A climate opportunity for all

We are in the midst of an important international event. In Paris, the world has come together to agree on a landmark global deal on climate change. This can only be achieved through a collective effort and the true determination of all countries. Already, over 165 countries covering more than 90 percent of global emissions have submitted contributions to the deal, outlining their emission reduction targets. These contributions have come not just from some of the biggest emitters - including the EU, Korea, the U.S. and China - but also from some of the most vulnerable countries in Africa, the Caribbean and the Pacific.

The political will at the highest level for a deal is evident, and major economies are showing unprecedented commitment. The EU and Member States were among the first parties to submit their pledge to cut greenhouse gas emissions by at least 40 percent by 2030 compared to 1990 levels. The EU’s ambitious targets are reinforced by an EU-wide binding target for renewable energy of at least 27 percent and an energy efficiency target of at least 27 percent.

President Barack Obama’s recent launch of the “Clean Power Plan” provided more important momentum to the negotiations, showing the U.S.’s willingness to deliver emission reductions and take further action beyond 2025. China has announced it will take a broad range of measures and peak emissions by 2030 or earlier and reduce emissions intensity by 60-65 percent from 2005 levels by 2030. Korea pledged to reduce its greenhouse gas emissions from 30 percent in 2020 to 37 percent by 2030 against business as usual levels.

But there is still a long way to go, and the sum of all countries’ commitments is not yet enough to put us on the path to a safe and stable climate. The pledges put forward in Paris need to be a baseline, and the deal will need to include a mechanism to increase ambition over time.

The deal also needs to send a long-term signal of global commitment to shift to low carbon, so as to provide businesses with certainty to unleash markets and help deliver climate action at the lowest cost. An agreement that works for business will be one that is built to last - to the middle of this century and beyond - because that is the time scale that convinces investors.

Some in industry and business continue to express concerns that strong climate action and ambitious emissions reduction targets will negatively impact competitiveness and be detrimental to the economy. But globally, such voices are becoming fewer in number as it becomes increasingly clear that there need not be a trade-offs between the move to a low-carbon economy and economic growth. Already, global economic growth and CO2 emissions are beginning to be decoupled. In the EU for example, between 1990 and 2012, GDP grew by 45 percent while total greenhouse gas emissions fell by 19 percent. There is also growing evidence that emissions reductions do not undermine profitability but rather can enhance it.

The transition to low-carbon economies, with all the technological innovation it will imply, will also be a source of opportunities for the private sector. The generalization of carbon pricing will indeed trigger the development of many sectors of the green economy, such as renewable energies, energy efficiency or low-carbon urban transportation, thus creating new sources of growth.

The EU has reaped huge benefits from moving first and moving quickly to pursue a low-carbon pathway. Flagship policies such as the EU Emissions Trading Scheme have not only delivered cost-effective emissions reductions but also stimulated investment in the low-carbon sector so that now the EU has a 22 percent share of the global low carbon market. Currently it is worth around 5 trillion euros ($5.5 trillion) and growing at 4-5 percent per year. By 2030, alternative energy industries alone could support up to 20 million jobs worldwide. Carbon pricing is now firmly on the agenda in many boardrooms.

The Paris Conference is not the end of the road. But it is a defining moment in global efforts to tackle one of the greatest threats to our prosperity and security. A strong deal with a long-term goal that provides certainty for business, investors and societies will benefit everyone. And we all need to play a role in securing and delivering it.

* The author is the Head of the Delegation of the European Union, and the text has been prepared in agreement with Heads of Mission of the EU Member States in the Republic of Korea.

by Gerhard Sabathil