Paris Climate Agreement to Enter into Force
The Paris Climate Agreement is on track to enter into force on November 5, 2016, following the European Union submitting ratification documents to the United Nations on October 5, 2016. The EU decision follows the ratification by both the United States and China and means that a total of 72 countries have now ratified the Agreement. These nations account for 56.75 percent of the world's greenhouse gasemissions. The Agreement's threshold requirement for entering into force required ratification by 55 countries accounting for at least 55 percent of global greenhouse gas emissions.
Accordingly, the Paris Agreement will enter into force less than 10 months after it was agreed and in time for the next COP meeting in Marrakesh in November 2016 and prior to the U.S. presidential election. Prime Minister Theresa May has also pledged to take steps to commit to the UK's implementation by the end of 2016. The Agreement itself aims to keep global temperatures rising to no more than 2 degrees Celsius compared to the pre-industrial era.
In addition, and separate to the Paris Climate Agreement, at least 200 nations met in Rwanda on October 15, 2016, and agreed to an amendment to the Montreal Protocol. Steps will be taken to cut back 80 percent of hydrofluorocarbons, or HFCs, which are used heavily in refrigeration and air conditioning. The richest industrialized countries have agreed to a 10 percent reduction by the beginning of 2019 with a ratcheting down by 2036 when they are to achieve an 80 percent cut from 2011–2013 production and consumption levels. The Agreement provides a sliding scale for developing nations with certain nations (e.g., China, Latin America, Africa) agreeing to a freeze by 2024, and other developing nations headed by India having until 2030 to comply.
France Announces National Green Bonds for 2017
On September 2, 2016, France announced that it would be the first country to issue national "green bonds" starting in 2017.
Green bonds generally finance environmental projects (e.g., solar and hydropower plants, wind farms, clean transportation, biodiversity conservation, climate change adaptation). The labeled green bonds market is expanding and should reach a volume of US$100 billion by the end of 2016.
Green bonds initially were issued by international public actors such as the European Investment Bank (2007) and the World Bank (2008). Lately, new actors in France—private banks, companies (e.g., EDF), and local public authorities (e.g., Région Ile de France)—have emerged, following the adoption of the Paris Green Bonds Statement during COP 21 in December 2015, in which major international investors encouraged governments to issue such bonds.
The French draft Budget Bill for 2017 includes a plan to finance green investments through the third "Program of Investments for the Future." The Program intends to dedicate an investment of €6 billion to sustainable development and green growth, once the Budget Bill is adopted at the end of the year.
An inter-ministerial task force will be set up to determine the criteria for a first issuance of national green bonds in 2017, subject to market conditions. Such criteria are expected to include issues such as the "green" nature, traceability, and reporting obligations of the financed projects. The task force should draw on existing standards such as the Green Bonds Principles and the French national EETC label ("Energy and ecological transition for the climate") designed to award investment funds that finance the green economy.
The French EETC label Criteria Guidelines, adopted in March 2016, clearly exclude nuclear and fossil fuels sectors from the EETC certification. They set criteria regarding the investment funds' contribution to the financing of energy transition and the transparency of their environmental characteristics. Similar conditions are expected for future national green bonds.