Considered perhaps a long-overdue healing but not a cure, the historic Paris Accord at least half-opens a shut door to a global low-carbon future. It's an apt Christmas Gift to the Planet. It's a clear signal to both developed and developing nations alike that more of the same is no option. As one of the slogans says, there is NO PLANET B.
The Paris Accord is legally binding on all 195 signatories (subject to ratification). However, it is based on differentiated Intended Nationally Determined Contributions (INDC) of which enforcement is no more than naming and shaming. Now all the Parties have committed themselves to this regime.
President Obama ably summarized America's leadership in this global trajectory. He mentioned the US historic agreement with China at the outset which helped bridge differences between developed and developing countries. As a result, there were already 128 INDCs on the eve of COP21. Now, there are 186 INDCs.
China taking a leading role at COP21 is informed by the nation's imperative of striving for green growth. Indeed, the momentum driving the positive outcome would not have happened without China coming on board, according to the New York Times.
Above all, geopolitics and geo-economics will never be the same again. Good news for green energy countries and businesses. Bad news for oil and gas "hegemons". The latter include countries like Saudi Arabia and Russia. A preliminary analysis in the New York Times shows how.
The game-changing dynamics are examined in detail in a Baker & McKenzie 26-page Overview in January, 2016, including "internationally transferred mitigation outcomes" (ITMO), Reducing Emissions from Deforestation and Forest Degradation (REDD+) with forest conservation, Climate Finance, Adaptation, Technology Transfer, Capacity Building, and Implementation.
Download Baker & McKenzie Report COP21 Overview
The report throws light on the confusing question on the extent to which the Paris Agreement is legally binding. The following extract is instructive -
"The reason for this confusion is that the NDCs, the substantive plans on how countries will achieve the well-below 2°C target, are not part of the Agreement themselves (instead they are submitted to a UNFCCC registry). The only aspects of Agreement which compel a state party to action (i.e. those articles denoted by the word "shall" rather than "should") are those which relate to obligations to share their NDCs at 5 year intervals for inclusion in a public registry. Additionally, developed countries are bound to provide climate finance to support developing countries and report on that finance every two years. Aside from these procedural points, there are no hard obligations on the Parties".
But legally binding or not, the momentum behind the Nationally Determined Contributions (NDCs) has created a global irreversible trend towards cleaner and greener world. The tectonic shifts will manifest themselves in the fossil fuel sector, as noted in the McKenzie Overview -
"The point was very clearly made at the COP by the Bank of England Governor who stated that under a 2°C carbon goal the "vast majority of reserves" of oil, gas and coal would become stranded. Indeed, measures such as the proposed OECD limitation on export financing for new coal assets would deal a significant blow to the coal sector. The Paris Agreement has simply reinforced this trend with post COP in share price The Paris Agreement movements downwards and upwards for fossil fuel and clean energy stocks respectively."
The Age of Oil is doomed to end sooner rather than later. After all, the Age of Stone ended, not for lack of stones.
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