Author Archives: Nat Keohane

UN talks produce a strong agreement on forest protection, but otherwise déjà vu

Around midnight on Friday, November 25 – several hours after the annual UN climate conference was scheduled to have ended – I stood in the hallway of a temporary conference center erected on the soccer pitch of the National Stadium in Warsaw, watching the scrum of the climate talks in their final hours.

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Nat Keohane is EDF's Vice President for International Climate and a former economic adviser to the Obama administration.

NGO representatives were pitching stories and sharing intelligence with reporters, negotiators were huddling in groups or dashing off to last-minute bilateral meetings, and everyone was scrounging for coffee or late-night sandwiches to power another all-nighter.

The talks appeared on the brink of failure as countries deadlocked over the core questions of which countries should be obligated to reduce emissions and who should pay for it. In the end, as nearly always happens, an agreement was reached and the talks didn’t fall apart. That has become a typical pattern at these annual UN talks.

If the scene was familiar, the headlines that came out of the talks were familiar as well: Developing Nations Stage Protest at Climate Talks (NY Times); UN presses rich nations to act on climate funds (FT); Modest deal breaks deadlock at UN climate talks (AP); UN talks limp towards global 2015 climate deal (Reuters); Climate Finance Battle Shows Expectation Gap at UN Talks (Bloomberg).

But despite the dulling sense of déjà vu that Friday night in Warsaw, there was already reason for celebration. That’s because earlier that same evening – in a break with past years – the Conference of the Parties (or COP, as the talks are formally labeled) had already held the first part of its closing plenary to formally adopt decisions on areas in which negotiators could agree.

During that session, the COP agreed on a comprehensive agreement on Reducing Emissions from Deforestation and forest Degradation (REDD+) – leading to what the UN, countries, media outlets and NGOs all identified as a bright spot in the negotiations.

Forest protection remains a crucial part of the climate action toolkit

With deforestation responsible for about 15% of the world’s manmade greenhouse gas emissions – that’s more than all the cars and trucks in the world – we can’t solve climate change without saving our forests. REDD+ creates economic incentives to reward countries and jurisdictions that reduce emissions from deforestation and degradation below rigorously defined baselines.

The Warsaw Framework for REDD+ Action, as it’s formally known, sets down deep roots for REDD+, and sends a clear signal that it will continue to be a crucial tool for protecting forests and the people who depend on them, by:

  1. ensuring a rigorous, transparent framework for measuring emissions reductions from reduced deforestation;
  2. affirming that financial flows will be “results-based,” meaning that REDD+ compensation will be tied to demonstrated results; and
  3. creating a structure for forest nations to share views on the effectiveness of REDD+ implementation.

The REDD+ outcome was a “big step forward,” my colleague and EDF REDD+ expert Chris Meyer told E&E News, explaining:

We had a foundation for the house; now we have the walls, the plumbing, the electricity and the roof for REDD+.

On the issue of forest protection, at least, the UN talks did exactly what they are supposed to do: they reaffirmed work that had been done in previous years, built upon it in negotiating sessions held over the past twelve months, and made the final push to resolve key issues of disagreement in the two weeks of talks in Warsaw.

This comprehensive package of decisions provides a structure for countries to develop REDD+ programs at a national level, and take advantage of the approximately $700 million per year already pledged for REDD+ program preparation and to pilot results-based payments.

The REDD+ agreement also opens a path for the International Civil Aviation Organization and other bodies that are considering developing market-based mechanisms, whether multi-lateral, national or regional, to bring REDD+ into their systems with an imprimatur of a multilateral standard.

Beyond REDD+, little formal progress

Outside of REDD+, the talks were notable more for what didn’t happen than what did. The talks didn’t make significant progress, although they managed not to collapse.

With two years until a new agreement is supposed to be reached in Paris, countries didn’t set a clear template for what they need to announce in terms of emissions reductions targets, or when they need to announce the targets. Nor did they make much progress on the key issue of climate finance – although surprisingly constructive talks on the difficult issue of compensating the world’s most vulnerable countries for the impacts of climate change reached a compromise agreement to create the Warsaw International Mechanism on Loss and Damage to address the issue going forward.

On two important but lower-profile issues, there appeared to be signs of common ground behind closed doors – but these didn’t translate into movement in the formal negotiations.

On the issue of agriculture, useful conversations occurred that could help integrate agriculture into a more holistic discussion of the role of the land sector in responding to climate change, even if no formal progress were made in the context of these negotiations.

On the critical question of how to construct an international climate architecture that promotes and supports ambitious national action through carbon markets, countries put some useful options on the table – but could not reach a decision, instead deferring further discussion until next June.

