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  • 12 Dec 2015 2:17 PM | Anonymous

    By Dirk Forrister, IETA

    As Friday drew to a close, Jeff Swartz and I went on a walkabout the Le Bourget COP 21 facility, trolling for information.  That’s what you do on the final day of the COP. The Presidency convened no open meetings today – so the only way to learn the status of things is through hallway conversations.

    Our first meeting was incredibly discouraging.  An exhausted European delegate thought we were at risk of losing it all – the accounting language, the crediting mechanism and the REDD+ mechanism.  He saw a slight hope that Brazil would stand firm, but suspected that the Venezuelan block on markets could prevail.  Admittedly, he was beyond tired – but as the issue had bumped upstairs, it was now in the hands of the President.

    Next, we got a report that allies in the Umbrella Group might be weakening.  The US has made clear all year that the market provisions are not a priority, since their current plan is a “domestic only” approach.  But others under the Umbrella have offered INDCs that express an intention to use international markets (New Zealand, Canada, Australia, etc).  Apparently, the US would offer little help from this point onward, so we continued our walkabout, looking for Brazil and New Zealand.

    We began to mobilize a few IETA members to make final contacts with delegations where they had influence.  We began to prepare two press statements:  one for success, one for failure (or shall we say, qualified success – because markets will go forward, regardless of the outcome… what is at risk is the potential advantages of international linkages with UN support).

    Instead, we found an AOSIS expert.  His view was extremely positive. He thought Venezuela could be calmed – and he reassured that AOSIS understands that their hopes of reaching serious levels of protection depend on markets to unlock greater ambitions. We took heart, given his enthusiasm.

    A few steps later brought an encounter with Panama.  Everyone is exhausted, he thought.  His assessment was that the fears of Venezuela prevailing might be overcome.  Best to get a good meal and get some rest, because the issue was kicked upstairs.  He left us saying, its hard to say where it will land, but we did all we could.

    At last, we found New Zealand.  She was firm, positive –and determined to win a workable structure in the Agreement.  But if it failed, she would help lead formation of a coalition outside the agreement to take markets forward.  Either way, she saw a good path forward.

    As we headed back to the IETA-WBCSD “Open for Business” Hub, we bumped into a smiling Canadian minister and her team.  Her assessment was bright.  She had led the ministerial consultations on markets – and she believed a solution was in sight. 

    Back on our home turf in the Hub, it was reassuring to see several of the IETA core team.  The ups and downs of the walkabout felt more like a policy rollercoaster.  (Now we know what its like in Australia!)  But the magnetic pull of the Hub reminded of the strength of our team, our allies in government and our friends in the NGO community.  We had all used the Hub as our “control center” for the two weeks, and it enabled our team to advance our views with maximum effect. 

    We’re still prepared with two press releases – and only a few hours to know the outcome!
  • 10 Dec 2015 10:54 PM | Anonymous

    By: Jonathan Grant, PwC

    Governments have agreed some of the small stuff and are now focusing on the most contentious issues in the final phase of negotiations. As expected, those issues are finance, loss and damage, the process for raising ambition and the long term goal of 1.5°C or 2°C.

    It's significant that the EU and vulnerable countries are starting to work together to support a more ambitious outcome. When signing a €475m development fund earlier this week, the EU and the ACP Group (of 79 African, Caribbean and Pacific states) highlighted their shared positions in the Agreement. This 'coalition of ambition', last seen building the Platform in Durban, might help unlock the deal.

    Although the text includes agreement for developed countries to provide finance to developing countries, a lot remains to be resolved. The scale of the commitments range from unspecified amounts to the $100bn per annum already agreed to. There are also references to all countries contributing, developed only or developed plus developing voluntarily. For such a crucial issue as who pays and how for the Paris deal, much remains open.

    But it’s also good to see countries reaching agreement on the cooperative measures or markets part of the agreement, which is broadly in line with what business has been calling for. The EU has been actively building alliances across the developed and developing country divide. There's been a different mood this week as countries build new coalitions and forge some compromises.

