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Julkaistu

Environmental Cooperation under CETA: Bold New Linkages, Bolder Risks

 

 

 

 

Sabaa A. Khan and Kati Kulovesi

Dr Sabaa A. Khan is Senior Researcher at CCEEL / UEF Law School. Her areas of expertise include regional trade agreements and she serves on the Joint Public Advisory Committee of the Commission for Environmental Cooperation, under an appointment by Canada’s Minister of Environment and Climate Change.

Dr Kati Kulovesi is Co-Director of CCEEL and Professor of International Law at the UEF Law School. She specializes in climate change law and holds a PhD in international economic law from the London School of Economics and Political Science.

The EU and Canada highlight climate change and the Paris Agreement in context of the CETA

In the same week as Canada, Mexico and the United States signed a new regional trade agreement that makes absolutely no mention of climate change, Canada and the EU made new efforts to formalize the climate change and trade linkage within the Canada-EU Comprehensive Economic and Trade Agreement (CETA). Representatives of the EU and Canada convened in Montréal for the inaugural meeting of the CETA Joint Committee, mandated to oversee and facilitate the implementation of all aspects of trade and investment under the CETA.

The meeting’s outcomes included a recommendation on ‘trade, climate action and the Paris Agreement’, reiterating the Parties’ shared commitment to the international climate change regime and Article 24.12(1)(e) of the CETA that specifically addresses climate change. The recommendation further signals the Parties’ intention to “step up the role of the Paris Agreement in their bilateral cooperation”.

This can be seen as a promising signal that the international climate change regime will play a salient role in shaping mega-regional trade flows. It is worth noting, however, that the increased trade in merchandise that has taken place under the first year of the CETA’s provisional application appears to be in sectors that are energy-intensive, and closely linked to the high-emissions extractive industries.

Source: Government of Canada

Moreover, the Joint Committee’s reaffirmation of the Paris Agreement at this point in time is an environmental moment worth modest celebration in light of ongoing concerns regarding the potentially massive environmental implications of the CETA investment protection provisions and the legally-ambiguous investment tribunal established under Art. 8.27.

Will the CETA’s Investment Chapter Have a Negative Impact on Environmental Protection in the Finnish Mining Sector?

While Canada and the EU continually underscore the immense mutual benefit that the CETA brings to businesses and communities and its environmentally progressive nature, it is difficult to ignore that the greatest environmental impact of the CETA is likely to be determined by its Investment Chapter, not the Trade & Environment Chapter that is explicitly dedicated to environmental issues.

The basic idea underlying the CETA’s Investment Chapter is to ensure that investors are treated equally and fairly, and that there is no discrimination between domestic and foreign investors. One of the mechanisms it includes for foreign investment protection is the possibility for investors to take legal action against governments through a new Investment Court System. A critical apprehension in this respect is that the prospect of costly legal challenges and damage to a country’s reputation in hosting investment might discourage governments from taking legitimate and necessary regulatory and administrative actions to protect environmental and public interests.

Even though the Investment Chapter reaffirms Parties’ regulatory right with regard to achieving legitimate policy objectives, including the protection of public health and the environment (Article 8.9), the provision on what constitutes a breach of fair and equitable treatment of investors (Article 8.10.4) leaves open the possibility for an investor to challenge governmental measures based on “legitimate expectations.” In light of these provisions, there are valid concerns that the CETA’s profitable implications for Canadian and EU investors come at the expense of the Parties’ willingness to regulate in the public interest and according to the principle of sustainable development.

In the context of the mining industry in particular – a key Canadian sector expected to benefit from the trade agreement – it is difficult to set aside the potential environmental and public health risks for EU Member states that are linked to the CETA’s investment protection rules and dispute settlement architecture. With over 50% of publicly-listed global exploration and mining companies headquartered in Canada, the CETA has not only opened up EU market access to a lucrative and globally powerful group of corporations, it has empowered them through the investment protection chapter to challenge public policy measures that interfere with their natural resource development projects.

