Archive for the ‘UNFCCC’ Category

Some post-Paris diplomacy

President Obama and Canadian Prime Minister Justin Trudeau met last week for their first formal bilateral meeting since the latter was elected. With the success of the Paris Agreement behind them, the two leaders made their first steps together towards implementation with the announcement of a number of actions. A greater focus on methane emissions figured high on the list of things to do, but perhaps even more important than this was the recognition that co-opoerative action is required to implement the provisions within the Paris Agreement that are aimed at carbon market development. The joint statement released during the meeting made a very specific reference to this work;

Recognizing the role that carbon markets can play in helping countries achieve their climate targets while also driving low-carbon innovation, both countries commit to work together to support robust implementation of the carbon markets-related provisions of the Paris Agreement. The federal governments, together and in close communication with states, provinces and territories, will explore options for ensuring the environmental integrity of transferred units, in particular to inform strong INDC accounting and efforts to avoid “double-counting” of emission reductions.

The reference here is to Article 6 of the Paris Agreement, which allows for “internationally transferable mitigation outcomes” (ITMO) between Nationally Determined Contributions. Article 6 also establishes an emissions mitigation mechanism (EMM) which could well support the ITMO by becoming, amongst other things, a standardised carbon unit for transfer purposes. These are the sorts of areas where considerable thought will be required over the coming months.

The statement represents a big step forward for the United States and for the further development of carbon markets. The USA was amongst the very first countries to release its INDC, within which can be found the statement;

Use of markets:
At this time, the United States does not intend to utilize international market mechanisms to implement its 2025 target.

This was not a big surprise at the time. It was still early days for the resurgent political interest in the importance of government implementation of carbon pricing and therefore the supporting role that international carbon markets can play in helping optimise its use. But a great deal has happened in a year (the USA released its INDC on March 25th 2015), topped off with Article 6 in the Paris Agreement. This time last year that looked like an almost impossible dream, although several of us in the carbon pricing community dared to talk about it.

But perhaps it is the developments in North America itself that have raised the profile of cross-border carbon unit trade with the respective national governments. Although the California-Québec linked cap-and-trade system got going in 2014, it wasn’t until 2015 that Ontario showed a sudden interest in joining the system. At the April 2015 Québec Summit on Climate Change, Ontario announced its intention to set up a cap-and-trade system and join the Québec-California carbon market. The following September, Quebec and Ontario signed a cooperation agreement aimed at facilitating Ontario’s upcoming membership in the Québec- California carbon market. To add to this, during COP21 Manitoba announced that it would implement, for its large emitters, a cap-and-trade system compatible with the Quebec-California carbon market. Québec and Ontario then committed in Paris to collaborate with Manitoba in the development of its system bysigning a memorandum of understanding tothat effect.

Others US states and Canadian provinces may join, with Mexico also looking on in interest. This could in turn lead to a significant North American club of carbon markets; perhaps one even starting to match the scale and breadth of the 30 member EU ETS. Clubs of carbon markets are seen by many observers as the quickest and most effective route to widespread adoption of carbon pricing. The Environmental Defence Fund based out of New York has written extensively on the subject with their most recent paper being released in August last year.

With parts of the USA members of a multi-national club of carbon markets, the Federeal government is then effectively bound to build their use into their NDC thinking. There may be a significant flow of units across national borders, which will make it necessary to account for them through Article 6 and the various transparency provisions of the Paris Agreement.

But most importantly there is the economic benefit of doing this; a larger more diverse market will almost certainly see a lower cost of carbon across the participating jurisdictions than would otherwise have been the case. This could translate into a lower societal cost for reaching a given decarbonization goal or open up the possibility of greater mitigation ambition.

A focus on the Philippines

Last week I was in Manila participating in the opening panel session of the Shell sponsored energy event, Powering Progress Together. The panel included IPCC WG1 Co-chair, Dr. Edvin Aldrian from Indonesia; Philippine Department of Energy Secretary, Hon. Zenaida Y. Monsada; and Tony La Vina, a former Undersecretary of the Department of Environment and Natural Resources, but currently Dean of the Ateneo School of Government. With the focus of our panel being the energy transition and climate challenge it didn’t take long to get to the situation faced by the Philippines and the Intended Nationally Determined Contribution (INDC) it submitted to the UNFCCC in the run-up to COP21.

The Philippines has seen energy sector emissions rise sharply in recent years (see chart) with coal use doubling between 2007 and 2014, while natural gas and oil demand remained almost static. Although oil use for transport increased, this was offset by a drop in oil based power generation.

Philippines Energy Emissions

Against this backdrop the Philippines submitted an INDC which calls for a 70% reduction in emissions for 2030 against a business as usual projection which sees increasing coal use in the power sector. The charts below were prepared by the Department of Energy. By 2030, full INDC implementation would see only a modest change in coal capacity from current levels, but a significant increase in natural gas and growth in wind and solar such that they become material in the overall power generation mix.

