Category: IPCC

Testing the limits of transition

dchone October 15, 2018

Over the past two years, on a timetable similar to that of the IPCC 1.5°C report, the Shell scenario team has been working towards the launch of the Sky scenario, which took place a few months ago. Sky is based around the principal goal of the Paris Agreement, i.e. limiting the rise in surface temperature to well below 2°C. The exact definition of ‘well below’ is open to discussion, but in Sky the outcome sees warming limited to 1.75°C (in 2100 with a 50% chance), which can be interpreted as an 85% chance of being below 2°C.

As discussed at length in the Sky publication, the emissions management task that underpins this outcome is extraordinarily rapid and comprehensive in that it must touch every aspect of the energy system and even extend beyond that into industrial greenhouse gases, agriculture and land use change. While there is a great deal of discussion about energy transitions in society, much of it focuses on the deployment of renewable energy for electricity generation and more recently the extent to which electric passenger cars will permeate the global market. While these are both important sectors, they do not represent a complete picture of the transition or emissions.

In the Sky scenario, electricity is largely decarbonised by 2050 and passenger car sales are almost entirely EV by the same year, but the journey is just beginning in 2050 for other parts of the energy system. For example, 2050 is the first year in which hydrogen appears in the Sky dataset for aviation; up until that point aviation is entirely hydrocarbon based, albeit some of this is in the form of biofuels. Even passenger car gasoline use continues well past 2050 because of the large stock of vehicles in society. These are not easily displaced and a long but shrinking tail of continued use stretches into the 22nd century.

Long tails will be a feature of the energy transition this century and cannot be easily dealt with. Even today in the United Kingdom, it is still possible to see sacks of coal being delivered for home heating, a practice that most people think vanished decades ago. These long tails will add up and in Sky, come the end of the century, continued global coal, oil and gas use is not that different to the 1960s, although it is in steady decline. The difference is that carbon capture and storage, in some form, is used to manage the emissions impact.

At the start of the transition the story has many similarities but turned upside down. For example, solar PV first appeared in the 1970s, even on calculators, but it then took 40 years for solar PV to reach 1% of global electricity generation. In Sky, we don’t see hydrogen appearing in heavy industry as an energy source until the 2050s, because it hardly exists today. In the metallurgical sector, there are plans for a first demonstration of hydrogen smelting but shifting to large scale commercial deployment will likely take 20-30 years, at best.

Against this background comes the IPCC Special Report on 1.5°C (IPCC SR15), released on October 8th in Korea, after the final meeting of the authors. Not surprisingly, it calls for an extraordinarily rapid transition, with emissions falling sharply from 2020 in the P1, P2 and P3 type pathways (IPCC SR15 archetype pathways). The Shell Sky scenario is referenced in the IPCC SR15 report (see chart below) given the success it demonstrates in limiting warming, but is called ‘ a delayed action pathway relative to others’, simply because emissions don’t show a clear downward trend until the late 2020s (more like a P4 pathway). After that, transition proceeds rapidly.

It is right that the climate science community should call for a sharp reduction in emissions as that is the lowest risk pathway for limiting warming, but such an outcome would require all of the policies in place by 2020 that Sky has posited could develop by 2030. For example, Sky sees carbon pricing implemented globally by 2030 with prices around $40 per ton of CO2 (a range of $25 to $60). In 2018 carbon pricing in some form covers less than a quarter of global activities and the level ranges from $5 to $30, with a few exceptions at higher levels.

The Sky publication also includes a sensitivity which sees the 1.5°C goal reached (i.e. surface temperature warming below 1.5°C in 2100 with a 50% probability). But this outcome is not achieved in Sky by simply speeding up the energy transition; Sky already represents the fastest real-world transition that appears possible today together with a relatively short capacity building period, i.e. the time it takes to implement robust policy frameworks globally. Rather, an additional measure is incorporated in the form of large scale reforestation, which introduces an increasing carbon sink from the early 2030s. The scale of that is significant and equivalent to increasing global forest cover by an area the size of Brazil over the coming decades. The use of such a carbon sink brings forward net zero emissions by about a decade to 2060, or 30 years after emissions start falling in Sky. IPCC SR15 recommends that emissions fall from 2020 and reach net zero by 2050, also a 30-year gap.

