Archive for the ‘UNFCCC’ Category

Finding the way to Paris from Lima

With the choice of a high road and a low road from Lima to Paris, the Parties seem to have selected the dirt track off to the side, replete with rocks, obstacles, difficult terrain and an uncertain destination. However, the map they have crafted in Lima, while full of options and dead ends, does at least have some clear pointers to the outcome that is actually needed. The question is whether or not these are followed.

The Lima call for climate action turned out to be a hard won outcome, with the talks extending into Sunday morning as negotiators struggled to reach agreement over one issue in particular that has dogged the process since its very beginnings in 1992 – the respective roles of developed and developing countries. Many commentators believed that the negotiations in Durban in 2011 had, at least to some extent, relegated this issue to the history books.

In particular, Professor Robert Stavins of the Harvard Kennedy School in Boston, said in his 2011 report on Durban;

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.

In the aftermath of Lima, the flavour of differentiation has reappeared and even some of the words. The call for climate action now incorporates a clear reference to “common but differentiated responsibilities“, albeit with the addition taglines of “respective capabilities” and “in light of different national circumstances“. Professor Stavins was quick off the mark with an assessment of Lima, but still maintained that the intent of Durban remained;

. . . . the fact remains that a new way forward has been established in which all countries participate and which therefore holds promise of meaningful global action to address the threat of climate change.

It is difficult to agree with this given the recent negotiations. By contrast, Jonathan Grant of PWC referred to the final day of Lima as “trench warfare mentality”. While it is certainly the case that all countries are still required to submit INDCs of some description, the allowable range of options and structure to pick from has broadened considerably. Notably, Parties “may include” details such as quantifiable information and time frames, rather than the previous wording of “shall include”.

Adaptation planning is strengthened considerably, with this subject now highlighted in the opening lines of the Lima text and also referenced clearly in the context of INDCs. For developed countries this probably has little meaning in terms of their own actions, but for a number of developing countries this could be interpreted as a call for additional financial assistance from developed countries simply to build national infrastructure. The Loss and Damage issue also resurfaced with specific mention in the Lima text. These two apparent concessions may turn out to be a high price to pay for retaining some semblance of the Durban mitigation philosophy.

The intensity with which the developed / developing country issue erupted in the last hours of the Lima COP raises valid questions about the negotiations over the coming year. Leaving this particular issue still looking for a solution in Paris itself may be a burden too great for those final days, but it could also be that no matter how much effort is put into solving it in the interim, it will nevertheless emerge again in the last hours in 12 months time simply because negotiations tend to do things like this.

Looking more positively at the Lima call for climate action, the 40 page annex, “Elements for a draft negotiating text“, throws up some interesting tidbits but also a host of negotiating options which will need to be resolved. Two tidbits of note are;

  1. The mention of carbon pricing in the text; “Acknowledging that carbon pricing is a key approach for cost-effectiveness of the cuts in global greenhouse gas emissions.
  2. The reference on several occasions of an end-goal of net-zero anthropogenic emissions; “Also recognizing that scenarios consistent with a likely chance of holding the global average temperature increase to below 2 °C relative to pre-industrial levels include substantial cuts in anthropogenic greenhouse gas emissions by mid-century and net emission levels near zero gigatonnes of carbon dioxide equivalent or below in 2100.

The carbon pricing mention is almost certainly the result of the recent tireless work of the World Bank in getting this critical subject back on the global agenda, but the reference is rather empty in that no strong follow-up text supports it. Rather, there are several vague references to the use of markets and mechanisms.

The “net zero” reference though is quite bold, in that even if this century sees a sharp reduction is emissions, a net zero goal is much more challenging. Residual emissions from agriculture, industrial processes, land use changes and some level of direct fossil fuel use will likely remain well into the 22nd century if not beyond that, which means at a minimum some large scale application of carbon capture and storage at some point in the future.

There was much more to Lima than just the last hours of tense standoff politics, but that is what the world will likely focus on in the coming days. The draft negotiating text sets out some clear options for the future, although if the weakest of these is picked in every instance the end result will have hardly been worth the effort. However, there is also text there that doesn’t have options, so that may well see the light of day in Paris. This is the case for some of the “net zero emissions” wording and also the need for Parties to “develop low emission strategies” and “maintain commitments / contributions / actions at all times“.

As such, there remain a few reasons to be hopeful.

