Dispute resolution under the Kyoto Protocol

Ecology Law Quarterly

Volumn 27, Issue 1, 2000, Pages 53-132

  Kalas, Peggy Rodgers ^a   Herwig, Alexia ^a  

^a NONE

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EID: 0039591540     PISSN: 00461121     EISSN: None     Source Type: Journal    
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References (381)

1. Given the ubiquitous presence of acronyms in discussions such as these, an acronym guide can be found as an appendix to this Article.
2. Article 12.9 of the Kyoto Protocol reads: "Participation under the clean development mechanism, including in activities mentioned in paragraph 3(a) above and in the acquisition of certified emission reductions, may involve private and/or public entities, and is to be subject to whatever guidance may be provided by the executive board of the clean development mechanism." Kyoto Protocol to the United Nations Framework Convention on Climate Change, Dec. 11, 1997, art. 12, 37 LL.M. 22 (1998) [hereinafter Kyoto Protocol].
3. NGOs could be subsumed under the heading of public entities investors under Article 12.7. See Kyoto Protocol, supra note 2, art. 12.7.
4. A discussion of Annex I joint implementation and emissions reduction credit systems are beyond the scope of this Article.
5. See Anita Margrethe Halvorssen, Climate Change Treaties-New Developments at the Buenos Aires Conference, 1998 COLO. J. INT'L ENVTL. L. & POL'Y 1, 9 (1998).
6. Annex B Parties are the same as Annex I Parties under the FCCC. Because the Protocol's text only refers to these countries as Annex I, this Article assumes the same designation. The original Annex I countries are Australia, Austria, Belarus, Belgium, Bulgaria, Canada, Czechoslovakia, Denmark, the European Community, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, Romania, the Russian Federation, Spain, Sweden, Switzerland, Turkey, Ukraine, the United Kingdom, and the United States. See United Nations Framework Convention on Climate Change, opened for signature June 4, 1992, S. Treaty Doc. No. 102-38 (1992), Annex I, 31 I.L.M. 849 [hereinafter FCCC].
7. Kyoto Protocol, supra note 2, art. 12.2. QELROs refer to the emission reduction targets contained in Annex B of the Protocol. See id. Annex B.
8. See id.
9. Id. art. 3.
10. See id. art. 17.
11. See Clare Breidenich et al., The Kyoto Protocol to the United Nations Framework Convention on Climate Change, 92 AM. J. INT'L L. 315, 318 (1998).
12. See Kyoto Protocol, supra note 2, art. 17. One constraint on the emissions trading system is that trading must be "supplemental" to domestic actions for purposes of meeting QELROs. However, the extent to which Article 17 emissions trading can contribute to meeting the QELRO commitments has not been established.
13. See Richard Stewart et al., Legal Issues Presented by a Pilot International Greenhouse Gas Trading System, at 2, U.N. Doc. UNCTAD/GDS/GFSB/Misc.1 (1996).
14. See id. at 5.
15. See id. at 5-6.
16. See id. at 5.
17. See Kyoto Protocol, supra note 2, art. 3.13.
18. See id. The Kyoto Protocol establishes commitments for Annex I Parties specifying targets in the form of emission budgets for the period between 2008 and 2012, known as the "first commitment period." See Fanny Missfeldt, Flexible Mechanisms: Which Path to Take After Kyoto, 7 RECIEL 128, 128 (1998).
19. See MICHAEL GRUBB ET AL., THE KYOTO PROTOCOL: A GUIDE AND ASSESSMENT 90 (1999).
20. The attribution Issue may present significant legal and policy issues which are not addressed in this Article.
21. See Missfeldt, supra note 18, at 129.
22. See id.
23. The United States used a similar approach by establishing a national market in sulfur dioxide emission allowances. See Robert Hahn & Gordon L. Hester, Where Did All the Markets Go? An Analysis of EPA's Emissions Trading Program, 6 YALE J. ON REG. 109, 114 (1989). Under the sulfur dioxide emissions program. EPA regulations specify that reductions must be surplus, enforceable, permanent, and quantifiable in order to qualify as emission reduction credits. See Final Trading Policy, 51 Fed. Reg. 43,814, 43,831 (1986).
24. The United States used a similar approach by establishing a national market in sulfur dioxide emission allowances. See Robert Hahn & Gordon L. Hester, Where Did All the Markets Go? An Analysis of EPA's Emissions Trading Program, 6 YALE J. ON REG. 109, 114 (1989). Under the sulfur dioxide emissions program. EPA regulations specify that reductions must be surplus, enforceable, permanent, and quantifiable in order to qualify as emission reduction credits. See Final Trading Policy, 51 Fed. Reg. 43,814, 43,831 (1986).
25. FCCC, supra note 6, art. 17.
26. See Richard Stewart et al., The Clean Development Mechanism - Building International Public-Private Partnership - A Preliminary Examination of Technical, Financial & Institutional Issues, at 9, U.N. Doc. UNCTAD/GD5/GF5B/Misc.7 (1999) [hereinafter Stewart, The CDM].
27. See Richard Stewart et al., The Clean Development Mechanism - Building International Public-Private Partnership - A Preliminary Examination of Technical, Financial & Institutional Issues, at 9, U.N. Doc. UNCTAD/GD5/GF5B/Misc.7 (1999) [hereinafter Stewart, The CDM].
28. Within the United States acid rain emissions trading system, a source's compliance is defined exclusively in terms of comparing actual emissions with the number of allowances held. See ENVIRONMENTAL DEFENSE FUND (EDF), COOPERATIVE MECHANISMS UNDER THE KYOTO PROTOCOL; THE PATH FORWARD 32 (1998), available at .
29. See Kyoto Protocol, supra note 2, art. 12.6 ("The clean development mechanism shall assist in arranging funding of certified project activities as necessary.").
30. For a discussion of these models, see PHILIPPE SANDS ET AL., INSTITUTIONAL ASPECTS OF THE CDM 3-4 (1998), available at .
31. See id. at 4.
32. See Kyoto Protocol, supra note 2, art. 12.10 ("Certified emission reductions obtained during the period from the year 2000 up to the beginning of the first commitment period can be used to assist in achieving compliance in the first commitment period.").
