ Not only does this normalise the movement away from fossil fuel dependence, but it also acts as encouragement to external countries to implement similar measures.⁵⁰⁹ This roll-on effect may positively impact public support and recognition for supply side climate action, as interested members can clearly see the outcomes achieved.⁵¹⁰ The creation of new supply side coalitions and international norms will increase the effectiveness of supply side mechanisms by addressing leakage concerns and reassuring participants of growing, collective action.⁵¹¹

503 Carlarne et al. 2016, p. 4.

504 Green 2018, The logic of fossil fuel bans, p. 450; Lazarus and van Asselt 2018, p. 9.

505 Rafaty et al. 2020, p. 3-4.

506 Green 2018, Fossil Fuel Free Zones, p. 6-8.

507 Green 2018, The logic of fossil fuel bans, p. 449; Green 2018, Fossil Fuel Free Zones.

508 Piggot et al. 2018, p. 2–3; SEI et al. 2019, p. 49.

509 Piggot et al. 2018, p. 2–3.

510 Lazarus and van Asselt 2018, p. 4; Green and Denniss 2018, p. 79-81.

511 SEI et al. 2019, p. 49; Asheim et al. 2019, p. 325.

The rules of Article 6.8 are too vague as of yet to determine what its reporting requirements could be. However, as its purpose is to contribute to NDC fulfilment, it is reasonable that reporting requirements could be tied into the NDC requirements outlined in Article 4 of the Paris Agreement. Relevant literature indicates support for using the UNFCCC NDCs as a vehicle for reporting on supply side policies because they are already set-up to track and monitor national emissions. The Production Gap Report, for example, outlines seven avenues through which supply-side policies could be implemented and NDCs are nominated as one potential mechanism.⁵¹² SEI et al. state that reporting requirements could include information on policies prohibiting new developments, subsidy reform and divestment from the fossil fuel industry.⁵¹³ Gerasimchuk et al. also claim that explicitly addressing supply side mechanisms through NDCs would generate a dialogue about how to achieve this fairly.⁵¹⁴ While only two Parties, India and Nigeria, currently include supply side approaches in NDCs,⁵¹⁵ it is likely that this could be extended to include other Parties such as New Zealand and Belize who have introduced national supply side regulation. With regards to Article 6.8, this would also help to fulfill the requirements of Article 6.8(a) by promoting higher mitigation ambition.

The UNFCCC also has the benefit of existing processes and mechanisms for reporting and monitoring GHG emissions. However, UNFCCC reporting processes currently focus on

“territorial emissions” and do not require reporting on extraction GHG emissions.⁵¹⁶ As a consequence, producing country Parties may have little incentive and face less public pressure to reduce emissions which result from upstream processes in their country.

Introducing new methods of accounting into the UNFCCC processes could add pressure and increase awareness regarding the impact of producer countries on global emission.⁵¹⁷ Extraction-based emissions could be a supplementary requirement in existing NDCs in conjunction with reports on national supply side regulation.⁵¹⁸ This would also enable more

512 SEI et al. 2019, p. 49-52.

513 Ibid, p. 50-51.

514 Gerasimchuk et al. 2018, p. 2-3.

515 SEI et al. 2019, p. 51; Asheim et al. 2019, p. 326.

516 SEI et al. 2019, p. 23.

517 Lazarus and van Asselt 2018, p. 5.

518 van Asselt 2014, p. 10-11; SEI et al. 2019, p. 23.

accurate tracking of the global carbon budget.⁵¹⁹ Importantly, as noted in relation the net-avoided emissions concept,⁵²⁰ there would also need to be monitoring of any substitutions to ensure they were not resulting in a higher carbon output. Implementing a new emissions accounting method could potentially be time consuming. Nevertheless, it would be less intensive than developing a new institutional set-up and accounting structure for supply side policies. Accordingly, this demonstrates how the existing UNFCCC infrastructure can be adapted to best promote supply side policies.