Climate Change Policy - International Energy Agency · Climate Change Policy ... Command and...

© OECD/IEA 2012

Takashi Hattori Head of Environment and Climate Change Unit, IEA

Climate Change Policy – framework and recent developments –

© OECD/IEA 2012

Outline

Climate change: evidence and impacts

Climate negotiations “101”

The challenge for the energy sector

[Break for discussion]

Climate policy options & policy packages

© OECD/IEA 2012

What is the greenhouse effect?

Source: Climate Change Indicators in the United States, 2nd edition, US EPA

© OECD/IEA 2012

Atmospheric CO2 concentrations

Source: IPCC AR5, Fig. 2.1

© OECD/IEA 2012

Temperatures 2001-2010

Source: World Meteorological Organisation, 2012

© OECD/IEA 2012

Sea levels are rising

Source: IPCC AR5, Fig. SPM.3

© OECD/IEA 2012

Potential tipping points

Collapse of the West Antarctic or

Greenland ice sheets

Disruption of East Asian

Monsoon

Retreat of Arctic sea ice

© OECD/IEA 2012

Climate change is persistent

Source: Zickfeld et al. 2013

© OECD/IEA 2012

Global temperature projections


© OECD/IEA 2012

Where we are headed?


© OECD/IEA 2012

What we know

Human activities are changing the climate

Long-term gradual effects (e.g., rise in average global temperatures and sea level)

Some types of extreme events (e.g., heat waves, heavy precipitation) are happening more frequently and with more intensity

Climate system may experience abrupt, unpredictable, and potentially irreversible changes with highly damaging impacts

© OECD/IEA 2012

What does this mean…

Climate change will have to be combated on two fronts: mitigation and adaptation

Reduce GHGs emissions (mitigation) => stabilise the concentration of GHGs => limit the global temperature increase

In 2011, countries agreed to a 2°C target

Stabilising emissions at 450 ppm corresponds to a 50/50 chance of meeting this goal

Adaptation to climate change impacts we are already locked into

© OECD/IEA 2012

Group Discussion

© OECD/IEA 2012

Outline






© OECD/IEA 2012

UNFCCC History

1992 UNFCCC

To “avoid dangerous anthropogenic interference with the climate system

195 Parties (countries) have ratified

Annexes of developed and developing countries (Annex I, non Annex-I)

1997 Kyoto Protocol

Binding emissions caps for developed countries

Credits under CDM for projects in developing countries

2008-12 First Commitment Period, 2013-2019 Second Period

© OECD/IEA 2012

2007 Bali launched negotiation of new commitments for developed countries and “Nationally Appropriate Mitigation Actions” for developed countries

2009 Copenhagen: 2C goal, $100B finance by 2020, mitigation from all countries (but no centralised architecture). Formalised in Cancún 2010.

2011 COP17 Durban: Extended Kyoto Protocol to 2020, Agreed to negotiate a new climate treaty with legal commitments for all countries

2012 COP 18 Doha: “Cleared the decks”

Agreed details of Kyoto Protocol extension text

Closed previous negotiating tracks (fast-start finance delivered, review launched, other work sent to COP “subsidiary bodies” SBSTA and SBI)

UNFCCC History

© OECD/IEA 2012

Negotiating Tracks

© OECD/IEA 2012

UNFCCC History

Durban Doha Warsaw Lima Paris

2011 2012 2013 2014 2015

Concepts Content

2013 COP 19 Warsaw: Half-way in the ADP Track

Preparation for commitments in 2014 (agree information needed, timelines, review process)

Building pre-2020 ambition

© OECD/IEA 2012

Key Issues for COP 19

1. Ratifications of Kyoto Protocol

2. Resolve procedural voting dispute

3. Clarify Finance (capitalise Green Climate Fund (GCF), plan for scale-up to $100B per annum mobilised)

4. Technical elements under SBI/SBSTA

New market mechanism, linking domestic markets (FVA), MRV for NAMAs and REDD, CDM improvements

5. ADP progress

6. Loss and Damage

© OECD/IEA 2012


1. Ratifications of Doha amendments to Kyoto Protocol

Outcomes:

So far 4/144 required ratifications

Bangladesh

Barbados

United Arab Emirates

Mauritius

© OECD/IEA 2012


2. Resolve procedural dispute on decision-making:

(For now)

