Francois Guillot—AFP/Getty Images
By Vivienne Walt
December 12, 2015

Officials from 195 countries, from giants like the U.S. to the tiniest impoverished states, agreed on the world’s first global climate-change deal on Saturday evening, committing the world to drastically cutting back carbon emissions and transforming the planet’s energy mix over the next several decades.

The 31-page deal came after two fraught weeks of talks at the U.N.’s mammoth climate conference outside Paris. The final agreement involves several legally binding clauses, with trillions of dollars dedicated to reducing the dependence on fossil fuels within many countries, and to rolling out a huge expansion of renewable energy.

A visibly emotional French President François Hollande opened the final day of the conference, known as COP 21, by appealing to the delegates’ sense of history. “It is rare to have the opportunity in a lifetime to change the world,” he said. “You have it. Seize it, so that the planet can live on.”

The final agreement included several provisions that many energy activists had long fought for. It aims to limit global warming to “well below” two degrees Celsius from its levels before the Industrial Revolution. In addition, countries will have to track their efforts in cutting carbon emissions and report on their progress every five years. And rich countries will finance poorer ones, with $100 billion a year by 2020 and a promise to increase financial support after that.

Among the most bitterly contested measures was over how dramatic the limits on global warming would be. Some participants argued that even a two-degree Celsius temperature increase would leave many nations vulnerable to the damaging effects of climate change.

Small island nations, which under the U.N. system have votes equal in power to big, rich countries, fought hard for most restrictive limits during the two-week conference. The final document includes a goal to cut back global warming to about 1.5 degrees Celsius above pre-industrial levels by the second half of this century, and to “peak global greenhouse gas emissions as soon as possible.” That would commit countries “to completely decarbonize the global electric sector by 2050,” the agreement says.

The scope of the document surprised many activists and delegates, many of whom arrived in Paris two weeks ago highly doubtful that they could get their demands met at COP 21—especially as the process required consensus, a hard feat given the number of participants involved.

Many officials warn that the deal’s true test is yet to come, as countries begin to implement new energy policies and are held to account for their actions. But as delegates broke for a long lunch on Saturday, environmental groups pored over the final text and expressed surprise at its strength. “We are on the cusp of a transformative moment,” Nathaniel Keohane, vice president for climate for the New York-based Environmental Defense Fund, told reporters. “It will make it harder for a whole lot of holdouts who have wanted to put a stick in it.”

As the details emerged, several CEOs put out statements saying they believed the agreement would be a boon for renewable energy and that business would play a big role in the energy transition.

“We have an opportunity to build a new economy, and business is poised to make it happen,” Richard Branson, founder of the Virgin Group, said in a statement on Saturday.

Unilever CEO Paul Polman said in a statement that the consequences of the climate agreement “will be felt in banks, stock exchanges, boardrooms and research centers, as the world absorbs the fact that we are embarking on an unprecedented project to decarbonize the global economy. This realization will unlock trillions of dollars.”

In interviews over the past two weeks, many activists cited two key events over the past year that paved the way for the deal.

The first was the encyclical by Pope Francis in June, in which he warned of “serious consequences” if the world did not act on climate change. That, say many, seemed to lift the issue above the fractious politics that have dogged the U.N.’s climate talks for years, and added a moral dimension to the negotiations.

The second was President Obama’s joint commitment for carbon-emissions cuts with Chinese President Xi Jinping in Beijing in November 2014. That shook up normally hostile blocs of countries within the U.N. and positioned the U.S. to take a more central role in the negotiations.

“For a long time, climate change was pushed by EU diplomacy and the U.S. was largely absent,” said Edward Cameron, managing director of the New York-based Business for Social Responsibility, which organized numerous briefings and panel discussions at COP 21. “The fact that there is genuine U.S. leadership has changed the dynamic entirely,” Cameron, who has attended 10 previous U.N. climate conferences, told Fortune. “And the change in China has been absolutely critical.”

Energy Secretary Ernest Moniz told Fortune in an interview on Wednesday that getting China to commit to far-reaching carbon-emission cuts was crucial to the administration’s strategy. “Before, many in Congress often fell back on the argument that China was not doing anything,” Moniz said. “Suddenly that changed. That kicked off a very different international conversation.”

In the closing moments of the talks, Secretary of State John Kerry, who has been in Paris for much of the talks, called the deal “a remarkable global commitment.” “We are sending … a critical message to the global marketplace,” he told a packed conference hall on Saturday, adding that he expected that the deal would “unleash business” and “move investment that will create new research and development.”

The deal still faces obstacles in the U.S. Many in Congress have vowed to strike down the agreement, even though U.S. negotiators in Paris have said that President Obama has put in place most of the provisions already.

Leaving the negotiating hall between the final sessions on Saturday, U.S. chief negotiator Todd Stern told Fortune on Saturday that the administration would “keep working on” the skepticism in Congress.

Finding consensus among 195 countries did not come without pain. The final negotiating session, which was scheduled for 3.30 p.m. Paris time, began four hours late because a few delegates were battling over whether commitments would include the word “should” or “shall.” Major emerging economies like India insisted that they should not have to pay for the energy transition, since the world’s pollution had been caused by more than a century of economic growth in the U.S. and in Europe.

And small island nations said they feared that even two-degree Celcius global warming would effectively risk wiping them off the face of the planet by raising sea levels. That fear of such a fate had become a symbol to many delegates, who had begun to pin grass artifacts from the Marshall Islands, a tiny Pacific nation, to their suit jackets.

Leaving the negotiations on Saturday, Tony de Brume, foreign minister of the Marshall Islands, told Fortune, “We are going to go back with an agreement that people can be proud of.”

More from Fortune on the Paris Climate Talks:

Obama Doesn’t Need Congress to Tackle Climate Change: U.S. Energy Secretary

How Big Business Found Religion on Climate Change

India’s Modi Demands ‘Climate Justice’ at Paris Summit

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