ANALYSIS: The Significance of the Paris Agreement

South Africa’s commitment to the Paris Agreement on climate change will require collaboration between government and business to achieve its stated carbon reduction goals

There has been tremendous progress in South Africa in responding to the Paris Agreement on climate change that was the key output of the Conference of Parties (COP21) held in Paris in 2015. The commitment to the agreement by South Africa has resulted in the country now needing to achieve a 42% reduction of its carbon emissions over ‘business as usual’ by 2025.

The agreement is a treaty under international law, but only certain provisions are legally binding, namely those expressed as ‘shall’. The COP21 decision takes effect immediately and serves to ‘get the ball rolling’ by clarifying the implementation details of the agreement as well as the actions and/or processes that need to be implemented prior to the Agreement taking effect. The agreement will only enter into force when the following two conditions have been satisfied: The agreement is ratified by 55 parties to the Convention, which account for at least 55% of global greenhouse gas (GHG) emissions.

The agreement was founded upon a broad base of principles, the most fundamental of which is its grounding in the broader sustainability context – a common concern for humankind. The agreement recognises that climate change represents an urgent and potentially irreversible threat to human societies and that the widest possible cooperation by all countries is required to mobilise stronger and more ambitious climate action in order to accelerate the reduction of GHG emissions. Key to the agreement is the principle of equity and common, but differentiated, responsibilities. This principle applies to the differing requirements placed on developed and developing country parties.

The long-term goals of the agreement are:

  • Holding temperature increases to ‘well below 2 °C above pre-industrial levels’ and further pursuing efforts to limit temperature increases to 1,5 °C above pre-industrial levels.
  • Increasing countries’ ability to adapt to the effects of climate change and to foster climate resilience.
  • Encouraging low GHG emissions development that does not compromise food production.
  • Making finance flows consistent with a pathway towards low GHG emissions and climate resilient development.
  • Reaching a peak in GHG emissions ‘as soon as possible’ while recognising that the timeframes for achieving this will differ between developed and developing countries.
  • Achieving carbon neutrality from 2050 onwards.

The key outcomes that arise from the agreement are:

  • Intended Nationally Determined Contributions (INDCs):  INDCs are public declarations in which countries outline their commitment to reduce their GHG emissions as well as the climate actions they intend to implement. The agreement establishes binding commitments to make INDCs and to pursue domestic measures aimed at achieving them. All parties are required to review and submit new INDCs every five years, with the clear expectation that the new INDCs will represent a progression beyond previous ones.
  • Developed versus developing countries: The agreement ends the strict differentiation between developed and developing country parties; establishing a common framework that commits all parties to put forward their best efforts and to strengthen those efforts in the years ahead. However, developed country parties are required to support the efforts of developing country parties, particularly through the provision of ‘climate finance’. Developing country parties are encouraged to make voluntary financial contributions to support other developing country parties.
  • Commitment to finance: The agreement extends the current goal of mobilising $100 billion per year through to 2025. A new, higher goal is to be set for the period after 2025. The contribution towards this goal by developed country parties is binding while the contribution by developing countries is voluntary. The finance will primarily be used to enhance the implementation of policies, strategies, regulations, action plans, and mitigation and adaptation climate change actions in developing countries.
  • Transparency and accountability: With the establishment of a transparency framework (to be negotiated in 2018), it is evident that reporting and accountability are important components of the agreement. Although parties are not legally bound to achieving their stated INDCs, the agreement commits all parties to reporting regularly on their emissions and progress made towards achieving their INDCs. Parties will be required to submit reports at least every two years. Additionally, the INDC progress and reporting of all Parties will be subject to an expert review. The first global stocktake will take place in 2018 and the five-year measuring and reporting cycle will start in 2020. The purpose of the global stocktake is to assess the collective progress towards meeting the goals of the agreement.

