Archive for the ‘United States’ Category

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)

As we head towards COP21 in Paris at the end of 2015, various initiatives are coming to fore to support the process. So far these are non-governmental in nature, for example the “We Mean Business”  initiative backed by organisations such as WBCSD, CLG and The Climate Group. In my last post I also made mention of the World Bank statement on Carbon Pricing.

2 C Puzzle - 3 pieces

This week has seen the launch of the Pathways to Deep Decarbonization report, the interim output of an analysis led by Jeffrey Sachs, director of the Earth Institute at Columbia University and of the UN Sustainable Development Network. The analysis, living up to its name, takes a deeper look at the technologies needed to deliver a 2°C pathway and rather than come up with the increasingly overused “renewables and energy efficiency” slogan, actually identifies key areas of technology that need a huge push. They are:

  • Carbon capture and storage
  • Energy storage and grid management
  • Advanced nuclear power, including alternative nuclear fuels such as thorium
  • Vehicles and advanced biofuels
  • Industrial processes
  • Negative emissions technologies

These make a lot of sense and much has been written about them in other publications, except perhaps the second last one. Some time back I made the point that the solar PV enthusiasts tend to forget about the industrial heartland; that big, somewhat ugly part of the landscape that makes the base products that go into everything we use. Processes such as sulphuric acid, chlorine, caustic soda and ammonia manufacture, let alone ferrous and non-ferrous metal processes often require vast inputs of heat, typically with very large CO2 emissions. In principle, many of these heat processes could be electrified, or the heat could be produced with hydrogen. Electrical energy can, in theory, provide this through the appropriate use of directed-heating technologies (e.g. electric arc, magnetic induction, microwave, ultraviolet, radio frequency). But given the diversity of these processes and the varying contexts in which they are used (scale and organization of the industrial processes), it is highly uncertain whether industrial processes can be decarbonized using available technologies. As such, the report recommends much greater efforts of RD&D in this area to ensure a viable deep emission reduction pathway.

Two key elements of the report have also been adopted by the USA and China under their U.S.-China Strategic and Economic Dialogue. In an announcement on July 9th, they noted the progress made through the U.S.-China Climate Change Working Group, in particular the launching of eight demonstration projects – four on carbon capture, utilization, and storage, and four on smart grids.

Reading through the full Pathways report I was a bit disappointed that a leading economist should return to the Kaya Identity as a means to describe the driver of CO2 emissions (Section 3.1 of the full report). As I noted in a recent post it certainly describes the way in which our economy emits CO2 on an annualised basis, but it doesn’t given much insight to the underlying reality of cumulative CO2 emissions, which is linked directly to the value we obtain from fossil fuels and the size of the resource bases that exist.

Finally, Sachs isn’t one to shy away from controversy and in the first chapter the authors argue that governments need to get serious about reducing emissions;

The truth is that governments have not yet tried hard enough—or, to be frank, simply tried in an organized and thoughtful way—to understand and do what is necessary to keep global warming below the 2°C limit.

I think he’s right. There is still a long way to go until COP21 in Paris and even further afterwards to actually see a real reduction in emissions, rather than reduction by smoke and mirrors which is arguably where the world is today (CO2 per GDP, reductions against non-existent baselines, efficiency improvements, renewable energy goals and the like). These may all help governments get the discussion going at a national or regional, which is good, but then there needs to be a rapid transition to absolute CO2 numbers and away from various other metrics.

There is a well-known saying that “Politics makes strange bedfellows”. In recent weeks, carbon pricing has seen its share of media exposure and strange bedfellows, although this shouldn’t come as a surprise given that it is all about politics anyway. The good news is that this much maligned and misunderstood subject is finally getting some solid airtime, albeit from some interesting supporters.

The re-emergence of this subject has been building for some time now, but perhaps was highlighted by the June 21st op-ed by Hank Paulson in the New York Times. Paulson served as Secretary of the Treasury during the recent Bush administration, following many years at the helm of Goldman Sachs. Although his article was in part directed at the launch of the recent Risky Business report, Paulson used the opportunity to reach out to the Republican side of the political spectrum in the US and argue that a carbon price (a tax in this case) was “fundamentally conservative” and “will reduce the role of government” rather than the opposite which many opponents argue. At least in my view, he is right. Intervening in the energy mix, forcing certain technology solutions, requiring a given percentage from a particular energy source and so on are all big government steps towards addressing emissions. A carbon price is clean and simple and can get the job done.

