Archive for November, 2012

Expectations for COP 18 in Doha

This week sees the start of the 18th Conference of the Parties of the UNFCCC, or COP18 for short, in Doha, Qatar. This should be a busy transitional COP, with much on the agenda to resolve and important steps forward being taken toward a long term international agreement. But procedural issues, agenda disagreements and fundamental sticking points could still dominate, leading to a two week impasse. Let’s hope not.

At the core of the process lie three work streams which have evolved over many years.

The oldest of these is the discussion on the Kyoto Protocol (KP), which has now been running in one form or another for most of the twenty year history of the UNFCCC. Discussion on a second commitment period (KP2) over the past years have embodied the toughest issues in the climate negotiations, such as the role of developing countries in reducing emissions, engagement with North America (neither Canada or the United States will participate going forward) and the need to put a robust price on CO2 emissions. I am a big fan of KP, despite its shortcomings. It was designed with carbon pricing as its central theme, allowed countries to trade to find lowest cost abatement pathways and through its architecture encouraged signatories to implement cap-and-trade based policy frameworks within their respective economies. The simple but clever ideas within it have not been matched since in terms of effectiveness and efficiency despite years of negotiations. Given sufficient willingness, there are clearly routes forward by which KP could evolve to become the much sought after “21st Century global agreement”, but instead it is reaching the end of its shelf life. There seems to be no resolution with North America under this banner, developing countries appear reluctant to let it be the approach to govern their much needed actions and even the country of its namesake city is unwilling to sign again on the dotted line. Australia and the EU remain as the KP bedrock, if for no other reason than to rescue the CDM and consummate their carbon market linkage with a common approach to accounting, offsets and single market currency (AAUs and CERs). The parties do need to agree on KP2, despite the lack of critical mass, and then roll forward its inherent carbon market architecture into the new grand design.

Next comes the discussion on long term cooperative action, or LCA, a workstream which appeared in 2007 at the Bali COP and is home to a broad range of developments from the Green Climate Fund (GCF), the Nationally Appropriate Mitigation Action (NAMA), the much discussed New Market Mechanism (NMM) and more recently the Framework for Various Approaches (FVA). It was meant to deliver the grand deal at Copenhagen in 2009 but didn’t and now labours on with many loose ends and partially thought through ideas which have not been implemented or even fully negotiated. Nevertheless it has been a useful testing ground for new thinking, but has not yet delivered any real mitigation action. It needs to stop now, but difficult issues remain such as the funding of the Green Climate Fund and the modalities for actually spending any money that may arrive in its coffers. These spinoffs from the LCA will need to continue under one of the Subsidiary Bodies or within the ADP (see below) discussions, but the parent discussion should be put to rest in Doha.

Now comes “the new hope”, the Durban Platform for Enhanced Action. For some, the parties at COP17 simply kicked the can 9 years down the road knowing that little new progress would be made, but for many this represents a much needed and major reboot of the process after years of making almost no progress at all on the respective roles of developed, emerging and developing economies. As Harvard’s Rob Stavins noted in his blog of January 2012;

Now, the COP-17 decision for “Enhanced Action” completely eliminates the Annex I/non-Annex I (or industrialized/developing country) distinction.  It focuses instead on the (admittedly non-binding) pledge to create a system of greenhouse gas reductions including all Parties (that is, all key countries) by 2015 that will come into force (after ratification) by 2020.  Nowhere in the text of the decision will one find phrases such as “Annex I,” “common but differentiated responsibilities,” or “distributional equity,” which have – in recent years – become code words for targets for the richest countries and a blank check for all others.

We should not over-estimate the importance of a “non-binding agreement to reach a future agreement,” but this is a real departure from the past, and marks a significant advance along the treacherous, uphill path of climate negotiations.

Although there have been some opening salvos fired in the ADP (Ad-Hoc Working Group on the Durban Platform for Enhanced Action) in various inter-sessional meetings this year, the heavy lifting for this work stream needs to start at COP18. In recent months the IEA, the World Bank, PWC and others have all made it abundantly clear that unless some truly meaningful progress is made in the sort term, the 2 deg.C goal will pass us by (it may already have) and that before we know it we will be looking at a 4 deg.C outcome, along with all its consequences. Even the timetable for the ADP, which seeks to reach agreement by 2015 for implementation in 2020 is problematic in terms of the need for immediate action, but it is what it is.

