10.4: The Promise of Paris

When the Copenhagen conference failed in 2009, it opened a vacuum. The eventual design of the Paris Agreement was the result of active efforts to fill that vacuum with new good ideas—including ideas that relied less on binding law and shifted to a more decentralized and flexible approach to bargaining.

At the core of the post-Copenhagen process was the idea that countries should set their own “pledges” for controlling emissions. In the run-up to Paris those pledges were called “Intended Nationally Determined Contributions” (INDCs), to indicate that these were pledges of what national governments intended to do and that these efforts were not centrally mandated but nationally determined. Once the Paris Agreement came into force, the “intended” was dropped and the pledges were simply called Nationally Determined Contributions (NDCs). The Paris process, by design, would begin with these NDCs that, over time, would be ratcheted tighter, and the overall progress of the system would be assessed.

The genius of this approach lay in its ability to engage many countries with diverse interests and capabilities. Before the Paris process, essentially all climate diplomacy focused on getting just the advanced industrialized countries to cut their emissions through binding accords, notably the Kyoto Protocol. Paris, by contrast, has the participation of almost every nation on the planet.

Several studies have tried to quantify the level of effort implied by different NDCs. While the results vary in detail, one pattern is most striking: the advanced industrialized countries are pledging the most. That’s because these countries have the highest incomes and are most responsible for historical emissions. Moreover, from the beginning of climate change diplomacy in the late 1980s, these countries were expected to take the lead and do the most to control emissions. Across the emerging and least developed countries, by contrast, the level of effort—measured as the cost of the pledged policies—is often low or zero. That’s not because these countries are unconcerned about climate change but because they view climate policy efforts through the lens of other goals, such as cutting local air pollution and improving energy security. The other goals drive policy; protection for the climate is a co-benefit, that is, a side benefit that was not the main purpose behind the policy.

Figure 10.4.1 Progress by major industrialized countries in meeting their Paris pledges. Green lines show the path to the pledge. Red lines show business-as-usual trajectory without major new policies; blue and thin green lines show improved trajectories that depend on key policies, but none of the improved trajectories delivers the Paris pledge. Adapted from Victor et al. 2017.

While the advanced countries have made bold pledges, a key challenge for the Paris process is that these nations are also falling short. As shown in Figure 10.4.1, all are bending their emission curves downward, but at a rate slower than needed to meet their NDCs.

The reasons for each country’s troubles vary. In the US, massive efforts by the Obama administration were unlikely ever to add up to honoring the goal of cutting emissions 26% to 28% below 2005 levels by 2025. Even with heroic assumptions about improved technology costs and maximal sequestration from forestry mixed in, emissions would decline at most 23%. Under Trump, the gap in US compliance with its own target has widened modestly as the federal government has sought to reverse the Clean Power Plan, which would reduce CO₂ emissions from electricity generation, and other policies.

In Japan, where the economy is already extremely efficient, policymakers made pledges for still more emission reductions that far extend beyond what they can deliver at home. The EU also faces challenges in meeting its NDCs, although these are not as serious as those in Japan. The region’s Emissions Trading Scheme (ETS) has capped emissions in the power and industrial sectors since 2005 and will assure that the EU will meet its goal of cutting greenhouse gas emissions in these covered sectors 40% by 2030. (Chapter 12 for an explanation of cap-and-trade schemes such as the ETS.) The big problem in Europe lies with the 60% of emissions that are outside the ETS—in the buildings, transport, agriculture, and waste sectors. Meanwhile, the share of EU emissions from agriculture, forestry, and land use is expected to double in the absence of additional mitigation that has been difficult to organize and implement. A shift to biomass for energy, for example, is merely moving emissions from the energy sector to land use without corresponding and sufficient mitigation in the latter.

These are serious problems, and the failures of leading countries to meet their pledges will lead many observers to declare Paris a failure. But a different reality is emerging—if the Paris framework works as designed, it will be able to adjust in response to new information about country performance. In theory, that performance includes undershooting and overshooting targets. But actually creating that kind of flexible framework will require fleshing out and completing many elements of the Paris framework for which the Paris diplomats did not reach final agreements. Over the next two subsections we look closely at that—first at why Paris worked when other efforts have failed, and second on the long list of items left unfinished at Paris.

Turning the corner at Paris

Why did Paris work when almost everything before it failed? The central answer lies in a new style of international cooperation. Instead of setting commitments through centralized bargaining, the Paris approach sets countries free to make their own commitments—the NDCs.

The flexibility of this pledge-and-review system helped transform climate diplomacy from the gridlock and impotence of the past. That made it easier for national governments to tailor their commitments to what they know they can deliver at home. (Or, more precisely, the system lets them tailor commitments to what they think will be politically helpful in pushing for climate policy at home. As shown in Figure 10.4.1, many important countries are not on track to meet their pledges even as they undertake significant efforts to bend down their emissions curves.)

