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Aspiration and Reality: Can the Paris Climate Agreement Work?

Joachim Weimann, Rüdiger Pethig, Barbara Hendricks, Ottmar Edenhofer, Thomas Puls, Thilo Schaefer, Heinrich Bottermann, Marc Gronwald, Marc Oliver Bettzüge, Jakob Peter
ifo Institut, München, 2016

ifo Schnelldienst, 2016, 69, Nr. 03, 03-29

Does the climate agreement reached at the world climate in Paris in December 2015 mark a key step for worldwide climate protection? Joachim Weimann, University of Magdeburg, sees some progress in the very fact that there is an agreement at all and that countries are committing to climate protection. In his opinion climate protection can only be successful if an international climate policy is implemented. The exact opposite was established in Paris, namely a national policy whereby each individual policy defines its own reduction goals and implements them independently. For Rüdiger Pethig, University of Siegen, the Paris Agreement – despite its numerous weak points - marks a milestone compared to what preceded it. Although the agreement in no way presents a solution to climate problems, it has at least raised hopes that a solution will be found in the future. Barbara Hendricks, German Federal Minister for the Environment, Nature Conservation, Construction and Nuclear Safety, sees the Paris Agreement as an opportunity to get to grips with climate change, as it has laid the foundations for successful international climate protection. European climate protection policy remains a central reference point for national planning. For Ottmar Edenhofer, Potsdam-Institut für Klimafolgenforschung, Christian Flachsland and Ulrike Kornek, MCC, Berlin, the agreement does not represent a climate policy breakthrough. It is now a question of driving forward the discussion of coordinated CO2 minimum prices and conditional climate financing in such a way so as to increase the opportunities for international cooperation. For Thomas Puls and Thilo Schaefer, Institut der deutschen Wirtschaft Köln, it is crucial that the large CO2 producers pursue a coordinated climate policy and that it is no longer economically profitable to deny climate protection. The best way to achieve this would be for the “heavyweights” to agree to a price system for CO2. Sven Schulze, HWWI, believes that the Paris Agreement will not suffice to decisively change the approach to global climate policy. Heinrich Bottermann, Deutsche Bundesstiftung Umwelt, sees the Paris Agreement as the mainspring for the climate-friendly restructuring of business and society at an international and national level that is urgently needed, insofar as it is used to develop new lifestyles and ways of doing business. Marc Gronwald, University of Aberdeen, looks at how “the market”, such as the market for CO2 pollution rights, for example, has reacted to the Paris Agreement. In the opinion of Marc Oliver Bettzüge and Jakob Peter, University of Cologne, the “imbalance between word and deed” raises concerns that the basis for a credible and consistent global climate policy was negotiated away in Paris. There is every possibility that the Paris Agreement may prove a “showy illusion” in retrospect.

JEL Classification: Q580, Q530, Q510

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ifo Institut, München, 2016