On December 12, the international community ended one of the most productive years of sustainability policy since 1992, when 194 countries concluded a long-term UN climate treaty known as the Paris Climate Agreement (PCA).
The Paris Climate Summit attracted 150 heads of state, including President Obama, along with more than 40,000 registered attendees and unprecedented business representatives. Combined with the UN’s new 2030 Development Agenda, the Paris agreement shows how the international community has defined an integrated multilateral framework of sustainability policy, implementation, markets and partnership that will depend on business innovation and investment, and impact companies of all sectors and sizes.
The Paris Agreement is a departure from its predecessor, the 1997 Kyoto Protocol, since it is based on national pledges that were not the subject of the negotiations. Among the agreement’s highlights:
- Establishment of an international framework for stocktaking on government actions in several areas, including mitigation, adaptation and technology cooperation. Countries are obliged to report on progress and set progressively more ambitious greenhouse gas reduction targets at five year intervals.
- Ambitious long term goals to limit mean temperature rise to 2.0 C, strive to 1.5 C, with global peaking and net carbon neutrality in the second half of the century.
- Call for public and private sources to mobilize a minimum of $100 billion per year to support climate action in developing countries, increasing after 2020.
The agreement will enter into force when 55 countries making up 55 percent of global emissions ratify it. USCIB noted several positive outcomes for business in the Paris agreement relating to technology innovation, the option to use markets for emissions reductions, and the engagement of business in near-term actions and technical inputs.
Historic Business Support and Attendance at COP21
“Business was seeking flexibility and clarity in this agreement, especially with regard to the possible use of markets at national and international levels,” said USCIB member Nick Campbell (Arkema). “We are pleased to see that the Paris Agreement does not preclude these options, and the door remains open for carbon markets to evolve among interested countries.”
USCIB members and staff, including President and CEO Peter Robinson and Vice President for Energy, Environment and Strategic International Engagement Norine Kennedy, were on the ground in Paris to advance USCIB policy priorities, hold several side meetings and presentations on U.S. business climate perspectives and demonstrate business’s stake in a successful outcome.
Prior to COP21, USCIB had strong concerns that some countries would attempt to address intellectual property in the Paris outcome as a barrier to the transfer of green technology. Thanks to sustained advocacy from USCIB and many other business organizations, the Paris Agreement does not reference IP, and underscores the need for enabling frameworks.
“Open trade and strong IP protection are central enabling conditions for innovation, stimulating investment and disseminating new greener technologies and knowledge,” said Kennedy. “Many governments continue to express interest in engaging with the private sector on climate action, and business will remain involved in the process as countries move to elaborate and implement the agreement.”
US Business Seeks A Recognized Role for the Private Sector
USCIB and the American Chamber of Commerce in France issued a joint declaration following a daylong meeting they convened on the role of U.S. companies in elaborating and implementing the Paris Climate Summit outcomes.
The declaration stated: “Until now, business groups have been viewed as ‘observers’ at these vital UN deliberations. Yet in view of all that business does and offers, that is a misnomer. We see COP21 as a pivotal opportunity to pursue institutional innovation. New challenges require new ways of working together, which can be achieved through the recognition and expansion of partnerships, dialogue and consultation between governments and the private sector.”
The two business groups stated that a recognized business consultative relationship would provide both long-term and short-term benefits, helping governments prioritize policies to address climate change, while allowing companies to better invest in cleaner technologies and solutions. This interface could provide national governments and the UN secretariat with detailed technical guidance on a range of matters, including implementation of the Intended Nationally Determined Contributions (INDCs) at the national and international levels.
In addition, USCIB represented U.S. business at the Business Climate Summit, a CEO level event organized by MEDEF, the pre-eminent French business group, in the second week of the Paris Climate Summit. Its conclusions also called for recognized dialogue with business as a necessary next step after COP21.
Further UN climate discussions beginning in 2016 will be needed to elaborate the agreement. Addressing the follow-up that will be required, USCIB’s Robinson stated: “Our takeaway from Paris is that the UN needs business. A solid working relationship between business and the UN system will be the catalyst for effective implementation. To be sure, business needs the UN Climate Agreement – but more importantly, the UN needs business.”
Taking Stock: USCIB’s Campaign2015 Initiative
In early 2015, USCIB launched a dedicated advocacy and outreach initiative to bring the voice of U.S. business into the multiple UN deliberations on sustainability which played out in 2015.
Campaign 2015’s objectives were to:
Represent U.S. business interests in real time – USCIB leadership and staff was able to travel to ensure U.S. business was at the table to inform the policy debate with persuasive and unique content
Champion and amplify USCIB messages, and communicate to influential audiences – USCIB held several dedicated meetings in Paris, New York, Washington, D.C. and Tokyo to voice positions, stimulate dialogue and advance USCIB visibility.
Promote opportunities and enabling frameworks for business investment, action, collaboration and innovation, utilizing USCIB’s Business for 2030 website as a platform for recommendations and USCIB member achievements.
Looking ahead to 2016, we expect to see a shift of UN discussions towards elaboration, implementation and tracking. The private sector will be a central participant, and there will be many opportunities for the U.S. business community to contribute to these global endeavors with the right enabling frameworks, and with recognized options for business involvement.
As it determines how to build on Campaign 2015, USCIB will:
- Assess specific tasks and opportunities assigned to business by the UN 2030 Development Agenda and SDGs in New York and through the UNFCCC
- Build on USCIB’s Business for 2030 website to continue to collect examples of business action, and offer additional resources for partnerships
- Identify opportunities to continue the dialogue and demonstrate the value of business engagement in forthcoming policy deliberations.