Prospects look bright for the Paris Climate Summit. The sole fact that this year’s COP (Conference of the Parties) will start with the government leaders meeting instead of finishing with it, as was usual in the past, is promising, writes Rolf de Vos of Ecofys. According to De Vos, if the more than 80 world leaders who will gather in Paris, including Obama, Xi Jinping, Modi and Putin, will get the Summit off to a good start, the work of two Summits can be done in the space of one. He predicts the Summit could lead to: a long-term 2050 goal, a five-year cycle of reviewing the pledges, the taking off of carbon pricing, more transparency in financing mechanisms and possibly the inclusion of non-state actors in future steps.
On 30 November, while still recovering from the horrific terrorists attacks on Friday the 13th, Paris will be the host of at least 80 government leaders from all major nations across the world. Together they will kick off the COP21 Climate Summit On 30 November they will together set the scene for the final Paris Agreement, to be concluded on 11 December. Which is the opposite from previous COPs, at which government leaders used to close the two weeks of negotiations.
“The preparation for this summit has never been better. I lost my scepticism about the UNFCCC process”
Delegates used to prepare the text, and the government leaders would sign it off. This is what happened in 2009 in Copenhagen: government leaders were only allowed to leave the building after about one extra day (and night) of negotiations. However, it makes perfect sense to start with presidents and prime ministers, for they are the ones that have the ultimate mandate for negotiations. Putting the leaders’ session at the beginning creates the opportunity to make progress that normally would take two COPs.
Preparatory work on the Paris Agreement has already been done in interim meetings, like the one in October in Bonn. However, negotiators there forced the co-chairs of the central negotiation process—who had drastically reduced the amount of text—to restore most elements, still leaving a large number of issues that are ‘still to be decided’. This means that the success of Paris will depend very much on the ambitions displayed by the government leaders.
In this context, the lights are at least yellow, and many would say they are green. “Paris will be a watershed event in climate policies,” said Edward Cameron, Policy Director of We Mean Business, during a Press Briefing on 17 November. “The Climate talks have never before been in such a promising position. It’s not enough, but a new economy is about to be established.”
His optimism was shared by others at the briefing, like Steve Howard, Chief Sustainability Officer of the Ikea Group, and Anne Simpson, Investment Director Global Governance of CalPERS, a $300 billion pension fund in the US.
The world still needs to bridge an emissions gap of about 9 billion tonnes of CO2-equivalents by 2025, a considerable amount compared to total global emissions today of about 50 Gt
Michael Liebreich, Chairman of Bloomberg New Energy Finance said: “Paris is heading for an ‘imperfect success’. In the last three years, the clean energy transition has gained momentum, mainly because the cost of clean energy has come down. In addition, the preparation for this summit has never been better. US talked to China, India talked to the US. I lost my scepticism about the UNFCCC process.”
The optimism is partly justified by the numbers. As of this writing, 174 of 196 countries have submitted their action plans (INDCs: Intented Nationally Determined Contributions). According to a recent report of the UN Climate office (UNFCCC), 147 pledges met the 1 October deadline. Their aggregated pledges deliver the best result ever. According to Climate Action Tracker and the IEA (International Energy Agency), the current pledges, if they are kept, would lead to a 2.7°C temperature rise, which is quite an improvement compared to the 3.6° that would be the result if all present policies in place were implemented. A few years ago, temperature rise in the 21st century was still predicted to be 4.8 degrees.
Nevertheless, the world still needs to bridge an emissions gap of about 9 billion tonnes of CO2-equivalents by 2025, or 15 Gt CO2 by 2030, to stay on track for not exceeding the 2°C threshold, still a considerable amount compared to total global emissions today (about 50 Gt).
To be sure, government leaders will definitely not bridge these gaps during this year’s Summit. But they could decide on how to get onto the 2° Celsius emissions pathway in the longer term. Progress will be guaranteed if heads of state agree on a long-term goal, for instance for 2050, together with a ’ratchet-up mechanism in a five-year cycle, gradually gearing up the ambitions in INDCs over the next decades. This is something that could not be accomplished by delegated negotiators, only by political leaders.
The aggregated INDCs and the road ahead to lower emissions are only one part out of three main desired outcomes of Paris. The second one relates to the Green Climate Fund, agreed to in Copenhagen in 2009. The Copenhagen Agreement may be regarded as a failure, it did deliver two results that are still important today: a general agreement not to exceed a 2°C temperature rise, and the establishment of the Green Climate Fund, which requires developed countries to finance mitigation and adaptation measures in underdeveloped countries with $100 billion a year starting in 2020.
“This amount of $100 billion is only ‘lubricating money’, because the real investment will be at a level of trillions of dollars”
Up till beginning of November, only $10 billion has been promised, but Paris is expected to help drive the Green Climate Fund forward. As many developing countries have now submitted their plans, it becomes clearer how money from the Green Climate Fund could be spent. This reduces the uncertainty that up till now was a good reason for richer countries to delay their pledges.
Nevertheless, there is still a long way to go. As Edward Cameron of We Mean Business notes: “This amount of $100 billion is only ‘lubricating money’, because the real investment will be at a level of trillions of dollars.”
As a third important element, Paris could become a real breakthrough if states and non-state actors, such as cities, business and citizen groups, could come to an agreement on how to proceed on a 2° pathway together. Here too government leaders have a crucial role to play. There are important reasons for them to listen to non-state actors. Business and cities will have a large part to play in bridging the gap. For instance, early November the World Business Council on Sustainable Development reported that its nine low-carbon business partnerships could achieve two-third of the emissions reductions needed to get on the 2° pathway.
There is every reason to assume carbon pricing will return after Paris on a prominent parallel UNFCCC negotiation track
Although business and cities do not take part in the negotiation process, the Lima Paris Action Agenda and the NAZCA database of the UNFCCC contain many non-state initiatives, proving that states and non-state actors are becoming increasingly aware of each other’s efforts. Representatives of We Mean Business said they are satisfied with the UNFCCC’s acknowledgement of business initiatives. Cameron: “For the first time, business and negotiators are really act ingtogether.”
A giant step towards integrating state and business efforts would be made if world leaders were to take a stance in favour of carbon pricing. And this looks quite likely. Already 62 countries apply carbon pricing mechanisms, covering some 12% of all greenhouse gas emissions in the world. Over half of the INDCs consider the use of such market-based mechanisms.
At present, carbon pricing (one mention) and market-based mechanisms (three mentions) have only a modest role in the draft text for the Paris Agreement. But even if a Paris Agreement would not refer to carbon pricing, it could still take off. For instance, a high-level Carbon Pricing Panel, initiated by the OECD, IMF and World Bank, is pushing hard for more carbon pricing mechanisms. Panel members include leaders such as Angela Merkel (Germany), Michelle Bachelet (Chili), François Hollande (France), Hailemariam Desalegn (Ethiopia), Benigno Aquino III (Philippines), Enrique Peña Nieto (Mexico), Jerry Brown (California), and Eduardo Paes (mayor of Rio de Janeiro).
So there is every reason to assume carbon pricing will return after Paris on a prominent parallel UNFCCC negotiation track. Still, it would be an important official acknowledgement of business efforts if carbon pricing does make it into the Paris agreement. Even better would be a decisive step allowing business to become an integral part of the negotiations one way or the other. For the required acceleration of emission reduction after Paris, it is indispensable that states synchronise with non-state actors.
This is the sixth post in Rolf de Vos’s Ecofys Paris Climate Blog, which has the aim to “bridge the gas between business and policy” ahead of the Paris climate conference.