33. See id. art. 12.9.
34. See id. art. 12.3(b). This Article provides that: Parties included in Annex I may use tne certified emission reductions accruing from such project activities to contribute to compliance with part of their quantified emission limitation and reduction commitments under Article 3, as determined by the Conference of the Parties serving as the meeting of the Parties to this Protocol.
35. See id. art. 12.5. This Article provides that: Emission reductions resulting from each project activity shall be certified by operational entities to be designated by the Conference of the Parties serving as the meeting of the Parties to this Protocol, on the basis of: (a) Voluntary participation approved by each Party involved; (b) Real, measurable, and long-term benefits related to the mitigation of climate change; and (c) Reductions in emissions that are additional to any that would occur in the absence of the certified project activity.
36. See id. art. 12.4 ("The clean development mechanism shall be subject to the authority and guidance of the Conference of the Parties serving as the meeting of the Parties to this Protocol and be supervised by an executive board of the clean development mechanism.").
37. See id. art. 12.5.
38. See Sands, supra note 28, at 16.
39. See Jacob Werksman, The Clean Development Mechanism: Unwrapping the 'Kyoto Surprise', 7 RECIEL 147, 150 (1998).
40. See Kyoto Protocol, supra note 2, art. 12.7 ("The Conference of the Parties serving as the meeting of the Parties to this Protocol shall, at its first session, elaborate modalities and procedures with the objective of ensuring transparency, efficiency and accountability through independent auditing and verification of project activities.").
41. Id. art. 12.5.
42. See id. art. 12.5(c). For a discussion on this topic, see Jacob Werksman, supra note 37, at 148.
43. See Missfeldt, supra note 18, at 134.
44. See id.
45. See id.
46. Missfeldt suggests that if, for example, a power plant was to be built, countries should be required to build a windpark instead of clean coal power plant. See id.
47. FCCC, supra note 6, art. 13.
48. Id. art. 14.
49. See Environment Directorate, Organisation for Economic Co-Operation and Development, Responding to Non-Compliance Under the Climate Change Regime, at 16, OECD Information Paper ENV/EPOC(99)21/FINAL (May 28, 1999) [hereinafter Responding to Non-Compliance].
50. See id.
51. See id.
52. See DAVID J. HARRIS, CASES AND MATERIALS ON INTERNATIONAL LAW 909 (4th ed. 1991).
53. See id.
54. See infra Part II.F.
55. See id.
56. See ANDREAS F. LOWENFELD, INTERNATIONAL LITIGATION AND ARBITRATION 338 (1993).
57. See id. at 338-42.
58. See id. at 331.
59. Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, art. II, 21 U.S.T. 2517, 330 U.N.T.S. 38 (entered into force June 7, 1959) [hereinafter New York Convention].
60. See LOWENFELD, supra note 54, at 332.
61. These exceptions are: the award was not made in the territory of a Party state, see New York Convention, supra note 57, art. I(1); the subject matter of the dispute was not commercial in nature, see id. art. I(3); the award was not binding in the country where it was made, see id. art. V(1), (3); the arbitrator was under some incapacity, see id. art. V(i)(e); or the enforcement of the award would offend public policy, see id. art. V(ii)(b).
62. See generally id.
63. FCCC, supra note 6, art. 13 (emphasis added).
64. See Xueman Wang, Towards a System of Compliance: Designing a Mechanism for the Climate Change Convention, 7 RECIEL 176, 178 (1998).
65. A Party's request could include questions a Party raises about itself, or issues raised by another Party or group of Parties. See FCCC, supra note 6.
66. See Kyoto Protocol, supra note 2, arts. 8.1, 8.2.
67. Id. art. 8.3.
68. See id. art. 8.
69. See RESPONDING TO NON-COMPLIANCE, supra note 47, at 15.
70. Kyoto Protocol, supra note 2, art. 18.
71. Id.
72. Id.
73. See Understanding on Rules and Procedures Governing the Settlement of Disputes, Annex 2 to World Trade Organization Agreement, Apr. 15, 1994, 33 I.L.M. 1226 [hereinafter DSU].
74. See id. art. 1.
75. See id. art. 17.
76. See id. art. 21.
77. See DSU, supra note 71.
78. See id. art. 1.
79. See id. art. 2. 1.
80. See id.
81. See id. art. 19.2.
82. See id. art. 5.1. These provisions include good offices, conciliation, and mediation. See id.
83. See id. art. 1.
84. See id. art. 6.
85. See id. art. 8.5.
86. Id. art. 8.
87. See id. art. 8.9.
88. See id. arts. 6, 12(b).
89. See id. art. 15.
90. See id. art. 15.2.
91. See id.
92. See id. art. 16.4.
93. See id. art. 17.4.
94. See id. art. 17.1.
95. See id. art. 17.14. The Appellate Body is comprised of people "of recognized authority, with demonstrated expertise in law, international trade and the subject matter of the covered agreements generally." Id. art. 17.3. Appellate Body members are not to be affiliated with any government but must broadly represent the members of the WTO. See id.
96. See id. arts. 17.2, 17.3.
97. See id. art. 17.6.
98. See id. art. 17.14.
99. See id. art. 14.
100. See id.
101. See id. art. 20.
102. See id.
103. See id. arts. 19, 22.
104. See id. art. 22.
105. See id. art. 25.1 (providing that arbitration is subject to the agreement of the parties, who shall agree upon the procedures).
106. See id. art. 22.1.
107. See id.
108. See id.
109. See, e.g., Judith Hippler Bello, The WTO Dispute Settlement Understanding: Less Is More, 90 AM. J. INT'L L. 416, 417 (1996).
110. See John H. Jackson, The WTO Dispute Settlement Understanding-Misunderstandings on the Nature of Legal Obligation, 91 AM. J. INT'L L. 60, 63 (1997).
111. See id. at 63-64.
112. See Judith H. Bello & Alan F. Holmer, The Post-Uruguay Round Future of Section 301, 25 LAW & POL'Y INT'L Bus. 1297, 1307 (1994).