Philippines Electrcity Capacity

The government also has big plans for the transport sector, with major electrification of the popular Jeepney (small buses) and tricycle (motorcycle based carriers) fleet. These are everywhere in Manila.

But as the Secretary pointed out in the panel discussion, this shift is dependent on outside financial help. The reduction goal represents at least 1 billion tonnes of cumulative carbon dioxide over the period 2015 to 2030 and although an anticipated cost of implementation isn’t given, it may well run into tens of billions of dollars. However, the immediate benefits should be considerable, particularly for health and welfare in cities such as Manila itself as roadside air quality improves with an alternative bus fleet. The INDC specifically notes (one of several mentions);

The mitigation contribution is conditioned on the extent of financial resources, including technology development & transfer, and capacity building, that will be made available to the Philippines.

The Philippines have certainly felt the sharp end of the global climate in recent years, but particularly with Typhoon Haiyan, a Category 5 Super Typhoon, in November 2013. That event led to a member of the Philippine delegation pledging to fast for the duration of COP 19 in Warsaw. The INDC is an ambitious start on their mitigation journey, but also highlights the challenges faced by many countries at a similar stage in their development. As the Philippine economy develops it will need much more energy than currently supplied; the surge in coal use as a response is also seen in many other national energy plans. Limiting the early growth of coal in emerging economies is one of the big global issues that the Paris Agreement and related INDCs must address as they are implemented. The provisions within Article 6 of the Agreement can help; ideally by channelling a carbon price into those economies with the necessary climate finance to change the energy outlook.

Developing Article 6

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Article 6 of the Paris Agreement contains a number of bolt holes for the development of market and non-market mechanisms to drive future mitigation.

Within these, paragraph 6.2 pertains to any linkage that might exist between Nationally Determined Contributions (NDCs), such as could occur between cap and trade systems residing in different countries. For example, Canada and the United States have such a linkage between the California and Quebec systems, with other states and provinces likely to join. Presumably when Canada presents the result of its NDC efforts to the UNFCCC at various stock takes, the transfer that has occurred between these two systems will need to be accounted for, with this paragraph leading to a clear set of modalities for the necessary accounting of the transfer. The longer term hope is that this paragraph provides additional impetus to such activities, catalysing both the use of such trading systems and the creation of links between them. This is an important step towards the formation of a globally traded carbon market.

Paragraph 6.4 is also a formative proposition, potentially containing within it the means to drive new investment and markets. It states;

A mechanism to contribute to the mitigation of greenhouse gas emissions and support sustainable development is hereby established under the authority and guidance of the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement for use by Parties on a voluntary basis. It shall be supervised by a body designated by the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement, and shall aim:

  1. To promote the mitigation of greenhouse gas emissions while fostering sustainable development;
  2. To incentivize and facilitate participation in the mitigation of greenhouse gas emissions by public and private entities authorized by a Party;
  3. To contribute to the reduction of emission levels in the host Party, which will benefit from mitigation activities resulting in emission reductions that can also be used by another Party to fulfil its nationally determined contribution; and
  4. To deliver an overall mitigation in global emissions.

Almost from the moment the gavel came down in Paris, commentators have been referring to this as the Sustainable Development Mechanism. This has become so embedded that when I returned to this part of the Agreement to write this post I was surprised that it isn’t actually called that. Rather, the mechanism is an EMM (Emissions Mitigation Mechanism) which supports sustainable development, not a sustainable development mechanism that happens to result in emissions reduction.

It is very early days, although Paragraph 6.7 gives the negotiators just this year to sort out the modalities and procedures of the mechanism. At a conference in London this month, a first discussion around Article 6 and particularly the mechanism within it took place. Although the meeting was more of a post-Paris stocktake, it offered an opportunity to get some thoughts and ideas onto the table.

One of the first of these was a presumption that the mechanism is simply the Clean Development Mechanism of the Paris Agreement, i.e. CDM 2.0. While it may eventually offer such a service, to limit it to this and no more may turn out to be very short sighted. In the first instance, the text above does not mention project activity or identify developing countries as the beneficiaries of the activities undertaken. This is in contrast to Article 12 of the Kyoto Protocol which clearly identified such a role for the CDM.

Rather, paragraph 6.4 is defined more broadly as a mechanism to contribute to the mitigation of greenhouse gases while fostering sustainable development. This means that it could have very wide scope and operate on many fronts or alternatively be specified quite narrowly but operate universally as a carbon trading unit. Other definitions or uses may also be considered.

Within a broad scope the mechanism could operate down to a single project, as was the case under the CDM, or become a crediting unit within a baseline system that operates across an entire NDC or within a sector covered by an NDC. Such a unit might be traded between systems, acting as the agent to link baseline-and-credit designs or even cap-and-trade designs. It could become a carbon reduction bought through a financing mechanism such as the Green Climate Fund, establishing that fund as a buyer of reductions as a means of driving mitigation activity. Other possibilities include linking it to technology demonstration or climate finance requirements.

