Climate Deal Reached in Paris

December 16, 2015

pic-energy-powerParticipants in the United Nations Climate Change Summit reached a deal on Dec. 12 after 13 days of intensive negotiations. The conference began on Nov. 30 and was scheduled to conclude on Dec. 11; however it stretched until the afternoon of Dec. 12 as delegates struggled to reach a deal among the almost 200 countries participating in the conference.

The agreement sets the goal of curbing greenhouse gas emissions enough to limit global warming to less than two degrees Celsius. This is widely considered the amount necessary to avert the most significant consequences of climate change. The agreement is structured on individual commitments from each country. Over time those commitments will be increased and starting in 2018, every five years countries will submit updated commitments. The deal also attempts to raise funds for developing countries seeking to transition their economies away from fossil fuels through the United Nations’ Green Climate Fund. The deal sets the goal of raising $100 billion a year for the fund by 2022.

The U.S. committed to reducing its greenhouse gases by 26 to 28 percent from 2005 levels by 2025. These carbon reductions will largely come from the Clean Power Plan rules that the Environmental Protection Agency completed this year which will speed the transition away from coal-fired power plants. The U.S. also committed to contributing $3 billion to the Green Climate Fund, with $500 million intended to come from the 2016 spending bill currently being considered by Congress.

The agreement is importantly, not binding or legally enforceable. Mechanisms built into the agreement will attempt to foster compliance through transparency and peer-pressure rather than legal consequences. Because the commitments for funds or emission reductions are not legally binding, the Obama Administration contends that this agreement does not constitute a new treaty, merely an extension of previously existing treaties. Therefore, it will not be submitted to the Senate for approval, which Republican leaders have already indicated it certainly would not get. While this tactic will save the U.S. the embarrassment of the agreement being defeated in the Senate, it will also likely result in a Republican-controlled Congress refusing to appropriate funds for the Green Climate Fund.

Commitments to emission reductions, whether from the Paris agreement or the Clean Power Plan before the energy infrastructure in the U.S. is in place, can potentially create a volatile energy market and increase electricity rates for small businesses.

NSBA supports energy policies designed to give affordable and reliable electricity to small businesses that are less capable of absorbing swings in the energy market. NSBA supports federal policies that promote adequate, reliable and affordable energy, including the promotion of alternative resources of energy such as wind, solar, hydro-electric and geothermal, among others.