Burning of carbon based fuels since
the industrial revolution has quickly expanded concentrations of air carbon
dioxide, increasing the rate of global warming and causing anthropogenic
environmental change. In December 2015, after years of negotiations, 195
countries pledged to work together to address global climate change. The
objective of the Paris Agreement was to limit warming between 1.5C to 2C during
this century.

To achieve this
ambitious and important objective, sufficient funds must be used to strengthen
the developing countries.

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Human activities
not just in developing countries but worldwide are altering the natural
greenhouse. Over the last century the burning of fossil fuels like coal and oil
has increased the concentration of atmospheric carbon dioxide. This happens
because the burning process combines carbon with oxygen in the air to make CO2,
also the clearing of land for agriculture, industry, and other human activities
has increased concentrations of greenhouse gases.

The majority of
actively publishing climate scientists agree that the key reason of the present
global warming trend and climate change is human growth of the greenhouse
effect.

 

I used the data from
World Bank to generate a line graph on excel. The graph shows that the growth
rate in emissions over the past decade is faster than that of previous decades,
indicating carbon dioxide emissions have accelerated in recent years, from 24.7
million in 2000 to 36.1 million in 2014.  Companies and countries make choices over
emissions without considering the consequences to other firms, or organisation who
are not directly involved in the transaction. 
Mass production of carbon has resulted in market failure, without an effective
intervention, the harm caused by pollution has reached a level where the
advantages from reduction in production were substantially higher than the
advantages of constant abating.

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Science organizations around the world have issued public
statements which led to in the creation of the Kyoto protocol of 1997. It was
supposed to keep greenhouse gas emissions from human activity at a certain
point where experts believed would offer the best chance of averting calamitous
climate change.
The Kyoto Protocol was a vital first step to a truly global emission reduction
regime that would steady GHG emissions.

Kyoto Protocol was adopted in December 1997
in Kyoto, it required developed countries to cut their greenhouse gas emissions
by at least 5% in the period 2008-2012 compared to 1990. Many developing
countries have also signed the agreement, but only the rich countries are
legally bound to cut.

The failure of the Kyoto Protocol, and the
difficulties of forging effective follow-up regimes, was largely due to
free-riding. Free-riding occurs when a party receives the benefits of a public
good without contributing to the costs. In this case,
countries have an incentive to rely on the emissions reductions of others
without taking proportionate domestic abatement. Enjoying the gains from
other countries’ cuts while ignoring its own obligations. Abatement, a country
can’t limit the benefits of clean air (non-excludable) and their consumption of
clean air does not decrease theirs (non-rivalrous). It is a public good.  

 

For example, two countries, China and the
U.S. Scientists have warned both countries that without reductions in carbon
emissions, negative costs will arise. Both countries recognise this, but
abatement efforts are a public good. China cannot exclude the U.S. from the
benefits of China’s abatement efforts, nor the other way around. This can be
observed in the figure below.

 

Each country can abate or pollute. The boxes
describe the net payoff (benefit- cost) to each nation in each of the four
outcomes. Outcome 1, both countries can abate and receive 75 each. Outcome 2,
China abates and U.S. ignores, China gets -50 and U.S. gets 100. This is
because abatement is costly. Outcome 3, U.S. abates, China ignores, U.S. gets
-50, and China gets 100. Outcome 4, both ignore, both get -25. The socially
optimal decision is for China and the U.S. to abate. It is socially optimal
because it creates the highest overall benefit. In this scenario, the problem here
is free riding. If the China knows USA will abate, then the best decision for
China is to ignore. And similarly, for the U.S. with over 100 countries, all
nations have a comparable pay-off matrix, they have an incentive to rely on the
emissions reductions of others without taking domestic abatement which will lead
to an outcome in the Nash Equilibrium of zero abatement.  

 

It committed 37 industrialised nations to
reduce their greenhouse gas emissions to below 1990 levels and provided
financial help to developing countries to accomplish the task.

