DOSSIER: International (start here)

Published 23:01 on January 1, 2017  /  Last updated at 09:01 on January 4, 2022  /  Dossiers  /  No Comments

This dossier provides an overview of international climate policy relating to carbon pricing, including a breakdown of the Paris Agreement and concise summaries of all its NDCs, global themes in carbon markets, internal carbon pricing, international climate initiatives and climate finance.


Addressing climate change is one of the biggest global challenges of the 21st century. The average global temperature on the earth’s surface is continuously increasing due to higher greenhouse gas concentrations in the atmosphere. In 1992, the international community of states adopted the UN Framework Convention on Climate Change (UNFCCC) and agreed to stabilise atmospheric concentrations of greenhouse gases at a level that would prevent further dangerous anthropogenic interferences with the climate system.

The Convention is guided by the Intergovernmental Panel on Climate Change (IPCC), a UN-backed panel of climate scientists, which has produced a series of Assessment Reports increasingly providing beyond doubt that global warming is progressing and that mankind is the main cause of this development. In its Fifth Assessment Report in 2014, the IPCC found that  global surface temperatures had already risen by 0.8 degrees Celsius and emissions would need to be cut by between 40-70% by 2050 under 2010 levels to give a good chance of staying below 2C, the goal agreed by UN parties in 2010.

In response to a call by governments, in Oct. 2018 the IPCC published a special report highlighting the far-reaching differences in impact between 1.5C and 2C of warming. It found the world must cut CO2 45% below 2010 levels by 2030 and achieve net zero CO2 emissions by mid-century if it is to stand a chance of limiting global warming to 1.5C. The CO2 emission cuts required to meet 1.5C are significantly steeper than 2C, which are estimated to require a 20% cut on 2010 levels by 2030 and net zero emissions by 2075.

It indicated that carbon prices of up to $590 a tonne might be needed to achieve the 1.5C goal as a necessary “lubricant” to help balance out the impact of higher energy prices amid other mitigation policies. Meeting the 1.5C target rather than 2C would require additional annual mitigation efforts of $900 billion in the energy sector alone, with all other sectors facing similar challenges.

The report painted an alarming picture of the consequences of allowing warming to hit 2C instead of 1.5C. For example, 10 million fewer people would be at risk from rising sea-levels under a 1.5C scenario compared to 2C, while a third of the insect species and half the plant and vertebrae species would face catastrophic loss of liveable territory. Limiting warming to 1.5C would also significantly reduce loss of crops, risk of drought, and ocean acidification.

It showed that the average global temperature for the decade 2006-2015 was 0.86°C above the pre-industrial baseline. In Nov. 2018 he UN’s World Meteorological Organisation said the global average temperature for the first ten months of the year was nearly 1°C above the pre-industrial baseline (1850-1900), with the average global temperature set to be the fourth highest on record. The 20 warmest years on record have occurred since 1998 and the top four in the most recent four years.

The UNFCCC made general commitments but the 1997 Kyoto Protocol set binding reduction targets on industrialised nations, with the first commitment period over 2008-2012. In late 2012, UNFCCC parties agreed a second commitment period for developed countries over 2013-2020. Participating developed countries account for less than 15% of all emissions as Russia, Japan and New Zealand refused to take on new targets. At Dec. 2015 UN talks in Paris, parties agreed on a new Agreement to bind all emitters to curb emissions, building on a series of voluntary pledges over the 2010s known as the Cancun Agreements under which many nations have taken action.


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