THE END OF FOSSIL FUELS

Pathway to Paris #5 from #COP20 Lima:
WHERE THE SUN SHONE AND THE SHADOWS CREPT IN

In this Issue #5 (to subscribe, please follow this link)

** Setting the stage for Lima

** The end of fossil fuels

** A shifting climate in the investment sphere

** How can we decarbonise the economy? 

** On the sidelines  

** The Lima deal 

————————————————————

Setting the stage

There is increasing clarity on both the future that needs to be avoided, and how to avoid that future. The World Bank’s report Turn Down the Heat found that the current trajectory would result in four degrees of warming; that future includes extreme heat-waves, declining global food stocks, loss of ecosystems and biodiversity, and life-threatening sea level rise.  And for the first time, the IPCC explored the amount of GHG emissions we can afford to emit before the world is likely to exceed 2 degrees of warming. This carbon budget gives the world a hard target against which national reduction strategies can be measured. Two thirds of the emissions have already been burned and under current projections the budget will be exceeded by 2040. This is the scientific context which provides the urgency for the UN climate change negotiations.

The China-US agreement created a remarkable launching pad for the UN climate talks in Lima, not because the targets announced (a cap on emissions by 2030 in China and 26-28% reduction in emissions in the US) were sufficient to achieve the 2 degree limit, but rather because the agreement represented a détente between two parties that have historically struggled to find common ground.

At the heart of this struggle (which goes beyond US and China) is the idea of common but differentiated responsibility, a UN principle that divides industrialised and developing nations. Developing countries argue that climate change has been primarily caused by industrialised countries over the course of their industrialisation (the idea of historical responsibility, like an accumulated debt) and therefore the burden of GHG emissions reductions is primarily the responsibility of those countries, particularly while developing countries lift their populations out of poverty. Industrialised countries argue that developing countries are now a major source of emissions, notably now that China has surpassed the US as the largest national emitter, and that climate change mitigation by definition is a collective effort*. Numerous mechanisms, such as industrialised countries financing developing countries, have been created to address this issue and at each negotiation these discussions are highly contentious. The China-US agreement, many observers hoped, represented a bridge over this chasm but the question was whether other countries, such as India would walk this bridge. In the end, the answer was partially, but more on that later.

Earlier this year, the UN High Level Meeting on Climate Change in New York convened by UN Secretary General Ban Ki Moon injected additional momentum into the talks with pledges for action by all sectors of society, a highlight was the moving presentation by a young Marshall Island poet. The high level talks were spurred on by the largest ever march on climate change in New York City, totalling approximately 400,000 people.

Also prior to Lima, countries had pledged funds just under $10 billion to the Green Climate Fund, nearly fulfilling a key commitment dating back to Copenhagen, and an indication of good faith to developing countries. However, during the talks the total climbed to exceed $10 billion. This fund will support low-emission and climate-resilient development pathways in developing countries.

*You can dive deep into these arguments using World Resource Institute’s Equity Explorer tool

============================================================

The end of fossil fuels

One of the discourses which captured the most attention was a pathway for long-term sustainable development with zero emissions, including options for net zero emissions by 2050 or full decarbonisation by 2050. This was part of the text describing what elements should be included in the Paris agreement. This text was not finalised in Lima and will be the basis of subsequent discussions next year. Proponents indicate that this statement ** reflects the latest science on what is required to stablise the climate. Additional controversy also erupted over the role of the fossil fuel industry in the climate talks and some delegates called for prohibition of their participation in future meetings, analogous to the way that tobacco companies are banned from relevant talks.