    The two main concerns raised at the BINGO (Business & Industry NGO) meeting this morning were how business is referenced in the Agreement and whether provisions for international emissions trading would be included. The message from the business group to the COP President is clear and made two simple requests. First, an explicit reference to the private sector in the preamble of the Agreement. Currently business and industry is only referred to obliquely as “various actors”. And secondly, the inclusion of internationally transferred mitigation outcomes (the new term for market or cooperative mechanisms) as set out in the current draft Agreement.

    Business and industry is a part of the climate solution. Business brings expertise, capability and resources to innovation, R&D, capacity building, education, technology transfer and deployment, and last but not least, finance. But the ability of business to contribute to this international cooperative effort will be limited if its role is not recognised in the agreement.

  • 10 Dec 2015 10:47 PM | Anonymous

    The case for limiting the rise in global temperatures to 2°C was made many years ago and finally agreed at COP16 in Cancun in 2010. But the text noted the importance of an even more aggressive target, notably 1.5°C, proposed by the small island states who were deeply concerned about future sea level rise. While 1.5°C doesn’t guarantee to limit sea level rise such that certain island nations remain safe, it does further shift the global risk profile in terms of possible major changes in the ice shelves.

    The idea of a 1.5°C goal has remained largely in the background since 2010, but COP21 has brought the issue to the forefront of negotiators minds, with a reported group of some 100 countries now willing to support such an objective. At a reception early in the second week, the UK Climate Minister was very upbeat about the 1.5°C goal and the government’s role in working with AOSIS (Alliance of Small Island States). At the COP Plenary on Wednesday night (9th December), many groups and nations spoke about the need for a 1.5°C goal.  But while there is increasing enthusiasm for and talk about such a goal, there seems to be limited substantive discussion on the feasibility of achieving it.

    As often discussed in my postings, the expected global temperature rise is closely linked with cumulative emissions over time, not the level of emissions in a certain year. This means that what might have seemed achievable in 2010, is all the more difficult in 2015 with higher emissions and continued upward pressure. In fact, between 2010 and 2015 another 60 billion tonnes of carbon has been released into the atmosphere. Total emissions since 1750 now stand at just under 600 billion tonnes carbon, with 1.5°C equivalent to some 750 billion tonnes carbon based on a climate sensitivity of 2°C per trillion tonnes. Even if emissions were to continue to plateau as we have seen over 2014-2015, the 1.5°C threshold would be reached as early as 2028.

    There are always a variety of trajectories possible for any temperature goal, but 1.5°C offers little room for flexibility, given its stringency. One such pathway which adds up to ~750 billion tonnes carbon by 2100 is shown below (global CO2 emissions on the vertical scale). In this pathway, global net zero emissions must be reached in just 40 years (860 million tonnes accumulation), followed by another half century of atmospheric carbon removal and storage (~100 million tonnes removal). Some 10 billion tonnes of CO2 must be removed and stored each year by late in the century, either through bio-energy with carbon capture and storage (BECCS) or direct air capture of CO2 and subsequent storage (DACCS). Significant reforestation would also play a major role. With infrastructure in place, the 22nd century might even offer the possibility of drawing down on CO2 below a level that corresponds with 1.5°C.


    Apart from massive reliance on CCS both on the way to net zero emissions and afterwards to correct the over accumulation, such a plan would require a complete rebuild of the energy system in just 40 years. This would include the entire industrial system, all transport and power generation. Alternatives would have to be found for many petroleum based products and a new large scale synthetic hydrocarbon industry would be needed for sectors such as aviation and shipping. While agriculture is largely a bio based emissions system, a solution to agricultural methane emissions would also nevertheless be needed.

