International and European Environmental Regulatory Regimes Alexandra R. Harrington Doctor of Civil Law Candidate McGill University Associate Fellow,

Transcription

1 International and European Environmental Regulatory Regimes Alexandra R. Harrington Doctor of Civil Law Candidate McGill University Associate Fellow, CISDL

2 Course Outline I. Course Description and Basic Background II. International Environmental Regulations III. European Environmental Regulations IV. Other Regional Systems IV. Questions and Conclusions

3 Background International Law Principles In International Law jurisprudence there are 2 key spheres, the international and the domestic (law of the states within the international law system). Many treaties are negotiated through the UN framework and UN s good offices, although it is not strictly necessary that the UN be involved in the treaty negotiations process. In order for a treaty or other international agreement to be binding on a state, the state must domestically ratify it, typically through a procedure set out in the state s constitution. The standard method of ratification is for the state s domestic legislative body to pass the terms of the treaty/agreement into domestic law.

4 Background International Law Principles Continued However, in many jurisdictions, such as the United States, it is possible for a domestic legislature to change or supersede already passed treaty obligations by passing later legislation. It is possible for a state to sign a treaty, signaling its acquiescence to the terms of the treaty, and yet not ratify the treaty on the domestic level (ie. the US in relation to the Kyoto Protocol). When signing treaties, it is possible for a state to issue derogations, exceptions or clarifications which either state that the particular entity will not comply with a certain portion of the treaty or provide the interpretive definition of a state towards a part(s) of the treaty. However, treaties can contain language baring any derogations or exceptions from its terms.

5 Background International Law Principles Continued Once a state has ratified a treaty, there are typically no methods of enforcing the state s responsibilities under that treaty, outside of public condemnation in the international community. The fact that the parties agree to a treaty or sign onto a treaty does not make it enter into force. Rather, the text of the treaty will state the number of signatories necessary for the treaty to come into effect as demonstrated by the Kyoto Protocol, other requirements beyond a number of signatories can be added for a treaty to become effective. Once a treaty has come into effect on the international level, there are typically conferences of the parties (COPs) which monitor its implementation and serve as a forum for discussion of treaty terms and future needs. Unless the treaty makes provisions to the contrary, a state may leave the treaty regime after giving at least a year s notice.

6 Background International Law Principles Continued A state MUST ratify the terms of a treaty to be bound by its terms unless the treaty codifies customary international law. Customary international law including jus cogens is uncodified laws/rules which are observed by a majority of the international community. Jug cogens norms are norms which are absolute in international law, regardless of their codification, such as the prohibition on slavery and genocide.

7 Background International Law Principles Continued Treaty negotiations are open to all members of the international community, although no state can be required to participate in a treaty negotiation or to sign/ratify a treaty. The same principles of treaty law are applicable to treaties and officially binding treaties and agreements entered into at the regional level. However, whether on the international or domestic level, ratification is not needed for a state to express its agreement to the terms of a declaration or other legally non-binding document.

8 Background International Law Principles Continued Standard treaty features include: 1) reporting requirements by state parties to an oversight body; 2) the creation of an oversight body; and 3) generally weak enforcement mechanisms. The default governing mechanism for treaty law is the Vienna Convention on the Law of Treaties. The one year minimum notice for state withdrawal from a treaty was established by the International Court of Justice in the Nicaragua case.

9 Environmental Background For the purposes of current international law and regulations, the following are considered greenhouse gases (GHGs): Carbon dioxide (CO2) Methane (CH4) Nitrous oxide (N2O) Hydrofluorocarbons (HFC2) Perfluorocarbons (PFCs) Sulfur hexafluride (SF6)

10 Regimes Current international environmental regimes trace their origins from the 1972 Stockholm Declaration, which sets out common beliefs and principles but not law per se. The Principles set out in the Stockholm Declaration were: Principle 1: Man has the fundamental right to freedom, equality and adequate conditions of life, in an environment of a quality that permits a life of dignity and well-being, and he bears a solemn responsibility to protect and improve the environment for present and future generations. In this respect, policies promoting or perpetuating apartheid, racial segregation, discrimination, colonial and other forms of oppression and foreign domination stand condemned and must be eliminated.

11 Regimes Stockholm Declaration Principle 2: The natural resources of the earth, including the air, water, land, flora and fauna and especially representative samples of natural ecosystems, must be safeguarded for the benefit of present and future generations through careful planning or management, as appropriate. Principle 3: The capacity of the earth to produce vital renewable resources must be maintained and, wherever practicable, restored or improved.

