The China Syndrome:

Challenges for Addressing Climate Change in the 21st Century

By

Arthur D. Wilson

A thesis submitted in conformity with the requirements for the degree of Master of Laws

Faculty of Law University of Toronto

© Copyright by Arthur D. Wilson 2010

ii

The China Syndrome – Challenges for Addressing Climate

Change in the 21st Century

Arthur D. Wilson

Master of Laws

Faculty of Law University of Toronto

2010

Abstract

Climate change is the greatest environmental international problem facing the world today.

First steps were taken to address the issue with the UNFCCC and the Kyoto Protocol, but the

Copenhagen summit did not result in the successful next step the world needed. This paper

begins with a review of the climate change regime to date showing the mistakes that were made

leading to failure in Copenhagen. It looks at China’s unique position in the international

community and concludes that a meaningful climate change solution is not possible without

China’s participation. It examines the concepts of CBDR and fairness to determine whether it is

fair for the world to demand China’s participation. It looks at characteristics which should be

present in a fair climate change solution, and concludes with a brief look at international trade

law to determine what alternatives would be available to a coalition of willing states to

encourage China’s participation in a global solution or, in a worst case scenario, to form an

effective solution without China’s willing participation.

iii

Acknowledgments

I am indebted to my Thesis Supervisor, professor Jutta Brunnée, Metcalf Chair in Environmental

Law, University of Toronto Law School, whose wisdom, guidance and support proved

invaluable to this undertaking.

I would also like to thank my family, friends and colleagues who encouraged and supported me

through difficult times during the completion of my Master of Laws and this project.

iv

Table of Contents

Acknowledgments..................................................................................................................... iii Table of Contents ...................................................................................................................... iv

1 Introduction............................................................................................................................1 2 Reviewing the History of the Climate Change Regime............................................................3

2.1 UNFCCC and the Road to Kyoto.....................................................................................4 2.1.1 The Byrd-Hagel Resolution..................................................................................7

2.2 The Kyoto Protocol........................................................................................................11 2.3 The Marrakech Accord ..................................................................................................14

2.4 The Road to Copenhagen...............................................................................................14 2.5 The Copenhagen Accord................................................................................................16

3 Why is China Special?..........................................................................................................21 4 A Fresh Take on CBDR........................................................................................................27

4.1 CBDR in Concept ..........................................................................................................28 4.2 Limitations on, and Critics of, the Concept ....................................................................30

4.2.1 Limitations.........................................................................................................31 4.2.2 Critics ................................................................................................................33

4.3 State Interpretation ........................................................................................................35 4.4 Application in Practice...................................................................................................37

4.4.1 Conclusion .........................................................................................................41 4.5 What CBDR Should Be .................................................................................................42

4.6 CBDR Summation.........................................................................................................44 5 Fairness and Justice ..............................................................................................................46

5.1 Introducing an Element of Pragmatism to the Fairness Debate .......................................52 5.2 Two Hypothetical Examples ..........................................................................................53

5.3 Conclusion.....................................................................................................................55 6 Addressing China’s Arguments.............................................................................................56

7 Looking for a Fair Solution...................................................................................................62 8 Trade Options as a Negotiating Tool.....................................................................................66

9 Conclusion ...........................................................................................................................73 References.................................................................................................................................76

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1 Introduction At the Copenhagen Summit1 in December 2009 the World needed an accord or at least

the framework for an accord to guide the climate change regime going forward beyond 20122. It

got neither. And in the wake of this, the Kyoto Protocol must surely be regarded as a failure ex

post. Many would argue, that Kyoto was a failure ex ante for a variety of reasons, including: Its

failure to set sufficiently ambitious targets; its failure to set reduction targets for any but the

Annex I countries; the withdrawal of the U.S. prior to ratification; the failure of many ratifying

countries to meet their targets; and the lack of a meaningful and effective compliance and

enforcement regime. However had the Copenhagen Conference of the Parties COP/MOP3

resulted in a follow up accord that included the U.S., set binding reduction targets for the

developing states (even if these were not to kick in until some future date), and improved the

compliance regime, then Kyoto would have assumed its place in history as the good “first step”

in the international community’s journey to control climate change. But that’s not what

happened in Copenhagen. And so the international community is faced with Kyoto as a failure

and for all intents and purposes being back at square one or perhaps two with respect to the

climate change regime.

This thesis will argue that Kyoto was in fact a failure ex ante both for the reasons listed

above, and for the fact that its very structure effectively doomed the Copenhagen round to

failure. It will further argue that any meaningful regime to address climate change going forward

has to involve binding commitments from both the U.S. and China4 now. It will examine

1 The Copenhagen Summit aka Copenhagen Climate Conference was officially COP 15 to the UNFCCC and

COP/MOP 5 to the Kyoto Protocol. 2 2012 is significant because it marks the expiry of the Kyoto Protocol.

3 Conference of the Parties under UNFCCC and Conference of the Parties serving as the Meeting of the Parties

under the Kyoto protocol. 4 In the context of this paper “China” expressly refers to the People’s Republic of China. However it also implicitly

refers to any large emitting developing states which could stand to take the place of China as an unregulated emitter should China itself be brought on board in a climate change regime, though an analysis of such a state’s rights and obligations under a climate change regime would require detailed consideration of the myriad factors which make each state unique in the international community. In short this paper is not put forth as a cookie-cutter solution to be applied to any large emitting developing state.

2

whether it is fair to demand binding commitments from China now and specifically whether such

demands can be made in accord with the principles of fairness and of common but differentiated

responsibility (“CBDR”) which has been the climate regime’s “framing principle to date”.5 It

will argue that such a demand does in fact fit within the concept of CBDR and that it is perhaps

the fairest practical solution to the real challenge facing the world. Finally it will examine what

options are available to find a viable solution to the climate change problem if China refuses to

become a willing participant in a multilateral environmental agreement (MEA) to address the

climate change problem.6

In a situation where a party that was not a substantial contributor to the creation of a

problem must be asked to be a substantial contributor to the solution to said problem, It is

difficult to conceive of such a solution being fair. But that is exactly the situation we face with

climate change. China was not a substantial historic contributor to the problem, but in 2006

China became the largest emitter of GHGs in the world.7 Because of this fact, a climate change

solution must involve China in order to be effective. And as much as China may argue that state

emissions allocations should be based on population (aka the per capita emissions allocation

model) the simple fact is public international law governs relations between nations as sovereign

equals,8 and such a piercing of the sovereign veil would be unprecedented. As of 2007 China

was responsible for more than 21% of world’s GHG emissions,9 and its share of emissions has

been growing over the past 3 years. As much as we might like, or feel we ought, to have a

solution without China, this is simply not a possibility at this point. So the point of this paper is

to argue how a climate change solution can be put forward that is fair to the world and is fair to

China.

5 Jutta Brunnée, “From Bali to Copenhagen: Towards A Shared Vision for a Post-2012 Climate Regime?”

forthcoming in (2010) 25 Maryland Journal of International Law 86 at 89. 6 This argument could apply to any current or future major emitter of GHGs. I’m limiting my argument to China for

simplicity and also because of China’s unique position as the world’s largest emitter right now. 7 Brunnée, supra note 5 at 87

8 Charter of the United Nations, 26 June 1945, Can TS 1945 No 7, Art 2(2)

9 International Energy Agency, CO2 Emissions from Fuel Combustion (2009 Ed), (Paris: IEA, 2009) at 56

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The paper begins with a review of the history of the climate change regime to date. It

then looks at China and what makes it a unique player on the world stage. Next it reviews two

concepts which will be key to reaching an effective climate solution (CBDR and fairness) and

examines China’s arguments as to why it should not be required to limit its emissions now. Then

it turns to discuss characteristics of a fair climate regime moving forward. Finally It looks at

international trade law to consider what tools of economic persuasion could be available to

encourage China to come on board or alternatively how trade laws would contribute to or detract

from an MEA between willing states that did not include China.

2 Reviewing the History of the Climate Change Regime10 The single most important global environmental challenge facing the world today is

anthropogenic climate change11. This is not to minimize the importance of other global

environmental issues, declining fish stocks for example, but climate change is unique in that the

degree and difficulty of change required to address it, and the potential consequences of not

addressing it, are on a scale not seen previously. Furthermore it is a pan-environmental problem,

in that if climate change is not addressed most efforts to address other global environmental

problems and social problems will be for naught.

The majority of human generated world green house gas (“GHG”) emissions come from

the use of fossil based fuels to produce energy.12 Scientific estimates conclude that in order to

stabilize global temperatures at a level 2-3 degrees Celsius above pre-industrial levels will

require a reduction in emissions on the scale of 60-80% by 2050.13 Regardless of debate over

10

For this section I am indebted to the lectures of Professor Jutta Brunnée, Metcalf Chair in International Law, University of Toronto Law School, Fall 2009. 11

Brunnée, supra note 5 at 87. Note that Brunnée specifically refers to this as a “public policy challenge” 12

Friedrich Soltau, Fairness in international climate change law and policy (New York: Cambridge University Press, 2009) at 6. 13

Ibid at 40.

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what the actual numbers are, it is generally accepted that in order to prevent potentially

catastrophic climate change, we need to move away from a carbon-energy based economy.14

The proper, long-term, solution to this problem requires cooperation from all states,

especially major carbon emitters such as the U.S. and China. However domestic political and

social challenges have to date made such cooperation difficult. These challenges must be

overcome.

The world took its first steps to address climate change with the United Nations

Framework Convention on Climate Change15 (“UNFCCC”) and under the guise of that

convention followed a road which led to the Kyoto Protocol16 and most recently the Copenhagen

Climate Summit.

2.1 UNFCCC and the Road to Kyoto

At the conclusion of the Copenhagen summit, U.S. President Obama, noting that the

summit had marked a breakthrough, stated: “For the first time in history, all the major economies

have come together to take action [on global warming]”.17 This statement, though perhaps

inspiring, is also incorrect.18 In fact the first time that all the major economies came together to

take action on global warming was in 1992 with the UNFCCC.

The UNFCCC came out of the United Nations Conference on Environment and

Development (UNCED), also known as the “Earth Summit” in Rio in 1992 and entered into

force in 1994. Rio represented a crest of international enthusiasm for international/treaty law

14

It is acknowledged that if effective CO2 sequestration techniques are developed, then fossil fuels could continue to be used to generate electricity, but such techniques do not exist currently. 15

United Nations Framework Convention on Climate Change, 4 June 1992, 1771 UNTS 107 [UNFCCC] 16

Kyoto Protocol to the United Nations Framework Convention on Climate Change, UN Doc FCCC/CP/1997/7/Add.1, Dec. 10, 1997; 37 ILM 22 (1998) [Kyoto Protocol] 17

Eric Reguly & Shawn McCarthy, “Leaders Proclaim Accord at Summit’s End”, Toronto Globe and Mail, Saturday December 19, 2009, A22. 18

Some might argue that no action was in fact taken, and I will examine this point later when analysing the actual agreement.

5

making, and while only a framework convention19, it is a remarkable document, the likes of

which we would be unlikely to see negotiated today20. As a framework convention the

agreement did not create binding substantive obligations on the parties – perhaps explaining why

it had 192 signatories including the U.S., Canada, China, India and Brazil – but it did lay out the

framework for change, the procedure to move forward and acknowledged key principles relevant

to the issue. These included, in the Preamble:

Noting that climate change was a “common concern of human kind”21

Noting that human activities are the cause in Recital 2.

Noting the differences between developed and developing countries in Recital 3,

acknowledging common but differentiated responsibilities (CBDR) of developed

and developing nations in Recital 6, and noting the need for developed countries

to take immediate action in Recital 18.

Acknowledging the no harm rule in Recital 8.

And other “good things” including: sustainable development; special vulnerability

of certain nations; taking action makes economic sense; action on climate will

have trickle down benefits to other environmental problems.

19

A common means for international treaty law making today is the framework-protocol model. The framework lays out basic principles, goals and procedures but tends not to include binding substantive obligations on the part of the Parties to it; the binding obligations come later in the protocols. This has been found to be an efficient method of international law making as it allows all parties to get on board with the general cause while leaving the hard work until later. Also, the use of protocols tends to allow countries to selectively choose what substantive subsequent agreements they will be party to, thus helping to avoid the all or nothing model which tended to achieve only lowest common denominator results. 20

Professor Jutta Brunnée, Lectures in International Environmental Law, at the University of Toronto Law School, 20 November 2009. Notes on file with the author 21

UNFCCC Preamble Recital 1. One must assume that the words “common concern” were not accidentally chosen. There is a notion (not customary law to date) in international environmental law that there are problems which transcend State borders and implicitly that the solution requires cooperation from all states. Challenging to the notion of common concern are the obligations which could go along with it and the perceived infringement on State sovereignty that may result. E.g. if Brazil were obligated to maintain its rainforest as a major carbon sink.

6

In short, the preamble pretty much had it all. Of course preambles are usually where the

big bold statements are seen, because they do not form part of the operative text of the

agreement. However the operative text of the UNFCCC also contains bold statements:

Article 2 sets out the objective of the convention as being “…to

achieve…stabilization of greenhouse gas concentrations in the atmosphere at a

level that would prevent dangerous anthropogenic interference with the climate

system.”

Article 3 lays out principles to govern actions by Parties including: CBDR

(paragraph 1); the precautionary principle (paragraph 3); and an implicit WTO

savings clause, stating that actions to combat climate change should not constitute

a means of trade discrimination.22

Article 4, outlining Party commitments, also affirms CBDR, the precautionary

principle, and the right to sustainable development.

And perhaps most noteworthy to the concept of CBDR, Annexes I and II

expressly name states who have the obligation to act first; i.e. the developed

countries.

The UNFCCC is a strong framework document. And it did set some actual collective

targets for GHG reductions for the Annex I parties. But not unexpectedly, given that these were

merely targets and not binding obligations, these targets were not met.23 Thus at the first

UNFCCC COP in Berlin in 1995 the “Berlin mandate” decided that negotiations should begin

towards the adoption of binding reduction commitments from the Annex I parties (developed

countries) with the result that two years later on December 11th 1997, the Kyoto Protocol was

adopted at COP 3 in Kyoto.

22

It is noteworthy that relevant portions of the text in Art. 5 of the UNFCCC were essentially taken verbatim from the chapeau to Article XX of the GATT/WTO 23

The fact that the U.S. as the single largest Annex I Party emitter did essentially nothing to reduce its emissions was also a contributing factor here.

7

2.1.1 The Byrd-Hagel Resolution

On July 25th, 1997, notably prior to the adoption of the Kyoto protocol, the U.S. Senate

adopted, by a unanimous vote, the Byrd-Hagel resolution.24 That resolution stated, inter alia:

Expressing the sense of the Senate regarding the conditions for the United States becoming a signatory to any international agreement on greenhouse gas emissions under the United Nations Framework Convention on Climate Change. . . .

Whereas greenhouse gas emissions of Developing Country Parties are rapidly increasing and are expected to surpass emissions of the United States and other OECD countries as early as 2015; . . .

Whereas the exemption for Developing Country Parties is inconsistent with the need for global action on climate change and is environmentally flawed; . . .

Whereas the Senate strongly believes that the proposals under negotiation, because of the disparity of treatment between Annex I Parties and Developing Countries and the level of required emission reductions, could result in serious harm to the United States economy, including significant job loss, trade disadvantages, increased energy and consumer costs, or any combination thereof; . . .

Resolved, That it is the sense of the Senate that--

(1) the United States should not be a signatory to any protocol to, or other agreement regarding, the United Nations Framework Convention on Climate Change of 1992, at negotiations in Kyoto in December 1997, or thereafter, which would--

(A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties, unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period, or

(B) would result in serious harm to the economy of the United States;25

Paul Harris notes that this resolution was at the time “billed by almost everyone outside

the Clinton administration [as] an abrogation of the CBDR principle.”26 Harris rejects this

interpretation, but whether Byrd-Hagel should be treated as an abrogation or an affirmation of

CBDR depends on how CBDR is defined. The concept of CBDR is discussed more fully in

section 4 of the paper, but suffice to say for now that the wording of the Byrd-Hagel Resolution

24

US, S. Res. 98, Expressing the sense of the Senate regarding the conditions for the United States becoming a signatory to any international agreement on greenhouse gas emissions under the United Nations Framework Convention on Climate Change, 105th Cong., 1997 [Byrd-Hagel] 25

Ibid. [emphasis added] 26

Paul Harris, “International Norms of Responsibility and U.S. Climate Change Policy” in Paul Harris, ed., Climate Change and American Foreign Policy (London: Macmillan Press, 2000) 224 at 237. [Harris, “International Norms”]

8

definitely clashed with the final wording of the Kyoto Protocol, though it did reflect the U.S.

position during negotiations for the protocol.27 So if one regards the Kyoto Protocol as an

example of CBDR in application, one could then draw the conclusion that the U.S. position was

an abrogation of CBDR. If on the other hand one regards Kyoto itself as either an abrogation of

CBDR or an unreasonable interpretation thereof, then perhaps the U.S. position is better seen as

an affirmation of that principle.

Based solely on the text of the resolution it is easy to see how it could be interpreted as an

abrogation of CBDR. The resolution contains no references to CBDR even in the preamble.

