Paris accord- Investor giants urge Trump to implement climate agreement
In a letter to the Group of seven (G7) countries, investors holding $15 trillion worth of assets urged countries led by US to implement the Paris climate agreement, despite Trump's abrogation threats. "As long-term institutional investors, we believe that the mitigation of climate change is essential for the safeguarding of our investments," the letter stated. Let us know more about the letter!
What context is this happening in?
Donald Trump has announced his intentions to cancel US commitments to the Paris Agreement in a bid to boost the domestic coal sector. Further, momentum has been building within the administration to realize the withdrawal and he is expected to come to a decision soon. Also, 200 nations are set to meet in Bonn from May 8-18, to negotiate rules under the Paris accord.
Paris Agreement
Under the Paris Accord signed in December 2016, nations agreed to make domestic efforts to limit global temperatures below two degree Celsius above pre-industrial levels, considered crucial by the Intergovernmental Panel of Climate Change to avoid the effects of dangerous climate change. President Obama had been extremely supportive of the Agreement. It came into effect in November 2016 and has secured 195 ratifications.
What is this letter about?
The letter was directed to G7 and G20 governments which will meet in Italy and Germany in May and July respectively. It urged state parties to honour their commitments. The letter was signed by 214 investors including the California Public Employees Retirement System. Activists urged nations, especially the USA, to prioritize climate action, particularly given uncertainty of Trump administration's commitment to the Paris Agreement.
Trump's withdrawal- what could happen?
US contributes to 15% of global green house gas (GHG) emissions, making it the second largest emitter after China. Trump's withdrawal might aggravate US emissions possibly accelerating the effects of climate change. Moreover, US withdrawal erodes the agreement's credibility prompting other nations to do the same. Further, the fight against climate change may not be able to benefit from US clean technology and assistance.
