Landmark Climate Agreement Struck in Paris Over the Weekend
The landmark climate agreement struck in Paris over the weekend ushers in a broad, new international effort to wind down the fossil-fuel era.
But as two weeks of tumultuous negotiations made clear, the pact’s success hinges on individual countries making a responsible choice, especially in how they produce and consume energy that could profoundly shape corporate behavior, financial markets and the global economic landscape.
Adopted by the 195 parties to the United Nations Framework Convention on Climate Change(UNFCCC) on Saturday night in Le Bourget near Paris, France, the new climate agreement set a long term goal to shift to a zero carbon economy after two weeks of intense negotiations.
The deal also commits all countries to keep a global temperature increase to well below 2 degrees Celsius and to pursue efforts to limit it to 1.5°C.
The deal requires progress reviews every five years. Developed countries agreed to take the lead in mobilising financial support for $US100 billion a year for developing countries by 2020.
As it was noted – developed nations have essentially gotten away with using fossil fuels to build themselves up, and can now afford to invest in renewable energy sources, whereas developing nations never got that chance.
To ensure progress and to enforce the individual goals set for each country, delegates are legally required to meet up again in 2023, and then every five years following, with new reduction targets for emissions to be evaluated by committee.
So the individual countries’ plans are voluntary, but the legal requirements that they publicly monitor, verify, and report what they are doing, as well as publicly put forth updated plans, are designed to create a ‘name-and-shame’ system of global peer pressure, in hopes that countries will not want to be seen as international laggards.
All parties agreed to adopt the historic agreement. However, the reduction of national greenhouse gas emission targets will be based on the individual plans of each country.
According to the UNFCCC, the Intended Nationally Determined Contributions (INDCs) submitted by all countries will be able to limit global temperature rises to 2.7°C above preindustrial levels.
This is still far from the ambitious targets of 2°C, let alone the 1.5°C that would more effectively prevent severe consequences of climate change.
The agreement sets out a timeline for all countries to return to the table every five years with their own tougher plans. The first is expected to take place in 2020.
The new deal will not, on its own, solve climate change. At best, scientists who have analysed it say, it will cut global greenhouse gas emissions by about half enough as is necessary to stave off an increase in atmospheric temperatures of 2 degrees Celsius or 3.6 degrees Fahrenheit.
That is the point at which, scientific studies have concluded, the world will be locked into a future of devastating consequences, including rising sea levels, severe droughts and flooding, widespread food and water shortages and more destructive storms.
But the Paris deal could represent the moment at which, because of a shift in global economic policy, the inexorable rise in planet-warming carbon emissions that started during the Industrial Revolution began to level out and eventually decline.
We will have to wait and see what will come of this historic agreement, but the one thing to be excited about is that it exists and that all the world’s countries have signed up to it, and that’s in itself is a pretty huge shift from the recent past.
At the same time, the deal could be viewed as a signal to global financial and energy markets, triggering a fundamental shift away from investment in coal, oil and gas as primary energy sources toward zero-carbon energy sources like wind, solar, bioenergy and nuclear power.
We believe the deal will unleash an avalanche of investment in other renewable energy sources and new technologies.
You can view the full climate change agreement document below: