But UK businesses demand more action at home on back of Paris Agreement
The global climate change deal agreed in Paris last night will send a strong signal to investors to support low carbon technologies, business and political leaders have predicted.
John Kerry, US Secretary of State, told ministers last night that the Paris Agreement is "literally sending a critical message to the global market place".
The accord signed yesterday following two weeks of intense negotiations commits countries to keep temperature rises "well below 2C" and to strive towards curbing temperatures to 1.5C. It effectively demands net zero emissions in the second half of this century and requires countries to review their progress every five years towards their national emissions goals. In addition, it promises $100bn a year of climate finance from 2020 to help poor countries cope with extreme weather and other climate shocks.
However, during the past two weeks businesses and ministers have maintained that the real test of a deal's success will be if it triggers flows of trillions of dollars into low carbon technology and infrastructure, sparking new innovations that will tackle the climate challenge.
"It won't be governments that actually make the decisions," said Kerry. "It will be the genius of the American spirit and it will be business unleashed."
Investors seem to agree. Nigel Topping, chief executive of the We Mean Business coalition, representing 500 companies and investors, said the Paris Agreement was an "economic catalyst".
"The world's governments have sent a decisive signal to businesses and investors that will accelerate the shift towards a thriving, clean global economy," he said in a statement. "The Paris Agreement will turn the billions of investment we've seen so far into the trillions the world needs to bring clean energy and prosperity to all."
However, UK businesses used the opportunity to once again raise concerns over the government's recent green energy policy rollbacks, including ending support for new onshore wind farms, slashing support for solar panels and ditching a long standing £1bn carbon capture and storage (CCS) competition.
Carolyn Fairbairn, CBI director-general, admitted the UK played an important diplomatic role at the talks, but warned "more needs to be done at home".
"The government must provide a stable environment that enables investment in cleaner, more affordable and more secure energy generation, including renewable technologies and new gas plants," she said. "As other nations start to play a greater role and increase their ambition, the UK needs a level playing field for carbon costs, so that our energy intensive industries can compete effectively in a global, low carbon market place."
RenewableUK's Chief Executive, Maria McCaffery, said the deal puts the world "firmly on course to limiting dangerous climate change" and she said Britain has proved it is willing to play its part.
But she urged the UK to boost its low carbon policies. "We hope that in the months to come we can see this accord translated into the necessary policies at home to achieve these goals, with ministers returning from the talks fired up to put their weight fully behind the development of the UK's plentiful renewable energy resources, including wind, wave and tidal power, without the government seeking to exclude successful and cost-effective technologies such as onshore wind from our energy mix," she said.
However, Energy and Climate Change Secretary Amber Rudd defended the government's recent policy moves and argued that a stable plan was being delivered in the form of the commitment to phase out unabated coal and plans for new gas and offshore wind investment. She highlighted the potential for the UK offshore wind market to expand further, and argued that through upcoming price support contract auctions the government would deliver significant business opportunities for the clean energy sector.
This article is part of BusinessGreen's Road to Paris hub, hosted in association with PwC.