113. See Steven P. Croley & John H. Jackson, WTO Dispute Procedures, Standard of Review, and Deference to National Governments, 90 AM. J. INT'L L. 193 (1996).
114. See Charles R. Fletcher, Greening World Trade: Reconciling GATT and Multilateral Environmental Agreements Within the Existing World Trade Regime, 5 J. TRANSNAT'L L. & POL'Y 341, 357 (1996).
115. United Nations Convention on the Law of the Sea, opened for signature Dec. 10, 1982, Part XV, 21 I.L.M. 1261, 1322 [hereinafter UNCLOS].
116. See id. art. 280.
117. See id. art. 286.
118. See id. art. 287, para. 1. State-Parties may nominate experts "whose competence in the legal, scientific or technical aspects of such field is established and generally recognized and who enjoy the highest reputation for fairness and integrity." Id. Annex VIII, art. 2(3).
119. States may change their elected dispute settlement system. See id. art. 287.
120. See id.
121. See id. art. 287(3).
122. See Law of the Sea - Report of the UN Secretary-General, 49th Sess., Agenda Item 35, U.M. Doc. A/49/631 (1994), reprinted in 10 INT'L ORG. AND L. OF THE SEA Y.B. 27-28 (1994).
123. See UNCLOS, supra note 113, art. 282.
124. See Jonathan Charney, Third State Remedies in International Law, 10 MICH. J. INT'L L. 57, 64 (1989).
125. UNCLOS, supra note 113, art. 197.
126. Id. art. 237, para. 1.
127. Id. art. 293, para. 1.
128. See id.
129. ITLOS has recently been established under Annex VI of UNCLOS. See id. art. 287, para. 1(a). ITLOS is comprised of people "with recognized competence in the field of the law of the sea." Id. Annex VI, art. 2. In August 1996, the State-Parties elected twenty-five judges to serve on ITLOS for staggered terms. See David S. Ardia, Does the Emperor Have No Clothes? Enforcement of International Laws Protecting the Marine Environment, 19 MICH. J. INT'L L. 497, 543 (1998). As of August 1997, ITLOS had not yet heard its first case.
130. See UNCLOS, supra note 113, Annex VI, art. 2, para. 4 & art. 4, para. 4; Shabtai Rosenne, Establishing the International Tribunal for the Law of the Sea, 89 AM. J. INT'L L. 806, 808 (1995). Persons elected to the Tribunal are those nominees who obtain the greatest number of votes and a two-thirds majority of the State-Parties. ITLOS members are to be "persons enjoying the highest reputation for fairness and integrity and of recognized competence in the field of the law of the sea." UNCLOS, supra note 113, Annex VI, art. 2, para. 1.
131. See GARY KNIGHT & HUNGDAH CHIU, THE INTERNATIONAL LAW OF THE SEA: CASES, DOCUMENTS, AND READINGS 796 (1991).
132. See UNCLOS, supra note 113, Annex VI, art. 21.
133. See id. art. 189.
134. See id. Annex VI, art. 20, para. 2.
135. The Draft Rules of the Tribunal provide that a non-State-Party may have access to the Tribunal if it is a Party to an agreement conferring jurisdiction on the Tribunal, and if it accepts the jurisdiction of the Tribunal or Sea-Bed Disputes Chamber and undertakes to comply in good faith with the Tribunal's decisions. See JUAN VINCENTE SOLA, THE INTERNATIONAL TRIBUNAL FOR THE LAW OF THE SEA 56(1986).
136. See UNCLOS, supra note 113, Annex VI, art. 37.
137. See id. art. 156.
138. The Assembly, composed of Authority members, is "the supreme organ of the Authority to which the other principal organs shall be accountable as specifically provided for in the Convention." Id. art. 160, para. 1. The Assembly elects the Council members and has the power to establish general policies on any question within the Authority's competence.
139. The Council serves as the executive organ of the Authority in concert with the UNCLOS and the Assembly's general policies. The Council consists of thirty-six members elected from the Assembly. See id. art. 161, para. 1. Council members represent four sets of interests: (1) consumers/importers of the minerals that could be supplied from the deep sea-bed sources; (2) investors in deep sea-bed mining; (3) producers/exporters of such minerals from land-based sources; and (4) developing countries representing special interests. The Council also includes eighteen members elected according to the principle of ensuring equitable geographical distribution of seats in the Council. See The Netherlands Institute for the Law of the Sea, 11 INT'L ORG. AND L. OF THE SEA Y.B. 24 (1995).
140. The Secretariat is comprised of a Secretary-General and staff as required. See UNCLOS, supra note 113, art. 166(1). The Secretary-General acts as the chief administrative officer of the Authority. The staff consists of both scientific and technical personnel. See id. art. 167(1). The Secretariat must respect the international character of the office and remain independent from any government or source attached to the Authority. See id. art. 168(1).
141. UNCLOS, supra note 113, art. 170. Article 170 of the Convention establishes "the Enterprise" as an operating arm of the Authority. Through the Enterprise, the Authority may engage in mining activities. The Enterprise is to conduct its first operations through joint ventures with other commercial enterprises. In addition, the Enterprise is subject to the same obligations as other miners and modifies Article 153(3) of the Convention to ensure that any plan of work submitted by the Enterprise is in the form of a contract like that of any other miner and thus subject to the requirements applicable to any other contractor. With respect to exploitation of the sea, UNCLOS adopts the "parallel system," whereby any private enterprise seeking to mine the sea-bed must identify two equally exploitable sites. The Authority then has the option of picking which of the two sites it wishes to retain for itself or permitting the mining consortium to exploit the other site. Throughout the system, the Authority incurs no exploration costs and maintains powers to regulate and deny access to particular countries and private consortia.
142. See id. Annex III, art. 12, para. 1; see also KNIGHT, supra note 129, 529-35.
143. See L.C. Caflisch, The Settlement of Disputes Relating to the Sea-bed, in THE NEW LAW OF THE SEA 310-11 (C. Rozakis & C.A. Stephanou eds., 1983).
