A final agreement adopted at the world climate summit in Paris last night heralds the beginning of the end of the fossil fuel era, according to experts, investors and environmentalists.

Lauded as a historic breakthrough by political leaders, the 31-page Paris Agreement was endorsed by a long and emotional standing ovation by representatives of 195 countries after two weeks of late-night negotiations, and 20 years of international diplomacy.

After repeated delays, disputes and drafting errors through the day, the French foreign minister, Laurent Fabius, banged a gavel at 6.30pm to signify that the deal was done. It was hailed as “a big step forward” by Scotland’s First Minister, Nicola Sturgeon.

“This historic agreement sends a signal of certainty about the global economy’s low carbon future,” she said. “We want to avoid the worst impacts of climate change falling on the poor and vulnerable.”

The agreement was broadly welcomed by many campaign groups, but condemned as inadequate by a few. All agree that there is much work still to be done to keep governments to their promises.

The Paris Agreement commits countries to “holding the increase in the global average temperature to well below 2°C above pre-industrial levels.” Above that, scientists say that the droughts, floods and storms induced by carbon pollution could be catastrophic.

The agreement also promises “to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change.”

It commits countries “to reach global peaking of greenhouse gas emissions as soon as possible”. This should be followed by “rapid reductions” in carbon pollution “in the second half of this century”.

The former US vice-president and climate campaigner, Al Gore, said that the agreement sent a message to investors. “The transformation of our global economy from one fuelled by dirty energy to one fuelled by sustainable economic growth is now firmly and inevitably underway,” he argued.

For Michael Jacobs, senior adviser for the New Climate Economy project, the agreement signaled the end of the fossil fuel era. “This is the moment when the world started shifting decisively away from fossil fuels and towards clean and safe energy systems,” he said.

Stephanie Pfeifer, who leads a network of 120 institutional investors with over 13 trillion euros of assets, said that countries would now decouple their prosperity from the use of coal, oil and gas. This would send “a very strong signal to business and investors that there is only one future direction of travel to reduce emissions,” she said.

According to Lang Banks, the director of WWF Scotland in Paris as an observer, the fossil fuel industry was “now living on borrowed time”. He said: “If governments are to stay true to keeping global temperature rises well below 2°C, then greater amounts of fossil fuels will need to remain in the ground.”

He called on the Scottish Government to start meeting its targets to cut climate pollution. “Next week’s budget provides an opportunity for the Scottish Government to set out meaningful policies, such as a clear, long term plan for improving energy efficiency,” he said.

Over 10,000 people took to the streets of Paris yesterday, including activists from Scotland, to put pressure on governments to go further in cutting climate pollution. One of the organisers, Bill McKibben from 350.org, criticised the fossil fuel industry for delaying the transition to cleaner energy.

“Since pace is the crucial question now, activists must redouble our efforts to weaken that industry. This didn’t save the planet but it may have saved the chance of saving the planet.”

The Paris Agreement includes a commitment by rich countries to channel at least $100 billion a year into developing nations from 2020 to help them cope with the impacts of climate change. But this is regarded as too little too late by critics.

Dr Richard Dixon, the director of Friends of the Earth Scotland, argued that the agreement had failed to tackle the climate crisis and the needs of the most vulnerable. “Rich countries have created an agreement that spells bad news for people and the planet,” he said.

"By delaying critical action to cut greenhouse gas emissions and failing to put sufficient finance on the table leaders have effectively signed a death warrant for millions of the poorest people around the world.”