The ambition embedded within the Paris Agreement is going to require change on a very large scale and at a very rapid pace; certainly much faster than could be envisaged through a project by project approach, as was the case with the CDM. While the CDM was very successful in what it did, the scale was hardly measurable against the size of the global energy system. This also argues against an early narrow use of Paragraph 6.4.

At this stage the possibilities are wide open and we need to keep them that way. In the months leading up to the Bonn intercessional meeting in late May, the opportunity exists to explore these options and think through the possible applications of a broadly defined mitigation mechanism. A rush to create CDM 2.0 would be a mistake, even if there is early recognition that the mechanism will need to fulfil this task as part of its overall definition.

It’s all about the transition

The ambition embodied within the Paris Agreement argues for the need to reach a state of net zero anthropogenic emissions around the middle of the century, although the text of the Agreement is less stringent and points to the second half of the century for a balance between sinks and sources. Either way, this presents a formidable challenge.

Looking at a modern developed economy today, it is possible to imagine a state of much lower emissions, or even net-zero. The technologies to have a zero emission power sector are readily available and have been for some time; look at the level that nuclear power reached in France as early as the 1980s. Today we also have carbon capture and storage and scalable renewable energy. Vehicle electrification is now coming of age and it is not difficult to imagine a future where this dominates, with heavy transport potentially using hydrogen. Homes can also be electrified and the service sector / secondary industry economy that drives the developed world today is primarily electricity based.

But the manufacture of goods still represents a large part of the global economy. Material goods represent one facet of our economy and certainly one that is critically important in the early stages of development of most economies. For example, between 2004 and 2014 some 350 million refrigerators were produced and went into use in China with a further 250 million exported. Production in 2000 was just 12 million units. China is now the world’s 6th largest exporter (2014 by value) of refrigerators, but this is just one sixth of US refrigerator exports.

The same is true when it comes to the refining and fabrication of the raw materials that developed and developing country secondary industry requires. These products all demand considerable use of fossil fuels for combustion based processes such as smelting, refining, base chemical manufacture and similar. Nevertheless, we could perhaps imagine a world based on 3D printing using various exotic materials (graphene, certain polymers etc.) as the raw material for manufacture. But even in this world considerable chemical plant capacity and therefore process heat would be required to manufacture the printer feedstock, but carbon capture and storage could handle emissions from these sources.

China grew rapidly on the back of large scale manufacturing and at the same time it built vast swathes of infrastructure; from cities such as Shanghai and Chongqing to the high speed rail networks that now connect them. Between 1995 and 2015 cumulative emissions from China amounted to some 130 billion tonnes of carbon dioxide, or 100 tonnes per person. For the most part, this wasn’t for personal domestic use (i.e. home electricity and heating), but to make products for consumers in China and for export which in turn finances domestic infrastructure for the future. The process is far from complete, but China is already starting to look to other economies to make its raw materials and supply finished products as it attempts to develop its service sector.

The situation for the least developed economies is not dissimilar to China 30 years ago. Some 3 billion or more people live in circumstances where little or only modest levels of infrastructure exists. While they may now have basic renewable energy for lighting and some other services, their standard of living remains far below other parts of the world. The development pathway in front of them may well be similar to the one that China embarked on in the 1980s. That pathway might even be funded by products made for the Chinese economy as its service sector grows and energy use reaches a plateau or even falls slightly.

The 100 tonnes per person of development emissions is perhaps the hardest to decarbonise. It is from steel mills, cement plants, chemical plants, manufacturing industry and heavy goods transport. These are the backbone industries and services for development, many of which have long gone from developed economies. They may also be quite expensive to decarbonise, which is problematic for economies in the earlier stages of rapid development. This development also leads to a degree of lock-in as once industries are created and jobs are in place there is a strong desire to keep them; the recent concern as the last major UK steel plant shed more jobs is an example. The same industries are also needed to continue making a wide range of products, from cars to iPhones, for consumers in the rest of the world.

One particular challenge for post-Paris implementation of the Agreement is this 100 tonnes per person of development emissions and the lock-in that follows. While the net-zero goal looks feasible and can be imagined as a longer term outcome, the interim emissions bulge as development continues and the supporting industries required for infrastructure are put in place may take us well beyond 2°C rather than the goal of well below. Further to this, the energy demand that will be created just to fuel the energy transition itself could be significant as hundreds of lithium mines open, solar PV factories expand and new vehicle technologies are offered to the public.

Article 6 within the Paris Agreement makes mention of a Sustainable Development Mechanism that results in emissions reductions. Such a mechanism could be an important part of the solution set for this problem. More on that to follow.

The highlight of the Paris Agreement is without question the ambition embodied within it. This had its foundation with the Alliance of Small Island States (AOSIS) and their deep concern regarding future sea level rise. But the issue snowballed as the conference progressed, supported by a strong dose of techno-optimism that was prevalent throughout the halls of the Le Bourget Conference Centre. The text that was agreed upon is important, with the goal embodied in to distinct sections;

Holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and 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;

Parties aim to reach global peaking of greenhouse gas emissions as soon as possible, recognizing that peaking will take longer for developing country Parties, and to undertake rapid reductions thereafter in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century . . .

