Last week a major environmental milestone has been reached: the Paris Agreement will enter into force. The official announcement came after the European Union voted to support the ratification the 30th of September, joining 73 countries who are responsible for 57% of the global greenhouse gas emissions. Among them are the world’s three largest emitters: China, India and the United States. This early ratification by leading countries shows urgency for governments to push for a shift towards a low-carbon economy.
When taking a closer look at the Paris Agreement, it becomes clear that the majority of work still lies ahead. Aiming to limit the global temperature rise well below 2 degrees Celsius, each country needs to set their own individual goals to reduce their emissions. So while the United States plans to reduce emissions immediately, China promises a decrease of theirs after 2030.
The Paris Agreement gives countries a general framework, but there are no consequences for not meeting set commitments. To encourage governments to reach their targets, the agreement reintroduces a market-based mechanism. So-called ITMO’s (Internationally Transferred Mitigation Outcomes) make it possible for rich countries to offset their emissions by purchasing carbon offsets from poorer countries. These cross-border transfers can spur market expansion and rally countries to set ambitious offsetting goals.
The Agreement does not only push governments to take action. It also calls on our economy as a whole. Businesses and investors are well aware of the economic opportunities that come with the transition to a low-carbon future and reducing emissions is increasingly recognized as an important agenda topic. This is a starting point to rethink our ideas about shared responsibility and tackling climate change. Once the agreement enters into force, everyone has to play their part.
Many businesses already recognize the importance to reduce emissions voluntarily. Now with the full backing from the world’s governments, there is momentum to go beyond Paris, with voluntary carbon compensation playing a key role in reaching ambitious goals. Climate projects benefit the local communities in other ways as well, like by reducing poverty, improving global health and creating economic opportunities. Reducing emissions will therefore also help in reaching the sustainable development goals (SDGs).
To support this shift towards a greener and more equitable world, we connect companies to low-carbon projects. With the help of the new framework, new interest in sustainability and tackling climate change can boost these projects. The Paris Agreement is a significant step forward, in which real actions and solutions will be seen to create a better environment for all.