The ADP needs to define a work programme that embraces the five primary strands of action coming out of the KP and LCA, namely;

  • National action defined through specific targets, goals and actions, but aligned with the overarching mitigation objective. This would also include REDD.
  • An underlying carbon market infrastructure as currently embodied by the KP but adapted to the applicable framework for mitigation action. Without an evolving price on carbon in the international energy markets, mitigation action will stall. This work stream should also pick up the NMM discussion.
  • A funding mechanism that can leverage private sector finance for kickstarting technologies and helping less developed economies invest in a low carbon pathway forward. This is the GCF.
  • A continuation of the work of the TEC and CTCN to share knowledge and best practice arising from technology implementation.
  • A robust approach to adaptation.

Recently the World Business Council for Sustainable Development resurfaced work that it undertook back at the start of the LCA, but which is highly relevant to the first of the two prospective work areas above. “Establishing a Global Carbon Market” looks at how the substance of the KP carbon market can be applied much more broadly to an evolving world of various approaches.

The above represents a tall order for two weeks work, but with some 10,000 people in tow there is certainly enough labour at hand to get this heavy lifting done. A refined single track approach will bring much needed focus back to the discussions which then paves the way for at least some hope that the 2015 goal for a new agreement can be met. In summary, the big asks for this COP are:

  1. Agreeing a continuation of the Kyoto Protocol through to 2020 and then politely ushering this Grand Dame of the UNFCCC off the stage with some reverence and applause.
  2. Bringing closure to the LCA work programme and shifting some key components (e.g. GCF, TEC) into the formulation of the ADP.
  3. Establishing a clear work programme for the ADP, which incorporates as a priority, the foundations for a continuing and evolving global carbon market.

Good luck and success to all the delegates.

As if following on deliberately from the PWC report which I wrote about last week, come two new initiatives announced this Monday.

The first is a report from the World Bank and is the flip side of the PWC finding that a 2°C goal is now effectively out of reach. Turn Down the Heat: Why a 4°C Warmer World Must be Avoidedhas been commissioned by the Climate Change Adaptation team at the World Bank, utilising the expertise of the Potsdam Institute for Climate Impact Research. Starting with the impacts that we are already seeing in a 0.8°C world, it looks at the unsettling prospects of a 2°C world and then the somewhat alarming implications of letting the climate issue slide and all of us wandering, eyes wide open, into a 4°C world.

The report is measured in its approach, not relying on histrionics to gets its message across. Rather, by stepping through the issue in terms of areas of concern against current observations, 2°C and 4°C impacts it gives the reader clarity in terms of where we are now, the political space currently targeted and the expected consequences in the medium term of not acting. The report also notes that impacts such as sea level rise will play out over many hundred of years, causing ongoing disruption over that period. A wealth of data is presented from a variety of sources, covering concerns such as ocean acidification, ice loss (sea level rise), extreme temperature events, agricultural impacts, water stress, disease vectors, non-linear change and changes to critical eco-systems.

The President of the World Bank Group, Dr. Jim Yong Kim sums up the issue very clearly in his forward:

We are well aware of the uncertainty that surrounds these scenarios and we know that different scholars and studies sometimes disagree on the degree of risk. But the fact that such scenarios cannot be discarded is sufficient to justify strengthening current climate change policies. Finding ways to avoid that scenario is vital for the health and welfare of communities around the world. While every region of the world will be affected, the poor and most vulnerable would be hit hardest. A 4°C world can, and must, be avoided.

Avoiding 4°C brings me to the second initiative of the day, the Carbon Price Communique. This is a statement released at an event in Brussels by the The Prince of Wales’s Corporate Leaders Group on Climate Change (CLG), a group which brings together business leaders from major UK, EU, and international companies who believe that there is an urgent need to develop new and longer term policies for tackling climate change. The statement serves as a timely reminder of the need for a carbon price within the global energy system, ideally delivered through national and regional market based policies such as the ETS in Europe. The Communique follows from similar statements in previous years, but is much more focussed on a specific policy recommendation that all governments now need to take on board. At launch, the Communique had been signed by well over 100 companies, with the numbers growing daily.

The Communique goes beyond the CLG and includes input from the International Emissions Trading Association (IETA) and the World Business Council for Sustainable Development (WBCSD). This adds strength to the effort and hopefully brings even wider business support.

At the heart of the Communique is the key ask:

Putting a clear, transparent and unambiguous price on carbon emissions must be a core policy objective. Although there are a number of mechanisms that can be used to do this, as businesses we would focus on working through the market, utilizing approaches such as emissions trading which offer both environmental integrity and flexibility for business. A price on carbon will reveal the lowest cost pathway to existing emissions reduction goals and can open the door to increased ambition. 

