The pace is speeding up for the world to reach the climate targets agreed at the Paris conference last winter. The Paris Agreement requires signatory countries to approve the agreement at national level. After less than a year, most of the major countries outside the EU have done so. Representatives from politics and business are currently gathering for the annual Climate Week in New York.
“Apart from the strong political signals which are now beginning to be converted into concrete actions around the world, one of the clearest impressions from New York, the global financial centre, is that banks, pension funds, insurance companies and investors are now completely in agreement about the importance of a more climate-adapted economic development,” says Erik Filipsson, Policy Advisor at Vattenfall.
“The financial market is now on the verge of systematically analysing and handling the regulatory and financial risks associated with the ownership of companies that invest in fossil fuels or depend on them to a great extent. When the financial actors reroute their monetary flows, that will have a significant impact on the climate transition.”
Must be ratified by 55 countries
In December last year the countries of the world concluded a new global climate agreement. The decision came after lengthy negotiations at the COP21 Climate Conference in Paris. At that time, 185 countries accepted the Paris Agreement which sets out a framework for the new global climate regime to run after 2020. The overall target is to gradually limit global warming to “well below” 2 degrees by means of ever tougher emissions requirements, and ultimately aim to limit it to 1.5 degrees.
In order for the agreement to come into force, it must be ratified by all the signatory countries, i.e. they must approve it by formal decisions of their respective parliaments. The Paris Agreement comes into force 30 days after at least 55 countries have ratified it who together account for at least 55 per cent of global greenhouse emissions. Experience from similar international agreements has shown that this process can take several years, but it has moved unusually quickly for the Paris Agreement.
“The overall impression is that the climate activities are currently moving ahead globally at a fast pace. Alongside the rapid ratification of the Paris Agreement, it should also be noted that China is about to launch a national market for emission rights (ETS) which is planned to start in 2017,” says Erik Filipsson.
“The Paris Agreement will probably come into force as early as this year, which is an impressive achievement in view of the fact that it’s only just a year after COP21. It can be compared favourably with the Kyoto Protocol from 1997 which took over seven years to be ratified before finally coming into force.”
As of this moment, 60 countries have already ratified the Paris Agreement. Two of them are the superpowers China and the USA, who together account for around 38 per cent of the world’s climate emissions. Their decision to accept the Paris Agreement, which they announced together at the G20 meeting in September 2016, has put pressure on other countries. The Obama administration wants the Paris Agreement to come into force before the new US President takes over on 20 January 2017. The Republican presidential candidate Donald Trump has said that he intends to stop the Paris Agreement, but if it has already come into force at that time, the USA will be unable to opt out of it for four years at the earliest.
A matter of time before the EU signs up
The EU has not yet ratified the Paris Agreement, simply because all its 28 member states must first approve it, and several of them insist on first reaching agreement on the principles as to how the EU is to honour its joint undertaking.
“There are no real differences of opinion between the member states as regards the quantitative contribution to which the EU had committed itself in Paris last year, i.e. at least 40 per cent lower emissions of greenhouse gases by 2030 compared with the 1990 level. But what has happened since then is that these countries have begun to discuss how they can mutually divide up the EU’s climate targets among themselves with respect to the sectors not already covered by the EU ETS,” says Erik Filipsson, who believes that it’s only a matter of time before the EU has ratified the agreement.
“There is no doubt that the EU will ratify the Paris Agreement, but the question is whether they manage to do so before the COP22 conference in Marrakesh in November 2016. The EU has a great opportunity to tip the scales since the ratification would mean that the second criteria is met and the Paris agreement could come into force,” says Erik Filipsson.
Vattenfall as sponsor
Vattenfall is involved in the New York Climate Week to show its continued support for the overall UN process. Vattenfall is one of the sponsors of the Sustainable Innovation Forum, the official economic forum for the UN’s environmental programme (UNEP), and is also one of the biggest organizers of concomitant events at the next big climate conference COP22 in Marrakesh, to take place on 7-18 November 2016.