I. Introduction
“There is a Kafkaesque aspect to implementation . . . [I]t is a crucial area, yet people act as if it did not exist.” –Walter Williams (1975)
International law treaties generally designate the States as the primary actors with the responsibility of effectuating terms of any such treaty. International environmental law is no different in this aspect. While there has been a growing observable trend of non-state actors being engaged in the processes of both legislation and implementation (perhaps most exemplary seen in the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)), the primary burden still rests on the States to follow through their promises (pacta sunt servanda). In International Environment Law, among all the major international instruments including the Montreal Protocol (1987), the Kyoto Protocol (1997), and most recently the Paris Agreement (2015), the effectiveness of these rests on the degree to which they are “domesticated”. What this means is that often such instruments impose no legally binding duty on the States to fulfil their commitments and in such situations, the onus is on individual States to implement their commitments in “good faith”. Therefore, these instruments have preferred the route of facilitation and cooperation than the harsher route of punitive deterrence.
Thus, the question this article wants to answer is how can “soft law” instruments, like the Paris Agreement, be given some bite through compliance mechanisms. It is important here to clarify that the article intends to restrict its focus to States’ national commitments under multilateral environment treaties (MEAs). Much has been written about States’ transboundary commitments and several principles have been established since the 1970s and 1980s with respect to the same. Global commitments have been at the forefront of international environment governance since the relative success of the Montreal and Kyoto Protocols. The Paris agreement is the latest and largest development in this respect and has been hailed as a “major leap for mankind”. However, its effectiveness in the long-term has proved to be falling short of expectations and this is evidenced by the recent institution of perhaps the largest suit in ICJ’s history. The goal of the suit is to enforce commitments of certain countries to the agreement which have remained substantially unfulfilled till now. Further, with US backing out of the Paris Agreement (again), further doubts are cast upon the efficacy of the agreement.
The piece would firstly, analyse the compliance mechanisms of the Paris agreement and discover its insufficiencies; secondly, argue for better compliance mechanisms through the integration of trade and sustainable development chapters (TSD) in free-trade agreements; and finally, address possible counter-arguments to this model’s adoption.
II. Legal Character and Compliance Mechanisms of the Paris Agreement
For the Paris agreement, the focus on “domestication” is immediately clear when one reads the terms of the agreement. The conceptualisation of Nationally Determined Contributions (NDCs) (Article 4(2)) as the primary vehicle of achieving the ambitious aims of the agreement is intriguing in several ways. Nationally Determined Contributions are meant to serve as a quantifiable and achievable outline of each party’s post-2020 climate actions. NDCs are useful in analyzing whether the global community is on track to achieve the broader goals of the Paris Agreement. The parties also have the ability to update their commitments depending on their national circumstances (a recent example of India can be seen here). While the parties to the agreement are left on their own to prescribe their own commitments, there are still a few interesting features of the agreement which promote transparency and accountability. Transparency framework as outlined in Article 13 of the agreement is one of the only provisions in the agreement which may function as a “hard obligation”.
Clause 7 of Article 13 reads as “Each party shall regularly provide […]”. This imposes an obligation on the States to provide information necessary to track progress made in achieving its nationally determined contribution under Article 4. The “hardness” of the obligation can be seen from the necessary technical review that these declarations have to go through (Clause 11 of Article 13). This necessary oversight is a distinct feature as there is an observable lack of the same in other provisions.There are various other measures which are facilitative in nature and aim to foster cooperation. Global stocktake, as outlined in Article 14 of the agreement, is one such provision through which contributions on a global scale would be weighed against the aims of the agreement. Clause 1 of the article mentions that this assessment of the global stocktake must be done in a “[F]acilitative manner, considering mitigation, adaptation and the means of implementation and support, and in the light of equity and the best available science.”
Interestingly, measures for ensuring compliance in the treaty are quite “soft” in their nature as opposed to the “hard” mechanisms of transparency. Article 15(2) of the agreement uses the terms “non-adversarial”, “non-punitive”, and “facilitative”, to signal the approach of the agreement towards non-compliance. Another compliance mechanism outlined in Article 24 of the Paris Agreement states that the dispute settlement clause in Article 14 of the UNFCCC is applicable mutatis mutandis to the Paris Agreement and this means that States may engage in negotiations and only then compulsory conciliations. However, Article 14(6) of the UNFCCC provides that the reward of conciliation would be a “recommendatory award” which the parties are to “consider in good faith.” This arduous process of negotiations deters States to engage in such negotiations and the non-binding final rewards further this deterrence.
