US President Barack Obama has told world leaders to "show business and investors that the world is on a pathway to a low carbon future".

Having arrived in the midst of heightened European security, Conference of Parties attendees in Paris were unsure what to expect from a city so recently rocked by shocking violence. By measure of a resilient city, attendees have been met by an overwhelming sense of hope that world leaders will reach a global consensus on tackling climate change.

This quiet confidence is built on the requirement for countries to submit their own Intended Nationally Determined Contributions prior to the commencement of the conference, a notion which was absent at 2009’s COP in Copenhagen, and within the Kyoto Protocol.

This has been an exercise of transparency and trust building, enabling an agreement of pledges to be built from the ground up, rather than imposing emissions reduction targets on reluctant parties. As summarised eloquently by US President Barack Obama during his opening statement on Monday, the Paris Agreement provides parties with “targets, which are not set for each of us, but by each of us”.

On a local front, the emissions reduction targets the Turnbull Government delivered to Paris will form the foundation of Australia’s participation when formal negotiations begin this week. While the numerical reductions targets attracted criticism from the federal opposition, as well as a vast array of environmental NGOs, the overarching premise of the contribution is positive, promising action consistent with the rest of the developed world.

Crucially, Australia’s INDC acknowledges the need for an “economy-wide” approach, reflective of the trend across developed parties, with an “absolute emissions reduction” target set to affect the national economy.

Canada, for example, a country with comparable natural resources and economic outlook to Australia, states that “reaching an ambitious target will require new policies in additional sectors and coordinated continental action in integrated sectors”. This approach is shared by the US, which also committed to “economy-wide change” as a cornerstone of its INDC submission. These continuous references to “responsible sector-by-sector regulatory approaches” reflect the extensive economic reach that any agreement will have on the global economy.

The reality is that what is being negotiated in Paris is not merely an environmental issue, but one that will transcend the few sectors the Australian INDC names (specifically: energy, industrial processes, agriculture, land use and waste). Indeed, the Paris Conference marks the formal departure from the notion that the environment and the economy operate as separate entities. This sentiment was echoed by Prime Minister Malcolm Turnbull who announced that Australia’s commitments are “good for the environment, good for the economy and good for jobs”.

This conscious reframing is reflected in the recently released Draft Agreement Text, which forms the basis of negotiations. The text makes repeated references to leveraging and attracting private sector investments and promoting access to public sector technology.

Indeed, the text explicitly invites industry to “scale up their efforts and support further actions by parties (the state actors) to reduce emissions and build resilience to the adverse effects of climate change”.

One of the few outcomes of last year’s COP held in Lima was the formalisation of this partnership with the private sector through the creation of the Non-State Actor Zone for Climate Action. NAZCA calls for commitments on climate action by companies, cities and investors alike, attracting over 10,000 global contributions to date, including many from within the Australian property sector.

While the scope and coverage outlined in Australia’s INDC does not explicitly call out the property industry, its involvement with the energy and industrial sectors leaves little doubt that the sector will feel the effects of the Paris negotiations. The INDC’s call that the Paris Agreement contain accounting provisions “recognising emissions reductions from all sectors” leaves little doubt that the Australian property sector’s performance will be included in Australia’s commitments under any agreement reached.

Australia’s repeated excellent performance within indices such as GRESB highlights the way private enterprise has transcended the oscillating federal politics emanating from Canberra. Despite policy fluctuations, the Australian property sector has continued to lead the way, showcasing the importance of climate change leadership in this new millennium.

There can be no doubt that the outcome of the Paris negotiations will bear across all sectors. And as the negotiations begin formally, it is worth returning to President Barrack Obama’s opening statement, which urged the world’s leaders to “show business and investors that the world is on a pathway to a low carbon future”.

It is just as crucial that business and investors meet governments on that pathway.

Key messages:

  • Paris is hopeful
  • Global economic reform is necessary to address climate change
  • A call to action to the private sector
  • The impact of Paris will be felt by the property sector

Ian Lieblich is sustainability coordinator at Investa Property Group

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