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The Paris Accord: From agreement to implementation

Submitted by on 30 Mar 2016 – 11:20

The COP21 has brought us the much-needed global commitment to tackle climate change. It’s now time to deliver on these commitments. Gabriela Ramos, Special Counsellor to the Secretary General, Chief of Staff and Sherpa, OECD, discusses everything from agreement to implementation

Gabriel RamosThe Paris Agreement at COP21 marks a decisive turning point in our response to climate change. Under the guidance of its President, Minister Fabius, the COP21 upheld a transparent and inclusive process for all Parties, resulting in 195 countries agreeing to strive for an ambitious temperature goal “well below” 2°C, with efforts to limit the global temperature increase to 1.5°C.

The successful outcome of the Paris Agreement would not have been possible without all the preparatory groundwork carried out by the French and Peruvian Presidencies, by the UNFCCC and other key stakeholders. The momentum was reinforced by strong support from Heads of State early in the COP, and boosted by society as well as the enthusiasm of business leaders to move ahead with market-based actions, such as putting a price on carbon, accelerating the phasing out of fossil fuel subsidies, and ramping up investment in clean energy.

The Paris Agreement includes several milestones for when and how this is to be achieved and each country must spell out a credible roadmap for action. The agreed support to be provided by developed countries will be paramount; while a framework to track progress for all countries, but “with built-in flexibility that takes into account Parties’ different capacities” will help enhance transparency.

Nationally Determined Contributions (NDCs) to 2025 or 2030 will be formalised with the ratification of a 5-year review cycle and facilitative dialogue in 2018. This will be a key mechanism for attempting to make bottom-up NDCs consistent with the long-term goal, while support will need to be provided to developing country Parties for implementation. All Parties are meant to report regularly on emissions and progress toward NDCs, adaptation actions, and on means of implementation, for example, finance, technology, and capacity building.

The OECD worked on several fronts leading up to and at the COP to support the negotiations and provide targeted assistance to the COP Presidencies of France and Peru. We put a great effort to prepare an up-to-date estimate of climate finance in the context of the commitment by developed countries to mobilise 100bn US Dollars per year by 2020. In 2015, the OECD report on climate finance, in a difficult field was referred by many as a defining contribution in the climate effort.

It was presented to Sherpas and Finance Ministers in Lima and I personally travelled to Bonne to discuss it with participants in the climate discussions. In addition, the G20 Climate finance Study Group mandated the OECD in 2015, to work on both an adaptation toolkit, in order to help policy makers in DC navigate and seize opportunities for accessing finance for adaptation; as well as on an inventory of existing climate funds.

This work has helped to increase transparency on methodological and data issues involved in making such estimates. Counting climate finance remains a contentious area, but it is vitally important to achieving our goals. In addition, following on from the work on “Climate change mitigation: policies and progress”, the OECD’s data and policy analysis is well-placed to underpin implementation efforts. While agreements may make the headlines, it is effective implementation that makes the difference.

Strong and coherent domestic policy is essential to drive the changes we need. Building further on our work conducted in 2015 on “Aligning Policies for a Low-Carbon Economy,” the OECD can support cost-effective action and policy alignment to implement countries’ own emissions reduction commitments and adaptation actions. We strongly encourage countries to conduct their own diagnosis of policy misalignments and strike the balance between multiple policy objectives. This can help to pave the way for governments to envision a more coherent way in their policy-design by involving multiple portfolios such as the SDGs.

The world can keep growing and emit less CO2, while at the same time enjoying cleaner air, better cities and reduce the risks to the natural systems on whose services we all depend. The recent OECD report on “The Economic Consequences of Climate Change” projected that with no further action the combined effect of selected impacts on global annual GDP are projected to rise over time to likely levels of 1.0% to 3.3% by 2060. These levels are expected to reach up to 6% in Africa, South Asia, South East Asia. (1)

Looking ahead, we need to try our best to craft new approaches to meeting the complex, cross-cutting challenges facing the world economy. The OECD’s New Approaches to Economic Challenges (NAEC) initiative – launched in 2012, and that I am proud to oversee– has spurred us to take a closer look at the green growth-productivity growth axis, a process which started under the OECD’s Green Growth Strategy in 2011.
NAEC has played an important part in expanding traditional growth models by focussing on different non-income dimensions (including environment) and distributional implications. We have extended our modelling capabilities to assess the stringency of environmental policies and the potential burdens that such policies might impose – overall, they don’t. In the years ahead, measurement and quantification will remain critical for tracking progress towards economic growth that is less energy and materials-intensive.

Governments have a central role to play in mobilising private investment in renewable energy. G20 countries host 80% of existing renewable power capacity around the world. The IEA estimates that annual renewable energy investment would need to increase from USD 270 billion in 2014 to around USD 400 billion in 2030 to peak global energy-related emissions by 2020. (2)

Recent OECD work presented at COP21 focuses on green investment banks and green bonds, which have the potential to provide low cost, long-term sources of debt capital needed by infrastructure projects. For example, the issuances of green bonds trebled in 2014 to around USD 37 billion and grew further in 2015. (3)

Ultimately, we must invest in reducing emissions and adapt to the climate change that is already locked-in. Even a world that is 2°C warmer will require costly adaptation, and there will be some residual effects that we will have to cope with.

The Paris Agreement brought us the much-needed global commitment to tackle climate change. We now need to deliver on these commitments. Experience has shown us that for developed and developing nations alike, the uncertainty of climate risks can wreak havoc – with the most vulnerable often being on the frontlines. Let’s ensure that policies are proactively geared towards a low-carbon and climate-resilient world

1. OECD, The Economic Consequences of Climate Change, 2015
2. IEA, Energy and Climate Change, World Energy Outlook Special Report, 2015
3. IEA, 2015, World Energy Outlook Special Report: Energy and Climate Change, OECD/IEA Publishing, Paris