Carbon and climate change – COP21 update

Six months ago, following two weeks of intense negotiations at the Conference of the Parties (COP21) history was witnessed with the landmark Paris Climate Agreement.

Since then countries globally are starting to ratify the Agreement with no less than 177 signatories. 17 countries have already deposited their instruments of ratification, which is the final step for a nation formally joining.

The world has advanced the Paris Agreement from targets to action through the commencement of the implementation of the Intended Nationally Determined Contributions through leveraging public and private finance for climate action; carbon pricing mechanism and carbon markets, sustainable development and transformational change, public-private partnerships, and innovative business models to fight climate change.

In 2015, revenues from emission trading schemes and carbon taxes rose by 60%, 13% of greenhouse gases are now covered by carbon pricing initiatives and that charging for emissions is seen as an important way for countries to deliver on the promises they made last December in Paris.[1]

The funding flows of agreed US$100 billion per annum by 2020 was boosted through the two key international funding arms – the Green Climate Fund and the Global Environment Facility – underlining support for the Agreement.

The Intergovernmental Panel on Climate Change (IPCC) has agreed to include the 1.5°C target in the overall assessment report (2018) to match the timing of the stocktaking on collective progress towards the Paris goals.

More businesses are on board

In additional to the nation state signatories, 163 global companies have signed up to science-based emissions targets, including a number of well-known Australian companies. We are also seeing an increasing number of companies and public sector bodies including climate change action plans in their sustainability reporting communications.

So what’s happening in Australia?

With a federal election just a few days away, climate change and carbon have not been a major focus of campaigning to date. The Liberal and Labor parties have leaders that are closer in outlook on this than in previous elections and while there is bipartisan support for the COP21 Agreement there is no current agreement on the long-term goal and the pathway to get there. Below is a snapshot of the key carbon and climate change policies of the two major parties:

Carbon

 

Post-election carbon is here to stay

Whatever the outcome of the election on 2 July, one thing is clear – carbon is here to stay. The COP21 Agreement has refocused the world on the transition to a low-carbon future – it is now inevitable. This means all organisations need to think again about emission reduction and efficiency opportunities now and into the long-term.

The COP21 Agreement set an ambitious goal and over time country targets (including Australia’s) are expected to increase which means the transition needs to start as soon as possible. Key sectors, such as the electricity sector will be impacted significantly and it has already started, with challenges noted in the electricity sector in South Australia as one example.

Looking to newer and emerging technology, including renewables with increases in wind and solar generation, and batteries and energy storage all have the potential to be game-changers. Recent announcements involving partnerships between commercial and academic parties collaborating to unlock the potential of carbon capture, use and storage technology to reduce the emissions-intensity of industries, including steel production, is a prime example of concrete efforts being taken. The transition to a low-carbon world will be long with many economic, environmental and social issues to be managed along the way.

Organisations should start now in order to take advantage of the opportunities as well as managing the challenges of the transition to a low-carbon world.

[1] The World Bank 2016, ‘Continuing Momentum for Putting a Price on Carbon Pollution’, 25 May, available at: http://www.worldbank.org/en/news/feature/2016/05/25/continuing-momentum-for-putting-a-price-on-carbon-pollution

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