And the use of the words “disparity of treatment” (emphasized in the quoted passage above)

would seem to suggest a rejection of the notion of differentiated responsibilities. But statements

made by senators during the floor debate show a strong affirmation of the CBDR principle (at

least in some form).28 Senator Patty Murray: “[W]e should assist our neighbors through

technology transfer, economic assistance, and joint ventures in meeting whatever emissions

goals are established.”29 Senator Robert Byrd: “emissions limitations goals, to be fair, should be

based on a country’s level of development. The purpose is not to choke off Mexico’s or …

China’s development.”30 Senator John Kerry: “[I]t is reasonable to permit some flexibility in the

targets and timing of compliance while at the same time requiring all countries to agree to make

a legally binding commitment by a certain date. … and we should be reasonable in helping

[developing countries to meet their commitments] because the goal here is to get everybody to

participate, not to create a divisiveness that winds up with doing nothing.”31 Senator Joseph

Lieberman: “New commitments by developing countries … need to be consistent with their

historical responsibility for the problem as well as their current capabilities.”32 And again from

27

Ibid at 235 28

Harris, “International Norms”, supra note 26 at 232. 29

Harris, “International Norms”, supra note 26 at 233 30

Ibid 31

Ibid 32

Harris, “International Norms”, supra note 26 at 234

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Senator Robert Byrd: “[W]hile countries have different levels of development, each must make

unique and binding commitments of a pace and kind consistent with their industrialization”.33

It is unfortunate that the actual text of the Byrd-Hagel resolution contains little that would

on its face indicate an affirmation of the CBDR principle. But it is reasonable to take the

statements of the senators at face value and to infer that at the time they at least believed they

were passing a resolution that would further the cause for an effective climate change regime

while at the same time protecting U.S. economic interests.

While Byrd-Hagel does not suggest that developing countries needed to move in lock

step with the Annex I parties, at a minimum it did require developing countries at least to limit

the growth of their GHG emissions. Whether the likely intent in the use of the word “limit” was

to suggest at a cap on emissions from developing countries or simply a limit to the growth of

their emission may never be known. I would suggest however that perhaps the real intent of

Byrd-Hagel was a unanimous show of force to the international community in the months

leading up to the final negotiation of the Kyoto Protocol. The U.S. had long argued for

commitments from developing nations and perhaps this was the its way of hinting to the world

that they would not be a part of an agreement which did not involve such commitments. Under

U.S. Constitutional law international treaties require senate approval for ratification. So with

Byrd-Hagel in place, the likelihood that the U.S. would be able to ratify a treaty that was in

direct conflict with that resolution was very low. So perhaps Byrd-Hagel was an opening salvo

– from which the U.S. Executive Branch was, at least formally, distanced – for the final round of

negotiations leading up to Kyoto.

Despite domestic and international U.S. efforts the Kyoto protocol was passed without

emissions commitments from the developing countries. The U.S. did not sign on to the protocol

until one year later at COP 4 in Buenos Aires. The question as to why the Clinton/Gore

administration would choose to sign an international treaty that they knew, or ought to have

known, had little or no chance of ratification by the Senate34 would, and has been, the subject for

33

Ibid 34

In the U.S. international agreements require approval from the Senate for ratification

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another paper. Christopher Marcoux, in his paper “Explaining the U.S. Decision to sign the

Kyoto Protocol”35examines the issue in some depth. Marcoux notes that at the 4th COP there

was an attempt by Argentina to place voluntary commitments from developing countries on the

provisional agenda,36 which was shot down by China and the G77. Argentina announced that it

would undertake voluntary commitments to curb GHG emissions anyway, and on the following

day the U.S. signed the protocol. Marcoux notes that the lead delegate from the U.S., Stuart

Eisenstadt, “characterized the decision as ‘historic’ and argued that this decision constituted the

kind of ‘meaningful participation’ by a developing country that would be a ‘precondition for

United States ratification of the protocol.’”37 Certainly a precondition, but whether a voluntary

commitment would be sufficient to satisfy the requirements of Byrd-Hagel for “specific

scheduled commitments”38 from developing states is questionable.

Marcoux makes note of the Clinton/Gore policy preferences to “limit domestic CO2

emissions, and for the United States to lead a global effort at limiting greenhouse gas

emissions.”39 He discusses the tactics and policy in some depth. He concludes that in the end

the Clinton/Gore reason for signing the protocol in the end was “not made with domestic

ratification in mind. It was made simply to keep the Protocol alive at all.”40 And this conclusion

makes some sense. Given the importance of U.S. participation in international MEAs and the

impact of the Bush administration’s decision to pull out of Kyoto altogether had (many thought it

would kill the deal),41 it is not unreasonable to posit that had the U.S. not signed on to the deal at

all, it might very well have died in its infancy.

35

Christopher Marcoux, “Explaining the U.S. Decision to Sign the Kyoto Protocol” (Paper delivered at the Annual Meeting of the International Studies Association, San Diego, CA, March 22, 2006). [unpublished – though may be available at http://www.allacademic.com/meta/p98631_index.html] 36

ibid at 10 37

ibid 38

Byrd-Hagel, supra note 24. 39

Marcoux, supra note 35 at 27 40

Marcoux, supra note 35 at 36 41

Professor Jutta Brunnée, Lectures in International Environmental Law, at the University of Toronto Law School, 26 November 2009. Notes on file with the author

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2.2 The Kyoto Protocol

The Kyoto Protocol, consistent with the principles laid out in the UNFCCC adopted

binding reduction targets for Annex I countries, while not placing any binding targets on

developing countries. While not reviewing the Protocol in great detail here, there are a few

provisions that are relevant to the discussion. First is the fact that not all countries are required

to reduce emissions by the same amount and in fact some are only required to limit growth. The

protocol sets 1990 as a base year for measuring emissions (though nations had the option of

choosing an alternate year) and Annex I countries committed to reductions measured against that

base year. For example the EU countries committed reduce their emissions to 92% of what they

had been in the 1990 base year period, while Canada committed to 95%, and Australia to

108%.42

Also noteworthy, and a fact largely misrepresented in mainstream media, is that this was

a commitment for a 5 year period from 2008-2012; i.e. the reductions had to cover that entire

period.43 The 5-year commitment provided flexibility to the parties, recognizing that there may

be circumstances beyond State control that can affect emissions, and so going over in one year as

long as this was compensated for by larger reductions in subsequent years. But given that Annex

I countries would not be expected to meet their commitments in the first year, it is reasonable to

conclude that the assumption was that by 2012 their annual emission levels would actually be

well below that which they had committed to. An example may prove instructive on this point.

Consider that country A emitted 100 units of GHGs annually in the base year 1990, and for the

sake of simplicity, assume that absent action on climate change these annual emissions would

have remained stable between 1990 and 2012.44 Country A had committed to a reduction to 95%

42

a ‘reduction’ to a percentage greater than 100% may seem a bit confusing. It should be remembered that many/most Annex I states’ emission levels had grown between 1990 and 1997. So such a reduction commitment could still represent a reduction from 1997 levels or it could represent a commitment to limit growth of GHG emissions because of some substantial change taking place or anticipated in the domestic economy. Canada for example, had it anticipated the growth of the carbon intensive oil sands industry sector, might have been better advised to have taken on a less ambitious commitment to reduction than it did. 43

The common misrepresentation in the mainstream media is that these are commitments to reduce emissions to committed level by 2012, suggesting that as long as Canada were to hit 95% by 2012 we would meet our Kyoto commitments. 44

This is of course an unrealistic assumption as emissions of most states were in fact growing over this period

12

of base year emissions between 2008 and 2012. In other words country A had committed to a 5

year cumulative emissions of 475 units of GHGs (95 x 5). To keep the example simple, assume

there are two ways that Country A could meet its commitments: They could reduce emissions to

95 units per year in 2008 and keep emissions stable at that level for the next 5 years; or they

could engage in gradual annual emission reductions so that while they would not been meeting

their annual commitment in 2008, they would have sufficiently reduced emissions below their

annual commitment levels by 2012 so that their overall commitment for the 5 year period would

be met. See the Table 1 and Figure 1 below:

Table 1

year no compliance Instant compliance Gradual Compliance 1 100 95 98 2 100 95 96 3 100 95 95 4 100 95 94 5 100 95 92

Total GHG 500 475 475

Figure 1

13

As the table and chart above show, under the gradual compliance scenario, by 2012

Country A’s annual emission levels would be at 92% of the 1990 baseline, which is 3% better

from a long term perspective than if it had found an instantaneous way to meet its commitments

in the short term.

Other features of flexibility in Kyoto include: A basket of gases specified in Annex A

allows parties to choose gases from the basket and so make reductions where most cost effective;

the option of meeting commitments by reduction in emissions, increase in carbon sinks, or some

combination of these; and the provisions of Articles 6, 12 and 17. Article 6 permits countries to

trade reduction units resulting from project in other Annex I countries. Article 12 provides for

reduction credits for projects that take place in non-Annex I states. And article 17 allows one

State to sell a portion of their overall emission allocation to another State. There are of course

various limitations on all of these provisions and a key supporting factor, present in Kyoto, are

provisions for a reliable means of measuring and reporting on State emissions.

In 2001, with the new Bush administration in place, the U.S. officially pulled out of

Kyoto,45 and in so doing almost marked the death of the protocol itself. In order for the protocol

to enter into force it required the ratification of 55 parties to the UNFCCC including Annex I

parties which accounted for 55% of the total GHG emissions as of the 1990 base year.46 With

the U.S. being the single largest Annex I emitter of GHG (remember that the U.S. did not pull

out of the UNFCCC which is where the Annex I parties are defined), ratification by virtually all

other Annex I countries was now required in order for Kyoto to enter into force. This in part

explains the eight-year gap between the adoption of the Protocol in 1997 and its entry into force

45

While generally condemned for this action, the U.S. should be at least partially respected for taking the legally correct action; knowing that they weren’t going to meet their obligations they pulled out. Canada on the other hand by affirming and ratifying its commitment and then effectively taking no steps to meet its obligations (i.e. we didn’t fail because our best efforts were not enough, we failed because we didn’t even try) has actually breached its legal obligations under Kyoto, and I believe the fact that Canada generally got a rougher treatment than the U.S. at the recent Copenhagen Summit is at least in part a reflection of this fact. 46

Kyoto Protocol, supra note 16, Art. 25

14

in 2005. Russia remained on the fence until the last moment, and it was only through strong

lobbying by the EU that they finally came on board.47

2.3 The Marrakech Accord

The genesis of the Marrakech Accord came in 1998 at COP 4 in Buenos Aires with the

adoption of the Buenos Aires Plan of Action The Accord was finalized and adopted in 2001 at

COP 7 in Marrakech. The goal of the Plan of Action was to finalize unresolved issues in the

Protocol and devise mechanisms for implementation. The resulting Marrakech accord

established, inter alia: operational rules for emissions trading; format for a compliance regime;

and more detailed provisions for monitoring, reporting and review. This paper does not include

a detailed discussion of Marrakech, but suffice to say that the extent to which the accord clarified

certain unresolved issues in Kyoto was certainly a contributing factor to the ratification by Party

states resulting in the entry into force of the Protocol in 2007.

2.4 The Road to Copenhagen

Discussions on what would come after Kyoto really began in 2005 even before Kyoto

entered into force. At the UNFCCC COP 13 in Bali the parties negotiated a roadmap for action

on climate change beyond 2012 and created the Bali Action Plan.48 Significant features of the

plan included:

Setting COP 15 (to be held in Copenhagen) as the meeting where a plan to

succeed Kyoto would be negotiated

Referring to countries as ‘developed’ and ‘developing’, i.e. not using the Annex I

language from the UNFCCC

Referring to “long term cooperative action”, implying 2020 and 2050 targets

47

Professor Jutta Brunnée, Lectures in International Environmental Law, at the University of Toronto Law School, 26 November 2009. Notes on file with the author 48

Bali Action Plan, Dec 1/CP.13 UNFCCC (2007)

15

Referring in a footnote to a report of Working Group III, the contents of which

contained 2020 and 2050 reduction targets.49

However these issues really only came to mainstream public attention in 2009. By the

Fall of 2009 the original hope that a final plan to succeed Kyoto would come out of Copenhagen

had proved to be essentially an impossibility. Summer discussions of the G8 had resulted in an

agreed goal to cut emissions by 80% by 2050, but no agreement could be reached on an interim

target. The G8 countries were only prepared to set mid-term targets if the developing countries

would agree to their own targets for 2050. Conversely developing countries were refusing to

agree to 2050 targets because the G8 were not agreeing to mid-term targets.50 However, as the

date for the start of the Copenhagen conference approached, there was some reason for

optimism, as the US committed to 2020 reductions and China began to show some signs of a

willingness to take action, though this optimism was reasonably limited to a belief that

Copenhagen would result in a framework agreement for future action. In the end, even this

proved an insurmountable challenge.

Differences between developed and developing nations’ positions on how CBDR should

be interpreted and applied was doubtless a major obstacle in reaching a new agreement in

Copenhagen. This principle had been affirmed by all Parties to the UNFCCC and Kyoto, though

neither of those agreements had called on developing nations to commit to any substantive

limitations on, or reductions in, their GHG emissions; making them comparatively easy

agreements for those countries to sign.

The absence of substantive commitments from developing countries, even on a very

small scale, was a flaw in the Kyoto Protocol. The very phrase “common but differentiated

responsibility” should imply that all Parties have some responsibility to take action but that the

degree or scale or timing of that action would be differentiated between states.51 The protocol

49

Professor Jutta Brunnée, Lectures in International Environmental Law, at the University of Toronto Law School, I December 2009. Notes on file with the author. 50

Ibid 51

The concept of CBDR and its application to climate change is discussed more fully in section 4.

16

provided for different levels of commitments from the various Annex I states, and should have

contained commitments from the developing states, even if those commitments were extremely

modest. By not requiring developing countries to take any substantive action the credibility of

CBDR with respect to Kyoto can be questioned. It may have been the intent of the parties that

commitments from the developing nations would come after 2012. Kyoto was only a 5-year

agreement and the earlier Montreal Protocol with respect to ozone depletion had granted a 10-

year grace period for compliance to developing countries.52 Perhaps the parties felt that making

reference back to the principles of the UNFCCC provided sufficient articulation that action by

the developing countries would come at a future date. However, as the Kyoto Protocol was the

first articulation of binding commitments by any countries, and effectively set the commitments

of developing countries at zero, it set a dangerous precedent for future negotiations.

The UNFCCC recognized that developing nations economies would be growing and that

their energy needs would also grow to meet their social development needs. But as Lavanya

Rajamani has observed these provisions “…do not provide developing nations with a carte

blanche to increase their emissions. The Phrase ‘share of global emissions’ is critical. It implies

that the UNFCCC countenances the growth of emissions in developing countries relative to the

emissions of industrial countries, not itself.”53 Still, a modest substantive commitment, or at

least a voluntary one, from developing countries reflecting these principles would have been a

worthy addition to Kyoto.

2.5 The Copenhagen Accord

The Copenhagen conference was COP 15 under the UNFCCC and COP/MOP 5 under

the Kyoto Protocol. As mentioned previously, the original goals for Copenhagen were to work

out the deal that would succeed Kyoto. As the date approached, these lofty goals were scaled

back to producing something more akin to another framework document which would guide the

process for finalizing the post-Kyoto deal at some date in the near future. In the end what the

52

The Montreal Protocol on Substances that Deplete the Ozone Layer, 16 September 1987, 26 ILM 154 (1987) Art. 5(1) [Montreal Protocol] 53

L. Rajamani, “China and India on Climate Change and Development: A Stance that is Legitimate but Not Sagacious?”, in S. Bernstein, J. Brunnée, D.G. Duff & A.J. Green, eds., A Globally Integrated Climate Policy for Canada (Toronto: University of Toronto Press, 2008) 104 at 111 [emphasis in original]

17

world got was an 11th hour backroom deal between a handful of the parties54 (though one can

take some optimism in the fact that both the U.S. and China were in that backroom) which

received the backing of 28 other key states north and south.55 But rather than being adopted by

all Parties present at the COP, it was instead merely “taken note of”. What does this mean?

To the pessimist it means that the world got as little as it could possibly get out of

Copenhagen without getting nothing at all. Or as Jeffrey Sachs put it “Two years of climate-

change negotiations have now ended in a farce in Copenhagen”.56 And one could argue that the

pessimists are the realists in this instance. However, not achieving a climate change solution, or

at least substantive progress towards one, in the near future is simply not an option. The

following analysis looks at the text of the accord and considers if there is any reason for

optimism coming out of Copenhagen, operating under the assumptions that the COP will

eventually adopt it and that the Parties both individually and collectively will take substantive

actions in accord with the principles it lays down,

In terms of hard numbers, the Accord does formally state the two degree Celsius cap in

maximum acceptable global temperature rise and establishes funding levels and dates for

delivery of aid from developed nations to developing nations.57 Of course grand, though

ultimately vapid, pledges for funding were made back in the UNFCCC; though no timelines or

dollar amounts were contained therein, so there may be some reason for optimism here. It is

hoped that with this commitment more concretely expressed, the developed nations will be

motivated to stand behind these new pledges. The accord has tables to document specific new

pledges for action on the part of developed and developing nations. At the conclusion of the

conference those tables were empty, but to date 138 countries representing 87% of global GHG

54

Original parties to the deal are reported to have been: US and the BASIC group of countries (Brazil, South Africa, India and China) 55

Brunnée, supra note 5 at 103. 56

Jeffrey Sachs “Obama’s Phony Climate Victory”, Toronto Globe and Mail (December 22, 2009) A19. 57

Copenhagen Accord, UNFCCC, Decision 2/CP.15 (2009) para 8. [Copenhagen]

18

emissions, have engaged or are thought likely to engage in the accord,58 which is arguably cause

for some degree of optimism.

The accord also uses slightly stronger language than the convention in stating that

“climate change is one of the greatest challenges of our time”59 and that “deep cuts in global

emissions are required”.60 It also contains the phrase “on the basis of equity” in reference to the

cooperative action to be taken to combat climate change; words which were first seen in the

UNFCCC. One must assume that this text was proposed by the developing nations, and one

wonders whether this could be a thin edge of the wedge for more equity based arguments and a

push by the developing nations towards a contract and converge type argument for per capita

emissions rights.61

The accord makes note of the fact that a “low-emission development strategy is

indispensable to sustainable development”62 and that developing countries should be provided

with incentives to continue on a low emission development path.63 Like much in the accord this

would seem to be just common sense. For the world to move away from a carbon-based

economy, one of the challenges developed nations face is that they have a massive carbon based

economic infrastructure that will need to be dismantled and replaced. For developing countries,

which do not yet have the extensive industrial infrastructure, to go down a carbon-based

industrial path at this point in history is madness. So we can take some solace that this fact has

been at least softly stated in the accord.

