Trying to Slow Climate Change: The Paris Agreement (January 2016)

January 2016:

In December 2015, representatives of almost 200 countries met in Paris. After vigorous debate and negotiation, they came to an agreement about how to control the emission of greenhouse gases over the rest of the century. This blog item briefly discusses the key economic features of the “Paris Agreement” and what it can be expected to achieve.

First, let us review the key features of the climate change theory. Fossil fuels such as coal, oil, and natural gas currently account for 86 percent of global energy usage (See Table 1).

When fossil fuels are burned for energy, they produce greenhouse gases such as carbon dioxide. The current scientific evidence strongly suggests that the accumulation of these greenhouse gases in the atmosphere will raise the average temperature of the planet over time—hence the term, “global warming.” Current projections also suggest that rising temperatures will melt the ice caps, causing a rise in the global sea level. In addition, rising temperatures could have unexpected and dangerous effects on weather, agriculture, and the livability of certain areas of the world.

So why haven’t governments undertaken actions to slow the emission of greenhouse gases? First, policy makers do not have experience using scientific models to make decisions about events that could happen 50 years or 100 years from now. Think about it: One hundred years ago, there was no such thing as computers, radio, or television. Orville and Wilbur Wright were flying the first airplane. Nuclear weapons did not exist, nor did radar, or antibiotics. Asking policymakers to look 100 years into the future requires them to exercise a tremendous amount of faith in scientific models.

At the same time, the problem of externalities makes it hard for nations to unilaterally enact successful policy to slow down climate change. The greenhouse gases emitted by China affects the United States, while the greenhouse gases emitted by the United States affect the little island country of Maldives (average height above sea level: 4 feet). This means that no individual country–including the United States–can by itself slow climate change single-handedly (see chart below for 2012 data on greenhouse gas emissions).

The Paris Agreement is an attempt to get nations to work together to slow the emission of greenhouse gases. The Agreement has two parts:

• Mitigation:
  • A long-term goal of keeping the increase in global average temperature to well below 2°C above pre-industrial levels;
  • Pledges by countries about their plans for mitigating the emission of greenhouse gases (The US plan can be found here; The Chinese plan can be found here)
  • A procedure for checking to see if countries are meeting their goals and pledges.
• Adaptation:
  • Developed countries  provide continued and enhanced international support to help developing countries adapt to climate change.

What kind of adaptation can developing countries make? For example, the Pacific Ocean nation of Kiribati, made of 30+ small low islands,  is worried that rising sea levels will reduce the amount of their land that can be inhabited or used for agriculture.  So in 2012 the Kiribati government purchased 6000 acres in Fiji, about 2000 miles away, as a backup plan for either farming, or for migration.

One thing that the Paris Agreement is missing: Any enforcement mechanism to make sure that countries follow the plans that they submit. The hope is that global public pressure will make it more likely that countries will meet or beat their goals.

Michael Mandel

Note: This textbook-based blog is explicitly non-political. We analyze current events for the beginning economics students without imposing our own views on the topic.

Key Terms

Mitigation: The implementation of policies and programs designed to significantly reduce emissions of greenhouse gases.

Adaptation: The response of consumer and business behavior to a change in conditions—for example, the alteration of behavior to reduce the negative impact of global climate change.

Review Questions

Review Questions for Mandel 2e

Additional Material

Audio Narration

Official video from the Paris Agreement