The Paris Agreement is an international treaty with the goal of “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels”.
It was adopted by 196 Parties at COP 21 in Paris, on 12 December 2015 and entered into force on 4 November 2016. All of the economies in which the EBRD invests have endorsed the Paris Agreement. It also has the widespread support of the Bank’s shareholders.
It also aims to strengthen countries’ ability to adapt to the impacts of climate change and, therefore, promotes both climate change mitigation (to achieve “net zero” greenhouse gas emissions in the second half of the century) and adaptation (through fostering climate resilience).
At the heart of the Paris Agreement are national pledges to contribute to global mitigation and adaptation goals. The Paris Agreement sets out a mechanism under which each country produces a nationally determined contribution (NDC), which must be submitted at a maximum of five-yearly intervals.
These NDCs are determined unilaterally and are expected to include targets for GHG emission reductions and adaptation. Commitments should reflect the “highest possible ambition”.
Each country’s NDC is expected to be more ambitious than the previous one (the ratchet mechanism). Ambition is different from country to country, reflecting the principle of “common-but-differentiated responsibilities and respective capabilities”.
This principle recognises that while all countries will contribute to global goals, national circumstance will determine national commitments- and is critical for the economies in which the EBRD invests, due to their diverse starting points.
Underpinning NDCs and to facilitate a long term view, countries can also prepare long-term low greenhouse gas emission development strategies and sector-specific low carbon roadmaps. These typically set planning, policy and investment priorities to achieve the goals of the Paris Agreement.