58

Who’s On Board With The Copenhagen Accord?, online: U.S. Climate Action Network http://www.usclimatenetwork.org/policy/copenhagen-accord-commitments. 59

Copenhagen, supra note 57, para 1 60

Copenhagen, supra note 57, para 2 61

First conceived by the Global Commons institute, the contract and converge concept refers to an overall contraction of global GHG emissions to sustainable levels and the convergence of levels of emissions by each state to equal levels on a per capita basis. 62

Copenhagen, supra note 57, para 2 63

Copenhagen, supra note 57, para 7. Though I submit that the use of the word ‘continue’ is somewhat farcical especially with regards to China which is continuing on an ever increasing emission development path.

19

The meat of the accord, such as it is, is found in paragraphs 4 and 5. In paragraph 4, the

Annex I parties commit to 2020 targets to be submitted by Jan 31, 2010, and the Annex I parties

that are also parties to the Kyoto Protocol commit to “further strengthen the emission reductions

initiated therein”.64 Paragraph 5 applies to non-Annex I parties, and they are required to

“implement mitigation actions”. So while they do not necessarily have to actually reduce

emissions, they do not have the option to do nothing. Of course many developing nations, such

as China, are already taking some domestic measures to mitigate emissions, and as the accord

does not specify a baseline year for mitigation actions to start, there does remain the possibility

that these nations will not be asked to do anything new. One must remember that since this

accord pertains to the UNFCCC and not Kyoto, there are no applicable compliance procedures in

place. Also noteworthy with respect to Paragraph 5 are the limited reporting requirements to be

imposed on developing nations. They are only required to report in accord with Art 12.1(b) of

the Convention, which requires only a “general description of steps taken” to be submitted, while

reporting requirements for Annex I parties are far stricter.

Concerns about reporting and international verification procedures infringing on State

sovereignty was a concern of China.65 The text of paragraph 5 shows a compromise in this

regard. With respect to non-internationally supported mitigation actions State sovereignty takes

priority over transparency and verifiability of reporting. However, internationally funded actions

will be subject to “international measurement, reporting and verification”, so here one could well

argue that transparency takes priority over sovereignty. But this is still a clear victory for China.

Given China’s economic strength it is unlikely to be near the top of the list for international

funding of mitigation projects; so the requirements for international verification would have no

practical impact on it. At the same time, despite being the single largest emitter in the world,

their duty to report on projects is limited to a “general description of steps taken or envisaged”,66

which is about as weak a commitment as can be envisaged.

64

Copenhagen, supra note 57, para 4. 65

Daniel Bodansky, “The Copenhagen Climate Change Conference: A Postmortem” (2010) 104 A.J.I.L (2010) 230 at 236. Also Globe and Mail, supra note 17. 66

UNFCCC, supra note 15, Art 12(1)(b)

20

Finally of relevance in the Accord are two references to “REDD-plus” (REDD =

Reduced Emissions from Deforestation and forest Degradation) in paragraphs 6 and 8.67 REDD-

plus is a label used to refer to paragraph 1b(iii) of the Bali Action Plan which called for “Policy

approaches and positive incentives on issues relating to reducing emissions from deforestation

and forest degradation in developing countries; and the role of conservation, sustainable

management of forests and enhancement of forest carbon stocks in developing countries”.

Adoption of REDD policies could mean, inter alia, paying developing nations not to chop down

their forests, thus giving new market value to a standing forest. Again this is a small step, but

since all efforts to reach a global forest accord since Rio have failed, any step which brings

forests back to the table has value.

In conclusion, the world made some small positive steps at Copenhagen, but the result

was certainly not on a scale envisioned in the Bali Action Plan. Sweden’s environment minister,

Andreas Carlgren “described the summit as ‘a disaster’ and ‘a great failure’”68 while Jairam

Ramesh, India’s environment minister, said “India has a good deal”,69 indicating that the discord

between developed and developing nations remains strong. The fact that the U.S. came back to

the table was indeed significant. And on its face the fact that China pledged to take some action

would also give cause for optimism. However in China’s follow-up letter to the UNFCCC

Secretariat, stating what actions it was going to implement, it stated that its planned actions were

voluntary and would be implemented in accordance with Article 4(7) of the UNFCCC. That

paragraph states inter alia that “…economic and social development … are the first and

overriding priorities of the developing country Parties.”70 So this must be regarded as a very soft

commitment at best.

In his recent article, Daniel Bodansky concludes:

67

Copenhagen, supra note 57, paras 6 and 8. 68

Justyna Pawlak, “EU Calls for More U.S. Involvement in Climate Works”, online: Reuters < http://www.reuters.com/article/idUSTRE5BL21F20091222>. 69

online: The Hindu < http://www.hindu.com/2009/12/21/stories/2009122154161000.htm>. 70

UNFCCC, supra note 15, Art. 4(7).

21

Although many negotiators left Copenhagen with a sense that the UNFCCC process is broken, there is no viable alternative at the moment, which means that the ad hoc working groups will continue to meet and the negotiations will continue to revolve around the COPs. But if world leaders were unable to make further progress through direct negotiations, under an intense international spotlight, there is little reason to expect midlevel negotiations to be able to achieve a stronger outcome anytime soon. As a result, the Copenhagen Accord may well represent the high-water mark of the climate change regime for some time to come.71

If Bodansky is right, it is hardly cause for celebration.

Time is short for negotiating and implementing a plan that will effectively address

climate change. Global emissions need to be capped by 2015 and reduced by 50-85% by 2050.72

The post-Copenhagen process should be allowed to play itself out, but only for a limited time. If

we do not see strong evidence at the next COP that this process is going to lead us to an effective

global climate change regime in short order, then it may be time to discard this process as a

failure and to find the viable alternative that, as Bodansky states, does not now exist.

3 Why is China Special? The success or failure of a climate change regime will depend to a substantial extent on

what happens in China.73 Ideally China will be an active, willing, participant in an effective post-

Copenhagen process. Or, China may be a less than willing participant in the as yet undefined

viable alternative. Either way, in order to make an argument as to what is and is not fair for

China and what the world’s fair expectations are of this country, an examination of relevant

present and historical characteristics is required.

71

Bodansky, supra note 65 at 240 72

Friedrich Soltau, Fairness in international climate change law and policy (New York: Cambridge University Press, 2009) at 7 73

R. Garnaut, F. Jotzo & S. Howes, “China’s Rapid Emission Growth and Global Climate Change Policy” in Ligang Song & Wing Thye Woo, eds., China's dilemma Economic growth, the Environment, and Climate Change ( Washington D.C.: Brookings Institution Press, 2008) 170 at 171 and 186.

22

With a population of 1.34 billion China is the most populous country on earth, followed

closely by India with 1.18 billion. 74 While China has engaged in various population control

measures since the 1950s, it is only with the one-child policy introduced in 1970’s that somewhat

effective reductions in population growth rates were achieved. And while the percentage

population growth in China did not exceed that of the U.S. by much, the chart below shows the

overall impact of that growth on world population.

Figure 275

China introduced market based economic reforms in 1978 and has since become the

worlds fastest growing major economy.76 But with 80% of its power derived from the burning

74

Sources for population numbers are: Official State population numbers/estimates; 2008 UN estimates for 2010; and Eurostat estimates. A list of all included countries with specific original sources may be found at http://en.wikipedia.org/wiki/List_of_countries_by_population. [World Population] 75

Catherine Mulbrandon, “Comparing Population Growth: China, India, Africa, Latin America, Western Europe, United States”. Online: Visualizing Economics http://www.visualizingeconomics.com/2007/12/09/comparing-population-growth-china-india-africa-latin-america-western-europe-united-states/.

23

of coal77, China has also become the world’s largest emitter of CO2,78 and recently became the

world’s largest consumer of energy, surpassing the U.S.79. China is emissions inefficient in key

carbon intensive industries such as steel and cement production, where its emissions exceed the

world average by 20% and 45% per ton of production respectively.80 Further evidence of the

pace of China’s growth, both as a producer and consumer, is found in the fact that 10 years ago

China’s energy consumption was just half that of the U.S..81

Most analysts and scholars did not accurately forecast the rapid growth in emissions or

energy consumption by China. Ironically a paper as recent as 2008, while making this same

point with respect to earlier papers, notes that in 2007 the Energy Information Association of the

U.S. department of energy was projecting that China would surpass the U.S. in overall energy

consumption by 2025.82 But as noted above, this event took place 15 years ahead of schedule.

One has to wonder whether, if China’s growth rate had been accurately forecast in these areas,

would the other nations of the world have accepted Kyoto Protocol as passed, with China making

no binding commitments towards emissions reductions or limitations on growth. For based on

76

“China Country Profile”, online: BBC < http://news.bbc.co.uk/2/hi/africa/country_profiles/1287798.stm>. 77

Jeff Rubin, “China’s Energy Consumption a Zero-Sum Game”, online: The Globe and Mail http://www.theglobeandmail.com/report-on-business/commentary/jeff-rubins-smaller-world/chinas-energy-consumption-a-zero-sum-game/article1652938/. 78

online: Millennium Development Goals Indicators http://mdgs.un.org/unsd/mdg/SeriesDetail.aspx?srid=749&crid=. [MDGI] 79

Andy Hoffman, “Outpacing U.S., China now the world’s largest gorger of energy”, online: The Globe and Mail http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/outpacing-us-china-now-the-worlds-largest-gorger-of-energy/article1645406/. 80

Michael P. Vandenbergh, “Climate Change: The China Problem” (2009) S. Cal. L. Rev. 905 at 938 81

Hoffman, supra at note 79 82

Warwick J. McKubbin, Peter J. Wilcoxen and Wing Thye Woo, “China Can Grow and Still Help Prevent the Tragedy of the CO2 Commons” in Ligang Song & Wing Thye Woo, eds., China's dilemma Economic growth, the Environment, and Climate Change ( Washington D.C.: Brookings Institution Press, 2008) 190 at 196

24

current forecasts the growth in China’s emissions alone are expected to outstrip the reductions

embodied in Kyoto by 2010.83

China’s conversion to a market based economy has had other benefits for its population.

Poverty has decreased from 53% in the early 1980s to 8% by 2001.84 But the pace of

development has been by no means uniform and the western provinces of China are still very

poor. Shanghai has a per capita GDP more than 10 times greater than that of Guizhou, its poorest

province.85

China’s record on environmental issues in general can best be described as dismal. China

suffers from a number of major environmental problems including: acid rain, desertification86,

contamination of agricultural land, poisoning of water supplies87, and radiation contamination

from nuclear weapons programs.88 It is also noteworthy that 16 of the 20 most polluted cities in

the world are in China.89 Annual deaths from air pollution in China are estimated to be between

83

Maximilian Auffhammer & Richard T. Carson “Forecasting the Path of China’s CO2 Emissions Using Province Level Information”, online: Department of Agricultural and Resource Economic, University of California Berkeley http://escholarship.org/uc/item/6d28j8rg at 30. 84

“Fighting Poverty: Findings and Lessons from China’s Success”, online: The World Bank http://go.worldbank.org/QXOQI9MP30. 85

Pan Jun & Zou Ji, “China: Policy-Making process on Climate Change” in Yasuko Kameyama et al., eds., Climate change in Asia : perspectives on the future climate regime (Tokyo; New York: United Nations University Press, 2008) 66 at 67 86

Shan Carter et. al, “China’s Environmental Crisis” online: The New Your Times http://www.nytimes.com/interactive/2007/08/26/world/asia/20070826_CHINA_GRAPHIC.html. 87

Patricia Ross McCubbin, “China and Climate Change: Domestic Environmental Needs, Differentiated International Responsibilities, and Rule of Law Weaknesses” (2008) 3 Envt'l & Energy L. & Pol'y J. 200 at 213 88

Mark MacKinnon, “Living the Worry-Free Life in China’s ‘Atomic City’” online: The Globe and Mail http://www.theglobeandmail.com/news/world/asia-pacific/living-the-worry-free-life-in-chinas-atomic-city/article1672870/. 89

McCubbin, supra note 87 at 212.

25

400,000 and 750,000.90 In 2004 levels of air pollution in China were more than triple that of the

U.S.91

In cases of conflict between economic development and environmental protection,

development is given priority.92 Indeed it is not unreasonable to assert that China’s

interpretation of “sustainable development” is essentially anything which allows them to sustain

their path of unbridled development, even at the expense of long-term environmental

consequences. In her book International Environmental Law and Asian Values, Roda Mushkat

talks of “the almost single minded quest for material transformation” paired against “the

worrisome scale of environmental degradation”.93

Despite being a one party state, China is also a federalist state with a weak rule of law.

The ability of the federal government to impose, regulate and enforce environmental policies in

the provinces may be limited by a number of factors including local government corruption and a

judiciary that is “poorly trained, rife with corruption and subject to political pressures to ignore

the law.”94 The relevance here is that China could face domestic compliance challenges even if

it agreed to become part of a new climate change regime.95

90

Jonathan B. Wiener, “Climate Change Policy and Policy Change in China” (2008) 55 UCLA L. Rev. 1805 at 1817, and McCubbin supra at note 87. 91

Carter, supra note 86 92

Pang Jun & Zou Ji, “China: Policy-making Process on Climate Change” in Yasuko Kameyama et al., eds., Climate change in Asia : perspectives on the future climate regime (Tokyo; New York: United Nations University Press, 2008) 66 at 67 93

Roda Mushkat, International Environmental Law and Asian Values: Legal Norms and Cultural Influences (Vancouver: UBC Press, 2004) at 111-112 94

McCubbin, supra note 87 at pp 202, 203. 95

This is not to suggest that the U.S. would not face compliance issues of its own, but this would be due to the structure of their rule of law (political and judicial) rather than weaknesses in it.

26

Forty percent of China’s economy is dependent on exports, with the majority of those

exports going to the U.S. and European Union.96 China’s economy cannot yet be said to have

been decoupled from the west as some have asserted. Economic linkages between China and the

U.S. grew stronger rather than weaker between 1997 and 2007, with the share of export GDP

rising from 18.6% to 36.1% and the share of GDP for exports to the U.S. growing from 3.3% to

6.9%.97 However as China’s domestic wealth increases, and with it domestic consumer demand

for goods, exports to the industrialized world will become less of a factor in its overall economy

and some decoupling may in fact occur. This is relevant to the point that if the industrialized

world hopes to flex some of its remaining economic muscle to encourage Chinese cooperation in

a climate regime, they had best do so soon.

In October 1997 President Clinton, in the course of remarks with respect to global

climate change stated that “Developing countries have the opportunity to chart a different energy

future consistent with their growth potential and their legitimate economic aspirations”.98 He

stated further that “the United States wanted ‘to help the developing nations grow as much as

they would without a treaty, but on a different energy path than the one we charted when we

were at the same stage of development.’”99 Clinton clearly saw that it did not make sense for

developing countries to construct a carbon based economic energy infrastructure at a time when

the world was learning that carbon based economies did not have long term viability. In other

words it made sense for developing countries, in constructing their economic and industrial

infrastructures, to build the structures of the future rather than the structures of the past.

Unfortunately China has elected to proceed with the creation of a carbon based economic

infrastructure to date. But China still has the opportunity to switch to a different ‘energy path’

and in so doing significantly reduce or even cap its emission growth levels going forward, should

it choose or be persuaded to do so.

96

Ligang Song & Wing Thye Woo, “China’s Dilemmas in the 21st Century” in Ligang Song & Wing Thye Woo, eds., China's dilemma Economic growth, the Environment, and Climate Change ( Washington D.C.: Brookings Institution Press, 2008) 1 at 262 97

ibid at p. 16 98

Harris, “International Norms”, supra note 26 at 235 99

Harris, “International Norms”, supra note 26 at 236

27

China has the world’s 3rd largest economy. It is a nuclear power possessing ICBMs and it

has successfully launched over 50 satellites into space.100 Many of China’s people may live in

poverty but as a state China is strong, wealthy and reasonably technologically advanced. There is

an “inequity … in allowing China to hide behind its developing state status: acting on behalf of

the interests of developing states, but implicitly favoring its position as a premium GHG

emitter.”101 And given “China’s dominance in global emissions and emerging importance as a

global economic force … it is no longer credible to claim that mitigation has to be undertaken

exclusively by industrialized countries.”102

4 A Fresh Take on CBDR As a framing element in the debate/negotiations over the climate change regime the

concept of CBDR warrants discussion here. Note that I do not refer to CBDR as a ‘principle’, for

it is not now a customary principle of international law as that term is generally understood.103

Further it is unreasonable to expect that CBDR will ever become a principle of customary

international law as it lacks sufficient specificity for such status, and at best it may become a

term for a collection of more specific customary principles of international law.

On its face the term appears quite simple in concept. But as with many aspects of

international law, simplicity of concept does not necessarily lead to simplicity of practical

interpretation or application. This section begins with a conceptual discussion of the concept and

its limitations, then proceeds to look at how different nations/regions have interpreted the

concept and how the concept has been applied in international law to date, specifically climate

change. Finally it looks at areas where the generally accepted interpretation may be found

100

CIA “The World Factbook”, online: CIA https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html 101

Tan Kai Liang, “From Kyoto to Post-2012: The Implications of Engaging China for Environmental Norms and Justice” (2009) 17 U. Balt. J. Envtl. L. 33 at 56 102

Ross Garnaut, Frank Jotzo and Stephen Howes, “China’s Rapid Emissions Growth and Global Climate Change Policy” in Ligang Song & Wing Thye Woo, eds., China's dilemma Economic growth, the Environment, and Climate Change ( Washington D.C.: Brookings Institution Press, 2008) 170 at 183. 103

Tuula Honkonen, “The Principle of Common but Differentiated Responsibility in Post-2012 Climate Negotiations” (2009) R.E.C.I.E.L. 18 (3) 257 at 258

28

lacking and suggests how the interpretation should be modified/extended to achieve better/fairer

results.