While the cooperation fostering mechanisms are ideal theoretically, there are no real obligations on the parties to comply with their NDCs. The adaptation mechanisms outlined in the agreement are nothing more than recommendatory and “assurance building”. The reason for the “soft law” nature of the treaty can be largely traced to the asymmetrical responsibility designated to the developed nations and their self-interested political motivations of having these compliance mechanisms as non-binding.
One may argue that global cooperation in such a sector of International Law should be preferred because the shared benefits of technological developments and other advancements would outweigh the potential losses caused by some non-compliant States. The issue with such a view is twofold- 1. Experience after the declaration of individual NDCs has shown that States often make less ambitious targets that are not aligned with ambitious global commitments; 2. With these reduced commitments too, non-compliance has been a common occurrence (the recent ICJ case is a manifestation of such frustrations). A prevalent theory as to why there is frequent non-compliance claims that cooperative approaches are suited to commitments that do not require significant changes in behaviour, while more demanding commitments, such as those under the Paris Agreement, require strong enforcement to really actualise these commitments.
While there are several different ways of trying to effectuate compliance through public participation (for eg see Article 1 Aarhus Convention 1998), and through non-state actors domestically (including holding the State to its commitments by filing cases), the next section would try to argue that including enforcement mechanisms in Free-Trade Agreements is the best possible solution to this issue.
III- Environmental Compliance Mechanism and Trade Agreements.
The model that the paper suggests is certainly not new to international law. It is important to clarify here that there are two ways in which trade agreements have been used to further environmental goals. One way is through blanket trade bans on certain substances. One example of such a ban is that of the Montreal Protocol through which trade of CFCs was restricted. There is one major issue with such a model, global trade is hampered and an unequal burden is imposed on countries which primarily trade in such substances. The second more relevant procedure for us here can be best shown through the procedure established under the erstwhile North American Free Trade Agreement (NAFTA), replaced now by the United States-Mexico-Canada Agreement (USMCA) in 2020. The chapter on trade and environmental sustainability remains largely unchanged (I will refer to the provisions of the USMCA hereinafter). What is meant with environmental compliance in these trade agreements varies but two principles are common and may be termed as foundational-
1. That the parties to the agreement will abide by general thematic standards with respect to domestic environment policies; here the parties are allowed a large degree of independence with respect to determination and execution of policy;
2. That the parties to the agreement will uphold their commitments under multilateral environmental agreements (some FTAs also explicitly mention certain MEAs).
A. The USMCA Model
Chapter 24 of the USMCA deals with environment compliance (similar to Trade and Sustainability Chapters in EU agreements). The procedure established is a long and arduous one but the most striking feature of the treaty is that primacy is given to cooperative negotiations and then if the party is still non-compliant, measures of punitive nature may be enforced. According to Article 31.19, punitive measures may include suspension of ‘benefits’ for the non-compliant party.
Similar measures can be located in the free-trade agreements of the EU, CPTPP, UK and Australia, and even India (possibly in the near future). There are a few notable differences and it is important to discern which approach would be better suited for ensuring efficient compliance.
B. EU’s TSD Model
Kateřina Hradilova and Ondřej Svoboda examine the EU’s approach in opposition to the US approach and list some interesting findings. The EU differs primarily in its approach by excluding pecuniary sanctions as a final compliance measure. The second major difference between the two approaches is with respect to dispute settlement mechanisms. While the USMCA refers to the general dispute settlement chapter (chapter 31) even for cases related to environment compliance, the EU Trade and Sustainable Development (TSD) chapters have a unique mechanism. This unique process is based on consultations and does not include any punitive measure for not following the recommendations of the expert panel.
This model of fostering cooperation has attracted several critics due to the ineffective dispute settlement mechanism which is rendered so because of the lack of sanctions. Criticisms by the European Parliament and the European Economic and Social Committee (EESC) led the Commissioner for Trade to introduce a 15-point action plan aimed at strengthening the dispute settlement mechanisms. However, France and Netherlands in a non-paper, published in 2020, considered this plan to still fall short of their expectations because of the lack of any sanctions. These recent criticisms by these stakeholders displays the changing perspectives on the TSD’s traditional approach, certainly fueled by the experiences of inefficiencies curated by the system.