The total carbon budget in Sky from 2018 through to 2100, a measure used in IPCC SR15, is 800 Gt CO2. This slightly exceeds the IPCC mid-range budget (the 50 percentile in transient climate response to cumulative emissions or TCRE for 1.5°C, Table 2.2 in the report) of 770 Gt. IPCC SR15 notes that budget estimations contain considerable uncertainty, including uncertainty related to overshoot pathways, of which Sky is one. SR15 notes that if these budgets are exceeded and the use of sinks is envisaged to return cumulative CO2 emissions to within the carbon budget at a later point in time, additional uncertainties apply because the TCRE is different under increasing and decreasing atmospheric CO2 concentrations due to ocean thermal and carbon-cycle inertia. This asymmetrical behaviour makes carbon budgets path dependent in case of a budget and/or temperature overshoot. Although potentially large for scenarios with large overshoot, this path-dependence of carbon budgets has not been well quantified for 1.5°C- and 2°C-consistent scenarios and as such remains an important knowledge gap.

The short story here is that the IPCC SR15 has set out a formidable challenge for society, with an accelerated timetable to minimise uncertainty. While Sky takes a different approach to the feasible rates of transition to that set out by IPCC, it clearly demonstrates that a possible pathway forward exists.

Note: Scenarios are not intended to be predictions of likely future events or outcomes and investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities. Please read the full cautionary note in www.shell.com/skyscenario.

A CCS gold rush?

dchone February 23, 2018

Later this year, the IPCC Special Report on 1.5°C will be released and it is very likely to put great emphasis on the importance of carbon capture and storage (CCS) and the role that it needs to play in containing global emissions such that a net-zero emissions outcome can be achieved and within the time needed to limit average surface temperature warming to 1.5°C. This is not a surprise, given the similar story in the IPCC 5th Assessment Report in 2013 for a 2°C outcome. Yet despite the recognition of the role of CCS, the technology is not being deployed at the rate necessary to make a difference, not just to emissions, but also to the cost of the technology itself which will almost certainly fall as experience is gained, supporting infrastructure is built and innovation kicks in.

The Global Carbon Capture and Storage Institute (GCCSI) track CCS development and they note that only 17 CCS Facilities (>400kt CO2 per annum each) with a total capture capacity of approximately 30 MtpaCO2 are operating today. Just five new facilities are under construction.

Source: GCCSI

Recently in The Guardian (Australian edition), an article appeared under the title “It’d be wonderful if the claims made about carbon capture were true”, which turned out to be more a critique of the coal industry than a deep criticism of CCS technology, but titles of that type don’t help the technology gain a true foothold. In a roundabout way, the author also reaches the conclusion that CCS is necessary, but deployment is far too slow.

Technology isn’t the issue holding up the deployment rate; that works just fine. CCS brings together a number of different technologies and processes that have been available in the oil and gas industry for decades and re-purposes them for CO2 capture and storage. Rather, the issue is the economics of doing this; unless there is a clear financial benefit for doing this, it won’t happen. To date that benefit has largely come through enhanced oil recovery (EOR), hence the number of blue coloured projects on the chart. But in a few cases, the benefit has come, at least in part, from a government implemented carbon pricing mechanism.

But a CCS white knight has now appeared on the horizon and it is potentially a game changer. The U.S. Congress has considerably expanded what was a modest and limited tax credit for CCS, into something meaningful that ought to accelerate deployment of the technology. On 9th February, Congress passed and the President signed into law a budget agreement that included language to expand a 2009 tax credit for CO2 capture and storage known as 45Q. The key provisions are that for stored CO2, the tax credit rises to $50 per tonne in 2027, while for use (EOR as well as other uses) the equivalent value is $35. The amounts will be adjusted for inflation after 2026. The credit goes to the facility that captures the CO2 and is available for the first 12 years of operation. There is no cap on the arrangement for the tax credit for CCS facilities put into service after 2018 and for which construction has started before 2024 and eligibility is on a performance basis. In order for the capturing facility to receive the credit, certain monitoring and reporting rules apply to the use and storage of the CO2. Under the previous arrangements for 45Q, the tax credit expired after a total 75 million tonnes of CO2 were stored or used for EOR. The 2009 tax credit was $20 for storage and $10 for use. Besides increasing the amount of the credit and certainty regarding its availability, Congress also made the credit available for air capture and storage of CO2, a nascent technology (just the capture part) that may become a key tool for drawing down CO2 from the atmosphere later in the century.