12 Regimes Stockholm Declaration Principle 4: Man has a special responsibility to safeguard and wisely manage the heritage of wildlife and its habitat, which are now gravely imperilled by a combination of adverse factors. Nature conservation, including wildlife, must therefore receive importance in planning for economic development. Principle 5: The non-renewable resources of the earth must be employed in such a way as to guard against the danger of their future exhaustion and to ensure that benefits from such employment are shared by all mankind.

13 Regimes Stockholm Declaration Principle 6: The discharge of toxic substances or of other substances and the release of heat, in such quantities or concentrations as to exceed the capacity of the environment to render them harmless, must be halted in order to ensure that serious or irreversible damage is not inflicted upon ecosystems. The just struggle of the peoples of ill countries against pollution should be supported. Principle 7: States shall take all possible steps to prevent pollution of the seas by substances that are liable to create hazards to human health, to harm living resources and marine life, to damage amenities or to interfere with other legitimate uses of the sea.

14 Regimes Stockholm Declaration Principle 8: Economic and social development is essential for ensuring a favorable living and working environment for man and for creating conditions on earth that are necessary for the improvement of the quality of life. Principle 9: Environmental deficiencies generated by the conditions of under-development and natural disasters pose grave problems and can best be remedied by accelerated development through the transfer of substantial quantities of financial and technological assistance as a supplement to the domestic effort of the developing countries and such timely assistance as may be required.

15 Regimes Stockholm Declaration Principle 10: For the developing countries, stability of prices and adequate earnings for primary commodities and raw materials are essential to environmental management, since economic factors as well as ecological processes must be taken into account. Principle 11:The environmental policies of all States should enhance and not adversely affect the present or future development potential of developing countries, nor should they hamper the attainment of better living conditions for all, and appropriate steps should be taken by States and international organizations with a view to reaching agreement on meeting the possible national and international economic consequences resulting from the application of environmental measures.

16 Regimes Stockholm Declaration Principle 12: Resources should be made available to preserve and improve the environment, taking into account the circumstances and particular requirements of developing countries and any costs which may emanate- from their incorporating environmental safeguards into their development planning and the need for making available to them, upon their request, additional international technical and financial assistance for this purpose. Principle 13: In order to achieve a more rational management of resources and thus to improve the environment, States should adopt an integrated and coordinated approach to their development planning so as to ensure that development is compatible with the need to protect and improve environment for the benefit of their population.

17 Regimes Stockholm Declaration Principle 14: Rational planning constitutes an essential tool for reconciling any conflict between the needs of development and the need to protect and improve the environment. Principle 15: Planning must be applied to human settlements and urbanization with a view to avoiding adverse effects on the environment and obtaining maximum social, economic and environmental benefits for all. In this respect projects which arc designed for colonialist and racist domination must be abandoned.

18 Regimes Stockholm Declaration Principle 16: Demographic policies which are without prejudice to basic human rights and which are deemed appropriate by Governments concerned should be applied in those regions where the rate of population growth or excessive population concentrations are likely to have adverse effects on the environment of the human environment and impede development. Principle 17: Appropriate national institutions must be entrusted with the task of planning, managing or controlling the 9 environmental resources of States with a view to enhancing environmental quality.

19 Regimes Stockholm Declaration Principle 18: Science and technology, as part of their contribution to economic and social development, must be applied to the identification, avoidance and control of environmental risks and the solution of environmental problems and for the common good of mankind. Principle 19: Education in environmental matters, for the younger generation as well as adults, giving due consideration to the underprivileged, is essential in order to broaden the basis for an enlightened opinion and responsible conduct by individuals, enterprises and communities in protecting and improving the environment in its full human dimension. It is also essential that mass media of communications avoid contributing to the deterioration of the environment, but, on the contrary, disseminates information of an educational nature on the need to project and improve the environment in order to enable mal to develop in every respect.

20 Regimes Stockholm Declaration Principle 20: Scientific research and development in the context of environmental problems, both national and multinational, must be promoted in all countries, especially the developing countries. In this connection, the free flow of up-to-date scientific information and transfer of experience must be supported and assisted, to facilitate the solution of environmental problems; environmental technologies should be made available to developing countries on terms which would encourage their wide dissemination without constituting an economic burden on the developing countries.