Reality and distortions in Lima

Wandering the COP20 campus, listening to side events and hearing senior political, business and NGO representatives talk about the climate issue results in a mild reality distortion field impairing your judgement; you start to feel sure that we must already be on a new energy pathway, that global carbon pricing is just around the corner and that the Paris deal will deliver something approaching 2°C.

Then something happens to shatter that field and realisation sets in that there is still a long way to go before a truly robust approach to the climate issue emerges. On Tuesday evening the field was disturbed by tweets from a colleague at PWC @JG_climate reporting on negotiators squabbling over INDCs, with Brazil’s concentric differentiation approach causing some angst amongst a number of developed countries and the proposed text describing the nature of an INDC expanding by some thirty pages. This negotiation is far from over and the road ahead to Paris will likely be very bumpy. There will be a few dead-ends to watch out for as well.

Another reality hit home on Monday afternoon with the recognition that many people in the civil society groups here in Lima just don’t want to hear about the reality of carbon capture and storage (CCS). The Global Carbon Capture and Storage Institute (GCCSI) held an excellent and well attended side event on Monday afternoon which was initially mobbed by some 100+ demonstrators and their press entourage. The demonstrators crowded into the modest sized room and the hallway outside, waited for the start of the event and then promptly left as Lord Stern opened the side event with his remarks on the need for a massive scale-up of CCS. Arriving and then departing en masse allowed them to tweet that civil society had walked out on Lord Stern. The demonstrators were equally upset that Shell was represented at the event with my presentation on yet another sobering reality; 2°C is most likely out of reach without the application of CCS; also a finding of the IPCC in their 5th Assessment Report. They also took exception to flyers for my book which carries the same message.

CCS Event (small)

What was really concerning about this walk-out was that the younger people who made up the group would rather protest than listen and learn. Had they stayed they would have heard a remarkable story by Mike Monea of SaskPower who talked about the very successful start-up of the world’s first commercial scale coal fired power plant operating with carbon capture, use (for EOR) and storage. This technology needs some form of carbon pricing structure for delivery and in the case of this project the bulk of it came from the sale of CO2 for EOR. There was also a capital grant from the government. Importantly, SaskPower noted that a future plant would be both cheaper to build (by some 30%) and less costly to operate. This potentially points the way to a technology that can deliver very low emission base load electricity at considerably lower CO2 prices than the ~$100+ per tonne of CO2 that current desktop studies point to. That may also mean CCS appearing without government support sooner rather than later. Of course, the actual construction and delivery of second generation projects will still be required to confirm this.

A minor reality distortion arose from a question directed at me during the GCCSI side event. One audience member asked me about Shell’s membership of ALEC, a US organisation that operates a nonpartisan public-private partnership of America’s state legislators, members of the private sector and the general public.  ALEC doesn’t seem to think that a carbon price should be implemented in the USA, hence the question to me given Shell support for carbon pricing.  Responding to the Climate correctly reported on my response, which was along the lines of “. . that despite their position  on climate issues we still placed a value on their ability to convene state legislators”, but DeSmogBlog had their own interpretation of this. They reported on this under a headline which stated “Company ‘Values’ Relationship with Climate-Denying ALEC”.

It’s also proving a challenge to gain acceptance for the reality of markets and the role they are likely to have in disseminating a carbon price throughout the energy system. This means that carbon market thinking is still struggling to gain a foothold in text proposals for Paris, with one negotiator commenting at an event I attended that “we don’t see much call for markets at this time“. Silence on markets is the preferred strategy for some Parties, with others taking the view that specific mention and some direction is a must. More on this at another time as the Paris text develops further.

The evenings in Lima have been filled with some excellent events. With so many people in town, dinner discussions are convened by the major organisations represented here, which results in great conversations, useful contacts and plenty of new ideas to think about. The Government of Peru have organised and run a very good COP, despite early concerns that there were initially no buildings on the site they chose for the event.

COP20 in Lima ended its first full week on a mixed note, but with some positive signs for the ongoing process. The detailed discussions on the role of carbon markets under the SBSTA ended in disagreement and postponement which was disheartening, but there remains hope that this key subject will still see the light of day under the ADP during the coming days. Curiously, China (and others) opposed deepening the market discussion at SBSTA because of a lack of guidance from the ADP itself, but according to the Earth Negotiation Bulletin they stated in the ADP when reflecting on the Paris Agreement non-paper (ADP.2014.11.NonPaper) that “sections on market and non-market approaches, and new market-based mechanisms could prejudge discussions under the Subsidiary Bodies”. They seem to be setting themselves up for their own private Catch-22 there. It was also unfortunate that those who will pick up the ongoing challenge posed by carbon emissions and climate change were reported on as follows; “YOUNGOs noted that markets have not delivered what they promised and called for a moratorium on markets.” Perhaps they have been reading Naomi Klein’s book “This Changes Everything”.

