IEEJ：December 2015

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Special Bulletin
A Japanese Perspective on the International Energy Landscape (250)

December 16, 2015

COP21 Adopts Paris Agreement Making Progress in Global Climate ChangeMeasures
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanOn December 12, the 21st Conference of Parties to the United Nations Framework
Convention on Climate Change (COP21) adopted an agreement on new climate change measures
beyond 2020 after two weeks of negotiations in Paris. The Paris agreement is the first accord on aninternational framework on climate change measures since the Kyoto Protocol adopted at COP3 in
Kyoto in 1997 to provide for greenhouse gas emission reduction targets. The Paris agreement calls
for restricting the global average temperature increase from the pre-industrial revolution level to well
below 2 C and states that it would be important to limit the temperature rise to less than 1.5 C. To
this end, the pact urges that global GHG emissions be peaked as early as possible and reduced
rapidly thereafter to effectively achieve zero emission with GHG absorption taken into account, inthe second half of the current century.
A total of 196 countries and regions are participating in the Paris agreement and willsubmit voluntary GHG emission reduction targets to the United Nations and implement plans toachieve these gargets. A major factor behind the agreement was that the UNFCCC parties adopted
the so-called bottom-up approach of accumulating their voluntary targets to reduce GHG emissions,instead of a top-down approach of requiring or mandating each country to achieve a certain emission
reduction target. In order to revise voluntary emission reduction targets to effectively cut emissions,the Paris agreement provides that each party should submit an improved target every five years andaccept experts’ verification of actual emission cuts.
An analysis of the targets, or Intended Nationally Determined Contributions (INDC),
submitted before the COP21 meeting, indicates that these INDCs may fall far short of cutting GHG
emissions to achieve the target of limiting the global average temperature increase from thepre-industrial revolution level to 2 C. In this sense, the Paris agreement cannot be taken as“sufficient enough” as far as the present INDCs alone are concerned. Nevertheless, the Parisagreement can be viewed as an important step for global climate change measures based on thefollowing points:
First, the accord enables climate change measures to be implemented as a global
framework for the first time ever. The Kyoto Protocol imposed GHG emission reduction
requirements only on some industrial countries including Japan and the EU members and others. TheUnited States, China, India and other major GHG emitters that account for about 50% of global CO21

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emissions failed to join the Kyoto Protocol framework, causing great doubts about the effectivenessof the protocol to address climate change. In contrast, 196 countries and regions are taking part in
the Paris agreement. It is significant that almost all countries in the world are voluntarily
participating in a framework to address the global problem of climate change, irrespective ofwhether emission reduction targets are ambitious or strong enough.
Second, it is important that the Paris agreement calls for submitting improved GHG
emission reduction targets every five years while implementing emission reduction measures, asexplained above. Behind the Paris agreement, the UNFCCC parties learned lessons from their failure
to reach agreement at their COP15 in Copenhagen, adopted the bottom-up approach to agree on aframework covering the whole of the world and gave priority to the feasibility of GHG emission cutsby making and revising voluntary commitments. But it is important to build into the agreement amechanism to guide the UNFCCC parties into improving targets regularly, instead of leaving them tovoluntarily implement GHG emission reduction measures. This time, they agreed on the nonbinding
GHG emission reduction targets due to opposition to binding targets from some countries including
the United States. Therefore, the regular revision of voluntary targets is significant.
The UNFCCC parties negotiated for two weeks to form the Paris agreement as theynavigated the maze of intricate national interests of industrial and developing countries with theirvarious domestic conditions. The most attention-attracting problem in the negotiations was industrial
countries’ financial assistance to developing countries for implementing climate change measures.
While developing countries demanded an increase from $100 billion in annual assistance, industrial
countries refused to specify any amount of assistance. Industrial countries also urged China andother emerging countries with substantial economic power to provide financial assistance. Various
other proposals were also presented for negotiations. Eventually, the UNFCCC parties gave priority
to reaching consensus and adopted a nonbinding document indicating that industrial countries will
provide $100 billion in annual assistance until 2020 and increase the annual amount later. Generally,
the parties gave priority to their realistic decisions to adopt the Paris agreement and form consensus
on this and other issues.
There may be various views about future prospects and challenges. One view is that it isimportant for the UNFCCC parties to steadily implement their GHG emission reduction targets inline with the Paris agreement. Their targets cover long terms. A long-term viewpoint is required forconsidering an energy supply and demand mix that has close impacts on GHG emission cuts.
Various energy measures, strategies and choices from next year will influence the medium tolong-term energy supply and demand mix and the future picture of CO2 or GHG emissions.
Japan has submitted its INDC to the United Nations, offering to reduce GHG emissions in
FY2030 by 26% from FY2013 based on its energy mix decided July this year. As the Japanese target
has been included into the Paris agreement, the international position of the Japanese target has beenclarified, irrespective of whether the target is legally binding or not. In this sense, an important
challenge for Japan is to realize the energy mix to achieve the target. The Paris agreement calls forrevising emission reduction targets to improve them every five years. The Japanese target is2

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sufficiently ambitious. As far as the Paris agreement provides for the regular revision, however,Japan will have to take measures in line with the agreement. Since the basic energy plan is set toundergo a revision every three years, the next revision may come in 2017. Therefore, acomprehensive energy policy consideration process may start next year. Japan will have to consider
policies and the timetable from an objective, scientific viewpoint based on the present and future
pictures of its energy conditions and GHG emissions.

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