On 12 December 2015, The United Nations Conference on Climate Change in Paris concluded with the release of the ‘Paris Agreement’ (‘Agreement’).

The Agreement is scheduled to be signed in New York on 22 April 2016 and will commence operation in 2020.

Signatories will commit to:

  • Holding the increase in the global average temperature to ‘well-below’ 2°C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.
  • Establishing and communicating progressive (i.e. improved) nationally determined contribution targets every five years (with provision to adjust its contribution at any time).
  • Enhancing support to developing countries towards the implementation of economy wide-absolute emission reduction targets.
  • Conserving and enhancing sinks and reservoirs of greenhouse gases in order to reach global peaking ‘as soon as possible’.
  • For developed country parties, providing financial resources to assist developing country parties with implementing their obligations under the Agreement.
  • Holding the first global ‘stocktake’ of the Agreement in 2023 and every subsequent five years.  This will involve a formal review of countries’ progress in meeting their commitments under the Agreement, including updates on the achievement of targets.
  • Operating within a ‘Transparency Framework.’  Under this framework, signatories must disclose information regarding their:
    • greenhouse gas emissions;
    • implementation and achievement of nationally determined contributions; and
    • financial assistance to developing countries,

via national communications, biennal reports and update reports, international assessment and consultation.

This information will be used for tracking purposes, determination of priorities and as part of the global ‘stocktakes’.

Implementation of the Agreement and promotion of compliance with its provisions will be undertaken by a non-adversarial and non-punitive committee which will report annually to the Agreement signatories.

The non-binding decision, which prefaces the Agreement, urges parties to adopt the Agreement and to:

  • Communicate by 2020, mid-century, long-term low greenhouse gas emission strategies to the Secretariat; and
  • For developed countries, seek to achieve the goal of jointly providing USD 100 billion annually in climate aid support to developing countries by 2020.

WHAT DOES THE AGREEMENT MEAN FOR AUSTRALIA?

As one of the world’s highest per capita emitters, Australia will need to adopt tighter national emission targets and clarify its domestic carbon policy.  This pressure will likely be reignited by the regular ‘stocktakes’ mandated by the Agreement and the requirement for information sharing and disclosure within a Transparency Framework.

There will also be increasing pressure on business from government, lenders and investors to transparently measure carbon emissions and implement appropriate abatement strategies.  Key to Australia’s contribution to global carbon reduction will be an early and clear policy statement from the Federal Government together with implementation strategies which provide certainty and support to affected businesses.