4.1 CBDR in Concept

The Vienna Convention on the Law of Treaties provides inter alia that “A treaty shall be

interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the

treaty in their context and in light of its object and purpose.”104 Looking to the ordinary meaning

of key words found in the concept we find:

“Common 1. Belonging equally to, coming from, or done by, more than one…. 2. Belonging to, open to, affecting the public.”105

“Differentiate. Constitute difference between, of, or in; make or become different in process of growth or development”106

“Responsible 1. Liable to be called to account … morally accountable for actions…. 2. Being the primary cause for; involving responsibility”107

So when applied to global problem ‘X’ in public international law, the concept is saying

that ‘X’ is a problem for which all states share responsibility, but for which the degree of

individual state responsibility may differ for one reason or another. Simple enough. More

complex are the questions of why one state has a different responsibility from another and what

individual state or regional responsibilities are.

The question of “why” hinges on notions of culpability and/or capability; i.e.

responsibility for causing the problem in the first place and/or being in a better position to help

solve the problem due to various factors including: wealth, knowledge, technological capability,

and manpower. With respect to climate change, at least at the time of the UNFCCC and Kyoto,

the answer to this question was simplified by the fact that those most culpable for, were also

104

Vienna Convention on the Law of Treaties (1969) 1155 U.N.T.S.331, in force 1980, Article 31 [emphasis added] 105

The Concise Oxford Dictionary of Current English, 7th ed, sub verbo “common” 106

The Concise Oxford Dictionary of Current English, 7th ed, sub verbo “differentiate” 107

The Concise Oxford Dictionary of Current English, 7th ed, sub verbo “responsible”. Note that I chose “responsible” rather than “responsibility” and the OED defines responsibility as “being responsible”.

29

considered to be those most capable of, solving the problem. It is conceivable, however, that a

situation could arise where those with maximum culpability also had minimum capability to

address an international issue of common concern.

The complexity of the question ‘what’ pales in complexity to that of the question ‘why’,

and in general the answer to the former will flow from the answer to the latter. Another way of

phrasing the question ‘what’ would be to look at how nations’ responsibilities are differentiated.

Rajamani outlines three basic notions for differentiation: Different targets; different timelines;

and providing assistance (financial, technological, etc) to other nations.108 Rajamani presents

these specifically with respect to climate change but I believe these would have general

application to CBDR in most instances.

Another question adding complexity to the concept is when should it apply? Given the

somewhat consensual nature of international law, do all nations have to agree that an issue is of

common concern before the concept of CBDR becomes applicable? There would seem to be an

incentive for a state, anticipating that its level of responsibility would be found to be high, to

deny the applicability of the concept to the problem in the first place or to formally come on

board but to later insist on a perhaps twisted interpretation of the concept to lessen its costs of

compliance. And in such a case, can willing states move ahead without the cooperation of the

recalcitrant state and either simply share all the responsibility for solving the problem amongst

themselves, or use whatever measures are legally available to them to convince the recalcitrant

state to come on board or to exact penalties on it for its non-cooperative stance? These questions

are of key significance in the climate change debate.

Roberts and Parks list four different approaches to measuring responsibility before

arguing that none will work and that a hybrid approach is needed. These four are “the Kyoto

grandfathering approach, which relies on entitlement principles of justice; the carbon intensity

approach, which rests on utilitarian principles of justice; the historical responsibility approach,

108

Lavanya Rajamani, Differential Treatment in International Environmental Law ( Oxford: Oxford University Press, 2006) at 191 [Rajamani, Differential Treatment]

30

which operates on the ‘polluter pays’ principle; and the egalitarian per capita approach”.109

They go on to argue that any one such principle would fail because “…poor nations and rich

nations hold almost diametrically opposed views of climate justice, largely for configurational

reasons having to do with their position in the global hierarchy of economic and political

power”.110 They present a number of hybrid proposals, including one referred to as the

‘Triptych’ proposal designed by scholars at the University of Utrecht. “Its novel contribution is

that it divides each country’s economy into three sectors: energy-intensive industry, power

generation, and the so called domestic sector (transport, light industry, agriculture and the

commercial sector). It applies the carbon intensity approach to the energy intensive sector,

‘decarbonization targets’ to the power sector, and a per capita approach to the ‘domestic’

sectors.”111 I won’t comment here on whether I believe this, or any of the other hybrid models

presented in that paper, represents the best or even a workable solution, but they do show the

necessity for moving beyond doctrinal positions to find a process which will result in the best

solution possible; and hopefully that solution is good enough.

The greatest barriers to meaningful North-South cooperation are not differences in principled understandings of ‘what is fair’. Rather, divergent principled beliefs are a consequence of more fundamental root causes: incongruent worldviews and cause beliefs, persistent global inequality, and an enduring deficit of North-South trust.112

4.2 Limitations on, and Critics of, the Concept

The concept of CBDR is not without its limitations and its critics. Limitations on CBDR

relate to scope and time; i.e. how far should we differentiate between the responsibilities of

states, and how long should we apply the principle to a specific issue. Critics argue that it is not

necessary to have a labeled concept and that doing so has not proved helpful.

109

J. Timmons Roberts and Bradley C. Parks, “Grandfathering, Carbon Intensity, Historical Responsibility, or Contract/Converge”, in S. Bernstein, J. Brunnée, D.G. Duff & A.J. Green, Eds. A Globally Integrated Climate Policy for Canada (Toronto: University of Toronto Press, 2008) 158 at 168 110

Ibid at 169 111

Ibid at 170 112

Ibid at 171

31

4.2.1 Limitations

Halvorssen and Rajamani have both rightly argued that an application of CBDR should

not be inconsistent with the object and purpose of the treaty to which it applies and further that it

should not be regarded as a permanent arrangement but rather should end when the differences

which gave rise to its applicability have ended.113 Cullet takes this a step further by arguing that

“the underlying practical rationale for differential treatment is to foster more efficient action on

issues of common concern, such as climate change, which requires the cooperation of all

states.”114 Thus suggesting that core motivations by industrialized states stem from rational

motivations and/or cost-benefit analyses, rather than some notion of moral reasonableness

stemming from historic state actions.

I would argue that CBDR as manifest in the Kyoto Protocol was in fact inconsistent with

the object and purpose of the UNFCCC. By not setting limits for developing countries, the

world’s largest emitter of the day (the U.S.) was lost from the deal. And by setting no binding

obligations of any sort for developing countries with respect to sustainable development, those

countries were in fact encouraged to develop in an unsustainable manner. A country like China

would be unlikely to develop cleaner forms of power which would be more expensive in the

short term, drive up costs of production and reduce China’s comparative advantage in world

markets, without some outside incentive to do so. Kyoto could have provided that incentive, but

it did not. Therefore if we look at the path of world emissions since the signing of the Kyoto

protocol, we see emissions growing in China at an alarming rate. Between 2000 and 2007 CO2

Emissions in China grew by 92%. Contrast this with emissions growth in the U.S. over the same

period of 1.67%.115

113

Anita Halvorssen, Equality Among Unequals in International Environmental Law (Boulder: Westview Press, 1999) at 103; Lavanya Rajamani, Differential Treatment in International Environmental Law ( Oxford: Oxford University Press, 2006) at 253. 114

Philippe Cullet, Differential treatment in international environmental law (Burlington, VT : Ashgate, 2003) at 16 115

online: Millennium Development Goals Indicators http://mdgs.un.org/unsd/mdg/SeriesDetail.aspx?srid=749&crid=. [MDGI]

32

In their 2007 paper, Auffhammer and Carson used econometric modeling techniques to

forecast future emissions growth from China.116 Their study found that the expected increase in

emissions from China by 2010 would far exceed the reductions predicted from countries who

had ratified the Kyoto Protocol.117 In other words, the result of China alone having no limitation

or reduction targets more than offset any benefit that could be expected from reductions in the

Annex I countries. This fact is not only relevant for the short term but also for future

negotiations. For if Annex I countries believe that the problem will continue to get worse despite

their best efforts, the incentive for them to act at all is greatly reduced.

In considering what is the appropriate degree of differentiation, Christopher Stone breaks

down the principle of CBDR by scale into three models: rational, equitable, and inefficient.118

States can be expected to be rational actors, i.e. they will behave in a way that favours their

rational self-interest. Under the rational model each state, recognizing the ultimate joint benefits

of taking action, acts entirely in their own self-interest, giving away as little as possible in order

to achieve the joint gain. The equitable model starts to introduce a notion of fairness and equity

to the process. Under the equitable model, some nations (the rich) give away more than they

would have had to under the rational model, but not so much that they do not still reap a net

benefit from the action. Finally under the inefficient model the rich nations are put in a net loss

position by the amount they are asked to give away to the poor nations. Here the notion of

distributive justice is introduced to the process, and I would argue that it is this model that the

developing nations are calling for in CBDR with respect to climate change. I would also argue

that this is not the correct model to follow and sticking to it will doom any climate change

regime to failure; perhaps even failure at the negotiating stage.

To argue for the inefficient model one would have to have a logical rationale to support

it, otherwise it would simply amount to punitive measures against the wealthy nations. As the

inefficient model entails added transfers of wealth from rich to poor states, one muse assume that

116

Auffhammer & Carson, supra note 83. 117

Auffhammer & Carson, supra note 83 at 30 118

Christopher Stone, “Common but Differentiated Responsibilities in International Law” (2004) 98 The American Journal of International Law 276 at 277-278

33

those that champion it want to tie the climate change issue and the world poverty issue together.

Now both of these are serious issues, perhaps among the most serious issues the world faces

today. But the two are not causally linked. The impoverished conditions in which many people

of the world live is not the direct result of green house gas emissions by the industrialized states

in the 19th and 20th centuries.119 And given the lack of a causal link, as well as the absence of

apparent efficiency gains from trying to find a single solution to address both problems, the idea

of combining the two most insurmountable international problems the world faces today into one

hyper-insurmountable problem seems most foolhardy.

There are many factors that contribute to the world not being a fair place. And we have a

moral responsibility to address these factors as best we can. But linking redistribution of world

wealth to the climate change regime is simply the wrong way to do it. Is there an unfair

imbalance of wealth in the world? Yes. Should we attempt to address it? Yes. Should we try to

address it through CBDR in climate change? No. We should seek some form of CBDR which

fits somewhere in Stone’s equitable CBDR model. Whether it should be closer to the inefficient

or the rational end of the scale is a matter for diplomats and politicians. Though I would suggest

that a resolution that initially allocates most of the equitable benefits to developing nations and

then slides back towards the rational model over time would make the most sense.

4.2.2 Critics

Critics of CBDR include Susan Biniaz120 who summarizes the concept as follows:

…the purposes of differentiation can be summarized as follows: (1) to assign a greater obligation to those who have contributed more to … climate change; (2) to assign a greater obligation to those who have more resources or capacity to deal with a particular problem, even if they did not cause that problem; (3) to recognize the special situation of one or more countries – and that does not necessarily have to be only developing countries, it can be other countries as well; (4) to recognize that countries may have

119

I do concede that recently worsening conditions for some peoples of the world due to what is argued are the early impacts of climate change (e.g. summer 2010 flooding in Pakistan) have a connection to historical GHG emissions, but this is not a strong enough connection to establish an overall causal link between GHG emissions and world poverty. 120

Ms Biniaz is a legal advisor to the U.S. Department of State

34

different priorities and that a particular environmental issue may not be their top priority; and (5) to promote broad participation in an agreement.121

Biniaz goes on to argue that the CBDR principle is neither necessary nor helpful. It is not

necessary because CBDR was happening in international agreements (for example the Montreal

Protocol) before someone decided that we needed to formally label it a Principle.122 She then

cites four reasons why it is not helpful: “(1) There is no agreement on what it means; (2) there is

no agreement on when it applies; (3) it is over argued; and (4) it breeds laziness in the

negotiating process”.123 Further she notes a flaw in the UNFCCC in that it expressly names the

“developed” countries in Annex I and that list can only be changed if all parties agree. A better

solution she argues, and I agree, would be to set criteria for what constituted an Annex I country

(GDP, world trade levels, etc) so that countries would automatically enter the Annex I list when

they reached a certain point in their development.124

While these comments are now seven years old they still have application to the

challenges we face today. Developing countries seem to wave the CBDR flag to argue lack of

any responsibility on their part. And China, now the world’s largest emitter, with a strong

industrial economy, advanced technology, and ample State wealth, should hardly be in a position

to abdicate international responsibility on the grounds that it is a poor, backward, developing

country; especially given the fact that its per capita GHG emissions now exceeds Turkey and

Latvia, both Annex I states under the UNFCC.125

121

Remarks by Susan Biniaz, American Society of International Law, Proceedings of the Annual meeting. Washington: 2002. pp. 359-363. 122

Ibid. 123

Ibid. 124

Examples of such modeling can be found in the Montreal Protocol, supra note 52 which gives a 10 year grace period to countries with per-capita consumption of CFCs below a certain level, and the Basel Convention on trade in hazardous waste which includes all OECD countries in its list of developed nations; so if a country joined the OECD after the fact and it would automatically be on the list. 125

World Resources Institute, Climate Analysis Indicators Tool, online at: < http://cait.wri.org>. [WRI]

35

4.3 State Interpretation

As Biniaz notes, a fundamental challenge facing CBDR is a lack of consensus as to what

it in fact means. This lack of consensus stems not so much from a high level of the

understanding of the concept but in answer to the questions of why, what, how, how far, and for

how long, discussed above.

The differences tend to run across the north/south or developed/developing country

divide. While many U.S. politicians have acknowledged a causal connection between global

warming and developed country emissions,126 the question of whether the reasons for

differentiation are based on capability or culpability remains a hot-button issue between

developed and developing nations. Developing nations favour an interpretation based on the

culpability of developed states and a resulting entitlement of developing states to different

treatment under the principle. The position is “rooted in obligation and liability”127, with

differential treatment being a ‘vested right’128 of the developing nations which they are entitled

to demand.129 Developed states in turn tend to favour an interpretation based on the

“consideration that industrial countries might be willing to show developing countries”130 and

the fact that their greater capacity for mitigation creates a certain moral responsibility among

them. The position is “rooted in morality, humanity, and goodwill”,131 with differential treatment

being a matter of benevolence from rich to poor which the developing countries may request.132

126

Harris, “International Norms”, supra note 26 at 232-237 127

Rajamani, Differential Treatment, supra note 108 at 86. Rajamani takes the liability issue a step further by finding it rooted not just in an imbalance of emissions but of general patters of exploitation of the developing countries during the period of colonization by developed countries. While I would not deny that such exploitation took place, and may in part be an explanation of the wealth/development divide between north and south, I do maintain that it is pragmatically foolhardy to attempt to lump these historical issues together under a present umbrella solution. 128

ibid 129 ibid 130

Rajamani, Differential Treatment, supra note 108 at 79 131

Rajamani, Differential Treatment, supra note 108 at 86 132

ibid

36

This difference in position is “at the heart of the dissonance between industrial and

developing countries in the international environmental dialogue”133 So the question is do we

need to resolve it, or can we simply find a way to move beyond it. If, as a practical matter the

Annex I countries would make the same contribution to the climate change regime whether that

contribution was ultimately justified by culpability, capability or some combination of the two,

then I would suggest that we should find a way to move beyond the culpability/capability

question lest it stall efforts at a solution.

However, if we do need to resolve this interpretational divide, how do we do so? Why do

industrialized nations, while admitting factual responsibility, resist admitting legal liability based

on culpability as Rajamani suggests? I would suggest two explanations for this position. First,

there may be the concern that admitting culpability could open a Pandora’s box of other liability

issues for the industrialized states. If the industrialized states are legally responsible for GHG

concentrations in the atmosphere, should they not be legally responsible for the consequences

that flow from this fact? So for example, should the industrialized nations bear some measure of

legal financial responsibility for the Summer 2010 floods in Pakistan if it could be shown that

they were the result of climate change? Or when the tiny country of Tuvalo disappears beneath

the rising sea, should the U.S., for example, be required to give away a portion of the Florida

Keys (assuming that these too have not disappeared beneath the rising tides) so that the people of

Tuvalo can relocate their sovereign country.

Second is the fact that developing nations are arguably pushing for an interpretation of

CBDR that would fall into Stone’s inefficient CBDR model. And if the rationale behind this

argument could be to redress issues not directly related to climate change (such as historic

exploitation from colonization as Rajamani suggests), then an admission of culpability could be

seen as the thin edge of wedge to other historic issues of culpability not directly related to

climate change.

133

ibid

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4.4 Application in Practice

“International law is founded upon the notion that states are juridically equal”134

A unique characteristic of public international law in general is that, given inter alia the

principle of state sovereignty, public international law is formed largely by consent between

nations. Customary international law seeks consistency of state practice and opinio juris135

while international treaties rely on the formal consent of the state parties to be bound to them.

Thus a discussion of how, if at all, the concept of CBDR has been manifest in practice merits

discussion.

The first seeds of the CBDR concept can be found in the Stockholm Declaration.136 In

the preamble it notes that “protection … of the human environment is … the duty of all

governments”137 thus introducing the notion of common responsibility for the environment, and

goes on to speak of shared responsibilities and equitable sharing of efforts.138 Of the formal

principles of the Declaration, Principles 2 and 13 articulate the concept of sustainable

development, while Principles 9 and 12 refer to the need for international financial and technical

assistance to be provided developing countries to meet their environmental challenges. Principle

6 contains an early recognition of climate change and Principle 24 mentions the need for

international cooperation by all countries to address environmental issues. So while lacking a

formal declaration of the CBDR principle, we can see an assembly of some fundamental

components of the overall concepts.

