History was made at the 21st United Nations Conference of Parties in Paris, with 196 countries reaching an agreement that will see a global effort to reduce emissions and slow climate change. An agreement of this breadth is unprecedented, and following the failure of the 2009 Copenhagen negotiations, the conference was considered a make or break moment, with US President Barack Obama recognising the event as “a turning point for the world”.
The agreement commits a shared effort to keep temperatures below 2°C above pre-industrial levels, with a target of 1.5°C. The plan allows for one large ‘peak’ in greenhouse gas emissions as soon as possible, as the world prepares for a massive push away from fossil fuels and other emitting technologies. In addition, the Paris climate agreement sets up a fiscal scheme which will see wealthier, developed nations provide a collective $US100 billion a year to underdeveloped nations to help establish renewable energy systems.
Australian Foreign Minister Julie Bishop concedes the agreement is by no means a perfect outcome, but it does meet the goals which the conference set out to achieve. She said: “The agreement secured today in Paris is an historic step in the global response to climate change. Australia worked constructively with other nations to secure an ambitious, effective and enduring outcome, which for the first time requires all countries to take action to reduce global greenhouse gas emissions.”
The reception of this agreement has been overwhelmingly positive, though some are concerned it is not enough, claiming too many concessions have been made in order to reach this deal. Signing the agreement is a great start, but there is some doubt over how closely the terms will be adhered to by all parties.
Kumi Naidoo, Executive Director of Greenpeace International, said: “The Paris agreement is only one step on a long road and there are parts of it that frustrate, that disappoint me, but it is progress. The deal alone won’t dig us out of the hole that we’re in, but it makes the sides less steep.”
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What does the agreement mean for Australia?
The Turnbull Government is yet to show signs of reform following the Paris agreement, though it is clear Australia’s climate policy will require a major overhaul if it is to comply with higher emission reduction targets set under the agreement.
Both sides of parliament have historically been quite reluctant to introduce hard-line climate policies as Australia is not a large emitter on net value – contributing 1.4% of the world’s carbon emissions. Our current emission reduction target is 5 per cent in 2020 compared to 2000 – a target that has been panned as inadequate by some commentators. Under the Paris agreement, Australia will now be required to reduce emissions by 26-28 per cent by 2030. The Prime Minister has advocated improved climate change policy, but the Government has expressed some minor concern with the climate agreement, saying it will not undermine Australia’s economy in order to comply with the terms.
Australia currently employs a ‘direct action’ climate policy centred on the Emissions Reduction Fund (ERF). The ERF is essentially a ‘reverse-auction’ whereby the Government pays polluters to reduce their emissions. $3.4 Billion was allocated to the fund in late 2014, however this fund has almost run dry, seemingly falling short of the 5 per cent by 2020 emissions reduction target. If the Government hopes to reach the much larger targets by 2030, some suspect this system may need to be scrapped and replaced with something more similar to an Emissions Trading Scheme (ETS) otherwise known as a ‘Carbon Tax’.
The concern with an ETS, as former Prime Minister Tony Abbott advocated in the abolition of the scheme in 2014, is there is a risk polluters might pass these added expenses onto Australian consumers. This could mean we are charged more for things like electricity, though it is arguable that the degree of utility retail competition in some states may help mitigate these added costs.
The renewable energy sector is rapidly growing and is expected to continue doing so into the future. Following the Paris climate deal, there may be some reform to current rebate and feed-in-tariff systems to further incentivise clean energy investment. Either way, there is never a bad time to invest in solar for your home or business.
The Paris agreement marks a global recognition of the climate change issue. Signing the agreement is one thing, but every participant adhering to its obligations is another. What is certain is that some things will have to change at home and abroad, so watch this space for future climate policy changes.