    A pathway that doesn’t involve future use of CCS would require net zero emissions in just 23 years – an option that isn’t even remotely feasible. Returning to the 40 year pathway, even this presents an immensely challenging task. While it might be feasible to have a zero emissions power sector in under 40 years, particularly given that all the necessary technologies to do so exist in one form or another, electricity still represents only 20% of final energy use. Solutions would have to be found for all other sectors, which in many instances involves electrification and therefore places a significant additional load on the redevelopment of the power generation system.Aviation would be particularly tricky.

    Finally, there is CCS itself. The pathway above (and almost any other 1.5°C pathway) is completely dependent on it, yet the technology is hardly deployed today. It is certainly commercially ready, but the barriers to deployment are many, ranging from the lack of an economic case for project development to public concern about deep storage of carbon dioxide. The later that net zero emissions is reached, the greater the post net zero dependence on CCS becomes.

    While the case for 1.5°C has certainly been made from a climate perspective, it has yet to be demonstrated from an implementation perspective.

  • 09 Dec 2015 10:16 PM | Anonymous

    By: Yvan Champagne, Blue Source


    1. a prefix…used with the meaning “under,” “below,” “beneath”

    Yesterday, Blue Source was proud to host a session in the IETA pavilion called Putting it all together; Maximizing the Potential of Market-based Mechanisms across North America. Our session was but one of at least a dozen that I counted in both the Blue Zone and Green Zone at COP 21 over the past few days alone, putting the focus on sub-national leadership and programmes.   

    Given the inferior connotation with the prefix, it is no wonder some provinces and states prefer the more neutral term “infra-national” when referring to their sub-national efforts to tackle climate change. In a climate policy context, this shouldn’t come as surprise though, should it? COP 21 can pretty much be boiled down to a semantic process where negotiators are furiously trying to find the right combination of magic words, in multiple languages, that will mobilise the world to get on with it and tackle climate change. Yes, words matter but so do sub-national efforts, especially for those of us from North America who believe markets are an important part of the climate change solution, so let’s come up with a few words that might better describe the importance of sub-national efforts, shall we?

    Let’s start with substance. More than anything, sub-national programmes have been about action and they’ve delivered results. California’s AB32 with cap and trade supported with complementary measures, Eastern US states and the utility-sector only RGGI programme, Ontario's phase-out of coal, Alberta’s intensity-based baseline and credit system, Quebec joining California and international linking of sub-national programmes. All of these trailblazing programmes have demonstrated unique approaches to reducing emissions, in different ways. They’ve done the heavy lifting of programme design, proving out that various approaches can work. 

    In a post-Paris world, where different nation states are likely going to take different paths to meet their INDCs, the importance of this smorgasbord of proven strategies cannot be overstated. Nations or regions can move beyond the debate about whether or not to price carbon, and to the much more productive discussion of how to price carbon, picking an approach that will work for their region. As one panellist put it earlier this week, their programmes are virtually “plug and play”.

    A second word might be subsistence. A core group of private sector project developers, project financiers, traders and verifiers have survived a decade of non-action in Canada or the US, and now stand poised to deploy and work on the next wave of emission reduction projects. Were it not for regional programmes, the critical mass of human and intellectual capital required to deliver on the bold reductions in the years ahead may have scattered to the four winds. But those people are still here. In fact, I’ve met many of them here at COP 21. Amazing people with tremendous talents, who’ve chosen to stay in the carbon game during some pretty lean times with the hope that, maybe, there might be another chance to scale up to fight the fight that needs fighting at a global scale. The opportunity to continue their craft in sub-national programmes got them here and they are ready for the next phase.

    The final word might be sublime. It’s a word found in a few languages with many similar meanings, many of which seem appropriate, maybe none more so than inspiration. Sub-national efforts, by demonstrating results, have renewed hope for many that we can in fact solve climate change. We can set some bold reduction goals and better yet, that we can achieve them, and there is nothing inferior about that.

