The Paris Agreement – Towards a Safer World The Paris Agreement represents an historic moment and a crucial turning point in the long, tortuous diplomatic struggle to reduce the risks of catastrophic climate change. Significant elements include more ambitious long-term mitigation objectives, an agreement for all countries – developed and developing – to review and scale up their mitigation efforts every five years, and a robust transparency framework for emissions reductions, including common accounting standards, regular national reporting and independent expert reviews. Importantly, the Paris Agreement strengthens the long-term mitigation goal agreed to in Copenhagen in 2009. Under the Copenhagen Accord, world leaders sought to limit the increase in the global average temperature to ‘below’ 2°C (i.e. above pre-industrial levels). Under Article 2 of the Paris Agreement, the goal is now ‘well below’ 2°C. There is also a commitment to ‘pursue efforts’ to keep the temperature increase to only 1.5°C above pre-industrial levels – admittedly, a formidable technical and political challenge. Additionally, the parties have agreed (under Article 4) for global greenhouse gas emissions to peak ‘as soon as possible’ and to achieve overall carbon neutrality ‘in the second half of the century’. Collectively, these provisions send a powerful signal: the unmistakable intention of the international community is to end humanity’s reliance on fossil fuels within several generations (except perhaps in the context of carbon capture and storage). Hopefully, this signal will decisively affect global investment patterns over the coming decades. It should, amongst other things, hasten the current shift to renewable energy sources and away from fossil fuel exploration and production. Almost certainly, fund managers will be under greater pressure to review and restructure their portfolios, and gradually divest of their fossil fuel stocks. Similarly, major banks will be more reluctant to support new, large-scale energy projects based on fossil fuels – partly because such projects will be more risky financially and partly for reputational reasons. There are of course risks to the effectiveness of the new Agreement. One of these is the possible election of a Republican as US President in late 2016. Currently, all the leading Republican candidates oppose significant policy measures to mitigate climate change, and most have distanced themselves from mainstream scientific views. Plainly, a skeptical Republican President could abandon the Obama Administration’s current climate change commitments, including its emissions-reductions target for 2030 (of -27% against 1990 levels) and, in effect, withdraw support for the Paris Agreement. A Republican administration could also undermine the Environmental Protection Agency’s efforts via the Clean Air Act to curb emissions from power stations. To compound matters, if the Republicans retain clear majorities in the House and Senate after 2016, additional legislative and fiscal initiatives to thwart mitigation efforts are highly probable.