The Doha climate talks set the scene for reaching a crucial global agreement in 2015. But emissions will continue to head in the wrong direction while we still subsidise fossil fuels
First the bad news. It’s happening right now. We’re already living through an overall global 0.8C temperature rise that’s manifesting itself through catastrophic heat waves, droughts and storms. Call it climate change or climate instability, the fact remains that the world isn’t moving fast enough to a low-carbon, green economy.
But wasn’t 2C supposed to have been the point below which we could avoid the most devastating effects of global warming? Just in the past year superstorm Sandy and a vicious heat wave across broad sections of the US grain belt caused record financial losses, while globally catastrophic weather events are on the increase wherever you look.
We’re just one superstorm away from a major world food shortage, the UN Food and Agriculture Organisation recently warned – and that’s at less than 1C warming.
“I think people should be panicking, actually, not just worried,” says Bill Hare, director of Climate Analytics in Berlin, a climate science centre that co-produced a recent World Bank report, Turn Down the Heat, spelling out what the world would be like if it warmed by 4C.
Even if all countries fulfil existing commitments, the world will warm by more than 3C by 2100. And, at present, a 3C rise is at the low end of predictions. Others, including the UN Environmental Programme, PricewaterhouseCoopers, and the International Energy Agency, are all predicting a rise of between 4C and 6C – taking us to a tipping point beyond which the earth’s self-correcting feedback mechanisms would fail.
So, what would a 4C world look like?
For starters, it would be hotter than at any time in the past 30 million years – and that’s only looking at the global average. The actual temperatures over land would range between 4C and 10C higher than pre-industrial temperatures, says Hare. The United States is likely to see summer temperatures rise by more than 6C, while in the Arctic and other regions a 15C rise is a distinct possibility. Hare believes this projected 4C rise now has a one in 10 chance of occurring as soon as 2070.
Window closing
Yet as credible reports like these were released in the run-up to the UN climate talks in Doha, the increasingly dire scientific warnings seemed to have little effect. Barely any new emissions reductions pledges or adaptation funding were put on the table. As a consequence, analysts say it’s unlikely depressed carbon markets will rally any time soon.
Doha did accomplish one very important thing: it extended to 2020 a shrunken down Kyoto protocol, the only legally binding UN mechanism for combating global warming. Kyoto now sets targets only for industrialised nations, but under a new agreement entered into by 2015, there will finally be emissions goals for all, including emerging nations such as China and India. Potentially, this is a game-changer as it finally tears down what US negotiators call the “firewall” separating developing and developed countries.
“Keep in mind the new process is creating a treaty that will not come into force until 2020, so whatever the parties agree to in 2015 will not have an impact on emissions [over the next seven years],” says Andrew Light, director of international climate policy at the US think-tank Centre for American Progress.
“It’s not the case that there’s no way we can avoid exceeding a 2C increase,” Light insists. “What is true is if we don’t make more significant cuts beyond what’s on the table between now and 2020 then, yes, we won’t hold the line.”
Light and most climate experts now agree the escape hatch is closing fast. Both China and the US are making progress in ramping up renewables investments, for example, but there are significant pitfalls along the way as governments continue to invest in brown energy. In 2011, total fossil fuel subsidies grew by 30% over the previous year to top $500bn in spending. That compares with $88bn for renewable energy, according to the International Energy Agency (IEA).
“It’s very clear that the battle on emissions is going to be won or lost in the energy sector,” says Samantha Smith, head of WWF’s global climate and energy initiative. “A lot can be done on agriculture, deforestation and the food value chain. That’s also important, but we have to first win on energy.”
To grasp what’s at stake, Smith and the wider climate science community point to a study published by the Carbon Tracker Initiative – a team of London financial analysts and environmentalists who for the past year have been warning investors of a pending $20tn “carbon bubble”.
The report, drawing on research by Bill Hare of Climate Analytics, calculates there is a 565-gigatonne carbon budget to be spent between now and 2050, after which the likelihood of exceeding the 2C target becomes a near certainty. Known fossil fuel reserves declared by mining and energy firms currently top 2,795 gigatonnes of carbon, meaning just 20% of those reserves can be used.
Time to act
Scientists says a 2C pathway that is economically feasible would require 15% cuts in global emissions by 2020 from present levels. Instead, in 2011 emissions rose 3.2%, and last year brought a near 6% rise, just as the window for effective action is quickly closing.