On the opposite page of the New York Times was the reality check from Nobel Prize winning economist Paul Krugman. While Krugman made it clear that Paulson had taken a “brave stand” and that “every economist I know would start cheering wildly if Congress voted in a clean, across-the-board carbon tax”, the sobering reality from Krugman is “we won’t actually do it”. Rather, he imagines a set of secondary measures, the “theory of the second best” as he calls it, including vehicle efficiency standards, clean energy loan guarantees and various other policy measures. My view is that while all of these are important parts of a coherent energy policy, they are approaching third best when it comes to CO2 emissions.

Meanwhile, another strong advocate of carbon pricing has emerged, namely the World Bank. They have never been silent on the issue and indeed have pioneered policy approaches such as the Clean Development Mechanism of the Kyoto Protocol, but this time they have gone much further and are being considerably louder and bolder. The World Bank have produced a statement, “Putting a Price on Carbon” and have called on governments, companies and other stakeholders (e.g. industry associations) to sign up to it. The statement calls for:

. . . the long-term objective of a carbon price applied throughout the global economy by:

  • strengthening carbon pricing policies to redirect investment commensurate with the scale of the climate challenge;
  • bringing forward and strengthening the implementation of existing carbon pricing policies to better manage investment risks and opportunities;
  • enhancing cooperation to share information, expertise and lessons learned on developing and implementing carbon pricing through various “readiness” platforms.

This is all good stuff, but of course now it needs real support. A further look at the World Bank website illustrates the growing patchwork of activity around carbon pricing. It’s quite heartening.

cq5dam_resized_735x490!

To finish where I started, the strange bedfellows, perhaps nothing could be closer to this than seeing Australian mining magnate and now Member of Parliament, Clive Palmer, on the same stage as climate crusader Al Gore. Only weeks before Mr Gore had made the very clear statement that “We must put a price on carbon in markets and a price on denial in politics”, but nevertheless stood with Palmer as he announced that he would support the Government’s decision to repeal the Carbon Pricing Mechanism (there isn’t a colour for repeal on the World Bank map). I don’t think Mr Gore was particularly happy about that bit, but hopefully was there for the follow-on, where Palmer announced that his party would require a latent ETS to be established in Australia for use once Australia’s main trading partners were also pricing carbon. Given PUP’s (Palmer United Party) hold on the balance of power in the Australian Senate, this might at least mean that Australia will stay in the ETS club and emerge again as a player in the years to come. However, considering the fact that New Zealand, the EU, parts of China, Pacific North America (i.e. California, British Colombia), Japan and (soon) South Africa all have some sort of carbon price, latency may indeed be short lived.

The US Submission on Elements of the 2015 Agreement has recently appeared on the UNFCCC website and outlines, in some detail, the approach the US is now seeking with regards “contributions”. Adaptation and Finance are also covered, although not to the depth of the section on Mitigation.

The submission makes it very clear that the US expects robust contributions from Parties, with schedules, transparency, reporting and review. There is also a useful discussion on the legal nature of a contribution. None of this is surprising as the US delegation to the recent COPs and various inter-sessional meetings has made it very clear that real action must be seen from all parties, not just those in developed countries.

But the submission makes no reference to the role of carbon markets or carbon pricing. Only in two locations does it even refer to market mechanisms and this is only in the context of avoiding double counting. This is coming from the Party that gave the world the carbon market underpinning of the Kyoto Protocol, which in turn has given rise to the CDM, the EU ETS, the CPM (in Australia) and the NZ ETS to name but a few, so perhaps reflects the current difficulty Parties are having keeping carbon price thinking on the negotiating agenda. 

I would argue that without a price on carbon emissions, the CO2 emissions issue will be much more difficult to fully resolve. Further to this, while individual countries may pursue such an agenda locally, the emissions leakage from such systems could remain high until the carbon price permeates much of the global energy system. This then argues for an international agreement that encourages the implementation of carbon pricing at a national level. The Kyoto Protocol did this through the Assigned Amount Unit, which gave value to carbon emissions as a property right. While there is no such “Kyoto like” design under consideration for the post 2020 period, the agreement we are looking for should at least lay the foundations for such markets in the future. The question is, how??