In a post written before the conclusion of COP21, I assessed that a 1.5°C goal would require a rapid forty year transition to net-zero anthropogenic emissions and a period until at least the end of the century with negative emissions via BECCS (bioenergy and CCS) and DACCS (direct air capture and CCS). But the pathway proposed by the Agreement itself isn’t quite as ambitious, even while it aspires to a 1.5+°C outcome. Rather, it proposes achieving a balance between anthropogenic emissions and removals by sinks in the second half of the century. This may not be sufficient to achieve the 1.5+°C goal, with a key deciding element being the role of natural sinks.

The 1.5+°C pathway issue is highlighted in a paper published by the MIT Joint Program in July 2013. MIT deliberately avoided the use of negative emissions technologies, partly due to concerns about their scalability but also preferring to test the impact of natural sinks on the outcome. Of these, the ocean is the major short term sink because of the imbalance between levels of CO2 in the ocean and the atmosphere.

MIT analyzed four pathways that result in net zero anthropogenic emissions. These are shown in the chart below (fossil energy CO2 emissions only) against a business as usual trajectory based on the 2010 post-Copenhagen national pledges.

  1. An immediate drop to net zero by 2015, starting in 2010 (Natural only after 2015).
  2. A very rapid drop to net zero by 2035, but with growth from 2010 to 2030 (Natural only after 2035).
  3. A more extended drop to net zero by 2060, with the decline commencing in 2010 (Alternative).
  4. The IEA 450 scenario, with emissions peaking around 2020 and reaching net zero by 2070 (IEA 450).

MIT Scenarios - CO2 emissions

Pathway 3 is of particular interest. In this case anthropogenic emissions are at net zero by 2060, although starting to decline from 2010 when energy emissions are at 30 Gt CO2 per annum (it is now 2016 and they are at ~33 Gt). This scenario sees temperatures rise above 2°C by mid-century, but then decline as the ocean takes up significant quantities of CO2 from the atmosphere but with nothing being added from anthropogenic sources.  After some 20-30 years, as the ocean’s upper layer comes into balance with the atmosphere, uptake of CO2 slows. Mixing into the deep ocean is much slower but will continue for hundreds to thousands of years.

Back in 2010 the cumulative emissions from 1750 (to 2010) stood at some 532 billion tonnes carbon, which means that Pathway 3 approximates a 1.5°C outlook as the area under the curve from 2010 to 2060 (energy, cement and land use) represents an additional 250 billion tonnes of carbon emissions, giving a total of some 780 billion tonnes. The relationship between carbon emissions and temperature is about 2°C per trillion tonnes. The chart below shows the modelled pathway which results in an end-of-century temperature rise of 1.5°C.

MIT Scenarios - Temperature

The natural sink is therefore very important, offering some 0.5°C (see the light blue line in the chart above) of temperature reduction following an overshoot. This is possibly the only way in which 1.5°C can be met,  although significant anthropogenic sinks may also be developed (including reforestation) later which could offer the same drawdown. As such, with the Paris Agreement potentially not making use of this and instead only providing for emissions to fall to a level which matches the ability of sinks to take up carbon emissions, the task of meeting 1.5°C becomes considerably more difficult.

The same is true of the IEA 450 Scenario. With 2010 now behind us, the future equivalent of the Alternative pathway which saw reductions from 2010 onwards is probably the red 450 line (reductions from 2020), which overshoots to 2.7°C before achieving something of a plateau at 2°C. But to bring this down further by the end of the century and therefore comply with the Paris Agreement would also require the major application of anthropogenic sinks, such as via CCS and rapid reforestation.

This discussion may be something of a moot point today because the job of rapidly reducing emissions hasn’t even started and arguably we have at least 40+ years to think about where the endpoint should be. Nevertheless, as nations begin to reflect on the Paris outcome in the coming months and relook at their respective reduction pathways, the long term end point does become relevant because energy infrastructure planning requires a multi-decadal outlook. In its initial formulation of a long term carbon budget, the UK did need to look forward to 2050 but that was from a 2008 starting point. With a new starting point of 2020 or thereabouts, a 2060 or even 2070 end-point may well be considered.

There is of course a disturbing flip side to this story – continued rapid uptake of CO2 by the ocean also gives rise to increasing levels of ocean acidification.

COP21: A success within the success

From the moment Laurent Fabius nervously banged his gavel on Saturday 12th December, the newswires, bloggers and analysts have been writing about the success of COP21 and the ambitious nature of the Paris Agreement. Without doubt, more will be written in the weeks and months ahead. But the deal was done and many parts made it possible.