144. See id. at 316.
145. Provisions governing the Sea-Bed Disputes Chamber are found in UNCLOS Part XI, Section 5 and Annex VI.
146. See SOLA, supra note 133, at 93.
147. See id. Article 187 of the Convention provides that the jurisdiction of the Sea-Bed Disputes Chamber includes disputes between: (1) State-Parties; (2) a State-Party and the Authority; (3) parties to a contract that are Parties to UNCLOS, the Authority of the Enterprise, State enterprises, and natural or juridical persons; (4) the Authority and a prospective contractor sponsored by a State; and (5) the Authority and a State-Party, a State enterprise, or a natural or juridical person sponsored by a State-Party. See UNCLOS, supra note 113, art. 187.
148. Prospective deep sea-bed contractors must be sponsored by a State-Party to have access to the Chamber.
149. See UNCLOS, supra note 113, Annex VI, art. 35(1).
150. See id. art. 35(2).
151. Id. Annex VI, art. 36.
152. See id. If the Parties cannot agree, the ad hoc committee is to be set up in the same manner as an arbitral tribunal, with each Party appointing one member and the third appointed by agreement, or if necessary, by the President of the Chamber. See id.
153. See id. Annex VI, art. 38.
154. See id. Annex VI, art. 39.
155. See id. Annex. VI, art. 25.
156. See id. art. 287, para. 2.
157. See id. Annex VI, art. 37.
158. UNCLOS provides that the Chamber has jurisdiction over disputes: (1) Between State Parties regarding the interpretation or application of Part XI and its related annexes; (2) Between the Authority and State Parties regarding: (i) Acts or omissions of the Authority in contravention of the Convention or rules and regulations adopted pursuant thereto; (ii) An allegation of acts by the Authority in excess of its jurisdiction or a misuse of its power; and (iii) Disapproval of a contract for exploration and exploitation of rights. (3) Between the Authority and private companies regarding: (i) the refusal to approve a plan of work or legal issues arising during the approval process, and (ii) the interpretation or application of a contract and activities undertaken pursuant to an approved work plan. Id. Annex VI, art. 187.
159. Id. art. 187(c)(ii).
160. See id. art. 187(d), (e).
161. See id. art. 188, para. 2. Commentators note that the split of jurisdiction between the Chamber and arbitration creates problems as to where the line should be drawn between contract Interpretation and Convention Interpretation. See, e.g., WOLFGANG HAUSER, THE LEGAL REGIME FOR DEEP SEA-BED MINING UNDER THE LAW OF THE SEA CONVENTION 56 (Frances Bunce Dielmann trans., 1983). UNCITRAL developed the UNCITRAL Arbitration Rules to arbitrate international trade disputes between countries with different legal, social, and economic systems. See John D. Franchini, International Arbitration Under UNCITRAL Arbitration Rules: A Contractual Provision for Improvement, 62 FORDHAM L. REV. 2223, 2223 (1994).
162. See id. art. 188, para. 2. Commentators note that the split of jurisdiction between the Chamber and arbitration creates problems as to where the line should be drawn between contract Interpretation and Convention Interpretation. See, e.g., WOLFGANG HAUSER, THE LEGAL REGIME FOR DEEP SEA-BED MINING UNDER THE LAW OF THE SEA CONVENTION 56 (Frances Bunce Dielmann trans., 1983). UNCITRAL developed the UNCITRAL Arbitration Rules to arbitrate international trade disputes between countries with different legal, social, and economic systems. See John D. Franchini, International Arbitration Under UNCITRAL Arbitration Rules: A Contractual Provision for Improvement, 62 FORDHAM L. REV. 2223, 2223 (1994).
163. See id. art. 188, para. 2. Commentators note that the split of jurisdiction between the Chamber and arbitration creates problems as to where the line should be drawn between contract Interpretation and Convention Interpretation. See, e.g., WOLFGANG HAUSER, THE LEGAL REGIME FOR DEEP SEA-BED MINING UNDER THE LAW OF THE SEA CONVENTION 56 (Frances Bunce Dielmann trans., 1983). UNCITRAL developed the UNCITRAL Arbitration Rules to arbitrate international trade disputes between countries with different legal, social, and economic systems. See John D. Franchini, International Arbitration Under UNCITRAL Arbitration Rules: A Contractual Provision for Improvement, 62 FORDHAM L. REV. 2223, 2223 (1994).
164. See UNCLOS, supra note 113, art. 189.
165. For instance, the Chamber has jurisdiction over disputes between the Authority and prospective contractors, who have been sponsored by a State, concerning the refusal of a contract or other legal issue that arises in negotiating a contract. See SOLA, supra note 133, at 97.
166. UNCLOS, supra note 113, art 187(d), Annex VI, art. 37.
167. Protocol on Substances that Deplete the Ozone Layer, Sept. 16, 1987, 26 I.L.M. 1541, 1544; Adjusted by the London Amendments, June 29, 1990, 20 I.L.M. 537; Adjusted by the Nairobi Amendments, June 21, 1991, and by the Copenhagen Amendments, Nov. 23-25, 1993, 32 I.L.M. 874 [hereinafter Montreal Protocol], available at ; see also Report of the Second Meeting of the Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer, U.N. Envtl. Programme, U.N. Doc. EP/OzL.Pro. 2/3 (1990).
168. Protocol on Substances that Deplete the Ozone Layer, Sept. 16, 1987, 26 I.L.M. 1541, 1544; Adjusted by the London Amendments, June 29, 1990, 20 I.L.M. 537; Adjusted by the Nairobi Amendments, June 21, 1991, and by the Copenhagen Amendments, Nov. 23-25, 1993, 32 I.L.M. 874 [hereinafter Montreal Protocol], available at ; see also Report of the Second Meeting of the Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer, U.N. Envtl. Programme, U.N. Doc. EP/OzL.Pro. 2/3 (1990).
169. See Montreal Protocol, supra note 163, Annex III, para. 1.
170. See id. Annex V.
171. See id. Annex V(A), (B).
172. See id. Annex V(C).
173. See id.
174. See id. Annex IV.
175. See id. art. 12.
176. See Bing Ling, Developing Countries and Ozone Layer Protection: Issues. Principles and Implications, 6 TUL. ENVTL. L.J. 91, 119 (1993).