21 Regimes Stockholm Declaration Principle 21: States have, in accordance with the Charter of the United Nations and the principles of international law, the sovereign right to exploit their own resources pursuant to their own environmental policies, and the responsibility to ensure that activities within their jurisdiction or control do not cause damage to the environment of other States or of areas beyond the limits of national jurisdiction. Principle 22: States shall cooperate to develop further the international law regarding liability and compensation for the victims of pollution and other environmental damage caused by activities within the jurisdiction or control of such States to areas beyond their jurisdiction.

22 Regimes Stockholm Declaration Principle 23: Without prejudice to such criteria as may be agreed upon by the international community, or to standards which will have to be determined nationally, it will be essential in all cases to consider the systems of values prevailing in each country, and the extent of the applicability of standards which are valid for the most advanced countries but which may be inappropriate and of unwarranted social cost for the developing countries.

23 Regimes Stockholm Declaration Principle 24: International matters concerning the protection and improvement of the environment should be handled in a cooperative spirit by all countries, big and small, on an equal footing. Cooperation through multilateral or bilateral arrangements or other appropriate means is essential to effectively control, prevent, reduce and eliminate adverse environmental effects resulting from activities conducted in all spheres, in such a way that due account is taken of the sovereignty and interests of all States.

24 Regimes Stockholm Declaration Principle 25: States shall ensure that international organizations play a coordinated, efficient and dynamic role for the protection and improvement of the environment. Principle 26: Man and his environment must be spared the effects of nuclear weapons and all other means of mass destruction. States must strive to reach prompt agreement, in the relevant international organs, on the elimination and complete destruction of such weapons.

25 Regimes Stockholm Declaration In addition to these principles, an important outgrowth of the Stockholm Declaration was the United Nations Environment Programme.

26 Regimes Rio Earth Summit 1992 In 1992, several important international environmental conferences were held. The outgrowth of the Rio Earth Summit was Agenda 21 and the Rio Declaration on Environment and Development.

27 Regimes Rio Earth Summit 1992 Agenda 21 created as a wide-ranging, worldwide policy statement, addressing the following areas in relationship to the environment, sustainable development, and economic growth. Combating Poverty Changing Consumption Patterns Demographic Dynamics and Sustainability Protecting and Promoting Human Health Promoting Sustainable Human Settlement Development Integrating Environment and Development in Decision- Making Protection of the atmosphere

28 Regimes Rio Earth Summit 1992 Agenda 21 continued Integrated Approach to the Planning and Management of Land Resources Combating Deforestation Managing Fragile Ecosystems: Combating Desertification and Drought Managing Fragile Ecosystems: Sustainable Mountain Development Promoting Sustainable Agriculture and Rural Development Conservation of Biological diversity Environmentally Sound Management of Biotechnology

29 Regimes Rio Earth Summit 1992 Agenda 21 continued Protection of the Oceans, All Kinds of Seas, Including Enclosed and Semi-Enclosed Seas, and Costal Areas, and the Protection, Rational Use, and Development of Their Living Resources Protection of the Quality and Supply of Freshwater Resources Environmentally sound management of toxic chemicals, including prevention of illegal international traffic in toxic and dangerous products Environmentally Sound Management of Hazardous Wastes, Including Prevention of Illegal International Traffic in Hazardous Wastes

30 Regimes Rio Earth Summit 1992 Agenda 21 continued Environmentally sound management of solid wastes and sewage-related issues Safe and environmentally sound management of radioactive wastes

31 Regimes Rio Earth Summit 1992 Rio Declaration on Environment and Development Overall, the need to protect the environment and health of all peoples, especially when in relationship to development, is stressed. Also stressed regarding trade and national legislation to create and implement liability for environmental degradation. Principle 1 - Human beings are at the centre of concerns for sustainable development. They are entitled to a healthy and productive life in harmony with nature. Principle 2 state rights and responsibilities regarding resources, state environment, and its exploitation. Endorses the precautionary principle. Endorses environmental impact assessments for national projects which could have an effect.

32 Regimes UNFCCC The United Nations Framework Convention on Climate Change (UNFCCC) was promulgated in 1992 and currently has 192 state signatories. Key definitions: Sinks any process, activity or mechanism which removes a greenhouse gas, an aerosol or a precursor of a greenhouse gas from the atmosphere. Climate change - a change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods.

33 Regimes UNFCCC UNFCCC Key Terms: Preamble - discusses the delicate balance of states rights and sovereignty over natural resources with the overall international law system. The preamble also stresses the need to fuse environmental concerns with social and economic development. Article 2, Objective stabilization of greenhouse gases in the global atmosphere so as to stop/prevent such gases from interfering with the climate system.

