### Date : 2024-08-15 16:58 ### Topic : Paris Agreement on climate change #macroeconomics #environmentalpolicy ---- ### The Paris Agreement on Climate Change The Paris Agreement is a landmark international treaty adopted by 196 countries at the 21st Conference of the Parties (COP21) to the United Nations Framework Convention on Climate Change (UNFCCC) in December 2015. It is the world’s first comprehensive climate agreement and represents a global commitment to limit global warming and address the impacts of climate change. #### Key Objectives and Provisions 1. **Temperature Goal:** - The central aim of the Paris Agreement is to keep the global temperature rise this century well below 2 degrees Celsius above pre-industrial levels. Additionally, the agreement seeks to pursue efforts to limit the temperature increase to 1.5 degrees Celsius, recognizing that this would significantly reduce the risks and impacts of climate change. 2. **Nationally Determined Contributions (NDCs):** - Each country that is a party to the Paris Agreement must submit its own climate action plan, known as a Nationally Determined Contribution (NDC). These NDCs outline the steps each country will take to reduce greenhouse gas emissions and adapt to the impacts of climate change. Countries are required to update and enhance their NDCs every five years to reflect increased ambition. 3. **Global Stocktake:** - The Paris Agreement includes a mechanism for reviewing collective progress towards achieving the agreement’s goals, known as the Global Stocktake. This process takes place every five years, with the first stocktake scheduled for 2023. It assesses the overall progress made by countries in reducing emissions, adapting to climate impacts, and providing financial support to developing countries. 4. **Climate Finance:** - Developed countries committed to mobilizing at least $100 billion per year by 2020 to support climate action in developing countries. This financial support is intended to help these countries mitigate greenhouse gas emissions, adapt to climate change impacts, and build resilience against climate-related disasters. The agreement calls for continued mobilization of climate finance beyond 2020. 5. **Adaptation and Resilience:** - The Paris Agreement emphasizes the importance of enhancing adaptive capacity, strengthening resilience, and reducing vulnerability to climate change. Countries are encouraged to develop and implement national adaptation plans, with a particular focus on supporting the most vulnerable communities and ecosystems. 6. **Transparency Framework:** - To ensure transparency and accountability, the Paris Agreement establishes a common framework for monitoring, reporting, and verifying countries’ progress. This framework includes guidelines for tracking emissions, climate actions, and financial contributions, with the goal of fostering trust and confidence among all parties. 7. **Loss and Damage:** - The agreement recognizes the importance of addressing loss and damage associated with the impacts of climate change, particularly for the most vulnerable countries. This includes mechanisms for cooperation and support in dealing with irreversible and severe climate impacts, such as extreme weather events and rising sea levels. #### Implementation and Challenges 1. **Voluntary and Non-Binding Nature:** - One of the key features of the Paris Agreement is its reliance on voluntary commitments rather than legally binding targets. While this approach allowed for broad participation, it also means that enforcement relies on peer pressure, transparency, and domestic political will, rather than legal penalties. 2. **Ambition Gap:** - Despite the commitments made under the Paris Agreement, current NDCs are insufficient to meet the 1.5 or 2 degrees Celsius target. This "ambition gap" highlights the need for countries to significantly increase their efforts in future NDC updates. 3. **Withdrawal and Re-engagement:** - The United States, under the Trump administration, formally withdrew from the Paris Agreement in 2020, citing concerns about economic costs and fairness. However, the Biden administration rejoined the agreement in 2021, signaling renewed commitment to global climate action. 4. **Financial and Technological Support:** - Meeting the financial commitments of the Paris Agreement has been challenging, with debates over the adequacy of support provided to developing countries. Additionally, access to technology and capacity-building remains a critical issue for many countries seeking to implement their NDCs. #### Conclusion The Paris Agreement represents a significant step forward in global efforts to combat climate change. Its success depends on the collective ambition and action of all countries, particularly in enhancing their NDCs, providing financial and technological support to vulnerable nations, and maintaining transparency in reporting progress. As the world faces increasingly severe climate impacts, the Paris Agreement serves as a crucial framework for international cooperation and long-term climate resilience. --- ### Economic Losses from Climate Change Climate change poses significant risks to the global economy, affecting various sectors such as agriculture, infrastructure, health, and finance. Economic losses from climate change are incurred through direct damage, such as property destruction due to extreme weather events, and indirect impacts, like reduced productivity, supply chain disruptions, and increased health costs. #### Key Sources of Economic Losses 1. **Extreme Weather Events:** - **Hurricanes, Floods, and Wildfires:** Climate change has intensified the frequency and severity of extreme weather events. For example, the 2017 Atlantic hurricane season, which included Hurricanes Harvey, Irma, and Maria, resulted in economic losses exceeding $300 billion in the United States alone. These losses include damage to homes, businesses, and infrastructure, as well as disruptions to economic activities. - **Wildfires:** In 2018, wildfires in California caused an estimated $24 billion in damages, according to the insurance company Munich Re. These fires are becoming more frequent and severe due to prolonged droughts and higher temperatures. 