Assignment 2

Harsh Shah

7903156

MGMT3130

Professor Hani

February 6, 2018
1. Climate Change Impact on business
The first impact on business due to climate change is that they need to hire

employees with sustainability and climate related skills to maintain environment-

friendly production and pay the appropriate amount of salary for sustainability

expertise of those employees. These trends have been observed in businesses

around the world as corporations are taking climate change seriously now like

finance, human recourse, marketing or any other functional department. According to

the job postings by the famous job search engine indeed, the job listings regarding

renewable energy sector under energy sector jobs had increased from 39% in 2014

to 51% in 2017 (Ruggeri, 2017). This illustrates the increase in the importance of

employees with education and experience about production with renewable energy

and sustainable sources. A survey in UK and North America displayed the salary

postings in which the findings suggested that the salary for employees working in

corporate social responsibility and sustainability sector were 1.5 to 2 times the salary

of a normal employee in the same company (Ruggeri, 2017). Thus, it can be

concluded that businesses need to invest more in human resources who are experts

in sustainability and climate related skills due to climate change as shown in

appendix A.

The second impact climate change affects businesses which have a

production facility based on producing renewable and environment friendly products

like Tesla for a competitive advantage in global markets. Such companies get a

subsidy from government for the production. Government provide subsidies for

environment friendly production; companies gain extra profit margins and produce

better products due to these subsidies. For instance, Trump said that the US might

withdraw from the Paris agreement due to which business leaders like Tesla and
 General Electric were worried that foreign competitors would gain a strategic

competitive advantage in this field as they would still receive the subsidies for

environment friendly production (Amadeo, 2019).

The last impact of climate change on businesses is investment. Investors

focus on demanding a climate risk disclosure from companies and only invest in

companies which follow corporate social responsibility and sustainability. According

to Forbes, more than $6 trillion dollars have been invested in companies with a clean

energy commitment since 2013 as people are getting more aware about the climate

change and the harmful impact it can have in the future (Schiano, 2018).

2. Overview of the Paris Agreement

The Paris agreement is an agreement made in Paris by the parties within the

United Nations Framework Convention on climate change to prevent climate change

and to invest towards a sustainable environment with low carbon emissions

(unfccc.int/, 2018). UNFCCC works on the enhanced co-operation between

countries to reduce greenhouse emissions and form international agreements for

countries to tackle climate change and maintain a sustainable environment The Paris

Agreement's long-term goal is, “keep the increase in global average temperature to

well below 2 °C above pre-industrial levels; and to limit the increase to 1.5 °C, since

this would substantially reduce the risks and effects of climate change” (unfccc.int/,

2018). The Kyoto protocol was a similar agreement in 1992 in Kyoto to keep the

carbon emissions low, but the United States and Canada were not a part of it and it

is soon to be expired and the new Paris agreement will be in effect. The main

difference between Kyoto protocol and Paris agreement is that Kyoto protocol had

legally binding terms and Paris agreement allows countries to independently evolve

and adjust their climatic strategies due to which the Paris agreement can succeed as
 it was designed to address the flaws of Kyoto Protocol (Wong, 2018). There are 195

current signatories and 184 parties in this agreement which holds more than 88%

greenhouse gas emissions. All 197 members have either signed or accorded to this

agreement and the overview is illustrated in appendix B.

3. Answers based on China

a. Status of agreement: China is a party to the Paris agreement as it has signed the

agreement on 22 April, 2016 and ratified the agreement on 3 September, 2016

(wikipedia.org, n.d.). The agreement came into force for China on 4 November,

2016.

b. Nationally Determined Contributions: Nationally defined contributions are the

main source of success of the Paris agreement. The Nationally defined

contributions are the contributions made by each country to reduce emissions

and adapt to the impacts of climate change (unfccc.int, n.d.). They are the

climate plans for post 2020 that each country will communicate in order to

achieve the long-term goals of Paris agreement (unfccc.int, n.d.). They are

submitted by countries to the UNFCCC secretariat for every five years thereafter

as in 2020, 2025, and 2030. China is a country which has ratified the agreement.

Due to this, China has to submit their main aims in the document of their

intended nationally determined contribution for the next future years in which

they state how they will prevent climate change and maintain a sustainable

environment to meet the emission targets agreed in the Paris agreement. For

instance, the nationally determined actions of China by 2030 are, “ To achieve

the peaking of carbon dioxide emissions around 2030 and making best efforts to

peak early, To lower carbon dioxide emissions per unit of GDP by 60% to 65%

from the 2005 level, to increase the share of non-fossil fuels in primary energy
 consumption to around 20%,and to increase the forest stock volume by around

4.5 billion cubic meters on the 2005 level” (www4.unfccc.int, n.d.).

c. What is the role of business in meeting the goals of the Paris Agreement; i.e. has

government incentivized business to take action; if so, how? Are individual

organizations self-motivated; if so; why? Be sure to provide at least three

examples of businesses and the actions that they are taking:

I. The businesses are motivated in China to follow the Paris agreement and find

sources to better tackle the climate change as the taxation policy is

preferential for businesses which focus on development of new energy or

improve the grid access and procurement mechanisms of solar, wind, and

hydro energy. Thus, businesses focus on development of clean and green

energy and products like that for getting preferential taxation (unfccc.int, n.d.).