34 Regimes UNFCCC Article 3, Principles developed states are given greater responsibilities for combating climate change; the need to assist developing states and be mindful of their special environmental needs is stressed; the application of the precautionary principle by state parties is encouraged.

35 Regimes UNFCCC Article 4, Commitments 1. All Parties, taking into account their common but differentiated responsibilities and their specific national and regional development priorities, objectives and circumstances, shall: (a) Develop, periodically update, publish and make available to the Conference of the Parties, in accordance with Article 12, national inventories of anthropogenic emissions by sources and removals by sinks of all greenhouse gases not controlled by the Montreal Protocol, using comparable methodologies to be agreed upon by the Conference of the Parties; (b) Formulate, implement, publish and regularly update national and, where appropriate, regional programmes containing measures to mitigate climate change by addressing anthropogenic emissions by sources and removals by sinks of all greenhouse gases not controlled by the Montreal Protocol, and measures to facilitate adequate adaptation to climate change; (c) Promote and cooperate in the development, application and diffusion, including transfer, of technologies, practices and processes that control, reduce or prevent anthropogenic emissions of greenhouse gases not controlled by the Montreal Protocol in all relevant sectors, including the energy, transport, industry, agriculture, forestry and waste management sectors;

36 Regimes UNFCCC Article 4 (1) continued (d) Promote sustainable management, and promote and cooperate in the conservation and enhancement, as appropriate, of sinks and reservoirs of all greenhouse gases not controlled by the Montreal Protocol, including biomass, forests and oceans as well as other terrestrial, coastal and marine ecosystems; (e) Cooperate in preparing for adaptation to the impacts of climate change; develop and elaborate appropriate and integrated plans for coastal zone management, water resources and agriculture, and for the protection and rehabilitation of areas, particularly in Africa, affected by drought and desertification, as well as floods; (f) Take climate change considerations into account, to the extent feasible, in their relevant social, economic and environmental policies and actions, and employ appropriate methods, for example impact assessments, formulated and determined nationally, with a view to minimizing adverse effects on the economy, on public health and on the quality of the environment, of projects or measures undertaken by them to mitigate or adapt to climate change; (g) Promote and cooperate in scientific, technological, technical, socio-economic and other research, systematic observation and development of data archives related to the climate system and intended to further the understanding and to reduce or eliminate the remaining uncertainties regarding the causes, effects, magnitude and timing of climate change and the economic and social consequences of various response strategies;

37 Regimes UNFCCC Article 4(1) continued (h) Promote and cooperate in the full, open and prompt exchange of relevant scientific, technological, technical, socio-economic and legal information related to the climate system and climate change, and to the economic and social consequences of various response strategies; (i) Promote and cooperate in education, training and public awareness related to climate change and encourage the widest participation in this process, including that of non- governmental organizations; and (j) Communicate to the Conference of the Parties information related to implementation, in accordance with Article 12.

38 Regimes UNFCCC Article 4 (2) 2. The developed country Parties and other Parties included in Annex I commit themselves specifically as provided for in the following: (a) Each of these Parties shall adopt national1 policies and take corresponding measures on the mitigation of climate change, by limiting its anthropogenic emissions of greenhouse gases and protecting and enhancing its greenhouse gas sinks and reservoirs. These policies and measures will demonstrate that developed countries are taking the lead in modifying longer-term trends in anthropogenic emissions consistent with the objective of the Convention, recognizing that the return by the end of the present decade to earlier levels of anthropogenic emissions of carbon dioxide and other greenhouse gases not controlled by the Montreal Protocol would contribute to such modification, and taking into account the differences in these Parties' starting points and approaches, economic structures and resource bases, the need to maintain strong and sustainable economic growth, available technologies and other individual circumstances, as well as the need for equitable and appropriate contributions by each of these Parties to the global effort regarding that objective. These Parties may implement such policies and measures jointly with other Parties and may assist other Parties in contributing to the achievement of the objective of the Convention and, in particular, that of this subparagraph;