  • 09 Dec 2015 3:34 PM | Anonymous

    By: Fiona Wild, BHP Billiton

    Low emissions technologies are central, and in fact critical, to managing climate change. Simply said, we cannot reach the climate goals being discussed in Paris without technology to transform our economies. Technology and innovation have the potential to improve energy efficiency, increase deployment of large-scale, step-change technologies like carbon capture and storage (CCS), scale up renewables, improve energy storage and increase fuel, vehicle and power station efficiency. However, to reduce global emissions at the scale required, we know that these technologies must be available at lower cost and much faster than the usual commercial timeframes. Industry has a significant collaborative role to play with government, academia and the community to facilitate this step-change.

    At the IEA technology day hosted by IETA, insights were provided into the opportunities for mitigation in the energy sector, which currently accounts for two thirds of global greenhouse gas emissions. CCS was described as a ‘must’, as although the relative share of fossil fuels is likely to decrease in the transition to 2°C, they will still be in the mix for decades. CCS is also the only large-scale option to address emissions from certain activities, including industrial processes such as steel-making, and could also deliver net negative emissions technology with BECCS (bio-energy CCS).

    Renewable energy has recently taken the leading role in net global power capacity additions. However, there need to be clear strategies to build smart and flexible systems that can incorporate them, increase energy storage and improve demand side management. Reducing methane emissions from oil and gas production could be one of the cheapest and easiest ways to reduce emissions at a scale which is often not appreciated. Similarly, two-thirds of economically-viable energy efficiency improvements are not being realised – offering a significant opportunity that must be pursued with great urgency.

    So what needs to be done to unlock this potential abatement? We need both ‘learning by researching’ and ‘learning by doing’ to achieve cost reductions and performance improvements. There must be support for early stage research and development and commercial scale deployment, supported by technology push and market pull.

    Technology’s share of overall research and development spend is now lower than 30 years ago. Clearly, there must be a significant ramp-up of investment. Where basic research in low emissions technology is pursued and supported by governments and academic institutions, the focus should be on areas of comparative advantage in research capacity and national interest. However, translating basic research into commercially deployed outcomes relies on business and the promotion of greater collaboration and open innovation. Innovation does not always just pop up by itself - it benefits from good policies to support it. 

    The IEA says that carbon pricing is a good start, but is not enough for less mature technologies, and hence innovation must extend to new domains including business models, policy frameworks and market designs. Here in Paris, the IEA is calling for a tripling of public investment in technology research and development, competitive financing for ‘first of a kind’ projects and increased collaboration between public and private entities in developed and developing countries. The US Department of Energy identified several collaborative efforts that could help to bring technologies through the ‘Valley of Death’ to commercial scale deployment, including the Clean Energy Ministerial, Mission Innovation and the Breakthrough Energy Coalition.

    As an energy and resources company, technology is vitally important to reducing our operational emissions. Working across supply chains offers even greater potential for emission reductions. Our focus is on developing a long term roadmap for our investments that will allow us to play our part in accelerating global deployment of low emissions technologies. When evaluating opportunity areas for potential technology acceleration, we consider the potential for our own skills and expertise to accelerate the change required and the opportunity to leverage our investments with suitable partners, including governments, peers and research organisations. For example, we recently announced a partnership with SaskPower to share lessons learned from their Boundary Dam project, the world’s commercial -scale, coal-fired power station with CCS.

    Shifting from a top-down to a bottom-up approach in international climate policy could make global implementation of new low emissions technology more difficult. But the UNFCCC can and should help countries that want to include low emission technologies in their mitigation portfolio. The Paris agreement and its long-term goal are essential to provide a clear signal for private sector investors and the Green Climate Fund could leverage these investments. The case for low emissions technologies is clear, now we just to need to create the enabling environment to bring them to market at the pace and scale required.

  • 07 Dec 2015 11:30 PM | Anonymous

    Nick Campbell, Arkema

    Work has started in earnest to resolve the difficult issues to reach the Paris Agreement. The four Working Groups have been working hard and reported back to the Paris Committee.

    Progress was reported on climate finance in particular it was stated that there was some flexibility from Parties on their role and I that developed countries should take the lead. The differentiation group stressed the link between mitigation and support.

