Australia’s commitments under the Paris Agreement are often invoked in domestic policy debate and politics, but are not widely understood. This post explains Paris further – and drills down to what it all means for industry.
The Paris Agreement came into force in November 2016 once it had been ratified by at least 55 nations representing at least 55% of global emissions, though substantive commitments under it do not start until 2021. At present 195 Parties to the UN Framework Convention on Climate Change have signed the Paris Agreement; 185 have ratified. The nations yet to ratify Paris (and their 2014 share of world energy emissions) are Angola (0.34%), Eritrea (0.01%), Iran (1.58%; holding out for broader international concessions), Iraq (0.63%), Kyrgyzstan (0.03%), Lebanon (0.06%), Libya (0.29%), Oman (0.22%), Russian Federation (4.86%; continues to consider ratification), South Sudan (NA), Turkey (0.9%; insists on being redefined as a developing country before ratification) and Yemen (0.08%).
The Trump Administration has announced its intention for the United States (14.75%) to exit the Paris Agreement. The terms of the Agreement prevent this from taking effect until 5 November 2020, immediately following the Presidential election. While the Administration has held out the prospect of remaining in Paris if concessions are made, they have not articulated or pursued specific improvements. The withdrawal appears likely to proceed, but it would be straightforward for a future President to reverse given the Agreement is structured to avoid triggering a requirement for (extremely difficult) ratification by the United States Senate.
Brazilian President Jair Bolsanaro has at times advocated for Brazil (2.25%) to exit Paris. He has also said that Brazil could remain if the Agreement is amended to block an unrelated South American rainforest initiative and disavow unrelated Indigenous independence initiatives. These concessions appear unlikely to be achievable, but Brazil’s potential response is also unclear.
Many issues are dealt with in the Paris Agreement and the more recently negotiated Paris Rulebook. References to “Paris commitments” most often cover one or more of the following elements:
What the world wants
Article 2 of the Paris Agreement sets out the overarching goals sought, including:
- Holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 °C above pre-industrial levels, recognising that this would significantly reduce the risks and impacts of climate change;
- Increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development, in a manner that does not threaten food production; and
- Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.
These goals frame everything else, though the status of the 1.5°C reference (a compromise required to bring small island states on board in 2015) remains contested, with this metric increasingly prominent following a landmark 2018 IPCC report.
How the world agreed to get there
Article 4 of the Paris Agreement sets out instrumental goals agreed to be necessary to achieve the overarching temperature goals:
- In order to achieve the long-term temperature goal set out in Article 2, Parties aim to reach global peaking of greenhouse gas emissions as soon as possible, recognising that peaking will take longer for developing country Parties, and to undertake rapid reductions thereafter in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century, on the basis of equity, and in the context of sustainable development and efforts to eradicate poverty.
“A balance between anthropogenic emissions by sources and removals by sinks” means net zero emissions. While the agreed text says that this should be achieved in the second half of the century, the best available science says that pathways consistent with warming of less than 2°C involve global net zero around 2070, while pathways consistent with warming of less than 1.5°C involve global net zero around 2050. References to equity here and elsewhere in the Agreement relate in part to the concept that more advanced economies should reduce emissions faster.
Article 4 also establishes procedural requirements for how national action will be sought and increased.
- Each Party shall prepare, communicate and maintain successive nationally determined contributions [NDCs] that it intends to achieve. Parties shall pursue domestic mitigation measures, with the aim of achieving the objectives of such contributions.
- Each Party’s successive nationally determined contribution will represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition, reflecting its common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.[…]
- Each Party shall communicate a nationally determined contribution every five years […]
- A Party may at any time adjust its existing nationally determined contribution with a view to enhancing its level of ambition […]
The Katowice Climate Conference agreed NDCs must be defined with a view to achieving Article 2.
What Australia has currently offered to do
While Australia has ratified the Agreement and agreed to pursue the goals and respect the obligations referred to above, we have also lodged a specific and initial NDC under Paris. This is to reduce Australia’s economy-wide emissions to 26-28% below 2005 levels by 2030, with this commitment to be further developed into an emissions budget for 2021-30. Australia also intends to develop a long-term emissions strategy by the end of 2020. We would expect to articulate a post-2030 NDC around 2024.
The sum of all current initial NDCs is inconsistent with the goals of the Paris Agreement. By extension, Australia’s individual NDC is also inconsistent, though judgments about the specific levels of effort embodied in national pledges or to be expected from different nations are notoriously difficult. The bootstrapping ‘pledge, review, upgrade’ process embodied in the Paris Agreement creates an expectation that all countries, including Australia, will deepen their pledges and their action until they are adequate. The high level climate summit in New York City this September is intended to elicit early commitments to deepen current NDCs.
What all this means for industry
Australian climate policy remains contested and in flux. The Federal Government supports the Paris Agreement as a whole, but has so far only announced policies towards the current 26% target. State Governments have committed to net zero emissions by 2050, though they are just at the beginning of policy development towards this. However, it seems clear that emissions targets will deepen over time and policies to achieve them will intensify. Incremental improvements in energy efficiency and emissions intensity are important, but industry should also be looking to longer term options for deep decarbonisation.
How would your sector look in a net zero emissions world? What are the technical options available? One effort to answer these questions in the global context is the Mission Possible report by the Energy Transitions Commission, an industry-NGO partnership. The solutions considered for freight, basic materials, industrial energy and more are well worth looking at, particularly when considering the next wave of investment and reinvestment in Australian industry. The time of 5% improvement targets is past, but the path to deep reductions is not yet as clear for much of industry as it is for the electricity sector.
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