The Paris agreement is a clever new system to drive climate action
This post is by Michael Jacobs and Ipek Gençsü. Michael is visiting professor at the Grantham Research Institute on Climate Change and the Environment at the LSE and senior adviser to the New Climate Economy project. Ipek is research and engagement co-ordinator at the New Climate Economy project. This post was originally published by the Grantham Research Institute, LSE.
The Paris agreement provides a remarkably strong basis for future global action on climate change. Going into the COP21 conference, many commentators believed that the result would be a minimalist ‘lowest common denominator’ agreement at worst, a fudged compromise at best. In fact the agreement lies at almost the highest level of ambition that could possibly have been achieved. It is underpinned by a sophisticated understanding of how political and economic change occurs.
The science of mitigating climate change is now really rather simple, but it has made the politics very difficult. To have a likely chance of staying within two degrees of warming, the 5th Assessment Report of the Intergovernmental Panel on Climate Change makes it clear that net global greenhouse gas emissions have to be phased out altogether within this century. (‘Net’ allows for the possibility of some sequestration by natural or geological means.) In turn that means that net carbon dioxide emissions must decline to zero by 2060-75.
Three significant problems overcome by clever architecture
But three core problems make this prospect very hard for policy makers to contemplate. First, current technologies are not yet sufficiently developed to achieve this zero emissions world, and many of those we do have appear still too expensive to be deployed at the scale needed. Second, although governments in most major economies have taken important steps in recent years to constrain emissions, this remains a difficult political process. Almost all governments are exposed to powerful high carbon interests, often including their own state owned energy companies, as well as understandable anxiety about the costs of the transition to energy consumers and businesses in high emitting sectors. Third, an international agreement can never force countries to reduce emissions. National governments are sovereign and domestic politics and economics will always trump international concern.
The Paris agreement overcomes these three problems through a cleverly designed architecture.
First, it sets an ambitious and clear long term goal for global emissions reduction. This is based explicitly on the science. The agreement acknowledges that climate change is already dangerous at 1.5⁰C of warming, so this limit should be the world’s ambition, over and above 2⁰C previously agreed by governments. It then states clearly the ultimate goal of net zero emissions, to be achieved in the second half of this century.
Second, knowing that governments are not, in the short term, willing to commit to achieving a pathway towards this goal, it sets up a regular process of ‘review and ratchet’. Every five years a stocktake will be conducted, showing how far current emissions projections diverge from the paths to 2⁰C and 1.5⁰C. Then two years after that all countries will have to produce new targets and plans for the subsequent ten or fifteen year period. The agreement states that these must be more ambitious than the last.
The first stocktake will be in 2018, and the next round of commitments in 2020, when countries with 2030 targets will be required at least to confirm and, ideally, to update, their current plans. This is vitally important, since we know that the current national pledges (Intended Nationally Determined Contributions, or INDCs) are not sufficient to put the world on a 2⁰C pathway. Despite these only having been published this year, the agreement effectively asks for them to be improved. And there is no limit in the agreement to this five yearly cycle: it will be continued until the gap between the requirement of a stable climate and countries’ collective ambitions is closed.
Third, the agreement establishes a ‘transparency system’ which will require all countries to measure, report and verify their emissions and policies under a common framework, so everyone knows what others are doing.
A system that understands economic and political change
This architecture relies on both a profound and realistic theory of economic and political change. Economically, the long term net zero goal and the five yearly ambition cycle are designed to send clear signals to business and investors that the future direction of the global economy is low carbon. Establishing simultaneous policy improvement cycles in all major economies, the agreement will create global markets in, and demand for, low carbon infrastructure and technologies. It tells investors that this is where future profits will be made, while high carbon assets will become more risky. The aim is not just to accelerate current deployment, but to stimulate innovation and drive costs down. This is vital, for it is this which will make higher ambition both economically and politically easier to achieve at every five year review point.
We can already see how this process can work. The 80 per cent drop in the cost of solar, 60 per cent in wind and 90 per cent in LED lights over the past six years, coupled with the rapid development of energy storage systems, demonstrate the kind of technological change the agreement is trying to generate. One has only to look at the higher ambition of the INDCs published this year over countries’ plans six years ago – not least, in plans for the deployment of these technologies – to see what can be achieved over the course of a policy making cycle. This is what the agreement seeks to replicate every five years.
Will governments be ambitious?
But will governments be as ambitious as the agreement hopes? That will depend, in every country, on the balance of high carbon and low carbon forces. A crucial role will inevitably be played in this by businesses and by civil society: scientists, NGOs, cities, subnational governments and others. They will need to apply pressure on governments to adopt stronger targets. But the agreement gives them regular ‘global moments’ at which to do so. Every five years climate change will return to the top of the agenda in every country, as the stocktake shows that the world remains off course and as governments must prepare new targets and policies for the future. The agreement is an open invitation for those people who care about climate to bring the requisite pressure to bear.
Critics have observed that countries’ commitments are not legally binding. But this misses the point. The requirement to improve national plans every five years is legally binding. And, though the commitments are themselves not binding at an international level, in almost all countries they will be translated into binding national law and policy, which is of course where it really matters. As we know from the commitments made in Copenhagen, which were not binding but have been almost universally carried out, governments cannot escape the plans they have presented to their domestic constituencies, especially with pressure from international peers. There is no reason to doubt that the current INDCs, and future ones, will be implemented.
So the Paris agreement represents a multilateral rules-based system which understands the economic and technological processes of innovation, and the political processes of civil society pressure, and uses them to achieve its goals. The agreement does not of itself save the world. No international agreement could do that. But it has established the core conditions to drive down future emissions. And it has effectively put the key levers in the hands of those – both businesses and civil society movements – who wish to do so.