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Paris Agreement gives Global Business climate clarity, now it’s time to take action

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Home » Paris Agreement gives Global Business climate clarity, now it’s time to take action

The new climate deal reached recently in Paris has been praised by business leaders across the globe, but they must now put their money where their mouths are and back up that praise with investment in shifting to a greener world.

The accord gives companies a helping hand in steering both themselves and the global economy towards limiting environmentally damaging gas emissions. However, a low carbon future is going to take a lot more than words.

The reality is that the global transition from oil and gas to renewable energy sources will be neither cheap nor easy.

Many times before, business leaders have bemoaned how the lack of a clear political message on climate change made it unclear how business should invest in renewable energy and cutting CO2 emissions. But, with more than 190 countries signing the pact, the business world has a clearer sense of which types of commercial renewable energy ecosystem is going to be needed in the long-term; from which types of energy to invest in, to the products and services needed.

Edward Cameron, policy chief for We Mean Business, a coalition of organisations working with companies such as Google, Microsoft and Nike to take strong climate change action, said recently that “This agreement provides business with the critical elements which we were calling for to catalyse a clean, thriving economy”.

Designed to ensure that global warming stays “well below” 2 degrees Celsius, and including pledges to seek to limit the rise to 1.5 degrees Celsius, the commitments made in Paris should help unlock the money needed for global transition to a low-carbon future.

Some, such as Virgin Group chief executive Richard Branson, are even predicting that trillions of pounds could now be unlocked in the transition to clean energy. “We have an opportunity to build a new economy, and business is poised to help make it happen,” Mr. Branson said recently. “The ‘Paris Effect’ will ensure the economy of the future is driven by clean energy”.

However, while details of each country’s specific targets and how it will regulate emissions are still to be worked out, the business world is still in the dark as to how emissions will be penalised and the speed at which the proposed changes will be adopted.

This has led to some arguing that the agreement’s clear long-term goals won’t be enough to change how the world’s economies operate in the short term, and that there will be a continuation of current global energy trends, rather than a dramatic shift away from fossil fuels. Tellingly, oil-dependent economies such as Saudi Arabia and Russia were amongst the most resistant to early suggestions that the accord should include a pledge to totally “decarbonise” the world economy.

Even those in the business world who welcomed the agreement warmly said that they can’t do it all by themselves, and that governments must put the promises they made in Paris into action.

Carolyn Fairbairn, director-general of the Confederation of British Industry, said the Paris deal represents an “exciting opportunity”, but the British Government needs to demonstrate its commitment to the goals outlined in the agreement.

With all this in mind, the next 12 months look like they will be crucial to achieving the Paris Agreement’s goals. Has your business begun planning how to cut emissions in 2016? We’d love to hear your thoughts below.

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