To be sure, we never expected much to happen at these Warsaw talks. They were always going to be more about headaches than headlines.

But it’s hard to escape the sense that countries spent two weeks reopening issues that we thought had been resolved and fighting the same battles that have been fought before, only to make a last-minute lunge in the final hours to finish barely ahead of where they started.

A good example is on the key question of participation. Since the 1992 UN Framework Convention on Climate Change, which listed the world’s advanced economies in an appendix or “annex,” the distinction between “Annex I” and “Non-Annex I” countries has been a central point of contention. Five years later, the Kyoto Protocol assigned emissions reductions only to “Annex I” countries. Eliminating the so-called “Kyoto firewall” has been a red line of the U.S. and other advanced economies, which point to the rapid growth in major emerging economies such as China and India, and the concomitant rise in their greenhouse gas emissions.

In 2011, at the UN talks in Durban, South Africa, countries declared that a new agreement, to be finalized in Paris in 2015, would be “applicable to all Parties” – a phrase widely understood to mean that the Annex I/Non-Annex I distinction would be erased. But the first draft of the negotiating text in Warsaw hardly referred to Durban and instead used the different term “broad participation.” That opening salvo didn’t last, and the final text reaffirmed the Durban agreement – but not before significant energy had gone into re-fighting that battle.

The world outside the UN talks

With little to show for their two weeks of long days and all-nighters, negotiators have left themselves a lot to do over the next two years to reach a meaningful outcome in Paris.

However, countries and other actors don’t need to wait for an international agreement in 2015 to start addressing climate change. It was clear, through events on the sidelines of the negotiations and conversations with other attendees at the conference, that cities, states, countries and regions around the world have already started moving to cut their emissions and adapt to climate change.

Some of the most interesting side events highlighted the progress made in China on provincial carbon trading pilots and explored how the Chinese experiments could learn from California’s experience in building a successful carbon market. And the Climate and Clean Air Coalition – a group of more than 70 state and nonstate partners working together to reduce short-lived super-pollutants like methane, black carbon, and HFCs – also announced important progress. Those side events were a reminder that the UN talks, while they remain important, are not the only game in town.

That’s a good thing, and a reason for optimism. Because with the damaging impacts of climate change already apparent in the United States and around the world, the world urgently needs near-term action to turn the corner on global emissions and put us on a downward trajectory toward climate safety.

Read EDF's press release on the outcome of the Warsaw negotiations: Strong agreement to protect forests highlight of UN climate talks.

Posted in Deforestation, REDD, UN negotiations, Warsaw (COP-19) |: | 3 Responses

Warsaw talks can lay groundwork for new international climate architecture

For the next two weeks, representatives from more than 190 countries are meeting in Warsaw for the annual international climate negotiations, known as the 19th Conference of the Parties to the United Nations Framework Convention on Climate Change — or “COP-19.”

Countries in Warsaw face the challenge of how to invite broad participation to an international climate agreement, while encouraging ambitious emissions cuts. Above: UNFCCC Executive Secretary Christiana Figueres gives a welcome speech in Warsaw. Source: Flickr (UNFCCC)

But while the delegates are gathering in Poland — and their hearts are with the Philippines — their minds will be 850 miles to the west, in Paris. That’s because in two years’ time, the same set of countries will meet there to conclude a new global agreement to fight climate change, intended to take effect from 2020.

As a result, even as delegates in Warsaw continue to work on individual issues – such as how to support policies that reduce emissions from deforestation, and how to finance work that reduces greenhouse gas emissions — they are also beginning to grapple with how to knit those components together in an overarching agreement.

No major breakthroughs are expected this year, but many nations have expressed the desire to develop a skeletal framework and flesh out a coherent design for the 2015 agreement.

Their challenge: How to invite broad participation, while simultaneously encouraging ambitious emissions cuts?

A middle path between “top-down” and “bottom-up”

The answer may be to seek a middle ground between what are sometimes called the “top-down” and “bottom-up” approaches.

The top-down approach envisions a sweeping agreement that would allocate the allowable “carbon budget” among countries and create a comprehensive system to implement it. Solving the problem in a single go would be great for the climate. But that approach doesn’t mesh with the political realities of tackling the climate issue in an arena with 190+ different nations, each with its own energy mix and development priorities. Those realities came into sharp relief four years ago in Copenhagen, where grand hopes of a “global deal” ran into the reality of a UN process better suited to incremental progress.

