Do, or do not. There is no try.

At COP23 next month, global leaders will continue the process of turning the vision of Paris into a reality. The first global “stocktake” of progress - a so-called "Facilitative Dialogue" - is not until 2018, when the collective commitments countries have made will be stacked against their commitments to limit temperature rises to two degrees over preindustrial levels.

Progress will be evaluated every five years thereafter.  This year’s event may be unlikely to provide too much news, but it’s a useful opportunity to assess the state of play in climate policy. 

We may need to wait until next year for a formal assessment of national climate commitments but we already have a pretty good idea of what the picture will look like.  The NGO Climate Action Tracker monitors the collective implications of national climate goals and estimates that the “intended nationally determined contribution” (INDCs) already submitted will be sufficient to limit temperature rises to around 2.8 degrees.  Our analysis infers this is a generous interpretation. Either way, it’s a long way from the commitment made last year and suggests national policy makers should have spent the last two years ratcheting up their goals.

In fact, very little has happened.  Since the Paris Accord was agreed in December 2015, just nine countries - representing under 3% of global greenhouse gas emissions - have submitted national plans to the UN. 

Number of INDCs submitted each month since 2015 and GHG emissions of submitting countries

 Source: UN INDC database, CAIT, Schroders calculations. MtCO2 is metric tons of CO2 equivalent 

On the one hand, the limited progress is clearly disappointing.  We have always said that the (carefully chosen) words in Paris mean less than the actions at home and it's clear there is far more to do.  On the other hand, 2018 will focus attention on the work that remains and we believe could prompt another leg up in the intensity of policymaking and social change. Over the last few months – apparently galvanised more than hindered by President Trump’s announcement of the US’ withdrawal from the Paris Accord – global leaders have stepped up policy making with renewed statements of intent, commitments to toughen carbon trading schemes and announcements of electric vehicle support.

Much more remains to be done and far bigger changes lie ahead of the global economy, industries and financial markets.  We believe those changes will be forthcoming, albeit in fits and starts. 

Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results. The value of an investment can go down as well as up and is not guaranteed. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Schroders has to its customers under any regulatory system. Regions/ sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. The opinions in this material include some forecasted views. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee than any forecasts or opinions will be realised. These views and opinions may change.  To the extent that you are in North America, this content is issued by Schroder Investment Management North America Inc., an indirect wholly owned subsidiary of Schroders plc and SEC registered adviser providing asset management products and services to clients in the US and Canada. For all other users, this content is issued by Schroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. Registered No. 1893220 England. Authorised and regulated by the Financial Conduct Authority.