Nearly 200 countries have reached an historic agreement on climate change following two weeks of negotiations in Paris, providing a clear signal to business on the direction of travel beyond 2020.
The agreement, which was reached on Saturday evening following more than 48 hours of tense round-the-clock talks, has attracted an historic level of global commitment, with 195 countries approving the measures set out in a final document.
The unanimous support for the deal is particularly notable, with previous negotiations having largely failed to reach a flexible compromise between different national interests.
The Kyoto Protocol, the UN’s outgoing agreement signed in 1997, only set emissions reduction targets for 37 countries. This time, developed and developing countries alike have voluntarily committed to implement measures to reduce emissions, taking into account “common but differentiated responsibilities and respective capabilities”.
Core elements of the deal include:
- A collective commitment to limit average global temperature increases to “well below” 2°C above pre-industrial levels and to “pursue” 1.5°C
- A goal to reach a carbon neutral global economy at some point during the 21st century, to be agreed at a later date
- A legal requirement on every country to review and update its voluntary commitments every five years, with each update independently assessed and progressively stronger
- A collective commitment by developed countries to mobilise a minimum of $100 billion (£67 billion) per year by 2020 to help developing countries reduce their emissions and adapt to climate change.
The current commitments submitted by individual countries in advance of the talks in Paris are far from enough to reach the goals set out in the agreement, meaning that more ambitious pledges will be needed at the first set of five-yearly reviews, set to take place in 2018.
However, on the whole the agreement in Paris is being seen as a resounding success.
Amber Rudd, energy and climate change secretary, said: “We have witnessed an important step forward, with an unprecedented number of countries agreeing to a deal.
“The deal will ensure all countries are held to account for their climate commitments and gives a clear signal to business to invest in the low carbon transition.”
EU climate action and energy commissioner, Miguel Arias Cañete, described it as a “major win for Europe”, adding that the EU will “continue to lead the global low carbon transition we have agreed.”
The deal has been widely praised by business leaders. The five-yearly updates to national pledges ensure certainty that the move towards a low carbon economy, and the legislative changes that come with it, will be supported by successive governments.
In addition, the agreement explicitly supports the concept of carbon pricing, something several multinational firms have already been doing independently, while the guarantee of at least $100 billion of annual climate finance for developing countries and increased funding for R&D will open up new markets for clean technologies.
Over 100 large firms used the conference in Paris to set out their own climate change commitments in line with climate science.
Paul Polman, chief executive of Unilever, which announced a goal to become ‘carbon positive’ by 2030, said: “The consequences of this agreement go far beyond the actions of governments. They will be felt in banks, stock exchanges, board rooms and research centres as the world absorbs the fact that we are embarking on an unprecedented project to decarbonise the global economy.
“Governments, businesses and people everywhere now clearly realise that the cost of inaction far exceeds the cost of action. Achieving a zero emissions economy is the greatest business opportunity of the century.”
Meanwhile, Carolyn Fairbairn, director of the Confederation of British Industry (CBI), called it “an exciting opportunity”.
“We now have a climate deal agreed by the world’s leaders that puts us on a sustainable low carbon path and which can provide the framework for business to invest with confidence”, she said.
“It will now be for governments to show how they plan to turn global ambition into national reality. Businesses will want to see domestic policies that demonstrate commitments to this goal and none more so than in the UK”.