At the other extreme, a purely “bottom-up” approach may appear more realistic, but risks achieving little. Without any framework in place to encourage countries to undertake ambitious actions, to verify that they are abiding by commitments they have made, or to provide them with the tools they need to carry them out, it is unlikely that their pledges will add up to anything remotely ambitious enough to solve the problem, or that their pledges will be implemented.

A middle road is needed: a path between “top down” and “bottom up,” and an approach that recognizes that while the UN can’t solve the problem at one blow, it has a key role to play in supporting and promoting effective action by countries. The key to this approach is constructing a legal framework, or “architecture,” that provides a home for a range of different national approaches while ensuring market integrity and encouraging ambition.

In Warsaw, an important portion of the discussion about the architecture of the 2015 agreement will play out in a track known as the “framework for various approaches,” established in Durban in 2011. Created as a forum for exploring both market and non-market approaches for reducing emissions, the “FVA" offers an important opportunity to set guidelines for the design of effective, high-integrity national programs. As a result, it provides an opening to chart the middle path.

Minimum pillars of an effective climate architecture

A sound climate architecture should give countries the confidence to take on and implement ambitious targets. It can do that by ensuring rigorous and transparent monitoring and reporting — so that countries can verify that other nations are following through on their own commitments. An architecture should create incentives for early action, even before a new agreement takes effect from 2020.

An architecture should also establish minimum guidelines or standards for the integrity of domestic programs, enabling countries to evaluate each other’s actions. Such an approach would also have the effect of facilitating environmentally sound linkages between and among those nations with existing and emerging carbon markets.

This kind of architecture could then become a “gift that keeps on giving,” as it would reinforce nations’ willingness to undertake even more ambitious targets in the future, secure in the knowledge that their negotiating partners are also undertaking and implementing their commitments.

Fortunately, establishing these guidelines does not require re-inventing the wheel: existing domestic and international emissions reductions programs have provided lessons that can be applied to both non-market and market approaches to reducing greenhouse gases. (We’ve summarized these in our most recent submission to the UN [PDF].)

One clear lesson from existing programs is that a workable and effective agreement to reduce carbon pollution would contain the following “minimum pillars”:

  1. National emissions budgets, with sectoral or jurisdictional emissions caps which may be internationally or domestically enforceable, supported by rigorous measurement, reporting, and verification (MRV) of emissions following internationally agreed standards, to ensure transparency;
  2. Incentives for early action;
  3. For those nations that choose to use them, high-integrity market mechanisms to meet their emissions caps; and
  4. Flexibility in how nations might participate in a new agreement, recognizing that some nations may not be able to ratify internationally binding elements of any final 2015 deal.

Our policy brief, A Home for All: Architecture of a future global framework for mitigation action [PDF], has more details.

What the Warsaw talks can deliver

Although nations are unlikely to define the content and structure for the 2015 agreement at this level of specificity by the close of the Warsaw meeting, we hope countries can agree on a clear blueprint for the next phase of work that incorporates these “minimum pillars” of transparency and environmental efficacy.

The Warsaw meetings are unlikely to generate much front-page news. But behind the scenes, the talks can play an important role in preparing the ground for Paris. The key task is to lay the foundation for a durable and dynamic legal architecture that accommodates real-world constraints, while refusing to accept a lack of ambition: an architecture that provides a home for all nations to contribute to addressing the shared global challenge of climate change.

As the impacts of warming temperatures and rising seas become ever more apparent around the globe, the need for such an architecture becomes all the more urgent.

Posted in News, REDD, UN negotiations, Warsaw (COP-19) |: | Leave a comment

What President Obama's Climate Action Plan means for international efforts on climate change

In a powerful speech earlier today, President Obama announced a comprehensive, common-sense set of steps that the Administration is taking to address climate change by cutting carbon pollution, preparing the United States for the impacts of climate change, and leading international efforts to address global climate change. It’s worth taking a look at what the President’s speech, and the Climate Action Plan he unveiled today, might mean in the international arena.

President Obama's new Climate Action Plan emphasizes the U.S. role in global efforts to stop climate change.

Much of the plan concerns what the U.S. – the world’s second-largest emitter – can do to reduce emissions at home. A major component is the President’s decision to direct the U.S. Environmental Protection Agency to move ahead with carbon pollution standards for existing power plants, which account for about 40% of carbon dioxide emissions in the United States. Putting in place such standards – using authority the Administration already has under the Clean Air Act – is the single most important step the U.S. can take to reduce carbon emissions.

More broadly, the President laid out a whole-of-government approach that includes actions from the Departments of Agriculture, Energy, Interior, Transportation, and other agencies across the federal government. (EDF President Fred Krupp provides an overview of the plan and his reactions to it on our EDF Voices blog.)

