A Global Climate Treaty Is Crucial

Nicholas Stern is the chairman of the Grantham Research Institute on Climate Change and the Environment and the E.S.R.C. Centre for Climate Change Economics and Policy at the London School of Economics and Political Science, and the president of the British Academy.

Updated September 29, 2014, 1:07 PM

A strong international agreement on climate change signed in Paris next year will be crucial because it will reinforce and encourage investments and policy decisions that are being made around the world by national, regional and local governments and by businesses.

Countries could assess whether their actions are consistent with goals and whether others are contributing appropriately.

In turn, decisions by individual countries and businesses, together with a growing number of examples of successful transitions to the low-carbon economy, will help create the confidence necessary for making an international agreement.

So what should such an agreement contain?

It should explicitly acknowledge a common goal of reducing global annual emissions sharply and urgently to give the world a reasonable chance of avoiding global warming of more than 2 centigrade degrees. As a result of the last attempt to secure an agreement in Copenhagen in 2009, countries responsible for more than 80 percent of the annual output of greenhouse gases made pledges, confirmed in Cancún a year later, to limit their emissions by 2020.

But countries must acknowledge that the commitment to the limit of 2 centigrade degrees, which is indeed wise, will require substantially greater ambition than current targets embody. The agreement should provide a way in which countries can assess whether their actions collectively are consistent with that goal, and allow each to act with the knowledge that others are also contributing appropriately to the management of the huge risks of climate change.

More than 60 countries have already introduced domestic legislation to tackle climate change, so the new agreement should convince more to consider how to turn their international pledges into national actions. It should also establish mechanisms through which efforts to tackle climate change can be measured, reported and verified. In addition, the agreement should generate incentives for countries to work collaboratively with each other, sharing knowledge, investing in new technologies and linking up carbon markets.

A strong agreement should be equitable, providing a means through which rich countries can lead by demonstrating strong ambition and providing examples of the transition to low-carbon growth. The agreement must ensure rich countries give support to developing countries for low-carbon economic growth, by bringing down the cost of finance and increasing overseas aid. The agreement should send a clear signal to the private sector about international climate action, reducing policy risk and unlocking trillions of dollars of investment in low-carbon infrastructure.