177. See Montreal Protocol, supra note 163, Annex IV(1), (3), (4).
178. See id. Annex IV(1).
179. See id. Annex VII(4).
180. See id. Annex III. para 2.
181. See id. Annex VII (2).
182. See id. Annex VII (4).
183. See Katya Jestin, International Efforts to Abate the Depletion of the Ozone Layer, 7 GEO. INT'L ENVTL. L. REV. 829, 836 (1995).
184. See Report of the Fourth Meeting of the Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer, U.N. Envtl. Programme, Annex IV, para. 5, U.N. Doc EP/Ozl.Pro.4/15 (1992).
185. See Vienna Convention for the Protection of the Ozone Layer, Mar. 22, 1985, art. 6(4)(i) (giving Parties the right to establish such subsidiary bodies as are necessary for the implementation of the treaty).
186. See Gunther Handl, Compliance Control Mechanisms and International Environmental Obligations, 5 TUL. J. INT'L & COMP. L. 29, 40 (1997).
187. See Winfried Lang, Compliance-Control in Respect of the Montreal Protocol, 89 AM. SOC'Y INT'L L. PROC. 206, 206 (1995) (defining the "encouragement-based approach" as an approach to dealing with noncompliance that does not punish the party but aids the party in its effort at compliance, and monitors its progress).
188. See id. art. 215.
189. See Dale S. Bryk, The Montreal Protocol and Recent Developments to Protect the Ozone Layer, 15 HARV. ENVTL. L. REV. 275, 289 (1991).
190. See Montreal Protocol, supra note 163, Annex FV(10); see also id. art. 11(5).
191. See id. art. 11(5).
192. See Elizabeth P. Barratt-Brown, Building a Monitoring and Compliance Regime Under the Montreal Protocol, 16 YALE J. INT'L L. 519, 564 (1991) (criticizing the Protocol for failing to affirm a crucial role for NGOs, which threatens to make their participation adversarial). NGOs have played an important monitoring role in other multilateral environmental agreements such as CITES or the Basel Convention. See Handl, supra note 181, at 43.
193. See Montreal Protocol, supra note 163, Annex IV(7)(a)-(e), (9).
194. See id. Annex IV(7)(d).
195. See id. Annex IV(9).
196. See id.
197. See id. Annex V(A)-(C).
198. See id. Annex IV(3).
199. See Jeff Trask, Montreal Protocol Non-Compliance Procedure: The Best Approach to Resolving International Environmental Disputes?, 80 GEO. L.J. 1973, 1982, 1988 (1992); see also Montreal Protocol, supra note 163, Annex III, para. 2.
200. See Jeff Trask, Montreal Protocol Non-Compliance Procedure: The Best Approach to Resolving International Environmental Disputes?, 80 GEO. L.J. 1973, 1982, 1988 (1992); see also Montreal Protocol, supra note 163, Annex III, para. 2.
201. See Montreal Protocol, supra note 163, Annex IV.
202. See Handl, supra note 181, at 36.
203. See id. at 47. Handl argues that the multilateral consultative process is a political and not a judicial body and that parallel- or subsequent-proceedings are not barred by the doctrine of lis pendens or res judicata. He maintains that only if a judicial body considered the imposition of sanctions would multilateral responses to noncompliance by the Parties to the Montreal Protocol be pre-empted.
204. See Montreal Protocol, supra note 163, Annex IV, Preamble ("The following [noncompliance procedure] . . . shall apply without prejudice to the operation of the settlement of disputes procedure laid down in Article II of the Vienna Convention.").
205. See id.
206. See Handl, supra note 181, at 47 (maintaining that a state that had not initiated the NCP itself could not be prevented from resorting to the ICJ even though the matter is under consideration before the NCP).
207. See id. at 34.
208. See id.
209. See Montreal Protocol, supra note 163, Annex IV(1).
210. See Handl, supra note 181, at 37.
211. See id.
212. See Lang, supra note 182, at 208.
213. See Barratt-Brown, supra note 187, at 542-43.
214. Montreal Protocol, supra note 163, art. 7. The Multilateral Fund was established by the London Amendments and coordinates financial assistance to developing countries, assesses their needs, and participates in capacity-building. See id. Annex II, art. 10; see also Timothy T. Jones, Implementation of the Montreal Protocol: Barriers, Constraints and Opportunities, 3 ENVTL. LAW. 813, 821 (1997).
215. Montreal Protocol, supra note 163, art. 7. The Multilateral Fund was established by the London Amendments and coordinates financial assistance to developing countries, assesses their needs, and participates in capacity-building. See id. Annex II, art. 10; see also Timothy T. Jones, Implementation of the Montreal Protocol: Barriers, Constraints and Opportunities, 3 ENVTL. LAW. 813, 821 (1997).
216. See, e.g., Trask, supra note 194, at 1976.
217. See, e.g., Barratt-Brown, supra note 187, at 256.
218. See Handl, supra note 181, at 42 (discussing the role of NGOs under CITES and the Basel Convention).
219. See Trask, supra note 194, at 1986 (pointing out that China has had a preference for informal resolution of disputes and has rejected third party involvement).
220. See Montreal Protocol, supra note 163, Annex IV(8).
221. See Trask, supra note 194, at 1982.
222. See Jones, supra note 208, at 854.
223. See Handl, supra note 181, at 34-35.
224. Decertification refers to the revocation of a credit that was earned through investment in a project that achieves emission reductions. Credits issued to the investor may have to be decertified because emission reductions were not accurately monitored. For further discussion, see infra Part IV.A.2.a.
225. See Susan Choi, Judicial Enforcement of Arbitration Awards Under the ICSID and New York Conventions, 28 N.Y.U. J. INT'L L, & POL. 175, 175 (1996).
226. See id.
227. Such grounds include an invalid arbitration agreement, a violation of due process, an excess of the arbitrator's authority, irregular composition of the arbitral tribunal, a setting aside of the award in the country of origin, a violation of public policy if the award is enforced, or the subject matter of the award is non-arbitrable according to the laws of the enforcing State. See New York Convention, supra note 57.
