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Future of the Paris Climate Agreement – the expert view

Future of the Paris Climate Agreement – the expert view
07 Jun
Five experts weigh-in on the future of the Paris Agreement now that the United States federal government is no longer involved

Last week, US President Donald Trump followed through on his campaign promise to withdraw from the Paris Agreement on Climate Change, a set of voluntary commitments designed to slow the rate of climate change. At the Overseas Development Institute (ODI), an independent think tank on humanitarian issues, five experts within the field of international development analyse what this means for climate policy in the rest of the world. They emphasise how the agreements reached at the 21st Conference of the Parties of the UNFCCC must be upheld and increased by all powers – international and domestic, public and private.

Alex Their, Executive Director, ODI
‘I am angry by what has happened. We have been on an incredibly important journey over the last couple of decades to find common ground and think about how to address what is probably the most fundamental challenge humanity has ever faced. We reached a high point of cooperation, of concern and it was a goading to action for all of us. To see that moving backwards is deeply concerning. The impacts of climate change are real and they are enormous – the real cruelty is that it will most affect the poorest, the least able to deal with it and often the people that had the least responsibility for it.’

Isabel Hilton OBE, CEO, China Dialogue Trust
‘There has been some focus in what people – rather indulgently – call a lapse in US climate “leadership” and that China might step up instead. There have been many interesting signals from China on that. At Davos, President Xi stressed the importance of the Accord, and six days ago the nation joined the EU in stating the deal “was more imperative than ever”. So there is little doubt about China’s commitment.

‘Some people don’t realise how far China has come since Copenhagen, where it was regarded as something of a “bad boy” of climate change. Ten years ago, China was still addressing the issue of its own development and it chose a particularly carbon-intensive model. Since then, a remarkable transformation has taken place: it took the opportunity to become the supplier of a carbon-constrained global market by the time of Paris. Domestically, there has also been an accumulation of environmental issues such as soil, water and air, which makes the government vulnerable. Climate denial is not a huge issue in China.

‘That being said, relations between China and the US are often uncomfortable and a key element – and success – of the Paris Accord was that it was constructed as a win-win for both of them. Their cooperative statements became enablers of the agreement. So where are we now? One partner has left the stage yet again and China has been slightly thrust into a leadership role with which it is not entirely comfortable in terms of global diplomacy. I don’t expect China to do the kind of mobilising of the diplomatic map that is going to be required of the accord – it’s not what China has experience of, or what it is particularly good at. Instead the nation will probably be looking for partners and encouragement. In terms of China’s determined contributions, it is well within its comfort zone – so will China be interested in ratcheting up those commitments? We will see. China also has laggards within its own economy, it is also exporting emissions by building coal power stations abroad. The message since Paris, however, has been generally positive.’

Kumi Naidoo, Launch Director, Africans Rising; former International Executive Director, Greenpeace
‘For a person from a continent that collectively carries little historic responsibility for climate change, from a continent where we are losing lives, infrastructure and from where we are seeing parts of land becoming depopulated now, I can say that the US has given us a deep sense of betrayal. It is, however, not unprecedented. George Bush Senior said at the first Earth Summit in 1992 “the American way of life is not negotiable.”

‘Fast-forward to Copenhagen in 2009, where we tried to secure a “FAB” deal – fair, ambitious and binding – and what we got was a “FLAB” deal – full of loopholes and bullshit. In 2015, the Paris Accord gave us the space to live to fight for another day, however, we did not see it as an unqualified success either. Fundamentally, the ambitions on the table are still taking us to climate catastrophe because, depending on exactly how you count it, the pledges are taking us to at least a 3.5-degree world. In that context, Trump’s decision is problematic because it takes the US out of the picture, it send the wrong kind of message of urgency. If his intention prevails, we are talking about a slippery slope to climate catastrophe much shorter than anyone anticipated.