Outcomes:

Forward-looking consultations underway

© OECD/IEA 2012


3. Clarify Finance (capitalise Green Climate Fund (GCF), plan for scale-up to $100B per annum mobilised)

Outcomes:

No interim finance milestones

Biennial high-level dialogue on finance

$100M for adaptation fund, $280M for REDD

GCF still awaiting operationalisation/capitalisation

© OECD/IEA 2012


4. Technical elements under SBI/SBSTA

New market mechanism, linking domestic markets (FVA), MRV for NAMAs and REDD, CDM improvements

Outcomes:

Agreed: MRV for NAMAs/Cancún pledges

REDD rules

No progress: New Market Mechanism and FVA

CDM essentially on hold awaiting ADP

© OECD/IEA 2012


5a. ADP progress: Workstream 1 (new climate agreement)

Outcomes:

Contributions (not “commitments”) to be communicated by Q1 2015 (if ready), “without prejudice to the legal nature of the contributions”

Information that will be provided “to facilitate clarity, transparency, and understanding” of the contributions to be agreed at COP20

Drafting timeline accelerated: text before COP20

… But nothing yet on structure of new agreement

© OECD/IEA 2012


5b. ADP progress: Workstream 2 (Pre-2020 ambition)

Outcomes:

Intensify technical work on opportunities with short-term high mitigation potential (e.g. energy efficiency), with a view to promoting voluntary cooperation.

….. Expect technical workshops in early 2014

© OECD/IEA 2012


6. Loss and Damage

Outcomes:

Agreement reached: Loss and damage mechanism established within Adaptation framework (subject to review).

© OECD/IEA 2012

Figure 1: Summary of 2020 pledge types

1

10

100

1,000

10,000

1 10 100 1,000 10,000

An

nu

al G

HG

em

issi

on

s in

20

10

exc

l. L

ULU

CF

sin

ks (

MtC

O2-e

q)

GDP in 2010 (billion 2005 USD, PPP)

No pledge

Intensity goal

Absolute cap

BAU goal

Carbon neutrality

Other goal

US

China

India

Japan

Russia

South Africa Germany

Brazil

Eritrea

Indonesia

Mexico

Republic of Korea

Iran

Turkey

Australia

Saudi Arabia

Thailand

Myanmar

Spain

Poland

Ethiopia

Morocco

Costa Rica

Tanzania

Togo

Note: Bubble sizes are proportional to population in 2010.

Absolute cap

Carbon neutrality

Intensity goal

Reduction from BAU

Other goal

No pledge

Source: Briner and Prag 2013 (CCXG)

Current Pledges

© OECD/IEA 2012

Country Negotiating Blocks

EIG (Mexico, Liechtenstein, Monaco, the Republic of Korea and Switzerland)

European Union

AILAC (Chile, Colombia, Costa Rica, Guatemala, Panama and Peru)

Umbrella Group: (More or less) Australia, Canada, Japan, New Zealand,

Norway, the Russian Federation, Ukraine and the USA

G77 (+China)

LDCs (50 least-developed countries)

AOSIS (43 low-lying and small island countries)

Also BASIC, OPEC, …

© OECD/IEA 2012

The road to 2015

2014: “Year of Ambition” Elements of negotiating text June 2014

UN Leaders’ Summit September 2014

COP 20 Peru December 2014: negotiating text to be on the table

2015: Year of Negotiation May 2015 full negotiating draft

COP 21 Paris December 2015: Agreement?

© OECD/IEA 2012

2015 20202013 2014

Agreement of any bounded flexibility for commitments and ex-ante information to be provided

Consultations on draft commitments

Clarification and ratcheting-up of draft commitments

Submission of draft commitments

Possible further ratcheting-up of mitigation commitments after 2015

Discussions on ex-post accounting rules for measuring progress towards commitments

2015 agreement

A possible process

Source: Briner and Prag, CCXG 2013

Technical

track

UNFCCC

CE

M

WE

F D

AV

OS

LE

AD

ER

S

SU

MM

IT

Political

track ??

© OECD/IEA 2012

Group Discussion

© OECD/IEA 2012

Outline






© OECD/IEA 2012

Are we on track?

© OECD/IEA 2012

Decoupling energy use from economy

Reducing the energy intensity of the economy is vital to achieving the 2DS.

