Last year was a breakthrough year for environmental action and the future looks bright for the coming year. In 2015, we saw a slate of bold carbon reduction efforts from President Obama and other world leaders. However, the crowning achievement of 2015 was the signing of the COP21 climate agreement, which has set the stage for even more ambitious action in 2016.
The COP21 deal provides the framework, and now we begin the difficult work of finding ways to meet the goals set in Paris (i.e. keeping temperatures below the 1.5 degree Celsius upper threshold limit). Now that the targets have been agreed upon, a host of market driven opportunities are emerging to deliver on these ambitious promises.
In 2015, we saw powerful growth in renewable energy and in 2016, the combination of policy and investment will accelerate that growth. As reported by Cleantechnica, a December report from Mercom Capital Group forecasts global solar PV installations will reach 64.7 GW in 2016. Mercom expects the U.S. to install 13 GW in 2016, making the nation the second largest solar market in the world behind China. Led by Asia, Europe and North America, GWEC predicts that global wind energy will grow to 478.6 GW in 2016.
While many are aware of the need for energy efficiency, most do not know how they can actually be energy efficient. As reported by Energy Manager Today, a recent survey of facility managers in large warehouse and distribution centers revealed that 93 percent think that “understanding energy consumption is a top priority for their business.” However, only 29 percent are fully aware of how much power their building consumes. This leaves a lot of room for improvement and driven by a tremendous opportunity to cut costs and emissions, we will see a large number bridge the knowledge gap and act on efficiency in 2016.
As explained in the article, “Things are changing quickly, and 2016 clearly will be an important one in efforts to make the lofty goals into action.”
The pressure to participate in some form of carbon pricing scheme will prove irresistible for most. Putting a price on carbon is one of the most powerful ways that markets can help wean the global economy off of fossil fuels and other sources of atmospheric carbon. Approximately 25 percent of the world’s emissions now fall under some form of carbon pricing system. There are already such systems in play in more than 50 jurisdictions around the world, including China, the world’s largest carbon polluter. Carbon markets like the RGGI have been proven to be successful (a Duke University led study suggests that emissions would have been 24 percent higher without RGGI).
As reported in Triple Pundit, the Climate Trust predicts that post COP21 global emissions reductions will drive significant growth in carbon markets. As more nations participate, we will achieve economies of scale, and this will attract even more new low carbon investment.
The fossil fuel divestment movement has seen a 50 fold increase in 2015 and this will keep growing in 2016. Divestment sends powerful market signals and helps to increase investment in the low carbon economy and renewable energy in particular. As of the end of 2015, a total of 430 institutions across 43 countries and representing $2.6 trillion in assets had already committed to divest from fossil fuel companies. The Climate Trust predicts that this momentum will gain significantly in 2016.
Together, the growth of renewables and efficiency alongside carbon pricing and divestment, will make 2016 the most important year for climate action to date.
Richard Matthews is a consultant, eco-entrepreneur, green investor and author of numerous articles on sustainable positioning, eco-economics and enviro-politics. He is the owner of The Green Market Oracle, a leading sustainable business site and one of the Web’s most comprehensive resources on the business of the environment. Find The Green Market on Facebook and follow The Green Market’s twitter feed.
Image credit: Phillippe 2009