A shifting climate in the investment sphere 

The UK Energy and Climate Change secretary Ed Davey called for firms to be required to disclose their investments in fossil fuels, which followed a major announcement during the UN Climate Summit by the Rockefeller Brothers Fund that it would divest from fossil fuels. Just before the COP, NRG, an electricity utility in the US committed to cutting emissions by 50% by 2030 and 90% by 2050 and then during Lima, EON, Germany’s largest utility, announced it would spin off its nuclear and fossil fuel divisions to focus on renewables. The Bank of England stated that it would be conducting an inquiry into the risk of an economic crash if oil and gas companies are prevented from using their oil and gas assets, after an earlier statement by Bank of England Governor Mark Carney that most fossil fuel reserves can’t be burned and must remain in the ground. Much of the notion of investment risk is derived from a 2012 report by the Carbon Tracker that identifies how much carbon must be left in the ground and a subsequent report in 2013 on resulting stranded assets

A growing divestment campaign along the lines of a similar effort targeting apartheid in South Africa has been supported by Archbishop Desmond Tutu and Secretary General Ban Ki Moon. All of these developments contributed to an emerging discourse that fossil fuels represent stranded assets and are risky investments in the backdrop of the Lima meeting.

The Prime Minister of the island state of Tuvalu captured the sentiment towards fossil fuels when he said “I ask you all to think for a moment about the term, fossil fuel. It is very apt. The fossil fuels we are burning today are made from extinct plants and animals. Fossil fuels signify extinction. We must not condemn ourselves to extinction riding on the back of the extinct. We must strive for renewal. We must dramatically change our future to renewable energy”.

How can we decarbonise the economy?

If fossil fuels are to be phased out, what will the future look like? This question is also gaining serious attention. In Lima, researchers described a major international analytical effort to explore deep decarbonisation pathways that achieve the 2 degree limit in warming. Sophisticated energy and economy models were developed for 15 countries representing 70% of global GHG emissions including Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Japan, Mexico, Russia, South Africa, South Korea, the UK, and the USA by universities and consultancies in each country. (Many of these are the same models used to understand the implications of national fiscal policy). While the results do not achieve sufficient reductions to limit warming to 2 degrees, they did achieve overall reductions of 47% by 2050. Key strategies included energy efficiency and conservation in all sectors, the generation of low-carbon electricity and fuel switching to lower or zero carbon energy in sectors such as transportation.  Not all technologies that were required to achieve this target are currently economically or technically viable (for example carbon capture and storage) and major collective efforts are required to bring these technologies to market.  Price Waterhouse Cooper has also analysed this low carbon future and emphasises how much change will be required to achieve that goal.

Perhaps the poster child of a low carbon future, Denmark’s efforts came to light at the first Multilateral Assessment Process, a new UN mechanism at which countries can cross-examine the plans and targets of developed countries.  Denmark’s plan is to ensure that all of the energy supply, including transport energy consumption, shall be based on renewable energy by 2050. Oil for heating purposes and coal are to be phased out by 2030, and electricity and heating supply is to be 100% renewable by 2035. The specific strategies and policies being employed to achieve this target are detailed in a catalogue of policies and actions. One of the key aspects of its strategy is district energy. Needless to say, comments from other countries were complimentary. A fascinating exercise and one can’t help but ask what will happen in Canada’s review, scheduled for July 2015.

Many other cities and organisations have are moving down this path with detailed and ambitious GHG and renewable energy targets. The UN launched NAZCA, (the Non-state Actor Zone for Climate Action), as a database to track targets and goals by states, cities and companies to illustrate, “the extraordinary range of game-changing actions being undertaken by thousands of cities, investors and corporations”, describes the UN.  In the first day after it was launched there were 319 cities, 69 subnational regions and 261 companies reporting ambitious targets.

On the sidelines 

The largest march on climate change in the history of Latin America took the streets in Lima, a diverse mix of 15,000 indigenous peoples, non-profit organisations, political parties and human rights activists. A global organisation of Catholic bishops called for the end of fossil fuels, a call reinforced in sentiment by the Pope.  In Canada, a report from David Suzuki Foundation showed how the country could achieve its targets by replicating the policies of BC, while Prime Minister Harper called unilaterally regulating the oil and gas industry crazy. An Ecuadorian anti-mining activist was found murdered just before making the trip to Lima, a stark reminder of the dangerous facing activists in many countries. And Typhoon Hagupit threatened and then ultimately made landfall in the Philippines, the third UN meeting in a row that has been accompanied by widespread destruction in the Philippines as the result of similar storms.

