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 annual Forum held by the MIT Joint Program on the Science and Policy of Global Change is always an interesting event, with excellent presentations and lively debate ensuing. The recent Forum held in Boston in early October was no exception thanks to a discussion on two very different approaches to triggering the necessary mitigation of carbon dioxide emissions.

The debate started with a presentation on cumulative emissions and the clear link to atmospheric warming. This comes back to the “stock” vs. “flow” nature of carbon dioxide into the atmosphere which I have written about here and is the foundation of my recent book. The key to the issue is that as CO2 is a stock addition to the atmosphere, it doesn’t matter when or where the CO2 is emitted for the same net accumulation. As a result, the eventual accumulation will tend towards the full release of known fossil fuel reserves simply because the infrastructure exists to extract them and as such they will get used somewhere or at some time.  This also implies only one remaining path forward (given that non-use is unlikely) for stabilizing atmospheric concentrations of CO2; capturing and storing the CO2 when the fuels are used (i.e. Carbon Capture and Storage or CCS)

The above line of reasoning led one participant to propose that the simplest solution to the climate issue was to mandate sequestration, starting with a small amount for each tonne of CO2 emitted, say 1-2%, but progressively increasing this throughout the century until 100% is reached. Tradable CCS certificates (where one certificate represents one tonne of CO2 stored) could be used to distribute the benefits of individual large projects amongst many, particularly in the early years when the sequestration requirement from an individual emitter would still be small. Further, it was argued that this was economically more attractive than the widespread use of a carbon price, which would have to get to higher levels (probably more than $50/tonne) than current systems are offering to trigger even the first CCS project.

In the case of CCS certificate trading, which might trade in the range $50-$100 per tonne of stored CO2 early on, the cost for an individual emitter would nevertheless be initially small. If this was started in 2020 at 1% and reached 15% sequestration by 2030 (i.e. 100% by mid 2080s), the average cost over the period 2020-2030 to an emitter would be $8.50 per tonne of CO2, even with CCS certificates trading at $100 each. This is about the current level of the EU ETS which of course is unlikely to see any CCS projects at such prices.

For a carbon pricing approach, the CO2 price would have to be somewhat higher than the current level in the EU ETS to trigger CCS activity, which would likely delay its implementation and in any case probably cause grief within the system simply because of the higher price and its claimed impact on industry, competitiveness and consumers. It was argued in the MIT debate that this latter effect could well mean that it becomes politically unacceptable to ever let direct pricing mechanisms get to the level required for CCS.

The carbon pricing economists in the room responded to this, arguing that the direct pricing approach was more efficient in that it would allow a range of other mitigation options to play out in the interim before CCS was actually needed. This brought the response that only under the circumstances of uniform carbon pricing with full global reach might this be true; although with the caveat that in the context of an accumulation problem, there were no other mitigation options other than CCS and not using the fuels in the first instance. Partial reach (e.g. the EU ETS and China ETS) of carbon pricing, while significant, might simply introduce a trade distortion, rerouting fossil fuels to other parts of the world and eventually resulting in the same accumulation in the atmosphere. The claim was that carbon pricing tended to address the problem on a flow basis rather than stock basis and measured success as reduced emssions in the location where it operated, rather than reduced accumulation in the atmosphere over the long term. By contrast, it was argued that any application of CCS, even on a local basis, dealt directly with accumulation.

There wasn’t a resolution to the issues discussed above, but the discussion was a great example of the early development of policy thinking. Carbon pricing has dominated the debate for many years and rightly so, but as the science shifts in its emphasis and focuses more specifically on the root causes, policy will eventually have to adjust as well.

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.

In conjunction with the ADP meeting in Bonn last week, the UNFCCC held a Technical Expert Meeting (TEM) on Carbon Capture and Storage. It was really good to see this critical technology finally getting some airtime at the UNFCCC and even more importantly the attendance at the meeting by the Parties was good. There was plenty of interest, lots of good questions and a real desire to understand how CCS could be further advanced and more importantly deployed. On a historical note, the meeting was held in what was the German Bundestag between 1949 and 1999. The pigeon holes used by the MPs were still there and dutifully labelled with names such as Dr. A. Merkel.

