Contrast the high emotion and tears in the plenary hall at Le Bourget when the Paris climate change deal was struck on Saturday night with the response over the next day or two from the fossil fuel industry.
“We are not too worried, to be honest. It does not change much right now,” an unnamed senior executive of a utility company owning coal assets told a Financial Times journalist.
The reasons for this coolness are twofold: the core of the deal is not legally binding upon governments; and a global carbon price is only obliquely referred to in the agreement, while the current European carbon price is too low to make a difference to investment plans. Besides, the oil industry has plenty more pressing problems.
Here is another contrast: the first speeches from the floor that were called by COP president Laurent Fabius on Saturday evening overwhelmingly applauded the deal, praising the fact that it was the first time that almost all governments of the world had reached accord on a deal to tackle climate change that seemed to have prospect of working.
It was left to the Nicaraguan representative Paul Oquist to bring everybody down.
“Based on science, it is not sufficient to reach a target of 1.5°C but leads us to 3°C of warming instead,” he told everyone with a stony face. “I want the world to sign up to a carbon budget now, and more financing from developed countries with guaranteed loss and damage compensation for vulnerable countries like Nicaragua.”
He was absolutely right. The deal is not sufficient, it is not perfect, but it was the best that could be managed.
Now for the final contrast that really struck me on the night: Gao Feng, the Chinese representative, made a speech from the floor announcing all of the measures that the Chinese government would now take as a result of the Paris Agreement, and it was impressive.
He was immediately followed by US Senator John Kerry who, of course, with an American election coming up next year and a Congress dominated by climate sceptic Republicans, could make no such promises. Instead he placed his faith in “the innovative power of American business that will lead the way forward”.
Following this speech President Obama issued a tweet crediting American leadership with securing the deal. This was hubris. In fact the credit should go to French leadership, with the French minister Laurent Fabius, having pulled out all of the diplomatic stops, being widely praised for keeping his calm and measured hand on the tiller throughout.
The agreement is probably the world’s greatest diplomatic triumph so far and one of which it should be justifiably proud.
But the French leadership could not have been possible without the help of South Africa and the spirit of Nelson Mandela – quoted by several speakers – and in particular a South African Zulu and Xhosa tribal decision-making process known as “indaba”.
Indaba was used in Durban in 2011 to break deadlocks, and involves diplomats being constrained from repeating their entrenched positions, instead being asked to talk personally and quietly about their positions and propose solutions to each other, while other delegates stand around listening and offering advice.
Last week, when faced by deadlocks and deadlines, Fabius’ response was to refine this process by splitting groups into two with specific tasks. Hostile parties spoke to each other constructively. Reports have it that this helped to break down the text and solve disagreements with extraordinary rapidity.
A West African diplomat told a journalist: “It is a very effective way to streamline negotiations and bridge differences, being participatory yet fair. It should be used more often.”
Some green groups, such as 350.org and Global Justice Now, have denounced the Paris Agreement for the same reason that Nicaragua did. James Hansen – known as “the father of climate change awareness” – called it a sham. But this is to undermine the exceptional efforts made by their own supporters that helped to push the negotiators as far as they did. It would not have succeeded without them.
Unlike the Kyoto Protocol, the Paris Agreement is something that can be worked with by everybody.
The crucial factor that will remove obstacles to its progress is an adequate level of finance.
Governments of developed countries are now encouraged by the 19-page supplement to the 12-page Paris Agreement document to set a new goal of giving over $100 billion a year to developing countries as climate finance for adaptation purposes by 2025.
This may be a problem given the current political and financial situation in countries such as the US and the UK. Since the US produces 15 per cent of the world’s greenhouse gas emissions, a way must be found around Republican opposition.
But while national governments wring their hands over being asked to spend billions, businesses are talking about spending trillions. This deal would not have been possible without big business both before and during Paris calling for an ambitious result.
The “Breakthrough Energy Coalition” includes the University of California, Bill Gates, chief executive of Amazon Jeff Bezos, Facebook’s Mark Zuckerberg and 27 other billionaire investors. It is a “network of private capital committed to building a structure… to help accelerate the change to the advanced energy future our planet needs.”
The Green Infrastructure Investment Coalition was another network launched in Paris last week with the aim of promoting investment into sustainable infrastructure. Its 13 founding members include Deutsche Bank, four Indian banks, Ceres in the USA, the European Investment Bank and the Australasian Investor Group on Climate Change. Foundation members are the Climate Bonds Initiative, the Principles for Responsible Investment, UNEP Inquiry and the International Cooperative Mutual Insurers Federation.
India’s International Solar Alliance, also announced in Paris, will attract $1 trillion for solar energy infrastructure in equatorial countries.
US multinational banks have set up their own funds: Goldman Sachs’ is worth $150 billion, Citi’s $100 billion and the Bank of America’s $125 billion.
Earlier this year, Apple, Walmart, Goldman Sachs and 10 other companies announced at the White House that they would pledge $140 billion in low carbon investments, and install 1600 megawatts of new renewable energy.
Corporate members of the World Business Council for Sustainable Development, with the IEA, have launched a Low Carbon Technology Partnerships initiative of corporate investments.
And that’s just a start.
How much would it cost, however, to meet the aspirations enshrined in the Paris Agreement? According to the International Energy Agency’s World Energy Outlook, Special Briefing for COP 21, published before the Paris talks began, which evaluated the cost of meeting the target set by 160 countries that submitted their INDCs, the bill is $13.5 trillion. But this would not meet the 1.5°C target, instead only bringing rising temperatures down to 3°C above preindustrial levels.
$13.5 trillion equates to $900 billion a year, according to Val Smith, director of corporate sustainability at Citi. Since that date, as well, a further 29 INDCs have been submitted which will push the bill up.
A reasonable estimate of the final cost might therefore be around $2 trillion a year. Yet much of this sum might be spent anyway in upgrading existing infrastructure and building new necessary infrastructure, and much of the investment will be in plant and technology that will actually save money by reducing energy and health costs.
Yet to this total we must add the cost of adaptation, which, of course, becomes less the more money is put into mitigation. And the countries that really need adaptation measures and sustainable infrastructure often do not have the wherewithal to handle big investments, such as competent local banks, legal systems and a skilled workforce.
Big investors like Goldman Sachs will only help countries on their own terms. Private finance, while key to the success of the project, will only go so far. That $100 billion a year from governments will be necessary.
Nevertheless, the Paris Agreement represents a turning point for the world. Now we now need action, and that is the theme of the next Conference of the Parties, COP22, according to its host country Morocco. This will be in eleven months, in Marrakech.