On Friday, April 22, countries that committed to limit global warming in the Paris Climate Change Agreement will officially sign the deal. In working to understand the economic implications of this agreement for developed and developing countries alike, we sit down with several of CIGI's Global Economy Program experts to discuss the global significance of this agreement.
CIGI: In terms of what this agreement means for Canada from an international economic standpoint, are you able to elaborate on the significance of what the agreement means in addressing climate change as a key policy problem of the day?
Céline Bak: Through the Pan-Canadian Clean Growth and Climate Change Framework, the Government of Canada established a way for the private sector, civil society and the public sector to identify and remove the barriers that stand between Canada and achieving its 2030 commitment of making a 30 percent reduction in GHGs from 2005 levels.
Initiatives that were launched or continued at COP21 and that will continue to play an important role in the decarbonisation of the economy include the partnership to assess carbon risks in asset owner portfolios, the further development of the Lima-Paris Solutions Agenda and Mission Innovation. Taken together, these new initiatives provide a way for countries, cities and citizens to work together to build a more diverse economy that no longer depends on fossil fuels as a global currency, that is innovative and resilient and puts society at its centre.
Sarah Burch: The recent negotiations in Paris injected energy and urgency into climate change policy-making, research, and practice. While media attention has understandably waned since November, the Canadian federal government has been following up on its commitments in Paris by initiating conversations with provinces and cities to develop a pan-Canadian climate plan and ultimately a carbon pricing system. The challenge will be to ensure that policies at all levels of government are consistent with one another, and working synergistically toward the same goal. It will also require the innovation and ingenuity of actors like small businesses, who are frequently ignored in conversations about climate change action.
CIGI: What would you say are the real achievements of the COP21 negotiations leading into the ratification of the agreement today?
Burch: The two most significant dimensions of the Paris agreement are its level of ambition and universality. For the first time 1.5 degrees Celsius (or 'well below 2 degrees') of warming was raised as a target that the international community should strive to reach in order to avert the most harmful of climate change impacts. This implies that transformative shifts toward more sustainable development pathways are required in next 10-20 years. The universality of the Paris agreement is important in that this is the first time that developing and developed nations have collectively agreed that emissions reductions (of varying degrees, and over different timescales) are required by all parties if the challenge of climate change is to be met.
Olaf Weber: The significance of the COP21 agreement has increased since the Paris meeting. Data suggests that the sea level may rise even higher than expected, and the world has seen a number of months with the highest temperatures ever. It will be crucial that countries start with activities to mitigate climate change.
Again, it seems that financial questions are crucial. Who will finance climate change mitigation and adaptation in industrialized and in developing countries? How do we establish a pricing mechanism for carbon emissions? On this background, it is a positive sign that China has put green finance and climate finance on the G20 agenda. Also through the establishment of the Climate Change Task Force of the Financial Stability Board, it becomes clear that the financial sector is affected by climate change and can have positive effects on climate change mitigation through investments into the green economy.