World Review | Paris climate deal a positive step, but major changes are far off

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Paris climate deal a positive step, but major changes are far off

Paris climate deal a positive step, but major changes are far off
Le Bourget, France, Nov. 30, 2015: French President Francois Hollande (L) and Indian Prime Minister Narendra Modi (R) during the COP21 conference on climate change (source: dpa)

APART from the collapse of world oil prices, 2015’s most important energy event was the Paris meeting on climate change. After a fortnight of negotiations, the agreement reached on December 12 was hailed as a landmark accord, or even, in the words of French President Francois Hollande, “a revolution for climate change.” However, a close look at the terms of the pact reveals just how disproportionate these reactions were, writes World Review expert Dr. Carole Nakhle.

The United Nations conference on climate change in Paris, known as COP21, received unprecedented backing. More than 150 world leaders, including Presidents Barack Obama of the United States, Vladimir Putin of Russia and Xi Jinping of China, kicked off the meeting with an unusual show of solidarity. Earlier in the year, Pope Francis published an encyclical on environmental protection, making the fight against global climate change a religious duty for many.

The delegates from 195 countries reaffirmed the ambitious, long-term goal of holding the global average temperature increase to “well below” 2 degrees Celsius (3.6 degrees Fahrenheit) relative to pre-industrial levels and to “pursue efforts” to limit the increase to 1.5 degrees Celsius.

Scientists believe the 2 degrees Celsius increase must be avoided to hold off the most serious effects of climate change. The Intergovernmental Panel on Climate Change confirmed that human influence on the Earth’s climate was clear: greenhouse gas emissions from human activity have increased rapidly since the pre-industrial era, driven largely by economic expansion and population growth. Carbon dioxide (CO2) emissions from fossil fuel combustion and industrial processes, in particular, are responsible for about 78 percent of the total greenhouse gas emissions increase from 1970 to 2010, according to the climate panel. Lowering these emissions will therefore entail reducing demand for fossil fuels.

The excitement surrounding the Paris accord mainly stems from the fact that nearly 200 countries – together responsible for 98 percent of global emissions, but which sometimes have widely varying interests – managed to reach an agreement.

Individual countries are required to report regularly on their emissions and implementation efforts, and such reports will undergo international review. Ahead of the meeting in Paris, most parties submitted their post-2020 climate action plans – known as “intended nationally determined contributions” (INDCs). Revised versions will be published every five years.

While this is a positive step, countries are not obliged to implement the INDCs. This raises concerns about individual countries’ long-term commitments, transparency in reporting and shortcomings in countries with weak institutions. What makes the substitution of fossil fuels more challenging is the simple fact that they are cheaper than the alternatives. This is particularly true in today’s low-price environment and, more importantly, in the absence of a price on carbon. The Paris meeting was completely silent on this issue, although many experts, world leaders and international organizations – including the IMF and the World Bank – point to the need for such a price and were particularly vocal on that aspect ahead of the meeting in Paris.

Even the CEOs of big oil companies have publicly confirmed the central role carbon pricing will play. Six major oil firms wrote an open letter to governments and the United Nations stating that they could take faster action on climate change if carbon pricing were implemented. Many countries, however, oppose putting a price on carbon because it would place a heavy burden on their economies.

Both renewables and nuclear power depend on strong government backing and subsidies. Fossil fuels, on the contrary, provide many governments with a major source of income, whether in terms of taxes on fuel or on upstream operations. If fossil fuels are to be phased out, governments will have to find another, substantial, source of income.

For a more in-depth look at this subject with scenarios looking to future outcomes, go to our sister site: Geopolitical Information Service. Sign in for 3 Free Reports or Subscribe.

Dr Carole Nakhle

Our Expert: Dr Carole Nakhle Dr Carole Nakhle is the Director of Crystol Energy. An Energy Economist by training, she is Associate Lecturer in Energy Economics at the University of Surrey ...

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