Summary of COP21 by Emmanuel Martinez,
Environment Director at Societe Generale
What did you take away from COP21?
COP21 was an undeniable success across the board, leading to the best agreement we could have hoped for in Paris. The Paris Agreement is an international treaty-level agreement and is legally binding. Its aim is to keep a global temperature rise this century well below 2 degrees Celsius, and even to limit it to 1.5 degrees Celsius where possible. It establishes a framework whereby countries put forward their intended contributions to emissions reductions through nationally determined plans which are reviewed every 5 years. Governments will be able to draw upon market and non-market mechanisms, including carbon prices or carbon quota trading systems for their national policies. 188 countries have submitted their Intended Nationally Determined Contributions which, together, take us closer to 3 degrees Celsius than 2 degrees Celsius - hence the importance of the review process.
The Agreement reflects the ambition. It calls for zero net anthropogenic greenhouse gas emissions to be reached during the second half of the century, and reaffirms the commitment by developed countries to jointly raise a minimum funding floor of US$100 billion per year by 2020 to support mitigation and adaptation. The mobilisation of society and the business world alike during COP21 is also unprecedented. The Portfolio Decarbonization Coalition, for example, is made up of 20 investors representing US$3.2 trillion who have committed to decarbonizing more than US$600 billion in assets. In fact, the role and commitments of non-state stakeholders are recognised in the Agreement and the Solutions Agenda which will gather in momentum over time.
COP21 and beyond …
To enter into effect by 2020, the Paris Agreement must have been ratified by at least 55 countries representing at least 55% of global greenhouse gas emissions. The implementing texts are expected to be adopted in 2016 at COP22 in Marrakech and during subsequent COP summits, which means that the process is far from complete. Thereafter, national policies will need to reflect global commitments. In Europe, we have the Climate Package which consists of a range of measures to improve energy efficiency and reduce carbon emissions. In France, it is essentially the Energy Transition for Green Growth Act that embodies France’s ambitions in the prevention of climate change. Implementation will inevitably take time.
What will the Paris Agreement change for Societe Generale?
The Paris Agreement provides a road map towards a decarbonised economy, i.e. to zero net anthropogenic greenhouse gas emissions during the second half of the century. The text specifies that the forecast figure of 55 gigatonnes of carbon dioxide in 2030 based on the regrouping of national contributions will need to be cut to 40 gigatonnes if we want to stay below the 2 degrees Celsius threshold. This long-term vision coupled with the recognised importance of incentive measures such as carbon prices and market mechanisms will make financing and investment decisions easier for the private sector. The Paris Agreement supports Societe Generale’s strategic goals. At the beginning of November, the Executive Committee adopted a climate policy that is aimed at committing the Group to the 2 degrees Celsius threshold. What is more, the numerous climate commitments made by companies during the COP summit also reinforce our climate strategy which includes accompanying our clients towards a decarbonized economy.
One of the fundamental aspects of the Paris Agreement is the emphasis on controls, reporting and reviews for actions and their impact on the climate. It is something which is common to most collective or individual commitments by companies and which will reinforce our own measurable commitments.
Lastly, there is the commitment by developed countries and call for voluntary contributions from other countries to provide a funding floor of US$ 100 billion per year to finance the transition towards a low-carbon, climate-resilient economy for developing countries. It is important that Societe Generale strengthen its partnerships with global and multilateral financial institutions. They will be key players in co-financing development and sharing the related risks.