    There was discussion on the re-submission of nationally determined contributions. It appeared that there is some agreement on a five year period to review submissions as well as progress towards a reduction target. It appeared that this should be an opportunity not an obligation to change national objectives and not to scrutinise individual contributions.

    For markets, informal discussions continued on how to include cooperative mechanisms in the Paris Agreement. The Minister from Canada will head the group to continue the discussions.

    At the Plenary, President Fabius stated that a new text taking into account the current work will be available.

  • 04 Dec 2015 10:19 PM | Anonymous

    By: Rebecca Fay, Natural Capital Partners

    Jonathan Shopley, Managing Director of Natural Capital Partners apparently has a new-found respect for people who regularly pull together panel discussions.  Having spent the last three weeks tirelessly calling on speakers for the Getting to Zero event this morning, he’s realised it’s not quite as easy as it looks.  But, in the end, it was time well spent because he had an inspiring array of speakers, and a lot of them.

    The session ran in two parts (there were a LOT of speakers), with the first focused on the public sector and the second on business.  Mark Kenber from the Climate Group started, making a strong case for setting simple, big targets, “100% may be more difficult to achieve, but it’s easier to communicate and clearly top of class.”  He was followed by a range of advocates for carbon neutrality, all of whom made a compelling case for the power of setting a clear, simple vision which people can buy into.  For Monica Araya, previous negotiator for Costa Rica and founder of Nivela, the power of carbon neutrality was the aspiration it set for people and business in the country, moving away from the technical language of decarbonisation and delivering a positive message about quality of life.  And for John Kilani, the UN’s Climate Neutral Now campaign is evidence that the organisation is “walking the talk” when it comes to delivering action.

    The two Canadian ministers on the panel - Minister Glen Murray, Environment Minister for Ontario, and Minister Mary Pollack, Environment Minister for British Columbia – had similar messages, albeit delivered in quite different styles.  The call was to win hearts and minds.  For Minister Pollack that’s about helping politicians communicate the value of action to the people in their communities who are really struggling to see it.  For Minister Murray, it goes deeper, to an existential level, requiring people to internalise the challenge in order to take it seriously and embed change in their lives.  His passion and commitment is pretty compelling, it’s hard to imagine the people of Ontario not rising to his challenge.

    With Norway, Costa Rica and Canadian states demonstrating their commitments to zero targets, the second session gave business the chance to step up, with ENEL and Google leading the charge.  Daniele Agostini gave a compelling account of how the utility company is transforming into a 100% carbon free portfolio, and voiced his desire for an agreement in Paris which will support the company’s dramatic approach.  In the few minutes available Kate Brandt of Google was only able to talk about a few of the innovative solutions the company is developing for the drive to zero carbon – from geo mapping to help homes identify if they have potential for roof-top solar, to using Google Street Cars to detect methane leaks, and going as far as early stage investigation into wind kite technology that can harness up to 50% more power than a typical wind turbine.  

    But, in addition to technology, the discussion was also as much about culture and communications, with Jonathan Grant from PwC describing three stages of transformation which are required to get all the way to zero:  from energy, to economic, to cultural.  As Peter Bakker from WBCSD put it:  “the 100% target is a powerful change mechanism in companies. If you only set a 50% target, everyone’s going to give you a reason why they should be in the 50% that doesn’t make change.”

  • 04 Dec 2015 12:00 PM | Anonymous

    By: David Hone, Shelll

    As the negotiators struggle on in Paris at COP21, the question of the long term goal has emerged. What should it be, how should it be structured and will it send the necessary signal to drive future national contributions.

    The idea of a goal goes back to the creation of the UNFCCC. There is the original text agreed when the Convention was first written in 1992, i.e. “. . . stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system . . . “. At COP16 in Cancun, the Parties to the UNFCCC reformulated this as a numerical goal; the need to limit warming of the climate system to no more than 2°C above the pre-industrial level with consideration for reducing this to 1.5°C as the science might dictate. This seems very clear, but in fact offers little immediate guidance to those attempting to establish a national or even global emissions pathway.