But there is also a welcome emphasis on the U.S. role in global efforts to address climate change, through measures that include reducing emissions from deforestation and forest degradation (REDD+), expanding clean energy use, mobilizing climate finance and leading efforts to address climate change through international negotiations.

The President’s plan highlights the recent agreement between the U.S. and China to work together in phasing down the consumption and production of HFCs – industrial gases used in applications such as refrigeration and cooling that are thousands of times more potent warmers than carbon dioxide on a pound-for-pound basis. And the plan points to the critical importance of helping vulnerable countries adapt to a changing climate, pledging to strengthen resilience to climate change around the world.

Comprehensive climate action plan includes efforts on international aviation emissions and coal-fired power plants around the world

Among the many international issues covered by the plan – many describing work that is already underway – two specific commitments stand out as worth focusing on in the coming months.

1) First, the Climate Action Plan recognizes the importance of addressing global warming pollution from international air travel, highlighting that the Administration is “working towards agreement to develop a comprehensive global approach” in the International Civil Aviation Organization, or ICAO. Progress on aviation is important not only because of the emissions involved (if global aviation were a country, it would rank in the world’s top ten largest emitters) but also because it represents an area where the international community could make headway in the near term. An agreement in ICAO at its upcoming meeting in September would give a valuable boost to international efforts more broadly, simply by demonstrating that agreement in multilateral forums is possible.

Of course, “working toward agreement” is pretty broad. But it seems reasonable to expect the Administration to be at least as ambitious as the airline industry itself. Earlier this month, the International Air Transport Association called for ICAO to agree on a global market-based measure to cap emissions from international aviation, and put forward principles to help governments reach that agreement.

ICAO should commit, this year, to develop such a detailed approach over the next three years and formally adopt it at the next ICAO Assembly in 2016. Such an ICAO agreement won’t happen without visible and assertive U.S. backing, however. That’s why it was so welcome to see international aviation mentioned in the action plan – and why we (and the rest of the environmental community) will be watching the Administration’s actions with interest over the next few months, and holding the Administration to its commitment to lead.

2) Second, the plan announces a new and stronger commitment to end financing for new coal-fired power plants around the world. The President “calls for an end to U.S. government support for public financing of new coal plants overseas,” with narrow exceptions for the world’s poorest countries (in cases where no other economically feasible alternative exists) or coal plants that capture and store their carbon emissions. This pledge appears to go considerably beyond the guidelines for coal-plant financing by multilateral development banks that the U.S. Treasury released in 2009, both by setting a higher bar for what coal plants would still be allowed and by covering all U.S. government support (including financing from the Overseas Private Investment Corporation, Ex-Im Bank, the Millennium Challenge Corporation, and USAID).

As importantly, the plan commits the Administration to “work actively to secure the agreement of other countries and multilateral development banks to adopt similar policies as soon as possible.” That sort of leadership will be critical, since past attempts to limit financing of new coal plants by multilateral development banks have run into significant opposition. A bright-line position from the U.S. government could be crucial in providing clarity on the issue and helping to push the world away from coal.

Ultimately, the international impact of the President’s speech and Climate Action Plan will depend on the emissions reductions that result. Carried out ambitiously, the steps announced yesterday could help put the United States on the path to cut greenhouse gas emissions 17% below 2005 levels by 2020 – meeting the target that the U.S. inscribed in the Copenhagen Accord in 2009.

Making good on that pledge, even in the face of intransigence by the U.S. Congress, would provide a welcome sign of renewed U.S. leadership. Today’s climate plan is an important step in the right direction.

Posted in News, United States |: | 2 Responses

New IEA report sets a road map to a cleaner energy future

Today, the International Energy Agency released a special report of its World Energy Outlook, entitled Redrawing the Energy-Climate Map. The report is notable not only for its substantive conclusions – but for what it signifies.

First, the substance:

The report starts by emphasizing that energy-related CO2 emissions are a crucial driver of global warming, that they are increasing rapidly, and that as a result the world is not on target to keep concentrations of greenhouse gases below the level that would provide even a fifty-percent probability of limiting the increase in average global temperatures to two degrees – a commonly cited benchmark to prevent the worst impacts of climate change.  Standard fare, perhaps – but noteworthy nonetheless coming from the world’s leading energy authority.

A road map toward a more secure future

The key finding of the report — what makes it required reading — is the analysis of what the IEA calls its “4-for-2˚C scenario.”