In Finland, the mining sector has been one of the key concerns in the context of the CETA. Past negative experiences, including from the Talvivaara mine, have increased the public’s awareness of the sector’s potential environmental impact. When approving the CETA, the Parliament requested the government to evaluate the need to reform the Finnish mining legislation in consideration of the CETA. In response, the government commissioned an expert report, which saw no need for reform. The report’s key message is that the Finnish legal system already contains adequate protection to ensure investors’ fair and equitable treatment.

This finding and the report have, however, generated controversy, not least because the report was commissioned from a law firm known for representing the interests of the mining sector and multinational mining companies. One of the questions is whether the legal analysis in the report is objective enough to constitute a response to the Parliament’s request.

Looking at the report commissioned by the Finnish government, it contains comprehensive and well-informed analysis of the Finnish national legislation. However, the international law dimension would have merited more attention. This would have included analyzing relevant case law to understand what kind of government actions have been challenged through investor-state dispute settlement. Such analysis should have studied at least case law involving the mining sector and Canadian mining companies.

Looking at investor-state dispute settlement, Canadian mining companies already have an extensive track record in seeking financial compensation from governments through arbitral disputes. The request for arbitration filed at the International Center for Settlement of Investment Disputes (ICSID) by Toronto-listed Gabriel Resources against Romania, seeking $4.4 billion for alleged losses in its halted gold-mining project, and the dispute between Vancouver-based Eldorado Gold and Greece (ruled in favor of Eldorado Gold) over the environmental impacts of mine development in the northern region of Halkidiki, are reflective of the kind of mining disputes that could proliferate under the CETA.

In the Gabriel Resources vs. Romania case, the mining company is basing its claim on “unjustified delays in the administrative permitting process, imposing shifting and non-transparent legal requirements, politicizing applicable legal and administrative processes, and ultimately abdicating the responsibility to make decisions on the permitting of the Project in contravention of the applicable legal framework.” In Eldorado Gold vs Greece the claimant’s argument also concerned, inter alia, delays over issuing environmental permits.

A quick glance at the relevant case law thus shows that legal arguments made in the actual proceedings tend to be more complex than those studied in the expert report commissioned by the Finnish government. It would therefore have been useful to also study the actual case law and consider its relevance in the Finnish context. Whether this would have affected the overall conclusion remains unknown without comprehensive analysis.

Overall, the concern remains over the CETA’s Investment Chapter risking to immobilize EU Member states’ from regulating in the interest of public and environmental health protection. Of course, Canada could face similar challenges brought on by EU investment in Canada-based mining operations. Since the Investment Chapter has not been implemented under the provisional application, and the CETA itself has yet to be fully ratified, there is still space for EU Member states to bring in mining legislation reforms to counteract the possible financial, environmental and public health risks associated with the expansion of Canadian mining interests in the EU.

Julkaistu

More Time for an Energy Revolution? Seizing the Opportunity to Slow Down Climate Change by Cutting Emissions of Short-lived Climate Pollutants

 

 

 

Kati Kulovesi, Yulia Yamineva and Veera Jerkku

View of the South of Delhi by Jean-Etienne Minh-Duy Poirrier (Under Creative Commons License)

THERE IS an important ‘ambition gap’ between the climate change mitigation policies pledged by countries in context of the Paris Agreement and those needed to avoid dangerous climate change. Discussions on ways to step up climate change mitigation efforts commonly focus on ways to reduce carbon dioxide (CO2) emissions. These indeed play a crucial role in long-term climate change mitigation. However, achieving radical cuts in CO2 emissions also requires a fundamental economic and energy transformation that is proving time-consuming to achieve.

OUR ARGUMENT is that short-lived climate pollutants (SLCPs) provide an attractive option that could ‘buy’ more time to cut CO2 emissions. The United Nations Environment Programme has estimated that reducing SLCP emissions, especially methane and black carbon, could slow the rate of global warming by 0.4-0.5°C by 2040 (UNEP, 2011). This is an important contribution given that the existing climate policies have been estimated to limit the global average temperature increase only between 2.9°C and 3.4°C by the end of the century (UNEP, 2016)., thus falling short of the 2°C target in the Paris Agreement.

SLCPS INCLUDE methane, some hydrofluorocarbons (HFCs), tropospheric ozone and black carbon. What unites them is a significant short-term warming effect on the climate. Methane, tropospheric ozone and black carbon cause local air pollution, thereby adversely affecting human health and ecosystems, including by reducing crop yields.

