COP21: The Paris Agreement adopted: a game changer?
In the aftermath of the end of negotiations in Paris, we take a closer look at the real and most significant outcomes. The Agreement itself is a legally binding treaty on climate action, which, applies to 187 countries and focuses on emission reduction starting as of 2020. A number of decisions and a number of governing bodies are to be put in place in order to give substance to the Agreement itself and its 29 Articles. The objective is to limit global warming to well below 2 degrees Celsius above pre-industrial levels, while pursuing efforts to limit the temperature increases to 1.5 degrees Celsius.
Countries will be reporting according to a transparency framework as part of the national inventory report on greenhouses gases built on a methodology accepted by the Intergovernmental Panel on Climate Change (IPCC).
Climate financing will continue in order to provide support to developing economies, as it is acknowledged that greenhouse gas peaking will be taking longer for them. The Financial Mechanism of the Convention shall serve as the financial mechanism of the Agreement and it shall ensure efficient access to financial resources through simplified procedures to countries in need. Always in the spirit of cooperation, the use of internationally transferred mitigation outcomes to achieve nationally determined contributions as part of the Agreement and on voluntary basis, shall be allowed.
Although the Agreement enters into force in 2020 changes will already start taking place as of 2016.
The Agreement promises to unlock several opportunities for a greener finance and what seems sure is that investors will have an important role to play in shaping and setting the scene.Furthermore, more transparency on the direct relation between climate change and finance is very much part of the Agreement and we hope that soon more and more players both at national and European level, will follow suit.