The signing by 175 countries of the Paris Agreement on climate change in New York last week sent another powerful signal of the international community’s strong resolve to limit the global average temperature increase to well below 2C – and to 1.5C if possible – by pursuing a transition to a zero-emission and climate-resilient economy.
This is very good news. Climate negotiations used to go from failures to half-successes, and create a lot of frustration and disappointment. After finally securing the holy grail of a new international accord under which all countries will take action to limit their emissions, the norm is now breaking previous world records for multilateral diplomacy.
On Friday, the 175 signatures was the largest ever number of signatures on an international agreement in one day. This should give us some hope: hope that the international community is rising to the climate change challenge, and is determined to turn it into an opportunity for sustainable development.
While there was a good reason to celebrate on Friday, we have no basis whatsoever for complacency. Paris was a political turning point, but now the hard work begins in order to turn it into concrete actions; concrete actions commensurate with the magnitude and urgency of the challenge we face.
From a legal perspective, the Paris Agreement is agreed, but it will not “enter into force” until accepted legally by at least 55 countries representing 55% of global emissions. This happens by a process called “ratification” – each country doing what is necessary at home to confirm that it is ready to take on the legal commitments in the treaty at the international level. This will take a bit longer than the simple act of signing, because for many countries ratification goes beyond the power of the executive branch, and requires building consensus through a legislative process, which is very important for ownership purposes. Remember: India has 36 political parties in its parliament and the European Union has 28 member states.
Despite the challenges in some countries, others have moved very quickly to ratify, among them some of the poorest and most vulnerable countries in the world, including Fiji, the Marshall Islands and Palau. Several others – 19 in total, representing 39% of the global GHG emissions – including the US and China, last week expressed their intention to ratify later this year, thereby building momentum for early entry into force of the Paris Agreement.
In the real economy – which is, after all, what matters most – the Paris Agreement has already started to demonstrate its positive effects. Countries are already working seriously on the implementation of their 2025 or 2030 emission reduction targets. In most cases, this requires policy development and passing new legislation; and in all cases, it requires tightening existing regulations. But all countries are now rolling up their sleeves to turn their NDCs into policy and investment plans, which is a very important move. And it sends a clear signal to business and investors, crowding in private investments for climate mitigation and adaptation.
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There are many examples, but let’s just take three: China release its XIIIth five-year plan; the economic, energy and environmental goals included in it will enable China to go beyond the 40 to 45% carbon emission reduction target in 2020 compared to 2005, and hopefully to peak its emissions before 2030. Canada, after Justin Trudeau’s election, is in the process of redefining its nationally determined mitigation contribution, and will submit once that is better than the other prepared by the previous government. And Costa Rica passed a law to invest in electric trains, introduced another bill to promote electric cars and buses, and declared dead a project of oil refinery.
Aside from what governments are doing, financial markets are quickly reflecting and adjusting to the new low-carbon paradigm. We should not be naïve: it is still a minority of financial market players that is taking the threat of climate risks and stranded carbon assets seriously.
But this minority is growing fast. The support by institutional investors groups to the implementation of the Paris Agreement before last week signature was a very important news. Besides, who would have thought that Larry Fink, CEO of Black Rock, the investment giant, would send a letter to CEOs of the Fortune 500 companies asking that they present him with a long-term business plan consistent with the commitments made in Paris? And what about the carbon disclosure task force of the Financial Stability Board (FSB), and the remarkable leadership of Mark Carney, Michael Bloomberg and others to mainstream the greening of big financial capital?
The picture is not entirely rosy. There are also some worrying signs, and we should recognize them. For a start, the fact that oil and gas companies met – in France, just a few months after the Paris Agreement – to discuss technical options for drilling fossil fuel resources located under the Arctic sends entirely the wrong signal. Proven reserves of oil, gas and coal are already way above the global carbon budget consistent with a 2C scenario, and most of them will have to be left under the ground. Even more so in a 1.5C scenario.
So it is about time the oil majors get their act together, and recognize the potential for natural gas to be used as a useful transition fuel in some countries. They must also recognize the need to invest much more heavily in renewable energy, synthetic fuels and Carbon Capture and Storage (CCS), as well as R&D in new and more transformation technology, as the necessary stepping stones to a net-zero GHG economy.
These issues are manageable. But precisely, they need to be managed. Paris was a success because we had a well thought-through strategy, and a coordinated action plan. A strategy that included everybody, and where nobody was left behind. And a strategy not only for nation-states, but also for non-state actors and civil society in all its diversity: NGOs, businesses, investors, mayors, governors, faith groups and many others.