One document in particular that drew attention was a paper circulated by Brazil, detailing an idea they had proposed at the October ADP meeting. Brazil have a long history of creative intervention in the process, being the country that “invented” the Clean Development Mechanism (CDM), which over the decade of its operational life has delivered tens, if not hundreds of billions of dollars (depends on your measurement definitions) of carbon finance to developing countries. It appears that Brazil is back to its creative best with a paper on “concentric differentiation”, which draws together both the concept of CBDR-RC* and the need for universal acceptance and eventual implementation of absolute targets as the route to atmospheric stabilisation of carbon dioxide.

The paper is best described by referencing a diagram included by Brazil (see below). Initially the INDCs** of various parties are scattered throughout the circles depending on their capabilities, with all developed countries starting in the middle. The crucial change to previous attempts at agreement is the inclusion of the proposal;

“developing country parties are expected to include in their respective NDC a type of economy-wide mitigation targets, leading to absolute targets over time”

This means that everyone migrates inwards as their capabilities allow, but that developing country parties at least start with an emissions goal, albeit intensity based, per capita based or based on a business-as-usual (BAU) deviation. Least developed economies start in the outer ring and are encouraged, but not required to present an INDC. Eventually all parties end up with absolute targets in the middle.

Brazil concept

This is a very encouraging proposal by Brazil and it also includes an extensive reference to markets, cap-and-trade, a reformed CDM and so on. But without wanting to take away from the importance of their thinking, it does raise the question of whether it is a decade or more too late. This is the proposal that should have come when parties were negotiating onward commitment periods of the Kyoto Protocol (KP), thereby giving that agreement new life and making it fit for purpose in the 21st Century. Almost all the necessary pieces were already in place, it simply (!! – nothing is ever that simple) required the addition of the middle ring and the provisions for promotion.

In KP language, the centre ring is the AAU (Assigned Amount Unit) world, now only home to the EU, Norway, Australia and Ukraine. Even Japan has left. The outer ring is the CDM world, which relies on financial flows from the inner ring. A renegotiation and addition to KP could have inserted the middle ring and promotion requirements and even developed a new carbon accounting unit for intensity based targets. With all three rings based on carbon units, the much needed “global carbon market” could have taken off relatively quickly. Such a design might have even brought back countries such as the USA given that its objections regarding developing country actions would have been addressed.

One aspect of the Brazil proposal that has some traction in the ADP is the idea that “backsliding” on INDCs won’t be permitted. In other words, once you have declared an INDC with an absolute target, that is where you stay.

The Brazil proposal is for the ADP and not for the KP; which means that parties will have to reinvent everything from scratch. But at least Brazil is there with its creative input leading the way. On to Week 2 in Lima where the Parties are at least into the process of negotiating text, rather than negotiating the procedures under which they would even consider text.

 

* Common but differentiated responsibilities and respective capabilities

**Intended nationally determined contributions

 

Getting going in Lima??

COP20 is now underway in Lima and I have been on the newly created site for two days. Less than three months ago this was apparently an empty piece of land in a large Peruvian government complex, but now it is a bustling and well fitted out set of temporary buildings for housing negotiators and observers from some 190 countries; plus of course their entourage, a large security contingent, caterers, support staff and voluntary guides. The facilities are good and the meetings have started, but solid progress is hard to identify. There’s a lot resting on Lima as Carbon Visuals have clearly shown!!

Lots resting on Lima

Although the ADP (The Ad Hoc Working Group on the Durban Platform for Enhanced Action) is charged with the unenviable task of producing an agreement text for Paris in just one year and has been running for three years with this in mind, the opening days here are once again like watching the opening rounds of a chess match, with the Parties positioning themselves for later confrontation rather than attempting to clear the way and open up the game. This isn’t to say that nothing has happened since Durban; there is at least a non-paper on elements of a draft negotiating text and this is where the discussions for this COP have started.

