The Paris Agreement on climate change entered into force on 4th of November. So far, the Agreement has been ratified by 115 Parties accounting for nearly 80% of global greenhouse gas emissions.
8 of top 10 emitters of greenhouse gases, including China, the US, the EU, India and Japan have ratified the Agreement (not yet Russia and Iran). Finland ratified the agreement two weeks ago (14th of November). Climate pledges or nationally determined contributions (NDCs) define the emission reduction targets and the long-term climate strategies to be accomplished by 2020 complement these contributions. For example, Germany has presented the strategy to be a greenhouse gas neutral country by 2050, and Canada has the goal to reduce its greenhouse gas emissions by 80 percent by 2050 compared to 2005 levels.
Two weeks ago in Marrakech Conference it was agreed to finalize the rules for implementing the Paris agreement by the end of 2018. Same time with the conference, Donald Trump was elected as the next president of the United States. This might weaken the role of the US – at least at the federal level – in the combat against climate change and give the opportunity to take a leadership role for other major parties such as China and the EU.
China has ambitious policies to combat climate change and local air pollution. People concentrate in cities and there is a growing need for clean solutions also from the local air quality point of view. According to IEA, China leads renewable investments and jobs, following by the EU. China’s Paris commitment indicated that the capacities of wind and solar are going to expand to 200 GW and 100 GW, respectively. And ever higher targets have been considered. Next year China is going to establish a nation-wide emissions trading scheme.
Many other countries are also taking remarkable steps and the global market for cleantech is expected to grow significantly. There is a need for more energy efficient housing, clean transportation and recycling solutions of waste. These clean solutions are often supported by the governments that leads wider deployment and cost reduction. So, more and more of these solutions start to be competitive without any subsidies.
Renewable energy, especially solar and wind, has enjoyed remarkable cost reductions (one third decline for wind and 40-75 percent decline for solar). The stock of electric cars almost doubled from the year 2014 to 2015 up to 1.3 million cars. Consumers want ever more clean solutions – from demand-side response services to batteries – with reasonable price.
Because mitigation and adaptation of climate change is a huge business opportunity, rethinking of business strategy benefits every company in every industrial sector. There is room for big and small actors from big and small countries. Especially, there is room for cooperation. This way companies can be part of the solution instead the problem.
Despite the political turbulence it seems that the show will go on and Paris will be a real climate changer!