While it may seem like the USMCA model is better for ensuring compliance, there are a few drawbacks to still consider. Dispute settlement mechanisms like the USMCA involve a lot of investment in terms of time and negotiations which often result in inadequate returns. The reason for this inadequacy and subsequent dissatisfaction with the reward is the lack of a uniform international standard for calculating financial compensation as a result of environmental non-compliance. While this model is not without its flaws, in the next section I argue that this way of ensuring compliance is the best possible model when compared to other prevailing practices.
IV. Sticks and Carrots in Environmental Compliance
Why then is this model still better than ensuring domestic compliance through methods discussed before- namely public participation and the role of an active judiciary? Domestically, relying on non-state actors and Courts to take up this advocacy role is relying heavily on judicial discretion and proactiveness of non-state actors. While there have been a growing number of instances wherein the two have worked in tandem to ensure compliance, to rely on that completely is taking the matter out of the realm of international law which is not suitable here as the most affected subjects of this non-compliance are the States themselves and hence, they must be endowed with access to such remedies.
Now to address the debate between dispute settlement mechanisms which foster cooperation (through technological and developmental aid) and those which intend to use pecuniary sanctions (through tariffs, suspension of benefits, or direct financial compensation), it is important to analyse how a combination of both sticks (sanctions) and carrots (incentives) is necessitated for ensuring compliance. It is a common misconception that States maliciously overpromise and underdeliver. It is important to analyse why States end up defying certain commitments; possible reasons could be miscalculations, change in circumstances, or simply poor planning. Hence, a system which prioritises only sanctions will prove to have an adverse impact on States’ future commitments and incentive to participate in the future. On the other hand, a “carrots” only approach may look appealing in the short term but studies have shown that cooperation cannot be fostered through incentives alone.Howard Chang, the famous lawyer-economist, argued that in systems where there is asymmetric distribution of information, a carrots-only approach as offered by the GATT secretariat may lead to perverse consequences with respect to compliance. Again, the recent criticisms of developed countries not following through their commitments, shows that an agreement which is majorly “soft law” in nature will not result in the desired outcomes. Therefore, a model which includes both cooperative and punitive measures would be the most suitable for ensuring compliance, and a model similar to that under USMCA has both these ingredients.
Another advantage of locating compliance mechanisms in FTAs than global treaties like the Paris Agreement is related to cooperation and participation of parties. Trade agreements include much fewer countries than global treaties and are often bilateral in nature. This is relevant because cooperation between fewer countries is most likely to sustain as opposed to a large number of parties; the reason for this is that any unilateral non-compliance is not punished very harshly when there are a large number of parties to the treaty. Further, ensuring continuing participation of all the parties to any agreement is a hard task ordinarily, and a harder task when there are punitive measures for non-compliance. One of the primary reasons for the USA pulling out of the Paris Agreement in 2020 was the asymmetric burden placed on the country. The veracity of this claim is not relevant but the fragility of the dependence on good faith compliance in such agreements was definitely on display.
FTAs, on the other hand, form part of necessities for any State to economically sustain and this mitigates against any impulse withdrawal. Also, since States would have much detailed negotiations on the terms of these agreements, there is greater possibility of ensuring that each State has a real say in the non-compliance mechanisms it is subjected to. One might argue that States would prefer to avoid the inclusion of these mechanisms in FTAs as it can only serve to their detriment, at least financially. To understand why this is a slightly misplaced argument, we must look at why States come together to form any such agreements. States have other non-financial benefits to forming such agreements including a form of virtue signalling wherein the State projects itself as a considerate entity to other nations and its own people. Further, for some States, these agreements are necessary for their survival. The EU’s insistence on the inclusion of TSD chapters in the FTA with India, is an example of how compliance in these areas has emerged as a key issue for certain nations.
To conclude, it is necessary to recognize the importance of both global treaties and bilateral FTAs in environmental governance. There is a need to ensure that both these forums continue to function in their most suitable capacity. Global forums like the Conference of Parties (COP) provide the unique opportunity of aligning domestic environment policies with global targets. This also serves as an excellent mechanism of sharing technical expertise with respect to scientific and technological advancements in environment sciences. However, as shown above, FTAs among countries are perhaps the ideal instruments of ensuring compliance to the commitments made in global forums. This tango of global forums and bilateral FTAs has the potential to give some “bite” to the “toothless beast” that is Multilateral Environmental Agreements currently.
Priyam Mitra is an undergraduate law student at NLSIU, Bangalore.
Image: Milton Glaser (1970), NY Times and Poster House