AT THE CCEEL, we have recently launched a new five-year research project known as ClimaSlow (Slowing Down Climate Change: Combining Climate Law and Climate Science to Identify the Best Options to Reduce Emissions of Short-Lived Climate Forcers in Developing Countries). The project is led by Professor Kati Kulovesi and funded through an European Research Council (ERC) Starting Grant for 2017-2021. Other CCEEL members involved in the project are Dr Yulia Yamineva  (Senior Researcher) and Veera Jerkku (PhD candidate).  The project also involves participation by the UEF Aerosol Physics group.

ONE OF the factors driving our interest in SLCPs is that we see them as an interesting opportunity to merge the global climate change agenda with the local health and environmental agendas. Air pollution poses a considerable risk to human health worldwide. It leads to heart and lung failures and cancer, causing approximately 6.5 million deaths each year (WHO, 2016). Through aggressive reductions in black carbon emissions, it would be possible to avoid 2.4 million premature deaths annually by 2030 as a result of reduced exposure to fine particulate matter (UNEP, 2011).

THE GROWTH in SLCP emissions over the next decades is expected to be driven by developing countries. Therefore, in addition to the focus on international and transnational cooperation, the ClimaSlow project looks at three national case studies: China, India and Nepal.

CHINA AND India are among the world’s key sources of black carbon and methane emissions and their emissions of HFCs are also set to rise. Air pollution is also an acute problem in all three countries damaging both public health and the economy. In China, for instance, air pollution is implicated as a leading cause of mortality (UNEP, 2015).  The project will look at the policies and regulations in place in the case study countries, and seek to identify ways to strengthen them through both national and global action. It will also try to identify opportunities for others to learn from the experiences of the three case study countries.

ONE OF the project’s motivations is that the legal and regulatory options to strengthen global action on SLCPs have not been studied comprehensively, and the climate impacts of such options are not yet adequately understood. The ClimaSlow project seeks to fill the vacuum by undertaking an analysis of the fragmented and multi-layered global legal and regulatory framework for SLCPs.

FURTHERMORE, THE ClimaSlow project breaks disciplinary boundaries through combining climate law and climate science. An analysis of legal and regulatory options is complemented by climate modelling work to determine their climate impacts and hence identify the most effective ways to achieve deep reductions in the emissions of SLCPs.

THE PROJECT will seek to maintain an iterative dialogue and share its interim and final findings with a variety of stakeholders including scientists, NGOs and policy-makers both internationally and in the case study countries. This will for instance be done through organising workshops, developing policy briefs and participating in relevant events. The project will also culminate in an interdisciplinary scientific conference in 2022.

YOU CAN stay up to date with project developments through the CCEEL website and Twitter account (@uefcceel), as well as the project’s own Twitter account @ClimaSlowERC.

Julkaistu

Introducing the CCEEL Blog and CCEEL Activities on Climate Law

katikulovesiharrovanasseltKati Kulovesi, Co-Director of CCEEL and Professor of International Law

Harro van Asselt, Professor of Climate Law and Policy

THE PAST few weeks have been remarkable for the evolution of international climate law. A month ago, the Paris Agreement obtained the required ratifications both in terms of the number of countries and their share of global greenhouse gas emissions. As a result, the Paris Agreement will come into effect on 4 November 2016. Its Parties will convene for the first time next week in Marrakesh, Morocco. The entry into force of the Paris Agreement and the first meeting of its Parties are major steps forward for international climate law and policy under the auspices of the United Nations Framework Convention on Climate Change.

BUT IMPORTANT developments have also taken place elsewhere. In early October, the International Civil Aviation Organisation (ICAO) reached agreement on a global mechanism to offset aviation emissions from 2020 onwards. This decision was taken against the backdrop of rapidly growing global aviation emissions. While not perfect, the new ICAO offsetting mechanism represents important progress after years of stalled negotiations.