II. The second change seen in China is major investment in electric cars. China

is spending heavily and supporting car companies with electric and renewable

sources which stop the carbon emissions. Thus, such electric car companies

are promoted to spend more in development of such products and

government supports it fully (www.climatechangenews.com, 2018).

III. The third technique Chinese companies have chosen is to relocate the

production companies abroad as the individual goal of China is met even

though the production companies may cause emissions in other countries.

China supports this as their individual aim of their country would be met, but

ignore that this will still impact the global result for carbon emissions in the

same way (Davies, Leefatt, & Westgate, 2018).

4. Based on your research, what do you believe may be the best way to achieve
real and lasting change towards solving the climate crisis? (i.e. do you think the
Paris agreement is enough)?

I do not think that the Paris agreement is an effective way to tackle climate

change. The research I did on China suggested that China participated on the Paris

Agreement very well in the first years, but now the country has understood that

green and clean energy is expensive and it also impacts the GDP in their country

negatively. (Adams, 2018) The country is now focussing on growth of its own GDP

and non-renewable sources of production as the U.S. president Trump talks about a

withdraw from the agreement and focussing on just betterment for U.S.A. Also, the

reports present that China was following the agreement, but it is hard to believe with

China’s history of fudging with the numbers and it was also proved that China was

burning coal 17% more than it its reports illustrated (https://thehill.com, 2018).

Thus, I believe that the Paris agreement in not going to be successful in major

countries like America, China, India, and Russia which are the major countries

responsible for more than 50% carbon emissions in the world. These countries will

only care for their own growth with burning non-renewable energy, change reports to

show they are following the treaty, and make investments only till a certain extent till

they are financially profitable. The only way to make changes in the climate is to take

legal actions against the countries which do not maintain the goal set by Paris

agreement. There should be a heavy penalty set for all the countries not following

this so that countries start producing with clean energy.

References
Adams, P. (2018, 12 12). China was the climate champion of Paris. Now it’s doing a complete U-turn.
Retrieved from financialpost.com: https://business.financialpost.com/opinion/china-was-
the-climate-champion-of-paris-now-its-doing-a-complete-u-turn

Amadeo, K. (2019, 01 04). Climate Change Facts and Effect on the Economy. Retrieved from
Thebalance.com: https://www.thebalance.com/economic-impact-of-climate-change-
3305682

Davies, P., Leefatt, K., & Westgate, A. (2018, 06 18). Can China Meet Its Paris Agreement Targets?
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meet-its-paris-agreement-targets/

https://thehill.com. (2018, 06 05). China's rising emissions prove Trump right on Paris Agreement.
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https://thehill.com/opinion/energy-environment/390741-chinas-rising-emissions-prove-
trump-right-on-paris-agreement

Ruggeri, A. (2017, 07 10). How climate change will transform business and the workforce. BBC.com.
Retrieved from BBC.com.

Schiano, S. (2018, 10 11). Climate Change Is Transforming Business. Retrieved from

www.forbes.com: https://www.forbes.com/sites/forrester/2018/10/11/climate-change-is-
transforming-business/#414ee2482f47

unfccc.int. (n.d.). Nationally Determined Contributions (NDCs). Retrieved from unfccc.int:

https://unfccc.int/process/the-paris-agreement/nationally-determined-contributions/ndc-
registry#eq-2

unfccc.int/. (2018, 07 03). What is the Paris Agreement? Retrieved from unfccc.int/:
https://unfccc.int/process-and-meetings/the-paris-agreement/what-is-the-paris-agreement

wikipedia.org. (n.d.). List of parties to the Paris Agreement. Retrieved from

https://en.m.wikipedia.org/wiki/List_of_parties_to_the_Paris_Agreement:
https://en.m.wikipedia.org/wiki/List_of_parties_to_the_Paris_Agreement

Wong, A. (2018, 02 11). Even without the US, the Paris climate agreement can succeed where its
predecessor failed. www.cnbc.com. Retrieved from
https://www.cnbc.com/2018/02/11/unlike-the-kyoto-protocol-the-paris-agreement-can-
still-succeed.html

www.climatechangenews.com. (2018, 07 09). China and EU can lead on climate action. Retrieved
from www.climatechangenews.com:
https://www.climatechangenews.com/2018/07/09/china-eu-can-lead-climate-action/

www4.unfccc.int. (n.d.). ENHANCED ACTIONS ON CLIMATE CHANGE:. Retrieved from

www4.unfccc.int: https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/China
%20First/China's%20First%20NDC%20Submission.pdf
Appendix

Appendix A: Indeed Job Postings for sustainability

Appendix B: Overview of key points of Paris Agreement