The 2015 United Nations (UN) climate change summit will take place in Paris in December, with the goal to limit global warming to 2°C above pre-industrialised levels. It is proposed that 190 countries sign a new international agreement that will establish post-2020 emissions reductions targets. In addition, it is also hoped the wealthier countries will make financial commitments to help vulnerable countries adapt to the impacts of climate change, such as water scarcity.
Hopes were high when negotiations were held in Bonn this month to agree on a draft text to use at the Paris talks to form a legally binding agreement. However, there was debate over the content of the document and countries were critical of the slow pace of negotiations. As the discussions in Bonn closed, it was agreed that by early October the draft text needed to be reduced to something that is clear and concise, as well as resolving any sticking points.
Ahead of the Paris summit, individual nations have been submitting their contributions towards a global emissions reduction target, known as nationally determined contributions (NDCs). These individual pledges will collectively make up a global carbon reduction commitment. The thinking behind this is that countries are more likely to engage with goals they have set themselves, rather than goals that are imposed upon them. To date 31 submissions have been made, one being made by the 28 EU member states that as a group have committed to cut emissions by 40% by 2030, compared to 1990 levels. It has also been agreed to set a binding renewable energy target of 27% and an optional target of a 27% energy efficiency improvement.
The inclusion of the world’s largest emitters of carbon, the US and China, means the anticipated Paris agreement would cover 50% of global emissions, nearly four times greater than the scope of the existing Kyoto Protocol. China has pledged to lower CO2 emissions per unit of GDP by 60 – 65% from 2005 levels, to increase the share of non-fossil fuel to around 20% and to assure that overall emissions will peak by 2030. Meanwhile, the US has committed to cut its emissions by 2628% compared with 2005 levels by 2025
In the lead up to the highly publicised talks, some nations have taken the opportunity to drive change. As host of the conference, France took the step of passing a new energy bill in July, in which it increased its carbon tax in step changes to reach €100/tonne by 2030 and committed to reduce nuclear generation, which currently makes up 75% of France’s generation mix, to 50% within the next ten years.
The UK has to date had a good track record on renewables investment and in the first quarter of 2015 renewable electricity generation broke records at 22% of the generation mix. However, since May the newly formed government has made a raft of changes to subsidies for renewables, and the European Commission has recently warned that the UK may not meet its 2020 renewables target. If a robust agreement is reached in Paris, the UK will need to demonstrate how it plans to meet the new post-2020 commitments.
Meanwhile, climate change is becoming a focal point of the US election and in August President Obama announced the Clean Power Plan, setting standards for power plants and milestone carbon targets on a state by state basis. However, there is political wrangling in the US over the legality of a US commitment to an international agreement without it first being submitted to the Senate. This inevitably adds an element of uncertainty to the future of any agreement.
Uncertainty surrounding climate legislation also presents a risk to energy companies, as growing levels of renewables capacity brings downward pressure to fossil fuel prices. While oil and gas will continue to make up the greatest share of the energy mix, strong emissions commitments could affect some investment decisions. Earlier this year, six major oil companies wrote an open letter to the UN calling for the introduction of international carbon pricing to provide a long-term stable framework. Approximately 40 emissions trading schemes have so far been established around the world, including the EU Emissions Trading System (EU ETS).
Talks will resume in Bonn on 19th October, with the aim of producing a text for the Paris summit that sets out the main areas of agreement and provides options for issues where there is no consensus. Meanwhile, some of informal meetings are taking place around the globe over the next few weeks to work towards an accord. World leaders have been invited to attend the first few days of the Paris conference to bring momentum to the talks. Christiana Figueres, the head of the UN’s climate change secretariat, said – “The proof is in the pudding and the pudding is going to come out of the oven in Paris.”
Written By- Nikki Wilson
