New Trade Deal Threatens Effectiveness of Paris Agreement

On Friday, November 4, the historic Paris Agreement drafted at the Paris Climate Change Conference came into effect. With Secretary-General Ban Ki-Moon’s receipt of instruments of ratification, acceptance, and accession from countries representing 55 percent of global emissions, the prerequisite for the agreement’s entry into force is fully met (1). Given the scope and ambitious nature of the Paris Agreement, its full entry into force is surprisingly quick. The inclusion and full support of China and the United States, which emit 28% and 16% of total global carbon dioxide emissions, respectively, is very promising (2).
    
The Paris Agreement aims to limit the global average temperature increase to below 2°C above pre-industrial levels (3). With 196 nation-states signing, the Paris Agreement builds off previous failures to establish international cooperation to fight global warming. Unlike previously suggested global pacts to fight climate change, the Paris Agreement allows individual countries to produce their “intended nationally determined contributions,” or INDCs, which cover five or ten year periods starting in 2020 (4). While this approach no doubt paved the way for the eventual acceptance of the pact, it also suggests that progress will be slow in cutting emissions.
    
Along with its individual INDCs, signatories to the agreement also agreed to present individual mitigation contributions and to come together every five years beginning in 2023 in a “global stocktake” to assess collective progress (5). Along with the individual goals set by each nation-state, signatories will be subject to an increasingly transparent accountability system that includes “technical expert reviews, multilateral peer review process, and a standing committee on implementation and compliance” (6). 
    
Current projections place Earth on a path to a 2.7°C increase by the end of the century, a number far above the desired 2°C limit (7). Certain preventative measures, such as the preservation of existing rain forests and transitioning to clean energy, will no doubt play an important role in not exceeding this limit. In addition, developed countries pledged in Copenhagen to devote 100 billion USD from public and private funds to developing nations in an attempt to facilitate sustainable development (8). However, it is important to note that research from the International Energy Agency suggests that more than 16 trillion USD will be needed by 2030 if current INDCs are to be met (9).
    
With supporters such as Presidents Barack Obama of the United States and François Hollande of France, many world leaders are well pleased with the metrics set by the agreement. Prominent scientists, however, have been quick to condemn its effectiveness. James Hansen, the former NASA scientist known as the catalyst for the fight against climate change, laments the lack of concrete action, commenting, “There is no action, just promises. As long as fossil fuels appear to be the cheapest fuels out there, they will continue to be burned” (10). Hansen’s comments reflect the even larger truth of the diplomatic difficulties of mobilizing market forces to cut carbon emissions often necessary for long-term development and energy supply.
    
Another challenge to the Paris Agreement may be forming behind closed doors in ongoing negotiations between the United States, the European Union, and 22 other countries. Leaks produced by Greenpeace Netherlands and WikiLeaks have recently given an insider perspective on the potential outcome of the secretive Trade in Services Agreement (TiSA), a trade agreement focused exclusively on opening trade and privatizing various services. The word services itself is vague in nature and, according to Green Peace, may refer to certain goods, along with sectors including banking and energy services (11). Notable economies absent from the deal include China and Russia.
    
In a world where trade deals such as the TPP and TTIP have become increasingly politicized in resistance to globalization, TiSA has the ambitious aim of deregulating various markets to boost international trade in services. Voters in both the United States and Great Britain have in recent times protested globalization, with the British voting to leave the EU and strong support emerging for Republican presidential nominee Donald J. Trump, who has based his campaign on a strongly nationalistic, protectionist background. Both Mr. Trump and his opponent, Democratic nominee Hillary Clinton, are against the Trans-Pacific Partnership.
 
Supporters of the TiSA point out that services are the fastest growing sector in the world economy and compose two thirds of global GDP (12). Advocates against the deal point to new leaks to voice concern for both protection of national sovereignty and of the environment. The leaks suggest the existence of a “ratchet” clause, which would not allow for the reversal of privatization in services such as water or energy, and of a “standstill” clause, which would prevent the placement of new regulations to increase trade barriers from the moment of TiSA’s passage (13). 
 
