Record-breaking Paris Agreement signing ceremony marks global shift from ambition to action on climate
The Climate Group
NEW YORK: Today a record number of political leaders from around the world signed the historic Paris Agreement, during a high-level signing ceremony at the United Nations headquarters in New York. The more than 160 signatories is the highest number ever recorded for an international agreement.
Top polluters such as the US, China and the European Union participated in the event, underlining the political significance of the climate deal and the unprecedented international support for its early entry into force.
The Climate Group played an instrumental role in the Paris success, by showcasing climate action that is already happening from sub-national governments and businesses through our projects and partner initiatives such as the We Mean Business Coalition and our States & Regions Alliance.
To be effective, the accord must be ratified by at least 55 countries representing 55% of global emissions. Today’s signing ceremony marks an important step toward this goal, accelerating momentum for a low carbon, prosperous economy.
“Like many high points of international diplomacy and other international processes, it’s very easy – once we’ve felt success – to assume all the work is done,” warns Mark Kenber, CEO, The Climate Group. “It was certainly the case in the aftermath of the Paris Agreement where, quite rightly, people felt we plucked victory from the jaws of defeat, and now have a new universal, binding climate agreement.”
However, “agreement is one thing, and implementation is another,” he underlines. “In the effects after Paris, it is often easy to forget all the hard work that is yet to come and – as in many things – if we can ignore hard work, we will.”
“It is therefore integral we maintain momentum this year, not only in action to deliver the Paris Agreement, which we are seeing across the work of our We Mean Business partners and our States and Regions activity, but also, maintain the public momentum – the idea that ‘something has changed’ after Paris.”
SEIZING THE OPPORTUNITY
Much has indeed changed since the historic Paris Agreement was reached at the global COP21 climate talks last December, with governments and businesses alike continuing to take bold climate action backed by increasing evidence in favor of its economic benefits.
Less than a month after the Paris Agreement was set, Bloomberg New Energy Finance (BNEF) reported that keeping global temperature rise below 2 degrees Celsius – the threshold set by the accord – is a US$12.1 trillion investment opportunity.
Forward-thinking companies are already grasping this chance: in a separate study BNEF showed how global clean investment attracted a record US$329 billion last year, which is about six times the amount invested in 2004.
At the same time, governments are already putting in place policies that will help businesses set their long-term plans. China, the world’s biggest polluter, topped the clean investment leaderboard, setting a record for wind energy with almost 33 gigawatt added last year.
The wind of change blows also at the sub-national level, where 35 members of The Climate Group’s States & Regions Alliance – accounting for 354 million people, 12% of global GDP and 2.9 Gigatons of CO2 emissions – have set ambitious, transparent goals to tackle climate change in order to both protect their citizens and boost their economies.
SMART, RISK-PROOF BUSINESS
The Paris Agreement signed today will further accelerate this ongoing global shift toward a low carbon economy, rewarding those businesses and governments at the forefront of the change.
New analysis by We Mean Business shows the immediate and long-term consequences of the international accord, for business operations, investors and consumers in particular.
A total of 397 companies, with combined revenue of US$7.9 trillion – as well as 183 investors with assets under management in excess of US$20.7 trillion – have made 951 commitments through the We Mean Business coalition, of which The Climate Group is a founding partner.
Of these companies, 58 are switching to 100% renewable power through the RE100 campaign, driven by The Climate Group and CDP, which will transform the energy market sector and future proof their investments.
The new research says the Intended Nationally Determined Contributions (INDCs) submitted by the countries before COP21, which are the national climate plans that constituted the backbone of the Paris Agreement, represent at least a US$13.5 trillion market for the energy sector alone in energy efficiency and low carbon technologies through 2030.
GLOBAL AMBITION
But the INDCs – which will put the world on a path toward a 2.7 degrees Celsius increase by 2100 compared with the pre-industrial era – are not ambitious enough to curb runaway climate change on their own. While 2.7 degrees is much less than the dangerous 4.8 forecast if no climate action is taken, it is still above the 2 degree limit set by the Paris accord.
This is why the ‘ratcheting mechanism’ of the Agreement, which will push for increased climate action every five years, is so important for both the 2 degree target and for businesses. In 2020, countries will submit new or updated climate plans, which in turn will help companies set their long-term goals and lead low carbon investment in their markets.
Businesses that are already taking bold climate action will continue to benefit from a 27% average internal rate of return on their low carbon investments. On the contrary, companies which choose not to adapt to the inevitable low carbon transition will suffer from the economic risks posed by climate change, the We Mean Business analysis warns.
“The Paris Agreement signing should also be seen in the broader context around a number of other events that are happening this year in the run up to COP22,” continues Mark Kenber. “The next key moment for business leaders and investors will be the Business & Climate Summit, held in London this June, where the real business action continues – now in the context of economic opportunity created by Paris.”
The Business & Climate Summit will take place on June 28-29, and will be critical for companies, investors and policymakers to foster a productive dialogue toward continuing business action on climate following the Paris Agreement.