While the ADP continues its discussions, the various strands of other dead or dying negotiations continue on, although to what end it is sometimes hard to see. Sitting within the technical bodies are the remnants of the LCA (the failed Copenhagen agreement), which includes the Framework for Various Approaches (FVA) and New Market Mechanism (NMM). This is where the main discussion around the use and expansion of carbon markets and mechanisms sits, but progress here has been close to zero since the discussions fell apart in Warsaw as I reported last year. No progress is being made in Lima, with a standoff between parties preventing any further discussion based on objections from Brazil, China, Bolivia, South Africa and Saudi Arabia to this work continuing in the absence of a mandate from the ADP. They have argued that until the ADP takes shape and sets the scene for the development of a carbon market framework, then there is no point having discussions on this subject on the sides. The problem is that unless these side negotiations make some progress in defining what a carbon market framework might look like, the ADP can’t really incorporate the necessary hooks within its structure to give the mandate to the FVA and NMM workstreams to continue their deliberations. Catch 22 comes to mind!

Perhaps on a brighter note, an active side event schedule is well underway. Attendance at these events, often lacklustre in the first few days, appears to be good, with an IPCC event that I spoke at on Wednesday afternoon playing to a nearly full house in quite a large room. This was an event about how people use and interpret the findings of the IPCC, rather than what the IPCC itself had to say in its 5th Assessment Report. But even here the differences in how people view the world show up. I spoke about the key role that CCS plays in scenarios that are targeting aggressive reductions (i.e. 430-480 ppm CO2e) and how a particular table in the IPCC report showed the sharp increase in costs if CCS was unavailable.

IPCC WGIII Table SPM2

My point was not just to highlight this table, but to use it to illustrate a problem the IPCC has in taking complex information and bringing it to the surface. The table was my case study. While it represents the actual findings of the IPCC, it seems to have little bearing on what people think (see below for my key slide from the presentation I gave) they said and I argued that the IPCC and UNFCCC are part of the problem in the way they summarise, shorten, tweet and disseminate the data. Deep down in the 5th Assessment Report it is very clear that a 2°C outcome is very (perhaps totally) dependent on the deployment of CCS, but this wasn’t even discussed in the high level summaries and press releases that were put out at the time. As I mentioned back in September, when the UN Climate Summit took place in New York, CCS wasn’t even on the agenda but a whole session was devoted to renewable energy. While renewable energy (solar / wind) is important in the context of energy access, the table clearly highlights that it isn’t really key to 2°C.

Declining facts

As if to underscore the point, the panellist from Climate Action Network took the stand and said that the IPCC work helped him realise that the world should and could be running on 100% renewable energy by 2050. It wasn’t at all clear to me where this realisation came from in the actual IPCC work, but you can probably guess who had the longest line of audience members wanting to be met with after the event – it wasn’t me.

Let’s hope for some greater enlightenment in the days to come.

In a post earlier this year I compared the endless claims around renewable energy to the famous “reality distortion field” (RDF) that was first employed by the Talosians in the original series of Star Trek, but was later linked with the management style of Steve Jobs. The RDF was said to be Steve Jobs’ ability to convince himself and others to believe almost anything with a mix of charm, charisma, bravado, hyperbole, marketing, appeasement and persistence.

It would appear that after the announcement by the USA and China on their emissions agreement, a new reality distortion field is appearing around the subject of Chinese coal use.

It is very clear from all the reports coming from China that there is real concern about the use of coal and its link with the air quality in many major cities. It is also clear that the Chinese government is now starting to address this issue through the management of coal use, including the closure of older more polluting stations, the use of natural gas, the rapid build of nuclear and renewable energy capacity and so on. But coal use is continuing to increase, albeit more slowly than in recent years. While coal use in parts of the country may even decrease in the near term, as rapid development spreads to all corners of China over the next decade energy demand will continue to grow and total coal use will probably follow.

In the excitement around recent announcements, many organisations are now pinning their hopes on Chinese coal use peaking much earlier than the announced 2030 timeframe for a peak in overall emissions. As a result, when a revised energy strategy was announced in China recently, it was widely reported under the effects of the new distortion field.

According to two Chinese news reports that I could find (Xinhuanet and Shanghai Daily), the following is what was apparently announced;

The State Council promised more efficient, self-sufficient, green and innovative energy production and consumption in the Energy Development Strategy Action Plan (2014-2020). It included a cap set on annual primary energy consumption set at 4.8 billion tonnes of the standard coal equivalent until 2020. Annual coal consumption will be held below 4.2 billion tonnes until 2020, 16.3 percent more than the 3.6 billion tonnes burned last year, according to the National Coal Association.

