Paris Agreement welcomed by Australian industry

The Paris Agreement on climate change was approved by 195 nations over the weekend, each of which has pledged to do its bit to limit global warming and prepare for its impacts.

Many aspects of the agreement were flagged in a draft version that was revealed last week, including five-yearly reviews and an ideal goal of limiting global warming to 1.5°C over pre-Industrial Revolution levels.

The agreement states that by the second half of the century, there should be a balance between the emissions from human activity, such as energy production and farming, and the amount that can be captured by carbon-absorbing 'sinks' such as forests or carbon storage technology.

Developed countries will be asked to take the lead by taking on absolute emissions cuts, while developing nations are encouraged to make emissions cuts over time. Rich countries will be required to provide funding to help these nations make the shift to green energy, as well as to defend themselves against climate change impacts like drought, storms and sea-level rises.

Foreign Minister Julie Bishop described the agreement as “an historic step in the global response to climate change… which for the first time requires all countries to take action to reduce global greenhouse gas emissions".

“The Paris Agreement provides for five-yearly reviews of national targets, underpinned by a rules-based system that will assess whether countries are meeting their commitments," Bishop said.

“It recognises and responds to the needs of the most vulnerable countries, including our island neighbours in the Pacific."

The response from Australian industry has been surprisingly positive, with Ai Group Chief Executive Innes Willox noting that the agreement gives Australia the “flexibility to design policies that match our circumstances and cut costs through access to abatement overseas".

“Critically, the agreement affirms Australia's right to purchase and include genuine emissions reductions in other countries towards Australia's targets — a vital way of containing the cost of meeting our goals," Willox said. “It also agrees to a new Sustainable Development Mechanism as one source of such traded reductions."

Willox acknowledged that there will be “more work to flesh out what was agreed in Paris", with Australia in particular said to have “a long way to go before we have stable, efficient policies that can achieve our emissions goals while maintaining and increasing our prosperity".

“But the strength and breadth of those commitments is very positive — both for addressing the risks of global climate change and for helping address industry's number one concern with climate policy: the risk that uneven international action disadvantages trade-exposed businesses, their employees and the broader economy," Willox concluded.

The final agreement can be viewed here.

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