As a result, the USA now has a $50 per tonne carbon pricing mechanism aimed directly at CCS and even more if removal of CO2 from the atmosphere is involved. While $50 per tonne of CO2 isn’t sufficient for every type of CCS project today, this amount could well be enough to unlock a wave of innovative projects, leading to new infrastructure, storage sites and technology improvements, giving birth to a real industry. Politics aside, this contribution from the United States could be the single most important step that any country takes in helping society reach the goal of the Paris Agreement.

Visualizing Change

dchone July 28, 2017

Climate change is one of those very difficult things to see first-hand, in that we need some form of historical reference and a clear link to warming. Further, the reference point needs to be visual and significant to have an impact. Sea level is one such reference, although in the clear majority of cases it moves so slowly that any reference to the past is almost impossible to discern. I lived in seaside areas on and off for several years in the 1970s and 1980s, but returning 30-40 years later offers little to no visual hint of change, even though change is underway.

I recently visited Chamonix in France where a very significant change is both underway and clearly visible. You can take the rack and pinion railway nearly a kilometre vertically from the town up to Montenvers, where the Mer de Glace glacier can be viewed and visited. This is the longest and largest glacier in France, and the second longest in the Alps. The scene from Montenvers, like much of the Alps, is beautiful, although the glacier itself is not easy to visualize in that its surface is largely covered with a dusting of debris from sides of the valley. Nevertheless, it is an imposing scene and more than worth the visit.

But this is just the beginning of the story. The glacier is shrinking rapidly, the first indication of which comes from the viewing sign that includes a dotted line showing the height of the glacier in 1820. The drop in height is very significant, but if that isn’t sufficient visualization of change, then a walk down a rocky path from Montenvers and then finally some 400+ steps to the glacier surface not only brings home the scale of change but also the rate – which appears to be accelerating.

The first impression comes when the hiker arrives at the 1820 line, well above the current glacier. This is quite a sobering moment in that there is no sign of ice, just summer wildflowers and trees.

This is just the first of many year signs, but the impression of acceleration comes lower down. Once the stairs are reached the first of several closely spaced signs appears, this one for 1990.

Soon after that comes 2003 (bottom right corner of the picture) and then finally the surface of the glacier itself, which brings the hiker to 2017. The drop from 1990-2003 was sizable for 13 years, but seemed small compared to the 2003-2017 change (14 years). The first drops from 1820 to 1920 and then 1985 seemed smaller by comparison.

The changes to the Mer de Glace have been widely recorded and written about, including an excellent report on the rate of decline based on Landsat satellite images. In its 5^th Assessment report the IPCC noted the general demise of mountain glaciers as follows;

Despite their variability due to different response times and local conditions, the annually measured glacier terminus fluctuations from about 500 glaciers worldwide reveal a largely homogeneous trend of retreat. In Figure 4.9 (see below for the Central Europe extract), a selection of the available long-term records of field measurements is shown for 14 out of the 19 RGI regions. Cumulative values of retreat for large, land-terminating valley glaciers typically reach a few kilometres over the 120-year period of observation. For mid-latitude mountain and valley glaciers, typical retreat rates are of the order of 5 to 20 m/year. Rates of up to 100 m/year (or even more) are seen to occur under special conditions, such as the complete loss of a tongue on a steep slope, or the disintegration of a very flat tongue.

Cumulative length change in metres vs. year

Recognizing that the reasons for change for any given glacier can be many and varied, the global trend is very clear and Mer de Glace is one example of this. If you are in the region over the summer vacation period then a visit is highly recommended, with the bonus of being able to walk inside the glacier when you finally reach the surface, thanks to some ingenious tunneling by the local tourist authorities.

Five steps for the Paris Agreement

dchone November 11, 2016

There have been many surprising developments in the Paris Agreement on climate change. The most recent was its entry into force on November 4 2016, setting new records for the speed of international diplomacy.

That happened after 55 countries covering more than 55 percent of global emissions, including the USA, China, Canada, India and Germany ratified the deal. The European Union then followed suit. Now, as negotiators and ministers meet at COP22, the United Nations climate conference in Marrakesh, Morocco, it’s time to look at the small print, or the 20 pages of decision text that supports the Paris Agreement.