134

Cullet, supra note 114 at 14 135

Essentially means that states are of the opinion that they are legally bound to comply with the custom in question. 136

Stockholm Declaration on the Human Environment, (1972) 11 I.L.M 1416 [Stockholm] 137

ibid at para 2 138

ibid at para 7

38

The Vienna Convention for the Protection of the Ozone Layer (1985)139 coupled with

The Montreal Protocol on Substances that Deplete the Ozone Layer (1987)140 are together two of

the earliest, and to date best, examples of CBDR in action; though the now familiar acronym had

not been conceived at that time. The preamble to the Convention recognizes the “circumstances

and particular requirements of developing countries”,141 while Article 2 articulates general

obligations of the parties and states that parties will meet these obligations “in accordance with

the means at their disposal and capabilities.”142 The Montreal Protocol goes on to lay out

substantive, binding compliance obligations. Here again we see CBDR in action. Unique

compliance obligations are laid out for developing countries in Article 5 of the protocol. Key

among the provisions is a 10-year delay in compliance obligations for developing countries,143

and tying compliance obligations of developing countries to the provision of financial aid and

technology transfer from developed countries.144 Articles 4 and 4A address issues of trade with

non-parties and parties respectively, to prevent the creation of so-called pollution havens for

production of ozone depleting substances.

Vienna and Montreal represent the high water mark of CBDR in practice to date. It was

clear that developed countries were to take the lead, but the obligations of developing countries

were also spelled out. And the limits on the extent to which the concept was taken, coupled with

the trade provisions helped to ensure that these measures enhanced, rather than detracted from,

the object and purpose of the Agreement. Also noteworthy is that the CBDR provisions are

largely based on capability rather than culpability, and so the whole fault debate is avoided. This

may be for two reasons. First, the developing nations, led by China, are relatively stronger

139

Vienna Convention for the Protection of the Ozone Layer, (1985) 26 I.L.M. 1529 [Vienna Convention Ozone] 140

Montreal Protocol, supra note 52 141

Vienna Convention Ozone, supra note 139, preamble para 4 142

ibid Article 2 Para 2(a) 143

Montreal Protocol, supra note 52, Article 5(1). 144

Montreal Protocol, supra note 52, Article 5(5).

39

internationally today than they were then145, and it is the developing nations who now argue

strongly for culpability with respect to climate change. Second, given the perceived greater

urgency of the situation and the ultimate objective to eliminate emissions of ozone depleting

substances, it would have been accepted that there was not an option for all countries not to act

domestically in the short term. In other words it really didn’t matter whose fault the problem was

historically. Everyone had to eliminate emissions in the short-medium term, and then wait for the

ozone to fix itself, which it has been shown to be doing.146

The first actual words in an official agreement came with Principle 7 of the Rio

Declaration which states: “In view of the different contributions to global environmental

degradation, States have common but differentiated responsibilities.”147 Note that the here

CBDR is hinging on culpability rather than capability, as it ties differences in responsibility to

differences in contribution to creation of the problem.. Principle 6 reiterates the special situation

of developing countries, while Principle 2 articulates the sovereign right of states to exploit their

natural resources but to ensure that their actions do not cause harm beyond their borders. And

the concept of sustainable development shows up in many places including Principles 3, 4, 5, and

8.

Rio was closely followed by the UNFCCC and later Kyoto. These were discussed in

some detail earlier but there are a few added points to make with respect to the CBDR concept.

The preamble to the UNFCCC and Article 3 thereof refer inter alia to states’ “common but

differentiated responsibilities and respective capabilities.”148 Whether this wording is meant to

reintroduce the notion of capability into the concept of CBDR (which was notably absent in Rio),

or is meant to emphasize that responsibility based on capability is a separate concept from

CBDR and so reinforce the responsibility stems from culpability notion expressed in Rio, or is

145

David Lampton, “What Growing Chinese Power Means for America” (Testimony prepared for U.S. Senate Committee on Foreign Relations) 7 June 2005) online: The Nixon Center www.nixoncenter.org. Also Tony Blair “Power is shifting east and fast”. Quote from 8 September 2010, interview with Charlie Rose. 146

Brian Handwerk, “Whatever Happened to the Ozone Hole?”, online: National Geographic Daily News iihttp://news.nationalgeographic.com/news/2010/05/100505-science-environment-ozone-hole-25-years/. 147

Rio Declaration on Environment and Development, (1992) 31 I.L.M. 876, Principle 7 [emphasis added]. [Rio] 148

UNFCCC, supra note 15, Preamble para 6, and Art 3(1).

40

meant as a form of ‘out’ by which a country could admit fault for the problem but argue that they

lacked the capability to contribute to the solution, is not clear. I would argue that the first

explanation is best matched to the theoretical concept. Article 3 goes on to state that

“Accordingly, the developed country parties should take the lead in combating climate change

and the adverse affects thereof.”149 Again, does this mean that developed parties should lead

because they are both culpable and capable or that developed parties should lead because of their

culpability and developing parties have an excuse to lag behind because of their incapability?

Based on the wording of Article 4(7) which makes reference to developing country commitments

and then ties effective implementation thereof to financial and technical aid from the developed

countries, I’m would argue for the first interpretation.

Finally with respect to the UNFCCC, the Preamble makes note of the Vienna Convention

and the Montreal Protocol with respect to Ozone depleting substances. Perhaps the intent of this

was to suggest that UNFCCC and later Kyoto would follow the model of Vienna and Montreal.

Though as we have seen there were circumstances, not least of which was the increased

economic and political power of the developing world, which would take this plan off the rails.

It is also possible that this was just an administrative matter, given the fact that the UNFCCC and

Kyoto were specifically to cover emissions of gasses not covered by the Montreal Protocol.150

The Kyoto Protocol was a disappointment from a CBDR perspective, primarily because it

contained virtually no commitments, binding or voluntary from developing countries. Indeed

developing countries actively opposed the inclusion of even voluntary commitments on their part

in the protocol.151 The closest we find to a commitment is in Article 10(b) of the protocol which

notes that all parties shall “formulate, implement, publish and regularly update … programmes

containing measures to mitigate climate change”.152 But this already flaccid commitment is

149

UNFCCC, supra note 15, Art 3(1) 150

UNFCCC, supra note 15, Art 4(2) 151

Paul Harris, “Common but Differentiated Responsibility: The Kyoto Protocol and United States Policy” (1999) 7 N.Y.U. Envt’l Law J. 27 at 34 [Harris, “CBDR”] 152

Kyoto Protocol, supra note 16, Art 10(b)

41

preceded by the opening words of the Article which state that this is all to happen “without

introducing any new commitments for Parties not included in Annex I.”153

Why Kyoto does not include even voluntary commitments from developing states, or

reiterate their commitment to sustainable development, or state that commitments are not

expected at this time but will come in the next round (even if those words were only to be found

in the preamble), remains a mystery. Article 4(9) makes reference to determining “commitments

for subsequent periods for parties included in Annex I”154 thus showing a clear view that Kyoto

was just a first step. It would have been logical to at least include a reference to future

commitments from non-Annex I parties here, as this would acknowledge that commitments from

non-Annex I parties would be expected at some future date. It is this very absence of anything of

this sort which doomed Kyoto, and likely the Copenhagen round to failure. As the first

agreement with binding obligations for climate change, Kyoto concretized the notion that

responsibility for combating climate change rested 100% with the developed states.

4.4.1 Conclusion

So what do we see from the practical application of CBDR to date, aside from seeing that

Biniaz’s criticism are not unfounded? We see consensus that capability to act is a component of

differentiation among nations, and that the wealthy more technologically advanced nations have

a duty to help out those with difficulty meeting their commitments. We see that responsibility

for causing the problem is a factor in differentiation, arguably stemming from the general

polluter pays principle, but we have not seen consensus that factual responsibility results in legal

culpability in this context. We see a tendency to make compliance with obligations by the weak

dependent on compliance with obligations of the strong, especially with respect to financial and

technological aid. And we see weak references to sustainable development; though rather than

being positioned as an obligation in itself, it is posited as a caveat on the broader right to

development.

153

ibid, Art 10 154

ibid, Art 4(9)

42

What we generally do not see is express language/practice tying the concept of CBDR to

the overall objective of the agreement, though the Montreal protocol came close in the preamble,

stating that the provision of aid to developing countries “can be expected to make a substantial

difference in the world’s ability to address [the problem]”.155 We do not see reference to the

temporary nature of the concept. We do not see clear statements of why one country is obligated

to do more/less than another. And we tend to see rather course categorization of countries (in

Kyoto it was just two: Annex I and everyone else) which do not reflect the real variety of either

culpability or capability that exists. And we do not see provisions (again with Montreal being an

exception) which dynamically define the haves and have nots in order to reflect the rapidly

changing world in which we live. The UNFCCC for example, would have been better had

Annex I countries been defined by some formula (GDP, total emissions, economic growth, level

of societal development, or more likely some combination thereof) so that as a country’s

circumstances changed its responsibilities could change with it.

4.5 What CBDR Should Be

I find the definition of CBDR, either as provided by scholars such as Biniaz, Rajavani,

Cullet and others, or as defined for more practical legal purposes by state interpretation and

collective state action as discussed above, to be lacking in a number of key respects. First, would

simply be those points noted in 4.4.1, above, with respect to what we do not see, or at least have

not seen consistently to date in the forums which collectively comprise the stock of international

law.

Second, it looks to history to find responsibility for situations of the past, present and

future; but absent the presence of history-based responsibility, it does not consider present

actions to find responsibilities for the present and future. More specifically, China, armed with

the knowledge of the consequences of historical state action, has a responsibility not to repeat the

mistakes of the past. Which is perhaps a more forceful way of expressing the principle of

sustainable development. And I would stress that sustainable development should be regarded as

155

Montreal Protocol, supra note 52, Preamble para 7

43

a duty of all nations – the developed to convert to it and the developing to pursue it in the first

place – rather than a mere caveat on a general right to development.

Third, in considering CBDR the discussions are always limited to emissions and wealth.

An important variable in the emissions equation is the population of the earth, as can be seen

from the classic IPAT formula156 environmental Impact = Population x Affluence x

Technology.157 As the population increases, ceteris paribus, emissions will increase. In the past

50 years, as Figure 2 (in section 3 supra) shows, the majority of population growth has happened

in developing nations and developing nations are expected to account for the majority of growth

between now and 2050.158 Thus in considering our differing responsibilities, we should not limit

ourselves only to differing responsibilities for emissions, but consider also differing

responsibilities for global population growth. Environmental impact of developed nations has

grown over time, fueled largely by affluence, and tempered somewhat by technology. For a

developing country such as China, its massive population implies that a relatively small increase

in affluence in the IPAT model could have massive effects on its overall environmental impact.

Further, the size of China’s population implies that changes in its population growth rate would

have a greater impact on world population than would a similar change in the U.S.. If China’s

grew by 1%, the percentage impact on world population would be 4 times greater than if the U.S.

population grew by the same percentage.159

To date, CBDR discussions have been limited to matters related to the Affluence

component of the IPAT formula. It is largely a result of the industrialized nations’ affluence that

they have larger per capita emission levels than the developing world. The point here is simply

that CBDR discussions need to consider all variables in that formula, and specifically population

growth.

156

Aufthammer & Carson, supra note 83 157

Note that the technology multiplier in particular could be a number greater or less than 1. If the multiplier is less than one this would be indicative of advances in technology reducing the environmental impact of society. 158

“Linking Population, Poverty and Development” online: United Nations Population Fund < http://www.unfpa.org/pds/trends.htm>. 159

A 1% increase in China’s population would increase world population by 0.2%. A 1% increase in U.S. population would increase world population by 0.05%.

44

4.6 CBDR Summation

The basic questions when it comes to CBDR are: who has a responsibility for what; why;

and how far do we take it. Looking at the answers:

Who’s responsible for what? The polluter pays based on culpability, and wealthy,

technologically advanced nations aids poor nations based on capability. More specifically in

practice, Annex I polluters pay based on culpability, and Annex I states aid non-Annex I states

based on capability.

Why are they responsible? This remains a bone of contention on the north-south divide,

with the south (developing nations) pushing strongly for responsibility based on culpability and a

right to redress on their part; and the north, while acknowledging factual responsibility for the

historic stock of GHGs in the atmosphere, pushing for a capability based approach for reasons

detailed earlier.

In looking at cause, law and economics scholars Posner and Sunstein suggest dividing

responsibility for greenhouse gases into stock and flow;160 stock representing the existing stock

of GHGs as of some set date, and flow representing current GHG emissions. An apt analogy is

that of a bathtub, where stock represents the amount of water in the tub, flow represents the

amount of new water flowing in, and the rim of the tub, or just shy of it, represents the maximum

combination of stock and flow to avoid serious and perhaps catastrophic consequences.

Looking first to stock, we need to pick a year where it can be established that the

industrialized countries knew, or ought to have known, that their emissions would be having an

impact on global climate. Whether that year is when the notion of climate change was first raised

in the academic community, when it received widespread acceptance in the community, or when

it was accepted by governments, would be relevant to the actual calculation of ultimate

responsibility, but it is not important for my purposes here. Suffice to say simply that some year

will be chosen. I’ll call this year “A”. And picking this year is only significant if we are using

principles of negligence rather than strict or absolute liability to assign responsibility. With

160

Eric Posner & Cass Sunstein, “Climate Change Justice” (2008) 96 Geo.L.J. 1565.

45

negligence, the liability is found if the State knew, or ought to have known, that GHG emissions

could cause damage; whereas with strict liability, liability stems from the simple act of omitting,

provided that the state could not show that it took all reasonable steps to prevent the emissions

happening (the defence of due diligence). Absolute liability would eliminate the due diligence

defence.

Next, we need to pick some year at which to cap the stock of GHGs in the atmosphere.

That year should be one which represents a reasonable approximation of the time when the

industrialized nations stopped being overwhelmingly the biggest emitters in the world. Now of

course since these changes do not in fact happen in a single year, what would probably be

required is to find a year where everyone could agree that the industrialized nations were the big

emitters, find another year where everyone could agree that by now the tables had turned, and

find some sort of mid-point between the two that could be selected as a shift year. I’ll call this

year “B”

Thus from a culpability/causation perspective, emissions caused prior to year “A” are not

the responsibility of the industrialized nations and would therefore be the common responsibility

of the world (note that I am not considering capacity as of yet). Emissions between years A and

B represent the portion of the stock that are the sole responsibility of industrialized nations. And

emissions after year B represent the flow where each country, industrialized or developing, is in

principle responsible for their emissions.

Under a strict liability approach, which developing nations would favour, the

industrialized nations would be responsible for all emissions prior to year B. But where I believe

this argument should backfire against the developing nations, is that by imposing strict liability

against the developed states they are implicitly saying that the developed states had no right to

cause this damage in the first place and therefore must make reparations now. But if the

industrialized nations had no right to emit large levels of GHGs even not knowing the

consequences, then surely the developing nations do not now have the right to emit large levels

of GHGs now especially since they do know the consequences, and the polluter pays principle is

now well established.

Finally the question of how far we take it is also a matter of outstanding debate. As to

how far on a matter of scale, the question comes down to whether we use the climate change

46

regime to address other historic/present north/south inequalities (Stone’s inefficient model).

Here the argument among scholars is mixed: law and economics scholars such as Posner and

Sunstein argue against this distributive justice model, while other scholars such as Rajavani look

to use the climate change regime to redress past wrongs of exploitation through colonization. I

side with Posner and Sunstein on this point. Where there does appear to be consistency in the

literature is in the notion that CBDR should not be taken so far as to detract from the object and

purpose of the agreement. In any case it is to be a temporary measure that should end when the

circumstances that warranted it end. The Montreal Protocol was an example of the former

principle in action while the Kyoto protocol is arguably an example of its breach. While we have

not seen evidence of the latter point (temporary nature) in application, this is more likely due to

the fact that in circumstances such as the Montreal Protocol, the object of the agreement was

achieved while the circumstances which warranted the initial differential treatment still existed.

5 Fairness and Justice In considering what a country’s responsibility for climate change should be it is

necessary to consider some more abstract questions of fairness and justice.

Combating climate change requires global action based on a consensus among sovereign nations that are more likely to adopt and faithfully implement an agreement that is perceived to be fair and equitable.161

Soltau gets it right. Not only would an unfair regime appear to be inequitable, it is highly

unlikely that nations would consent to an agreement which was unfair to them or appeared to be

unfair to them.162 But what is meant by the terms fair and fairness. Soltau points out, referring to

the work of Thomas Franck, that “there is no one conception of fairness, but rather that fairness

‘is a product of social context and history’”163

161

Soltau, supra note 12 at 5 162

of course MEAs are not negotiated in a vacuum and different states have different levels of bargaining power. State’s may be ‘encouraged’ to consent to an MEA that may not on its face appear fair, providing that sufficient incentives (whether of the carrot or the stick variety) are provided as suasion. 163

Soltau, supra note 12 at 147.

47

One could devote an entire text to a discussion of the meaning of fairness, rights, and

justice, as many have, but that is not my focus here. Instead I will briefly examine some

plausible concepts of fairness, and then look at China’s claim that it is not fair to ask it to curb

even its emissions growth in light of these concepts.

Essentially what is being considered here is a distribution of a good of sorts, that good

being CO2 emissions allocations. Of the myriad models for fairness and distributive justice, I’ll

look at just three: egalitarian, utilitarian, and liberal Rawlsian. The first two were selected

because they bracket the issue quite well: equal distribution of “wealth”164 for all and

maximizing collective wealth for all respectively. The third, because it represents a flexible

middle ground somewhere between the two end points.

Under an egalitarian model every actor has the same right to emit. Now strictly speaking

the ‘actors’ in international law are states, however a model which would suggest that tiny

Tuvalu had the same right to emit as China would rightly be dismissed as absurd. So for the sake

of this exercise I’m going to assume that the egalitarian model pierces the sovereign veil and

allocates emissions to people; essentially a per capita distribution model. A slightly softer

version of the model would say that emission rights are distributed so as to fulfill an equal level

of need for all parties. So for example if people living in colder climates need more power than

people living in moderate climates then distribution would be adjusted accordingly.

A utilitarian model would see emission rights distributed in such a way as to maximize

overall wealth. So for example if country “A” can produce a basket of goods while emitting

50% of the CO2 that it takes country “B” to produce the same basket, then it makes sense to give

country “A” a greater allocation of emission rights because it can do more with it. This is similar

to allocating emission rights based on CO2 per unit of GDP, though since certain industries are

more carbon intensive that others by nature, there would need to be an adjustment factor to

recognize the group of industries that make up a certain country’s GDP. Or alternatively

allocation could be done internationally by industry.

164

I’m using the term ‘wealth’ not in the strict monetary sense but rather as a term for general wellbeing. One might choose the terms ‘welfare’ or ‘utility’ as alternatives

48

In his book Justice as Fairness165 John Rawls provides a concise restatement of his

seminal work A Theory of Justice. Rawls posits a “realistically utopian”166 theory of justice for

society. Rawls’s work is quite abstract in the discussion of what he terms “primary goods”167

which are in fact more meta-goods and social conditions than actual tangible goods. While they

arguably encompass such things as food, shelter, education, etc., these more tangible goods are

not expressly discussed by Rawls. So one must concede that by taking Rawls’s distribution

theories as they relate to primary goods and applying them to an actual concrete good, one is

taking certain liberties with the theory, but the theory can still have application.

A key component of Rawls’s theory of distributive justice is the difference principle, by

which we “compare schemes of cooperation by seeing how well the least advantaged are under

each scheme, and then … select the scheme under which the least advantaged are better off than

they are under any other scheme.”168 Now the difference principle could well be applied to

emissions in a domestic context, indeed Justice as Fairness is presented as a theory of

application to a domestic context only. One could envision a situation where the very poor had

to burn dung or coal for heat and cooking, and where their emission rights would be better

allocated to another individual who could produce fossil based power more efficiently, with the

proviso that the poor would then be given an equivalent supply of clean power for heating and

cooking at a price somewhat below what they had been paying for coal.

It is more difficult to attempt to apply the theory in an international context, indeed Rawls

rejects its application in The Law of Peoples.169 However in the example he uses there for

rejecting its application he speaks of the impracticality of redistributing natural resources from a

165

John Rawls, Justice as Fairness – A Restatement (Cambridge Mass.: The Belknap Press of Harvard University Press, 2001) [Rawls, Fairness] 166

ibid at 4. Rawls defines realistically utopian as “probing the limits of practical political possibility” 167

ibid at 57 168

ibid at 59 169

John Rawls, The Law of Peoples (Cambridge Mass.: Harvard University Press, 1999 [Rawls, Peoples] at 116

49

resource rich to a resource poor country.170 Here the discussion is with regards to a right to do

something (emit), and I would suggest that because we are not dealing with the redistribution of

physical matter, it makes the concept possible, though still conceptually difficult. And it is

possible that the application of the CBDR principle could serve as an international equivalent to

a domestic redistributive taxation scheme.

So of these three distribution models, egalitarian, utilitarian and Rawlsian, which one

gives a fair distribution in theory and to what extent can that theory be translated into practice?

Egalitarianism has a certain equitable appeal; you have a pie, you need to divide that pie into 6

billion pieces, so why shouldn’t everyone get the same size piece. But an egalitarian distribution

would not maximize wealth and welfare for the community.171 By contrast a utilitarian model

would maximize overall wealth and welfare, but perhaps at the expense of the least advantaged

in the resulting community. This is the appeal of the Rawlsian approach. It permits an uneven

distribution to improve overall welfare if and only if it results in a system where the least well off

are better off than they would have been under any other distribution, including egalitarian and

utilitarian.

One might well question whether the Rawlsian approach is tenable at a global scale? To

this I would simply respond that the final approach that is agreed to between nations to combat

climate change will be an agreement of politicians and diplomats. And regardless of the

approach taken, compliance and enforcement will always be an issue. The practical value of the

Rawlsian approach is a demonstrative/persuasive one. If it can be shown to nations that an

approach is more fair and in their best interests than other available approaches, they are more

likely to sign on and make best efforts to comply.

Usually with any of these models we are not talking about a distribution of a single

particular good and are usually considering utility resulting from a distribution rather than the

170

ibid. 171

Imagine for example that everyone in society had an equal right to attend medical school. Since not everyone can attend medical school, admissions would have to be allotted on some sort of lottery system, with the result that the quality of health care in the community would not be maximized. This is just a small example but the overall principle is sound

50

distribution itself. It is in fact impossible to know, without a study far beyond the scope of this

paper, what the world would look like if everyone had an equal right to emit CO2, but it would

certainly look very different than it does today. If CO2 emissions are a requirement for

industrialization, as China would argue they are and as they in fact were at the time of the

industrial revolution, then had the industrialized states been required to stick to a set level of

CO2 emissions they would have been unable to industrialize when they did or at the pace that

they did. Without the wealth and technological advancements which came with industrialization,

the consumer society, with its rapacious appetite for goods and services, as we know it would

have been unlikely to develop. When China adopted its market economic policies in the 1970s it

is unlikely that the export market that has fuelled its phenomenal growth over the past 30 years

would have even existed. Thus it can be argued that China’s rapid growth is dependent, at least

in part, on the historical emissions of the industrialized states.

The work of Amartya Sen in his recent text The Idea of Justice172 is also of value to this

analysis. Drawing on ancient Indian Sanskrit, Sen introduces the concepts of niti and nyaya; both

words that mean justice in Sanskrit. Niti refers to “organizational propriety and behavioural

correctness”173, while nyaya refers to “a comprehensive concept of realized justice”.174 Stated a

different way, niti refers to a concept of justice which concerns itself with the institutions (the

means) of justice, while nyaya concerns itself not only with the means to justice but with the

ends, the actual results. Sen’s two concepts could be seen as similar to a two element notion of

fairness put forward by Thomas Franck: “‘right process,’ or procedural fairness, and substantive

fairness, or the fairness of outcomes.”175 Now one cannot assume that someone taking a niti type

approach would be totally uninterested in results, for in designing their means they must have

had a motivation for the choices they made, and that motivation would be the desired ends.

172

Amartya Sen, The Idea of Justice (Cambridge Mass.: Harvard University Press, 2009) 173

ibid at 20 174

ibid 175

Soltau, supra note 12 at 146.

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Further, I would suggest that the distinction between niti and nyaya is relatively more

important the further we are from a just society. A niti theorist would take the view that if you

get the means right the ends will necessarily follow. The value of a nyaya type theory is, I

believe, to serve as a double-check on the niti theory. If you can show that injustice still exists by

examining results, then you have shown that the niti theory either did not get the means right

after all or, and this is perhaps more likely in reality, had presented an incomplete set of means

and so all ends were not accomplished. Thus were we to achieve something akin to Rawls’s

realistically utopian, just society, the two concepts would, for all practical purposes, converge.

For when we achieve the substantively just nyaya type results, this would be an indication that

we had in fact finally got the more procedural/institutional niti type structures of justice correct

as well.

The relevance to our analysis of justice/fairness in this context is that a just climate

change regime needs to be just from a distinctly nyaya perspective. I would suggest that while it

does show some concern for results, the Kyoto protocol leans towards a niti perspective. Had the

Copenhagen COP/MOP resulted in a successful step forward towards an effective climate

regime, then one could look at the totality of the UNFCCC, Kyoto, Copenhagen, and future

cycles of the COP/MOP as a successful nyaya type approach to climate justice. With each cycle

we would examine the results of the institutions and processes we had put in place in the climate

regime, we would identify where we had and had not achieved the desired results, and then

would make adjustments to the institutions and processes of the regime with a view to coming

closer to ultimate object and purpose of the climate regime. But unfortunately everything seemed

to grind to a halt in Copenhagen.

Ultimately climate justice will be manifest in the results. It will not matter if the things

agreed to on paper seemed fair and reasonable around a negotiating table if the objective and

purpose of the agreement is not met. And justice/fairness must be considered on a global scale

not merely in nation-to-nation terms. China has several arguments (discussed in detail in section

6) for why it should not be called upon to curb its emissions now. These are understandably

rational, albeit somewhat selfish, arguments of the ‘what’s just for China’ variety. But we have

to think in a ‘what’s just for the world’ context. If China’s inaction on climate change

significantly increases the risk that serious or even catastrophic climate change will occur despite

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best efforts of willing states, then we truly cannot say that we have achieved global nyaya

climate justice, and therefore China’s position would be neither just nor fair.

5.1 Introducing an Element of Pragmatism to the Fairness Debate "Fleeing from the Cylon tyranny, the last Battlestar, Galactica, leads a ragtag, fugitive fleet, on a lonely quest—for a shining planet known as Earth." 176

Were this in fact the explanation for how human life came to exist on the Earth – arriving

as interstellar colonists, armed with the knowledge of the impact that GHG emissions could have

on a planet – we would almost certainly have set things up differently than they are today. But

that is not the reality we face. Notions of fairness and justice, particularly on a global scale are

relatively modern concepts. We should not completely ignore history in making decisions for the

present and future, but at the same time it is not practical to attempt to redress even a small

fraction of the injustices and wrongs of history, many of which were perpetrated on and suffered

by individuals long since dead, in attempting to posit a more just and more fair future for the

peoples of the world. This is not to say that we should accept gross differentiations in wealth

between peoples as a static given, but simply that as a world today we have to play the hands we

have been dealt from history. Despite the fact that there is an apparent historic correlation

between GHG emissions and wealth,177 we need to resist the temptation to tie global wealth

redistribution to the climate change regime, simply because such a tie dooms to failure any

efforts to establish an effective regime. So we need to play the hands we’ve been dealt. This is a

much more appealing prospect to the developed world because to date they have been dealt the

better hand. But the developing world needs to be cautious not to overplay their hand, lest the

developed world walk away from the game altogether and perhaps start a new game.

If one insists on a strict egalitarian definition of fairness then one will find that the world

is not a very fair place, and indeed never will be. Indeed as long as we accept the principle of

state sovereignty as a fundamental principle of international law there will always be more and

176

Lorne Greene in the role of Commander Adama. Closing narration for “Battlestar Gallactica” 1978-79 season. 177

I use the word apparent simply because the discussion of the validity of such correlation is beyond the scope of this paper.

53

less wealthy states, by virtue of the myriad factors that affect the wealth of a people, including

availability of natural resources, climate, population density, levels of education, forms of

government, presence or absence of corruption in government, and so forth. This is not to

suggest that the world is currently a fair or just place by any means, indeed it is not. However

attempts to use a climate change regime to remedy both climate change issues and broader issues

of disparities of wealth adds a burdensome layer of complexity to one of the already more

complex problems humankind has had to face. So I suggest that except to the extent that it is

required to achieve the primary results of a fair climate change regime, redistribution of wealth

from rich to poor should not form a part of that regime. In other words in the context of the

climate change regime we should only transfer wealth and technology to states in need if it can

be tied directly to their domestic efforts to mitigate climate change or adapt to climate change.

There may be other valid reasons for transferring of wealth and technology to poor nations, but

these should be done via separate international agreements where the reasons for these additional

transfers related directly to the objects and purposes of those agreements.

5.2 Two Hypothetical Examples

In considering what would be a fair solution today, it is worthwhile to look at two

hypothetical scenarios and what would have been considered fair in those contexts.

Example 1. In this scenario the industrialized nations elect to take decisive action on

climate change in the late 1970’s. At this time there was already scientific evidence of the

mounting problem and the economic/industrial revolution in China was in its infancy. One can

reasonably posit that an MEA conceived at that time, whether or not it would have included

developing nations as active participants, would have at least contained provisions to with

respect to the migration of GHG emitting industries to non-participants in order to prevent the

creation of so called pollution havens which would both thwart the objective of the agreement

and cause significant economic harm to the member states. Would this have been regarded as

unfair or unreasonable? I think not. And had such an MEA provided a delayed implementation

provision for developing states and a provision for technology transfer (similar to the Montreal

Protocol) it would have provided significant incentives for developing states not to repeat the

past mistakes of the industrialized world and to follow a path of sustainable development.

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The point here is that we cannot pick and choose between what errors of the past should

be addressed. China has benefited both from the industrialized worlds rapacious appetite for

consumer goods and from its failure to act to address climate change at an earlier date. It is

unfair to reap the benefits from another person’s errors/crimes while asking them to remedy

those errors/crimes. If it is now reasonable to ask industrialized states to remedy the results of

their past actions/inactions, then it should be reasonable if part of that remedy involves trade

measures to attempt to eliminate pollution havens. Industrialized states should have acted

earlier, and if they had acted they would have included measures to prevent the creation of

pollution havens. So actions they take now should address both emissions and pollution havens

such as China.

Example 2: In this scenario the world faces the same stock levels of GHGs in the

atmosphere as it does today, and the anthropogenic flow of GHGs into the atmosphere is the

same, but rather than that stock of GHGs having been caused by long term emissions from the

industrialized states, it was caused by a natural event which was predictable and could have been

averted by the industrialized states had they chosen to take action.178 For the sake for this

argument let us assume that a large ‘meteorite’ of frozen CO2 was approaching the earth

(perhaps the result of some alien culture’s carbon sequestration policies) which could be diverted

or destroyed by some satellite based laser. The industrialized nations of the time did not take

action because CO2 was not perceived to be a threat and the expense of diverting this large

frozen ball of CO2 would have been immense; i.e. on a cost-benefit analysis given available data

it did not make sense to take action. Under this scenario would the industrialized nations be

found culpable for the stock of CO2 in the atmosphere? Again I think not.179 It is quite

conceivable that they would still be called on to take a greater share responsibility for the

problem, but this would be grounded in capability rather than culpability. And I would assert that

178

This example admittedly tests the bounds of reality. The cynic is likely to ask, how did we get to where we are today without our actions being the cause of the problem. But as many scenarios presented in theses and papers have little connection to reality, I ask the reader’s indulgence for the purpose of this thought exercise. 179

By analogy, consider a situation where a river flows through a state. If that state pollutes the river they may be found culpable for the harm this causes to the neigbouring state that the river flows into (the Trail Smelter principle). But if a polluted river flows into one state and they do not take action to clean it up, even if they had the capability to do so, they are not going to be found culpable for damages caused to downstream states. While not a direct parallel to the situation here discussed, the same principles apply.

55

it is highly likely that with respect to ongoing flow of GHGs into the atmosphere all nations,

developing and developed, would be called on to act now, to the extent they were able, because

there would not be a group of states to whom blame for the situation could be assigned.

5.3 Conclusion

Any climate change regime that does not result in an effective solution to the climate

change problem is not a fair regime. This is not to suggest that every regime that would result in

an effective solution is necessarily a fair regime. Proper application of the principle of CBDR is

required to ensure that burden is shared equitably among nations. Many states and peoples will

suffer greatly from a problem which they had little or no contribution to creating and which they

can make little or no contribution to solving. Examples would include small island states which

may be wiped off the face of the earth by rising sea levels, as well as many of the people in sub-

Saharan Africa and other regions of the world which are predicted to suffer disproportionate

consequences if the climate change problem goes unchecked.180

And every state has the right to social and economic development, though it has been

agreed in numerous international conventions181 that such development must be sustainable.

Indeed unsustainable development by large nations such as China or the U.S. would virtually

ensure the failure of any climate change regime. But the responsibility of these two nations

(which can here be used as symbols for the large emitters in the developing and industrialized

worlds respectively) is different. The U.S. has developed in a largely unsustainable manner, so it

is its responsibility to replace its unsustainable infrastructure with a sustainable one. China on

the other hand is relatively early on in its development path. It is China’s responsibility not to

construct an unsustainable industrial infrastructure, but rather to construct a sustainable one at

first instance. In other words it is part of China’s responsibility not to repeat the mistakes of the

180

UNFCCC, supra note 15 preamble. While not specifically mentioning sub-Saharan Africa, the document references “arid and semi-arid areas or areas liable to floods, drought and desertification”. 181

These include: Stockholm Declaration, Rio Declaration, UNFCCC, Kyoto Protocol, IUCN Draft International Covenant on Environment and Development (1995), UN Convention on the law of the Non-Navigational Uses of International Watercourses (1997) [specifically w.r.t. sustainable use of watercourses], (1994) Agreement Establishing the World Trade Organization, and others.

56

past, though to date China has shirked this responsibility. So it would perhaps be more realistic

to say that it is China’s responsibility not to continue to repeat the mistakes of the past.

The climate change problem cannot be solved without China’s meaningful

participation182. It is therefore fair to demand that China get involved now. As has been noted

by Adams, individuals living in areas most likely to face catastrophic effects of climate change,

such as Tuvalu or Bangladesh “… would not care who emitted the greenhouse gases, only that

they were emitted. They would not accept that the need for economic development in China and

India outweighs their own rights.”183 However in order to be fair such a regime must maintain

China’s right to sustainable development over the longer term. It has been argued that climate

change is a problem that we need to solve now or we may not be able to solve it at all.184 And

while this is a most politically incorrect thing to suggest, the world has lived with poverty and

suffering for a very long time. If need be, perhaps we can wait a little longer to solve these

problems. If we do not effectively address global climate change, the suffering of the poorest

peoples in the world will increase, through food shortages, malaria, droughts, flooding and other

extremes of climate, and efforts to address world poverty and suffering will be for naught. Thus

if looking for a solution which ties climate change to world poverty results in an ineffective

solution to both, as to date it has, then it is important to deal with both issues separately and give

priority to climate change if needed. At least in theory we can begin to address climate change

without specifically addressing world poverty. The converse is not true.