The strongest evidence for the need for a carbon price comes from one technology, carbon capture and storage. Without it, there is little possibility of balancing rapidly growing energy needs against an atmosphere with a finite capacity to hold CO2 and stay below a given temperature threshold. But getting CCS will require a price on CO2 emissions. Along the way, a clear pricing structure will deliver rapid fuel switching, new bioenergy technologies and renewable power generation. But the eventual prize is CCS, also because it is currently the only known approach to deliver a reliable negative emissions scenario which the World Bank 4°C report identifies as the necessary approach to actually reverse some of the damaging impacts it identifies (e.g. ocean acidity beginning to recover by the end of this century).

More companies need to read, recognize and sign the Carbon Price Communique in the coming weeks.

The PWC report is a reminder that the lack of substantive action today has consequences. In support, the World Bank has given us a clear heads up on what those consequences are. Finally, there is the Carbon price Communique and the growing level of business interest behind it. This is what governments now need to do and it is clear that a significant portion of the business community is there to support such action.

Last week PWC released the 2012 version of its “Low carbon economy index”, the fourth edition of a publication that started just prior to the Copenhagen COP. The main message delivered by the publication is a grim one, although hardly surprising, that the much discussed 2°C target is now effectively out of reach.

 We estimate that the world economy now needs to reduce its carbon intensity by 5.1% every year to 2050 to have a fair chance of limiting warming to 2°C above pre-industrial levels. Even to have a reasonable prospect of getting to a 4°C scenario would imply nearly quadrupling the current rate of decarbonisation. The decarbonisation rate required for a 2°C world has not been achieved in a single year since World War 2. The closest the world came to that rate of decarbonisation was during the severe recessions of the late 1970s/early 1980s (4.9% in 1981) and the late 1990s (4.2% in 1999). The expected reduction in emissions resulting from the current economic slowdown has not materialised, partly because of sustained growth in emerging markets.

Even more bad news follows, with an analysis of the various national pledges made following the Copenhagen COP. Not only does the publication make it clear that the cumulative impact of the stated contributions is insufficient for a 2°C pathway, but that many nations appear to be falling short of actually meeting them.

Even more worryingly, with eight years to go, it is questionable whether several of these pledges can be met.

The resurgence of gas in the global energy mix features in the report as an important driver of change, albeit with the concern about long term lock-in. Nevertheless, growth in natural gas production is leading to a real reduction in emissions in some parts of the world, but particularly the United States.

No matter which country or region you look at, progress made is pretty dispiriting. In a table of some 20 key countries, the worst performer in 2011 was Australia, although over the last decade it hasn’t done too badly in terms of its change in carbon intensity. I suspect that is more due to the fact that it didn’t plunge into recession like almost everybody else, so carbon intensity continued to fall as growth remained high. Therein lies a problem with using carbon intensity as the metric – appearances can sometimes be deceiving.

With 2°C pretty much condemned to the history books, the report goes on to look at the increasing risk of a much higher temperature rise over this century. Even the possibility of an excursion to 6°C is mooted. This outlook isn’t too far off the Shell Scramble (2008) scenario which resulted in CO2e levels approaching 1000 ppm by the end of the century and a consequent temperature rise of over 4°C and rising. By contrast, Blueprints saw temperatures beginning to plateau at between 2°C and 3°C.

None of this is good news, particularly given the amount of change that can take place in the global ecosystem as a result of small changes in temperature. Take sea level, for example. Although it could take well over a millennium to reach a new equilibrium level, the end result is incredibly temperature sensitive. We shouldn’t be surprised by this given that sea level was over 100 metres lower than today during the previous ice age, when temperatures were lower by about the amount we are worried they may rise in the future. As indicated below, a shift from 2°C to 2.5°C adds about 10 metres of eventual sea level rise (although not anytime soon).

 

All this raises the question as to what we should or could do, given that 2°C is not feasible. The “numbers guys” at PWC don’t go there and arguing for a higher target is a political non-starter, but at some point the discussion is going to have to happen.

 Based on the work of Allen, Meinshausen et al, which equates a given stock of atmospheric CO2 with long term temperature rise, it is possible to derive a chart which shows, for a given annual reduction until emissions are zero, the impact in terms of expected (midpoint) temperature rise.

For example, starting today, 2°C requires about a 2.5% year on year reduction in emissions – and this is now deemed infeasible by PWC. But if we delay until 2025, the required reduction is over 4% p.a.

