Over the weekend in Paris, representatives of nearly 200 countries reached agreement on a treaty that for the first time commits nearly every country to curbing emissions of heat-trapping gases linked to climate change. Its goal: to limit the increase in global average temperatures to “well below” 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial levels, and to “pursue efforts” to limit the temperature increase to 1.5°C.
The Paris Climate agreement is being described by world leaders and media outlets as “landmark” but it raises a host of questions for businesses.
After Paris: Three big questions raised by the Paris Climate Agreement
1. ClientNote
Date Dec. 14, 2015
Subject After Paris: Three Big Questions Raised By the Paris Climate Agreement
Over the weekend in Paris, representatives of nearly 200 countries reached agreement on a Treaty
that for the first time commits nearly every country to curbing emissions of heat-trapping gases
linked to climate change. Its goal: to limit the increase in global average temperatures “well below”
2 degrees Celsius (3.6 Fahrenheit) above pre-industrial levels, and to “pursue efforts” to limit the
temperature increase to 1.5°C.
DidParissucceed?
The treaty has been described by world leaders and media outlets as “landmark,” and there are
indeed many reasons to view it in those terms. It is the first time in history that every country in the
world has agreed on the need for a common climate goal which, as Kevin Anderson of the Tyndall
Centre for Climate Change has noted, “is a really positive move forward that is testament to years of
meticulous science.”
Unlike previous agreements, the Paris treaty also includes emissions targets for all nations, not just
the richest few. It has been a longstanding bugbear of the US that emerging polluters such as China
and India could escape action while expecting developed countries to shoulder the burden. The
Paris negotiators appear to have neatly addressed this standoff between the developed and
developing world.
Finally, Paris creates a process for increasing pressure on governments and businesses around the
world to reduce their emissions. Every five years, beginning in 2020, each country will be expected
to contribute a new national plan for reducing emissions. Countries will also be legally required
every five years to report on how they are performing in cutting emissions, using a universal
accounting system provided by the UN organization that coordinated the talks. The idea is to create
a ‘“name-and-shame’ system” of global peer pressure that causes countries to reduce their
emissions or risk being seen as obstacles to progress. The hoped-for effect is to send a “signal” to
investors to channel more money into low-carbon alternatives to fossil fuel.
However, as the celebratory mood from Paris recedes, there are also reasons to be cautious. By
itself, the Paris Agreement won’t meet the ambitious goals set for it. The document “notes with
concern” that the voluntary emissions cuts do not put the world on a pathway to 2°c emissions.
According to the UK Energy and Climate Change Secretary, Amber Rudd, the deal will deliver
something closer to 2.7°C.
Another point for concern are the lack of delivery mechanisms for achieving the ambitious targets.
Responsibility for implementing the treaty will remain with nation states, which will have the
advantage of marking their own homework and setting their own assignments and deadlines. This
voluntary approach was critical to achieving a treaty, but it may also prove its undoing when
history judges its achievements.
Whatdoesitmeanforbusiness?