6 Addressing China’s Arguments China has three arguments they can put forward for why they shouldn’t be required to

limit their GHG emissions and contribute to the climate change solution now.

182

Supra note 73. 183

Todd B. Adams, “Rawls' Theory of Justice and International Environmental Law: A Philosophical Perspective” (2007) 20 Pac. McGeorge Global Bus. & Dev. L.J. 1 at 12 184

Without the polar ice caps the ocean warming would accelerate as more heat from the sun is absorbed. Melting permafrost has been predicted to have the potential to release large amounts of methane into the atmosphere; predicted increases in wildfires from droughts would further up the ante of CO2 in the atmosphere; and rises in water temperature reduce the oceans ability to act as a carbon sink.

57

China’s first, and perhaps substantively best, argument is that it is not responsible for

(most of) the climate change problem to date. Looked at in the context of who’s responsible for

most of the current stock of GHGs in the atmosphere, this is true. But as noted earlier, China has

undoubtedly benefited from those who did create the climate change problem. While this is not

meant to exonerate the industrialized nations from their responsibility to lead, as they were the

main cause of the problem and have reaped benefits from it far in excess of those reaped by

China, China has reaped substantial benefits, particularly in the last 30 years. Also while China

may have not contributed substantially to the current stock of GHGs in the atmosphere, they are

now the largest contributor to the flow of GHGs going in to the atmosphere, and based on the

polluter pays principle185 should be accountable for those emissions.

So this argument from China has some merit with respect to the existing stock of GHGs

but not with the respect to current flow, and it is worth recalling the argument put ward by

Posner and Sunstein with respect to separating stock from flow in the climate change regime

discussed in section 4.6.

China’s current inaction on climate change contributes to the overall climate change

problem in another way. If an effective solution to climate change is not possible without

China’s participation, then other countries, Annex I included, will be less likely to participate in

a climate change regime without China. A climate change regime will entail at least short to

medium term costs. Using a simple cost-benefit analysis a country would be unlikely to be

willing to spend money on a program they expected to be unsuccessful. So here China has a

unique capability, and therefore arguably a responsibility, to motivate key nations of the world to

participate in a climate change solution. Admittedly the participation of the U.S. would also be a

key motivating factor, but once China is on board with a regime that has safeguards to prevent

the migration of emissions to new pollution havens such as India, The U.S. would be very hard

pressed to find a legitimate argument not to come on board as well.

China’s second argument is what I will call the “it’s our turn” argument. The core of this

argument is that the industrialized nations emitted vast amounts of CO2 in the course of their

185

Rio, supra note 147 at Art. 16

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industrialization and path to wealth, so now it is China’s turn to do the same; predicated of

course on the assumption that development and increased CO2 emissions go hand in hand, as

historically they have. Essentially China is arguing for its right to develop. But as argued

previously, sustainable development should not be regarded as a mere expendable caveat on the

right to develop. The duty to develop sustainably must supercede the basic right to develop, at

least when a breach of that duty has an impact on the rights of other peoples and nations; i.e.

when a country is big enough that what it does or does not do matters to the world.

So while it might seem fair in one sense for China to have the same opportunities as the

industrialized countries did over a century ago, the fact is that the rules of the game have

changed. The world is different now: in our levels of knowledge about the impact of our actions;

the global population; the technological alternatives to a carbon economy which are coming on

line; that fact that given the current stock of GHGs in the atmosphere the marginal cost of further

emissions, by any country, is far greater than it was a century ago; developments in international

law including the polluter pay principle; and the fact that if China continues on its path of

unbridled, carbon focused development, major if not catastrophic climate change is highly

likely.186 Even if one could regard this as a sort of tit-for-tat fairness between China and the

Annex I industrialized world, which I do not, it is certainly not fair to the roughly 62% of the

world’s population living outside of the Annex I countries and China.187

Finally, if China were not expected to take responsibility for the emissions of its first 30

years of industrialization and the ongoing flow of emissions from its continued industrialization,

the logical conclusion is that any country has a right to pursue a path of unsustainable

development through the first 30-40 years of industrialization, and further that responsibility for

dealing with these emissions rests on the world as a whole. But I would then argue that the

principle would need to be applied retroactively to exonerate now industrialized states from their

early period of emissions. And if we were to follow this model, should the period of free

186

Vandenbergh, supra note 80. Vandenbergh’s specific point is that China’s projected emissions may cause catastrophic change even if all other countries approached near zero emission levels. As this is highly unlikely to occur, I have extrapolated Vandenbergh’s point to suggest a high likelihood of catastrophic consequences if China stays on its current path. 187

World Population, supra note 74

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emissions be measured in years or in volume of emissions? i.e. do each of the industrialized

stated get freed of responsibility for a volume of emissions equal to those of China in the past 30

years? Since this doesn’t seem like a fair solution, it is implicitly unfair for China to continue to

increase its GHG emissions unchecked.

China’s third argument centres on the fact that its per capita GHG emissions are still well

below that of most of the industrialized world. China, India, and the G77 have advocated a

number of proposals for GHG accounting on the egalitarian principle that every citizen of the

earth has an equal right to the atmosphere and so permitted pollution levels should be done on a

per capita basis.188 In theory this approach has a certain equitable appeal; after all why isn’t

everyone entitled to the same sliver of the pie. But this is not really what China is arguing for.

China is basically arguing that because they have a massive population, they should as a country

be given a collective emission right equal to the per capita emission rights of their population,

but that they as a country should then be free to do with it as they wish. So they are essentially

asking for a piercing of the veil of sovereignty only for so long as it takes to do a head count of

their people; then the sovereign veil goes back into place and GHG emission allocations become

just another natural resource that they are free to manage as they wish. Thus their population

effectively becomes a resource for industrial emission rights, even if much of the population will

not see the direct benefit of those rights which were allegedly theirs.

It is not unexpected that China, and India, champion the per capita emissions model.

They both have massive populations and as such a per capita distribution of emission rights

would maximize their emission allocation. But it is noteworthy that as of 2005 China’s per capita

emissions already exceeded those of two Annex I countries: Turkey and Latvia.189 And also that

between 2000 and 2007 57% of total world growth in CO2 emissions came from China despite it

having only 19% of the world population.190

188

J. Timmons Roberts and Bradley C. Parks, supra note 109 at 164 189

WRI, supra note 125. 190

Calculation based on population and emissions data drawn from: World Population, supra note 74 and MDGI, supra note 115 respectively

60

There are a number of reasons for rejecting the per capita (“PC”) model. First, from a

practical perspective it simply is not going to happen. Such a model would entail vast transfers

of wealth from the U.S. and other Annex I countries to China and India, and they simply would

not agree to this.191 Now this does not mean that there should not or will not be some sort of

realignment of emissions during the 21st century, but insisting on a per capita model dooms

negotiations to failure. Beyond this practical point, there are other reasons to reject the per capita

distribution model.

Second, if we are looking to use GHG emission permits as a means for wealth

redistribution, Posner and Sunstein demonstrate that there is not a significant correlation between

per capita GDP and population.192 So as a means of wealth redistribution the per capita model is

flawed.

Third, there will be costs to climate change, but all countries will not suffer the effects of

climate change equally. Not taking account of this in an emission distribution scheme would

therefore cause an unfair overall result. Consider for example China and India. Similar in

population, but suppose that India were expected to suffer far more from the effects of climate

change than were China.193 Thus India would end up in a net worse off position than China

under a PC distribution, as they both could benefit equally from their right to emit, but the costs

to India of climate change would be greater.194

Fourth, per capita distribution encourages population growth. The earth’s capacity to

sustain human life is not without limits. Advances in technology may help us reach a level of

sustainability, but as world population increases each year the challenges to technology become

191

Eric Posner & Cass R. Sunstein "Should Greenhouse Gas Emissions Rights Be Allocated on a Per Capita Basis?" (2009) 97 California Law Review 51 at 56 192

ibid at 74. 193

To my knowledge India is expected to suffer more than China from the effects of climate change, but estimates of the impacts of climate change on China are changing. 194

Posner & Sunstein, supra note 191 at 75

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greater. As far back as the Stockholm declaration 195 we see reference to international concern

for rising population levels, yet little has been done globally to address the issue, and population

continues to rise at a rapid pace. With increased population will come increased GHG

emissions. Further, since most growth is predicted to occur in developing nations, the impact on

GHG emissions per unit of consumption/production will be proportionately higher as these

nations are generally working with less efficient and dirtier forms of energy production.

Under a PC model a country that managed to effectively control its population would be

penilised as it would lose emission rights over time as other countries’ populations grew. The

model is thus inherently unstable in this regard, as from year to year one state’s emissions

allocations could change based on the actions or inactions of others.

Posner and Sunstein also point out that a climate treaty with a PC distribution would

“most likely require the allocation of valuable permits to the governments of poor states, the

same corrupt or ineffective governments that have misused foreign aid. It seems highly likely

that some of these governments would misuse these permits as well, for example by transferring

them to cronies”196 They note further that these governments will be likely to sell the permits

and after that “they will be free to use the revenue however they wish. But the governments of

developing nations are not particularly generous to their poor.”197 Thus if the thought is that a

PC distribution will transfer wealth from rich to poor, the reality is that it would transfer wealth

from rich to poor nations but that the truly poor people in these nations might see little benefit.

Finally, I reject the per capita model, simply because it is unprecedented at international

law and represents a challenge to the notion of states as sovereign equals. If China is to have a

greater right to emit GHGs based on its population, this sets a precedent for arguing for other

population based international rights. Why for example is it fair that with 20% of the world’s

population China only has one vote at the U.N.? Or why shouldn’t China be able to defend cases

195

Stockholm, supra note 136 at Principle 16 196

Posner & Sunstein, supra note 191 at 90 197

Posner & Sunstein, supra note 191 at 91

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of trans-boundary pollution by arguing that on a per capita basis the amount of pollutants emitted

was very small?

So per capita emissions fails on a number of fronts. It encourages population growth, it is

unlikely to succeed as a means of distributive justice (due to government corruption, etc), it

implies a massive transfer of wealth from rich to poor states of a scale which would surely move

it into the inefficient CBDR model, and it in fact ensures that no universal climate change deal

would be reached, thus thwarting the overall objective and purpose of the regime.

Having considered and rejected each of China’s arguments for non-involvement, there

still remains the question of what would be a fair solution which included China’s involvement,

voluntary or otherwise. This is considered in the next two sections.

7 Looking for a Fair Solution I do not pretend to know what the fair solution is, or even that there is one single best

solution to a problem which has proved largely insurmountable to the international community to

date. The purpose of this section is to advance ideas and concepts that could prove useful in the

quest for an effective climate change regime and to discuss four key characteristics that any

solution needs to have in order to be both effective and fair.

First, a matter that will need to be settled is the question of who’s responsible for what

and why. With respect to responsibility based on culpability, and recalling my earlier discussion

of Sunstein’s stock and flow model, I would argue for taking Sunstein’s model and breaking it

down a step further. First we would have stock emitted prior to year A, for which responsibility

is not based on culpability. Next we would have stock emitted between years A and B, for which

responsibility would rest with the developed nations based on culpability. Finally we would

have stock emitted after year B and ongoing flow, for which responsibility would rest with the

emitting country, developed or developing based on culpability. Of course an ultimate

agreement might very well contain a more complex breakdown, but the basic concept but

forward here is sound.

With respect to capability it is simply a matter of the nations with greater wealth,

technology and opportunity – some nations because of circumstance will have opportunities to

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implement lower cost or more effective mitigation efforts – to take on a bigger slice of the

solution pie.

A point that must be remembered is that unlike say an oil spill, which you can go out and

at least partially mop up, the existing stock of GHGs in the atmosphere cannot be artificially

removed. Some acceleration of dissipation may be possible by creation of new carbon sinks

through, for example, reforestation, but to a great extent we just have to let nature take its course

on this point. So how will responsibility based on culpability manifest itself in the solution?

Two options will be part of a fair solution. First, the more culpable nations will agree to

accelerated schedules for flow reduction as compared to the less culpable nations. So the major

industrialized nations (and this does not necessarily include all of the UNFCCC Annex I or

Annex II countries) will agree to do more sooner than say China, to reduce their ongoing flow of

emissions. Likewise China will agree to do more sooner than say Tuvalu, to reduce its ongoing

flow. Second, the more culpable nations will contribute relatively more to international funds

and technology banks to assist poorer nations with both mitigation and adaptation efforts.

Lastly on this point, I would note that since the most capable nations are also likely to be

found the most culpable, and as there will be a given level of overall global effort required to

implement an effective solution, whether the justification for a country’s overall contribution is

based more or less on culpability or capability may not be of that much practical importance in

the ultimate result. This is not to suggest that the distinction is not important, merely that it

should not be allowed to become a sticking point in the pursuit of the end goal.

Second, the allocation of rights to emission flow going forward will need to be

determined. I’ve considered and rejected the emissions per capita model. Alternatives exist.

Allocation could be based on efficiency of output (emissions per unit of GDP). Here one would

see that major developing emitters like China and India rank well down the list in terms of

efficiency behind UNFCCC Annex II countries.198 One could argue that this should be the

yardstick of emissions allocations; give the energy to the countries that can use it most

efficiently. Another alternative would base emission rights on land mass, essentially arguing that

198

International Energy Agency, CO2 Emissions from Fuel Combustion (2009 Ed), (Paris: IEA, 2009) at 83

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the conceptual column of air above a country was just another natural resource for that country to

exploit as it chose subject to Principle 2 of the Rio Declaration not to “cause damage to the

environment of other states or of areas beyond the limits of national jurisdiction.199 Of course in

the complex world in which we live simple doctrinal solutions such as these are neither practical

nor possible, but they could factor in to a hybrid solution such as those discussed by Roberts and

Parks to arrive a model which was effective, efficient and fair. For example industrial emissions

could be tied to GDP and standards for the particular industry. Just as with other free trade

principles, the nations that can produce a good with the lowest emissions should enjoy a market

advantage in doing so. So as noted previously, since China is GHG inefficient with respect to the

production of steel and cement, they should import these goods from more GHG efficient states.

A modified per capita model, with adjustments to account for differences in climate,

population density, etc which have an impact on the degree of emissions required to meet a base

standard of living, does have appeal for domestic consumer consumption. In theory one could

place a progressive tax on GHG emissions at the ultimate point of consumption, and then let the

markets come up with the ultimate solution. This would transfer some responsibility for China’s

emissions to the U.S. (and other industrialized nations) because 40% of China’s industrial

economy is still focused on exports. As the private sector came up with technological solutions

to lower emissions and hence costs of production, it would be in their interest to transfer at least

some of this technology to China, so that they could continue to take advantage of China’s huge

labour force and comparatively low labour costs. It would also be in China’s interest to work to

develop its own cleaner technologies so as to maintain its competitive advantage in world

markets. If it were judged that market forces were not going far enough or fast enough on the

transfer of technology (i.e. we weren’t getting enough CBDR from the markets), then further

steps could be taken by domestic governments in industrialized nations to nudge the market

along.

This would be a true application of per capita distribution, as with emissions measured at

point of ultimate consumption, the right to emit up to a given level would truly rest with the

citizen consumer rather than with the state. Further, by bringing the cost of emissions directly

199

Rio Declaration, supra note 147 Principle 2

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home to the consumer, the consumer would be empowered and motivated to demand and reward

suppliers who produced the goods they wanted with a smaller carbon footprint, further

empowering the market to do what the market does best: generate supply in response to

demand.200 So here, China would benefit, because a portion of its emission would no longer be

its, and the world would benefit, because market forces in developed nations would demand

more carbon efficient production methods for Chinese goods.

Markets are very efficient at coming up with solutions to problems when all costs are

factored in. Markets however are not necessarily fair as we define that term; efficiency and

fairness are not synonymous. The climate change crisis we face today is due in large part to the

fact that GHG emissions have been regarded as an economic externality and their impact has not

been factored in to the cost of production.201 Nuclear energy, which will form a key component

of the move away from a carbon based society, at least in the short to medium term, is today

considered far more expensive than energy generated from coal for two reasons. First, societies

have attempted to factor the perceived risks from nuclear power into its cost of production.

Second, societies have failed to factor in the risks from coal-generated power into its cost of

production/consumption. And yet based on deaths per megawatt of power generated coal would

prove to be a far riskier source of power generation than nuclear energy to date.202

Finally on this point, and at the risk of reconnecting the climate change regime to issues

of world poverty, there should be a basic consumer emissions exemption, similar in concept to

the basic Canadian income tax exemption. Essentially this would acknowledge that a certain

level of emissions were necessary to maintain the basic necessities of life, and a climate change

regime should not add to the hardships of those already least advantaged. Though ensuring that

this exemption was fairly distributed within developing nations would prove to be an

implementation and enforcement challenge

200

Vandenbergh, supra note 80 at 935 201

Nicolas H. Stern, “The Economics of Climate Change: The Stern Review” (Cambridge: Cambridge University Press, 2007) at 27. 202

while I have not conducted a rigorous study to prove this point, I believe the mere fact that 500,000 – 750,000 people die in China every year from airborne pollution, largely attributably to coal, is sufficient proof of the risks from coal to allow me to make this claim.

66

Third as argued above, the solution has to involve China, and indeed the other developing

countries as well; pollution havens and/or free riders cannot be present in an effective, fair

solution. Developed countries must continue to lead, but developing countries need to follow in

a meaningful way with binding targets of their own. This added responsibility on the developed

nations needs to be recognized as a differentiating factor in the responsibilities/burdens they are

assuming.

And finally the tasks of fighting world climate change and fighting world poverty should

be decoupled to the extent possible.