228. See Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, art. 13, opened for signature Mar. 18, 1965, 575 U.N.T.S. 159, 17 U.S.T. 1270 [hereinafter ICSID Convention].
229. See id. arts. 53, 54.
230. See id. art. 2.
231. See id. art. 5.
232. See id. art. 6.
233. See id. art. 4(1).
234. See id. art. 4(2).
235. See id. art. 13(1), (2); see also Kenneth S. Jacob, Reinvigorating ICSID with a New Mission and with Renewed Respect for Party Autonomy, 33 VA. J. INT'L L. 123, 127 (1992).
236. See Jacob, supra note 228, at 127.
237. See ICSID Convention, supra note 221, art. 37(2)(a).
238. See id. art. 37(2)(b).
239. See Ibrahim F.I. Shihata, The Settlement of Disputes Regarding Foreign Investment: The Role of the World Bank, with Particular Reference to ICSID and MIGA, 1 AM. U. J. INT'L L. & POL'Y 97, 102 (1986).
240. See ICSID Convention, supra note 221, art. 26.
241. See Choi, supra note 218, at 178; see also ICSID Convention, supra note 221, art. 26.
242. The Convention states: The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a contracting State (or any constituent subdivision or agency of a contracting State designated to the Centre of that State) and a national of another contracting State, which the Parties to the dispute consent in writing to submit to the Centre. ICSID Convention, supra note 221, art. 25(1).
243. See David A. Lopina, Note, The International Centre for Settlement of Investment Disputes: Investment Arbitration for the 1990s, 4 OHIO ST. J. DISP. RESOL. 107, 115 (1988).
244. See discussion infra Part II.F.2.
245. See generally Lopina, supra note 236, at 114-15.
246. See Jacob, supra note 228, at 127; see also ICSID Convention, supra note 221, art. 25(1).
247. See Jacob, supra note 228, at 129.
248. Investment protection agreements are called bilateral investment treaties (BIT). There are currently over 1,100 such treaties in force. See Bilateral Investment Treaties, at v, ICSID Doc. ICSID/17 (May 30, 1997). BITs protect investors against expropriation, guarantee national treatment, and in most cases provide for recourse to ICSID as a dispute settlement mechanism. For cases involving BITs, see Fedax N.V. v. Republic of Venezuela, reprinted in 37 I.L.M. 1378 (1998), and Asian Agricultural Products, Ltd. v. Republic of Sri Lanka, reprinted in 30 I.L.M. 577 (1991). See also RUDOLF DOLZER & MARGRETE STEVENS, BILATERAL INVESTMENT TREATIES (1995); Aron Broches, Bilateral Investment Protection Treaties and Arbitration of Investment Disputes, in THE ART OF ARBITRATION: ESSAYS ON INTERNATIONAL ARBITRATION 63 (Jan C. Schultsz & Albert Jan Van Den Berg eds., 1982).
249. Investment protection agreements are called bilateral investment treaties (BIT). There are currently over 1,100 such treaties in force. See Bilateral Investment Treaties, at v, ICSID Doc. ICSID/17 (May 30, 1997). BITs protect investors against expropriation, guarantee national treatment, and in most cases provide for recourse to ICSID as a dispute settlement mechanism. For cases involving BITs, see Fedax N.V. v. Republic of Venezuela, reprinted in 37 I.L.M. 1378 (1998), and Asian Agricultural Products, Ltd. v. Republic of Sri Lanka, reprinted in 30 I.L.M. 577 (1991). See also RUDOLF DOLZER & MARGRETE STEVENS, BILATERAL INVESTMENT TREATIES (1995); Aron Broches, Bilateral Investment Protection Treaties and Arbitration of Investment Disputes, in THE ART OF ARBITRATION: ESSAYS ON INTERNATIONAL ARBITRATION 63 (Jan C. Schultsz & Albert Jan Van Den Berg eds., 1982).
250. Investment protection agreements are called bilateral investment treaties (BIT). There are currently over 1,100 such treaties in force. See Bilateral Investment Treaties, at v, ICSID Doc. ICSID/17 (May 30, 1997). BITs protect investors against expropriation, guarantee national treatment, and in most cases provide for recourse to ICSID as a dispute settlement mechanism. For cases involving BITs, see Fedax N.V. v. Republic of Venezuela, reprinted in 37 I.L.M. 1378 (1998), and Asian Agricultural Products, Ltd. v. Republic of Sri Lanka, reprinted in 30 I.L.M. 577 (1991). See also RUDOLF DOLZER & MARGRETE STEVENS, BILATERAL INVESTMENT TREATIES (1995); Aron Broches, Bilateral Investment Protection Treaties and Arbitration of Investment Disputes, in THE ART OF ARBITRATION: ESSAYS ON INTERNATIONAL ARBITRATION 63 (Jan C. Schultsz & Albert Jan Van Den Berg eds., 1982).
251. See ICSID Convention, supra note 221, art. 25(3).
252. See Jacob, supra note 228, at 128.
253. See ICSID Convention, supra note 221, art. 25(4).
254. See Lopina, supra note 236, at 118.
255. For example, Israel, Papua New Guinea, and Jamaica have limited ICSID jurisdiction. See generally Measures Taken by Contracting States for the Purpose of the Convention: Notification Concerning Classes of Disputes Considered Suitable or Unsuitable for Submission to the Centre, ICSID Doc. 18.c (1987).
256. See Jacob, supra note 228, at 136.
257. See ICSID Convention, supra note 221, art. 25(1).
258. Id. art. 66(1).
259. See id. art. 25(2).
260. See id. art. 27.
261. See The International Chamber of Commerce Hosts a Third ICSID, AAA, ICC Symposium, NEWSFROM ICSID, Winter 1986, at 8, 9.
262. See ICSID Convention, supra note 221, art. 26.
263. See Jacob, supra note 228, at 131.
264. See ICSID Convention, supra note 221, art. 44. Parties to ICSID can opt out if they so choose.
265. See id. art. 42(1). The Convention provides: The Tribunal shall decide a dispute in accordance with such rules of law as may be agreed by the parties. In the absence of such agreement, the Tribunal shall apply the law of the Contracting State party to the dispute (including its rules on the conflict of laws) and such rules of international law as may be applicable. Id.