My interpretation of this is that China has outlined its energy consumption goals for the period 2014 to 2020, but said nothing about the post 2020 period. However, this was reported very differently by others who decided to interpret the announcement as a cap on coal use by 2020. For example, the UNFCCC press release said;

The Chinese State Council also announced a new energy strategy action plan that includes ambitious measures to cap national coal consumption as early as 2020 at 4.2 billion tons, and reduce coal’s share of China’s primary energy mix to less than 62 percent by that same year.

The Climate Reality Project even had a small poster made to announce their interpretation of the plan;

China coal

Chinese coal use might peak in the medium term and emissions from coal will certainly have to peak before 2030 because of their announced INDC (national contribution) in-tandem with the announcement by the USA. But even then coal use may continue to grow if carbon capture and storage (CCS) can be successfully deployed at scale.

For me, the big announcement of the week is the proposed creation of a national carbon market to follow the regional trials now underway. Shanghai Daily reported the following;

China will open a nationwide carbon market in 2016 to help the government reduce emissions by 2030, the National Development and Reform Commission yesterday said in Beijing. Su Wei, an official at the climate change department under the NDRC, said he expected the market to be mature by 2020.

A robust and mature carbon market active throughout the 2020s could bring emissions from coal to a rapid standstill and even see them fall through fuel switching to natural gas and the deployment of CCS. Then it will be time to put up a poster.

The in-tandem announcement last week by the USA and China caught many by surprise, resulted in lots of applause and back slapping and then raised questions as to which country has the tougher or easier deal. A bit of simple analysis offered below may help answer that question.

In the long period between Kyoto and Copenhagen as commentators saw that the Kyoto Protocol probably wasn’t going to be sufficient to rein in global emissions, various ideas (re)appeared as to how the future reduction burden should be shared, particularly amongst countries with widely different development pathways. One idea that gained considerable prominence was known as Contraction and Convergence. In fact this idea was first proposed in 1990 by the Global Commons Institute (GCI).

Contraction refers to the ‘full-term event’ in which the future global total of greenhouse gas emissions from human sources is shrunk over time in a measured way to zero net-emissions within a specified time-frame.

Convergence refers to the full international sharing of the emissions contraction-event, where the ‘emissions-entitlements’ for all countries result from them converging on the declining global per capita average of emissions arising under the contraction rate chosen.

Last week the USA announced reductions of 26-28% by 2025 relative to 2005 and China announced a peaking in emissions by 2030. There really isn’t enough information given to fully dissect this, but a few simple assumptions makes for an interesting observation. For starters, I have assumed that energy emissions are a proxy for total emissions, in part because energy information is so readily available whereas information on methane, other GHGs and land use is much more difficult to piece together. The second assumption is that the 2020-2025 annual rate of reduction in the USA of about 2% p.a. continues through to 2030 (i.e. a reduction of 37% in 2030 relative to 2005) and the third assumption is that China exhibits a noticeable “glide path” towards a 2030 peak, rather than extreme growth that comes to a shuddering halt. At least for energy emissions, the picture looks something like the one below, but in the language of convergence, i.e. emissions per capita.

Emissions per capita USA and China

What becomes apparent is that the USA and China appear to have adopted a “Contraction and Convergence” approach, with a goal of around 10 tonnes CO2 per capita for 2030, at least for energy related emissions. For China this means emissions of some 14.5 billion tpa in 2030, compared with the latest IEA number for 2012 of 8.3 billion tonnes, so a 75% increase over 2012 or 166% increase over 2005. It also has China peaking at a level of CO2 emissions similar to Europe when it was more industrial, rather than ramping up to the current level of say, the USA or Australia (both ~16 tonnes). By comparison, Korea currently has energy CO2/capita emissions of ~12 tonnes, so China peaking at 10 is some 17% below that.

If the USA and China stayed in lockstep after 2030 with the same reduction pathway that plays out in the USA over the period 2020-2030, that might mean 6.6 tonnes CO2 per capita by 2040, or 9.5 billion tpa for China, which is still slightly higher than the current level.

The release of the IPCC 5th Assessment Report Synthesis document on Sunday was a useful reminder of the wealth of measurements, observations and science behind the reality of the anthropocene era and the impact it is having on global ecosystems. While some may embrace this material as proof of society’s “wicked ways” and others may contest it on the grounds of conspiracy or hoax, the real job at hand is to find a way of dealing with the challenge that is posed. Within the 100+ pages of text of the longer report, two parts in particular highlight the scope of what needs to be done.