In this context, Smith says what’s required is a massive and fast ramp-up in renewables investments alongside a corresponding phase-out of fossil fuel subsidies. There’s a role for natural gas in the transition, as witnessed in Europe, she adds, where short- and long-term renewable energy targets have enabled an ongoing shift from coal to gas and then – ultimately – to 100% renewables by 2050.
But just focusing on double digit growth rates in renewables – starting from fairly low levels – does nothing to curtail the overall trend in fossil fuel growth, says Stephan Singer, director of WWF’s global energy policy. In fact, the world is relying ever more heavily on fossil fuel, rather than speeding up the green transition.
In response, progressive business leaders and environmentalists say they are ready to turn up the pressure on a fossil fuel subsidy phase-out campaign. Doha left the gate open to reenergise climate politics globally, while at the domestic level public opinion will give both politicians and business leaders a mandate to take bolder action.
“Already the conversation has changed. This is enormous,” says Paul Simpson of the Carbon Disclosure Project, citing everything from ongoing UN discussions and unfulfilled vows by the G20 to a burgeoning fossil fuel divestment movement led by US environmentalist Bill McKibben.
“Emissions trading schemes, yes; renewables policy, yes; but what about fossil fuel subsidies? It’s step one of action on climate change,” says Simpson. “That’s got to be in your climate change strategy. That’s what’s new. Transparency around fossil fuel subsidies has increased in the past 12 months. Before it was just something else in the energy debate.”
Show me the subsidies
Germany and the UK both continue to subsidise their fossil fuel industries by almost $7bn annually, while OECD production subsidies stand at roughly $58bn. The US did so to the tune of $13bn in 2011. The problem is that getting rid of these subsidies comes with a heavy political price, especially among developing countries whose governments view large subsidies as the most cost-effective way to provide useful energy.
The IEA estimates a complete end to fossil fuel subsidies would bring about a 10% reduction of global carbon dioxide emissions by 2050. For starters, those subsidies keep fossil fuel prices artificially low, says Singer. That directly leads to a reduced uptake in renewables and buries the real cost of operating a coal-fired power plant, for example, the dirtiest of all power sources. “It also provides an implicit policy signal of ambivalence from government that hinders companies’ long-term investment risk assessment,” says Bill Hare.
Many developing countries are enthusiastic about phasing out fossil fuel subsidies, not just to protect the climate but also to balance budgets. WWF’s Samantha Smithpoints to China as an example of a nation successfully phasing out fossil fuel subsidies, whereas India is just beginning that process.
As for the EU, the overall coal production subsidies will be phased out by 2017. For a coal-dependent country such as Germany, this will hasten the energy transition, though such a cut-off isn’t a silver bullet, just a necessary precursor, says Jan Burck, the climate policy team leader at Germanwatch.
“Germany is important because it is one of the first countries wanting to phase out coal and nuclear and to really try to be a low-carbon economy,” says Burck. The UK has similar ambitions but isn’t as coal-dependent. Britain made the switch to gas in the 1990s. The same goes for small Scandinavian countries.
Green jobs
By first setting renewables targets and then applying generous incentives, Germany created hundreds of thousands of jobs, spurring on a green economy that may reach 50% renewables in its power sector as soon as 2020.
“Germany is absolutely going through a bumpy transition,” says Smith, noting the speed at which the country is now travelling. Only in 2007 were national renewable energy targets first placed on the table. Until that point, it was Germany’s 16 federal states that had driven the energy transition – buoyed in no small part by a generous feed-in tariff whose proceeds grew new local industry, tax revenue, and jobs. Since the Fukushima disaster in Japan, German federal policy has been clear and consistent, while in the UK, adds Smith, lack of political leadership is hindering a more aggressive energy transition.
That leadership is sorely needed – both at international conferences and at the domestic level. Even in leading countries such as Germany there have been significant challenges along the way – notably in the building of its offshore wind sector, a stalled electric car roll-out, and a market system whose low renewables pricing structure does nothing to curtail high up-front construction costs.
“We are at a crossroads now,” says Burck. The country is investing in renewables but needs fossil fuels as a temporary back-up, including cheap coal, which it will continue to buy from neighbouring Poland or the US, regardless of the EU’s 2017 coal subsidy phase-out deadline.