FINALLY, ON 15 October 2016 an important new amendment was adopted to the Montreal Protocol on Substances that Deplete the Ozone Layer to phase out hydrofluorocarbons (HFCs). These are highly potent greenhouse gases used mostly in air conditioning and refrigerators. Without new regulatory measures, it was feared their emissions would grow, posing a serious threat to climate change mitigation efforts. Indeed, it has been estimated that if implemented, the Montreal Protocol amendment will slow down global warming by up to 0.5 degrees Celsius in the next few decades.

THESE THREE developments are undoubtedly all significant milestones in the evolution of international law on climate change. Just a few years ago the prospects for all three agreements looked gloomy, and the recent developments thus show that countries are increasingly prepared to use international law as an instrument to tackle climate change.

HOWEVER, LOOKING more closely, they also demonstrate that international climate law inhabits an increasingly complex legal and regulatory space with several sites of governance. Moreover, there is a growing emphasis on both national discretion and procedural obligations. The effects these shifts will have in practice will greatly depend on the level of implementation. Critical analysis by the academic community will be needed to understand the relevance of these developments for climate law and governance, and for environmental law more broadly.

AGAINST THIS backdrop, we are launching this CCEEL blog to create a new forum for a critical debate on current developments in climate, energy and environmental law. In this first blog post, we offer a snapshot of our activities in the field of climate law. Future posts will focus mainly on substantive issues and will be published approximately twice a month. In addition to the climate law activities introduced here, CCEEL participates actively in research on, inter alia, international energy law and these activities will be covered in future posts.

MANY OF us at CCEEL are closely following the global climate change negotiations and regularly participate in the UNFCCC process. We also frequently consult various organizations on international climate law and policy. Recent examples include several reports on negotiations for the Paris Agreement and the Agreement’s implementation prepared for the Finnish Ministry of the Environment.

OUR RESEARCH covers both general aspects of the evolution of the UN climate regime, as well as the regime’s various substantive dimensions. Some of our most recent publications discuss the Warsaw Framework to reduce deforestation through REDD+, climate finance after the Paris Agreement, and options for the enhanced transparency framework of the new treaty.

THE SCOPE of climate law is, however, much broader than the UN climate regime, and our research examines to which extent other international legal regimes can contribute to, or distract from, efforts to tackle climate change. Recent research by CCEEL staff specifically analyses efforts to address sectoral greenhouse gas emissions from international aviation and shipping through the International Civil Aviation Organization and the International Maritime Organization as well as interlinkages between climate change, ozone depletion and air pollution.  Another important topic for climate policy and for our research concerns links between international trade law and climate law, including in the context of the World Trade Organization. Our activities are not, however, confined to the international level, but we are also actively following developments related to climate law in the European Union and in Finland.

THE CCEEL also has various research activities related to short-lived climate pollutants. The White project is looking at their regulation in the Arctic region, including how they are being addressed by the Arctic Council. In January 2017, we will be launching a new interdisciplinary research project ClimaSlow, funded through a 5-year grant by the European Research Council. Through this project, we will be looking at ways to strengthen the regulation of short-lived climate pollutants in key developing countries, including China, India and Nepal.

THE INTIMATE link between climate change and energy issues is also reflected in CCEEL’s research activities. We have recently studied links between climate law and renewable energy law in a special issue of Climate Law, guest-edited by CCEEL staff. Moreover, we are interested in examining the international regulation of energy subsidies, and in particular fossil fuel subsidies. Related to this, we are exploring the extent to which – and under which conditions – international institutions can help steer countries away from fossil fuel production.

WITH THIS introduction, we welcome all our students, researchers and the broader climate and environmental law community to follow our blog and engage in interactive discussion through comments.

UPCOMING BLOG POSTS AT CCEEL BLOG

  • Rainforests in the Paris Agreement: Old Wine, New Bottles? – Eugenia Recio, PhD Candidate, CCEEL, UEF Law School
  • Regulation of Short-Lived Climate Pollutants in the Arctic: Interim Outcomes of the White Project, Dr Yulia Yamineva, Postdoctoral Researcher, CCEEL & Dr Sabaa Khan, Postdoctoral Researcher, CCEEL
  • Relevance of the Paris Agreement for International Environmental Law – Prof. Harro van Asselt and Prof. Kati Kulovesi

This post has also been published at CCEEL Blog at CCEEL website.