Source: ETP 2012

© OECD/IEA 2012

All technologies have roles to play

© OECD/IEA 2012

0

10

20

30

40

50

60

2009 2020 2030 2040 2050

Gt C

O2

Power generation efficiency and fuel switching 3% (1%)

Nuclear 8% (8%)

End-use fuel switching 12% (12%)

End-use fuel and electricity efficiency 42% (39%)

Renewables 21% (23%)

CCS 14% (17%)

Technology contributions to reaching the 2DS vs 6DS

Source: ETP 2012

© OECD/IEA 2012

Issues for the energy sector

What would it really take for energy sector investment to shift onto a 2C path?

How does review/ratcheting of climate commitments put forward by countries fit with:

Investment decisions

Domestic energy policymaking

How to capture need for long-term energy sector transformation AND short-term emissions targets (technology, infrastructure lock-in)?

© OECD/IEA 2012

Group Discussion

What impacts of climate change are being felt in your country? What is the state of awareness on this subject and does it get much attention in media and political circles?

Are you aware of any specific climate or energy policies being used to address GHG emissions at local or national levels? What technologies and policies are likely to be most relevant in your country context?

Are other issues related to water, pollution, environment, or energy security playing into your country’s climate change policy debate?

© OECD/IEA 2012

The global climate change problem

Considered to be the most significant challenge of the 21st century…

… but why is it so difficult to solve?

The earth’s climate is a global public good

Energy is an essential economic input

The relevant timeframe is very long

Key uncertainties are large and varied

Distributional impacts can be large

Policies to control GHGs are still relatively new

© OECD/IEA 2012

Price-based

instruments

Taxes on CO2 directly Taxes/charges on inputs or outputs of process (e.g. fuel and vehicle taxes) Subsidies for emissions-reducing activities Emissions trading systems (cap and trade or baseline and credit)

Command and

control

regulations

Technology standards (e.g. biofuel blend mandate, minimum energy

performance standards)

Performance standards (e.g. fleet average CO2 vehicle efficiency)

Prohibition or mandating of certain products or practices

Reporting requirements

Requirements for operating certification (e.g. HFC handling certification)

Land use planning, zoning

Technology

support policies

Public and private RD&D funding Public procurement Green certificates (renewable portfolio standard or clean energy standard) Feed-in tariffs Public investment in underpinning infrastructure for new technologies Policies to remove financial barriers to acquiring green technology (loans,

revolving funds)

Information and

voluntary

approaches

Rating and labelling programmes Public information campaigns Education and training Product certification and labelling Award schemes

Climate change policy options

© OECD/IEA 2012

Price of CO2

€/tCO2e

MtCO2

Policies to unlock energy

efficiency blocked by non-

economic barriers

Carbon price mediates

cost-effective action

economy-wide Technology support

policies to:

• reduce long-term costs

• enable timely scale-up

Reduced long-term

marginal abatement

cost

Infrastructure, Financing

Policy packages can lower costs

© OECD/IEA 2012

International carbon markets

Domestic market mechanisms with link to international carbon

market

(e.g. emissions trading scheme; sectoral trading)

Crediting mechanism linked to international markets

Domestic emission reduction policies

with possible crediting link to international carbon markets

(e.g. NAMA or sectoral

crediting)

Carbon markets

© OECD/IEA 2012

Understand fundamentals:

-Abatement potentials, costs

-Macroeconomic impacts

Consider case for further supplementary policies

Assess wider economic effects

Assess interactions, adjust if necessary

REVIEW TO MAINTAIN COHERENCE OVER TIME

Bu

ild C

on

stitu

en

cy fo

r Clim

ate

Ch

an

ge

Re

sp

on

se

Establish Policy Core: Carbon price supplemented by

-Energy efficiency policies

-Technology policies

Regular Review of Policy Packages

© OECD/IEA 2012

Centralised fuel production,power and storage

A smart, sustainable energy system

© OECD/IEA 2012

A sustainable energy system is a smarter, more unified and integrated energy system

Centralised fuel production,power and storage

Renewable energy resources

EV

Co-generation

Smart energysystem control

Distributedenergy resources

Surplus heat

H vehicle2

Climate Change Policy - International Energy Agency · Climate Change Policy ... Command and...

Documents

Transcript of Climate Change Policy - International Energy Agency · Climate Change Policy ... Command and...