In the post 2020 world, carbon pricing is going to have to start at the national level, rather than be cascaded from the top down. Many nations are pursuing such an agenda, including a number of emerging economies such as China, South Korea, South Africa and Kazakhstan. Linkage of these carbon price regimes is seen as the key to expansion, which in turn encourages others to follow similar policy pathways and join the linked club. The reason this is done is not simply to have carbon price homogeneity, but to allow the transfer of emission reduction obligations to other parties such that they can be delivered more cost effectively. This allows one of two things to happen; the same reductions but at lower cost or greater reductions for the expected cost. The latter should ideally be the goal and is apparently the aspiration the USA has, given it states that the agreement should be “designed to promote ambitious efforts by a broad range of Parties.” The carbon price is simply a proxy for this process to allow terms of trade to be agreed as a reduction obligation is transferred.

All of this implies that the post 2020 agreement at least needs a placeholder of some description; to allow the transfer of reductions to take place between parties yet still have them counted against the national contribution. As it stands today, it is looking unlikely that explicit reference to carbon pricing or carbon markets will make its way into the agreement, but perhaps it doesn’t need to at this stage. On the back of a transfer mechanism, ambition could increase and a pricing regime for transfers could potentially evolve. If that happens to look like a global carbon market in the end, then so be it.

President Obama’s recent speech on climate change marks a welcome shift for an Administration that has been largely silent on the issue for some time now and puts into context the climate teasers that were dropped into the Inauguration and State of the Union addresses.

As many commentators have now discussed, the speech focused mainly on the steps that the USA will take to deliver on its Copenhagen pledge. Whether theses steps will be sufficient remains to be seen, but they are nevertheless concrete and doable, which are two important prerequisites for success.

But the very end of the speech was perhaps the most important turning point for me, in that it marks the first real attempt by the USA to guide the global political process on climate change since, perhaps, the mid 1990s when the Kyoto Protocol was hammered out. Of course the Administration put tremendous effort into the process in the lead-up to Copenhagen and President Obama went to the negotiations along with many other leaders, but at that point in time his Presidency was less than a year old, which in the context of the UNFCCC process is really not very long. There just hadn’t been enough time for the new Administration to really make its mark.

On the back of the following three short paragraphs are we now going to see the USA in the driving seat, and what will that mean? With over three years left in the Obama Presidency, there is certainly time to guide the international climate process.

And finally, my Administration will redouble our efforts to engage our international partners in reaching a new global agreement to reduce carbon pollution through concrete action.

Four years ago, in Copenhagen, every major country agreed, for the first time, to limit carbon pollution by 2020.  Two years ago, we decided to forge a new agreement beyond 2020 that would apply to all countries, not just developed countries. 

What we need is an agreement that’s ambitious — because that’s what the scale of the challenge demands.  We need an inclusive agreement -– because every country has to play its part.  And we need an agreement that’s flexible — because different nations have different needs.  And if we can come together and get this right, we can define a sustainable future for your generation.

The current state of the international post 2020 discussion remains lacklustre at best. Although there is some progress on items left over from the Copenhagen era, for example the Green Climate Fund, almost nothing has transpired on what might happen in the period after 2020. Further, a series of national pledges under some sort of international umbrella of ambition is highly unlikely to deliver any real shift in global emissions, more structure is needed.

In the mid 1990s the USA did set the agenda and drive the pace with its idea of building a global carbon market, starting with clearly defined ambition in developed countries, supported by carbon pricing instruments (most notably the AAU) and strong compliance. Many countries adopted this approach and the EU embraced it by cascading its own obligations into an internal carbon market, as did New Zealand and eventually Australia. Although such a Kyoto style framework is not on the agenda now, there is still much to learn from its implementation as I have discussed in earlier postings. In particular, a new market mechanism which mimics the role of the AAU for those that wish to link their domestic carbon is one possible option. This could at least lay the foundations for a global carbon market.

Difficult though it may be, key architecture questions are on the table today, yet progress in addressing them is at a standstill. This is where American  (and European) leadership is required. Simply trying to coax ever greater pledges out of the likes of China and India isn’t a route to success, rather a clear and robust framework needs to emerge that will drive energy investment down a lower emissions pathway and trigger one technology in particular, carbon capture and storage (CCS).

Love it or hate it, carbon pricing remains a key deliverable. CCS will eventually be triggered by a carbon price, but in the interim an international agreement needs to ensure that this technology appears on a near commercial scale in a dozen or so countries / regions (e.g. North America, EU, Russia, Oceania, Gulf States, South Africa, China and India).

