What is the Paris Outcome
21st Conference of the Parties (COP21) produced an agreement likely shaping our world over the coming decades in terms of economy, energy consumption pattern, and environment.
- Economy: The economic measure will help to shape the both global and regional economy through two ways: strengthening support to developing nations and refining the cities and provinces to companies and investors aligning including green stock markets and funds. According to UNFCCC, governments will devote greater efforts in supporting developing countries to build their own clean, climate-resilient futures, and a clear roadmap on climate finance is showed to ratchet up to USD 100 billion by 2020.
- Energy consumption pattern: Since fossil fuels on which most of the countries are heavily relying are major sources contributing to Green House Gases (GHGs) emissions, countries support expanded use of renewable energy sources. According to EIA, renewable energy becomes the fastest-growing energy source at a rate of 2.6%/year, and it is expected to increase in 30 year (Figure 1).
- Environment: The primary effect by the Paris Agreement on environment is CO2 emission which is linked to global temperature, sea level, and a series of environmental factors. According to analysis on CO2 emissions by International Energy Agency (IEA) (2016), global emissions of CO2 remained essentially flat at 32.1 billion tonnes since 2013 (Figure 2). Based on this trend, global CO2 emission reaches a peak and it is expected to decrease in the future.
Challenges faced by Paris Agreement
Notwithstanding 195 countries agree to abate the climate change by controlling the CO2 emission, it is hard to clarify the responsibility of each country in coping with the climate change. Admittedly, the developed countries such as the U.S., German, and France should take more responsibility in cutting CO2 emissions since they had accumulatively emitted bigger amounts of GHGs than developing countries. However, the responsibility varies as the globally economical construction changes. According to report conducted by Chinese Academic of Social Science (CASS) (2015), with a transfer of large scale of low-end manufacturing from developed to developing countries, the share of developing economies in world output increased from 19% in 2000 to more than 37% by 2015. In this case, developed countries become conservative in willingness of funding, action to cut emission and international trading, resulting in a higher demand to developing countries in terms of cutting emissions. However developing countries may not have a higher willingness to contribute more in cutting emissions, which may lead the COP21 agenda to an impasse.
Regional effects in Hong Kong (HK), China
The UNFCCC was extended to HK as a part of the People’s Republic of China. HK is obliged to play a part to fulfill the obligations imposed upon China. Basically, the Paris Agreement impacts HK in a top-down effect from government to private sector. According to Hong Kong Climate Change Report conducted by Environment Bureau, HK is planning to fulfill its obligations through cutting CO2 emission, adapting to climate change and strengthen climate change resilience. It is worth to mention that HK launched a Carbon Footprint Repository for Listed Companies in Hong Kong, which enables listed companies to disclose their carbon footprints as a result of their business operations and share successful stories on carbon management and practices (Figure 3).