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The international agreement, forged at the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties in Paris (COP21), took many by surprise, both for its ambition and its substance. 

It has spurred renewed efforts in emissions reduction, including by the US and China, the world’s largest greenhouse gas emitters, who have formally become parties to the Paris Agreement, and a strengthening of domestic and regional policies, such as China’s national carbon market.

Just last week, the threshold for the Agreement was reached and it will come into force on November 4, 2016. 

But what does it mean for BHP Billiton?

In September 2015, we released our Climate Change: Portfolio Analysis, to provide insight into our approach to scenario analysis and the potential impacts on our portfolio of a shift to a 2 degree world. 

This is not a static piece of work. Climate change is fully integrated within our portfolio analysis and strategic planning processes. 

Following the significant shifts we have seen in the last 12 months, we have issued a timely new update - Climate Change: Portfolio Analysis – ‘Views after Paris’ - which provides insight into how we track signals in the external environment, to provide an indication of which scenarios are becoming more or less dominant. 

Climate change is fully integrated within our portfolio analysis and strategic planning processes.

Climate Change: Portfolio Analysis – ‘Views after Paris' explores the emerging alignment of global climate change policy developments in the last year, and the potential for it to deliver an orderly transition to a less than 2 degree outcome. It also takes an in-depth look at the continuing transition towards lower emissions energy across the global economy through the lens of two areas of growth – lower emissions power generation (renewables) and increasing electric vehicle (EVs) uptake.

There has been an increase in combined wind and solar power generation capacity globally by nearly 50 times since 2000. The International Energy Agency recently increased its forecasts for wind and solar growth rates by 12 per cent. Each nation will have to decide how it manages the role of these energy sources as part of the broader energy mix.

 

Similarly, demand for EVs is also strengthening. By 2035, we expect that there will be approximately 140 million EVs on the roads – representing around 8 per cent of the total vehicle fleet. Read more about our views on EVs.

Our analysis considers the potential portfolio impacts of these developments, including the likelihood of increased demand for copper for solar and wind generation, and the potential for lower real crude oil prices as a consequence of growing uptake of EVs.

electric vehicles animation

Climate Change: Portfolio Analysis – ‘Views after Paris’ also discusses how the signals we are tracking are supportive of our Global Accord Scenario, in which there is an orderly transition to a 2 degree outcome – an outcome for which we actively advocate. 

Download a copy of our most recent study Climate Change: Portfolio Analysis ‘Views after Paris‘

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