Paris Climate Agreement

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By Paul Davies and Michael Green

The Vice-President of the European Investment Bank, Jonathan Taylor called for “a renewed effort from the world’s financial institutions to make the Paris Agreement a reality” at the COP 22 Conference, held last month in Marrakesh.

Green finance will have an instrumental role to play in the transition of countries to a low carbon economy. Indeed, sovereign green bonds have been described by financial analysts as “the perfect financial vehicle” and “missing link” to enable signatories to finance their sustainable infrastructure.

There have been a number of notable developments in green finance in recent months, sustaining its momentum.

By Paul Davies and Michael Green

The Paris Climate Agreement (Agreement) officially enters into force today, 30 days after it was ratified by at least 55 Parties to the Convention, representing at least an estimated 55% of the total global greenhouse gas emissions.

From today, the provisions within the Agreement will be legally binding upon, and enforceable against, the signatory states. In light of this, a number of interesting obligations have been triggered, namely: (i) national climate change plans have been transformed from Intended Nationally Determined Contributions to Nationally Determined Contributions; (ii) the governing body, the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA), must be established to preside over the implementation of the Agreement; and (iii) a rule book to govern the Agreement and prescribe rules for reporting and accounting for climate change action should be produced imminently.

By Paul Davies and Michael Green

Prior to the G20 Leaders’ Summit on 4 September, China and the US ratified the Paris Climate Agreement during a ceremony in Hangzhou, China. This commitment from the world’s largest carbon dioxide emitters is expected to prompt developed nations in Europe to follow suit.

The adoption of the Paris Agreement by 195 countries is widely considered to be one of the most ambitious international environmental agreements, whereby parties committed to limiting the increase in the global average temperature to 2˚C above pre-industrial levels while striving to limit the temperature increase to 1.5˚C.

China and the US join 25 other signatories who have ratified the Paris Agreement – the majority of whom are islands particularly vulnerable to climate change, for example, the Bahamas and Nauru. With China and the US now among the signatories, it is likely to accelerate the entry into force of the Paris Agreement.