The Paris climate negotiations, which seek to deliver the next global framework for reducing emissions, kick off in just over a week. As we head into Paris, it is fair to say that close observers are optimistic but nervous.
The draft agreement is 50-odd pages long, and a number of key political issues remain to be resolved. Sticking points include:
- how to we ensure that countries regularly ratchet up emission reduction action through time.
- How – if at all – does the agreement capture the fact that that countries are at different stages of development? What does this mean for the contribution of less-developed countries to global action?
- How do we ensure that the world's poorest nations are supported, financially and otherwise, to participate in climate change solutions and adapt to its impacts?
But there is also cause for confidence. The Paris negotiations seek to establish an agreement for a new common international framework that will drive domestic action. For the first time, the agreement will call for domestic actions from all countries, a critical step toward keeping warming below the 2°C threshold. This 2°C threshold is what the international community has agreed, through time, we will avoid.
The careful planning and political leg-work ahead of Paris will, it is hoped, ensure we avoid the utter chaos that marked the Copenhagen summit in 2009.
Moreover, the world has changed significantly since then. [fold]
First, climate change is no longer seen as solely an environmental issue. Governments, national security agencies, central bankers, institutional investors, health professionals, major global businesses and many others now regard climate change, and the global response to it, as a major strategic issue that must be managed.
More and more countries have policies to limit emissions. At Copenhagen in 2009, there were some 420 climate change laws and policies at a domestic level. By the end of 2014, there were over 800.
Another major development is the rapid transformation of the energy sector. Renewable energy is now the world's second-largest source of electricity. The scale of uptake and rapid cost reductions is giving countries the confidence to commit to reduce emissions.
Ahead of the Paris meeting, over 150 countries have also put forward initial emission reductions targets, covering nearly 90% of global emissions. These targets vary in their degree of strength and credibility, but they also show how meetings like Paris can increase global action. Without the looming climate negotiations, many countries, including Australia, would not have felt pressure to put forward new targets and implement new domestic policies to achieve them. As a result, we're closer to the 2°C target than we would otherwise be.
Analysts suggest that achieving these targets would put the world on track to almost 3°C global warming. This is a significant improvement on previous projections of global action, which put warming at 4°C or more, but still falls short of the sub-2°C limit. The targets also imply a significant acceleration of action to decarbonise high-emissions sectors such as electricity. For example, these targets would see investment in renewable energy increase to become the world's dominant source of electricity by 2030.
Finally, businesses are increasingly seeing climate change as a strategic issue that needs to be proactively managed. Climate change is already having wide-ranging economic effects, which are expected to become more intense. There is a growing trend of investment managers, with long-term horizons or fiduciary duties, considering the effects of climate change on their members.
Throughout 2015, a number of Australian businesses have released statements showing their willingness to take action on climate. The Australian Climate Roundtable brought business, investor, union, research, environment and welfare groups together. A statement was released encouraging Australia to do its bit on climate change. In September, leaders from AGL, BHP Billiton, GE, Mirvac, Santos, Unilever, Wesfarmers and Westpac Group published a statement that supports an effective Paris agreement outcome.
This provides some optimism for the future, regardless of the outcomes of the Paris meeting. If the core political issues in the meeting are resolved, the outcome can be a further catalyst for global action to address climate change.
Yet, regardless of the outcome, business, investors, communities and governments will not turn their backs on the global boom in clean energy. That train has left the station. After Paris, it will be up to our political leaders to come together to ensure Australia minimises the risks of this transition while maximising the opportunities for our nation.
Photo courtesy of Flickr user UNclimatechange.