ZEW Press Statement on COP 21: Paris Agreement Lays Foundation for Making Climate Policy a Priority

Dr. Oliver Schenker, head of the Research Department, "Environment and Resource Economics, Environmental Management" at the Centre for European Economic Research (ZEW), provides his perspective on the climate agreement achieved at the UN climate summit in Paris.

"Despite its shortcomings, the climate agreement concluded in Paris on December 12, 2015, is a milestone. For the first time, after twenty years of climate diplomacy and six years after the debacle in Copenhagen, an international climate agreement has been achieved which obliges the majority of countries, whether developing, emerging or industrialised, to limit their emissions.

There is no doubt that the emission reductions agreed to by the contracting states are still far from sufficient if the aims stated in Article 2 of the agreement are to be achieved – that is, limiting global warming to below two degrees. The agreement does, however, lay the foundations for climate policy measures to be made a priority of the international community over time. There are three points to note here.

First and foremost, the tendency to divide countries into two separate groups; developed countries which need to do something, and developing countries which don't need to do anything, has finally been overcome. In contrast to the Kyoto Protocol, the two biggest emitters of CO2, China and the US, are now also on board. This reduces the cost of national climate policy measures. The risk that the competitiveness of a national economy will be damaged and companies relocate to other countries as a result of ambitious measures has become smaller.

Second, the success of the Paris agreement will depend on whether it will be possible to monitor the measures agreed to by the contracting states. The fact that the same rules and the obligation to report now apply to all states, without differentiation being made between developing and developed countries, will make it easier to further develop these obligations in the future and to make the measures implemented by individual countries comparable within clearly defined cycles.

A third point is that ambitious climate targets will only be achieved in the long-term if the costs of climate policy are kept as low as possible. It is therefore vital that market-based instruments are explicitly mentioned in Article 6 of the agreement.

We will soon know whether the term ITMOs (Internationally Transferred Mitigation Outcomes) will have to be adopted, alongside the term INDCs (Intended Nationally Determined Contributions), into the glossary of climate diplomacy. It is important, however, to provide a framework which would allow climate measures to be implemented where they are cheapest.

More was achieved in Paris than we could realistically have expected at the beginning of the conference. From this perspective, the agreement should be considered a remarkable success. But the time window within which global energy systems must now be modified is extremely small. The Paris agreement lays a good foundation and provides the plans, but the actual building which shall protect the earth from global warming must yet be built."

For more information please contact

Dr. Oliver Schenker, Phone 0621/1235-229, E-Mail schenker@zew.de