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The Paris Agreement is one of the most significant international effort to combat climate change. It unites countries across the world in a shared mission to reduce greenhouse gas emissions and build a sustainable future for this and upcoming generations. Just as a trusted accountant in Box Hill can help individuals and businesses stay on top of their financial responsibilities, the Paris Agreement helps countries stay accountable to their environmental commitments.

What is Paris Agreement?

The Paris Agreement is a legally binding international treaty under the United Nationals Framework Convention on Climate Change (UNFCCC). Signed in December 2015 and entering into force in November 2016, the goal of the Paris Agreement is to strengthen the global response to climate change by:

• Holing the increase in the global average temperature to well below 2 Celsius degree above pre-industry level, while pursuing efforts to limit it to 1.5 Celsius degree.
• Requiring each country to prepare, communicate, and maintain Nationally Determined Contributions (NDCs).
• Submit increasingly ambitious NDCs, every five years, taking a ratchet mechanism.

The Paris Agreement is unique as it requires participation and commitment from both developed and developing countries, creating a truly global pact.

Background and Evolution

The Paris Agreement was built on decades of negotiation. Unlike the Kyoto Protocol (1997), which placed binding targets only on developed nations, the Paris Agreement involves all countries, recognising that climate change is a universal challenge.

Key milestones leading to Paris:

• 1992: United Nationals Framework Convention on Climate Change (UNFCCC) established
• 1997: Kyoto Protocol adopted
• 2009: Copenhagen Accord highlighted the urgency of a global deal
• 2012: Doha Amendment adopted
• 2015: Paris Agreement adopted by 196 countries

This evolution shows the growing international consensus that climate change is not just an environmental issue but also an economic and social challenge.

Australia’s Commitment

Australia is a full party to the Paris Agreement and has submitted ambitious NDCs:

• 43% reduction below 2005 levels by 2030
• 62%-70% reduction below 2005 levels by 2035

These ambitious emission targets open up exciting opportunities for Australia in sustainable industries such as renewable energy, solar power, and green exports, while also demanding careful planning to ensure orderly economic transition.

Why the Paris Agreement Matters

The Paris Agreement is not just about climate, it has far-reaching impacts on economy, communities, and future opportunities.

Benefits includes:

• Driving capital investment in renewable energy and green jobs.
• Promoting electrification, reshaping industries and job markets.
• Stimulating sustained economic growth by providing cleaner, cheaper energy.
• Improving living standards and easing cost-of-living pressures over time.

Building a Sustainable Future

The Paris Agreement represents a collective global effort to safeguard our planet while creating new avenues for innovation and resilience. Australia’s active role highlights both the challenges and opportunities of transitioning to a low-carbon economy.

This article is part of an upcoming series on climate change and related policies. With Australia recently announcing its 2035 emissions target, stay tuned for deeper insights and expert analysis from our professional team at Infinity Solution.

It also completes our coverage of the Economic Roundtable, which addresses issues such as economic resilience, productivity, budget sustainability and tax reform. While climate change was not extensively discussed during the meeting, many organisations highlighted it in their submissions and discussion papers.

Sienna Jiang, Managing Director of Infinity Solution Tax Plus, strongly believes that climate action will be crucial for rebooting and strengthening Australia’s economy, both now and into the future.

In today’s ever-changing economic environment, having a trusted accountant by your side can make all the difference. At Infinity Solution Tax Plus, our experienced team is here to help you navigate uncertainty, optimise your tax strategies, and secure your financial future with confidence.

Contact us today on 03 7046 2254, to arrange an initial consultation, or to visit us at 818 Whitehorse Rd, Box Hill to meet your local experts in person.