Sea levels will continue to rise if future temperature increases are not limited
Zoe Knight is Head of HSBC’s award-winning Climate Change Centre of Excellence. She answers questions on the COP 22 climate change conference taking place in Marrakech this month and how it could boost international efforts to mitigate climate change.
What is COP 22?
COP 22 is the 22nd in a series of annual conferences bringing together countries from around the world to discuss climate change. The 2016 conference is happening in Marrakech, Morocco.
Representatives from 197 nations will discuss how to work together to reduce greenhouse gas emissions and move to a low-carbon future.
The meeting in Marrakech comes one year after the Paris Agreement, a milestone commitment from governments around the world to limit temperature rises to well below 2 degrees Celsius compared with pre-industrial temperatures. The conference in Marrakech is about making that agreement work: countries will attempt to write the rules that help to translate high-level commitments into action, and make sure that the principles agreed last year can be implemented in practice.
Reducing emissions requires significant investments over many years
Was the Paris Agreement a good deal?
Securing an agreement between so many nations was an achievement. Despite their huge differences in outlook, incomes and political systems, they recognised they had a shared interest in combatting climate change and could achieve more by taking a coordinated approach.
The deal was also more ambitious than some observers had expected. A group of nations who are particularly vulnerable to the effects of climate change successfully convinced others to agree to “pursue efforts” to limit the rise to 1.5 degrees Celsius. With average temperatures already up by 1.18 degrees, that’s a stringent target.
What has happened since the Paris conference?
There is a lot of momentum behind the Paris Agreement. To enter into force, it needed 55 parties covering 55 per cent of global greenhouse gas emissions to ratify it. This happened on 4 October 2016, quicker even than what the United Nations had forecast as a best-case scenario.
There is still a long way to go, however. Meeting the aspirations in the Paris Agreement will mean major changes in the way people live, affecting everything from energy networks and transport systems to how we design cities and construct buildings. That’s easier said than done. While countries have made individual practical commitments towards the high-level goals set in the Agreement, they still fall well short of what is needed.
Zoe Knight, Head, Climate Change Centre of Excellence, HSBC
What would be a good outcome from COP 22?
For the Paris agreement to work properly it needs a clear rulebook. The more progress negotiators at COP 22 are able to make on drafting those rules, the better. This means that a lot of the debate is likely to be technical.
For example, countries have been producing reports on their greenhouse gas emissions for many years. But there is a lack of clarity on how they should report on carbon dioxide emissions in particular. So further guidance in this area would be helpful, making it easier for investors and other groups to assess whether they are living up to their ambitions.
Or take international investments. If one country makes a big investment in a windfarm in another state, both need rules on which should get the credit – not least to avoid the risk of carbon savings being counted twice.
Some non-governmental organisations (NGOs) would also like to see countries at Marrakech making new national promises to cut emissions. They think governments need to raise their level of ambition and take further practical steps if they are to succeed in keeping global temperature rises within the agreed limits.
How can banks help?
Banks have a crucial role to play as societies and economies make the transition to a low-carbon way of life. Reducing emissions requires significant investments over many years. Banks can help governments and companies raise funding to build new green infrastructure. They can also advise investors on the long-term opportunities in sectors likely to do well in a low-carbon future, as well as alerting them to the potential risks of investing in industries and sectors less likely to thrive.
This dialogue about green finance has evolved rapidly over recent years, in my view. The average level of understanding among investors has risen dramatically. Above all, I think there is a growing acceptance of the scale of the transformation that is required to make the shift to low-carbon living that governments expect.
Why the Paris Agreement matters
The countries that came together in Paris recognise that climate change is real and that human action contributes towards it. They agreed that a failure to limit future temperature rises could have serious long-term social, economic and human costs, including rising sea levels, increasing incidence of flooding and drought, and growing strain on vital resources such as agricultural land and fresh water. By taking action, countries can limit these costs.