These, to me, are the critical pages. They are effectively the instruction manual for the Agreement. They invite nations to act, recommend courses of action, decide on dates for delivery and ensure nations honor commitments. There is no room for interpretation and changes. The instructions are there to ensure that the necessary mechanisms and pathways for reducing emissions actually work.

Of all the steps that need to be taken, for me there are five that stand out. To keep the deal on track, these should all be delivered in the near term, or before 2020.

Promises must become hard numbers

The decision text notes that the combined actions to reduce emissions specified by the 196 nations in their INDCs and submitted to the UNFCCC before they gathered in Paris falls far short of the goals of the agreement itself, to limit warming of the climate system to well below 2° Celsius. That means that governments should take stock of their collective actions in 2018, and assess their progress. This will involve considerably more than a simple review. While the Paris agreement demonstrated a new political consensus on climate change, the same countries now have just two years to turn their promises into hard numbers.

No more vagueness. Deadlines must be set

After this initial collective stock-take in 2018, the pressure to deliver will only intensify. By 2020, nations will have to reformulate their actions. This will require prompt and probably challenging discussions on a national level. It isn’t just that the combined national actions falls short of the Paris agreement. Today, barely a single one of the plans appears in line with the ambitious goal that emerged on December 12 2015. Only Costa Rica comes close with its landmark proposal to be carbon-neutral by 2100.

Precise numbers have to be clarified

The Paris agreement moved the global goalposts when negotiators agreed to limit warming to well below 2° Celsius. But there could be more to come. The agreement offers a so-called stretch goal to limit warming to 1.5° Celsius and gives the science community just two years to establish how that might be achieved. Such a goal requires emissions to fall dramatically over the next 30 years. It could even mean the establishment of industries in the second half of the century that remove carbon dioxide from the atmosphere.

Countries must develop their energy transition timetables

The parties to the agreement have just four years to formulate how they will develop economy-wide strategies for lowering carbon emissions through to the middle of the century. These strategies must take into account the goals of the Paris agreement and therefore should draw on the work outlined above, which is not due until 2018. Even for the most advanced economies, plans that stretch over decades outlining the direction of energy systems are a tall order, given the uncertainties historically surrounding energy planning.

It’s time to talk about government-led carbon pricing systems

Arguably, the single most important step that governments can take to achieve the goal of the Paris Agreement is to implement public policy that places a cost on carbon dioxide emissions. Some may think of this as the business of national or regional governments. But it’s worth thinking about how national currencies work. They are exchangeable around the world according to clear global rules. Article 6 of the Paris agreement offers the opportunity for similar rules for government-led carbon pricing systems, bringing much-needed alignment between the various systems. But Article 6, like the rest of the agreement, is brief. The negotiators now have to turn this into a functioning trading mechanism. This is no small task. But it is a vital one

As COP22 got going this week, some of the historic divisions began to resurface, such as the different approaches that developed and developing countries should take. Nevertheless, the discussions on implementing the Paris Agreement in full got underway and the national negotiators began working towards a successful conclusion to the COP by next Friday evening.

Debating the global temperature goal

dchone August 5, 2016

Within the Decision Text supporting the Paris Agreement, paragraph II.21 calls on the IPCC as follows;

21. Invites the Intergovernmental Panel on Climate Change to provide a special report in 2018 on the impacts of global warming of 1.5 °C above pre-industrial levels and related global greenhouse gas emission pathways;

This has prompted a number of academic institutions and climate scientists to start publishing on the issue of a 1.5°C goal, with much more likely to come in the months ahead. One such paper (Huntingford, C. and Mercado, L. M. High chance that current atmospheric greenhouse concentrations commit to warmings greater than 1.5 °C over land. Sci. Rep. 6, 30294; doi: 10.1038/srep30294 (2016).) was reported on recently by the BBC, under the heading Debate needed on 1.5C temperature target.

In fact the paper was about where we are today in terms of temperature and reaches a similar conclusion to the one that I reported on recently after attending an MIT Joint Program forum. At that meeting, the response to my question about current levels of warming was as follows;

. . . . current warming is around 1.1°C since pre-industrial times, but that there is more to the story than this. The climate system is not at equilibrium, with the oceans still lagging in terms of heat uptake. Therefore, if the current level of carbon dioxide in the atmosphere was maintained at some 400 ppm, the surface temperature would rise by another few tenths of a degree before the system reached an equilibrium plateau.