Within 1.2.2:

Despite a growing number of climate change mitigation policies, annual GHG emissions grew on average by 1.0 GtCO2eq (2.2%) per year, from 2000 to 2010, compared to 0.4 GtCO2eq (1.3%) per year, from 1970 to 2000. Total anthropogenic GHG emissions from 2000 to 2010 were the highest in human history and reached 49 (±4.5) GtCO2eq yr-1 in 2010.

Within 3.2 and 3.4:

Global mean surface warming is largely determined by cumulative emissions, which are, in turn, linked to emissions over different timescales. Limiting risks across reasons for concern would imply a limit for cumulative emissions of CO2. Such a limit would require that global net emissions of CO2 eventually decrease to zero.

There are multiple mitigation pathways that are likely to limit warming to below 2 °C relative to pre- industrial levels. Limiting warming to 2.5 °C or 3 °C involves similar challenges, but less quickly. These pathways would require substantial emissions reductions over the next few decades, and near zero emissions of CO2 and other long-lived GHGs over by the end of the century.

The IPCC have now fully embraced the cumulative emissions concept and taken it to its logical conclusion; near zero emissions within this century. This wasn’t explicitly mentioned in the 2007 4th Assessment Report, but was only really there by inference in the mitigation scenario charts that extend beyond 2050. Anyway, the reference is very clear this time around.

This represents a formidable task given the other half of the problem statement also shown above; that emissions are rising faster than ever. There is a second uncomfortable truth buried within this paragraph, which is the implication that current mitigation policies aren’t working.

So there we have it in a nutshell;

Emissions are rising faster than ever, current policies to stop this aren’t working, but we need to be at zero in 85 years.

Eighty five years is the lifetime of an individual. It means that someone born today will need to see a radical change in energy production within the course of their life, to the extent that it is constantly changing for all 85 years, not just locally but everywhere in the world. Arguably someone born in England around 1820 saw this as the industrial revolution unfolded and the Victorian era took hold. But someone born in 1930 hasn’t actually seen a fundamental change in the energy system, rather an enormous scaling up of what was starting to become commonplace at the time of their birth.

This is the issue that I explore in my new book and which is tackled in the Shell New Lens Scenarios released last year. Both the scenarios show that this puzzle is solvable, albeit in very different ways and with different policy approaches but with different levels of success. A critical factor in both scenarios is the timing and deployment rates of carbon capture and storage (CCS). The earlier this starts and the faster it scales up, the higher the chance of limiting warming to around  2°C. This is also highlighted in the IPCC Synthesis Report which says in Section 3.4;

Many models could not limit likely warming to below 2 °C over the 21st century relative to pre-industrial levels, if additional mitigation is considerably delayed, or if availability of key technologies, such as bioenergy, CCS, and their combination (BECCS) are limited (high confidence).

CCS is of course dependent on a price for carbon dioxide or in its absence a standard of some description to implement capture and storage. These policies are largely absent today, despite over two decades of effort since the creation of the UNFCCC. There are certainly some major carbon pricing systems in place, but most are delivering only a very weak carbon price signal and none are leading to large scale rollout of CCS or show any signs of doing so in the near future. Rather, the emphasis has been on promoting the use of renewable energy and increasing the efficiency of energy use. Both of these policies will bring about change in the energy system and efficiency measures will almost certainly add value to most, if not all economies, but it is entirely possible that large scale adoption of these measures doesn’t actually cause global CO2 emissions to fall.

The IPCC have also put a cost on this policy failure in Table 3.2, which shows mitigation costs nearly one and a half times greater in a world which does not deploy CCS. This high cost comes about because the only way to resolve the scenario models is to limit economic activity as means of mitigation; CCS rollout prevents that from happening.

Another way of looking at this is to imagine the actual climate change consequences of delaying CCS rollout, since the likelihood of limiting economic activity is very low. A back calculation from the Shell scenarios implies that every year large scale rollout of CCS is delayed, 1 ppm of atmospheric CO2 is added to eventual stabilisation. This comes about from the cumulative nature of the problem. As such, a 30 year delay means accepting an eventual concentration of CO2 that is some 30 ppm higher than it need be which in turn has consequences for impacts such as sea level rise.

The negotiators now preparing to head to Lima for COP20 and then to Paris a year later may well be poring over the pages of data and dozens of graphs in the 5th Assessment Report, but the message is nevertheless a simple one, although requiring some bold steps.

Did the UN Summit shift the dial?