Redrawing the Energy-Climate Map

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The world is not on track to meet the target agreed by governments to limit the long term rise in the average global temperature to 2 degrees Celsius (°C).

International Energy Agency, June 2013

The International Energy Agency (IEA) is well known for its annual World Energy Outlook, released towards the end of each year. In concert with the WEO come one or more special publications and this year is no exception. Just released is a new report which brings the IEA attention back squarely on the climate issue, Redrawing the Energy-Climate Map. The IEA have traditionally focused on the climate issue through their 450 ppm scenario. While they continue to do that this time, they are also going further with a more pragmatic model for thinking about emissions, that being the “trillion tonne” approach. I have discussed this at some length in previous posts.

The report looks deeply into the current state of climate affairs and as a result fires a warning shot across the bows of current national and UNFCCC efforts to chart a pathway in keeping with the global goal of limiting warming to 2 °C above pre-industrial levels. The IEA argue that we are on the edge of the 2 °C precipice and recommends a series of immediate steps to take to at least stop us falling in. With the catchy soundbite of ” 4 for 2° “, the IEA recommend four immediate steps in the period from now to 2020;

  1. Rapid improvements in energy efficiency, particularly for appliances, lighting, manufacturing machinery, road transport and within the built environment.
  2. Phasing out of older inefficient coal fired power stations and restricting less efficient new builds.
  3. Reductions in fugitive methane emissions in the oil and gas industry.
  4. Reductions in fossil fuel subsidies.

These will supposedly keep some hope of a 2°C outcome alive, although IEA makes it clear that much more has to be done in the 2020s and beyond. However, it didn’t go so far as to say that the 2° patient is dead, rather it is on life support.

I had some role in all this and you will find my name in the list of reviewers on page 4 of the report. I also attended a major workshop on the issue in March where I presented the findings of the Shell New Lens Scenarios and as a result advocated for the critical role that carbon capture and storage (CCS) must play in the solution set.

As a contributor, I have to say that I am a bit disappointed with the outcome of the report, although it is understandable how the IEA has arrived where it has. There just isn’t the political leadership available today to progress the things that really need to be done, so we fall back on things that sound about right and at least are broadly aligned with what is happening anyway. As a result, we end up with something of a lost opportunity and more worryingly support an existing political paradigm which doesn’t fully recognize the difficulty of the issue. By arguing that we can keep the door open to 2°C with no impact on GDP and by only doing things that are of immediate economic benefit, the report may even be setting up more problems for the future.

My concern starts with the focus on energy efficiency as the principal interim strategy for managing global emissions. Yes, improving energy efficiency is a good thing to do and cars and appliances should be built to minimize energy use, although always with a particular energy price trajectory in mind. But will this really reduce global emissions and more importantly will it make any difference by 2020?

My personal view on these questions is no. I don’t think actions to improve local energy efficiency can reduce global emissions, at least until global energy demand is saturated. Currently, there isn’t the faintest sign that we are even close to saturation point. There are still 1-2 billion people without any modern energy services and some 4 billion people looking to increase their energy use through the purchase of goods and services (e.g. mobility) to raise their standard of living. Maybe 1-1.5 billion people have reached demand saturation, but even they keep surprising us with new needs (e.g. Flickr now offers 1 TB of free storage for photographs). Improvements in efficiency in one location either results in a particular service becoming cheaper and typically more abundant or it just makes that same energy available to any of the 5 billion people mentioned above at a slightly lower price. Look at it the other way around, which oil wells, coal mines or gas production facilities are going to reduce output over the next seven years because the energy efficiency of air conditioners is further improved. The fossil fuel industry is very supply focused and with the exception of substantial short term blips (2008 financial crisis), just keeps producing. Over a longer timespan lower energy prices will change the investment portfolio and therefore eventual levels of production, but in the short term there is little chance of this happening. This is a central premise of the book I recently reviewedThe Burning Question.