    The climate system is a slow lumbering beast and the global temperature could take years or even decades to settle down once there is stabilization of carbon dioxide (and other greenhouse gases) in the atmosphere. It could be decades after that before we are collectively sure that no further temperature rises will take place. But the science has shown that the eventual rise in temperature is strongly related to the cumulative emissions of carbon dioxide over time, starting when emissions were negligible (say 1750) and running through several centuries (e.g. to 2500). Myles Allen et. al. from Oxford University equated 2°C to the cumulative release of one trillion tonnes of carbon, which offers a far more mechanistic approach to calculating the point at which 2°C is reached. So far, cumulative emissions amount to some 600 billion tonnes of carbon. However, even this approach has uncertainty associated with it in that the actual relationship between cumulative emissions and temperature is not precisely known. If emissions stopped today, it is very unlikely (but not a zero chance) that warming would continue to above 2°C, but if emissions were to stop when the trillion tonne threshold is reached then there is only a 50% chance that the temperature would stay below 2°C. The agreement in Cancun doesn’t cover uncertainty.

    The Oxford University team have developed a website that counts carbon emissions in a bid to familiarize people with the concept. As of writing this post, it was counting through 596 billion tonnes and provided an estimate that 1 trillion tonnes will be reached in October 2038. The INDCs already reach out to 2030 and as they stand, will not put the necessary dent into the global emissions profile that is needed to avoid passing one trillion tonnes. In terms of energy system development, 2038 is in the medium term. Most forecasts out to this period, including the IEA New Policies Scenario which factor in the INDCs, show energy demand and emissions rising over that period, not falling.

    In line with the Cancun Agreement, a number of Parties have maintained the need to lower the goal to 1.5°C, but particularly those from low lying island states who are justifiably concerned about long term sea level rise. This goal is being voiced more loudly here in Paris. Using the relationship developed by Allen et. al., this implies that 1.5°C would be exceeded if cumulative carbon emissions passed 750 billion tonnes, which could happen as early as 2027. This would imply a massive need for atmospheric CO2 capture and storage over the balance of the century for the simple reason that cumulative emissions could not be contained to such a level by energy system reductions alone.

    More recently the concept of net zero emissions (NZE) has emerged. This is the point in time at which there is no net flow of anthropogenic carbon dioxide into the atmosphere; either because there are no emissions at all or if emissions remain because they are completely offset with a similar uptake through carbon capture and storage or reforestation and soil management. Emissions are likely to remain for a very long time in sectors such as heavy transport, industry and agriculture. NZE has been closely linked to 2°C, but in fact any temperature plateau, be it 1.5°C or even 4°C requires NZE. If not, warming just continues as atmospheric CO2 levels rise. There is now a discussion as to when NZE should be reached –as early as 2050 (but practicality must be a consideration), or perhaps by the end of the century. However, what is actually important is the area under the emissions curve before NZE is achieved, less the area under the curve after it is reached, assuming emissions trend into negative territory with technologies such as direct air capture or bioenergy with carbon capture and storage (DACCS or BECCS). The date at which NZE is reached is important, but not necessarily an indicator of the eventual rise in temperature. Just to complicate matters further, although the world needs to achieve NZE eventually, it may be the case that net anthropogenic emissions do not have to be zero by 2050 or 2100 to meet the 2°C  goal because of carbon removal arising from natural sinks in the oceans and terrestrial ecosystems.

    Other proposals put forward by Parties and some observers simply call for an urgent peaking of emissions. This is important as well, but again it doesn’t tell the full story. What happens after the emissions peak is critical. A long slow decline to some plateau would be positive, but unless that plateau is close to NZE, then cumulative emissions continue to build, along with the associated warming. Other proposals argue for emissions to be at some reduced level by 2050, which presumes a certain follow-on trajectory equating to 2°C or thereabouts.

    Where the Parties land in this discussion remains to be seen, but with only days left and the complexity of goal setting becoming apparent, this may end up being an issue for the years ahead rather than one that can be fully resolved in Paris in a week. 2°C may have to do for now.

    Emission pathway

  • 02 Dec 2015 11:30 AM | Anonymous

    By:  David Hone, Shell

    As COP 21 starts and the negotiators face the task of reaching an agreement, one of the most important points of discussion will be the review and recalibration of INDCs. Many organisations, including some business-based ones (ie, We Mean Business), are arguing for a five yearly review of the national contributions. If strictly adopted, this might mean that the first round of INDCs are already under review before they formally commence (ie, 2020), such that the global emissions outcome by 2025 is already lower than current INDC projections would project. An alternative is a 10-year review, such that the first deviation from current INDC projections becomes apparent in the early 2030s.

    There are practical considerations associated with this. Many who view the energy industry from the outside have consistently had expectations for rapid change. For example, the UNFCCC itself has continued with its pre-2020 workstream even as the time for meaningful change has diminished. This isn’t to argue that nothing can happen between now and 2020, but it is unlikely that much extra can now happen in that time frame. The energy industry is built on long lead times, project cycles that can stretch out to a decade and capital cycles that are often laid out years in advance of actual spending. Sometimes this can be disrupted, particularly when there is a sudden shift in market price structure, but that is not the normal pattern of change.

    There is also the reality of policy development timelines needed to trigger change. For example, the EU is in the midst of a three year (at least) examination of the climate and energy needs for the period 2020 to 2030, which requires green papers, white papers, various stakeholder consultations, draft legislation, parliamentary committee discussion, a parliamentary vote, Member State agreement and transfer to national legislation. It is unlikely that this would be revised as soon as 2018-2021 having just reached agreement on the entire package in 2016 and finalised EU wide adoption in 2017. The institutional capacity may not exist for constant revision nor does the timeliness of data (eg, current IEA GHG data has just been published for 2013).

    But there is an overriding thought which should take priority – the emissions and therefore eventual temperature impact of moving to a more aggressive review timetable. It is very clear that the current round of INDCs do not deliver a 2°C pathway – many analysts and the UNFCCC have concluded that. The INDCs also say little to nothing about the past 2030 period, so future INDCs or review of current INDCs will be needed.

    A relatively basic analysis can give some insight as to the climate value of review and the benefit of conducting that on a five-year basis or a 10-year timetable. I put this together as outlined below:

    • There isn’t really a clear emissions trajectory for the current round of INDCs, at least not after 2030. For the purposes of this analysis I have assumed that they result in peaking of global emissions in the 2030s, followed by the beginnings of a decline to 2040 and beyond. Some would argue that even this is optimistic.
    • The 2°C pathway reaches net-zero emissions in about 2080, then enters a period of negative emissions through the use of a technology such as BECCS (biomass energy with carbon capture and storage).
    • In the case of a five-year correction process, I assumed that every five years the UNFCCC looks at progress against a 2°C pathway (which of course will change over time, but I haven’t got into that detail) and after each new round of submissions the INDC pathway, as it would be at that point in time, shifts a quarter of the way further towards the 2°C pathway. The result is an emissions trajectory that starts to deviate from the current INDC pathway by 2025.
    • In the case of the 10-year correction process, the same happens but on a 10 year cycle, with the intervening five-year period declining at the same rate as the previous five-year period. Because of the slower turnaround in the process, I also assumed that after a more protracted INDC discussion, the shift in the pathway is relative to the 2°C line as it was five years earlier, rather than at the time. As such, there is a bit more lag built into the process and emissions remain the same as the current INDC pathway until after 2030.
      • The chart above shows the four potential pathways; 2°C, the current INDCs extended out for several decades and the corrected pathways, based on five-year and 10-year correction cycles.