The UN Climate Summit has come and gone and leaders from many countries have made announcements, pledges or at least offered moral support. But are we any better off as a result? Reflecting on the last few days of meetings, events, panels and speeches in New York, I would have to argue for the “yes” case. As such, it contributes another piece to the Paris jigsaw.

UN Climate Summit Jigsaw

Although nothing that was formally pledged or offered is likely to make a tangible difference to global emissions in the medium term, one subject has resurfaced in a major way that can: carbon pricing. While there was still a focus on efficiency and renewable energy at many events, the need to implement policy to put a price on carbon dioxide emissions came through loud and clear. In recent months this has been led by the World Bank and they were able to announce in New York that 73 countries and some 1000 companies have signed their Statement, Putting a Price on Carbon, which is an extraordinary result for just a few months of concerted effort.

Given that this was a UN event rather than a national event, the focus naturally shifted to the global story, with an emphasis on how the Paris 2015 agreement might accelerate the shift to carbon pricing and a carbon market that operated globally. The International Emissions Trading Association (IETA) held a number of events around the city outlining its ideas on how this might happen.

Its kickoff was an event on Monday afternoon, the day before the Summit, where a team led by Professor Rob Stavins of the John F. Kennedy School of Government at Harvard University presented new work on linking various carbon emission mitigation approaches. The work suggests that such linkage could be the foundation mechanism behind a globally networked carbon market and can be found in summary here. It illustrates how even quite different approaches to mitigation might link and then deliver the economic benefits associated with a larger more liquid market.

But if this approach is to be adopted, the big question that would still need to be addressed is how the Paris agreement might actually facilitate it. IETA offered some thinking on is, with an outline proposal that even included some basic treaty text to enable such a process. Given that the 2015 agreement will almost certainly be structured around INDCs, or Intended Nationally Determined Contributions, the text proposal needed to embrace this concept and work with it, rather than attempting to impose a carbon price or carbon market structure by diktat. The basic reason for trading in a market is to exchange goods or services and optimise revenue and / or lower costs as a result, so the text simply suggested that parties (nations) could be offered the ability to exchange and transfer mitigation effort (INDCs) should they (or companies within their economies) wish to do so, but requires that it be recorded in some form of carbon reduction unit. The proposal by IETA is as follows;

Cooperation between Parties in realizing their Contribution

  1. Parties may voluntarily cooperate in achieving their mitigation contributions.
  2. A unified international transfer system is hereby established.

a.  A Party may transfer portions of its defined national contribution to one or more other Parties through carbon units of its choice.
b.  Transfers and receipts of units shall be recorded in equivalent carbon reduction terms.

There could be many variations on this theme, but the idea is to establish the ability to trade and require a carbon unit accounting of it if and when it takes place. Of course many COP decisions will be required in years to come to fully flush this out.

What was interesting about this proposal was the reaction it got from those closer to the negotiating process. Rather than simply acknowledging it, one meeting in New York saw several people debating the wording as if the formal negotiation was underway. I understand that this was exactly the reaction IETA were looking for and hopefully it bodes well for the development of market mechanisms within the Paris outcome.

There were of course other themes running through the various events. The new business coalition, We Mean Business, was actively marketing its new report which attempts to make the case that emission reduction strategies in the business sector can deliver returns on investment approaching 30%. This is a rather misleading claim in that it is primarily focussing on efficiency improvements in certain sectors, which of course factors in the local cost of energy, but particularly electricity. There is no doubt that reducing electricity consumption can lead to improved competitiveness and growth, hence a very attractive ROI, but this is very different to a real reduction in emissions that actually delivers benefits globally. This is a major theme of my recent book. The problem with such claims is that they shift attention away from the much more difficult task of actually reducing emissions to the extent that cumulative atmospheric carbon dioxide is impacted; such reductions require real heavy lifting as delivered through the use of carbon capture and storage.

Overall, It was an interesting week, framed by 300,000 demonstrators on Sunday and a plethora of world leaders speaking at the UN on Tuesday. Just maybe, this was the start of something meaningful.

A huge turnout in New York

I am in New York for Climate Week, which includes the UN Climate Summit on Tuesday. Sunday saw an enormous turnout for the People’s Climate March as can be seen from a few of my pictures below.