The morning session covered the technology more broadly and focussed in on some major CCS projects either in operation or under development around the world. I had been invited to speak about the Shell Quest Project in Canada. The afternoon session had a focus on the “U” in a new acronym now entering the discussion, CCUS or Carbon Capture Use and Storage.

Carbon Capture and Use sounds like a great way forward; why not capture the CO2 and put it to good use? That way there will be an economic incentive to tackle emissions and the problem will be solved. This took me back to a dinner at COP19 in Warsaw last year where one participant suggested that CO2 be commoditized such that it would be used even more widely. Unfortunately, this is where thermodynamics gets in the way.

Carbon dioxide sits at the bottom of a deep thermodynamic well.

Thermodynamic well

It is a by-product from a very energetic chemical reaction, the oxidation of a hydrocarbon molecule (i.e. combustion). This releases a tremendous amount of energy (which is why fossil fuels have such value), but leaves us with CO2, which then doesn’t have the energy to react quickly with anything. As such, it is very stable and any chemical use for CO2 which converts it into something else requires a similar amount of energy to that produced when the CO2 was created in the first place. One of the key presentations at the CCS TEM was about the manufacture of polycarbonates (and other chemicals) from CO2. This was an excellent piece of work, but the tricky subject of process energy doesn’t jump out of the presentation.

There is also another tricky subject that needs to be opened up; for the most part, the use of CO2 in chemical processes has no impact on the atmospheric CO2 balance, unless of course the chemical is eventually sequestered. Otherwise the CO2 simply returns to the atmosphere when the chemical is used or the plastic degrades. Even if sequestration is the end point, chemical processes will never operate on the scale necessary to manage global CO2 emissions from energy use.

I did a bit more searching on these subjects and found an excellent paper at the University of Bath online publication store (originating from Imperial college), but beware it is long, detailed and very technical. However, an extract from the early part of the paper highlights the above points:

The development of methods to activate and use CO2 to prepare chemicals and materials is an attractive research goal. Carbon dioxide is abundant, renewable, of low toxicity and is emitted as a waste product from a myriad of industrial processes. A longstanding goal of synthetic chemistry has been to develop catalysts and processes which consume it, however, such reactions pose significant challenges. As the most highly oxidized state of carbon, CO2 is the lowest energy state of all carbon-containing binary neutral species: indeed, CO2 and water are the end-products of most energy releasing processes, including combustion and metabolic pathways. The table below illustrates the free energy of formation of carbon based molecules: the large energy required to reduce it is the most significant obstacle. This energy can either be directly input as physical energy or indirectly via the use of reactive chemical species as reagents; it is the latter strategy which powers the copolymerisation of epoxides and CO2. Free energy of Formation

Nature is successful in transforming approximately 200 billion tonnes/year of CO2 into carbohydrates via photosynthesis. Synthetic chemistry has been less successful, so far there are only a limited range of reactions which can transform CO2 to useful products, those that yield materials with high market volumes and/or economics are even scarcer. Successful reactions include the synthesis of urea (146 Mt/y, 2008), inorganic carbonates (45 Mt/y, 2008, mostly Na2CO3 via the Solvay process), methanol (6 Mt/y), salicylic acid (60 kt/y, 2003, via the Kolbe-Schmitt process), organic carbonates (100 kt/y, 2009; the subject of recent reviews) and polycarbonates (a few kt/y). Current production volumes for aliphatic polycarbonates produced from CO2 are small, however, the polycarbonates sector as a whole is large and growing. In Asia alone the sector is forecast to grow by 8-10%, resulting in the construction of new polycarbonate plants and opportunities for new technologies. Finally, it is important to note that CO2 consumption by chemical processes (approx. worldwide ~ 100 Mt/y) cannot impact global CO2 levels, nor are they a means to address climate change (UK CO2 emissions in 2008 from power stations exceeded 200 Mt/y). However, they could be a means to add value to a portion of the CO2 from carbon sequestration and storage (CSS) processes.

