The entry into force of the Paris Climate Agreement in November was an unprecedented achievement in the global fight to tackle climate change. The agreement, formally adopted in record time by China, India, the United States and more than 130 other countries, calls for limiting global temperature rise to well below 2-degrees Celsius, and reaching net zero greenhouse gas emissions by the second half of this century. Strong global investor and company support for the agreement, organized by Ceres and our partners, We Mean Business and the Global Investor Coalition on Climate Change, was integral in getting the agreement across the finish line.
In 2016, there was also powerful business action in committing to more ambitious greenhouse gas reduction goals and using more renewable energy to power their operations. Many of the strongest actions came from Ceres Company Network members, including Apple, General Motors and Bank of America, which made commitments to run their facilities with 100 percent renewable power. Apple has nearly hit its 100 percent goal, and next is focused on greening its suppliers’ product manufacturing in countries like China and Japan.
This business momentum is a direct result of plummeting costs for wind and solar energy, which is making renewable energy less expensive in many states than fossil fuel generation, including natural gas- and coal-fired plants. Investors are also seeing big opportunities in green energy, including key investor partner the California Public Employees’ Retirement System (CalPERS), which acquired up to a 25 percent ownership stake in a 550-megawatt solar farm in southern California. These and other projects are a key reason why renewable energy accounted for roughly two thirds of the new U.S. generating capacity added in 2016.
While laudable, global clean energy investments are not at the scale needed to limit global temperature rise to well below 2-degrees Celsius. To spur that level of investment, Ceres convened more than 500 investors at our biennial Investor Summit on Climate Risk, and with Bloomberg New Energy Finance, released a report that maps the funding “gap” between business as usual and 2-degrees Celsius scenarios.
Ceres also made inroads working with companies to reduce their financing and lending in carbon-intensive sectors. For example, Ceres Company Network member JP Morgan Chase & Co. agreed to revise its coal policy so that it would no longer provide financing for new coal mines globally and will curtail investment in new coal-fired power plants.
While Ceres is encouraged by this wide-ranging progress, the 2016 U.S. presidential election has created some uncertainty about the path forward in 2017. No matter the policies in Washington, we are confident that due to the action by investors, companies, cities and states, global momentum will continue towards a low-carbon, clean energy future.