The question from my last post, which was a while ago (I started an LLM, which has kept me busier than expected) – was how to write “keep it in the ground” into international agreements.

The notion of keeping it in the ground is simple;  if a nation commits to reduce GHGs by 5% per year, they reduce their fossil fuel production by that amount. There are no loopholes, no trade-offs, no caveats – just results. The result of such a policy is GHG production declines, and we have a chance.

Every other “solution” – carbon taxes, cap and trade, market mechanisms of every kind, involve trade-offs and inevitable loopholes. The difficulty with “keeping it in the ground” is political, because of its lack of loopholes it confronts the will to actually change. At the international level that challenge is only multiplied, as every nation will look to the other’s refusal to comply.

Today, for instance – both Canada and the USA have made some measures towards curbing GHG’s, and some limited progress. Yet, since 1996, Canada’s crude oil production has only gone up (until the last few months due to covid). USA oil production did decline from 1985-2005, but has since gone up to an unprecedented high. Neither of these count LNG, which has also increased massively in the USA, where it has literally doubled since the year 2000 (along with the concomitant methane from drilling).

While Canada and the USA are claiming small climate gains, where did all this extra oil and gas (and GHGs) go? To other countries, where they will burn it and theoretically “account for it themselves.” This 2018 article gives a good description of the challenges of international carbon accounting, and reminds us of a chilling truth – “the contradiction between reports that anthropogenic emissions have stopped rising and atmospheric measurements showing that annual increases in CO2 levels have reached record levels.”

So, if we were to switch to all nations cutting oil and gas production in accordance with their national GHG reduction commitment – how do we enforce that internationally?

Joe Biden has an idea in his Plan for a Clean Energy Revolution and Environmental Justice, although I don’t think he intended it to be applied this way – “Biden will also condition future trade agreements on partners’ commitments to meet their enhanced Paris climate targets.” Great idea.

Here is the proposal:

• All nations agree to cut oil and gas production in accordance with their national GHG reduction commitment
• Those who do not agree are excluded from new international trade agreements and face other trade penalties
• The agreement includes a “non-enforcement” clause for all past trade agreements the signatory is part of – agreeing not to enforce the old agreement against any other signatory for a failure to meet the terms of it, in the course of meeting this new agreement
• For instance, if the USA, in cutting oil production in accord with its national GHG commitment, breaches NAFTA – Canada will have waived its right to enforce against the USA in that matter
• That leaves, as potential challengers, private investors through investor-state dispute settlement (ISDS) mechanisms. These are described well here. It basically means that when two states have signed a trade agreement that has an ISDS, and a corporation in one state feels the other state has breached or infringed it’s rights – it can sue in international tribunals for damages or other remedies. Nations live in fear of ISDS and many new environmental laws since the development of ISDSs, have been tailored to ensure they do not lead to ISDS conflicts. So how do we get around ISDSs in already-existing trade agreements?
• All signatories of this new agreement would agree to mutually revisit and revise their existing trade agreements to edit their ISDSs to remove the ability to sue for breach of this new agreement. It would take time, as the revision mechanisms in some international agreements are complex and have fixed timelines
• In the meantime – a global fund could be set up to pay any losses incurred through ISDSs in existing trade agreements

Is it easy? No. Is it likely to happen, politically? No, not anytime soon. Is it completely possible and manageable? Yes.

The benefits:

1 – emissions actually will go down, not just pretend.

2 – this is completely traceable – there are no shell games, no loopholes. Countries that produce extra oil and gas will not be able to export it, and will be easy to trace.

3 – this will create scarcity in the oil and gas market, driving prices up, making oil and gas less competitive with renewables, and hastening its decline, and their concomitant rise.

We are not on a path toward meeting our climate targets, we are on a path to tipping points, storms, heatwaves fires, famines, and destruction. The loophole-rich solutions, the comfortable change – have not helped.

This may be tough, but it’s better than the other option.