Deal done

In the end it is the detail and implementation that will count. One critical aspect of implementation received a major boost from a short but very specific piece of text within the Paris Agreement; Article 6 might just be the additional catalyst that is needed for the eventual emergence of a global carbon emissions market and therefore the all-important price on carbon.

The Paris Agreement was never going to be the policy instrument that would directly usher in a global price on carbon; carbon pricing is a national or regional policy concern. But the Agreement could offer the platform on which various national carbon pricing policies could interact through linkage, bringing some homogeneity and price alignment between otherwise disparate and independently designed systems. The case for this was initially put forward through collaboration between the International Emissions Trading Association (IETA) and the Harvard Kennedy School in Massachusetts. A number of papers coming from the school underpinned a Straw-Man Proposal for the Paris Agreement, authored by IETA in mid-2014 and eventually published at the end of that year. The straw-man didn’t mention carbon pricing or emissions trading, it simply proposed a provision for transfer of obligation between respective INDCs, in combination with rigorous accounting to support said transfer.

. . . . . may transfer portions of its defined national contribution to one or more other Parties . . . . .

In addition, the straw-man proposed a broader mechanism for project activity and REDD+. The IETA team worked hard during 2015 building the case for such inclusions in the Paris Agreement. A number of governments, business groups and environmental NGOs came to similar conclusions; Paris needed to underpin carbon market development. After all, fossil fuel use and carbon emissions are so integrated into the global economy that only the power of the global market could possibly address the problem that has been created.

Roll on twelve months and the Paris Agreement now includes Article 6, which provides the opportunity for INDC transfer between Parties and a sustainable development mechanism to operate more widely and hopefully at greater scale than the Clean Development Mechanism (CDM) of the Kyoto Protocol. In the case of the transfer, Article 6 says;

. . . . . approaches that involve the use of internationally transferred mitigation outcomes towards nationally determined contributions . . . . .

While not exactly the same as the original IETA idea, it does the same job. Of course, like every other part of the Paris Agreement, this is just the beginning of the task ahead. The CDM within the Kyoto Protocol was similarly defined back in 1997, but it was not until COP7 in Marrakech in 2001 that a fully operational system came into being. Even then, the CDM still required further revisions over the ensuing years.

Exactly how the transfer between INDCs materializes in a UNFCCC context is not clear today, although such a transfer is a prerequisite for cross border linking, such as between California and Quebec or what might eventually become multiple US States and multiple Canadian Provinces. The good news for now is that the provision is there and its use can be explored and developed over the coming year before the COP convenes again in Marrakech in 2016. The eventual goal remains the globally linked market.

Global market

COP21: Targets, goals and objectives

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As the negotiators struggle on in Paris at COP21, the question of the long term goal has emerged. What should it be, how should it be structured and will it send the necessary signal to drive future national contributions.

The idea of a goal goes back to the creation of the UNFCCC. There is the original text agreed when the Convention was first written in 1992, i.e. “. . . stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system . . . “. At COP16 in Cancun, the Parties to the UNFCCC reformulated this as a numerical goal; the need to limit warming of the climate system to no more than 2°C above the pre-industrial level with consideration for reducing this to 1.5°C as the science might dictate. This seems very clear, but in fact offers little immediate guidance to those attempting to establish a national or even global emissions pathway.

The climate system is a slow lumbering beast and the global temperature could take years or even decades to settle down once there is stabilization of carbon dioxide (and other greenhouse gases) in the atmosphere. It could be decades after that before we are collectively sure that no further temperature rises will take place. But the science has shown that the eventual rise in temperature is strongly related to the cumulative emissions of carbon dioxide over time, starting when emissions were negligible (say 1750) and running through several centuries (e.g. to 2500). Myles Allen et. al. from Oxford University equated 2°C to the cumulative release of one trillion tonnes of carbon, which offers a far more mechanistic approach to calculating the point at which 2°C is reached. So far, cumulative emissions amount to some 600 billion tonnes of carbon. However, even this approach has uncertainty associated with it in that the actual relationship between cumulative emissions and temperature is not precisely known. If emissions stopped today, it is very unlikely (but not a zero chance) that warming would continue to above 2°C, but if emissions were to stop when the trillion tonne threshold is reached then there is only a 50% chance that the temperature would stay below 2°C. The agreement in Cancun doesn’t cover uncertainty.

The Oxford University team have developed a website that counts carbon emissions in a bid to familiarize people with the concept. As of writing this post, it was counting through 596 billion tonnes and provided an estimate that 1 trillion tonnes will be reached in October 2038. The INDCs already reach out to 2030 and as they stand, will not put the necessary dent into the global emissions profile that is needed to avoid passing one trillion tonnes. In terms of energy system development, 2038 is in the medium term. Most forecasts out to this period, including the IEA New Policies Scenario which factor in the INDCs, show energy demand and emissions rising over that period, not falling.