Most of the world’s emissions come from countries that aren’t worried (yet) about global climate change. Take China, the world’s biggest emitter. Its leaders have learned more about the dangers of unchecked climate warming, and that has made the country a bit more willing to act. But the nation still has other much more pressing priorities—like clearing the urban air of smog. Or take India, another big emitter, which is also mainly focused on priorities other than global warming, such as making the nation’s power grid more reliable. The pledging approach lets these countries offer packages of policies that align with their self-interests while also doing something to slow the growth of global climate pollution. When you look closely at the politics of the US, you see a similar story—outside the politically progressive coastal states, most of the nation is not seized by fear of global climate change.

Eventually a much more integrated global treaty will be needed to make major cuts in greenhouse gas emissions—one directly focused on the global goals. But the flexibility of a pledging system offers a way to get started and build confidence that, in time, will beget more confidence and a willingness to do more. This is the same theory—with a similar approach—that guided the creation of the highly effective system for international coordination of trade policy through the General Agreement on Tariffs and Trade (GATT) and, since 1995, the World Trade Organization (WTO). Trade diplomacy began in the 1940s with simple, self-enforcing agreements that aligned with national interests; through successive rounds of bargaining, those national policies were ratcheted forward and integrated. Easier problems were tackled first, building confidence that made it possible to tackle harder diplomatic challenges. The Paris Agreement moves the world in that direction.

In addition to flexible commitments, the Paris approach also envisioned a flexible geography for cooperation. Many diplomatic discussions would be universal—involving all nations. But some would not. The more countries try to achieve deep cooperation with large joint gains, as outlined in Table 10.2.1, the harder it will be to craft the deal. All else equal, that crafting process will be aided if countries can pick and choose their partners—turning a problem of highly complex negotiations with nearly 200 countries into a much easier (but still difficult) task of working with a smaller club of the countries that matter most.

Figure 10.4.2 Rank order of global emissions, spending on energy-related R&D, and energy patents. Chart shows that the largest countries account for the vast majority of emissions and an even higher concentration of effort to control emissions. Data from Victor 2011.

Figure 10.4.2 shows why this flexibility in the numbers of participating countries is so important. It shows a rank order plot for emissions of CO2 (the most important long-term warming gas) as well as two key elements for addressing the climate problem—spending on energyrelated research and development (R&D) and successful outputs from that spending: new patents on energy innovations. The biggest country for each line is shown on the left, with the rank of 1. Then the line accumulates with the first two countries (ranked 1 and 2) and so on. China accounts for about one-quarter of global emissions of warming gases (depending on the data set used for analysis). China and the second largest country (the US) account for about two-fifths, and so on.

What is clear from Figure 10.4.2 is that there is massive inequality in the global system. A few countries account for most of the emissions and most of the effort. Politically, that inequality is potentially good news because it means that cooperation efforts can begin with just a few countries. The flexibility built into Paris allows and encourages these smaller climate clubs to form.

Challenges for putting Paris into practice

While reaching the Paris Agreement in 2015 was a huge accomplishment, that process left a long list of things undone. This is normal. The process of diplomacy often runs right to the deadline (and then some), agrees on what is essential, and leaves the rest to be filled in later (or never). When agreements are pretty simple, there isn’t much filling in to do—for example, the UNFCCC was essentially complete when signed in 1992. The Kyoto Protocol, which was negotiated past its deadline (workers were removing the chairs from the conference hall when the diplomats finally declared their work done on December 11, 1997), left holes on important concepts such as accounting systems. It took another 4 years to fill in those holes.

Now that we have explored what makes for successful cooperation, we can explore how the post-Paris process may unfold—and we can also help identify some priorities for the process of filling out the details left unfinished in Paris.

First and most important is that the theory of cooperation that guides the Paris process is based on the idea that countries can best determine what they are willing and able to do—and those determinations will vary over time with changes in technology, interests, and knowledge. That theory of cooperation suggests that the process of making and adjusting pledges—the NDCs—is vital to the success of Paris. That’s why the news that the advanced industrialized countries aren’t on track to meet their pledges is so disturbing—because it is these countries that have the resources and motivation to lead in the effort to reduce global emissions.

It is crucial that leading governments—especially from the advanced industrialized countries that should be leading the efforts at cooperation—shift the conversation away from compliance with numerical targets and toward the level, quality, and transparency of effort. Because there are so many confounding factors that affect emissions—such as economic growth, shifts in political winds, and technology—a country might achieve its numerical target by sheer luck and with minimal effort. Conversely, a country may make major, costly efforts but still fail to achieve its targets if (for example) economic growth is more rapid than forecast or new technologies don’t prove viable despite substantial investment. A flexible self-declaration approach to diplomacy ensures that leading countries keep their goals in line with what really matters: effort, or action. Europe, Japan, and the portions of the US that say they still honor their Paris pledges should begin the process of updating their goals to reflect the reality of what they are actually able to implement, even if that updating process reveals that real-world efforts fall short of fantasy-world goals. This process might also help provide cover for the Trump administration (or its successor) to reset the US national goal and rejoin the Paris Agreement fully.

