The election of Donald Trump to US president has concerned the global community in its fight to slow climate warming. But at COP22 the focus is on progress … though maybe not so much from Australia.
It has been almost one year since the Paris Agreement committed 197 global parties to limit the increase in global average temperature to well below 2°C above pre-industrial levels, and pursuing efforts to limit the increase to 1.5°C. The historic agreement, signed in April this year, set the world on a trajectory towards a low-carbon economy, seeking to reach net zero emissions by the second half of this century.
Now, 12 months later, these parties gather again in Marrakech, Morocco for the 22nd Conference of the Parties.
A key focus will be the practical implementation of the Paris Agreement. A crucial component of this will be the interaction of parties who have ratified the agreement, incorporating the instrument of international law into domestic policy, and those who, for a magnitude of reasons, have not yet done so.
Sanctioned by some of the world’s largest emitters including the US, China, Canada, India, Brazil and Saudi Arabia, the agreement now binds over two-thirds of the agreement’s 197 signatories.
Those nations that have ratified the agreement have taken significant steps to reduce their carbon footprints. Since Paris, China has invested over $US600 billion in green finance projects as they transition to a low-carbon economy, while the US’s Clean Power Plan legislates efficiency standards for American power generators. India has pledged to generate 100GW of solar electricity by the year 2022 (jeopardising planned Australian coal exports) and Saudi Arabia, the world’s largest oil exporter, is using an investment-based approach, seeking to increase the share of its national investment fund overseas holdings from five per cent to 50 per cent by 2020, thus removing the economy’s reliance on fossil fuels.
Despite Australia recently ratifying the agreement, domestic climate policy has remained stagnant since the COP in Paris.
As noted by Climate Council chief executive Amanda McKenzie, “Australia has taken no new concrete steps, legislative or otherwise, since Paris to pursue the goals of reducing our emissions or increasing renewable energy.”
Rather, the most recent action surrounding domestic climate policy has been attempts to remove or reduce institutions such as the Clean Energy Finance Corporation, the Australian Renewable Energy Agency and the National Renewable Energy Target. We can be grateful that in the absence of a Senate majority, these institutions have survived the federal government’s perceived war on renewables. While the Emissions Reduction Fund is scheduled for review in 2017, Australian businesses might be forgiven for taking climate action of their own accord in the interim.
Indeed the potential consequences of inaction are jarring. The Australian Centre for Policy Development’s recently released a legal opinion piece warning of the potential fiduciary duty of directors to consider the impact of climate change risks on their businesses. Such a duty could lead to personal liability under the Corporations Act.
The piece opined that “it is likely to be only a matter of time before we see litigation against a director who has failed to perceive, disclose or take steps in relation to a foreseeable climate-related risk”. Crucially, “reputational harm” was referenced as a potential outcome, with changing societal expectations (which had previously affected universities and super funds through the divestment movement) potentially having a wider ranging impact on Australian corporations. Imagine a world in which directors owe a fiduciary duty to guard against reputational damage should they not properly consider operational climate change risks.
This, in combination with Australia’s engagement in our truly global economy, will ensure that business as usual behaviours will have to change in order for Australian businesses to remain competitive.
The growth of mechanisms such as green bonds and the exploration of power purchasing agreements for renewable energy hints that such action is taking place. And as parties gather in Marrakech for the first COP in this post-Paris era, let’s hope they are merely the beginning of strong action, ensuring Australia plays an integral role along the pathway to a 2°C future.
Ian Lieblich is sustainability coordinator at Investa Property Group.