By Cody Laska
Money and Investing Writer
On the eve of the G20 summit in Hangzhou the United States and China, who are responsible for producing a combined 38 percent of all global greenhouse gas emissions, agreed to ratify the Paris Climate deal; an unprecedented attempt to control global climate change.
The plan includes such clauses as keeping the warming rate to below 1.5 C, emission reduction goals based on region location, a 5-year review mechanism to adjust plans in case they are not working and a removal of liability of more developed nations to smaller ones in the event of “extreme weather conditions” or “slow onset events.”
Currently the agreement has only been ratified by 26 countries, short of its 55 country objective.
However, it is expected to reach this by the end of the year and begin to take effect in December or early January 2017. Meaning that it will come down to individual efforts of the countries that have already ratified to begin implementing changes on their own; however, this is not something new for any developed nation as they have been operating under their own climate saving plans as far back as the early 1990s in some cases.
Ultimately the energy market did not react to this news as most investors view the ratification as either a diplomatic stunt that will unlikely come about or will simply not come about as intensely as planned.
Crude oil, heating oil, unleaded gas (NYMEX) and Brent crude oil (ICE) futures have all seen gains in the past week seeing a significant rise in value despite the market environment for fossil fuels in the past year.
This is most likely due to the discovery of a 2-billion-barrel oil field in west Texas named “Alpine High” by the Apache Corporation (APA).
However, in a quote from Apache chief executive John Chirstmann IV “This is a giant onion that is going to take us year to unveil and peel back” does not bode well.
The area where the field was located had an industry stigma around it as it is in an unconventional location for an oil field. This could lead to more ambitious and aggressive oil location operations by other energy firms; which will produce more oil but not at a rate fast enough to beat the start date of the Paris Agreement, pending its ratification by 55 countries.
Only time will tell if the Paris Agreement will have the desired effect by its creators or if it will befall the same pitfalls as its 2009 Copenhagen Climate Change Conference predecessor.
In summary the G20 summit in Hangzhou came in with an intent to focus heavily on environmental issues but with the ratification of the Paris Agreement by host nation China before the meetings began, it was effectively removed it from the table.
The summit focused heavily on the current situation in Syria, trade between developed nations and growing economies, and the migrant refugee crisis impact Europe.
A version of this article appeared in the Tuesday, September 13th print edition.
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