2. **Agricultural Losses:** - **Crop Yields:** Climate change affects agricultural productivity through altered precipitation patterns, increased temperatures, and the proliferation of pests and diseases. A study published in *Nature Climate Change* estimated that climate change could reduce global maize yields by 24% by 2030 and wheat yields by 17% without significant adaptation measures. These reductions in crop yields can lead to increased food prices and reduced food security, particularly in vulnerable regions. - **Livestock:** Changes in temperature and water availability also impact livestock, reducing productivity and increasing mortality rates. The livestock sector could face significant economic losses, especially in regions where pastoralism is a primary livelihood. 3. **Infrastructure Damage:** - **Sea-Level Rise:** Rising sea levels threaten coastal infrastructure, leading to increased flooding and erosion. The World Bank estimates that by 2050, annual global flood losses could reach $1 trillion in coastal cities due to sea-level rise and increased storm surges. The costs of protecting and relocating infrastructure, as well as the economic disruption caused by flooding, contribute to significant economic losses. - **Heat Stress on Infrastructure:** Higher temperatures can lead to infrastructure failures, such as roads buckling or rail lines warping. The increased costs of maintenance and repair, as well as disruptions to transportation networks, can impose substantial economic burdens. 4. **Health Impacts:** - **Heat-Related Illnesses:** The increased frequency of heatwaves leads to higher incidences of heat-related illnesses and deaths, which burden healthcare systems and reduce labor productivity. For example, the 2003 European heatwave caused over 70,000 deaths, with estimated economic losses of approximately $13 billion due to healthcare costs and lost productivity. - **Vector-Borne Diseases:** Climate change expands the range of vector-borne diseases such as malaria and dengue fever. The spread of these diseases into new regions can strain public health systems and reduce economic output by increasing morbidity and mortality rates. 5. **Economic Disruption:** - **Supply Chain Disruptions:** Climate change can disrupt global supply chains by damaging infrastructure, affecting transportation routes, and reducing the availability of raw materials. For instance, the 2011 Thai floods, exacerbated by changing weather patterns, caused widespread disruption to global electronics and automobile supply chains, resulting in billions of dollars in losses. - **Migration and Displacement:** Climate-induced migration and displacement create economic challenges for both the migrants and the receiving regions. The costs associated with providing services, infrastructure, and employment to displaced populations can be substantial. #### Real Data on Economic Losses 1. **Global Economic Costs:** - According to a report by the *Global Commission on Adaptation* (2019), the cost of inaction on climate change could reach $7.9 trillion annually by 2050. This figure includes direct damages from extreme weather events and indirect effects on economic growth and productivity. - The *Insurance Information Institute* reports that insured losses from natural disasters worldwide in 2020 were $83 billion, with climate change being a significant driver of these losses. 2. **Sector-Specific Impacts:** - The *Intergovernmental Panel on Climate Change (IPCC)* projects that global economic losses in the agricultural sector could range from 0.2% to 2% of global GDP by 2100, depending on the extent of climate change and the effectiveness of adaptation measures. - A study published in *Science* (2017) estimates that unmitigated climate change could reduce global GDP by more than 20% by 2100, with disproportionate impacts on low-income countries. 3. **Regional Impacts:** - The *European Environment Agency* estimates that the economic losses from climate-related extreme weather events in Europe could reach €240 billion annually by 2050. - In the United States, the *Fourth National Climate Assessment* (2018) projects that climate change could reduce annual GDP by 10% by the end of the century if global emissions are not significantly reduced. ### Conclusion Economic losses from climate change are significant and wide-ranging, affecting nearly every sector of the global economy. These losses underscore the importance of immediate and sustained efforts to mitigate climate change and adapt to its impacts. Investing in climate resilience, transitioning to low-carbon energy sources, and implementing effective climate policies are crucial to reducing the economic costs associated with climate change in the future. ### Reference: - ### Connected Documents: - [[13.2 Environmental Policies and Regulations]]