Second, this pledge-driven process requires indicators and processes to make it easier to determine which national policy efforts are really working. The logic of decentralized self-declaration of commitments is partly rooted in the benefits of flexibility (as discussed above) and partly in the processes of learning that arise when there are large amounts of useful information on policy implementation available. That learning is partly technical—for example, if leaders in the process of shifting power grids to renewables reveal information about what works, then followers can follow more quickly. Partly, the learning is about coalition formation. For example, environmental interest groups can gain information and examples that can make them more politically powerful by looking to the experiences in other markets where emission cuts have been successful.

So far, the picture on transparency is highly uneven. The NDCs for most countries are extremely short, and key assumptions that underlie the pledges are hard to pin down. Even the Obama administration, which initially vowed to set a high standard for transparency, did not disclose the crucial modeling assumptions it used to project future emissions. Transparency is vital to bottom-up diplomacy yet inconvenient for governments that are focused on always looking good.

Getting quick agreement on the right indicators and the best content for NDCs will be impossible within the formal UN-based Paris process because there are too many countries that don’t want high levels of transparency and the accountability that would follow. A solution to this problem is for countries that are committed to cutting emissions to volunteer themselves for detailed mutual reviews of their policy efforts— much as China and the US did when they released in October 2016 mutual peer reviews of their efforts, under the G20, to reform fossil fuel subsidies. If a few leaders demonstrate how to reveal useful information about their policy pledges and how to do transparent reviews of that information, then the rest will follow.

Many theories of international bargaining view the climate change problem as provision of a global public good for which most countries have a strong incentive to defect. That view suggests the need for strict monitoring and enforcement procedures. Such procedures would be needed, according to this view, because countries would not be willing to adopt costly mitigation policies unless their economic competitors did the same. This “verification and enforcement” view of cooperation suggests that cooperation hinges on the ability to deter and punish defectors.

The theory of cooperation embodied in Paris is different. The Paris approach is based on the idea that, for now, the main impediment to cooperation is not knowing what to do—or how to demonstrate to others that each country has a reasonable plan of action in place. In some of my research with Columbia Law School professor Charles Sabel, we call this “experimental governance” because it is based on the idea that countries and firms are running, in effect, experiments—learning what works and then selecting superior ideas for scaling up. According to this view of cooperation, which is embedded into the logic of Paris, what matters most right now is maximizing the number of experiments and creating an information-rich process to help everyone learn what works.

The genius of the system adopted in Paris is that it could radically increase the supply of this type of information. An effective information regime will lower the costs for crafting collective agreements. According to this view, the top priority over the next few years is to identify countries that are willing to show how to improve their NDCs.

Figure 10.4.3 Global trade in embodied carbon between highly industrialized countries (HIC), upper middle income countries (UMC), lower middle income countries (LMC), and lowest income countries (LIC). The figure shows the different emissions statistics that are based on where products are produced (territory-based accounting) versus where they are ultimately consumed (consumption-based accounting). From IPCC 2014 and Victor et al. 2014.

Over time, it will be important as well to lay the foundation for a future verification and enforcement system—so that, as cooperation deepens, there aren’t strong incentives for countries to avoid doing their fair share. One of the key elements in that will be dealing with trade effects, as shown in Figure 10.4.3. The figure shows the different emissions statistics that are based on where products are produced (using territory-based accounting) versus where they are ultimately consumed (using consumption-based accounting). For example, when a ton of steel is produced in China and sent to the US where it is used to construct a bridge, the emissions associated with that production are assigned to China under territory-based accounting but to the US under consumption-based measurement. Nearly all emissions statistics today are territory based, which creates incentives for firms and consumers to select products made offshore and then import the products, avoiding the costly emission controls that would be needed if the product were made at home. Over time, those incentives also result in new investment shifting to offshore locations where pollution controls are more lax. These mismatched incentives also encourage offshore producers to avoid signing up to emission control policies lest they suffer an economic disadvantage. Fixing this problem will require adjustments at the border to compensate for the emissions embodied in traded products.

Third, the Paris process will move only as quickly as governments want to invest in deep decarbonization. Many governments are already making efforts because cutting emissions of warming gases overlaps with other goals, such as reducing air pollution or promoting energy security. That co-benefits approach to action can help get efforts under way, but they won’t be enough to make the deep reductions in emissions needed to stop climate warming.

