At COP-7, in Marrakesh, the parties to the Kyoto Protocol agreed to establish a Compliance Committee with Facilitative and Enforcement Branches (UNFCCC, 2001). The Enforcement Branch will serve as a forum for determining whether Annex B parties have met their emissions targets and complied with their monitoring and reporting requirements (see Chapter 2 by Ulfstein and Werksman). It consists of ten members, drawn from countries that are parties to the Protocol, who will serve for no more than two consecutive four-year terms. If the Enforcement Branch determines that a party has exceeded its emission target under Article 3.1, it is required to apply the following sanctions:1

1 Deduct from the party's assigned amount for the second commitment period a number of tonnes equal to 1.3 times the number of tonnes of excess emissions in the first commitment period.

2 Require the development of a Compliance Action Plan by the non-compliant party.

3 Suspend the non-compliant party's eligibility to make transfers2 under Article 17.3

The purpose of this chapter is twofold: first, to illustrate how the sanctioning of non-complying parties itself imposes costs and creates benefits for complying parties; and second, to consider how the composition of the Enforcement Branch may affect decisions to impose sanctions in light of these costs and benefits, if the members of the Enforcement Branch act in the interests of their own countries rather than in their individual capacities. We only intend to show the weakness of the sanction mechanism with regard to the possibility of the members of the Enforcement Branch to take their own countries' interests into account when making decisions, and how this may influence the decisions of the Branch. This implies that our argument will be of interest as long as the sanctions mechanisms are carried out at least once, and as long as some members of the Branch would take own interests into account when making decisions. We do not discuss the rationale for parties' non-compliance, neither do we argue that all the members of the Enforcement Branch will in fact use their own countries' interests as a basis for making decisions.

The degree to which members of the Enforcement Branch have an opportunity to take their own countries' economic interests into account in carrying out their responsibilities within the Compliance Committee is subject to debate. At first glance, there seems to be no room for dispute over the issue of non-compliance, and hence no room for the exercise of discretion. Each Annex B Party has agreed to an assigned amount before the start of the first commitment period. Emissions and transactions are recorded and registered by the party and assessed by an Expert Review Team (ERT).4 At the end of the commitment period, each Annex B party's total emissions will be compared to its assigned amount and its use of the flexibility mechanisms. However, as Rypdal et al (2003) argue, this procedure masks an exercise that necessarily requires judgement and discretion, particularly with regard to uncertainties related to the calculation, assessment and adjustment of national inventories of emissions (see chapter 4 by Berntsen and associates, and Chapter 5 by Mitchell). Hence, it is not always obvious whether a country is in compliance or not, and the Enforcement Branch may have to use a considerable amount of discretion in reaching its determinations. However, once the issue of compliance is settled, the Marrakesh Accords leave no room for discretion about the form the sanctions will take (see Chapter 2 by Werksman and Ulfstein). In this chapter we take it as a given that there is some room for discretion by the Enforcement Branch members, and hence this discretion affords members an opportunity to take their own country's economic interests into account. We use the expression 'impose sanctions' to refer to the consequences of an Enforcement Branch decision that a country is in non-compliance with its Article 3.1 commitment.

Further, even when it is possible for Enforcement Branch members to take their own countries' interests into account, it might be questioned whether they would actually do so. First, the Marrakesh Accords expressly provide that members of the Branch shall serve 'in their individual capacity'. This implies that the members should not take instructions from their country of nationality or from any other country. On the other hand, the composition of the Branch is based on a specific distribution of the members across geographical regions and between Annex I and non-Annex I parties. This suggests that the Conference of the Parties (COP) acknowledges the usefulness of involving representatives from various countries with potentially differing economic interests in both the determination of compliance, and the implementation of sanctions for non-compliance. If it could be guaranteed that the members of the Enforcement Branch served only in their individual capacity, this complex composition of the Enforcement Branch with respect to the members' nationality would seem unnecessary (and even counterproductive, since the best qualified candidates are not necessarily chosen; see Chapter 2 by Ulfstein and Werksman). The discussion in this chapter proceeds under the assumption that some Enforcement Branch members may take their own country's interests into account when taking decisions. When this occurs, the composition of the Enforcement

Branch could influence whether sanctions are imposed on a country considered for non-compliance.

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