Some nations were on track to meet or exceed
their Kyoto goals by 2011, but other large nations were falling behind. The two
biggest emitters, the United States and China together emitted more than enough
greenhouse gas to erase all the reductions made by other countries during the
Kyoto period. China emitted 22.3% and the U.S emitted 13.4% in 2011. USA’s lack of participation meant that many considered
the agreement to be in error. Some countries did not find the Kyoto Protocol
economically such as Canada, they ratified the protocol but later withdrew in
2011. Canada was not on track to meet its targets as emissions increased while
the economy grew. This allowed Canada to avoid paying penalties of up to 14 billion
Canadian Dollars for missing its targets. The Canadian environment minister,
Peter Kent said in 2011 “The Kyoto protocol does not cover the world’s
largest two emitters, the United States and China, and therefore cannot
work,” He believed that Kyoto did not represent the way forward for Canada
or the world. Thus, it is clear any notion of free-riding makes it impossible
for international arrangements to work as they rely on shared responsibility,
countries need to be sure all other countries are doing their part to cut
emissions.

The Kyoto Protocol failed due to the
distribution of emission reductions between countries. Nations that have
historically been exposed to moderate emissions, such as India and Brazil, were
not affected by the requirements of the agreement, even though emissions in
these countries were and still are today increasing strongly. Developing
countries ratified the protocol, but it did not require them to make any cuts.
The protocol did not attract any new members from developing countries. As a
result, there was significant attrition in the coverage of emissions under the
protocol. Also, emissions grew more rapidly in non-covered countries, particularly
developing countries.

 

 

 

Other mechanisms used to prevent climate
change such as the EU Emission Trading system have also been proved to be
equally flawed. The EU ETS puts a cap on the carbon dioxide emitted by
corporates and creates a market and price for carbon allowances. It covers
airlines and more than 11,000 industrial sites, accountable for around 45% of
EU greenhouse gas emissions currently around 2bn tonnes of CO2 equivalent. Through
emissions trading system, countries could trade emissions permits, the
agreement allows countries to follow up their obligations in other ways than
simply cutting domestic emissions, by assigning property rights to abate, the
costs of emissions are now internalised, incentivising countries to decrease,
hence a step closer to the social optimum level of emission. Furthermore, an
industrialised country can pay for measures that reduce emissions in another
industrialised country. The country that pays has the right to let out more at
home, while the host country can drop out correspondingly less.

The EU Emissions Trading System failed due
to poor management of the carbon market which led to an overflow of carbon
permits that reduced the price of permits to a level that it was an
insignificant cost to the industry, hence to this point not cutting down
emissions, the agreement did not include international shipping and air
traffic, which accounts for a significant part of global emissions. In addition, the EU Emission trade system has not been
cost-effective and has funded polluters at tax payers’ expense, The EU ETS has
constantly seen firms pass on carbon costs to customers that were never
incurred in the first place. A large amount of companies has gained billions of
euros in unjust way.

it was not until in Paris 2015 that
countries decided to agree on a new climate agreement that could replace the
Kyoto Protocol. The Paris Climate Change Conference is quite different from
that in Kyoto with a more rational expectation and a more realistic attitude of
all members. In addition, global economic development, the advancement of
technology, low-carbon development and the international community’s awareness
and attention on climate change have undergone important changes. As a member
of the EU and host country, France was also in active contact with the parties,
which reflects the strong political will of countries to address climate
change.

The target was to
reduce their emissions as quickly as possible, limit warming to 1.5 to 2
degrees and continue to present national climate action plans describing their
future targets for combating climate change The agreement also specifies the
principle that future national plans must be at least as ambitious as the
current ones that will significantly reduce global emissions. There have been
some critics, for instance, Jørgen E. Olesen, a former member of the UN’s
Climate Panel (IPCC) believes that it can be a bit difficult for politicians
and others to understand that climate change is not dependent on what we are releasing
right now and here, but what we have totalled over time. We have not yet seen
the final impact on the climate of the emissions we have had so far. Before and
during the Paris Conference, countries presented comprehensive National Climate
Action Plans aimed at reducing their emissions. The government agreed every 5
years to present their contribution to more ambitious goals, they also agreed
to inform each other and the public about how to achieve their goals to ensure
transparency and overview.

Under the Paris
Agreement, the INDC became the first Nationally Determined Contribution when
the countries ratified the agreement. Once the Paris Agreement was ratified,
the NDC became the first greenhouse gas targets under the UNFCCC that applied
equally to both developed and developing countries On 3 August 2016 China and
US ratified 2015 agreement on INDC. Together they both create 38% of total
global emission, with China’s alone emitting total of 20%.  

 

The INDCs will be crucial to the success of the UN’s
climate deal in the future. It is the first time that all countries, whether
rich or poor, have been obliged to come forward with pledges to manage their
greenhouse gas emissions. The promises made between now and December will,
therefore, act as a barometer of where the world stands on tackling climate
change.