More political pressure will change how countries view their interests. Elsewhere in this volume you are reading about how interest groups can be mobilized and about how the spread of scientific information can help mobilize interest. All that is important, and there is something else that can help a lot as well: technological innovation.

Figure 10.4.4 Different visions for future emissions. The chart shows published “baseline” scenarios, for which governments do not introduce significantly new policies (gray lines, for which the highest lines yield more than 6°C of warming). Deep emission controls (blue lines) are consistent with stopping warming at about 2°C above preindustrial levels, a widely discussed goal. Reproduced from the Global Carbon Project, CC BY 4.0 license.

Deep decarbonization of the economy implies a massive, transformative change—in particular, a transformation in how energy is produced and used. Figure 10.4.4 offers a sense of scale of the effort needed—the gray lines are published scenarios showing future emissions of greenhouse gases without significantly new policies, and the blue lines are scenarios consistent with stopping warming at about 2°C. There is a massive difference between the two, and studies that look into the details of these energy systems (and agriculture systems, for a fraction of world warming emissions comes from changes in how land is used) suggest that the energy system of the future may not look anything like the system of today.

A central element to that transformation is innovation. New energy systems won’t come into being entirely on their own—they require new ideas. And new ideas are, like a safe climate, a public good. They are available to everyone and can be excluded from none. Earlier in this chapter we learned that public goods require cooperation because countries and firms, if they think just about their narrow self-interest, won’t do enough to deliver those public goods.

Figure 10.4.5 Public sector spending on energy-related research, development, and demonstration (RD&D). Data from the International Energy Agency.

Innovation is a global public good—new ideas for new energy systems, as they appear, will be available to everyone. A key challenge in the Paris framework is to ensure there will be enough investment in these global public goods. Figure 10.4.5 is not encouraging—it shows public sector investment in energy-related research, development, and demonstration (RD&D) for all the Western industrialized countries. (The data for these countries are relatively good, but this figure understates the world total investment, especially in recent years, because it excludes China.) Today, investment is barely back at the level of the late 1970s when the world was consumed with energy crises. The new energy crisis—the problem of carbon and other warming gases—requires a lot more effort.

On the first day of the conference that led to adoption of the Paris Agreement, nearly two dozen countries pledged to double their investment in public sector energy-related RD&D through a scheme known as Mission Innovation. Delivering on that mission is important not just for increasing the supply of new ideas from which real new decarbonized energy systems can emerge. It is also important politically because as the supply of new ideas for decarbonization rises, the cost of controlling emissions will go down. Less costly low-emission technologies will shift perceptions—away from the view that deep decarbonization is daunting and impossible, to the view that such decarbonization is feasible. That, along with new information about the harmful consequences of unchecked climate change, will alter how countries evaluate their interests, will help interest groups that favor decarbonization get stronger, and will make governments more willing to act within the Paris framework (and within frameworks that emerge after Paris).

Fourth, the arguments made in this chapter suggest that a pledge-driven approach to cooperation is the best feasible strategy. But realism is needed about the rate at which experiments can be implemented, and lessons learned and diffused. Because more than two decades passed without a serious strategy for addressing the climate problem, there is a lot of catching up to do—even if the Paris process unfolds effectively.

The trajectory of emissions in the absence of climate stabilization policies, such as the trajectories in the gray lines of Figure 10.4.4, gives a sense of just how much remains to be done. There is a huge gap between baseline levels of emissions and what would be needed to stop warming at about 2°C. The Paris pledges might have closed that gap by perhaps one-third to one-half, but as noted earlier, even those pledges aren’t being met by the countries that are expected to lead the global effort—the gap between emissions and stabilization that already existed in the Paris pledges is getting wider. Deeper pledges will be needed, although the feasibility of that effort to achieve greater ambition is hard to assess. That reality suggests that the planet is likely to blow through the 2°C goal. New goals will be needed.

Fifth, and final, is the topic of leadership. There is much attention to the need for leadership, and the Paris process itself can’t do much to create leaders. The pressure for leadership must come from within key jurisdictions—countries, states, groups of firms, and even cities.

Figure 10.4.6 California’s emissions trajectories and goals. Reproduced with permission from the California Air Resources Board.

California has been a reliable leader in this area and has set ambitious goals out to 2050, when the state expects to cut emissions 80% (Figure 10.4.6). Like all other leaders, California must grapple with the fact that leadership tends to come from economies that are already green and getting greener. Yet stopping global warming requires that the whole planet (especially the big emitters) get much greener. Leadership requires followership. The Paris process might help on that front by creating more focus on the lessons that leaders learn—and helping others internalize those lessons. But for that to work, leaders probably need to invest not just in good-looking activities at home but in creating the conditions to help generate followership.