In line with the Cancun Agreement, a number of Parties have maintained the need to lower the goal to 1.5°C, but particularly those from low lying island states who are justifiably concerned about long term sea level rise. This goal is being voiced more loudly here in Paris. Using the relationship developed by Allen et. al., this implies that 1.5°C would be exceeded if cumulative carbon emissions passed 750 billion tonnes, which could happen as early as 2027. This would imply a massive need for atmospheric CO2 capture and storage over the balance of the century for the simple reason that cumulative emissions could not be contained to such a level by energy system reductions alone.

More recently the concept of net zero emissions (NZE) has emerged. This is the point in time at which there is no net flow of anthropogenic carbon dioxide into the atmosphere; either because there are no emissions at all or if emissions remain because they are completely offset with a similar uptake through carbon capture and storage or reforestation and soil management. Emissions are likely to remain for a very long time in sectors such as heavy transport, industry and agriculture. NZE has been closely linked to 2°C, but in fact any temperature plateau, be it 1.5°C or even 4°C requires NZE. If not, warming just continues as atmospheric CO2 levels rise. There is now a discussion as to when NZE should be reached – as early as 2050 (but practicality must be a consideration), or perhaps by the end of the century. However, what is actually important is the area under the emissions curve before NZE is achieved, less the area under the curve after it is reached, assuming emissions trend into negative territory with technologies such as direct air capture or bioenergy with carbon capture and storage (DACCS or BECCS). The date at which NZE is reached is important, but not necessarily an indicator of the eventual rise in temperature. Just to complicate matters further, although the world needs to achieve NZE eventually, it may be the case that net anthropogenic emissions do not have to be zero by 2050 or 2100 to meet the 2°C  goal because of carbon removal arising from natural sinks in the oceans and terrestrial ecosystems.

Other proposals put forward by Parties and some observers simply call for an urgent peaking of emissions. This is important as well, but again it doesn’t tell the full story. What happens after the emissions peak is critical. A long slow decline to some plateau would be positive, but unless that plateau is close to NZE, then cumulative emissions continue to build, along with the associated warming. Other proposals argue for emissions to be at some reduced level by 2050, which presumes a certain follow-on trajectory equating to 2°C or thereabouts.

Where the Parties land in this discussion remains to be seen, but with only days left and the complexity of goal setting becoming apparent, this may end up being an issue for the years ahead rather than one that can be fully resolved in Paris in a week. 2°C may have to do for now.

Emission pathway

 

As COP21 starts and the negotiators face the task of reaching an agreement, one of the most important points of discussion will be the review and recalibration of INDCs. Many organisations, including some business based ones (i.e. We Mean Business), are arguing for a five yearly review of the national contributions. If strictly adopted, this might mean that the first round of INDCs are already under review before they formally commence (i.e. 2020), such that the global emissions outcome by 2025 is already lower than current INDC projections would project. An alternative is a 10 year review, such that the first deviation from current INDC projections becomes apparent in the early 2030s.

There are practical considerations associated with this. Many who view the energy industry from the outside have consistently had expectations for rapid change. For example, the UNFCCC itself has continued with its pre-2020 workstream even as the time for meaningful change has diminished. This isn’t to argue that nothing can happen between now and 2020, but it is unlikely that much extra can now happen in that time frame. The energy industry is built on long lead times, project cycles that can stretch out to a decade and capital cycles that are often laid out years in advance of actual spending. Sometimes this can be disrupted, particularly when there is a sudden shift in market price structure, but that is not the normal pattern of change.

There is also the reality of policy development timelines needed to trigger change. For example, the EU is in the midst of a three year (at least) examination of the climate and energy needs for the period 2020 to 2030, which requires green papers, white papers, various stakeholder consultations, draft legislation, parliamentary committee discussion, a parliamentary vote, Member State agreement and transfer to national legislation. It is unlikely that this would be revised as soon as 2018-2021 having just reached agreement on the entire package in 2016 and finalised EU wide adoption in 2017. The institutional capacity may not exist for constant revision.

But there is an overriding thought which should take priority – the emissions and therefore eventual temperature impact of moving to a more aggressive review timetable. It is very clear that the current round of INDCs do not deliver a 2°C pathway – many analysts and the UNFCCC have concluded that. The INDCs also say little to nothing about the past 2030 period, so future INDCs or review of current INDCs will be needed.

A relatively basic analysis can give some insight as to the climate value of review and the benefit of conducting that on a five year basis or a ten year timetable. I put this together as outlined below;

  • There isn’t really a clear emissions trajectory for the current round of INDCs, at least not after 2030. For the purposes of this analysis I have assumed that they result in peaking of global emissions in the 2030s, followed by the beginnings of a decline to 2040 and beyond. Some would argue that even this is optimistic.
  • The 2°C pathway reaches net-zero emissions in about 2080, then enters a period of negative emissions through the use of a technology such as BECCS (biomass energy with carbon capture and storage).
  • In the case of a five year correction process, I assumed that every five years the UNFCCC looks at progress against a 2°C pathway (which of course will change over time, but I haven’t got into that detail) and after each new round of submissions the INDC pathway, as it would be at that point in time, shifts a quarter of the way further towards the 2°C pathway. The result is an emissions trajectory that starts to deviate from the current INDC pathway by 2025.
  • In the case of the ten year correction process, the same happens but on a ten year cycle, with the intervening five year period declining at the same rate as the previous five year period. Because of the slower turnaround in the process, I also assumed that after a more protracted INDC discussion, the shift in the pathway is relative to the 2°C line as it was five years earlier, rather than at the time. As such, there is a bit more lag built into the process and emissions remain the same as the current INDC pathway until after 2030.