39 Regimes UNFCCC Article 4(2) continued (b) In order to promote progress to this end, each of these Parties shall communicate, within six months of the entry into force of the Convention for it and periodically thereafter, and in accordance with Article 12, detailed information on its policies and measures referred to in subparagraph (a) above, as well as on its resulting projected anthropogenic emissions by sources and removals by sinks of greenhouse gases not controlled by the Montreal Protocol for the period referred to in subparagraph (a), with the aim of returning individually or jointly to their 1990 levels these anthropogenic emissions of carbon dioxide and other greenhouse gases not controlled by the Montreal Protocol. This information will be reviewed by the Conference of the Parties, at its first session and periodically thereafter, in accordance with Article 7; (c) Calculations of emissions by sources and removals by sinks of greenhouse gases for the purposes of subparagraph (b) above should take into account the best available scientific knowledge, including of the effective capacity of sinks and the respective contributions of such gases to climate change. The Conference of the Parties shall consider and agree on methodologies for these calculations at its first session and review them regularly thereafter; (d) The Conference of the Parties shall, at its first session, review the adequacy of subparagraphs (a) and (b) above. Such review shall be carried out in the light of the best available scientific information and assessment on climate change and its impacts, as well as relevant technical, social and economic information. Based on this review, the Conference of the Parties shall take appropriate action, which may include the adoption of amendments to the commitments in subparagraphs (a) and (b) above. The Conference of the Parties, at its first session, shall also take decisions regarding criteria for joint implementation as indicated in subparagraph (a) above. A second review of subparagraphs (a) and (b) shall take place not later than 31 December 1998, and thereafter at regular intervals determined by the Conference of the Parties, until the objective of the Convention is met;

40 Regimes UNFCCC Article 4(2) continued (e) Each of these Parties shall : i) Coordinate as appropriate with other such Parties, relevant economic and administrative instruments developed to achieve the objective of the Convention; and (ii) Identify and periodically review its own policies and practices which encourage activities that lead to greater levels of anthropogenic emissions of greenhouse gases not controlled by the Montreal Protocol than would otherwise occur; (f) The Conference of the Parties shall review, not later than 31 December 1998, available information with a view to taking decisions regarding such amendments to the lists in Annexes I and II as may be appropriate, with the approval of the Party concerned; (g) Any Party not included in Annex I may, in its instrument of ratification, acceptance, approval or accession, or at any time thereafter, notify the Depositary that it intends to be bound by subparagraphs (a) and (b) above. The Depositary shall inform the other signatories and Parties of any such notification.

41 Regimes UNFCCC Article 4(3) 3. The developed country Parties and other developed Parties included in Annex II shall provide new and additional financial resources to meet the agreed full costs incurred by developing country Parties in complying with their obligations under Article 12, paragraph 1. They shall also provide such financial resources, including for the transfer of technology, needed by the developing country Parties to meet the agreed full incremental costs of implementing measures that are covered by paragraph 1 of this Article and that are agreed between a developing country Party and the international entity or entities referred to in Article 11, in accordance with that Article. The implementation of these commitments shall take into account the need for adequacy and predictability in the flow of funds and the importance of appropriate burden sharing among the developed country Parties.

42 Regimes UNFCCC Article 4(4) 4. The developed country Parties and other developed Parties included in Annex II shall also assist the developing country Parties that are particularly vulnerable to the adverse effects of climate change in meeting costs of adaptation to those adverse effects.

43 Regimes UNFCCC Article 4(5) 5. The developed country Parties and other developed Parties included in Annex II shall take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-how to other Parties, particularly developing country Parties, to enable them to implement the provisions of the Convention. In this process, the developed country Parties shall support the development and enhancement of endogenous capacities and technologies of developing country Parties. Other Parties and organizations in a position to do so may also assist in facilitating the transfer of such technologies.

44 Regimes UNFCCC Article 6 In carrying out their commitments under Article 4, paragraph 1(i), the Parties shall: (a) Promote and facilitate at the national and, as appropriate, subregional and regional levels, and in accordance with national laws and regulations, and within their respective capacities: (i) The development and implementation of educational and public awareness programmes on climate change and its effects; (ii) Public access to information on climate change and its effects; (iii) Public participation in addressing climate change and its effects and developing adequate responses; and (iv) Training of scientific, technical and managerial personnel. (b) Cooperate in and promote, at the international level, and, where appropriate, using existing bodies: (i) The development and exchange of educational and public awareness material on climate change and its effects; and (ii) The development and implementation of education and training programmes, including the strengthening of national institutions and the exchange or secondment of personnel to train experts in this field, in particular for developing countries.

45 Regimes UNFCCC Article 7 establishes the place of the Conference of the Parties (COP) within the system of treaty governance. Article 12 creates communication requirements on the part of the state parties and provides specifics as to the content of the communications, with more information required from Annex I, developed states, including states that are in transition economically. Sets out Annex I states, which are developed states, and Annex II states, which are developed states that are responsible for providing funding to developing states.

