At the COP211 in December last year, countries reached an agreement on combating climate change - the Paris Agreement. The agreement has entered into force in November 2016, after a rapid ratification process led by big polluters such as the United States of America, China, India and the European Union.
The Paris Agreement and the need for rapid action
The record time for the agreement ratification, along with each country setting its own commitments and the many private sector ongoing initiatives, signal a continued momentum of the global megatrend to reduce Greenhouse Gas2 (GHG) emissions and to a low carbon economy.
Despite world efforts, the International Energy Agency predicts that countries' NDCs3 are consistent with achieving a 2.7ºC global warming, far away from a 2ºC target (let alone the 1,5ºC). 2016 made the headlines for being the hottest year on record; and the Great Barrier Reef has suffered a huge blow. Direct impact on mankind this year was felt everywhere on earth, either through the effects of hurricane Matthew in Haiti, droughts in Uruguay, wildfires in Canada or floods in China.
The public and private sector commitments are therefore crucial to stabilize and reduce GHG concentrations in the atmosphere at a level that will prevent even more dangerous human interference with the climate system.
Public-private sector momentum at COP22- Some key takeaways for sustainable financeCountries have set 2018 as the deadline to complete the plan to operationalize the Paris Agreement., which made COP22, the "action COP", a key event to advance on the negotiations.
The meeting was stage for multi-billion dollar packages support for clean technologies, renewable energy capacity building and commitments to reduce GHG emissions. Initiatives for boosting water and food security in developing countries were also among the many initiatives launched.
"The landmark Paris Agreement set the course and the destination for global climate action. Here in Marrakech, governments underlined that this shift is now urgent, irreversible and unstoppable"
said Patricia Espinosa, Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC)
Marrakech Climate action proclamation, issued by the countries represented in COP22, the proclamation reiterates that fighting global warming is an urgent duty to respond by both the private and the public sector. Focus should be on reducing GHG emissions and to foster efforts to achieve the United Nations 2030 Agenda for Sustainable Development and the Sustainable Development Goals. The proclamation also recognizes the momentum generated by the private sector, calling for an increase to the volume, flow and access to finance of climate related projects.
International Solar Alliance, a common platform of "sun-rich" countries located between the tropics is seeking to mobilize USD 1 trillion for Solar Energy by 2030. Led by India, its member countries seek to massively increase their energy generation capacity from solar energy by reducing cost of capital and promoting projects and technologies. After 60 prospective countries participated in October's Steering Committee, the alliance gained momentum during COP22 with 16 new member countries.
We Mean Business, a coalition of private sector businesses setting science-based targets to reduce GHG emissions, announced that 471 companies with over USD8 trillion in market capitalization sum over a thousand commitments to climate action. According to the initiative, these companies represent all sectors and geographies.
The Africa Day at COP22 showed African countries' commitments to the Paris Agreement. Many African presidents were present to reinforce their NDCs and highlight the opportunities that renewable energy has for Africa. Besides influencing climate negotiations, pan-African initiatives such as the African Renewable Energy Initiative (AREI) are committing to achieve at least 300 GW of renewable energy by 2020.
The US, Mexico, Germany and Canada submitted the first Long-Term climate strategies to the UN under the Paris Agreement completing their NDCs for the Paris Agreement. All four of the submitted strategies are compatible with the agreement goal of reducing GHG emissions by 50% by 2050, compared to 2005 levels.
There was initially some anxiety that climate actions would suffer if a country failed to deliver on its commitments. However, by the summit's close, some of this had eased, thanks in part to the characteristics of the Paris Agreement and to the achievements of this COP. It was demonstrated that the flexible structure of the Paris Agreement and the aims set by the parties are not dependent on one country.
The way forwardEU Commissioner for Climate Action and Energy Miguel Arias Cañete said:
"The progress here in Marrakech is the clearest proof that the world is forging ahead on global climate action. Climate change is bigger than any one country, any one election. And despite all the current uncertainties, this is our clear message from Marrakech: We will stand by Paris, we will defend Paris, and we will implement Paris. The global clean energy transition is here to stay, and Europe will continue to lead the way towards a more sustainable and competitive economy."
Momentum on climate action remains strong. Governments are changing regulations, businesses and institutional investors are adapting their business models to the low-carbon economy. To date, the UNFCCC has identified over 12500 different commitments to climate action by companies, cities, subnational, regions, investors and civil society organizations, which are complemented by 517 policy options from member countries.
Market fundamentals also support action. Renewable costs are expected to continue decreasing, there are big economic benefits in improving the energy efficiency of industries, electric vehicles are becoming an everyday sight in many cities, carbon prices are being introduced worldwide, regulation such as the European Union directives for ESG disclosure by large businesses and pension funds will make the private sector accountable for their actions. And the list would go on.
Together, these initiatives are transforming the world to achieve the 17 Sustainable Development Goals and those that do not adapt will be left behind.
It is broadly recognised that private finance is having and will continue to have a key role to play in successfully achieving a lower carbon economy. It is essential that money flows into the right projects. From renewable energy production, low carbon transportation, and higher levels of resource efficiency, banks and other financial institutions are supporting businesses in their transition efforts to a low carbon economy.
Next UNFCCC meeting will be held in Bonn, Germany, in May 2017. In the commonly called "mini-COP", parties will meet to continue negotiations on the implementation of the Paris Agreement.
COP23 will be organized by Fiji, also in Bonn. Parties are expected to finalize and adopt a roadmap to implement the Paris Agreement in the post 2020 era.
1 Conference of the Parties (COP) organized under the United Nations Framework Convention on Climate Change (UNFCCC). Is the United Nations Climate Change Conference, which happens annually. COP 21 was held in Paris, France, December 2015, while COP22 was held in Marrakesh, Morocco, November 2016.
2 Greenhouse Gases (GHG): Prevent outgoing heat to leave the Earth's atmosphere. It is the aim of the Paris Agreement to reduce manmade Greenhouse gas emissions, in order to prevent global warming. GHG includes Carbon Dioxide, Methane, Nitrous oxide or Fluorinated gases.
3 National Determined Contributions (NDCs): Contribution that each Party aims to achieve in GHG reductions, along with domestic mitigation measures. It is prepared, communicated and maintained by each Party signing the Paris Agreement. See Article 4 of the Paris Agreement for more information.