06.10.2016 : Paul Melville

Opportunities presented by the Paris Agreement on climate change

150 global leaders, security detail, 30,000 police, countless officials, activists, and one lad from Te Awamutu.

The Paris Agreement on climate change will enter into force in November and aims to facilitate a global transition to a zero carbon economy. Under this agreement all countries will be required to develop domestic policies that will reduce emissions, develop short-term climate change objectives and long-term emissions reduction strategies. Such a transition will require investment and innovation in electricity generation, transport, energy use, buildings, urban design and land use. We all have an opportunity to be at the forefront of this transition.

7 October 2016

Late last year, two weeks after a series of tragic terrorist attacks, over 150 world leaders gathered in Paris, France, to convene negotiations on a new global treaty. The leaders present represented all the major economies of the world, and included Barack Obama, Vladimir Putin, Xi Jinping, Narendra Modi, and our very own John Key. It was the largest meeting of heads of state in the history of the world.

Take the time to pause and think about that for a second – three quarters of the world’s leaders in one room, for the first time in history, all to discuss one thing.

So, what could cause so many global leaders to take time away from political events at home and come together in Paris? While it was security and humanitarian issues that had dominated media attention in the run up to this meeting, leaders had a longer-term challenge on their minds: climate change.

Along with the 150 global leaders, security detail, 30,000 police, and countless officials, activists, and general hangers-on, was one lad from Te Awamutu, New Zealand. To find myself in the middle of such an event is something that seems a bit strange now, but had become a normal part of my life at the time.

The negotiations for the Paris Agreement had begun in June 2012, in Bonn, Germany; I had attended the majority of negotiating sessions as an agricultural advisor within the New Zealand delegation. At times, this involved briefing Ministers and senior negotiators on how aspects of the agreement would impact New Zealand’s agricultural sector and also participating in the discussion of aspects of the negotiations with other country delegations in bilateral meetings. At other times, this involved leading negotiating streams, developing areas of text, and working with country officials from around the globe to find agreement on areas of the treaty.

This four-year negotiation process had developed the foundation of a practical global agreement on climate change. However, at the point leaders arrived in their motorcades in Paris, a global consensus was far from completed and there was a real risk the summit could end in failure. Global discussions on climate change have been on-going for over 20 years, and over this time there have been many failed attempts to reach a global position on climate change, the most notable being the Copenhagen summit in 2009. The Kyoto Protocol also promised a lot, but ultimately was not a durable solution to the issue of climate change.

Remarkably, the Paris summit did achieve a consensus to a new global agreement that includes new emissions reduction measures for all countries of the world. This was a result of strong political leadership by all the key countries, the development of new and pragmatic solutions to the difficult political issues that have held back the climate change process, and a superb facilitation job by the French.

Once the negotiations are over, such an agreement is required to be ratified by an agreed number of members before entry into force - in the case of the Paris Agreement, at least 55 countries representing at least 55 percent of global emissions. For comparison, the Kyoto Protocol took eight years to move from a negotiated agreement to the entry into force of the treaty. The Paris Agreement has reached this point this week, a mere sixth months since opening for ratification. This has included receiving ratification from countries such as the United States, China, France, Germany, India and Brazil, and will now enter into force in November (with legally binding obligations for all member countries). New Zealand has also ratified this week, and Australia will likely ratify soon.

Contents of the Paris Agreement

So what is included in the Paris Agreement? Collectively, the agreement seeks to limit warming to no more than 2 degrees Celsius, while also recognising efforts should be taken to limit this to 1.5 degrees, if possible. To do this the agreement seeks to achieve carbon neutrality in the second half of the century.

Countries will:

  • Submit a short-term climate change target every five years
  • Implement domestic polices with an aim to achieve these targets
  • Develop a long-term low-emissions strategy
  • Explain how they are adapting to climate change
  • Developed countries are required to provide financial support for actions in developing countries

Every five years, countries are required to communicate their national contribution to these aims. The first round of these national contributions is largely already complete, with 188 countries having submitted draft targets ahead of the Paris Summit.

In addition, countries are also asked to submit a long-term low emissions development strategy. Countries are asked to come forward with these by 2020. These strategies will spell out how countries intend to make the transition to carbon neutrality, with the expectation for developed countries that these strategies will reach carbon neutrality by 2050.