46 Regimes UNFCCC Conference of the Parties (COPs) are held annually under the UNFCCC. At these COPs, states act on their own and have also established several import negotiating groups: G-77 Alliance of Small Island States Least Developed Countries Umbrella group of developed states that aren t part of the EU. OPEC, CACAM

47 Regimes Kyoto Protocol 1999 Kyoto Protocol signed 2005 Kyoto Protocol went into effect when it reached set number of signatories AND the signatories represented at least 55% of 1990 carbon emissions. Will expire in Article 2 places responsibilities on Annex I states as to how they achieve their targeted emissions reductions. For example, promotion of sustainable agriculture and GHG reductions beyond those already required.

48 Regimes Kyoto Protocol Article 3 Provides guidance and requirements for Annex I states both in transition and not in transition. Also allows for relevant states to acquire emissions credits, which sets the stage for other important provisions. Article 4 Allows for Annex I states to jointly implement projects which work towards fulfilling their emissions requirements.

49 Regimes Kyoto Protocol Article 6 allows for Annex I states to trade carbon emissions and enter into joint implementation projects. Article 7 sets out Annex I state reporting requirements to the COP. Article 10 - requires states, in accordance with their common but differentiated responsibilities, to work individually and as regional entities towards further promoting and implementing goals of the Protocol

50 Regimes Kyoto Protocol Article 11 - requires that developed states provide funding to developing states to assist them with the implementation of Kyoto requirements, as well as for technology transfers. Article 12 Establishes the clean development mechanism. Article 13 Establishes the COP s role in the governance and future negotiations of environmental law.

51 Regimes Kyoto Protocol Article 17 sets out the governance requirements for emissions trading by the COP.

52 Regimes Kyoto Protocol New systems established under the Kyoto Protocol: Relevant Terminology AAU - assigned amount units. Equivalent to one metric tonne of CO2 equivalent according to the Marrakesh Accords. Used in the context of emissions trading. CER - certified emissions reduction. Equal to one metric tonne of CO2 equivalent according to Marrakesh Accords. Are used in the context of clean development mechanisms. ERU - emission reduction units. Equal to one metric tonne of CO2 equivalent according to Marrakesh Accords. Used in the context of joint implementation.

53 Regimes Emissions Trading New systems established under the Kyoto Protocol: Emissions Trading Under this system, an Annex I state may acquire AAUs from another Annex I state that has AAUs to spare, in order to offset its needs. In emissions trading, Annex I states may also trade with other Annex I states for CERs and ERUs once they have been generated through the projects described below. Within states and/or regions, emissions trading systems can and do exist, as will be discussed more in the European section.

54 Regimes Clean Development Mechanism New systems established under the Kyoto Protocol: Clean Design Mechanism (CDM) Under the CDM system, an Annex I state receives CER credits for funding/supporting an emissions reducing project in a non-annex I state (NOT including states in transition). Subsequent COPs have established stringent rules for these proposed projects (insert slide with a breakdown of basic rules). The CERs earned by an Annex I state are used as credits against their own emissions targets. There are, however, now limits to how many CERs an Annex I state can earn through CDM.

55 International Economic Regimes Joint Implementation (JI) Under the JI system, an Annex I state receives ERU credits for investing in an emissions reducing project located in another Annex I state (regardless whether it is a state in transition). However, the state in which the project is located has its emissions target reduced by the amount of the ERU credit given in order to offset the benefit to the investing state. As with CDMs, there are strict rules of eligibility for both the investing state and project as well as the host state in order for a project to be covered as a JI.

56 Regimes Registry Systems Prior to engaging in any of the above activities, a state must create a registry system for the credits used/acquired and have that system approved by the overall reviewing mechanism set up under the auspices of the UNFCCC.

57 Regimes Marrakesh Accords The Marrakesh Accords came out of the 2001 COP. Heavily emphasized capacity building, and the roles of various states in capacity building were amplified. The legal regulation of technology transfers and practical implementation of them were a key development. Emissions trading, CDM and JI were given greater structural definition and guidance than had been provided in Kyoto. Also established that, despite the existence of emissions trading, CDM and JI, no legal right to emit has been created at law.

58 Regimes Nairobi COP 2006 Issued amendments to the Kyoto structure, in particular giving a more specific energy generation cap to various categories of CDM projects and undertakings.