INDC Review Pathways

  • The chart above shows the four potential pathways; 2°C, the current INDCs extended out for several decades and the corrected pathways, based on five year and ten year correction cycles.

As shown, the uncorrected INDC pathway is a 3+°C scenario, whereas both the five year and ten year correction pathways are about 2.5°C and both arrive at a net zero emissions outcome around the turn of the century. As such, it is clear that a review cycle can change everything and has the potential to deliver a clear outcome rather than an open ended emissions tail stretching well into the 22nd century.

But the difference between them is 0.15°C, or a cumulative 280 million tonnes of CO2 over the balance of the century. While this is not insignificant, the more important goal for the negotiators should be to agree a clear review and recalibration process, rather than be too focussed on the precise timeliness of it.

The last few weeks have seen a flood of Intended Nationally Determined Contributions (INDC) arrive at the UNFCCC offices in Bonn, presumably to be included in the assessment of progress promised by the UNFCCC Secretariat for release well before the Paris COP21.

There are now some 150 submissions and assessing them in aggregate requires some thinking about methodology. For starters, the temperature rise we will eventually see is driven by cumulative emissions over time (with a climate sensitivity of about 2°C per trillion tonnes of carbon – or 3.7 trillion tonnes CO2), not emissions in the period from 2020 to 2025 or 2030 which is the point at which most of the INDCs end. In fact, 2025 or 2030 represent more of a starting point than an end point for many countries. Nevertheless, in reading the INDCs, the proposals put forward by many countries give some clues as to where they might be going.

For Europe, the USA and many developed economies, the decline in emissions is already underway or at least getting started, with most having already said that by mid-century reductions of 70-80% vs. the early part of the century should be possible. But many emerging economies are also giving signs as to their long term intentions. For example, the South Africa INDC proposes a Peak-Plateau-Decline strategy, which sees a peak around 2020-2025, plateau for a decade and then a decline. Similarly, China has clearly signalled a peak in emissions around 2030, although with development at a very different stage in India, such a peak date has yet to be transmitted by that government.

Nevertheless, with some bold and perhaps optimistic assumptions, it is possible to assess the cumulative efforts and see where we might be by the end of the century or into the early part of next century. In doing this I used the following methodology;

  1. Use an 80/20 approach, i.e. assess the INDCs of the top 15-20 emitters and make an assumption about the rest of the world. My list includes USA, China, India, Europe, Brazil, Indonesia, South Africa, Canada, Mexico, Russia, Japan, Australia, Korea, Thailand, Taiwan, Iran and Saudi Arabia. In current terms, this represents 85% of global energy system CO2 emissions.
  2. For the rest of the world (ROW), assume that emissions double by 2040 and plateau, before declining slowly throughout the second half of the century.
  3. For most countries, assume that emissions are near zero by 2100, with global energy emissions nearing 5 billion tonnes. The majority of this is in ROW, but with India and China still at about 1 billion tonnes per annum each, effectively residual coal use.
  4. Cement use rises to about 5 billion tonnes per annum by mid-century, with abatement via CCS not happening until the second half of the century. One tonne of cement produces about half a tonne of process CO2 from the calcination of fossil limestone.
  5. Land use CO2 emissions have been assessed by many organisations, but I have used numbers from Oxford University’s trillionthtonne.org spreadsheet, which currently puts it at some 1.4 billion tonnes per annum of carbon (i.e. ~5 billion tonnes CO2). Given the INDC of Brazil and its optimism in managing deforestation, I have assumed that this declines throughout the century, but still remains marginally net positive in 2100.
  6. I have not included short lived climate forcers such as methane. These contribute more to the rate of temperature rise than the eventual outcome, provided of course that by the time we get to the end of the century they have been successfully managed.
  7. Cumulative emissions currently stand at 600 billion tonnes carbon according to trillionthtonne.org.

The end result of all of this are the charts below, the first being global CO2 emissions on an annual basis and the one below that being cumulative emissions over time. The all important cumulative emissions top out just below 1.4 trillion tonnes carbon.

Global CO2 Emissions Post INDC

Global Cumulative Emissions post INDCs

The trillionth tonne point, or the equivalent of 2°C, is passed around 2050, some 11 years later than the current end-2038 date indicated on the Oxford University website. My end point is the equivalent of about 2.8°C, well below 4+°C, but not where it needs to be. The curve has to flatten much faster than current INDCs will deliver, yet as emissions accumulate, the time to do so is ticking away.