      As shown, the uncorrected INDC pathway is a 3+°C scenario, whereas both the five-year and 10-year correction pathways are about 2.5°C and both arrive at a net zero emissions outcome around the turn of the century. As such, it is clear that a review cycle can change everything and has the potential to deliver a clear outcome rather than an open ended emissions tail stretching well into the 22nd century.

      But the difference between them is 0.15°C, or a cumulative 280 million tonnes of CO2 over the balance of the century. While this is not insignificant, the more important goal for the negotiators should be to agree a clear review and recalibration process, rather than be too focused on the precise timeliness of it.



    • 02 Dec 2015 11:30 AM | Anonymous

      By: Arjuna Dibley, Baker & McKenzie

      There have been some substantial commitments made in 2015 towards the goal, initially agreed during the Copenhagen climate conference of 2009, of  mobilising $100 billion of climate finance per year by 2020. To name a few: the French Government has committed to €5 billion per annum by 2020; Germany to €4 billion per annum by 2020; the Asian Development Bank has pledged a doubling of climate finance to $6 billion by 2020. Despite these efforts, climate finance will continue to feature prominently in this year's climate change conference in Paris. 

      Climate finance refers to the funding required by countries to transition their economies to limit carbon emissions to levels that prevent a 2°C increase in temperature since pre-industrial levels. It most often refers to financing provided by the developed world to the developing world for such purposes. Climate finance is an important concept, because it acknowledges the fact that the developed world has been responsible for most historical anthropogenic emissions, and hence calls on developed countries to financially support developing countries transition towards the shared goal of a decarbonised global economy. For this reason, the latest version of the draft climate agreement developed in Bonn in October, includes a whole article dedicated to climate finance. One of the key issues still to be resolved during the discussions in Paris, is what sources (private, public, multilateral development bank) of climate finance will be included.

      The climate finance negotiators are likely to agree to include the private sector as a source of potential finance. This is because substantial amounts of capital are required to meet the long held 2°C mitigation goal. The International Energy Agency anticipates that $16.5 trillion is required between 2015-30 to reorient global energy systems to meet the 2°C goal. Despite the recent substantial pledges of substantial public finance by several governments, finance from the public sector alone is not sufficient to meet this multi-trillion dollar financing requirement. Instead, more private capital must flow towards climate change objectives, in the form of investments into renewable energy projects, financing green development projects through financial instruments, such as bonds and corporate social responsibility programs, among others. Countries are beginning to utilise public finance to leverage greater private financial flows, with Japan recently pledging to mobilise $10.6 billion per year from 2020, including both public and private finance.

      Governments in the developed world are increasingly creating the policy settings required to get private finance flowing into projects and programs that support the 2°C target. This includes, for instance, publicly funded incentive schemes which support the financial viability of renewable energy projects. In the developing world, however, progress to get private climate finance flowing has been slower. In part, this is because of the broader development challenges in those countries, including an underdeveloped rule of law. Private sector investors are reticent to invest into renewable energy, forest conservation, or green buildings where their return on investment is at risk due to an inability to efficiently enforce contracts or unclear or underdeveloped legal frameworks. In Baker & McKenzie's experience of working with major companies, funds and other private sources of capital, the reason why climate investments most often do not progress in developing countries is because their legal enabling environments are too risky.

      Efforts to improve the rule of law in developing countries thus need to be a central focus of the mechanisms established to boost and deploy climate finance. For instance, the Green Climate Fund - the UN founded financing mechanism through which public climate finance can be deployed - could make strategic investments into programs improving the rule of law in developing countries into which climate finance will flow. This may include investments towards into improving legal frameworks which facilitate green bonds, or investing in measures to improve transparency and accountability around green investments. Without concerted effort to improve the conditions for private climate finance in developing countries, private capital will continue to flow mostly to the developed world and not at the levels required to stay below 2°C of warming. Regardless of what particular wording on climate finance is agreed to in Paris, if effort is not made to work with countries to improve their legal and financial systems to attract greater private sector investments into low carbon solutions, the goal of both developed and developing countries working towards decarbonisation will remain unrealised.

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