Similarly, the paper reported on by the BBC, argues much the same line;

There is strong evidence that even for current levels of atmospheric GHGs, there is a very high probability that the planet is committed to a mean warming over land greater than 1.5 °C relative to pre-industrial times. Such warming could be greater than 2.0 °C, and in particular for large continental regions away from coastlines.

While a debate about the global goal wasn’t a feature of the paper itself, the BBC interviewed the authors and reported that while they believed it to be a good idea to have an “aspirational” 1.5°C goal in the Paris agreement, that nevertheless if the world is to take 1.5°C seriously, then a serious discussion needs to be held about the implications of that goal. The author of the paper is quoted as saying “I think there needs to be a very thoughtful debate about what’s to be gained at these different temperature levels, if approaching the lower levels meant severely damaging the economy,”.

Such a discussion has been largely absent, replaced with a somewhat myopic focus on 2°C and now “well below 2°C, with a view to 1.5°C”. I discussed this at some length in my first book, drawing on the work of the MIT Joint Program in their 2009 report Analysis of Climate Policy Targets under Uncertainty. In that report the authors demonstrated that even a modest attempt to mitigate emissions could profoundly affect the risk profile for equilibrium surface temperature. This is illustrated below with five mitigation scenarios, from a ‘do nothing’ approach (Level 5) to a very stringent climate regime (Level 1).

An important feature of the results is that the reduction in the tails of the temperature change distributions is greater than the shift in the temperature goal (represented by the median of the distribution). For example, the Level 4 stabilization scenario reduces the median temperature change by the last decade of this century by 1.7 ºC (from 5.1 to 3.4 ºC), but reduces the upper 95% bound by 3.2 ºC (from 8.2 to 5.0 ºC). In addition to being a larger magnitude reduction, there are reasons to believe that the relationship between temperature increase and damages is non-linear, creating increasing marginal damages with increasing temperature (e.g., Schneider et al., 2007). These results illustrate that even relatively loose constraints on emissions reduce greatly the chance of an extreme temperature increase, which is associated with the greatest damage.

But the other focus of the Paris Agreement stands apart from such debate. As previously discussed in several postings, Article 4 calls for a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century, i.e. a state of net-zero emissions. In fact such an outcome is eventually required irrespective of the temperature outcome; without it warming continues.

Net-zero emissions arguably brings a more practical focus to the task of emissions mitigation. It defines an end-point and allows a discussion on the pathway there, the types of technologies required and the shape of the energy economy once achieved. All of this features in the new supplement to the Shell New Lens Scenarios, A Better Life with a Healthy Planet: Pathways to Net-Zero Emissions.

Scenarios are part of an ongoing process used in Shell for more than 40 years to challenge executives’ perspectives on the future business environment. They are based on plausible assumptions and quantification, and are designed to stretch management thinking and even to consider events that may only be remotely possible.

A focus on the Philippines

dchone March 8, 2016

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

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

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

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

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

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

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

Carbon pricing and climate science in the media

dchone June 5, 2015

The past few weeks, highlighted by the Business & Climate Summit in Paris and Carbon Expo in Barcelona, has seen many CEOs, senior political figures and institutional leaders call for increased use of carbon pricing. This is certainly the right thing to be saying, but it begs the question, “What next?”. Many countries are already considering or in the process of implementing a carbon pricing system, but still the call rings out. While uptake of carbon pricing at national level certainly needs to accelerate, one critical piece that is missing is some form of global commonality of approach, at least to the extent that prices begin to converge along national lines.

On Monday June 1st six oil and gas companies come together and effectively called for such a step in a letter from their CEOs to Christiana Figueres, Executive Secretary of the UNFCCC and Laurent Fabius, Foreign Minister of France and President of COP 21. Rather than simply echo the call for carbon pricing, the CEOs went a step further and specifically asked;

Therefore, we call on governments, including at the UNFCCC negotiations in Paris and beyond – to:

introduce carbon pricing systems where they do not yet exist at the national or regional levels
create an international framework that could eventually connect national systems.

