Climate deal requires $16.5 trillion investment to cut pollution
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Paris: The deal struck at United Nations climate talks requires an overhaul of historic proportions for energy policies worldwide and a huge investment in cleaning up the pollution now damaging the Earth’s atmosphere.
Targets outlined in the agreement on Saturday, involving 195 countries, will require $16.5 trillion of spending on renewables and efficiency through 2030, according to the International Energy Agency (IEA). To accomplish that, governments will have to offer incentives for clean energy production, scale back support for fossil fuels like oil, make emissions more costly, and reduce deforestation. The changes will touch industries from transport to construction, and encourage people to change their behaviour.
“The strength of the agreement is that it allows a thousand policy flowers to bloom,” Paul Bledsoe, a climate aide during US President Bill Clinton’s administration, said in an interview in Paris, where the deal was sealed. “This sends a powerful economic signal that fossil fuels will be saddled with financial and legal premiums to remain part of the energy mix, and clean energy will enjoy subsidies.”
The deal aims to limit the global temperature increase since the Industrial Revolution of the 18th and 19th centuries to 2 degrees Celsius (3.6 degrees Fahrenheit), while calling on nations to “pursue efforts to limit the temperature increase to 1.5 degrees.” That more ambitious goal implies vast cuts to emissions from burning fossil fuels.
“Politically as well as technologically, this is no walk in the park,” said Ottmar Edenhofer, chief economist at the Potsdam Institute for Climate Impact Research Institute near Berlin, and a lead author of the UN’s most rigorous assessment of climate economics. The target may trigger “a fundamental shift of investments towards renewables, energy efficiency, and carbon capture and storage,” he said.
Policies such as carbon pricing through markets or taxes, and planting trees while burning biomass rather than fossil fuels, will also be needed, and in a 1.5-degree scenario, they’ll need to be stepped up, Edenhofer said.
Pledges to limit carbon from 187 nations aren’t yet enough to hold to a 2-degree pathway, let alone 1.5 degrees. according to researchers at the Climate Action Tracker, a group of four European institutions, who estimate the measures will cap the rise at 2.7 degrees. While those changes would be small for a single day, applied to the world they mark a shift in the climate that’s quicker than the one that ended the last ice age.
That would mean “high risks by climate extremes, commitment to multimeter sea-level rise and detrimental impacts for global agriculture and food security,” said Bill Hare, chief executive officer of Climate Analytics, a Berlin-based research group. “It would also lead to complete loss of coral reefs and serious impacts on water resources in many regions.”
Keeping that in mind, envoys in Paris established a review process that would ensure countries look at their targets every five years, with a view to stepping up ambition based on advances in technologies and declining costs of clean energy.
National emissions goals enshrined in the pact are voluntary, though binding transparency rules mean nations “risk a pariah status if they flout their pledges,” according to Bledsoe, the former Clinton aide. “The heart of the deal is emissions monitoring. The only way we’re going to be able to compel compliance is through accurate data.”
The IEA’s figures reflect the costs of nations reaching the voluntary commitments they made under the Paris program plus an estimate of what it would take to bring temperatures down to the 2-degree target.
“The 2 degree target as it stands now is very challenging to meet,” Fatih Birol, director general of the IEA, said in Paris on 9 December. “We need to accelerate our efforts even further to reach 1.5 degrees.”
The new system will place more rigorous requirements on the largest developing countries, such as China and India, to monitor and report their emissions and the progress made toward their targets. That’s important because developing nations account for more than half of global emissions and the agreement can’t succeed without them reducing their greenhouse gases.
“If people don’t know if others are delivering on their promises, it undermines trust in the whole framework and makes them reluctant to increase their cuts in the future,” said Nick Mabey, chief executive officer of the UK policy analyst E3G, who as a climate adviser to former UK Prime Minister Tony Blair.
The new deal doesn’t take effect until 2020. Over the next five years, governments will have to complete the rules for the various mechanisms set up in the agreement on transparency and technology transfer. It won’t come into force until at least 55 parties, accounting for 55% of global emissions, have ratified it.
“The main work is for every country to go through their domestic process to ratify and join the agreement,” said Jake Schmidt, international program director at the Natural Resources Defense Council in Washington. As far as the UN process, “they basically have the guiding principles and need to write the detailed rule book.”
Under the deal, every five years, starting in 2018, there would be a global assessment of whether combined efforts are sufficient. And from 2020, countries must update old pledges or prepare new ones, also every five years.
“Markets now have the clear signal they need to unleash the full force of human ingenuity and scale up investments that will generate low emissions and resilient growth,” UN Secretary-General Ban Ki-Moon said in Paris after the talks concluded. “What was once unthinkable has now become unstoppable.”
The deal also sent a longer-term signal to investors, saying nations should work toward “a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.” That means that greenhouse gases from burning fossil fuels must be equal to those absorbed by planting trees and the facilities capturing carbon for permanent underground storage.
“Today we celebrate,” said European Energy and Climate Commissioner Miguel Arias Canete. “Tomorrow we have to act.” Bloomberg