266. See id. art. 48(1).
267. See id. art. 54(1).
268. See New York Convention, supra note 57; see also Choi, supra note 218, at 208.
269. See New York Convention, supra note 57; see also Choi, supra note 218, at 208.
270. See ICSID Convention, supra note 221 art. 52(1) (providing an exclusive list of the grounds on which annulment may be sought). Article 53(1) provides that: The award shall be binding on the parties and shall not be subject to any appeal or to any other remedy except those provided for in this Convention. Each party shall abide by and comply with the terms of the award except to the extent that enforcement shall have been stayed pursuant to the relevant provisions of this Convention. Id. art. 53(1).
271. See id. art. 54(2).
272. See id. art. 55 ("Nothing in Article 54 shall be construed as derogating from the law in force in any Contracting State relating to immunity of that State or of any foreign State from execution.").
273. See Jacob, supra note 228, at 134.
274. Some scholars have pointed out such a possibility. See, e.g., id. at 136.
275. See ICSID Convention, supra note 221, arts. 50-52.
276. See id. art. 52(1).
277. See W. Michael Reisman, The Breakdown of the Control Mechanism in ICSID Arbitration, 1989 DUKE L.J. 739, 761.
278. See id. at 761.
279. See id. at 788-805.
280. See id. at 763.
281. Interestingly, the Convention provides that if an award is annulled, the dispute shall be submitted de novo to a tribunal at the request of a Party. See ICSID Convention, supra note 221, art. 52(6).
282. See Reisman, supra note 267, at 804.
283. For a list of pending and concluded cases, see .
284. See Jacob, supra note 228, at 149.
285. See id.
286. See id. at 150.
287. See Michael D. Rowat, Multilateral Approaches to Improving the Investment Climate of Developing Countries: The Cases of ICSID and MIGA, 33 HARV. INT'L L.J. 103, 135 (1992).
288. See ICSID Convention, supra note 221, art. 25(1), (2).
289. See Georges R. Delaume, ICSID Arbitration and the Courts, 77 AM. J. INT'L L. 784, 784-85 (1983).
290. See id.
291. See Rowat, supra note 277, at 121.
292. See ICSID Convention, supra note 221 art. 61(2).
293. See Choi, supra note 218, at 175-76.
294. While an agreement to arbitrate is uniformly held to be a waiver of sovereign immunity for the purpose of the arbitration, the waiver does not automatically extend to execution. See LOWENFELD, supra note 54, at 331-65.
295. See supra note 107 and accompanying text.
296. See Shihata, supra note 232, at 113-14.
297. See id. at 114.
298. See Rowat, supra note 277, at 122.
299. See supra Part I.B.
300. The first commitment period is from 2000-2008. Subsequent periods have not yet been established.
301. See Stewart, supra note 13, at 3.
302. See id.
303. See, e.g., Michael Grubb, International Emissions Trading Under the Kyoto Protocol: Core Issues in Implementation, 7 RECIEL 140, 141 (1998) (discussing shared liability rule).
304. See id. at 141.
305. Most problematic is the likely reluctance by States to be exposed to increased liability. For example, the United States has refused to ratify the Rome Statute which establishes International Criminal Court. Rome Statute of the International Criminal Court, U.N. Doc. A/CONF.183/9 (July 17, 1998), reprinted in 37 I.L.M. 999 (1998), available at . The United States' refusal is based primarily on its fears that its own armed forces might be subject to criminal liability. See generally Gerard E. O'Connor, Note, The Pursuit of Justice and Accountability: Why the United States Should Support the Establishment of an International Criminal Court, 27 HOFSTRA L. REV. 927 (1999).
306. Most problematic is the likely reluctance by States to be exposed to increased liability. For example, the United States has refused to ratify the Rome Statute which establishes International Criminal Court. Rome Statute of the International Criminal Court, U.N. Doc. A/CONF.183/9 (July 17, 1998), reprinted in 37 I.L.M. 999 (1998), available at . The United States' refusal is based primarily on its fears that its own armed forces might be subject to criminal liability. See generally Gerard E. O'Connor, Note, The Pursuit of Justice and Accountability: Why the United States Should Support the Establishment of an International Criminal Court, 27 HOFSTRA L. REV. 927 (1999).
307. See Grubb, supra note 293, at 141.
308. See supra Part I.B.
309. See Grubb, supra note 293, at 145. Discounting in proportion to seller's liability has also been termed "shared liability."
310. See discussion of potential noncompliance measures infra Part III.B.3.
311. For purposes of this discussion, we are limiting our analysis to binding options.
312. See infra Part III.B.3.a.
313. See FCCC, supra note 6, art. 14.
314. See 1945 I.C.J. Acts & Docs., art. 34, 59 Stat. 1055, 1059.
315. See Giorgio Bernini, Foreign Investments and Arbitration in the Frame of Globalization of World Economy, 4 Croat. Arbit. Year. 83, 85 (1997).
316. See supra Part II.F (discussing ICSID).
317. Human rights tribunals have opened the door in this area, providing direct access to individuals. Pursuant to Article 25(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms, a State-Party may recognize the competence of the European Commission on Human Rights to receive petitions by individuals. See European Convention for the Protection of Human Rights and Fundamental Freedoms, Nov. 4, 1950, arts. 28-37, 213 U.N.T.S. 221.
318. The dispute settlement mechanism under the Protocol has yet to be established. See Kyoto Protocol, supra note 2, art. 16 (noting that the dispute settlement mechanism in the Protocol should be established as soon as possible).
319. See supra Part III.B.1 (discussing disputes that may arise concerning emission monitoring determinations).
320. See supra Part III.B.1.b (discussing access to the Protocol dispute mechanism and technical knowledge).
321. See infra Part III.A.1.a.
322. See infra Part III.A.1.b.
323. See infra Table 4. Some of these positive factors include a choice of forum, binding resolution, private party participation, and an informational dispute resolution process.
