It's done: for the first time, the world has a truly universal agreement on climate change. It's not perfect, but the agreement will boost the momentum to modernise and clean up economies. Clean energy in the global power sector, already outstripping fossil fuel investments, is now set to become the dominant source of electricity.

Over the last decade or more, momentum has been building. More and more governments are limiting pollution and building new clean industries, and increasingly investors are recognising and accounting for climate-induced financial risk. Paris marked this trend with many governments, businesses, investors and financial regulators taking additional steps to address climate change.

There are five key elements of the historic Paris agreement:

  1. Stronger than expected global warming goals not just to keep warming well below 2°C above pre-industrial levels, but also to pursue efforts to keep warming to 1.5°C, half a degree above current warming.
  2. A universal and durable agreement requiring actions from all countries, and spanning decades, unlike previous agreements which needed to be renegotiated regularly.
  3. Bankable signals to investors that policies will continually ratchet up, with five yearly reviews to achieve net zero emissions through time.
  4. A pathway to proper transparency and accountability with work to do over the next four years.
  5. Support for the vulnerable and poor nations to be scaled up after 2025 from a floor of US$100 billion. 

For Australian domestic policy, the Paris agreement marks a critical point. The Government recognised the need to work towards net zero emissions where greenhouse gas emissions are balanced against natural and industrial processes of removing pollution from the air. And our diplomats played a constructive role in the negotiations, including joining the High Ambition Coalition and supporting the 1.5°C goal.

Yet we have less ambitious domestic targets and policies more aligned to global warming of 3-4°C. Our 2030 targets would still leave us as the highest per capita polluter in the developed world — alongside just Saudi Arabia in the G20. So for Australia the real work is only about to start.

To maintain international credibility and take effective climate action, there are four steps the Australian Government should now take:

  1. Improve initial post-2020 pollution reduction target and commit to net zero emissions before 2050.
  2. Expand domestic policies and, in particular, have a plan to replace existing coal fired power plants.
  3. Increase climate finance investment to assist vulnerable countries.
  4. Cancel our Kyoto carry over of surplus carbon credits.

The rest of the world is now accelerating down this path. 

Australian politicians, business and community groups have a choice: we can continue to stay in the partisan, policy or technology trenches that have left us lagging after six years of squander and division since the 2009 Copenhagen climate talks, or can we find a way out of those trenches to join the boosted momentum and investment flows that will come out of Paris.

Photo courtesy of Flickr user UNclimatechange.