Five Years on from the Paris Accord, New Commitments to Come

What assessment can be made five years after the signing of the Paris Agreement on Climate Change?

Damien Navizet: First, that this agreement is still alive and kicking. The European Union and 187 countries have ratified it, including the USA – which withdrew but will be coming back. Together, they account for 97% of global greenhouse gas emissions. It is an inclusive agreement that matches the scale of the problem and entered into force in record time. For the first time, each country has been left to define their own engagements.

Several assessments have pointed to countries’ lack of commitment in 2015. This leads us onto a trajectory of 3 °C of global warming by 2100. However, the agreement provides for commitments to be revised upward every five years. It has also prompted non-State actors to make climate commitments, such as the USA where several States and large corporations have adopted objectives for greenhouse gas emissions.

The revision of the commitments has started to work, with an increasing number of countries announcing carbon neutrality targets: Japan and South Korea by 2050, China by 2060. This will gradually reverse the global warming trajectory.

In practical terms, what does the Paris Agreement involve for an institution like AFD?

Climate change has been a strong marker for AFD Group’s action for about ten years now. This position has been strengthened by the mandate given to us by the French Government in July 2017 to support the implementation of the Paris Agreement. We also subsequently adopted our “100% Paris Agreement” climate strategy (2017-2022), which aims to support low-carbon and resilient transitions in developing countries.

Since COP21, AFD has committed to be a bank aligned with the Paris Agreement. This means that we exclude financing new projects that are not geared to the recommendations of the agreement in our countries of operation. We are also helping about 30 countries develop their long-term climate strategies through our 2050 Facility and 15 countries to adapt to the impacts of climate change via Adapt’Action.

Further reading: Climate Solutions around the World for 2020

In 2019, AFD Group mobilized €6.1 billion of climate finance, including €3.3 billion for climate change mitigation, which will reduce emissions by 9.9 million tons of CO2 equivalent a year, and €2 billion for adaptation projects, with 41% in Africa.

This financing has also led to a number of private climate investments: over €2 billion in 2018 and €2.7 billion in 2019, according to our estimates. Furthermore, the mid-term review of our climate strategy has highlighted that we could make some further improvements to our internal practices. Since 2012, we have been fully offsetting the greenhouse gas emissions generated by our professional travel, procurement, buildings and so on. But we can take things further and control these emissions.

What are the current dynamics in public development banks?

The Paris Agreement has caused reverberations throughout the financial world. All banks realize that climate change has an impact on their credit risk. They now want to be able to understand and manage the various risks, as well as the implications of a low-carbon transition.

In terms of public development banks, in September 2019 during the UN Climate Action Summit, the International Development Finance Club (IDFC) announced that its members were going to mobilize $1 trillion of climate finance by 2025.

The accord of the accord continues to be made well into 2020 with the Finance in Common Summit, co-organized by AFD from 9 to 12 November. Through a joint declaration, public development banks from all over the world – some 350 – committed to support the transformation of the economy and societies towards sustainable and resilient development.

This involves aligning their financing with the objectives of the Paris Agreement, for example, by ending support for carbon-related projects, taking action for biodiversity and applying the most demanding environmental and social standards. With the postponement of the climate COP, this summit has helped make headway on these issues.

Further reading: 10 Highlights from the First Global Summit of Development Banks 

A virtual event will be held on 12 December to mark the fifth anniversary of the Paris Agreement. What can we expect of it?

On Saturday 12 December, a year ahead of COP26 which will be held in Glasgow at the end of 2021, France, the UK and the United Nations, in partnership with Chile and Italy, are organizing the Climate Ambition Summit to mark the fifth anniversary of the adoption of the Paris Agreement.

During this virtual event, Heads of State and Government, along with coalitions of non-State actors, will present new commitments for climate change mitigation, adaptation and financing for international climate action. One of the main announcements expected concerns the raising of the European Union’s objectives to reduce greenhouse gas emissions to -55% by 2030 (compared to 1990) against -40% at present. Several countries will also confirm or announce carbon neutrality objectives. It is, however, a bit soon for an announcement from the USA.

The 12th of December will also mark the third anniversary of the first One Planet summit, which has the central theme of financing. On this occasion, an event will take a look at the achievements of the coalitions formed during the summits in December 2017, September 2018 and March 2019. 

The next One Planet Summit will be held on 11 January in Paris and will focus on ways of taking action for the protection of biodiversity. On both this issue and climate change, the international community will need to raise the level of ambition in 2021.