The acceleration of green economy investments following the Paris Climate Agreement in 2015 is expected to create net 35 million new jobs over the next decade, a new report entitled, The Paris Effect: How the Climate Agreement is Reshaping the Global Economy, from global consultancy SYSTEMIQ on Thursday finds.
The first-of-its-kind report assessed at a sectoral level where the Paris Agreement enabled the transition to a low-carbon economy in the past five years, and how it is expected to accelerate through the 2020s.
The Paris Agreement aims to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.
Out of the 195 countries that signed the Paris Agreement, 189 countries represent 97% of global emissions.
According to the report, since the Paris Agreement was ratified on December 12, 2015, the investments and deployment in low-carbon solutions have grown further.
The report shows that while greenhouse gas emissions and global temperatures continue to rise, low-carbon progress in all sectors of the economy is accelerating.
"Declining costs of solar and wind energy make these resources better bets than fossil fuels across multiple markets while the pace of electric vehicle development has repeatedly confounded projections," the report said.
"In 2015, low-carbon technologies and business models could rarely compete with incumbent carbon solutions. Today in 2020, low-carbon solutions are competitive in sectors representing around 25% of emissions. By 2030, these solutions could be competitive in sectors representing 70% of global emissions," the study finds.
With the ratification of the Paris Agreement, the concept of "net zero" has radically changed with governments accelerating policies and laws in response to the Paris effect, according to the report.
"We know that inadequate action translates into massive and costly climate risk. The Paris Effect makes it clear that it also puts economies at risk of falling behind the next wave of the creation of prosperity," said Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics. "That wave is already gathering pace and will become a dominant force in growth and transformation over this decade. Wise policymakers and investors will aim for the opportunities, jobs, and resilience that can be delivered only through a net-zero economy."
- Companies worth $12.5 trillion have net-zero targets
After 2015, countries, cities, regions and companies accounting for over 50% of GDP now have net-zero targets while 121 countries are implementing or working on net-zero plans, the report reveals.
Over 1,500 companies worth $12.5 trillion have net-zero targets and asset owners valued at $1.5 trillion are targeting a 1.5C portfolio alignment.
However, in the years since the Paris Agreement, emissions have risen from 53 billion tons CO2 equivalent in 2015 to 55 billion tons.
"Even a severe COVID-driven contraction of the economy has barely changed this trajectory. The world is not on track to avoid dangerous, irreversible climate change. That is a key reality on which we need to act urgently and collectively. But it is not the whole story," it said in the report.
Jeremy Oppenheim, founding partner of SYSTEMIQ said the study shows that the Paris Agreement created a unifying framework for unprecedented climate action.
"We should not be misled by 2050, it will come faster than we think. With the right policy support, zero-carbon technologies and business models can outcompete old carbon-intensive industries across multiple sectors by 2030," he said, adding that smart countries, companies, investors and cities know that the balance of risk has shifted.
"They want to get ahead of the curve, benefitting from the new jobs, health and value creation opportunities, and not find themselves left behind," Oppenheim concluded.
By Nuran Erkul Kaya