The Paris Agreement: Consequences for the EU and carbon markets?

Politics and Governance, Vol 4, No 3, 2016, pp. 188-196.

Most observers agree that the Paris Agreement (PA) was a step in the right direction. However, we argue that we do not know how effective it will become in a problem-solving perspcetive. We start the article by giving a brief account of the Paris Agreemnent. There are certainly positive elements but there are also weaknesses and uncretainties. To 'test' its potential effectiveness we therefore discuss the PA in relation to EU climate policies and carbon markets, primarily the EU ETS. We discuss its potential significance along three causal patyways; the legal - political - and bureaucratic pathways. Regarding the EU we argue thatr a combination of these pathways will increase the pressure on 'laggards' within the deliver on the 40% target by 2030. It may also contribute to keep climate on the EU agenda, but long-term effects are uncertain. Regarding carbon markets, particularly the EU ETS, the PA was welcomed by the proponents of a stronger EU ETS. However, neither of the three pathway have turned out to be important so far. As things stands now the case of the EU ETS shows that it will be challenging to use the PA in internal processes and that hopes in this regard should be moderate. In conclusion we stress that however the EU and carbon markets are, the main challenge of the PA is to enable developing countries to reduce their emissions.