Paris Agreement: The power of ingenuity with collaboration is insurmountableMaría Mendiluce, CEO of the We Mean Business coalition
Five years ago, the Paris Agreement united 196 countries behind a shared set of goals aimed at averting catastrophic climate change. The unprecedented commitment from all countries to keep the global temperature rise in check, and to strengthen their efforts every five years, was a historic turning point.
In the five years that followed, three things have become abundantly clear.
Firstly, the threat of climate change has escalated into a true crisis which is having real and devastating impacts all around the world.
Secondly, the science is clear that limiting the temperature rise to a maximum of 1.5ºC, as opposed to well below 2.0ºC, is the only way to avoid the worst impacts of the climate crisis, as underlined by the IPCC’s Special Report on 1.5ºC.
The third key development is the one that gives me hope. There has been a huge upswell in support for the Paris Agreement through commitments, climate solutions, action and investment from a vast array of stakeholders including businesses, states and regions and civil society.
Back in 2015, just a handful of pioneering businesses demonstrated strong support for the agreement alongside the We Mean Business coalition and its partners. We were all calling for bold climate ambition from policy makers. Businesses backed up this call by setting science-based emission reduction targets, committing to switch to 100% renewable energy with RE100 and joined other key initiatives to cut their climate impact.
Today, this handful of companies has grown to over 1,000 committed via the Science Based Target initiative, with over 325 committed in line with the 1.5ºC trajectory and reaching net-zero by 2050, and over 270 committed to RE100. These companies are implementing climate solutions at scale, transforming industries, driving innovation and growth and providing good, long-term jobs.
Critically, their commitment to climate action has not been shaken by the COVID-19 pandemic. If anything it has become stronger, with a raft of new bold commitments throughout the troubled year of 2020.
Countries have increased ambition
Since Paris, more and more countries have seen that taking action on climate is good for competitiveness, jobs and growth, and have made strong progress on climate policies.
Surprisingly, some of the boldest ambition has been displayed since the outbreak of the Covid-19 pandemic with a swath of commitments from the world’s largest economies to reach net-zero emissions by mid-century.
Most recently, the EU, Japan and South Korea have committed to net-zero 2050, while China has committed to reach carbon neutrality before 2060. And just last week, the UK showed strong leadership by increasing its Nationally Determined Contribution (NDC) to be in line with the goals of the Paris Agreement. In 2015, these moves would have seemed unimaginable. But today, what is being called the ‘race to zero‘ underlines how countries are viewing climate action as a catalyst for progress, not a hindrance.
Progress has been reinforced by the commitment from President-Elect Joe Biden to re-join the Paris Agreement following his inauguration on January 20th, paving the way for increased ambition from the US. With the addition of the US, all G7 countries will be committed to net-zero 2050 and half of the G20. Recent analysis from Climate Action Tracker shows that these updated climate pledges would mean the rise in world temperatures could be held to 2.1ºC by the end of this century. This underlines the scale of the increased ambition but also highlights how important it is to take action to achieve it and increase ambition even further.
Good for growth and jobs
Why are these countries making the commitment to net-zero? It is because they recognise not only the imperative to tackle the climate crisis, but also the economic and jobs benefits of transitioning to an inclusive and resilient zero-carbon economy. They are also facing increasing pressures from consumers and investors.
As governments look to boost their economies in the wake of COVID-19 they must consider this. We quantified the jobs that could be gained from a green recovery and found that green recovery plans boost income, employment and GDP better than return-to-normal stimulus measures globally and nationally, with the added benefit of reducing emissions.
The private sector recognises this and companies are calling for stimulus funds to be directed to green measures. To date, more than 1,200 major global companies have called on governments to invest in climate action and resilience to create jobs and recover better.
Meanwhile, there are growing tailwinds from enabling technologies, including renewable energy and electric vehicles (EVs), which are helping to drive momentum. Again, the level of adoption that we see today, would have been thought of as fantastical at the signing of the agreement.
Renewables are on track for exponential growth with the right policy backing and investment, our research shows. Sales of EVs are also on track for exponential growth – registering a 40% year-on-year increase in 2019. And new technologies such as green hydrogen are showing huge promise. These climate solutions need a supportive policy framework to ensure they accelerate at the require speed and scale.
Companies have been integral in driving these technologies forward both through innovation to create the supply and through demand, such as with renewable power and electric corporate fleets. They are also calling for climate ambition from governments to give them the long-term clarity to scale up their investments in the zero-carbon economy.
More needs to be done
However, while momentum is building, many countries are not on track to reach the global climate goals and must step up urgently with enhanced Nationally Determined Contributions, long-term climate plans and sectoral policies.
The Climate Ambition Summit on 12th December is a key point to signal increased ambition, but countries not ready to show increased ambition at that point need to rapidly reassess and step up in 2021.
All countries need to ensure their climate targets are aligned with limiting global temperature rise to 1.5ºC and achieving global net-zero emissions by 2050. They must also have interim goals aligned with these and should be delivering against those goals now.
Alongside aligning their policies with climate science, countries must support all companies to transition to net-zero by providing clear and consistent policy frameworks. These policies should be carefully planned and managed to ensure an inclusive, fair and just transition that leaves no-one behind by protecting workers at risk of job losses and vulnerable communities.
To finance this transition, markets also need full information on climate risks and opportunities, and clear pricing signals and policies that shift global financial flows away from polluting investments and toward zero-carbon products, services and business models. It is vital that governments recognise this and put in place effective regulation and policies to manage risk and harness opportunities. These include taking firm action to permanently remove market-distorting fossil fuel subsidies, putting a meaningful price on carbon that incentivizes cost-effective zero–carbon investment and making climate-related financial disclosure mandatory across the economy in line with the TCFD recommendations.
By increasing climate policy ambition, governments will unlock faster action from business, drive growth, innovation and jobs. This positively reinforcing ambition loop between companies and governments will help us achieve the most ambitious goals of the Paris Agreement faster.
The world has changed since 2015. We have achieved things that seemed impossible then. We have learned that the power of human ingenuity combined with collaboration is insurmountable. Now’s the time to put all our political and business weight behind the transition and ensure that we achieve equally unimaginable things in the next five years so that we get on track to halve emissions by 2030 and build the zero-carbon economy of the future.
Why the UK’s increase in climate ambition is good for business