To support progress towards these outcomes, our companies would like to open direct dialogue with the UN and willing governments.

The request is very clear – this isn’t just a call for more, but a call to sit down and work on implementation. The CEOs noted that their companies were already members of, amongst other bodies, the International Emissions Trading Association (IETA). IETA has been working on connection of (linking) national systems for well over a year (although the history of this effort dates back to the days of the UNFCCC Long Term Cooperative Action – LCA – workstream under the Bali Roadmap) and I am co-chair, along with Jonathan Grant of PWC, of the team that is leading this effort.

Late last year IETA published a strawman proposal for the Paris COP, suggesting some text to set in place a longer term initiative to develop an international linking arrangement. I spoke about this at length to RTCC at Carbon Expo in Barcelona.

The strawman is what it implies, an idea. It could be built on to develop a placemarker in the Paris agreement to ensure that the framework mentioned by the six CEOs actually gets implemented in the follow-up from Paris – as the CDM was implemented in the follow-up from Kyoto.

From my perspective, this week wasn’t just about carbon pricing, but also about climate science. On the same day that the FT published its story on the letter from the oil and gas industry CEOs, The Guardian chose to run a front page story implying that I had tried to detrimentally influence (apparently being a former oil trader!!) the content of the London Science Museum’s Atmosphere Gallery, a display on climate science that Shell agreed to sponsor some years ago. The reporter had based his story on exchanges between Shell and the Science Museum staff when the gallery was looking to do a recent refresh.

I did engage in such a discussion and I did make some suggestions as to content which I thought was new and interesting since the Atmosphere Gallery was first established. Unfortunately The Guardian wasn’t able to publish my proposals as they were put forward during a meeting between me and two staff members from The Science Museum, so to complete the story I will publish them here. Although this particular piece of science dates back to a 2009 Nature article by Oxford University’s Professor Myles Allen and his team, it didn’t feature in the Gallery when it was first put together (the Advisory Panel met during 2009 as part of the design phase of the Gallery). But today, it is the foundation work behind the concept of a global carbon budget which has become a mainstream topic of discussion. My angle on this was to illustrate the importance of carbon capture and storage in the context of this science, but with an emphasis on the science itself. My discussion with The Science Museum staff members took place on 23^rd June 2014 and I asked them to consider the following for the refresh of the gallery:

1. As background, three papers that have come from Oxford University:

Warming caused by cumulative carbon emissions towards the trillionth tonne

Myles R. Allen, David J. Frame, Chris Huntingford, Chris D. Jones, Jason A. Lowe, Malte Meinshausen & Nicolai Meinshausen

Greenhouse-gas emission targets for limiting global warming to 2°C

Malte Meinshausen, Nicolai Meinshausen, William Hare, Sarah C. B. Raper, Katja Frieler, Reto Knutti, David J. Frame & Myles R. Allen

The case for mandatory sequestration

Myles R. Allen, David J. Frame and Charles F. Mason

2. Consider using (or adapting) a trillion tonne video made by Shell where Myles Allen talks about CCS in the context of the cumulative emissions issue:

3. Consider putting the Oxford University fossil carbon emissions counter in the Atmosphere Gallery as this would help people understand the vast scale of the current energy system and the rate at which we are collectively approaching the 2°C threshold;

4. Reference the Trillion Tonne Communique from Cambridge:

5. Offer the use of the Shell “CCS Lift” (an audio-visual CCS experience) to help explain this technology to the gallery visitors.

My pitch to The Science Museum was that this approach offered a real opportunity to feature the Science Museum and the Atmosphere Gallery in the very public discussion on carbon budgets, get some good media attention in the run-up to Paris 2015 (e.g. through the very visible counter), tell the CCS story in context (the Myles Allen video and the CCS audio-visual display) and raise awareness of the cumulative nature of the problem (i.e. the science). In the end they decided not to use this material, but I stand by the proposal.

Fifty shades of grey?

dchone February 20, 2015

The tension was building throughout the week, but finally just before Valentine’s Day weekend the negotiators in Geneva completed the first draft of a Paris negotiating text and released it at the end of the eighth part of the second session of the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP). Contained within this 86 page document, replete with perhaps 400 or so carefully worded options to select from and 1,234 square brackets, is supposedly the necessary political recipe for addressing the climate issue over the coming decades. Or were we presented with the greyness of diplomacy and compromise, which may be the best that can be managed for now, but doesn’t incorporate the necessary toolkit to drive down emissions in the decades to come?