‘However there are three positive aspects I would like to point out:
1. Trump is reviled among a large portion of the planet: if he says the Paris Accord is bad it is going to galvanise opinion in a positive way. There has been a false sense of security since the Accord and Trump’s speech has brought it back to the fore.
2. The US has always pushed for minimalism in climate deals. In fact, the level of ambition of the Paris Accord would have been higher if the US wasn’t a negotiator. Just because it is out doesn’t mean everyone else cannot ratchet up their own commitments.
3. The timeline for pulling out of the Paris Accord will line up with the next US election. We need to keep track of this development it is at the centre of issues.

‘Walking away from last week’s statement depressed and demoralised would be a bad thing to do. What we will judge the American people by is how they respond to their leader. Furthermore, it is not unreasonable to expect that big business in the US will fill the vacuum left by the US government.’

Stewart James, Managing Director, Deputy Head of Group, Government Affairs, HSBC
‘There’s a famous joke in the UK, that came from [an apocryphal] news headline in the 1940s “Fog in the English Channel – Continent isolated”. Here I see parallels where we are tempted to say “US pulls out of the Paris Agreement – rest of the world isolated”. Of course, exactly the opposite is true and I think the reason people have been emotionally worried but, so far, economically relaxed is because the judgement that people make in business is that this set of policy actions has reached escape velocity. While what Trump has done will have an impact, it doesn’t fundamentally alter the direction that we are on. There are leading US firms that are in favour of the Paris Accord and will continue to invest in a sustainable future and many of the key actors will continue to move in the direction we would want them to go.

‘Large financial institutions – like any large institution – tend to react on uncertainty and make judgement on risk. The Paris Accord continues to give a degree of certainty about what to expect in the future. That signal alone is exactly the thing you need for the business world to respond and make the necessary changes internally to the way that they work. Even then, experts have differing views about the timeframe in which we will be able to begin to achieve some of the Paris objectives. But if you judge the state of the world as such: that it’s going to move us from a fossil fuel world to a low carbon economy, as a large bank you begin to make different judgements about the risk you are putting your assets at. So why are they slow? Well Paris wasn’t that long ago and I think it takes a while for large institutions to change the way they do all that internal thinking and begin to reflect the future.

‘As for pension funds and long-term asset managers, we really need a dating agency. If you ask those who have the money why they don’t invest it in this multi-trillion infrastructure gap, they might say “we don't have any viable projects”, while people who have the infrastructure say “we don’t have the money”. Some of that can be about perception, but a lot of it is also about engineering ways to get money to flow to the kind of projects we want them to flow to.’

Shelagh Whitley, Head of Programme, Climate and Energy, ODI
‘I think climate finance is very important and the fact that the US has said it is not going to fulfil its part is significant. However, as some have mentioned, the government commitments are in the realm of billions, our work at the ODI has moved towards the questions of the shifting trillions: the fiscal incentives such as carbon pricing and fossil fuel subsidies.

‘In that field, our work has focused on how many prioritise fossil fuels over renewable energy. Every year, G20 governments provide £450billion of subsidies to fossil fuels, almost four times the amount for renewables. Interestingly, there was no mention of fossil fuels in the Paris Agreement, in fact, there aren’t many mentions of specific solutions, fiscal or otherwise. Instead, what you have is this target of 1.5 degrees, which is a broad goal, but in order to actually meet it there are unwritten, strict restrictions about what resources can be exploited. If governments are to meet the two-degree goal or come close to 1.5, then only the oil and gas currently being extracted or in development can be used. In other words, those that already have steel and cement attached to them – and that’s not including coal. So we can’t explore for more oil and gas, we can’t develop recently discovered sources. That fact really frames what is possible, both in terms of curtailing demand for fossil fuels but also in curtailing supply. Fundamentally, climate impacts are happening much faster than expected but also the technology is evolving faster than expected, so governments will have to respond to that by looking very carefully at supply and demand. The Paris Agreement is just a guideline for how to get there.

‘At the same time, I’m encouraged now that with climate change it is all hands on deck. It may seem like parochial politics but recently in my home country, Canada, a new coalition has been formed by two parties with a very strong green agenda which could potentially protect the entire west coast from fossil fuel development. It emphasises that every city government fight and every provincial government fight is important and can actually create the space for federal governments to stay on track.’

These perspectives were given at The Overseas Development Institute as part of an event ‘Future of the Paris climate agreement’

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