Written by: Johnathon Fata
On December 12, 2015, 196 countries came together to adopt the Paris Climate Agreement. This historic Agreement came within the United Nations Framework Convention on Climate Change (UNFCCC) to deal with the mitigation and reduction of greenhouse gas (GHG) emissions. This Agreement allows each country to set their own plans and processes to help reduce the country’s contribution to climate change. The Agreement has three primary goals:
To hold the global temperature averages from rising more than 2 °C from pre-industrial levels and aim to keep them below 1.5 °C
Increase the country’s ability to adapt to the adverse impacts of climate change and the development of low-GHG emissions technologies
Create financing mechanisms that support low-GHG emissions technologies
This agreement is the first ever to be signed by nearly every country on earth and a significant step forward in taking actions to reduce the impacts of climate change. Furthermore, it is completely voluntary, non-binding and there are no mechanisms for enforcement.
On June 1, 2017, the United States of America withdrew from the Paris Climate Agreement. Unfortunately, the basis and justification for this decision is based on flawed assumptions about the economic repercussions of implementing policies that help reduce GHG emissions. In fact, policies that move our economy towards a lowered GHG emissions future have provided incredible economic benefits to the states and jurisdictions that have adopted them.
To see the positive impacts of climate-friendly policies, look no further than Waypoint’s home state of California. Over the past 40 years, California has implemented policies to encourage energy efficiency, making it the state with the second lowest energy consumption per capita for both the residential and commercial sectors and Californians pay 17% less than the national average on their monthly utility bills. Pair that with the fact that in the last 5 years, California’s GDP has grown at a compound annual growth rate of 3.23% per year. That’s more than double the overall U.S. Economy’s growth of 1.96% over the same period.
Additionally, when looking at job growth within the energy sector, consider that there are more than twice as many clean energy jobs than those that contribute more significantly to climate change. That equates to 2.95 million jobs in clean energy out of 4.1 million total energy-related jobs. Energy efficiency employs more than 2.2 million people alone.
These positive economic impacts are not missed on state and world leaders. Following the U.S. departure from the Agreement, over 1,200 business leaders, mayors, governors, and college presidents signed an open letter vowing to "continue to support climate action to meet the Paris Agreement," even "in the absence of leadership from Washington.” Additionally, 274 U.S. Mayors representing 58 million Americans, known as the “Climate Mayors”, have committed to working to uphold the Paris Climate Agreement. Finally, just a couple of days ago on June 6, 2017, California Governor Jerry Brown and China’s President Xi Jinping signed an agreement to work together to reduce emissions.
Waypoint is a strong supporter of reducing GHG emissions within the commercial real estate (CRE) industry. Lowered energy costs translate to increases in asset value and happier tenants. Our Product and Services help utilities and CRE investors capture the benefits of energy efficiency, creating positive economic impacts and reducing GHG emissions; a true win-win situation. While Waypoint regrets the U.S.’s departure from the Paris Climate Agreement, it will not affect the mission of our company and commitment to reduce energy consumption and GHG emissions within CRE industry.