Business will deliver the solutions for climate change, but they need an international deal from Paris to give them the confidence to do so
The stage is finally set for the climate change negotiations in Paris. At the outset, it is essential to understand that these talks will not solve the climate change challenge overnight, but they should establish a lasting framework to do so.
It is business that will deliver the solutions: the products and process, the homes and transport that we will all use in a low-carbon future. But to develop these, business needs to understand and have confidence in the direction of travel. This is why an international deal on climate change is so important.
A huge amount of work has been done already. More than 150 countries have come forward with climate change pledges, covering around 90 per cent of global emissions. The US and China have reached an agreement, which would have been unthinkable just a few years ago. And there is a draft negotiating text that contains all the elements necessary for a deal. So in all, we are far ahead of where we were in the run up to the negotiations held in Copenhagen in 2009.
But the pressure is on Paris to deliver. First, the agreement needs to set out what degree of change is acceptable. This is likely to be 2oC – the temperature that the science suggests is the limit of “safe” change. Business action is going to be critical to reach this goal. But, as the CBI has said before, targets are only as good as the policies that underpin them.
Bold progress needed
The national pledges – Intended Nationally Determined Contributions (INDCs) in UN lingo – are an important step, setting out what individual countries plan to contribute to the global effort. It will be for each country to decide how they achieve them, but for them to have credibility and to drive business investment, there should be a clear global obligation to meet them, and a transparent process to review progress towards them.
The UN has assessed the pledges made so far, and it looks like they will only put us on a path to limit warming to around 2.7oC. This is why Paris will not solve the climate challenge alone. It means the deal needs to include a way to increase ambition over time – and for industry, this means levelling the playing field.
The UK, and Europe, has led the way on decarbonisation, and we should continue to do so, not least because we contributed most of the carbon already in the atmosphere. But, the efforts we have already made to cut emissions mean that we will have less impact in future. As other countries capacity and capability to reduce emissions increases, they must be encouraged to follow suit.
For some countries, this won’t be easy. They simply can’t, or won’t achieve the reductions they need to make as things stand. Finance will therefore be critical to getting everyone to sign up to a deal.
Commitments are coming forward, but they need to reach $100bn by 2020 – the amount promised at Copenhagen.
And the Paris agreement should not only ensure this flow of money. It also needs to set out how it can leverage private-sector finance to drive both adaptation and mitigation measures where it is needed most.
In just a few weeks, we will know the outcome of all these negotiations. Business and civil society have given their backing. It is now up to the politicians to put in place a lasting agreement, so business and society can build a low carbon future.