The Paris Climate Accord is positive news for the planet and for the banking industry. In the spirit of our dynamic logo theme, we’re unveiling the logo above to reference it.
Here are the facts:
- The agreement seeks to limit the rise in global temperatures this century to 2 degrees Celsius.
- Developed countries will make binding reductions in their carbon emissions and to submit their progress.
- The Accord goes into effect once 55 countries representing 55% of global emissions ratify it. The U.S. and China, which together represent 40% of global emissions, said they intend to do so this year.
This will create a new, global market for financial products and services that cater to carbon reduction. American Banker reported on the significance of the agreement to the banking industry:
The agreement is widely expected to be the catalyst for large-scale lending and investments in greenhouse gas (GHG) reduction technologies and infrastructure. The International Energy Agency has estimated that the investment required to meet the Paris Agreement goals could be a towering $1 trillion annually.
In other words, meeting the Accord’s metrics requires an amount of capital a bit smaller than the GDP of Mexico. That’s worth taking note of.