South Africa submitted their Intended Nationally Determined Contributions (INDCs) on 25 September 2015. The commitment made is that South Africa’s emissions by 2025 and 2030 will be in a range of between 398 and 614 MT CO2e. Achieving this will require collaboration between national government, local government and business. South Africa’s response is guided by to objectives outlined in the National Climate Change Response White Paper (NCCRP) issued in 2011. The objectives that will guide the country include:

  • To effectively manage inevitable climate change impacts through interventions that build and sustain South Africa’s social, economic and environmental resilience and emergency response capacity.
  • To make a fair contribution to the global effort to stabilise greenhouse gas (GHG) concentrations in the atmosphere at a level that avoids dangerous anthropogenic interference with the climate system within a timeframe that enables economic, social and environmental development to proceed in a sustainable manner.

The strategy to deliver on these two objectives is contained in the INDCs. They also recognise the need to ensure that any strategy has to respond to the priorities in South Africa of eliminating poverty and inequality; creating decent employment which leads to sustainable economic development; improve basic education, health and social welfare; and enable access to food, shelter and modern energy services.

The NCCRP is quite clear that any mitigation and/or adaptation activities need to consider the above four priorities in the implementation of various programmes and projects.

The adaptation goals include:

  • Develop a National Adaptation Plan and begin operationalisation as part of the NCCRP for the period through to 2030.
  • Take into account climate considerations in national development, sub-national and sector policy frameworks through to 2030.
  • Build the necessary institutional capacity for climate change response planning and implementation through to 2030.
  • Develop an early warning, vulnerability and adaptation monitoring system for key climate vulnerable sectors and geographic areas through to 2030 and reporting of the National Adaptation Plan with rolling five-year implementation periods.
  • Develop a vulnerability assessment and adaptation needs framework by 2020 to support a continuous presentation of adaptation needs.
  • Communicate past investments in adaptation for education and awareness as well as for international recognition.

The mitigation goals include:

  • The principle that the country will shift from a ‘deviation from business-as-normal’ commitment to a ‘peak, plateau and decline GHG emissions trajectory’.
  • Time frames for the implementation of policy instruments under development that include a carbon tax, desired emission reduction outcomes (DEROs), company-level carbon budgets, as well as regulatory standards and controls for specifically identified GHG pollutants and emitters.
  • The scope and coverage that will be economy wide for all sectors and with a material focus on three GHGs: carbon dioxide, methane and nitrous oxide. The major categories identified include: energy; industrial processes and production (IPPU); waste; and AFOLU (agriculture, forestry and other land use).
  • Planning processes, assumptions and methodologies based on the national climate policy (NCCRP) and the National Development Plan (NDP) and will be given effect to through energy, industrial and other plans and legislation.
  • Determining that the South African contribution is an ambitious and fair effort to carbon reduction with a focus on ensuring that it takes into account the national context.

The Department of Environmental Affairs (DEA) issued three draft regulations relating to the implementation of the carbon reporting requirements. These include the regulation relating to the guidelines on how to compute and report on carbon emissions, the six gases and 15 processes that are required to be reported on (pollution prevention plans to be submitted to the DEA) and the carbon offset regulation.

The National Treasury also issued the draft carbon tax bill that provides the approach for the levying of a carbon tax.

In response to these new regulations affected companies have been submitting pollution prevention plans for approval by the DEA.

These plans will enable the company to receive a carbon budget allowance. The plans will give the company and the DEA more certainty on where the carbon reductions will come from. However, it is essential that all companies begin the process of ensuring that they are able to report accurate carbon emission numbers because of the likely implementation of the carbon tax.

The overriding principles that form the basis for South Africa’s commitment to reducing global carbon emissions of equity, responsibility, capability and sustainable development are central to all activities being undertaken now and into the future. It is also recognised that those developed countries responsible for the creation of the current global emissions levels have a responsibility to assist those developing countries who have the task of contributing to the global reduction of emissions through providing climate finance and other technological expertise in order for them to achieve their country reduction commitments.

Author: Jeremy Grist CA(SA) is an independent consultant

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