More than a week has passed since 195 countries announced a climate change deal to hold global average temperatures to 2°C above pre-industrial levels, with an aspirational ceiling of 1.5°C. While the accord represents an unprecedented level of international cooperation on climate change, many in the U.S. are still trying to understand just what the parties agreed to at the 2015 United Nations Climate Change Conference and the implications back home.  

Nationally Determined Contributions  

Under the Paris Agreement, the signatories have committed to reducing economy-wide greenhouse gas (GHG) emissions in accordance with non-binding plans, referred to as “Nationally Determined Contributions.” These NDCs are the centerpiece of the agreement and more than 185 countries, including the United States, already have proposed reduction targets.  

Though not strictly enforceable, the NDCs will be made publicly available and will be subject to scrutiny. The agreement requires the parties to reassess and potentially deepen their emissions reduction targets every five years beginning in 2020. The parties have agreed to develop common accounting guidelines, including methodologies and metrics to ensure consistency, to be applied periodically to their efforts, also on a five-year basis. The Intergovernmental Panel on Climate Change (IPCC) has been further directed to prepare a report on how to achieve the 1.5°C target.  

Financial Commitments  

The agreement also includes a collective goal of providing financial assistance to developing nations for adaptation and mitigation efforts. Though not contained in the agreement itself, developed nations have made a pledge to collectively provide at least $100 billion in both public and private funds per year. The signatories are also encouraged to increase funding for the development and transfer of advanced technologies and capacity building. Countries are to report on their financing efforts every two years.  

U.S. Commitments  

For its part, the U.S. has pledged to reduce emissions up to 28% from 2005 levels by 2025. Only a quarter of this goal is expected to be met through implementation of the U.S. Environmental Protection Agency's Clean Power Plan, raising concerns among many in carbon-intense industrial sectors that additional efforts will be proposed to clamp down on GHG emissions outside the power sector. The U.S. is also expected to take a lead role in financing climate mitigation efforts in developing countries. Because it does not include binding targets, the agreement arguably does not require the advice and consent of the Senate. However, Congress does have the power to defund future efforts by the Administration to advance the goals of the climate accord.  

What Comes Next?  

High ambitions to cut global carbon emissions call for massive new investment in low-carbon technologies and renewable energy. They also call for increased scrutiny in the acquisition and future management of carbon-intense assets. Without a formal enforcement mechanism, however, much fear the Paris Agreement will become at best an empty gesture. It remains to be seen whether the transparency provisions of the accord—meant to hold developed countries publicly accountable for their stated emissions targets and their financial, technological, and capacity-building commitments to developing countries—will be effective.