Threats stemming from the inclusion of these two clauses may be minimal for developed countries’ pre-existent public services. As such, public services such as transportation or water will not be threatened. For developing countries, on the other hand, the risk of foreign companies privatizing services such as health care or exploiting labor and natural resources is much higher. Critics, however, do have a valid concern in stating that the ratchet and standstill clauses limit power of governments to reverse liberalization of services, especially in regions where high-carbon emission natural resources are important to local economies.
 
Unlike the Paris Agreement, where no economic or diplomatic sanctions arise from failure to live up to INDCs, the proposed enforcement method for TiSA would follow the WTO state-to-state dispute process, allowing corporations to sue countries for imposing certain restrictions on services. In the past, this method has largely favored corporations and liberalization of trade, with 43 of 44 WTO cases siding with corporations suing states for imposing restrictions deemed unnecessary (14).
 
TiSA’s energy annex clearly states that its proposed trade rules would apply to all power generation services, including renewable and non-renewable sources (15). With its overarching goal of curbing government’s powers to regulate services and energy companies, TiSA in its nature functions against the goals set forth in the Paris Agreement. By its nature, the Paris Agreement calls for more regulation on fossil fuel extraction, not deregulation. Governments, for example, may be penalized for limiting exploration of fossil fuels by corporations. While renewable sources of energy are growing increasingly scalable and cheap, many corporations and providers of energy are forced to rely on fossil fuels that emit large sources of carbon dioxide for the time being.
 
It is important to note, however, that these leaks display ongoing negotiations that may or may not influence the future outcome of the final TiSA deal. MEP Viviane Reding has commented that the European Union will “’never consent’ to a trade pact that diminishes the EU’s right to regulate on climate, health, and social laws” (16). While Ms. Reding’s comments largely align with the EU’s actions as of late, the passage of TiSA would signal a defeat in the battle against climate change and may serve to enrage opponents of free trade. 

(1) "Paris Climate Agreement to Enter into Force on 4 November." United Nations, 5 Oct. 2016.     Web. 02 Nov. 2016.
 
(2) "Global Greenhouse Gas Emissions Data." EPA. Environmental Protection Agency, n.d. Web.     27 Oct. 2016.
 
(3) "Paris Agreement." European Commission. N.p., n.d. Web. 28 Oct. 2016.
 
(4) "Questions and Answers on the Paris Agreement." The European Commission. N.p., n.d. Web.     28 Oct. 2016.
 
(5) Ibid.
 
(6) Ibid.
 
(7) Schmidt, Jake. "Paris Climate Agreement Explained: What's in It and Where Is It Taking     Us?" NRDC. Natural Resources Defense Council, 12 Dec. 2015. Web. 02 Nov. 2016.
 
(8) Ibid.
 
(9) Bawden, Tom. "COP21: Hitting the Climate Change Targets Agreed in Paris 'will Cost     $16.5trn'" The Independent. Independent Digital News and Media, 13 Dec. 2015. Web.     02 Nov. 2016.
 
(10) Fallon, Dan. "What You Should Know About The Historic Paris Global Warming     Agreement." Digg. N.p., 12 Dec. 2015. Web. 02 Nov. 2016.
 
(11) Boren, Zachary Davies. "Leaked: How the 'new TTIP' Could Undermine Global Action on     Climate Change." Energydesk. Greenpeace, 20 Sept. 2016. Web. 02 Nov. 2016.
 
(12) Johnston, Ian. "The New TTIP? Meet TISA, the 'secret Privatisation Pact That Poses a Threat     to Democracy'" The Independent. Independent Digital News and Media, 30 Aug. 2016.     Web. 02 Nov. 2016.
 
(13) Ibid.
 
(14) Boren. Ibid.
 
(15) Neslen, Arthur. "Global Trade Deal Threatens Paris Climate Goals, Leaked Documents     Show." The Guardian. Guardian News and Media, 20 Sept. 2016. Web. 02 Nov. 2016.
 
(16) Ibid.

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Image: © Bragearonsen | Dreamstime.com - Campaigning Against The Trade In Services Agreement (TISA) Photo