The agreement also contains five-yearly stocktakes of progress. Two years prior to each new round of national contributions the United Nations process will undertake a review of progress towards the aims of the agreement. If country contributions are not sufficient to avoid 2 degrees warming, these reviews will identify this and place pressure on countries to increase the strength of their efforts.

It is important to note that the requirement to submit a national contribution falls on all countries, from large and powerful countries, such as the United States and China, to countries with less capacity, such as The Gambia and Malawi. To support developing country participation, implementation of contributions, and also adaptation to the effects of climate change, countries have agreed to mobilise a massive 100 billion dollars per year by 2020. This is another important aspect of this agreement of which the effects will flow through the economies we operate in. A ‘Green Climate Fund’ has already been established and received US$10 billion in initial capital.

In addition to these emissions reduction and finance aspects, the agreement also contains many measures related to adaptation to climate change, transparency of action, and so on.

The agreement does not contain the firm legal emissions reduction obligations that many climate campaigners would like to see, but rather is designed to allow countries to start to move together in the right direction now (through national communications) and increase the pressure on each other to take action over time (through global stocktakes). This design reflects a ‘realpolitik’ of the agreement: more stringent requirements may, in reality, be self-defeating if they resulted in reduced participation overall.

Opportunities this creates for all of us

The Paris Agreement aims to stimulate a new period of climate action by governments of the world. In the short-term, we will likely observe this through the development of new plans and actions for climate change by our governments. These will initially be in the form of 2030 reduction targets and long-term low emissions development strategies.

The key areas of our economies that will participate in this change are electricity generation, transport, energy use, buildings, urban design and land use. Many reading this blog may be subject matter experts across these sectors, and it is worth thinking about how we can influence this process to ensure the plans developed are informed of the ambition that is possible, pursue emerging opportunities, and are efficient in their allocation of resources.

Once governments shift from a planning to an implementing phase, these plans will likely result in a substantial increase in investment in low-emissions technologies, infrastructure, and urban development. If done well, this transition has the potential to not only reduce the carbon footprint of our societies but also improve the connectivity, health and vibrancy of the places we live. Again, many reading this blog may be part of developing and implementing this transition. I encourage you to think about the opportunities the Paris Agreement may create in your own work area or business, and consider what steps we could take now, and in the future, to ensure we are in the best position possible to be at the forefront of this change.

The implementation of emissions plans will result in large shifts in spending and investment patterns. For example, New Zealand’s indicative 2030 target, of a 30 percent reduction from 2005 levels, is currently estimated to cost $36 billion dollars over the 2021-2030 period. For comparison, the Auckland City Rail Link is estimated to cost a total of about $3 billion – so it is likely a large number of infrastructure projects will need to be funded in order to meet country targets in a strategic manner. Again, this will create opportunities for many businesses and individuals to develop innovative solutions to support countries to achieve emissions reduction objectives.

There will also, of course, be many challenges along the way. Governments will face difficult choices on where the cost for such a transition will fall, and how they prioritise investment in different areas. So far, in New Zealand, the government has primarily used international carbon markets, through operation of the emissions trading scheme, to meet our international targets. The initial costing of the 2030 target suggests that, if New Zealand follows a similar approach in the future, 81 percent of the mitigation required would be achieved through the use of international offsets, rather than mitigation at home.

Given the scale of the challenge and the dollars that will be spent, I think this would be a missed opportunity. There are strategic challenges here at home (transport, urban form) that could be addressed together with our Paris Agreement obligations. It would seem crazy to spend so much money on low-emissions development offshore when there are so many investment opportunities here in New Zealand. It is often the case however, that governments struggle to consider the coherence and linkages between the many different policy challenges they are grappling with. For example, the New Zealand government's approach to climate change has not (so far) been well connected to strategic planning for Auckland, or regional development strategies. Given the investment that will be required to fulfil New Zealand’s obligations under the Paris Agreement, it is timely to ask how New Zealand can meet this obligation in a way that also addresses strategic challenges in land use, transport and urban form domains at the same time.

I hope this overview has left you with plenty of thoughts and ideas on how to include the Paris Agreement in your current and future work plans. I encourage you to share any such ideas in the comments below, and please reach out to me to talk further about parts of this article that may have intrigued you!

About the Author

Paul Melville

Associate - Policy Advisor

Paul is an Associate in our Wellington Environments team. He previously worked at the Ministry for Primary Industries as a Senior Policy Analyst and was a member of multiple New Zealand delegations to United Nations climate change negotiations as an agricultural advisor and negotiator.

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