In the context of the UNFCCC, the term subnational describes all governments which are not countries; these states, provinces and cities are very busy on the sidelines through umbrella organisations (for example see ICLEI) and as coalitions of the willing (for example see C40, the Climate Group. A special one day session at Lima City Hall organised by ICLEI explored efforts by cities.  A stream of mayors and environmental managers for major cities in Latin America and Asia described their efforts to reduce GHG emissions and adapt to climate change. Public transit, urban planning and flooding were the most resonant themes in cities that ranged from 2-11 million in population. The climate change agenda often blended with a social justice agenda. For example, the Mayor of Bogota discussed how providing infrastructure for cars discriminates in favour of the wealthy while a Brazilian mayor compared cars with cigarettes to which national governments are addicted. Plans in many cities on public transit are very ambitious with kilometres of new metros and transit lines in the works. A new GHG inventory protocol was launched that will help standardise GHG tracking in cities, creating sufficient rigour to enable the use of climate finance for city-led projects on transportation, urban planning and renewable energy (the $10 billion Global Climate Fund has also announced a focus on cities. The Inter-American Development Bank has launched a major cities program focused on climate change (scroll down) as has the World Bank, including a certification program for city climate planners. Cities sought to ensure the inclusion of their efforts in the final text but were unsuccessful. They did however issue the Lima Communique that warns that we are close to a point of no return and commits to accelerating global advocacy as well as raising the level of climate ambition within cities, a plea for additional action by cities.

The Lima deal 

“Fossil fuel limits closer in all nations”, reported Bloomberg, while the New York Times headline was, “climate deal would commit every nation to limiting emissions”, similar to that of the Globe and Mail, while CBC reported “UN negotiations pass watered-down climate deal in Lima”.

The Lima negotiations needed to accomplish two tasks; firstly to agree on the types and nature of targets that countries needed to set prior to Paris and secondly, identify the elements of the Paris agreement to provide a basis for negotiations over the course of the next year.  On the basis of the optimism inspired by the events described earlier in this brief, many delegates perhaps took it for granted that the divide between developed and developing nations would be dissipated. However, that proved not to be the case with extensive and heated discussions over responsibility for emissions reductions and financing mitigation and adaptation efforts as well as compensation for loss and damage emerging.  As a result the discussions that were supposed to end on Friday carried on well into Sunday night through five different drafts before arriving at a consensus. What did emerge at the end is a framework for a legally binding agreement that includes all countries in the world, a key foundation for negotiations leading upto Paris, but an agreement that is in all respects weak with respect to achieving the two degrees target, particularly in actions leading up to 2020 when the Paris agreement kicks in, and supporting nations that are being impacted by climate change. One other notable outcome is that the US is no longer a pariah.

For the first time ever, all countries will go to work to identify post 2020 GHG emissions targets, and those ready to do so will report them in the first quarter of 2015. The UN will report back on the cumulative impact of these targets by November, 2015 prior to the Paris negotiations in December. Between now and Paris there will be at least two more rounds of negotiations and another high level UN Summit on climate  change in New York. In the negotiations leading up to Paris, governments will address the sticky issue of how they will finance efforts by developing countries to mitigate and adapt to climate change. Further the agreement relies on countries to determine what is fair and ambitious without providing any particular guidance, for example establishing their targets on the basis of their current emissions or their historical emissions.

“The most inspiring development in Lima was an outpouring of support for a long-term effort to reduce emissions. Over a hundred countries now advocate for a long-term mitigation goal. This would send a strong signal that the low-carbon economy is inevitable”, said Jennifer Morgan of World Resources Institute. There were disappointing results for cities and states, with any reference to the role of sub-nationals in addressing climate change removed from the final text.

The difficulty of the negotiations in Lima caught many delegates by surprise and many of the most challenging issues remain on the table. A legally binding agreement that includes all countries with sufficient ambition to reduce emissions below the 2 degrees level is not all guaranteed and will take considerable compromise and additional efforts by all parties.

Next briefing

* What’s next for cities

* IPCC Synthesis Report

* The rise of renewables

* Featured network: UNGC