Even exciting new technologies such as LED lighting may not actually reduce energy use, let alone emissions. Today, thanks to LEDs, it’s not just the inside of buildings where we see lights at night, but outside as well. Whole buildings now glow blue and red, lit with millions of LEDs that each use a fraction of the energy of their incandescent counterparts – or it would be a fraction if incandescent lights had even been used to illuminate cityscapes on the vast scale we see today. The sobering reality is that lighting efficiency has only ever resulted in more global use of lighting and more energy and more emissions, never less.

doha_skyline_560px

An analysis from Sandia National Laboratories in the USA looks at this phenomena and concludes;

The result of increases in luminous efficacy has been an increase in demand for energy used for lighting that nearly exactly offsets the efficiency gains—essentially a 100% rebound in energy use.

 I don’t think this is limited to just lighting. Similar effects have been observed in the transport sector. Even in the built environment, there is evidence that as efficiency measures improve home heating, average indoor temperatures rise rather than energy use simply falling.

The second recommendation focuses on older and less efficient coal fired power stations. In principle this is a good thing to do and at least starts to contribute to the emissions issue. This is actually happening in the USA and China today, but is it leading to lower emissions globally? In the USA national emissions are certainly falling as natural gas has helped push older coal fired power stations to close, but much of the coal that was being burnt is now being exported, to the extent that global emissions may not be falling. Similarly in China, older inefficient power stations are closing, but the same coal is going to newer plants where higher efficiency just means more electricity – not less emissions. I discussed the efficiency effect in power stations in an old posting, showing how under some scenarios increasing efficiency may lead to even higher emissions over the long term. For this recommendation to be truly effective, it needs to operate in tandem with a carbon price.

The third and fourth recommendations make good sense, although in both instances a number of efforts are already underway. In any case their contribution to the whole is much less than the first two. In the case of methane emissions, reductions now are really only of benefit if over the longer term CO2 emissions are also managed. If aggressive CO2 mitigation begins early, and is maintained until emissions are close to zero, comprehensive methane (and other Short Lived Climate Pollutants – SLCP) mitigation substantially reduces the long-term risk of exceeding 2˚C (even more for 1.5˚C). By contrast, if CO2 emissions continue to rise past 2050, the climate warming avoided by SLCP mitigation is quickly overshadowed by CO2-induced warming. Hence SLCP mitigation can complement aggressive CO2 mitigation, but it is neither equivalent to, nor a substitute for, near-term CO2 emission reductions (see Oxford Martin Policy Brief – The Science and Policy of Short Lived Climate Pollutants)

After many lengthy passages on the current bleak state of affairs with regards global emissions, the weak political response and the “4 for 2°C “ scenario, the report gets to a key finding for the post 2020 effort, that being the need for carbon capture and storage. Seventy seven pages into the document and it finally says;

In relative terms, the largest scale-up, post-2020, is needed for CCS, at seven times the level achieved in the 4-for-2 °C Scenario, or around 3 100 TWh in 2035, with installation in industrial facilities capturing close to 1.0 Gt CO2 in 2035.

Not surprisingly, I think this should have been much closer to page one (and I have heard from the London launch, which I wasn’t able to attend, that the IEA do a better job of promoting CCS in the presentation). As noted in the recently released Shell New lens Scenarios, CCS deployment is the key to resolving the climate issue over this century. We may use it on a very large scale as in Mountains or a more modest scale as in Oceans, but either way it has to come early and fast. For me this means that it needs to figure in the pre-2020 thinking, not with a view to massive deployment as it is just too late for that, but at least with a very focused drive on delivery of several large scale demonstration projects in the power sector. The IEA correctly note that there are none today (Page 77 – “there is no single commercial CCS application to date in the power sector or in energy-intensive industries”).

Of course large scale deployment of CCS from 2020 onwards will need a very robust policy framework (as noted in Box 2.4) and that will also take time to develop. Another key finding that didn’t make it to page one is instead at the bottom of page 79, where the IEA state that;

Framework development must begin as soon as possible to ensure that a lack of appropriate regulation does not slow deployment.

For those that just read the Executive Summary, the CCS story is rather lost. It does get a mention, but is vaguely linked to increased costs and protection of the corporate bottom line, particularly for coal companies. The real insight of its pivotal role in securing an outcome as close as possible to 2°C doesn’t appear.

So my own “ 2 for 2°C before 2020“ would be as follows;

  1. Demonstration of large-scale CCS in the power sector in key locations such as the EU, USA, China, Australia, South Africa and the Gulf States. Not all of these will be operational by 2020, but all should be well underway. At least one “very large scale” demonstration of CCS should also be underway (possibly at the large coal to liquids plants in South Africa).
  2. Development and adoption of a CCS deployment policy framework, with clear links coming from the international deal to be agreed in 2015 for implementation from 2020.

