The Paris Agreement to the United Nations Framework Convention on Climate Change has achieved one of two key necessary conditions for ultimate success—a broad base of participation among the countries of the world. But another key necessary condition has yet to be achieved—adequate collective ambition of the individual nationally determined contributions. How can the climate negotiators provide a structure that will include incentives to increase ambition over time? An important part of the answer can be international linkage of regional, national, and sub-national policies, that is, formal recognition of emission reductions undertaken in another jurisdiction for the purpose of meeting a Party’s own mitigation objectives. A central challenge is how to facilitate such linkage in the context of the very great heterogeneity that characterizes climate policies along five dimensions: type of policy instrument, level of government jurisdiction, status of that jurisdiction under the Paris Agreement, nature of the policy instrument’s target, and the nature along several dimensions of each Party’s Nationally Determined Contribution. We consider such heterogeneity among policies, and identify which linkages of various combinations of characteristics are feasible; of these, which are most promising; and what accounting mechanisms would make the operation of respective linkages consistent with the Paris Agreement.
The Durban Platform for Enhanced Action negotiations are likely to lead to a Paris outcome that embodies a hybrid climate policy architecture, combining top-down elements, such as for monitoring, reporting, and verification, with bottom-up elements, including ‘Intended Nationally Determined Contributions’ from participating countries, detailing plans to reduce emissions, based on national circumstances. For such a system to be cost-effective – and thus more likely to embody greater ambition – a key feature will be linkages among regional, national, and sub-national climate policies. By linkage, we mean formal recognition by a mitigation programme in one jurisdiction of emission reductions undertaken in another jurisdiction for the purposes of complying with the first jurisdiction's requirements. The Paris outcome could play at least four different roles with respect to linkage of heterogeneous policy instruments. First, it could discourage linkage, either by not allowing countries to count international transfers toward their mitigation contributions, or by limiting the number or types of transferred units that can be counted for compliance purposes. Second, it could be silent on the topic of linkage, creating legal and regulatory uncertainty about whether international transfers are allowed. Third, it could expressly authorize linkage but not provide any further details about how linkage should occur, leaving it to future United Nations Framework Convention on Climate Change negotiating sessions to work out the details or to national governments to develop bilateral or multilateral linkage arrangements. Finally, the Paris outcome could establish institutional arrangements and rules that facilitate and promote linkage. We examine how a future international policy architecture could help facilitate the growth and operation of a robust system of international linkages. Several design elements merit serious consideration for inclusion in the Paris outcome, either in the core agreement or by establishing a process for subsequent international elaboration. At the same time, including detailed linkage rules in the core agreement is not desirable because this could make it difficult for rules to evolve in light of experience.Policy relevanceThese findings have implications for the efficient and effective design of an international climate policy architecture by detailing the role that linkage can play in supporting heterogeneous climate policies at the regional, national, and sub-national levels.