The Paris Agreement has hit the headlines in recent months. The US has now withdrawn from the agreement, but other countries – and even individual US states like Hawaii – have recommitted to its terms.
So what does it all actually mean?
A fresh start
The Paris Agreement was significant because it was the first time all 197 parties had reached an agreement (it was ratified by 148 of these)1. It also included involvement and pledges from 1200 other parties, such as companies like the Westpac Group.
The agreement included:
- A long-term goal to limit global warming to 1.5 degrees Celsius above pre-industrial levels.
- The commitment to be carbon neutral between 2050 and 2100.
- Individual nation pledges on emissions with review and strengthening every five years.
It also covered developing countries and included support from the UN1.
What does the agreement mean for Australians?
Australia has pledged to reduce its greenhouse gas emissions by 26-28% compared to 2005 levels by 2030. The policy and regulation to establish this is the Direct Action Plan and Safeguard Mechanism2 which consists of:
- An Emissions Reduction Fund: companies purchase emissions reductions through a reverse auction by optional involvement.
- Safeguard Mechanism: companies are penalised for exceeding an emissions reduction baseline or ceiling from past emissions.
- Renewable Energy Target: supports investment into renewable energy including rebates for Australians installing rooftop solar panels or solar hot water systems.
As the debate over how best to limit greenhouse gas emissions continues, government policies and initiatives may continue to change over the coming years. There may be a variety of costs to implement with both companies and consumers likely to be affected. Companies in energy and utilities in particular will need to change over the coming years to manage emissions. The International Energy Agency has estimated $US13.5 trillion globally will need to be invested in energy efficiency and low-carbon technologies between now and 20303.
3 ways to reduce your carbon footprint
1) Home tweaks
Insulating your home can help keep it cooler in summer and warmer in winter so you don’t need to switch on the heater or air conditioner as much. You could also look at installing solar panels or battery banks to help manage your electricity needs. Don’t forget to look at the small stuff like changing your light bulbs to energy-saving options or water-efficient shower and tap heads.
2) Step out of the car
Sometimes using a car is unavoidable but you can cut down on fuel emissions by using public transport and carpooling. If you don’t need to travel far, consider doing your heart a favour by walking or riding a bike. If you need to fly interstate or overseas, you might even want to consider paying for a carbon offset which goes towards investing in projects to support the environment like protecting forests or developing renewable energy.
3) Check what’s on your plate
You may not be thinking about greenhouse emissions when you eat your dinner but it still has a cost – packaging, transport, even harvesting and processing or raising livestock. Obviously we all need food to live so what’s the answer? You could try and buy local produce, avoid packaging where you can and take your own bags to the shops and reduce your food waste by only buying what you need. You could also start your own veggie patch or keep your scraps from going into landfill by making a compost heap.
If you wish, you can also make sure your investments are sustainable as part of managing your carbon footstep. BT Financial Group is a signatory to the United Nations’ Principles of Responsible Investment and also to the Montreal Pledge, which commits investors to measuring and publicly disclosing the carbon footprint of their investment portfolios. As part of the Westpac Group, BT Financial Group is also a signatory to the Paris Pledge which demonstrates a commitment to support the objectives of the Paris Agreement. You can visit www.bt.com.au/sustainability to find out more.
Would you like help planning your finances for a sustainable future? Contact us or speak to your financial adviser.
This information is current as at 12/072017.
This document provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information has been prepared without taking account of your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs.
The information contains material provided by or derived from third party sources believed to be accurate at its issue date. While such material is published with necessary permission, no company in the Westpac Group accepts any responsibility for the accuracy or completeness of, or endorses any such material. Except where contrary to law, we intend by this notice to exclude liability for this material. Information current as at 12 July 2017.
© BT Financial Group 2017 – a Division of Westpac Banking Corporation ABN 33 007 457 141 AFSL & Australian credit license 233714