Climate march 1 (small)

Climate march 2 (small)

Climate march 3 (small)

Climate march 4 (small)

Climate march 5 (small)

Climate march 6 (small)

Climate march 7 (small)

Climate march 8 (small)

Climate march 9 (small)

Climate march 10 (small)

MIT takes a view on a new climate agreement

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In my most recent post outlining ten reasons why the global 2° C goal is more difficult than most commentators imagine, I referenced a new MIT report, Expectations for a New Climate Agreement, which looks at the prospects for the expected Paris COP21 agreement actually changing the current global emissions pathway. The findings don’t give a lot to be hopeful about, but nevertheless are worthy of further review.

The work has been carried out by the MIT Joint Program on the Science and Policy of Global Change, a unique coming together of disciplines ranging from atmospheric chemistry to macro-economics, all under one roof. The team has developed considerable modelling expertise, which also combines the aforementioned disciplines to allow policy feedback to impact emissions and therefore the climate model itself. For the sake of transparency, Shell is a sponsor of the Joint Program.

The first stumbling block the researchers hit in trying to assess what Paris might deliver was the current lack of detail or even a basic outline of the scope of the deal; this with just 15 months to go. While it is now widely assumed that COP21 will deliver a bottom up agreement based on contributions at a national level, there is almost no information available on accounting periods, review options, the nature of a contribution (e.g., reduction quantity, mitigation action, adaptation effort, financial aid, capacity building, technology transfer, R&D effort), terms of compliance, extension provisions and so on. Rather, all this had to be assumed, with the consequence of considerable uncertainty around the MIT findings. For example, MIT focus on a target date of 2030 for the first round of contributions, but continue the simulation of the effects of assumed contributions through to 2050.

A reference case is presented which sits within the RCP 8.5 range, the equivalent of atmospheric concentrations of CO2 exceeding 1000 ppm over the long term. This represents a 4+°C scenario by the end of the century.

Electricity generation is the single largest emitting sector in most countries and therefore features first in the resulting analysis. The MIT team argue that the majority of policy effects on emissions can be covered with just two options: controls on coal-fired generation and renewable energy mandates. In the case of coal, various regions and countries are assumed to pledge restrictions in coal generation, as outlined in the table below. Crucially though, large future users such as India are not expected to make a pledge of this type.

MIT Coal Assumptions

Renewable energy is also expected to grow strongly, with the EU reaching a 35% share in electricity generation by 2050, with other regions following, albeit not as aggressively.

MIT Renewable Portfolio Assumptions

In the transport sector, efficiency is the trend to watch, with vehicle efficiency improving by 2% per annum from 2020 in developed countries and by 1% per annum in the rest of the world. Similarly, in the commercial transport sector, a constant focus on efficiency in trucking fleets sees emissions between 10 and 20% lower than the reference case by 2050. However, the sector remains oil based for the entire period.

Efficiency is also the major driver in reducing household emissions from the reference case, with developed countries leading the way and achieving a 20% differential by 2050. However, for other parts of the world this falls to as low as a 5% improvement over 30 years.

Significant improvements are also assumed for land use change emissions and methane emissions.

The effect of all this is noticeable, but growth in global emissions still continues through to 2050, although at a slower pace than the reference scenario. MIT have 2050 CO2-eq emissions at about 71 Gt, vs. their estimate of 56 Gt in the year of the agreement, i.e. 2015. This outcome is compared with two other projections in the figure below. One is the Reference case used throughout this analysis. Also shown, for comparison purposes, is their estimate of emissions to 2050 if commitments made in Copenhagen are met in 2020 and sustained thereafter. By this analysis, the expected contributions from current negotiations will bring the nations part way toward an RCP 4.5 pathway (a median global temperature increase of 1.8°C over this century or about 2.6°C above the pre-industrial level) but will also leave much to be done in subsequent efforts.

MIT Reductions

The issue of subsequent efforts and the nature of any review process is where the MIT analysis carries its starkest warning. The paper notes that if an agreement is reached in 2015, going into effect by 2020, the earliest review of performance along the way might not be before 2025. In this case, an effort to formulate the next agreement under the Climate Convention, or a tightening of COP-21 agreements, would not start until 2025 or after, with new targets set for a decade or more after that. If this expectation is correct, then global emissions as far out as 2045 or 2050 will be heavily influenced by achievements in the negotiations over the next 18 months.

Finally, the analysis calls for a common pricing regime as a preference to individual national actions conducted in isolation. The benefit here is a simple one, a lower overall cost for the global economy. Alternatively, for the same cost, greater ambition could be realized.

Based on the MIT work it would appear that negotiators and their national governments still have a long way to go to be able to say that they have a deal and set of actions that is effectively dealing with anthropogenic warming of the climate system.