The Paris Agreement, reached in December among 195 countries, was not supposed to be the savings grace for climate change. Its intention was to stave off the most devastating effects of climate change by limiting the increase in global temperatures to two degrees Celsius, and to just 1.5 degrees Celsius if possible.
Furthermore, although 94 countries have ratified the agreement (including Pakistan and Australia), only 66 percent of global emissions are represented within these countries. From a market perspective, many companies do not yet have a strong financial imperative to make sweeping changes to address climate change.
And although Ángel Gurría, the secretary general of the Organization for Economic Cooperation and Development, was adamant, saying “The world needs a big, fat price on carbon,” the market for carbon emissions has actually weakened in the months since the deal was approved. “It has gone from $9 after the agreement to $6 — it shows us the market impact of the Paris Agreement has not been as strong as we all think,” Mr. Birol said.
Yet as The Huffington Post explains, the Paris Agreement has set out robust frameworks to provide much-needed support and the Green Climate Fund will play a key role: US$10.3 billion have been pledged to the Fund, and the Fund has committed US$ 1.2 billion to 27 projects. Unfortunately, this still falls short of the ambition to mobilize US$ 100 billion per year by 2020.
The Philippines is one of the developing nations who have committed to reduce carbon emissions.
EcoWatch reports that very large-scale reallocations of investment are necessary. UN estimates show that achieving sustainable development will require USD $5-7 trillion a year, a large slice of which must fund the transition to a low-carbon, resilient world economy. To fulfill these investment needs, we will need to look at creative funding options, beyond the traditional ones and in which both public and private sector flows are aligned and scaled-up.
Measuring progress is an ambitious challenge, and one of the most crucial aspects of the Paris Agreement are Nationally Determined Contributions, which oblige countries to become more ambitious in their commitments over time. (The follow up Nationally Determined Contributions (NDCs) are due in 2020 and 2025.) To help countries stay on track and inform their future commitments, the UNFCCC will take stock of progress every 5 years starting in 2023. Countries are required to regularly report on their emissions and implementation efforts, and the agreement is developing an enhanced transparency and accountability framework which would harmonize reporting and verification requirements.
In a few short days, the COP 22 conference will take place in Marrakech to accelerate work on the legislation and to see emerge a definable pathway for developed countries to materialize the promises made in Paris. Stay tuned for an update on the ongoings in Marrakech next week.
Sources: The Guardian, The Huffington Post, The New York Times, EcoWatch, Scientific American