Analyses of the INDCs submitted by countries
conclude that, while they are moving closer to the 2-degree goal, they are not
ambitious enough to achieve it. An analysis by the Climate Action Tracker, a group
of research institutions, concluded that the INDCs, if fully implemented, could
result in warming of 2.7 degrees Celsius, which would be 0.9 degrees lower than
without them.

it is the flexibility of the INDCs which
could prove to be the Paris agreements greatest asset. the absence of a penalty
being imposed on a nation if failing to meet their specified INDC may have
allowed the Paris agreement to achieve such high levels of participation. No
risk of penalty enables ambitious INDCs and it is expected that this would have
a positive impact on countries to submit similarly ambitious targets. For example,
the U.S. pledged a domestic reduction of 26% to 28% in greenhouse gases by
2025, compared to 2005 levels, working towards the 28% target. This includes
the land-use sector and excludes international emissions credits. The USA’s participation
meant that many considered the agreement to be accurate. Therefore, the high
levels of participation may prove an effective way to prevent or reduce the
free riding problem. More countries find that the INDCs is economically
beneficial.

 

As all countries face a similar pay-off
matrix, they all have the incentive to abate thus reducing free-riding. With
more countries involved in the agreement the pay-off involved in the figure
above, countries abate is significantly greater. In comparison to Kyoto
protocol, the US raised the issue that, developing countries such as India and China
were allowed as free-riders and no cuts in emission was required from them.  Their reason for lack of participation was
due to the failure of the Kyoto Protocol to include all countries, as one of
the largest emitters, China and India were not included.  With the Paris agreement, it has managed to
include the biggest emitters to reduce its emission, both developing and non-developing
countries. India is set to reduce its emissions intensity per unit GDP by 33%
to 35% below 2005 by 2030 and China by 60% to 65% by 2030 on 2005 levels.

 

The INDC agreement is not legally binding,
countries must constantly report to the UN on what they’re doing, there’s no
one who will come after them with sanctions if they don’t keep their
promises.  The INDCs is voluntary which
means the long-term impact of the agreement may be uncertain. The fact that nations
will not be penalised if they fail to live up to their promises could be the
biggest weakness in the agreement.

Climate Finance:

The main purpose of the Paris Agreement is
to limit warming to 1.5C to 2C during this century. To achieve this ambitious
and important goal, sufficient funds must be used to strengthen the developing
countries. Article 9 of the Paris Agreement states that developed countries
shall provide financial resources to assist developing countries. rich nations will
continue to contribute climate financing to help poor countries both reduce
emissions and build resilience to the adverse effects of climate change.  However according Oxfam, they estimated that
just 16% of the $100 billion a year that was promised by wealthy countries in
2009 to aid poorer nations cut carbon emissions has been paid. To partly
rectify the agreement, the COP decided that the $100 billion per year from 2020
goal will continue through 2025, and that from 2025.

Tracy Carty, Oxfam’s policy adviser said “We
need to see specific commitments in Bonn to increase adaptation finance and for
that money to be spent supporting small farmers who are on the front lines of
the climate crisis” she believed that there is lack of commitment to developing
countries, also warning that the issue “cannot be kicked down the road”

 

Summary

In conclusion, the
Paris agreement is a step in a longer process of fighting global warming. The
advances that it has made upon its predecessors such as Kyoto is impressive. Unlike
the Kyoto protocol, all nations in the Paris agreement must do their part, with
no exception for developing nations. However, it cannot be denied that the
agreement has its weaknesses. Because the accord is voluntary, the deal doesn’t
need to be ratified. Nations do not have to obey the agreement of reduction in emission,
they can pollute while all other countries abate. One way to ensure that
countries obey with their commitments is if there was an effective consequence
to not obeying, this could act as a warning to the free-riding behaviour of
countries. If the penalty is reliable as a threat, it would be enough for
countries to incentivise compliance. However, many countries would be opposed
to the strict enforcement of sanctions. On the other hand, the Paris agreement
could be argued that it has produced the best possible outcome in the short
term, without an international agreement, it will be harder, if not impossible,
to lead international cooperation to counteract climate change. In the long
term, it is too early to assess the impact of the agreement, especially as it
does not come into force until 2020. For now, I believe that the Paris
agreement can be viewed as a success and it is on the right track