Even with a five year review period built into the Paris agreement, can the outcome in 2030 or 2035 really be significantly different to this outlook? Will countries that have set out their stall through to 2030 actually change this part way through or even before they have started along said pathway? One indication that they might comes from China, where a number of institutions believe that national emissions could peak well before 2030. However, the problem with accumulation is that history is your enemy as much as the future might be. Even as emissions are sharply reduced, the legacy remains.

Nevertheless, we shouldn’t feel hopeless about such an outcome. Last week I was at the 38th Forum of the MIT Joint Program on the Policy and Science of Global Change and I was reminded again during one of the presentations of their Level 1 to Level 4 mitigation outcomes which I wrote about in my first book, 2°C Will Be Harder than we Think. These are shown below.

Shifting the Risk Profile

Taking no mitigation action at all results in a potential temperature distribution with a tail that stretches out past 7°C, albeit with a low probability. However, we can’t entertain even a low probability of such an outcome, so some level of mitigation must take place. While Level 1 remains the goal (note however that the MIT 2°C is not above pre-industrial, but relative to 1981-2000), MIT have shown that lesser outcomes remove the long tail and contain the climate issue to some extent. The INDC analysis I have presented is similar to Level 2 mitigation, which means the Paris process could deliver a very substantial reduction in global risk even if it doesn’t equate to 2°C. More appreciation of and discussion around this risk management approach is required, rather than the obsession with 2°C or global catastrophe that many currently present.

Of course, extraordinary follow through will be required. Each and every country needs to deliver on their INDC, many of which are dependent on very significant financial assistance. I looked at this recently for Kenya and India. Further, the UNFCCC process needs its own follow through to ensure that global emissions do trend towards zero throughout the century, which remains a very tall order.

Final steps towards Paris?

The last ten days have seen a rush by nations to publish their Intended Nationally Determined Contributions (INDCs), with the much anticipated INDC from India amongst those submitted. On Monday October 5th, the Co-Chairs of the ADP also released a proposal for a first draft of a new climate change agreement for Paris. So it has been a very busy few days, but are we any closer to a deal and could that deal have sufficient ambition to bend the emissions curve?

The India INDC is telling as an indicator of where the developing world really is, versus where the rapidly emerging economies such as China now find themselves. In the case of the latter group, there is thinking towards an emissions peak with China indicating that this will be around 2030 and continuing signals from the academic and research community in that country indicating that it may well be earlier. One such article appeared recently in the Guardian. But for the much poorer developing countries the story remains very different.

The submissions from India is 38 pages long, but of this some 28 pages is supporting evidence and context, explaining the reality of Indian emissions, the need to grow the economy to take hundreds of millions out of poverty and the expected use of fossil fuels to power industry, including areas such as metal smelting, petrochemicals and refining. With a focus on efficiency in particular, India expects to achieve a 33 to 35 percent reduction in CO2 intensity of the economy, but in reality that means a rise in energy related emissions to around 4 billion tonnes or more by 2030, up from some 2+ billion tonnes per annum at present (1.954 Gt in 2012, IEA). This could be tempered by a further element of their contribution which aims to increase forest sinks by some 3 billion tonnes of CO2 in total through to 2030.

There has been considerable speculation as to the renewable energy component of India’s INDC, with a hope that this would show enormous progress in solar deployment in particular. The INDC took the somewhat unusual route of talking in capacity additions, rather than generation (and therefore emissions). India aims to achieve 40% cumulative electric power capacity from non-fossil fuel based resources by 2030. This is significant, but less than it might appear. In a very simple example where 100 GW of generating capacity is comprised of 40 GW solar PV and 60 GW coal, the generation mix might be around 14% renewables and 86% coal. This is assuming a 20% capacity factor for the solar PV (maximum is 50% with day-night) and 80% capacity factor for the coal.

India has also put a considerable price tag on their INDC, with a mitigation effort of some US$ 834 billion through to 2030. In a previous post I looked at the costs assumed in the Kenyan INDC, which came to some $25 billion, but for a population of ~60 million (average through to 2030). With a projected population of some 1.5 billion by 2030, the finance side is in the same ballpark as the Kenyan INDC, albeit on the higher side.

Finally, the last few days have seen new draft text appear – shortened dramatically from some 80 pages to a manageable 20. But references to government led carbon markets, carbon pricing systems or even the use of transfer mechanisms between parties are largely missing. Article 34 of the Draft Decision does hint at the need to rescue the CDM from the Kyoto Protocol by referring to the need to build on Article 12 of the Protocol, but it will be of little use if there isn’t substantial demand for credits in developing and rapidly emerging economies. Simply creating a new crediting mechanism or even bringing the CDM into the Paris agreement won’t on its own direct the finance to the likes of Kenya and India. That demand and related finance flow will only come if the developed and emerging economies are building emissions trading systems (such as in China) and have the ability and confidence to transfer units related to it across their borders. So a great deal of work remains to be done.