7th December 2015
TUS President Barack Obama said the summit could be a
"turning point" in international efforts to reduce
greenhouse gas emissions and prevent catastrophic levels
of global warming. He said "(the) next generation is
watching… Climate change could define the contours of
this century more than any other (issue)… I came here
personally to say the United States not only recognises
the problem but is committed to do something about it."
When the US President and many other world leaders talk
like that - people begin to sit up and listen.
Delegations are negotiating a global agreement aimed at limiting an average global temperature increase to 2°C as this is regarded by those that study climate as the tipping point after which climate change accelerates and becomes less predictable.
Decarbonisation is front and centre in Paris and 170 member states arrived with signed off INDCs (Intended Nationally Determined Contributions) focusing on CO2 emission reductions. Many have committed to reducing their CO2 emissions by between 70% and 80% from 1990 levels. There is a great deal of talk of engineering a zero carbon future by 2050.
However, Angela Merkel has already stated that countries’ INDCs don’t go far enough to prevent the 2°C global warming right now. The pressure is on to cut more, more quickly.
The UK itself has already made a commitment to reduce CO2 by 80% from 1990 levels by 2050, cutting output from 556 Mega Tonnes of Co2 (mtCO2) to 124 mtCO2 in the next 35 years. At the summit, David Cameron has also pledged £5.8bn this Parliament (equivalent to 0.7% of UK GDP) to help developing countries deal with the damaging effects of climate change.
Others are still looking for new technology solutions to decarbonisation. The most high profile announcement in this area came from none other than Bill Gates who launched the Breakthrough Energy Coalition which combines the resources and cash of more than 20 Billionaires – many of them tech entrepreneurs in Gates’ image.
Mark Zuckerberg and his wife Priscilla Chan make up two of the Coalition players in the star-studded list. In case you missed it, last week the couple pledged to give away 99% of their wealth to charity so that’s about $45bn! Jeff Bezos, founder of Amazon, Jack Ma of Alibaba, Meg Whitman CEO of HP, Richard Branson and George Soros amongst many others joined the Coalition.
More than 20 countries including the USA will double investment in technology designed to offer cleaner alternatives to burning carbon to create energy. Russian President Vladimir Putin believes that the future may lie with carbon nanotube technology which they are developing and have committed to share with the world.
Amid all these amazing announcements and star-studded gatherings, there is the serious business of hammering out a combined agreement and then making it legally binding. The 33-page document that attendees started with a week ago has already been shrunk to 19 through two rounds of revisions. It is anticipated there will up to four more rounds of editing in the final week before we arrive at the end document that all players will be able to sign off.
One sticking point remains developing countries like India which are in the midst of massive growth and development. Their demand for more power is rising rapidly. Both India and China are still building coal fired power stations at an alarming rate. Developing countries are demanding more help from developed countries to make the expensive switch to cleaner energy generation.
But China, in particular, recognises it cannot just be part of the problem. Its increasing well-healed urban citizens want cities free from life-limiting smog which is particularly awful in the capital city. China would also be heavily impacted by rising sea levels which come with global warming.
The other key issue now is holding countries to account. Many leaders including David Cameron placed a strong emphasis on reviewing progress, at least every five years. Others including Mark Carney, Governor of the Bank of England and chair of the Financial Stability Board (FSB) which brings together the finance chiefs of 46 countries together controlling 93% of global GDP; are focused on finding a concrete and comparable measure of climate change success so that each country ad company can know how it is doing in near real-time.
Also announced at the summit is the appointment of Michael Bloomberg as chair of the brand new Climate Disclosure Taskforce (CDT) which must come up with the right measures to incentivise carbon reduction. The CDT will need to gather and publish the right type of information needed to assess ‘climate risk’ to address capital market failure in this area. This will help insurers value that risk for example. Will it also facilitate the holy grail of finding a uniform global price for carbon?
For example, it should be possible to work out in a few years to come which company is a ‘carbon-light’ company based on all its activities and the activities of its suppliers around the globe. It will stimulate businesses and institutional investors to divest away from carbon risk/exposure. All CEOs of global businesses will have to report on their progress in this area. A third of the world’s top 1000 companies do so already according to Mark Carney. But reporting is currently inconsistent and difficult to compare with others.
However there are still clear inconsistencies in terms of what leaders are saying at this summit and what is happening ‘on their watch’ in the countries they represent. In the electricity generation sector alone in the UK, just over the last six months since the new Tory Government was elected, we’ve seen:
1. The plug being pulled on renewables subsidies prematurely;
2. A green-light being given to fracking;
3. A new ‘dash for gas’
Later this month, the latest Capacity Auction is likely to hand contracts to some 3GW’s worth of ‘diesel farms’ around the country to help meet our short-term peak power demands.
Then there’s the Infrastructure Act that received royal assent back in February, which legally binds current and future UK governments to maximise the economic recovery of petroleum from the UK’s continental shelf. We are now legally bound to squeeze every last drop of oil out of the ground.
The advantage of the increased measurement, reporting and scrutiny around carbon emissions targets set at international, national and corporate level (which will undoubtedly flow from COP21) is that policy inconsistencies and resulting failures to meet these voluntarily-agreed targets, will become a much bigger deal for the leaders that sign up to them.
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