Knowing that the world isn’t going to do much until 2020 when a new global agreement is scheduled to kick in, a 2.5°C goal requires about a 1.6% p.a. reduction, assuming action starts immediately. This would mean no new emissions from 2020, plus some 100 very big CCS projects (1 GW power station) starting up each year through the 2020s on existing facilities – and so on. This isn’t very different to the rate at which new coal fired power plants are appearing today, so it is probably feasible from an implementation perspective. Of course keeping all other emissions in check will be a further challenge, but that task could potentially be achieved by aggressive fuel switching and renewable energy deployment, supported by efficiency improvements.

The PWC report is a timely reminder of the situation that we are now in and the ambition that the proposed new global agreement is going to have to aspire to.

  •  Allen, M. R. et al (2009) Warming caused by cumulative carbon emissions towards the trillionth tonne, Nature, 458:1163-1166, which argues that a one trillion tonne release of carbon gives a most likely warming of 2°C, with a likely (one-sigma) uncertainty range of 1.6-2.6°C.
  • Meinshausen, M. et al (2009) Greenhouse gas emission targets for limiting global warming to 2°C, Nature, 458:1158-1162, which argues that a total release of 0.9 (0.71) trillion tonnes of carbon gives a 50% (25%) risk of temperatures exceeding 2°C.
  • Allen, M. R. et al (2009) The Exit Strategy, Nature Reports Climate Change, 3:56-58, which provides a commentary on the implications of the above papers for non-specialists.

 

I have just got back from the annual Council meeting for the World Business Council for Sustainable Development (WBCSD) where it was good to hear the new President, Peter Bakker, talking about a much more focused and serious response from the organisation to key issues such as climate change. During the week real challenge has come from the likes of Paul Gilding and Will Steffen of The Stockholm Resilience Centre. The latter is well known for the development of the Planetary Boundaries framework, which seeks to quantify the limits on a set of critical parameters impacting the stability of the conditions of the Holocene period (which has seen the development of human civilization during a 10,000 year period of relative global stability).

The nine Planetary Boundaries are shown in the figure above and are;

  • Stratospheric ozone depletion
  • Nitrogen cycle
  • Phosphorous cycle
  • Global freshwater use
  • Change in land use
  • Biodiversity loss
  • Atmospheric aerosol loading
  • Chemical pollution
  • Climate change (level of CO2 in the atmosphere)

These have become a useful metric, but Will Steffen admitted that the complexity of the subject has been a challenge. A further challenge to simplify the structure has been posed back to the Stockholm Resilience Centre. They have taken up this challenge and revisited the approach, reducing it to three critical metrics. They are as follows;

  • Climate change – rather than just measuring this in terms of CO2 in the atmosphere, the metric is the global heat balance. Because of increasing levels of greenhouse gases in the atmosphere, the atmosphere is no longer in heat balance, rather there is more heat coming in than going out. This situation needs to be brought back into check.
  • Biodiversity – this is key to the production of goods and services from the biosphere, including most critically food for human consumption.
  • Introduction of novel entities – this is about the introduction of new “stuff” into the environment.  Perhaps one of the best examples of this was the use of Chlorinated Fluoro-carbons (CFC). These offered tremendous economic benefit but with no concept of the damage that would be done to the ozone layer. Will Steffen made an interesting observation about this and noted that we missed a major catastrophe almost by chance. CFCs could well have been BFCs or bromine based. Had this been the case, the more reactive nature of bromine would have devastated the ozone layer by the time the interaction was unravelled, with no chance of recovery. Fortunately this wasn’t the case, but the point was clear.

The nine boundaries work still stands and will continue to be critical to their thinking, with this new model more an “aide memoire” to the bigger picture.

P.S. This is becoming old news now, but in the same session at the WBCSD meeting, a comment was also made about Hurricane Sandy, its impact and climate change. The view expressed was that these are linked for three reasons;

    1. This was by far the biggest hurricane ever recorded north of the Carolinas. It was driven by increasingly warmer waters in the Atlantic.
    2. It should have tracked out into the Atlantic as many hurricanes have done, but didn’t because of a large blocking high pressure system. There is growing evidence that the appearance of such high pressure systems is linked to the change in ice cover in the Arctic. 2012 saw the lowest September Arctic sea ice cover on record.
    3. New York infrastructure was built in a different era. Even the 20cms of additional sea level over the past century made a significant difference to the water volume in the storm surge and the consequent flooding of lower Manhattan and other low lying areas.

C2ES also released a paper on this subject during the week, which you can view here.