Governments will have to partner with private companies to achieve low-carbon goals
The Paris climate change agreement has paved the way for a comprehensive reduction in greenhouse gas emissions, with an ultimate target to restrict the rise in global temperature by 1.5 or 2 degrees C.
Such a huge target, however, cannot be achieved by actions of the governments alone. Bureaucracy tends to move much too slowly to yield timely and efficient results. Thus, an equal, if not greater, responsibility falls on the private sector.
A number of countries have implemented direct policies and programs to have industries reduce their GHG emissions. Some of the most well known are the European Union and New Zealand. Emissions trading schemes or cap-and-trade programs in these jurisdictions have been operational for some years now.
However, these programs and schemes were implemented following years of discussions and arguments. In both the jurisdictions, disagreement over the future of the respective programs continues.
So, a number of companies across sectors have started taking initiatives to reduce their direct and indirect GHG emissions. Several private sector companies, like Microsoft, have introduced an internal carbon price.
Several funds, banks, and financial institutions have announced plans to reduce their exposure and investments in carbon-intensive assets. Such decisions by funding agencies also push companies to increase investment in low-carbon assets.
Also, private sector companies are playing a pioneering role in increasing the use of renewable energy. Companies like Google, Apple, Amazon and Facebook are working to reduce their carbon footprint and reduce energy dependence on fossil fuels.
From the measures already taken by the private sector and those expected in the near and medium term, it is clear that governments around the world will have to partner with private companies to achieve low-carbon goals.