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US and China Ratify Paris Climate Agreement

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Ahead of the G20 meeting held in China last week, the US and China announced joint ratification of the Paris Climate Agreement. This ratification is seen as a turning point for global climate action because, together, these two nations emit 38% of global emissions. It was particularly important that US ratification took place before the end of President Obama’s term in office because otherwise US involvement, and indeed the future of the agreement, could have floundered

The Paris Agreement is a legally binding agreement that was reached between 195 countries in December 2015 to keep global warming “well below 2°C” and to “pursue efforts to limit the temperature increase to 1.5°C above pre-industrialised levels”. Each nation, or group of nations, set a plan to cut emissions together with an outline of how this would be achieved. It was agreed that the global peaking of emissions will be achieved as soon as possible, although this will take longer for developing nations.

Before the Paris Agreement can enter into force, it requires ratification from 55 countries to cover 55% of global emissions. To date, it has been ratified by 27 countries making up 39% of emissions. Some countries, such as India, have said they are not yet ready to sign the agreement.

In order to meet its climate change target, China will need to reduce its emissions per unit of GDP by 60 to 65% by 2030, against 2005 levels. It has also pledged that 20% of China’s energy will be from non-fossil fuel sources by 2030. The BP Statistical Review, published in June this year, showed that China’s energy intensity has recently declined but that it remains the highest energy consumer.

The UK’s ratification of the Paris Agreement might not take place until 2017, according to climate minister Nick Hurd. The UK, which emits approximately 1% of global emissions, has seen a delay in a number of key climate change and energy policy decisions as the result of the Brexit vote and subsequent change of leadership. At present, the UK is part of an EU commitment to reduce emissions by 40% by 2030 against 1990 levels. It remains to be seen whether the Brexit decision needs to impact this, with commentators arguing that it does not need to.

The government was expected to publish an emissions reduction plan this autumn in order to meet its own 2030 targets, but this may also be delayed until 2017. Once the decision has been made whether or not to proceed with the nuclear generation plant at Hinkley Point, this will no doubt lay the ground for its energy and climate change policies. Businesses are looking for some long-term direction following more than 12 months of uncertainty with cuts to renewable subsidies, consultations on carbon compliance, and debate over the direction for the UK’s energy mix.

Three large insurance companies, Aviva, Aegon, and Amblin, called on the G20 to stop subsidising fossil fuels due to the risk that climate change presents. However, no deadline was agreed for this at the meeting of the twenty major economies. Financial institutions have been calling for the inclusion of the cost of climate change in business costs, for example by setting a global carbon price. With regard to the Paris Agreement, a G20 communiqué stated “We welcome those G20 members who joined the Agreement and efforts to enable the Paris Agreement to enter into force by the end of 2016 and look forward to its timely implementation with all its aspects. “


Nikki Wilson

Nikki joined Alfa Energy in September 2015 as a Carbon Management Consultant where she advises clients on legislation, compliance, and the implementation of carbon management schemes. She is a Practitioner member of IEMA, has a postgraduate diploma in Environmental Decision Making, and has over 15 years’ experience in energy consultancy.