59 Regimes Bali COP 2007 Action Plan set out specific agenda items that will be addressed by the COP in Copenhagen in 2009: An agreement for long term cooperative action in the international community. Enhanced national/international action on mitigating climate change. Enhanced action on adaptation. Enhanced action on technology development and transfer to support action on mitigation and adaptation. Enhanced action on the provision of financial resources and investment to support action on mitigation and adaptation and technology cooperation.

60 Regimes Poznan 2008 Officially promulgated laws/rules for the Adaptation Fund Board and endorsed a MOU with the World Bank for its financing. The Adaptation Fun Board will be financed by revenues derived from the CER credit system.

61 Background European Union What is the European Union, as a matter of law? What states are members of the EU? Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom Croatia, the Former Yugoslav Republic of Macedonia and Turkey are currently seeking admission to the EU.

62 Background European Union What are the primary governmental bodies of the EU? European Parliament composed of representatives elected directly by the people of the member states Council of the European Union composed of representatives from the member states European Commission overall governmental body Within the European Commission, there are Directorates- General to oversee particular policy areas. The relevant Directorate-General for Environmental Regulations is the Directorate-General for the Environment. European Court of Justice European Union Presidency

63 Background European Union Background continued Directorate General for the Environment is the oversight and state-originated complaint investigation body for the EU and its environmental policies/practices, as well as the policies/practices of member states. Also represents the EU at relevant treaty negotiations.

64 European Regulatory Regimes - EU Background The foundational document of the EU is the Treaty of the European Union. Relevant terms of the Treaty: Article 2 EU objectives are economic, social, to present a unified international stance, including promoting sustainable development, and the advancement of freedom, security and justice. Article 4 common economic policy. Article 6 Environmental protection requirements must be integrated into the definition and implementation of the Community policies and activities... In particular with a view to promoting sustainable development.

65 European Regulatory Regimes - EU Background Treaty of the European Union continued Title III Agricultural policies and practices. Title V Transportation provisions/regulations. Title VI Competition and taxation policies. Title VII Economic and monetary policy. Title IX Common commercial policy. Title XVI Industry. Title XIX Environmental policies and practices. Title XX Development cooperation. Title XXI - Economic, financial and technology cooperation with third countries.

66 European Regulatory Regimes - EU Background Lisbon Treaty Currently being discussed and will likely be voted on soon. If adopted, the Treaty would create a more cohesive European entity in line with a common constitutional/federal structure.

67 European Regulatory Regimes - Background Important terminology: EU ETS EU Emissions Trading System. Directive an enacted European Union law. Regulations enacted regulations/rules by the European Union.

68 European Regulatory Regimes EU ETS The EU ETS was created in 2003 and will legally expire in Terms of EU ETS Directive: Preamble states that the EU members created EU ETS because they decided to exercise the Kyoto Protocol option regarding joint emissions as well as emissions trading. Article 3 definitions Allowance allowance to emit one tonne of CO2. Emissions the release of GHG into the atmosphere from sources in an installation.

69 European Regulatory Regimes EU ETS EU ETS Directive Article 3 continued Installation a stationary technical unit where one or more (covered) activities are carried out and any other directly associated activities which have a technical connection with the activities carried out on that site and which could have an effect on emissions or pollution. Operator any person who operates or controls an installation or, where this is provided in national legislation, to whom decisive economic power over the technical functioning has been delegated.

70 European Regulatory Regimes EU ETS Article 4 from 2005 onwards, requires that EU member states ensure that installations have the requisite permit in order to continue operations. Article 5 sets out the minimum amount of information which a Member State must require from permit applicants. Article 6 sets out the required elements, contents and conditions for a granted permit.

71 European Regulatory Regimes EU ETS Article 9 National Allocation Plan. Requires Member States to submit to the Commission a plan detailing how the permits allotted to them will be used. The Commission has the ability to accept or reject (in part or in full) the plans. Article 11 allocation and issue of allowances. Article 12 transfer, surrender and cancellation of allowances. Article 13 Validity of allowances.

72 European Regulatory Regimes EU ETS Articles 14 & 15 guidelines and verification for allowance use. Article 16 requires Member States to create penalty provisions regarding permits/allowances and that the Member State notify the Commission of violations. Article 19 requires Member States to create allowance registries. Article 21 Member State reporting requirements. Article 24 with Commission approval, Member States may include more emissions than those covered by the Directive in the emissions trading system.