But that might take some political courage!

We tend to think of climate change as a relatively modern issue, perhaps marked by the testimony before Congress of James Hansen in summer 1988.  The terms “climate change” and “global warming” hardly appear in literature before 1975 and didn’t really take off until the mid-1980′s. Google ngram climate change

There is of course Svante Arrhenius who published on the role of carbon dioxide in 1903 and even some others before that. There was certainly research on the issue throughout the 20th Century, including the work of Keeling and Callendar. But this week I was prompted to read a bit about the Revelle Factor (ocean uptake of CO2, more basic research in the 20th Century) and came across the following publication, endorsed and signed in 1965 by then President Lyndon Johnson and produced by the President’s Science Advisory Committee. It is a review on the then current state of the environment with a focus on pollutants. To my surprise, contained within it is a lengthy chapter on the rising levels of CO2 in the atmosphere from the use of fossil fuels and its impact on global temperature. Was this the earliest political prompt on the issue from the science community?

 White House 1965

In the days before computer models, climate lobbyists, sceptics, warmists and the pseudo-scientists who claim to have deep and insightful knowledge of atmospheric physics and chemistry (a.k.a. a variety of journalists, hobbyists, lawyers, political figures and others) which the atmospheric physicists themselves “apparently don’t have”, here is a first (??) thoughtful introduction and analysis by the science community, published by the United States Government on an issue that has become paramount today. It makes for interesting reading.

The paper looks at the atmospheric build up of CO2, the likely further build up by 2000 as fossil fuels continue to be consumed, expected temperature rises, the possible impact on global sea levels as ice caps melt and concludes;

The climatic changes that may be produced by the increased CO2 content could be deleterious from the point of view of human beings.

Perhaps the most surprising aspect of the chapter on Atmospheric Carbon Dioxide is the discussion on a geoengineering solution. The above conclusion goes on to say;

The possibilities of deliberately bringing about countervailing climatic changes therefore need to be thoroughly explored. A change in the radiation balance in the opposite direction to that which might result from the increase of atmospheric CO2 could be produced by raising the albedo, or reflectivity, of the earth . . . . . . .

Nearly fifty years later, not a great deal has been done in response to all this, although climate science has certainly advanced. But in his opening remarks, President Johnson calls for “highest priority of all to increasing the numbers and quality of the scientists and engineers working on problems related to the control and management of pollution“. The fact that some in our society have chosen to demonize these people and even mock their work is a sad state of affairs.  Tackling climate change means we need more scientists, with society fully behind young people focusing on science, technology, engineering and mathematics.  Governments too can play a bigger role, not only like Johnson did in recognizing the problem but by enacting enabling policy measures and delivering public funding to support progress in research and development.

Albert Einstein once said that “The definition of insanity is doing the same thing over and over again and expecting different results”. So it was that I spent the last few days in Doha, perhaps anticipating that something might just be different this time around – after all there were things to be done and a whole new agreement to be crafted by 2015.

Finally late on Saturday, COP18 came to an end. Two weeks of discussion and negotiation had barely moved the needle, so the challenge to bring the conference to a useful conclusion and at least move the agenda forward somewhat fell on the Qatari President of the COP, H.E. Abdullah Bin Hamad Al-Attiyah – which is what he did, despite the objections of some parties. At the end of it all, UNFCCC Christiana Figueres tweeted;

“Read how COP18 has opened a gateway to greater ambition and action on climate change . . . .

Some may see this as a rather optimistic perspective on a COP that may well be remembered more for the excellent facilities provided by the Government of Qatar, rather than anything tangible that the countries were able to agree to actually reduce emissions. The outcome could be described at best as administrative. The three objectives I discussed at the beginning of the conference were delivered to some extent, although the Durban Platform did not progress as much as might have been expected, given the tight delivery timetable it has.