The text certainly contains sufficient versions of one important overarching requirement; that being the need to reach net zero emissions at some point in the future. In the context of the level of greenhouse gas emissions, the word zero appears in the text seven times, from a non-specific reference of “net zero greenhouse gas emissions in line with the ultimate objective of the Convention“, to the highly ambitious proposal for “zero emissions of CO2 and other long-lived greenhouse gases in the period 2060–2080“. I discussed this at some length in my previous post, with the conclusion that an end of the century net zero emissions objective is perhaps achievable, but much earlier than this looks unlikely. Even a timeframe of 85 years will require enormous effort, including extensive use of carbon pricing and the widespread deployment of carbon capture and storage (CCS). This view received quite a number of comments on The Energy Collective. My post wasn’t to argue that nothing would happen or that no progress could be made, but to point out the difficulty of rapidly slowing down and turning a system that has such enormous momentum. All of the suggested technologies that filled the comments section will almost certainly play a role, but the challenge is the time it takes to do all this. My own experience in the energy industry tells me the timeframe is decades, not years. In my view, the text now taking us forward to Paris doesn’t present the necessary conditions for a strong response, but it is only part of the story and much more will be revealed over the coming weeks and months as the INDCs (Intended Nationally Determined Contributions) are also published. This text seems to be more about achieving some diplomatic harmony around the climate issue and at least trying to get everyone marching to the same tune.

But returning to the text itself, the other area that needs considerable support and diplomatic effort is seeing a carbon price emerge within the global energy system. The phrase “carbon pricing” gets two mentions in the 86 pages of text, but there are many options presented on the “use of markets”. To some extent, “markets” is UNFCCC code for a carbon price, but not in all cases. It can also mean the further development of market mechanisms (such as the CDM) and the ability for developing countries to sell credits from these mechanisms to developed countries as a means of securing clean energy investment. While many variations around this theme are presented, there is no proposed language in the current text that really sets out to establish a full global carbon pricing regime – although Option 4 on page 17 perhaps comes closest by trying to resurrect something that operates along the lines of the Kyoto Protocol. A global carbon market seems to be a step too far for most countries at the moment, even though it is an essential part of the solution set. Rather, a proxy based approach is being proposed through multilateral institutions such as the World Bank, which hopes to see a global market develop over time through the linkage of various national and sub-national emissions management approaches and the interchange of the domestic units, quotas and allowances on which they are based. In the World Bank model, this would be governed by an exchange rate mechanism. This week also saw the UK House of Commons Energy & Climate Change Committee launch a report on the linking of emissions trading systems. The report concluded that;

Any agreement reached at the UNFCCC COP 21 in Paris at the end of 2015 should promote the use of carbon markets and facilitate the future linking of emissions trading systems.

One final reality check on the paris text is that nowhere in the 86 pages is CCS mentioned. While the UNFCCC is always very careful about featuring a specific technology and understandably so, the clear advice from the IPCC 5^th Assessment Report was that 2°C cannot be reached without it, at least not within reasonable cost bounds. The IPCC does get mentioned 23 times.

In contrast with the events in Geneva, BP published their Energy Outlook 2035 which showed both overall energy demand and demand for fossil fuels rising in the outlook period (see chart; source: BP). The corresponding rise in energy system emissions is also given, reaching some 40 billion tonnes per annum by 2035. This is in contrast to the IEA 450 Scenario which argues for a fall in emissions to nearly 20 billion tonnes by 2035. However, the outlook does include a rising carbon price through to 2035, when it reaches some $40 per tonne CO2. Judging from the data presented, the main impact of this seems to be to bring coal growth to a near halt, but that’s all. The BP analysis presents a very different outlook to the one we need to stay within the 2°C threshold agreed by governments at the Cancun COP back in 2010. It also argues for a clear and robust outcome from Paris, although the current text doesn’t point in that direction.

Reality and distortions in Lima

dchone December 10, 2014

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

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

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

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

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

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

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

Brazil is back; but are they a decade late?

dchone December 7, 2014

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

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

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

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

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

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

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

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

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

* Common but differentiated responsibilities and respective capabilities

**Intended nationally determined contributions