73 European Regulatory Regimes EU ETS Article 25 allows links between EU ETS and third party systems as long as the third party is in compliance with Kyoto Protocol requirements. Article 27 allows for Member States to ask the Commission to grant exceptions for certain emitting installations. Article 28 allows operators to combine and pool their allowances if they meet certain criteria.

74 European Regulatory Regimes EU ETS Revisions In 2009, the EU passed new legislation providing for the continuation of EU ETS after its scheduled expiration in More than merely extending the terms of EU ETS, the legislation also revised some aspects of EU ETS. Article 3 allows for a more expansive definition of GHGs for the purposes of the trading system.

75 European Regulatory Regimes EU ETS Revisions Article 4 provides a slightly more expansive Member State requirement regarding requiring permits for applicable installations/operators. Article 6 contains new review and revision requirements for permit holders. Article 9 - complete overhaul of national provisions into community wide provisions regarding calculation and apportionment of allowances.

76 European Regulatory Regimes EU ETS Revisions Article 9a - more specific community-wide allowances and adjustment requirements. Article 10 requires Member States to auction off allowances which are not allocated. The quantity of allowances auctioned is to be set by the Commission. Article 10b requires the Commission to examine the issue of support to specific energy intensive industries in the event of a carbon leak. Article 10c permits Member States to give a transitional free allowance to operators/installations that have begun energy modernization buy 2008.

77 European Regulatory Regimes EU ETS Revisions Article 11 new national implementation measures imposing greater Member State reporting requirements to the Commission and limits on the free allocation of allowances by Member States. Article 11a allows for Member States to trade-in unused CREs and ERUs which would otherwise expire with the Kyoto Protocol system. Article 12 - new Commission requirements regarding inspection for insider trading and market manipulation.

78 European Regulatory Regimes EU ETS Revisions Article 13 new, more expansive validity of allowances provisions. Article 14 requires the Commission to develop and Member States to implement new emissions monitoring requirements. Article 15 enhanced verification and disclosure requirements for permit holders and Member States. Article 24 enhanced Member State procedures for unilateral inclusion of additional activities and gases.

79 European Regulatory Regimes EU ETS Revisions Article 24a - new harmonized rules for projects that reduce emissions. Article 27 new, more specific provisions and requirements for Member State exclusion of small installations. Article 29a requires the Commission to meet and take action in the event of significant price fluctuations that last for at least 6 months.

80 European Regulatory Regimes Relevant Directives/Measures In addition to the EU ETS Directives, the EU has been extremely active in the field of environmental regulation. The following is a sampling from particularly relevant areas of EU environmental regulation. EU Directives/policies regarding pollution generally Emissions from car air conditioning systems Environmental liability/polluter pays directive Landfill waste directive National emissions ceiling directive Fluoronated GHG directive

81 European Regulatory Regimes Relevant Directives/Measures EU Directives/policies regarding transportation and the environment Clean Sky JTI directive (aviation) Marco Polo Directives (shipping) Railways directive Shipment of waste directive

82 European Regulatory Regimes Relevant Directives/Measures EU Directives/policies regarding energy and the environment Energy taxation directive Biofuels directive End User directive Heavy vehicle directive and amendments

83 European Regulatory Regimes Relevant Directives/Measures Other directives Environmental Impact Assessment requirements Ozone depleting substances directive Sulfur directive Water policy directive

84 Other Regulatory Systems Regional Greenhouse Gas Initiative (RGGI) Members: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont. Applies only to power plants within the participating states, as these entities are regulated by the states themselves. Operates somewhat similarly to EU ETS. The states themselves set a cap on CO2 emissions overall and then engages in an auction system in order to allow power producers to acquire the allowances they need to operate.

85 Other Regulatory Systems Western Climate Initiative (WCI) US Members: Arizona, California, New Mexico, Utah, Oregon, Washington (State), Montana Canadian Members: British Colombia, Manitoba, Ontario, Quebec There are also a number of US states, Canadian provinces and Mexican states that are observers, meaning that they are able to offer their input into WCI practices as well. Members and observers work together to address climate change and other environmental issues through a series of committees. Has just crated a cap & trade program for GHGs that will be in place starting 2015.

86 Other Regulatory Systems Midwest Greenhouse Gas Accord US Members: Iowa, Illinois, Kansas, Michigan, Minnesota, Wisconsin Canadian Member: Manitoba US Observers: Indiana, Ohio, South Dakota Canadian Observer: Ontario Is currently working to create a cap & trade market system

87 Conclusion