After two long weeks of negotiations in Paris, 195 nations finally reached consensus on a United Nations climate change agreement. EnergySage has been tracking developments around the negotiations in the weeks leading up to Paris. Now, we’re breaking down the deal and what exactly it means for the future of solar.
Key points in the Paris climate deal
- A goal to limit temperature increases to 2°C, and a directive to consider efforts that limit increases further, to 1.5°
- A directive to begin emissions reduction efforts immediately in order to reach peak emissions as soon as possible and achieve “net zero” emissions sometime in the second half of the century.
- Funds that will be made available for poor countries to adopt clean energy and adapt to climate change.
- Transparency measures to ensure that countries are reporting their emissions correctly.
Unlike previous climate agreements like the Kyoto Protocol, the Paris climate accord is voluntary, and targets are not legally binding. Negotiators are relying on public accountability to apply the necessary pressure that will lead countries to meet their goals.
How the Paris climate deal will impact the solar industry
Without a doubt, the landmark agreement in Paris set in motion major changes to how global economies choose to generate their electricity in the decades to come. As the New York Times reports:
The [Paris] deal could be viewed as a signal to global financial and energy markets, triggering a fundamental shift away from investment in coal, oil and gas as primary energy sources toward zero-carbon energy sources like wind, solar and nuclear power.
Markets are already beginning to reflect this shifting perspective. Reuters reports that coal and oil and gas stocks fell in the aftermath of the agreement, while solar and other renewable energy stocks climbed. Bloomberg declared, “Big Oil, Make Way for Big Solar,” describing how the climate accord is just the latest signal to markets that investing in renewable energy is a smart move. Our friends at the Motley Fool even pointed to Paris as a potential cause of SolarCity’s stocks climbing by 12 percent.
The full impact of the Paris climate deal remains to be seen, and many of the details are dependent on the outcome of future negotiations. However, as part of the negotiations, nearly every country in the world has submitted a plan outlining how they will reduce their greenhouse gas emissions. Previous climate negotiations couldn’t achieve that.
The Paris climate deal is great news for zero-emissions energy sources like solar power. Even for developing economies, the incentives to invest in renewable resources like solar power over conventional power sources like oil and gas just grew even larger. This agreement is yet another sign that renewable resources are our energy future, and countries are paying attention now more than ever.