Years from now, the Paris climate conference may be seen as the point where ambitious long term global climate policy was finally enshrined in an international agreement, and where the world found a formula that enables consistent action. True, there is a massive gap between present policy ambition and the aspiration to keep warming to well below 2°. But the Paris agreement creates a mechanism to ratchet up ambition, and there is reason for optimism that the world can progressively do better.

Success at Paris was no surprise. Years of negotiations and bilateral deals between the US, China and Europe had laid the groundwork. And the stars were in alignment with an outgoing US president wanting to create a legacy on climate action, the EU determined to get a proper agreement after the diplomatic failure at Copenhagen in 2009, and China now convinced of the merit of decisive action.

Of course, things could have gone wrong. But the remarkable diplomatic effort of the French government, as Howard Bamsey explains, safeguarded the effort and landed the deal in a form that was acceptable to most parties. Jeff Sachs called it a diplomatic triumph. The emotional scenes in Paris when the agreement was adopted speak volumes about the sheer relief those deeply engaged in the process felt at getting a meaningful climate deal over the line.

High ambition, and closing the commitment gap

A key feature of the agreement is that it encompasses all countries. The notion of differentiated responsibilities remains, but the separation of developed and developing countries into two groups is gone. For a long time, this distinction was an obstacle to domestic action to cut emissions in both groups of countries. Now, all are part of the same regime of putting forward nationally based targets for emissions that will be reviewed and strengthened over time.

Many aspects of the Paris deal will need to be fleshed out in negotiations over the next few years, and thorny issues like financing for climate change action in developing countries remain a bone of contention. But the foundation and structure are now in place.

The headline outcome from Paris is the long-term ambition of 'holding the increase in the global average temperature to well below 2° above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°'. This is a significant strengthening compared to the earlier 2° goal, and was a condition for support from small islands developing states. And it is now enshrined in a an agreement that has much higher standing than the 2009 Copenhagen Accord.

This new target is a very high aspiration given the dwindling global carbon budget. And there is a massive commitment gap between the new global goal and the emissions reductions pledges now on the table, which are consistent with a 2.5° to 3° trajectory.

The Paris Agreement provides for five-yearly reviews of nationally determined contributions (emissions targets) and for each successive target being a 'progression'. That means a ratcheting up of each country's targets, and thereby of the global effort. Great increases in ambition will be needed if the world is to have a chance to meet the 'well below' 2° goal.

In this way, the very high ambition of the Paris agreement can act as a constant reminder and a benchmark for the assessment of any major policy change or investment anywhere in the world: is it compatible with a trajectory to keeping warming to well below 2°?

Low-carbon growth

There is reason for optimism that higher ambition will be reflected in national targets, policies and actions. The development of low-emissions technology is progressing quickly, and costs of many key technologies — for

example solar panels — have tumbled more quickly than predicted. Moreover, the experience the world over is that well-designed policy instruments are highly effective in driving uptake of cleaner technologies.

And, crucially, the dominant thinking about climate change action has changed. Cutting emissions used to be seen as a costly endeavour, the burden of which had to be shared among reluctant nations. Now, low-carbon growth is increasingly seen as an opportunity to mobilise investment and shift to a more modern, better type of economic expansion.

China now sees low-carbon transition as an opportunity for economic modernisation and industrial leadership, and one that is in line with other important objectives such as improving air quality and energy security. Where China leads, many developing countries will follow. In rich countries, building up a clean energy and industrial sector is also increasingly regarded as a promising way to foster economic growth. For example, South Australia's goal of net zero emissions is predicated on the notion of economic opportunity.

The challenge ultimately is decarbonisation of the world economy. This is possible without compromising economic prosperity, but it will require strong and consistent action to further develop low emissions technologies, and to immediately start investing at large scale in energy efficiency and carbon-free energy supply.

The Paris agreement contributes to a growing sense that a phase-down of conventional fossil fuel use over coming decades is inevitable. We will see this reflected in policy, and, crucially, in investment decisions and in capital markets.

The signaling effect of Paris could turn out to be substantial.

Australia is back

The Australian government's stance, rhetoric and external perception on climate altered fundamentally with the change in Prime Minister from Abbott to Turnbull. There was a palpable sense at Paris that 'Australia is back'; back as a constructive force in global climate negotiations, and as an active supporter of compromise and a reasonable outcome, and as a country that commits to meaningful action domestically.

Our senior political representation signaled that climate policy was once again taken seriously: the PM attended, and a cabinet minister — first Environment Minister Greg Hunt, then Foreign Minister Julie Bishop — was present and engaged throughout the two weeks. And the Australian delegation became known for its technical ability and willingness to engage.

This positive impression will need to be underpinned with actions. The Turnbull government has already signaled that the existing 2030 target (of a 26% to 28% reduction in national emissions relative to 2005) is likely to be strengthened, and flagged a review of climate policy in 2017. If there is a change in government in 2016, the likely outcome would also be a stronger target and more effective policies than we have now.

Australia can, and needs to, move to a more comprehensive, consistent and cost-effective climate policy framework. That may not be easy after years of acrimonious politics, but there is a shared desire for principled climate policy among business and civil society organisations.

Paris can become a powerful catalyst for change.

Photo courtesy of Flickr user Yann Caradec