The last point is critical and it is why processes such as described above and the use of CO2 for enhanced oil recovery (EOR) are so important. All of these give real value to a modest amount of CO2. This is nowhere near the scale necessary to impact atmospheric concentrations, but enough to allow carbon dioxide capture plants to be built, which in turn allows capture technology to develop and become more cost competitive. This then makes CCS a more attractive option over the longer term and gives confidence that it is commercially viable at a certain carbon price.

The Australian Prime Minister, Tony Abbott, turned up in Queensland very recently to open a coal mine (the $US3.4 billion Caval Ridge Mine in Central Queensland, a joint venture between BHP and Mitsubishi which will produce 5.5 million tonnes annually of metallurgical coal and employ about 500 people). In a TV interview he managed to inflame a number of commentators around the world with his quote that “Coal is good for humanity, coal is good for prosperity, coal is an essential part of our economic future, here in Australia, and right around the world . . . . . “.

In this world in which it is difficult for politicians to say anything without getting criticised, he was perhaps in a losing situation before he spoke, simply because of the critical role that coal happens to play in the global economy cast against the reality that its cumulative carbon footprint is the single largest contributor over time to the build-up of CO2 in the atmosphere. More recently, increased coal use has also contributed most to the rapid rise in global emissions.

In one sense Abbott is correct in that over and over again coal has been the starting point for industrial development. I explored this in more depth a few months ago. Coal is an inexpensive fuel, but perhaps most importantly it requires only minimal technology to utilize. There is no need for pipelines, leakage monitoring or sophisticated storage facilities. One could argue that the most important piece of technology is a shovel. This was true in Victorian England, it is still true in parts of China today and it may well be the case as Africa begins to industrialize on a large scale. Of course, the development of Africa on the back of the vast coal resource that sits in that continent (200 billion tonnes in Botswana alone) will send emissions to levels that are hard to contemplate and even more difficult to reduce. That is highly unlikely to be good for humanity.

Contrast this with the latest offering from activist and author Naomi Klein, who has recently published a book on the climate issue; This Changes Everything. I am about a quarter of the way into this and try as I may to be objective, I am already wondering if I will ever finish it. I feel that I have already been vilified a hundred times over, not just as part of the fossil fuel industry that she likens to an evil empire, but also as a shareholder daring to expect a return on my investments (“. . . . pour their profits into shareholder pockets . . .” ). Ms. Klein seems to believe that nothing short of a return to collective ownership, community living, local production and simple lifestyles will be sufficient to reduce carbon dioxide emissions. She blames anybody and everybody for the problem of rising emissions and lands the issue squarely at the feet of the economic system that has served us pretty well for centuries. Apart from her argument for the need to change everything, it looks as if I will have to plough through another 300 pages to find out how she imagines this might actually happen. My guess is that it could be more wishful thinking than practical policy advice. Should I ever get to page 533 (!!) I will let you know, but I don’t know if I have a thick enough skin for that.

One reviewer did manage to make it to the end and his views can be found here.

In the midst of this cacophony of criticism, the rational middle continues on without much of a voice. But some of us are at least trying. My new book, Putting the Genie Back: 2°C will be harder than we think, hasn’t attracted the talk shows or celebrity endorsements yet, but I have at least had some good feedback from readers and that is very gratifying. I wrote it to try and present a more balanced view of the climate issue and it does seem to be succeeding in that regard.

The Climate Group has posted an interesting story on its website and has been tweeting a key graph from the piece of work (below) with the attached text saying “From 2000 to 2012, wind and solar energy increased respectively 16-fold and 49-fold”.

Climate Group Image

The story is headed “Wind and Solar Power is Catching up with Nuclear” and argues correctly that the global installed capacity of these two new sources of electricity are catching up with nuclear. Although the article concludes with the sobering reality that actual generation from wind and solar are still just a fraction of that from nuclear, the headline and certainly the tweets are somewhat misleading.