  1. The highlight was the agreement on a second commitment period for the Kyoto Protocol, which will now run through to 2020. Most commentators made much of the fact that the agreement only included Europe and Australia, but this is a rather unfair representation of the conclusion. True, the coverage is not what it was for the 2008-2012 period, but looking at it from the reverse perspective, only Canada, Russia, Japan and New Zealand have dropped out. All of the other former Soviet states have remained, as have Switzerland and Norway. Of course the developing countries have remained, but still without commitments other than to make use of the Clean Development Mechanism. The AAU issues were largely put to rest and at least for the time being the agreement leaves the world with the internal workings of a carbon market, but not much else.
  2. The LCA discussion proved to be the most fractious, perhaps because it is home to the financial flows that are now beginning to percolate through the UNFCCC. This shouldn’t be confused with the carbon market financial flows of the Kyoto Protocol and the future New Market Mechanism, but the much anticipated flow of public funds from developed to developing countries. The job of the COP was to bring the LCA to a close, which in turn would make way for a more focussed discussion on the 2015 Durban Platform agreement. But money got in the way. Many parties claimed that the work of the LCA was incomplete, largely because of the fact that the money is hardly flowing and the Green Climate Fund remains uncapitalised. The US argued that this is because the modalities of the fund have not been agreed and complained that where money had been made available, such as through the Fast Start Mechanism, no appreciation was shown on the part of the recipients. In the end, the LCA did close, but mainly through an administrative sleight of hand which relocated most of its activities to various technical groups under the Convention.
  3. Finally, there was the ADP (Durban Platform). The delegates spent two weeks discussing this under two work streams, one which is looking at increasing the level of ambition up to 2020 and a second which is looking more holistically at the structure of an overarching framework. At this late stage, increased ambition through to 2020 seems like a rather pointless discussion. The energy mix for the 2020s is rapidly being cast in stone all over the world, to the extent that only relatively minor changes could now be made. This isn’t to say that we should give up, but we should at least recognise that major initiatives starting today will only bear fruit in the 2020s and 2030s, but not before then. Even a modest energy efficiency initiative could still take a decade to fully play out, given the time for political agreement, national ratification and finally implementation. Gripped by the urgency of the issue, the parties managed to agree the meeting schedule for the period between now and 2015, but failed to take matters further. That amounts to a year lost since Durban, with almost nothing to show in terms of progress. Unfortunately, even the world’s glaciers would consider the pace to be slow.

Perhaps there was a gateway opened to ambition and action, but nobody has passed through it, or seem likely to in the near future. The level of ambition also remains far short of a 2 deg.C trajectory. By contrast, the side event programme was full of national delegates, some who had come from the negotiation meetings, talking about their national programmes. Not surprisingly, the Chinese “carbon market” presentations were packed.

Now comes the sting in the tail – “loss and damage”. I suspect that this is a subject that has had the lid kept on it for some time, but it is in the open now, probably because of the claimed dissatisfaction with the level of funding and financing flowing from developed countries. The final version of the text raises the worrying prospect of the development of a mechanism to address the impacts of climate change. The following two clauses are pretty clear on the issue:

8. Requests developed country Parties to provide developing country Parties with finance, technology and capacity-building, in accordance with decision 1/CP.16 and other relevant decisions of the Conference of the Parties;

9. Decides to establish, at its nineteenth session, institutional arrangements, such as an international mechanism, including functions and modalities, elaborated in accordance with the role of the Convention as defined in paragraph 5 above, to address loss and damage associated with the impacts of climate change in developing countries that are particularly vulnerable to the adverse effects of climate change;

Subjects like this have the potential to stall the process for years, although some may argue that the current rate of progress is little better than stalled anyway. It will also get to the issue of apportioning blame, since this is the flip side of “loss of damage”. If there is blame to share, then the only pragmatic way to do it will be on the basis of cumulative emissions, since this is the root cause of the climate issue. Unfortunately nature doesn’t know anything about emissions per $ of GDP, it just sees accumulation. Given current development rates and the size of some national populations, the cumulative national emissions league table is rapidly changing. By 2020, many of the leading nations “to blame” for the state of the climate (at least on the basis of cumulative emissions) will be today’s “developing countries” (some further thoughts on this to follow in a future post).

The parties will convene in Warsaw next year, somewhere in Latin America the year after and possibly in France in 2015 – all that seemed to be agreed without too much fuss. There will be various inter-sessional meetings in the meantime, but if a deal is really going to be agreed by 2015, something remarkable is going to have to happen. We should reflect on the fact that the noisy and messy closure of the LCA was the sad end of a process that started in Bali and was supposed to deliver a global deal. It didn’t. Perhaps Einstein was right.

Expectations for COP 18 in Doha

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

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

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

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

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

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

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

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

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

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

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

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

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

Good luck and success to all the delegates.