Looking towards Cancun

The unusual end-point to the Copenhagen climate conference last December and the rounds of UNFCCC negotiations that have followed in 2010 could lead even the most optimistic observer to the view that the international climate process is struggling. There is a growing consensus that Cancun is now a stepping stone to a potential agreement at COP 17 in South Africa in 2011 or perhaps at the Rio+20 Summit in 2012. But this feels increasingly like the state of play following the Bali Roadmap and the many meetings throughout 2008 and 2009 for the much anticipated agreement in Copenhagen. Perhaps in two years time we will all be looking towards COP 19 (2013) and COP 20 (2014) with the hope of the agreement coming then – although third time lucky is hardly a basis for solving a tough issue like climate change.

As noted in my posting in January, the national pledges made in Copenhagen, while representing a solid start, also demonstrate that reducing emissions globally to a level compatible with 2 degrees C is very challenging.

The current process is also somewhat arcane, focusing on issues such as technology transfer, climate funds, common but differentiated responsibilities and methodology templates and much less on the actual job at hand which is how best to reduce emissions. Is it time therefore to refocus the tremendous energy and persistence of the negotiators into a more pragmatic approach which might actually deliver a mitigation pathway to follow?

Changing tacks now could be very disruptive, but it is at least worth considering how else this particular problem might be addressed. One route forward would be to disassemble the issue into several component parts (remember the wedges), each of which could then be progressed, rather than seeking the all encompassing solution. Within each of the components, smaller agreements and clear milestones would define progress. Of course some chunky issues would remain, notably the financial one, but with a clearer plan of action these may become much easier to resolve.

Looking at the issue of emissions mitigation (adaptation remains another chunky part), there are really only five key components. They are (in no particular order):

  • Using energy more efficiently such that we consume less;
  • Using lower or zero carbon forms of energy;
  • Capturing and geologically storing CO2 emissions;
  • Managing the emissions of gases such as methane, HFCs and SF6;
  • Managing the carbon emissions impact of land use.

Breaking the problem up in this way also leads to potential solution sets and policy instruments.

One doesn’t have to look far to find a government grappling with the concept of energy efficiency, in fact pretty much every government on the planet has embraced the idea. Coordination of objectives, standardization and some application of targets could be a powerful enabler to accelerate action in this area. For example, it might well be much simpler for the United States and China to agree on a common approach to lighting and the switchover of technologies (e.g. incandescent to LED) than an acceptable set of targets for emission reduction in their economies. With a timetable agreed, other markets would doubtless follow and issues such as financing and technology transfer would become much more tangible. Say for example a smaller developing country agrees to adopt the same lighting timeline as China but wants to do a certain amount of the manufacturing locally. With a national timetable in place therefore underpinning demand, a major lighting technology provider would see a powerful incentive to build a facility in that country (technology transfer), even more so if an international loan guarantee or grant was on offer (financing).

Looking further down the list, the emissions of other greenhouse gases could be tackled more in the style of the Montreal Protocol. Certainly for HFCs, SF6 and similar gases a timetable approach is practical. This is more problematic for methane and N2O, particularly given the link with land use and agriculture, but at least in industrial instances a defined pathway could be set out. This has happened already to address the pre-1990s practice of venting methane at crude oil production facilities and similar changes have taken place in the chemicals industry to sharply reduce emissions of gases such as N2O.

Land use is increasingly being addressed as a separate issue anyway, simply look at the REDD+ discussions to see that taking place. Issues such as agricultural methane emissions could be included within this category.

That then leaves energy substitution and the application of carbon capture and storage as areas to be tackled. These can both be very effectively driven by a price of carbon, typically delivered directly through a cap and trade approach (notably in the power generation and large industrial sectors) or indirectly via a project mechanism linked to a cap and trade system. Focusing the project mechanism on substitution and CCS also makes it a much more effective instrument and largely addresses issues such as arbitrage (delivering credits into the market at vastly lower cost than the prevailing market price) and competitiveness (improving a competitors energy efficiency by paying it to do so) that hinder the existing structure of the CDM.

A word about CCS as well – some might argue that this is “just another technology” and therefore shouldn’t have any special mention. After all, why not mention wind or nuclear in the same section. The difference is that CCS is the only technology available to remove CO2 (carbon) from the atmosphere on a large scale in a short time and put it back where it was found. If you think about it, this is really what the whole climate change issue boils down to. Have a read of Jim Hansen’s latest book and you will see why – it is very likely that we have, collectively, already emitted too much. CCS can be applied directly at a coal fired power station to remove emissions before they occur or perhaps in a biomass power station which then gives an indirect draw down of emissions already in the atmosphere. Although not feasible today, CCS may eventually even be employed in the direct removal of CO2 from the atmosphere, but the thermodynamics of such a process don’t look very good at the moment.

Even if tools such as cap-and-trade aren’t in vogue, governments could still agree on measures that incentivize low carbon energy and trigger investment in CCS (e.g. an emissions performance standard).

All of this isn’t to imply that somehow the international discussion becomes easy, but it does at least offer the opportunity for segmented progress. A meeting such as Cancun may have little chance of a comprehensive global agreement, but there would doubtless be a great feeling of satisfaction and real progress if the negotiators left with, say, an international agreement on lighting and SF6 emissions in place and a pledge by three or four major economies to each sequester at least 50 million tonnes of CO2 by 2020.