Both wind and solar have very low on-stream factors, something like 30% and 20% respectively in the USA, whereas nuclear is close to 90%. This means that although 1 GW of solar can deliver up to 1 GW of output, this is highly intermittent, needs considerable backup and results in an average output of only 200 MW (with a low of zero half the time). By contrast a 1 GW nuclear power station is on stream most of the time and delivers about 1 GW 24/7 throughout the year. Therefore, comparing solar or wind capacity with nuclear capacity gives little insight into the actual energy being generated, which is really the point of any comparison in the first instance. The global generating picture actually looks like this (Source: BP Statistical Review of World Energy 2014);

Generation by source

Wind, but particularly solar generation are still only a fraction of nuclear generation, even with the global nuclear turndown following Fukushima. Interestingly, both wind and solar are only rising at about the same rate that nuclear did in the 1960s and 1970s, so we might expect another 30+ years before they reach the level that nuclear is at today, at least in terms of actual generation.

The comparison of capacity rather than generation has become a staple of the renewable energy industry. Both coal and nuclear provide base load electricity and have very high on-stream factors. Depending on the national circumstances, natural gas may be base load and therefore also have a high on-stream factor, but in the USA it has been closer to 50% as it is quite often used intermittently to match the variability of renewables and the peaks in demand from customers (e.g. early evenings when people come home from work and cook dinner). This is because of the ease with which natural gas generation can be dispatched into or removed from the grid. However, natural gas is also becoming baseload in some parts of the USA given the price of gas and the closure of older coal plants.

Capacity comparisons look great in that they can make it appear that vast amounts of renewable energy is entering the energy mix when in fact that is not the case, at least not to the extent implied. Renewable energy will undoubtedly have its day, but like nuclear and even fossil fuels before it, a generation or two will likely have to pass before we can note its significant impact and possibly even its eventual dominance in the power sector.

My new book, Putting the Genie Back, goes to some length picking apart the climate issue and then explaining why carbon capture and storage (CCS) is such a critical part of the solution set. It eventually becomes clear when you really think it about and consider three things;

  • The huge scale of the fossil fuel based energy system;
  • The way carbon dioxide accumulates in the atmosphere and;
  • The extraction economics of fossil fuels.

But few of us have the time to really think about an issue such as climate change, let alone read books on the subject or attend seminars, lectures and climate conferences (although quite a few of these don’t mention CCS at all and some barely acknowledge the need for a carbon price). Rather, in this word of social media, 140 character tweets and 24/7 News Channels, we often get just a few minutes to come to terms with a concept and form an opinion. As such, is it possible to explain the role of CCS in such a short amount of time?

With an eye on the UN Climate Summit and then the opportunities in the lead-up to COP21 in Paris, the World Business Council for Sustainable Development (WBCSD) has given it a try. The media they have used is video, working with an exciting graphics company called Carbon Visuals. The challenge was to help the audience understand why CCS is important in just a few minutes, not just by being told so, but by being convinced.

Carbon Visuals focussed on two key aspects of the climate issue, that being the huge scale of fossil fuel use and the way in which CO2 from this use accumulates in the ocean / atmosphere system, with further accumulation likely due to the global fossil resource base still to be extracted to meet energy needs.

The visuals depicting scale are very attention grabbing, to help the viewer recognise that fossil fuel use is highly unlikely to diminish in the near term or even vanish in the longer term. For example, daily global coal use alone buries Midtown East Manhattan.

Coal mountain

This is then contrasted with renewable energy, which while growing very rapidly, isn’t even outpacing the growth in fossil fuel use, let alone forcing it down.

The animation steps up a notch when it comes to depicting CO2, which bursts out of Central Park and literally buries New York as it accumulates. These spheres are something of a Carbon Visuals “trademark”, first appearing in an excellent video they made about New York City emissions.