324. See supra Part III.B.3.a.
325. For a detailed discussion of the Montreal Protocol's NCP, see supra II.E.
326. See id.
327. A second commitment period is not yet agreed upon; therefore, the possibility of borrowing may provide an incentive for negotiators to inflate the second commitment period's budget. See Werksman, supra note 37, at 30.
328. See Kyoto Protocol, supra note 2, art. 12.
329. See id. arts. 12(2), 5.
330. See id. art. 12(7).
331. See Xueman Wang, Towards a System of Compliance: Designing a Mechanism for the Climate Change Convention, 7 RECIEL 176, 177 (1998).
332. See Kyoto Protocol, supra note 2, art. 12(7).
333. See Dan Dudek et al., Cooperative Mechanisms Under the Kyoto Protocol - The Path Forward (visited Jan. 24, 2000), available at .
334. See generally John Lanchbery, Verifying Compliance with the Kyoto Protocol, 7 RECIEL 170, 171-72 (1998). This possibility for error exists despite ex post certification of credits, fostering the integrity of the CDM system and providing a check on the validity of the credits.
335. See Kyoto Protocol, supra note 2, art. 12(4).
336. See Barratt-Brown, supra note 187 (arguing that NGOs can play an important role in supplementing monitoring and compliance).
337. See Kyoto Protocol, supra note 2, art. 12.5(a).
338. See also Grubb, supra note 293, at 62 (discussing this model for compliance under the Kyoto Protocol generally).
339. See Cooperative Mechanisms Under the Kyoto Protocol, supra note 322.
340. For a discussion of the various types of liability rules under ex ante certification, see Grubb, supra note 293, at 141.
341. See Philippe Sands & Richard B. Stewart, Legal and Institutional Issues in Establishing a Pilot International System for Trading Greenhouse Gas Allowances or Credits, at 11, UNCTAD Doc. 1GDS/GFSB (1998) (Proceedings of London Conference) (arguing that the possibility of a market in credits could be established pursuant to the language of the Kyoto Protocol).
342. See Stewart, The CDM, supra note 25, at 47-48.
343. See id.
344. See Grubb, supra note 293, at 141.
345. For a discussion of the various types of investments, see Stewart, The CDM, supra note 25, at 22-37.
346. For proponents' views of an ex post certification approach, see id. at 7.
347. See id. at 9.
348. See Rowat, supra note 277, at 127.
349. See Stewart, supra note 25, at 7.
350. See Kyoto Protocol, supra note 2, art. 1.2.10.
351. See Tom Tietenberg et al., International Rules for Greenhouse Gas Emissions Trading, at 45-47, UNCTAD/GDS/GFSB/Misc.6 (1999). A similar problem obtains with respect to the allowance trading system. Under existing allowance trading systems, allowances are normally allocated to private sources for free.
352. See infra Part II.D for a discussion of these dispute settlement mechanisms.
353. See infra Part I.E.
354. See infra Part II.d.4 for a discussion of the Sea-Bed Disputes Chamber.
355. See Stewart, The CDM, supra note 25, at 47.
356. See DSU, supra note 71, art. 13(1), (2).
357. See id. art. 17(6).
358. See Kyoto Protocol, supra note 2, art. 6.2 ("The conference of the Parties serving as the meeting of the Parties to this Protocol may, at its first session or as soon as practicable thereafter, further elaborate guidelines for the implementation of this Article, including verification and reporting."). These "activities" are CER generating projects between Annex I parties. See id.
359. See Stewart, The CDM, supra note 25, at 37.
360. See id, at 18.
361. See UNCLOS, supra note 113, art. 291.
362. See supra Part III.B.1.a.
363. See Kyoto Protocol, supra note 2, art. 12.3(a).
364. See LOWENFELD, supra note 54, at 332.
365. See New York Convention, supra note 57.
366. See generally LOWENFELD, supra note 54.
367. See id.
368. See LOWENFELD, supra note 54, at 332.
369. See generally Lopina, supra note 236.
370. See Werksman, supra note 37, at 148.
371. The ICSID Convention allows States to enter reservations to the jurisdiction of ICSID. See ICSID Convention, supra note 221, art. 25(4). Entering a reservation has the effect of removing certain types of disputes from the jurisdiction of an international arbitration panel such as those instituted under the auspices of ICSID.
372. See id. art. 54(1).
373. See Stewart, The CDM, supra note 25, at 14. The suggested solution could probably be adapted to the CDM as well.
374. For instance, UNCLOS' International Sea-Bed Authority conducts its own mining operations (through the Enterprise), and supervises and controls those carried out by State Parties, State enterprises, and the private sector under contract with State enterprises. UNCLOS, supra note 113, Annex IV, arts. 12, 13. The role of the Enterprise is analogous to the potential role of the C/P Authority under the Protocol. The development of UNCLOS' deep sea-bed regime required the consideration of the following questions: (1) who should be authorized to invest in projects; (2) what is the role of the Sea-bed Authority and Enterprise, and what regime governs the composition and voting system; (3) what will be the inherent conditions of contracts for investment in projects; (4) to what extent must projects be insured and who may insure them; (5) how will profits be shared and in what proportions; and (6) who shall have access to the dispute settlement regime, under what conditions, and will its jurisdiction be exclusive.
375. See John Charney, Third Party Dispute Settlement and International Law, 36 COLUM. J. TRANSNAT'L L. 65, 75 (1997) [hereinafter Charney, Third Party Dispute Settlement].
376. FCCC, supra note 6, art. 13.
377. Kyoto Protocol, supra note 2, art. 18.
378. See Jonathan I. Charney, The Implications of Expanding International Dispute Settlement Systems: The 1982 Convention on the Law of the Sea, 90 AM. J. INT'L L. 69, 71 (1996).
379. Id. Competition forces the various fora to develop more liberal rules. Indeed, the ICJ has recently allowed States to determine the composition of special chambers of the ICJ, rather than risk losing cases to arbitration. See id.
380. See Charney, Third Party Dispute Settlement, supra note 367, at 76.
381. Montreal Protocol, supra note 163, Annex IV, para. 1.