8 Trade Options as a Negotiating Tool Given its position to date, it is unlikely that China will be easily persuaded to change its

negotiating stance on climate change and come on board with a new effective solution. So given

the necessity of China’s participation in an effective climate change solutions, voluntary or

otherwise, I want to look at what options could be available to a coalition of willing nations to

persuade China to participate. In the past China has shown itself to be open to economic

incentives, so this may provide a useful tool to persuade China to change its position.203

With 40% of its economy reliant on exports,204 it is reasonable to conclude that China

would not hold fast to a negotiating position that put its export economy at risk. So the question

is under international trade rules could a coalition of willing states legally impose trade sanctions

against China based on GHG emissions from their production processes? And what form would

these trade sanctions take? Essentially we’re talking about presenting China with an alternative

at the negotiating table: come on board with a fair solution or face the consequences of being

outside of the solution arrived at by a coalition of states who are willing to take meaningful steps

to address climate change. A solution without China should still be regarded as a fall back

option, but making China aware that this fallback option existed would encourage them to

become an active participant in a fair global climate solution.

203

Jonathan B. Wiener, “Climate Change Policy and Policy Change in China” (2008) 55 UCLA L. Rev. 1805 at 1816 204

Song & Woo, supra note 96

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As far back as the Byrd-Hagel resolution of 1997, the U.S. has expressly voiced its

concerns with respect to environmental policy measures which could, or could be perceived to,

harm the American economy. While not as clearly voiced by other Annex I countries (with the

recent exception of Canada) this must also be a concern for them. Even those who willingly

signed, ratified and took steps to meet their obligations under the Kyoto Protocol, must have

done so with the understanding that this was a first step only, and that obligations from

developing nations would follow. For regardless of any considerations of fairness, as a practical

matter efforts to combat climate change will be less effective, and at worst ineffective, if a by-

product of State action were the migration of carbon intensive industries to jurisdictions which

were not subject to GHG emission restrictions.

Were a State, such as the U.S. to bring in domestic policy measures which placed

increased costs on domestic producers and thereby decreased the competitiveness of those

producers in global markets, there would be a strong desire on the part of the government, if only

for self preservation, to bring in trade measures which would re-level the playing field in

international trade for their domestic producers. These measures would most likely involve

some sort of tariff on imports and some sort of subsidy, or rebate of domestic taxes, on goods

bound for export. A group of willing states (perhaps the Annex I nations) could agree to

common emission standards from industrial production, and thus trade freely amongst

themselves. In order to prevent migration of high emitting industries to pollution haven

countries, they would have to apply the same standards to imports or impose tariffs on those

imports which did not meet agreed emission standards. It is debatable whether these nations

would or should provide emissions subsidies to their domestic producers who are exporting to

nations outside of the agreement. The temptation would certainly be there in order to protect

their industries with large export markets, but doing so would reduce the effectiveness of

agreement in combating climate change.

Could such tariffs/subsidies be in compliance with the GATT/WTO?205 The short answer

to the question, as with many in law, is: it depends. It depends on both the substantive – i.e. that

205

For a more in depth analysis of this issue the reader is directed to: a) Paul-Erik Veel, “Carbon Tariffs and the WTO: An Evaluation Of Feasible Policies”, Journal of International Economic Law 12(3), 749-800, and b) G.C.

68

it is truly made to combat climate change and not as a thinly, or even thickly, veiled protectionist

measure – and procedural form of the trade measures. And it depends on how the WTO would

decide on issues which are not yet settled as matters of international trade law. I’ll consider the

second question first under the assumption that any trade measure adopted would be some form

of tariff applied to import goods rather than an import quota or outright ban.

WTO analysis is usually a multi-step process. First is to consider whether the trade

measure violates any of the rules of the WTO. Second is to consider whether, despite a prima

facie violation of the rules, is the measure saved by a provision of Article XX, which enumerates

general compliance exceptions. Subtle differences in the nature of trade measures can have

dramatic impacts on the legality of such measures under the WTO. For example, one of the first

things to consider is what it is we are in fact taxing. A tariff on an imported good based its

carbon footprint would almost certainly run afoul of GATT Article III:2 (The national treatment

principle), because the WTO would most likely find that one roll of steel was “like” another roll

of steel and refuse to take note of differences in CO2 emitted during production.206 However a

tax directly on CO2 emissions might be able to pass this hurdle. Historically the WTO has

accepted differentiation based on product but not on process of production.207 It is not known

whether an agreement between nations which declared that GHGs created in the manufacture or

consumption of the product formed a part of that product, rather than an externality of the

production process would have any impact on the WTO’s treatment of the situation. However it

is reasonable to assert that in the face of a challenge to an agreement which was truly intended

to, and if allowed to stand likely would, have a significant impact on climate change, the WTO

Hufbauer, S. Charnovitz, and J. Kim. Global Warming and the World Trading System (Washington D.C.: Peterson Institute for International Economics, 2009).

206

Note that were the tax to be the same on all like products and based say on average emissions in domestic production or most efficient domestic production, then the GATT violation could perhaps be avoided. But such a measure would not have the desired effect of influencing foreign manufacturing processes. 207

Paul-Erik Veel, “Carbon Tariffs and the WTO: An Evaluation Of Feasible Policies”, Journal of International Economic Law 12(3), 749 at 774. Also Richard L. Revesz et al., eds., Environmental Law, The Economy, and Sustainable Development (Cambridge UK: Cambridge University Press, 2000) at 159.

69

would, to the extent that it could credibly do so within its bounds, want to be able to let that

agreement stand, rather than assuming the position as a key obstacle to meaningful international

action on climate change.

Also of relevance to carbon tariffs are potential Article I (Most Favoured Nation – MFN)

violations. “Article I:1 has been held to preclude discrimination among countries on the basis of

policies adopted by those countries. … Even measures which are facially neutral between

countries of origin may be found to violate Art I:1 if the result in a discriminatory impact as

between countries”208 Therefore a carbon tariff which had a greater impact on one country than

another because of more carbon intensive energy generation policy could violate the MFN

principle.

The intent, or perceived intent of the trade measure can also impact its legality. So

protectionist or other anti-trade measures wrapped in a green cloak will have more difficulty

surviving a WTO challenge than will trade measures where the true intent matches the stated

intent, and where the expected result of the measures will match the intended result. For the

remainder of this section I will assume that we are dealing with measures of this type, and the

law is by no means settled on whether even measures of this type would be legal under the

WTO. The types of measures discussed here would be positioned as border tax adjustments209

(“BTA”) rather than trade sanctions. So rather than having the purpose of punishing countries

which were slow to take measures against climate change, the purpose of the BTA would be to

“equilibrate conditions between an imported product and a domestic product.”210

A yet to be resolved issue is whether a tax on CO2 emissions from the production process

could be positioned as a BTA. Article II provides that the tax can be imposed on the product

itself or in respect of “an article from which the imported product has been manufactured in

208

Veel, ibid at 784-785. 209

BTAs are permitted under Articles II.2(a) and III.2 of the GATT 210

G.C. Hufbauer, S. Charnovitz, and J. Kim. Global Warming and the World Trading System (Washington D.C.: Peterson Institute for International Economics, 2009) p. 70

70

whole of in part”.211 Questions arise as to whether energy used in manufacture constitutes an

“input” and further whether CO2 emitted as a by-product of energy production, and therefore

clearly not an “input” in the strict sense of the word, could be the subject of a BTA. After a

lengthy analysis of the issue in his paper, Veel concludes that “While charges on by-products of

the production process are not specifically excluded from tax adjustments, they are certainly not

made explicitly eligible for border tax adjustments in any WTO treaty or panel decision”,212 and

further comments that provisions of the Agreement on Subsidies and Countervailing Measures

(ASCM) tends to suggest that taxes on CO2 emissions would not be adjustable at the border.

I would argue that a BTA on carbon emissions would likely be found to be in violation of

one or more Articles of the GATT if for no other reason other than that these sorts of trade

measures were not contemplated at the time of drafting, and to simply read this intent into the

agreement ex post would require a very activist tribunal and would not sit well with the parties.

Assuming a violation of the GATT is found, it remains to be determined whether the

trade measure can be saved by a provision of Article XX (Exceptions). Possibly applicable

provisions include XX:(b) (protection of human health) and XX:(g) (conservation of an

exhaustible natural resource). While arguments would likely be made under both provisions, it is

generally accepted that XX:(g) is the better “fit” of the two. Also relevant is that (g) has a lower

standard of proof than (b). Under (b) the party seeking the exception must show the measure

was “necessary to protect human health” whereas under (g) they must show it to be “relating to

the conservation of an exhaustible natural resource. [emphasis added]. I will first consider the

feasibility of a XX:(g) exception in some detail, and then will touch briefly on the XX(b)

exception.

The seminal case with respect to an Article XX(g) exception is the US - Shrimp case.213

There the Appellate Body (“AB”) of the WTO held that determining whether a violation of a

211

General Agreement on Tariffs and Trade, 30 October 1947, 58 UNTS 187 Art II.2(a) [GATT] 212

Veel, supra note 207 at 774 213

Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998

71

provision of the GATT is permitted by an Article XX exception is a two stage process. First it

must be determined if a measure is prima facie justified under one of the listed exceptions. And

second, it must be determined if the measure is in compliance with the provisions of the Chapeau

of Art XX.214 The stage one test for a XX:(g) exception has three criteria. First, the resource in

question must be shown to be an exhaustible natural resource. Second, the trade measure must

relate to the conservation of the resource. Third, the measure must be taken in conjunction with

similar domestic measures. When determining what constitutes an “exhaustible natural

resource” the AB in US – Shrimp “held that the words ‘exhaustible natural resources’ ‘must be

read by a treaty interpreter in light of contemporary concerns of the community of nations about

the protection and conservation of the environment.’”215 In light of this I believe it highly likely

that a sustainable atmosphere would be characterized as an exhaustible natural resource. Further

a properly constructed BTA paired with like domestic measures should be able to satisfy the

second and third criteria of the stage one test.

I now need to consider stage two, the Chapeau stage. The leading case on interpretation

of the Chapeau to Article XX is again the US – Shrimp case. There the AB of the WTO found

that in order for a measure to run afoul of the provisions of the Chapeau, 3 elements needed to be

satisfied: “there must be discrimination, it must be arbitrary or unjustifiable, and it must occur

between countries where the same conditions prevail.”216 And whether a trade measure will pass

the Chapeau test can very much depend on how that measure is structured, both substantively

and procedurally.

In US – Shrimp the AB also held that countries were required to “tak[e] into

consideration [the] different conditions which may occur’ in other States”217 when seeking to

justify measures under XX:(g). This raises the possibility that developing nations could argue

214

“chapeau” is a term of art in international trade law used to refer to the opening paragraph of the GATT Article XX 215

Veel, supra note 207 at 776 216

Veel, supra note 207 at 787 217

Veel, supra note 207 at 790

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their more carbon intensive economies were “conditions” occurring in their State in seeking to

refute at XX:(g) justification for a carbon BTA or other environmental measure.

Finally of note in US – Shrimp is the fact that it shows a softening of the AB to consider

differentiation based on process rather than simply product. The killing of turtles due to a

method of shrimp catching could be argued to be an externality of the production process, just as

high carbon emissions from steel production could be. But in this case the WTO was willing to

accept this as a reasonable form of differentiation. And it was suggested by the wording of the

ruling that this would apply to Article XX as a whole and so would apply to cases brought under

Article XX(b).218

Turning briefly to Article XX(b) The AB provides instructive interpretation in a case

regarding the ban on importation of Asbestos by France.219 Article XX(b) permits trade

measures that would otherwise violate GATT/WTO where such measures are “necessary to

protect human, animal or plant life or health”220 The AB took a two step approach in

interpreting XX(b). First is to consider whether the trade measure is indeed directed at the

objectives of the article. Second is to consider whether the measure was necessary to achieve the

stated policy objective.221 The AB found that ‘protection’ of human health implied the existence

of a risk to health.222 And further that the term ‘necessary’ implied that there was not a

reasonable alternative available which was less restrictive on trade which would achieve the

policy goals.223 It would seem therefore that there one should be able to argue for an exception

under Art XX(b) for trade measures introduced to combat climate change, as there is ample

scientific evidence that such change will have a negative impact on human health worldwide.

218

M. Trebilcock and R. Howse, The regulation of International Trade (London & New York: Routledge, 2005) 541 219

Appellate Body Report, EC – Measures Affecting Asbestos and Asbestos-Containing Products (WT/DS135/AB/R, 12 March 2001) 220

GATT, supra note 211, Art. XX(b). 221

Trebilcock & Howse, Supra note 218 222

ibid 223

ibid at 545

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But whether an argument was based on XX(g) or (b) or both, it would still have to pass

the chapeau test. One of the reasons the AB found that US – Shrimp ultimately failed the

chapeau test was the failure of the US to meaningfully attempt to reach an agreement with the

other nations before imposing the trade measures. Whether climate negotiations to date would

qualify as such meaningful measures, or whether a new and more focused round of negotiations

would be required is beyond the scope of this paper.

The bottom line on this issue is we simply do not know how the WTO will go on this

issue because there is not case law directly on point as of yet. But it is the opinion of Veel,

Charnovitz and Kim,224 that it should be possible to construct trade measures to combat global

climate change that could be justified under Art XX(g) or XX(b) of the GATT. I share this view.

Some concessions might have to be made to China, which could lessen the overall effectiveness

of the measures, but unless the WTO were to allow some form of environmental measures which

included China, the effectiveness of XX(g) and (b) exceptions would be largely negated.

Domestic environmental and health policies if not coupled with like trade measures would be

met with a migration of effected industries to China developing nations where the domestic

standards did not apply, thus creating pollution havens, and lessening or negating the

effectiveness of the action.

9 Conclusion There’s no question that the industrialized nations were the primary historic cause of the

stock of anthropogenic GHGs in the atmosphere. There is some question of the degree of

culpability of these nations, depending on whether one favours a strict liability or a negligence

approach. There’s also no question that at least some developing nations, particularly China in

the last 30 years, benefited by the emissions rich actions of the industrialized nations. There is

some question as to the degree of benefit.

As noted earlier global emissions need to be capped within 5-10 years and reduced

dramatically by 2050. In order to achieve this, developed nations must shift to a practice of

sustainable industrialization and developing nations must practice sustainable development on

224

Supra note 205

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their path to industrialization. Any country’s right to develop must be subject to a duty to

develop in a sustainable manner.

Capping emissions cannot happen without the participation of China. So a fair deal

needs to be proposed to China. Ideally China would recognize its global responsibilities and be a

willing participant in such a deal. Absent China’s willing participation, the alternative of a

solution between a coalition of willing states coupled with reasonable trade sanctions against

unwilling states should be considered; first as a tool of persuasion to bring China back to the

fold, and if need be as a last resort, as a non-global MEA to take what measures are possible to

combat climate change.

A fair deal is one that effectively addresses climate change, while to the extent possible

does not impair or delay the sustainable development of the developing world. But since, if left

unchecked, climate change will ensure even greater suffering for the least advantaged citizens of

the world, addressing climate change has to take priority over development in the short term, if

need be. But this could only be justified if the developed nations were to take very aggressive

steps to combat climate change domestically, even at the expense of their own economic growth

and wealth. It would not be fair for developed nations to continue to enjoy growing wealth at the

expense of the development of developing nations. This would be a clear violation of Rawls’s

difference principle.

The world made a grand symbolic start in the fight against climate change with the

UNFCCC. Then the world took some tentative first substantive steps with the Kyoto Protocol,

but those steps proved too small and too tentative. Overall the protocol must be regarded as a

failure in its interpretation of CBDR by not assigning any binding targets, current or future, on

the developing world, and in so doing losing the support of the worlds largest emitter of the day,

the U.S.. And as Kyoto essentially gave the developing nations the right to do nothing in the

fight against climate change, It also set the world up for failure in Copenhagen. Copenhagen

should have seen a scaling up of global efforts against climate change, but since a 20% increase

in nothing is still nothing we again did not see binding commitments from the developing world.

The world now hangs in limbo with an unsigned accord, no new emission reduction standards to

follow the expiration of Kyoto in 2012, and no firm plans (at least that are being made public)

for how to move forward. Will all the countries come back to the table again under the auspices

75

of the UNFCCC or will that convention just fizzle out with the expiry of Kyoto? And if not the

UNFCCC then what? An MEA between a coalition of willing nations coupled with trade

measures as necessary against the unwilling nations would seem the most likely alternative. And

perhaps that’s a good alternative. For the time being India and China are still dependent enough

on exports that trade measures, or the threat thereof, could have a real impact on their negotiating

positions. But as China’s economy and wealth grows, it will more and more become its own

market, and the G8 will continue to lose critical bargaining power against China.

From a practical perspective China has to be a participant in the fight against climate

change, as does the U.S. and all other large emitters developed or developing. Countries that are

willing to act need to present a plan which recognizes this fact, so as to be fair to the world, but

also which contains provisions to help China move to a path of true sustainable development in

order to be fair to China. Negotiations with China need to be vigorous and honest, with no

hidden protectionist agendas. But if China refuses to become a willing participant, then a

coalition of willing states needs to move forward without China and use trade measures to

prevent further migration of production to China, establishing it as a pollution haven. Giving

China the knowledge that such a coalition was willing to take this action as a last resort would, I

believe, provide it with an incentive to alter its position at the bargaining table and participate in

a deal which was fair to the world yet protected their own economic and environmental interests.

The climate change solution will not come without costs. These costs must be shared.

The rich should initially shoulder a greater amount of the burden; but an understanding among

all nations that each is participating to the extent possible, whether through mitigation or

adaptation or both as appropriate, which is a fundamental component of the framing principle of

CBDR, is essential to arriving at a fair, effective solution to the challenge of climate change.

76

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Maximilian Auffhammer & Richard T. Carson “Forecasting the Path of China’s CO2 Emissions Using Province Level Information”, online: Department of Agricultural and Resource Economic, University of California Berkeley http://escholarship.org/uc/item/6d28j8rg

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