By the Blouin News Business staff

Climate change in 2015 – an economic imperative

by in Global Economy.

An environmental activist performs during Earth Day celebration at Surabaya University on April 22, 2014 in Surabaya, Indonesia. AFP/Getty Images

An environmental activist performs during Earth Day on April 22, 2014 in Surabaya, Indonesia. AFP/Getty Images

2015 will be a key year for climate change – and the planet. If nations around the world are able to agree on the importance of reaching a global binding agreement on climate – and a roadmap towards a more sustainable planet – the United Nations Climate Change Conference (UNCCC) could see every country sign a historical treaty at the end of the year, in Paris, to reduce greenhouse gas emissions and more. The deal is crucial to keep global warming below the maximum 2 degree Celsius increase this century, a threshold agreed upon in 2009.

All actors involved know that the stakes are high. Before the UNCCC conference takes place, Ban Ki-moon, U.N Secretary General – who has taken a more proactive role on the problem than his predecessors – will host a climate summit in New York in September 2014, when the UNGA takes place, to be attended by world leaders (he has been put extra time into trying to get as many heads of state as possible to confirm their presence). Private sector and civil society representatives will also take part in the meeting, which will be an important step towards the aforementioned climate change deal. “I appeal to all people everywhere to raise their voices. Speak out on behalf of this planet, our only home,” Ban Ki-moon said on April 22. The biggest point of conflict between some developed and developing countries remains who will commit to greater emission cuts — and by how much.

That’s not the only reason why 2015 is crucial for the planet’s future. At the end of the year the Millennium Development Goals (MDGs) are set to expire. They will be replaced by a series of Sustainable Development Goals (SDGs), which are currently in the making – a key pillar for further economic progress, for more social inclusion and for making the environment safe. “At the beginning of 2015 world leaders will begin to negotiate a final outcome document for a summit to take place in September 2015 and it will be at that summit that the SDGs will be adopted. They will most likely be adopted for the period 2016 up to 2030, the next fifteen year phase,” according to Jeffrey Sachs, an important player in setting the SDGs, in an interview with Blouin News. (Watch the interview ‘Jeffrey Sachs on the future of climate change’ in the video below and read more on Sachs’ creativity on fighting climate change).

In its most recent report the U.N.’s Intergovernmental Panel on Climate Change (IPCC) clearly stated that the worst is yet to come. Delaying climate action will raise the economic and environmental cost, as IPCC Chairman Rajendra Pachauri recently said: “If you allow emissions to increase, the impact of climate change will become progressively more serious, and the technologies that you would have to put in place to reduce emissions very sharply would be that much more expensive.” The report states that in order to avoid the worst effects of climate change, the world will have to reduce greenhouse gas emissions significantly by 2050 and then become carbon neutral by 2100.

As important as these summits and agreements is the need to shift towards a renewable energy based economy. This transformation doesn’t top policy-makers agenda at the moment even if the industry is making itself relevant. While important progress has been achieved in implementing renewable energy, there is also some disheartening news when it comes to investment in clean energy. In 2013, and for a second consecutive year, global renewable energy investment fell: it totaled $214 billion in 2013, 23% below a 2011 peak, according to the latest global renewable energy annual report from the Frankfurt School-United Nations Environment Program Collaborating Centre (FS-UNEP) and Bloomberg New Energy Finance. The upside is that renewable energy accounted for 43.6% of new power capacity, while its share of worldwide electricity generation increased to 8.5% from 7.8% in 2012. What’s more, some 1.2 billion metric tons of carbon dioxide (CO2) emissions were avoided as a result of renewable power generation last year.

The make-or-break Paris summit could produce the world’s most important treaty on climate change. Perhaps it could produce a clearer picture of the economic cost of climate change as well as the economically optimal amount of global warming mitigation for generations to come. Or a roadmap on how to reduce dependence on fossil fuels and boost renewable energy investment and technology. Economists are still trying to present a clear image of how much climate damage will cost if we aren’t able to take serious steps to slow global warming. Let’s hope 2015 proves the year to do just that.