What will success at the Paris climate talks look like?

This article is published in collaboration with Chatham House.

This December, countries will gather in Paris to hammer out a global agreement to limit climate change at the United Nations Framework Convention on Climate Change’s 21st session of the Conference of the Parties. The last attempt to do so ended in acrimony and recrimination; Copenhagen has gone down in history as a failure. Six years on, should we expect things to be different in Paris? I would argue yes for two reasons; one encouraging, the other less so.

Improved conditions for a deal

The costs of a low-carbon pathway are falling, while the benefits are becoming increasingly clear. Since Copenhagen, the costs(opens in new window) of renewable energy technologies have continued to fall precipitously—by around 75 per cent for solar photovoltaic cells and 30 per cent for wind turbines. Renewables are now the second largest source of electricity worldwide and are competitive with fossil fuels in a growing number of geographies. Although coal remains the largest and cheapest source of power, it kills; the costs of premature deaths from exposure to outdoor air pollution can approach, or even exceed, 10 per cent(opens in new window) of gross domestic product in high-carbon emitting countries. The local benefits of low-carbon technologies, in terms of cleaner air, fewer deaths, less illness, and higher productivity are increasingly clear. There is growing evidence that the transition to a low-carbon economy is well underway and that economic growth and carbon emissions are decoupling: 2014 was the first year of global economic growth without growth in energy emissions.

Perhaps most crucially for Paris’s prospects, there is closer alignment between the United States and China as indicated by their joint announcements on climate change in 2014 and 2015; this signals political appetite for a deal between the world’s two largest emitters that was not evident at Copenhagen.

Lower ambition, better odds

Some of the improved prospects are clearly the result of changes in the wider economic and political context. However it is also the case that prospects for agreement have improved as ambition for the strength of any deal has declined. Before Copenhagen, the aspiration was for countries to negotiate legally binding emissions reductions within the context of an aggregate ‘top-down’ target. Since then, negotiations have moved towards a softer, ‘bottom-up’ framework in which countries make nonbinding, nonstandardized pledges of any kind they wish. This shift is reflected in the official terminology for these pledges: intended (i.e. nonbinding) nationally determined (i.e. not top-down) contributions (i.e. not commitments), or INDCs for short. While there is still expectation that countries in Paris will agree (or agree to agree) to some kind of legal instrument, it is not expected that the INDCs themselves will be legally binding.

Essentially, negotiations have traded architectural integrity for political feasibility: the softer, looser framework now being negotiated is more palatable to key parties, particularly the United States and China, thereby improving the chances of an agreement. Unlike at Copenhagen, the INDCs have been submitted in advance of Paris, potentially simplifying the negotiating dynamics. The problem is that they do not add up to a total consistent with the globally agreed goal of keeping warming below two degrees Celsius: the guardrail above which climate change becomes very dangerous. This should not be surprising, of course—it would be naive to suppose that the world’s largest collective action problem will be solved through individual action, which is essentially what the bottom-up INDC approach attempts to do.

Raising ambition, closing the gap

To avoid ‘locking in’ insufficient contributions, negotiations will have to continue after Paris to raise ambition and close the ’emissions gap’ between what is pledged and what is required. The problem is that the gap looks like it will be very large, signalling low collective ambition and throwing into question the credibility of any stated aspiration to close it.

The INDCs pledged for Paris look set to reduce global emissions by about six gigatons of carbon dioxide equivalent(opens in new window) (Gt CO2e) from where current policies suggest they would be in 2030. For a good chance of keeping warming below two degrees Celsius, emissions will need to be cut by around 16 Gt CO2e more—about the same as the current emissions of the United States and China combined. Relative to existing policies, ambition will need to more than triple if the emissions gap is to be closed.

The leading proposal(opens in new window) for how to close the gap is for countries to submit new INDCs every five years that are more ambitious than the last, leading to a regular ‘ratcheting up’ of effort and incremental narrowing of the gap. The logic is that processes of learning, innovation, and deployment will steadily reduce the cost of a low-carbon pathway, making it politically easier for governments to increase their pledges over time. This should in turn drive faster progress towards a low-carbon economy, creating virtuous ‘cycles of improvement’. The problem is that, so far at least, government ambition has lagged behind technological progress. While low-carbon technologies have made dramatic progress since Copenhagen, the INDCs indicate government ambition has increased more modestly.

What would a robust ratchet mechanism look like?

The apparently weak feedback from technological improvement to political ambition and the size of the emissions gap both underline the need for a strong process to ratchet up ambition. Ideally, the Paris agreement would include an explicit recognition of the scale of the emissions gap (and therefore the extent to which ambition must be increased) and a requirement that each country commit to submitting increasingly ambitious INDCs. An independent scientific analysis for each review point based on the latest science and emissions data would allow governments and civil society to monitor progress toward closing the gap. The process could be further strengthened through the inclusion of an analysis that allocates the emissions reductions needed between countries, based on a set of predefined equity criteria. This would provide a common basis on which to scrutinize and assess pledges, increasing accountability and making it harder for unambitious countries to ‘free ride’ on the efforts of others. It would, however, almost certainly be resisted by many governments due to its ‘top-down’ nature.

Of crucial importance is the question of when a ratchet process would begin. Current proposals for a so-called ‘stock take’ in 2023 or 2024, when countries would presumably first review the emissions gap, would not see governments table more ambitious INDCs until 2025, a decade after Paris. By then global emissions will need to have peaked for a decent chance of keeping global warming below two degrees Celsius. This would be much too late.

An earlier ratchet process is therefore crucial to a successful Paris outcome. Ideally the first review would occur in the next few years, with a first upward revision of INDCs in 2020, when the Paris agreement is implemented. Few governments have any appetite for raising ambition again so soon after Paris, however. Securing a strong, frequent and early ratchet process will be a challenging, but critical, objective for progressive countries.

A long-term goal?

Considerable momentum has emerged around the idea of a long-term decarbonization goal, which could send a strong signal about the future course of the global economy, facilitating long-term planning and low-carbon investment, and providing a reference point for subsequent five-year cycles to increase INDC ambition. In their 2015 declaration, the Group of Seven leaders recognized the need to decarbonize the global economy within the second half of the century. This was mirrored in a joint statement from Germany and Brazil, showing that this is not only a developed-country aspiration. Might such a target make it into the Paris agreement? Possibly, though the devil will be in the detail. The recent US-China announcement avoided saying anything concrete about emissions reductions (how much, by when) when it recognized the need for ‘global low-carbon transformation during the course of this century’. This suggests China’s position has not changed since Copenhagen, when it insisted on striking a long-term global emissions goal from the text.

Although a long-term goal would be a welcome outcome from Paris, it cannot credibly substitute for near-term targets to which governments can be held accountable. The corollary of this is that a long-term goal itself is only credible if the INDCs indicate a plausible chance of meeting it. This is currently not the case: the INDCs imply higher emissions in 2030 than today, which is patently not consistent with any plausible pathway to eliminate emissions during the second half of the century. A long-term goal can only be as credible as any mechanism to raise the ambition of INDCs.

The question is not whether Paris will deliver a deal. It will. Nor is the question whether Paris will secure sufficient commitments to limit global temperature rises to below two degrees Celsius. It won’t. The real question is whether Paris can agree a credible mechanism to deliver an early, material increase in ambition that keeps the two degrees Celsius goal alive.

Publication does not imply endorsement of views by the World Economic Forum.

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Author: Rob Bailey is the director of the Energy, Environment and Resources Department.

Image: Splinters of ice peel off from one of the sides of a glacier. REUTERS/Andres Forza.