In the first of a two-part series, Nina Rachet analyses the workings and possible outcomes of COP21, and the Paris treaty’s impact on investments and business by economic sectors.
Climate change is the most important problem of the 21st century. It is becoming costly, both politically and economically, to ignore. The public support for a “greener” world has recently peaked, a change in behaviour accompanying growing economic losses in business and investments. Thus, all eyes will be turned towards the 21st Conference Of the Parties (COP21) set to take place in Paris.
COP21 represents a major opportunity to regulate and adapt to climate change. Past summits on this global problem have failed to result in a significant globally-inclusive deal of carbon emissions. The Kyoto protocol came to an end in 2012 and no other global deal on carbon emissions has emerged since then. The reputational costs if COP21 should fail will be important for states. France, as the host of the conference, is particularly concerned due to internal political divisions and its position as a diplomatic power.
The human and economic costs of climate change will continue to increase thus regulating this global matter is increasingly costly the more an international treaty is delayed. Rachel Kyte, VP of the World Bank, recently declared that the world was at the bottom of a hockey stick. By 2050, without carbon regulations, climate change will have generated billions of economic losses, massive migration movements and thousands of climate-related casualties. It is thus necessary – both economically and politically – to agree on a global deal on carbon emissions at COP21 in Paris this winter.
COP21: a Global Solution for a Global Problem
A global political solution to climate change is necessary in order to plan and implement international long-term policies. It would offer the assurance of stability and continuity of a global regulatory framework needed to invest in green activities. COP21 has ambitious objectives, necessary for adapting and mitigating climate change.
The Paris summit has already achieved considerably more than previous summit. Through pledges and interstate agreements, China and US appear to be committing fully to resolving climate change. The business world seems attached to a greener production since climate-related losses have recently and dramatically increased. Therefore, a global deal on carbon emissions in Paris is likely to include four pillars-objectives.
Global Deal on Carbon Emissions: Challenges
Obtaining an international agreement on carbon emissions will be complicated. Past COPs have shown that business elites more willing to cooperate towards regulating carbon emissions than political elites. While governments failed to achieve a concrete agreement during COP16, important businesses encouraged industries to move forward with implementing greener forms of production rather than wait on a global political deal. The Paris Agreement must therefore be too costly to disregard for states, thus a legally binding treaty on which the public and all branches of the state agree must emerge. This implies a lengthy ratification process in democratic countries as heads of states and government must obtain parliamentary approval to implement the treaty. This issue particularly concerns the USA, as the Republican-dominated Congress is not inclined to climate politics. In the absence of ratification, efforts to reduce carbon emissions and implement greener forms of production would be severely delayed and states would not insure the stability and continuity of long-term regulation on carbon emissions as well as financial aid to green activities. Additionally, while states have been committing to reducing carbon emissions, governments’ pledges currently do not meet COP21’s first and second objectives.
Finally, climate finance is one of the major issues in the negotiations towards Paris. The emergence of the Green Climate Fund (GCF) at COP17 was a successful measure towards providing aid to developing countries’ transition towards green economic development. However, these nations’ representatives have complained about the reluctance of developed countries to pledge financial aid to the Fund. Estimating that US$100bn per year by 2020 needed to finance the poorest regions’ green development, pledges to the GCF only amount to US$10.2bn and less than 60% of these pledges have been officially transferred to the Fund. The USA contribution to GCF – US$3bn – has yet to be ratified by the Congress. The uncertainty of green aid to developing states is problematic, as climate change is increasingly devastating and costly for the world’s poorest populations. Climate finance is also competing with fossil fuel subsidies that take up to US$2 trillions globally. These subsidies crowed up governmental capacity to finance greener activities, such as research into renewable energy and sustainable productions. Although recent scientific advancements have helped towards reducing carbon emissions, it is essential for the successful transition to zero-carbon world that research and development (R&D) be given the appropriate attention by governments. This funding would ensure continued governmental help toward green R&D and offer added stability to investments research. However, carbon pricing has recently been included in the Paris Agreement proposal that would help implement carbon regulation and provide stability to future energy prices.
Nina Rachet has recently completed a MSc in International Public Policy from the University College London (UCL). Currently working as a freelance political analyst, her main interests are climate politics, post-war development and conflict. In the future, she aspires to work on international development and peace projects.
The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.
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