CO2 pile in NYC

Finally, the animation puts this into perspective in terms of global accumulation and the likelihood of exceeding the trillion tonnes of carbon threshold (and therefore 2°C), unless of course large scale deployment of CCS takes place to mitigate such an outcome. Of course a great deal has to happen for this scale of CCS to be built, starting with more widespread application of carbon pricing.

CCS Animation

You can watch the animation here and look in more detail at the images and thinking behind it here.

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.

With the UN Climate Summit on Tuesday September 23rd, there has been a push to have new thinking and material ready for the event. One high profile release on September 16th was the report from The Global Commission on the Economy and Climate, or Better Growth, Better Climate, The New Climate Economy Report. This was the culmination of months of work by a select group of academics, business people and economists aimed at showing how both economic growth and the need to address rising levels of carbon dioxide in the atmosphere were compatible, if not synergistic. Oddly though, the Commission doesn’t feature any leaders or well-known figures from the energy world.

New Climate Economy Report Cover

The report is solid in its findings, to a point. Although the clear need for a strong, predictable carbon price is mentioned a number of times, there is little follow-up on this in the synthesis report and no usable recommendations or even direction on the development of mechanisms, trading systems or tax policy. Rather the report devotes most of its space to urban development, land use, renewable energy trends and financing of low carbon energy. Even cloud computing and modular building techniques get a mention as examples of step changes in efficiency. There is no doubting that these are important innovations, but the ability to put up a building in China in just 15 days using modular construction is more like putting development on steroids, than addressing greenhouse gas emissions. Faster construction, even with recycled materials (as was the example given), means more urbanization, more electricity use, more roads, cars, transport networks and the like, all to support the new city residents being housed at an accelerated rate.

Development and growth are clearly the themes of this report, but is there enough in there to also tackle the issue of carbon dioxide emissions? Coal is chastised any number of times, but it remains the fuel of choice for newly emerging economies to take their first steps towards industrialization. While carbon pricing gets a nod, but not much else, carbon capture and storage barely rates a mention. Yet this is arguably the game changer for fossil fuels, particularly coal. Oddly the report refers to CCS as a game changer, but doesn’t elaborate. Nevertheless, the report has been eagerly anticipated and as such qualifies as another important piece of the puzzle on the way to COP21 in Paris.

New Climate Economy Report Jigsaw

So now for the straight talk, which rather implies I think that the New Climate Economy Report has its fair share of double-talk!!

I have been writing these blog articles for nearly six years and not surprisingly this has accumulated to a great deal of content. A start-up company in the publishing industry, Whitefox, noticed this and approached me about turning the content into something more substantial. So started a rather lengthy discussion between me, the various communications teams in Shell and Whitefox, but the end result is a good one; an e-book on the climate issue which is now available.

Putting the Genie Back

Hopefully it will be the first of a few, all under the title “Putting the Genie Back”, but with various subtitles. This effort covers the climate issue more broadly, but lands on the essential role that carbon pricing has to play in dealing with it, rather than the hope that simply pushing renewable energy and introducing further efficiency measures will somehow solve the problem by proxy. The current plan is that a second book will cover the subject of the carbon pricing controversy more deeply and the third will look at the international process as we head towards Paris.

For those wondering about the title, it’s meant to encapsulate many themes in just a few words. Genies typically grant great wealth when released, but often come with their own set of problems. They are also very hard to recapture, but in the case of carbon dioxide emissions from fossil fuels, that may not be as difficult as some think. However, scaling this up to meaningful size will be a challenge.

The book will be available for Kindle and can be found here, so if you are interested in the climate issue but can’t find the time to piece six years of somewhat random posts into a coherent story, then do yourself a favour and download a copy. You will also be doing two great NGOs a favour as well, as they will get the benefit of the small charge made by Amazon. They are C2ES, the Washington based climate and energy think-tank and 2041, a small UK outfit dedicated to the preservation of our last truly untouched ecosystem, Antarctica.

Thanks and enjoy.

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)