by Martina Jung
We had not expected a global climate treaty – or anything close to it – to emerge from the Copenhagen Climate Change Conference 2009, and we had not been optimistic that emission reduction commitments would be made, in particular by China. So, we were not especially disappointed with the content of the Copenhagen Accord.
In contrast, the wider consensus view appears to be that Copenhagen failed to meet its goal: To reach binding agreements among the participating states to tackle global warming, which would serve as the basis for a global climate treaty to be signed in 2010. Indeed, participating countries have done little more than to take note of the Copenhagen Accord, without committing to accept it. The minimal compromise achieved does not include precise emission reduction targets or control mechanisms, nor is it legally binding or unanimous.
However, there are two points in the Copenhagen Accord which give us reason for optimism. The first is the recognition among UN member states that the increase in average global surface temperatures by 2050 must be limited to 2 degrees Celsius or less. This is the first time that scientific evidence of global warming has entered political documentation, applicable to 193 states. Looking ahead, this targeted restriction will serve as a universally accepted cap against which developments can be measured. The second is the pledge by industrialised nations to provide USD 30 billion to developing countries for the next 3 years. The pledge is aimed to step up action against climate change, and may be scaled up to USD 100 billion annually by 2020. This cash should accelerate installation of renewable energy capacity.
Achievements such as these are just a first step towards a global climate treaty. For now, they will have little immediate impact on the fundamentals of renewables stocks. But the need for continuing negotiations, and the growing pressure to achieve legally binding agreements, provides room for a positive mid- and long-term effect on renewables.
In the short-term, we do expect more ambitious action on a national level. In the course of the Copenhagen conference, China and the US presented various measures that they are prepared to implement in order to reduce their carbon emissions. All of them include the increase of renewable energy capacity, implying the potential for creating new jobs and reducing their countries’ dependence on foreign resources. The statements released by the world’s two largest emitters after the conference confirm their commitment to address the climate change problem and their willingness to further promote renewable energy technologies. We believe there will be more countries that follow this path now that 193 states are involved, at least politically.
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