Fresh Ink on the Paris Agreement, But What Does it Actually Mean?

It’s hardly new news that a profound shift towards a low carbon economy is underfoot globally. But it’s not every day that 175 world leaders come together, pens in hand, to herald a new era of sustainable energy for countries across the globe.

Agreed, signed, ratified, accepted… What does it all really mean? What is the signficance of a treaty and will it actually give rise to any “real action”?

But most importantly for our clients, what does it mean for you: the Australian business community, industry, local governments and community organisations?

Paris… Climate… Signing…

Let’s start off with the part we all know. The COP21 Paris climate talks that took place in late 2015 were a gathering of world leaders to discuss the way forward to limit global warming to less than 2 degrees Celsius compared to pre-industrial levels. COP21 saw discussion on the movement from fossil fuels towards solar, wind and other renewables, as well as how more developed nations would assist those less wealthy to make the transition to the low carbon economy.

Following the Paris talks – which were essentially a strategy session with no formal, binding commitment – the signing of the agreement now signals countries’ intent to proceed with what was agreed. True, the signing process isn’t technically binding until ratification occurs (more on that later) but it’s the essential next step.

On Friday 22 April, delegates from 175 countries descended upon New York to officially sign the agreement that came out of those talks – a historical record for a one-day signing ceremony! Not all countries were present, but then again, that was just for one day; China and the US both intend to ratify the agreement by the end of this year.

That’s right – not just sign, but ratify. The difference between ratifying and signing is the level of commitment involved: by signing you express your country’s desire and intent to proceed, and by ratifying, you tie your country to actually upholding the agreement by spelling out what you’ll do to achieve the broader goal that was agreed globally. Ratification is needed to bring the Paris agreement into full force and make the COP21 climate talks actually “count”, namely, be valid as a mandate for action. 55 countries need to ratify the Paris Agreement and these need to account for 55% of global emissions.

What does this mean for Australia – and you, our local businesses?

With Australia signing the agreement in New York, it’s now a matter of us coming home to nut out how we actually ratify it: what policy measures the government will extend, revise or put into place.

But the take-home message – what matters to the business and local community – is that the move towards low-emissions energy generation and carbon reduction is official, and it will become a higher priority than ever before by adding political weight and a global gaze to Australia’s carbon reduction efforts. The Paris agreement’s reporting rules are more stringent, for example, with updated climate plans being required for submission every 5 years.

As a country, our track record on climate policy isn’t amazing. So if Australia is serious about ratifying the Paris agreement then we’ll need to shift gears pretty hard and pretty fast. And we will – because we must – so we look to the election and policies that each party will propose to achieve the commitment of COP21.

For now, businesses and organisations on the ground need only know that the low carbon economy is maturing and to get onto the right side of that change. If leadership from the top has been sluggish or patchy, this inevitably will change.

So take heart. No matter how you look at it – whether the drivers are global, national, economic, social or moral – we can all get smart by jumping on the right train: the one invested in renewables, in getting energy efficient, in auditing our energy use and in making energy management a priority now and eventually, business as usual.

Do this in the knowledge that your actions are essential to thriving in the inevitable low carbon future – and if you wish, feel free to let us help you!