To win the battle of implementation, we will need to quickly put in place a new strategy that fits with this new phase, and this new climate regime. The battle of implementation is also a war against time: the clock is ticking, and if global emissions don’t peaking quickly during this decade, the window of opportunity for the 2C or 1.5C pathways will close.
In the immediate term, we need to be clear that simply implementing the current set of emission targets (intended nationally determined contributions, or INDCs) will not be enough. They would take us to about 3 degrees of warming. In the coming year or two, countries not only need to be more specific about how they intend to implement their NDCs, sector by sector, and through several policy instruments. They will also need to ratchet up the ambition of their NDCs.
Mid-century zero-emission development strategies have an important role to play in this regard. It is therefore very welcome that several countries of the Major Economies Forum – including the US, Canada, China and the EU – have committed to develop and make available such strategies before 2018. These countries will soon be joined by others in the high ambition coalition and Climate Vulnerable Forum.
So the upcoming phase is not just of phase of implementation, but also a phase of increasing ambition. And it also needs to be a time for cooperation, and not just for more negotiations and bargaining. There is a very important agenda ahead for the UNFCCC negotiations. COP22 will need to demonstrate balanced progress across a number of very important issues for the efficiency and ambition of the new climate regime, such as the global stocktake, transparency (for both action and support), finance, technology, capacity building (which has a very important role to play), adaptation and loss and damage. It will also need to lay out a clear plan for the early entry into force of the Paris Agreement, which reassures Parties about the continued inclusiveness of the process going forward.
Most importantly, the UNFCCC process will also have to demonstrate the effectiveness of the Paris Agreement, and track the delivery of the commitments that were made, including commitments to increase action pre-2020. Developing a credible roadmap for the mobilization of US$100 billion a year by 2020 by developed countries, from public and private sources of finance, to support ambitious and transparent mitigation and adaptation actions in developing countries, is essential in this regard.
For sure, North-South public finance flows will be insufficient alone to finance the transition to a zero-emission and climate-resilient economy. Ultimately, it is all investment flows – public and private, international and domestic – that will have to be strategically reoriented with mitigation and adaptation objectives in mind. And we need to be talking not only about the hundred billions of North-South financial flows, but more so about shifting the trillions of dollars of infrastructure and technology investments necessary to decarbonize the world’s energy systems. But the public flows are a central part of the bigger picture of climate finance, a key to building trust, and developed countries must deliver on their commitment – not only for moral and solidarity purposes, but because it enables developing countries to be more ambitious in the actions they undertake.
Of course, the delivery of commitments goes way beyond the pathway to $100 billion. The success of COP21 relied heavily on actions taken by governments outside of the UNFCCC and commitments made by non-state actors. They are what made Paris possible as much as they are an outcome of the negotiation process. It is a complex climate regime we built to address climate change: a regime in which the UNFCCC plays a central role, because it is the only legitimate negotiation forum; but a regime in which key decisions are taken outside of the UNFCCC, and need to be made consistent with the objectives, principles and rules of the Paris Agreement.
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Important decisions will be taken this year in the context of the Montreal Protocol on HFCs; on GHG emissions from the international aviation and maritime sectors in the ICAO and IMO, respectively; and in the G20 on fossil fuel subsidies, carbon pricing, climate finance and many other issues. All of these forums need to take decisions consistent with the spirit and ambition of the Paris Agreement. It will require cooperation, peer group pressure and a whole lot of innovation.
Important initiatives were also launched in Paris during COP21. To pick only a few: the Carbon Pricing Leadership Coalition, Mission Innovation, the Solar Alliance and Renewable Energy for Africa. These initiatives are key to make sure the cost of low-carbon technologies declines, and so does the cost of capital to pay for their deployment. They are therefore essential to enable countries to ratchet up their NDCs over time, and close the emissions gap globally.
Finally, there are all the individual commitments that were made and the coalitions that were built by non-state actors: the science-based targets taken by companies, the commitments to purchase renewable energies, the decarbonization of investors’ portfolios, the issuance of green bonds and other climate-friendly financial instruments, the commitments to reduce emissions made by cities, regions and states…
These commitments played a very important role to enable countries to do more, to be less conservative in the assumptions they make and the targets they set. Going forward, we need to make sure we have the right governance to track the implementation of these commitments, scale them up, get other partners on board, and feed back into the negotiation process. Ultimately the success of implementation of the Paris Agreement will depend on its integration within development planning and the Sustainable Development Goals (SDGs).
This is a very exciting time for climate action and if we all join forces, I am sure we can win this battle too.
Laurence Tubiana is climate change ambassador for France and a candidate to lead the UN Framework Convention on Climate Change