Fossil fuels can be used in this interim transition period but only in conjunction with a cut-off of fossil fuel subsidies and setting challenging renewables targets, sending the appropriate short- and long-term policy signals. “We have a really good chance the system will work,” says Burck, “and we have to prove it by candidly discussing the problems but also by demonstrating the advantages.”
Business acts
While there might still be time, climate experts agree that action is needed now. And there is an opportunity for business to stake out a unified position calling for decarbonised policies while also deliberately battling fossil fuel lobbyists in a more charged and visible manner.
“We are facing a war with the fossil fuel industry,” says Hare, “and that points to the need for the investment community to treat it as a war and to actually step up pressure on governments.”
Wake-up calls are happening in different places, but at the same time the past three years have seen industry use the global financial crisis to reverse the political commitments.
Perhaps paradoxically, one of the most alarming trends is the rise of natural gas, because ultimately it will help breach the 2C ceiling, say scientists. Get locked in to a gas infrastructure and very quickly you crowd out renewable energy investment. Reinvesting gas profits into cleaner solutions is an option – but it’s one that needs to be lobbied for in a unified manner.
The model should be a race to the top, says Burck, not one that sees emissions reductions as a burden. Germany is the best example for other large economies such as China and the US to follow. And now there is hard data, with the IEA and others clearly showing the benefits of a high energy efficiency, low-carbon supply stream.
Hare says it’s these messages that industry needs to pick up and aggressively use to counteract what he calls “the quiet and insidious influence of the established incumbents”.
Energy finance
Climate insiders say a reinvigorated energy finance campaign is now taking shape in the wake of Doha. Movements such as the investor network on climate risk organised by the Boston-based environmental coalition Ceres are a good model but need to include a bigger block of companies while cutting loose those that stand in the way.
“The problem with business associations is they are only as powerful as their most conservative member,” says WWF’s Samantha Smith.
“When you have Shell in there [as at the World Business Council on Sustainable Development] then you aren’t going to get any radical, game-changing statements. You’re going to get calls for a global carbon tax. That’s nice, but it’s not going to happen in my lifetime.”
Investing in renewables and vetting supply chains are essential but what’s needed now is a concerted lobbying effort, says Paul Simpson of the Carbon Disclosure Project. “There are different sectors that are far too interested in self-preservation,” he says. “We need them to either get out of the way by 2015 or at least change their tone.”
That renewable energy is now economically viable augurs well for the future. Cut out fossil fuel subsidies and the world has at least one leg to stand on in the absence of a globally mandated price on carbon.
Future talks
In Doha, countries laid out a timetable for working on a new all-nations deal, due to be agreed in 2015 and to come into force from 2020. The Kyoto agreement only sets targets for industrialised nations.
Negotiations would be split into two “work streams” – one looking at actions to combat climate change from 2020 and another to look into how to step up ambition before 2020.
They agreed to hold a first session of talks from April 29 to May 2 2013, in Bonn, Germany, perhaps another in September 2013, and at least two sessions in 2014 and two in 2015.
The talks are named the Durban Platform after the South African city that hosted talks in 2011 where the new push for a global deal from 2020 was decided.
“Don’t get distracted by Doha,” says Andrew Light, director of international climate policy at the US thinktank Centre for American Progress. “The big meeting was Durban.”
Getting a second commitment period for Kyoto was important, but the drama at Doha was overblown, given the stakes of the meeting. The question now is whether civil society pressure can embolden political leaders to step up in 2015. The focus will be on domestic action by major emitters to prepare the way, says Chris Fox, co-director of policy at Ceres. “We’ve learned the lesson from Copenhagen,” Fox says. “An international treaty is not possible without having national level commitments first.”
UN climate summits – what are they good for?
By some accounts, UN climate summits have an almost complete disregard for reality. So frustrated are respected academics and climate experts that some now want to ditch the current system and try something new.
“I absolutely don’t agree with that,” says Samantha Smith, head of WWF’s global climate and energy initiative.
“The UN process has lots of fuzz but it does include the voices of low income and even middle income countries that are hard hit. It has lots of transparency,” says Smith, “It has deadlines such as 2015 where countries actually have to stand up and say what they are going to do.”
It provides civil society with important leverage, something not available in any other international forum.
Smith says: “The UN is important but it’s not the COPs [conferences of the parties] that matter but what you do leading up to the COPs as a society and as individuals that ensure countries come there with political will.”