The Agreement reached at COP21 in Paris, the successful culmination of six years of international negotiations, is stronger than expected. It will add significant momentum to initiatives to reduce emissions and adapt to climate change and will have profound implications for business. What actions should companies take today to prepare for the significant changes to come?
In advance of the COP21 negotiations, all parties to the United Nations Framework Convention on Climate Change (UNFCCC) were asked to submit their national plans for limiting GHG emissions and adapting to the effects of climate change.
These plans, known as Intended Nationally Determined Contributions (INDCs), set out national GHG emissions targets and summarize the policy measures that are planned to deliver those targets. 187 countries, comprising more than 98 percent of global GHG emissions, have submitted their INDCs.
The INDCs show that all of the world’s big economies, including China and India, are planning to significantly transition away from ‘business as usual’ (BAU) emissions between now and 2030. The major developed economies are planning to reduce emissions by at least 25 percent over the period from 2005 to 2030. This will be achieved through a combination of policy and regulatory measures and market-based mechanisms that will impact significantly on business practices and investment into the future. The Paris Agreement will raise the bar further through the 5-yearly reviews of progress.
This raises some important questions for you:
- What will COP21 mean for your company?
- How are you planning to manage the business risks and opportunities that will result from the transition to a global economy with substantially lower GHG emissions?
- Will you be able to respond effectively to the myriad of carbon-related regulations, costs and incentives that are being introduced in each of the countries where you operate?