The IEA identifies a package of four policies that could keep the door open to 2 degrees through 2020 – at no net economic cost to any individual region or major country, and relying only on existing, widely available technologies:

  1. Specific energy efficiency measures in transport, buildings, and industry (1.5 GT savings in 2020/49% of the total package)
  2. Limiting construction and use of the least-efficient coal-fired power plants (640 MT/21%)
  3. Minimizing methane emissions from upstream oil and gas production (550 MTCO2e/18%)
  4. Accelerating the partial phaseout of fossil fuel subsidies (360 MT/12%)

The IEA estimates that these four measures would reduce energy-related GHG emissions by 3.1 GT CO2-eq in 2020, relative to IEA's "New Policies" reference scenario – corresponding to 80% of the reduction required to be on a 2-degree path.

Take a look at this chart, from IEA's report, that summarizes the policies:

Here's a second chart, also from IEA's report. This one makes the key point about no net economic costs:

Four policies, using widely available technologies, imposing no net economic cost on any individual region or major country, that put the world in the position to make the turn to climate safety.

That’s the headline.

The cost of delay

IEA's report also discusses the vulnerability of the energy sector to climate change, and emphasizes that delaying climate action will drive up the costs of meeting a 2 degree target later.  The report estimates that putting off action until 2020 would trim near-term investment by $1.5 trillion in the short run – but at the cost of requiring an additional $5 trillion to be spent in subsequent years.  In present-value terms, using a 5% discount rate, delay doubles the cost of action: from $1.2 trillion to $2.3 trillion.

This is an argument that we at EDF — and others — have been making for some time. But it is a crucial one nonetheless – and the IEA analysis gives some added analytical weight to the argument.

Not an oil shock, but a climate shock

These findings are especially welcome coming from IEA, a world-respected authority on energy markets and policy that was founded to facilitate international coordination among oil-consuming countries.  Indeed, the messenger may be nearly as important as the message.  What launched the IEA was the 1973-4 oil crisis.  Now, nearly forty years later, the IEA report makes clear that the real energy-related threat to economic prosperity is not an oil shock, but a climate shock.

Back to the big picture

To be sure, the four policies analyzed in this report won’t fully suffice to address climate change in the long run: indeed, much more ambition will be needed.

Under the “4-for-2˚C” scenario, the IEA estimates that world energy-related emissions will peak and start to decline before 2020 – but we’ll still need concerted action on a global scale to get greenhouse gas emissions onto a steepening downward trajectory.

Take a look at one more chart from IEA's report:

Acknowledging this point, IEA's report underscores the importance of continued innovation in low-carbon technologies in transport and power generation (including carbon capture and storage), and highlights the vital importance of a long-term carbon price.

Beyond the scope of the report, there’s much to be done outside the energy sector – in particular by curbing tropical deforestation, and promoting the spread of agricultural practices that can achieve the “triple win” of greater productivity, greater resilience to climate, and lower environmental impacts (including GHG emissions).  And all of these efforts must be carried out in tandem with the overarching challenge of promoting broad-based economic prosperity around the globe, as President Jim Yong Kim of the World Bank has repeatedly emphasized.

But the bottom line is that one of the most hopeful publications on climate change you’ll read this year has come from the International Energy Agency, of all places.  Here is a road map toward a cleaner, more secure future.  Now it’s up to us to take it.

Cross-posted from EDF's Climate 411 blog.

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World's Carbon Markets: EDF, IETA launch online resource on emissions trading programs

While Washington is stuck in gridlock, other jurisdictions around the world are moving forward on climate policy.

Market-based approaches to cutting carbon are in place in jurisdictions accounting for nearly 10% of the world’s population. Above: areas shaded blue have emissions trading programs that are already operating; areas in green have programs that are launching or being considered.

Market-based approaches to cutting carbon are already in place in jurisdictions accounting for nearly 10% of the world’s population and more than a third of its GDP. Many more jurisdictions are either moving ahead with market-based measures, or actively considering them.

As interest grows around the world, policymakers are increasingly seeking information about the range of existing and proposed initiatives.

In response, EDF has partnered with the International Emissions Trading Association (IETA), a trade association that represents businesses involved in carbon trading and climate finance, to launch The World's Carbon Markets: A case study guide to emissions trading.

The online resource provides detailed information about key design elements and unique features of 18 emissions trading programs that are operating or launching around the world.

EDF has also put together a quick reference chart that makes comparing the 18 programs even faster and easier.

Growing interest in emissions trading

Market-based policies are a proven way to limit carbon pollution and channel capital and innovation into clean energy, helping to avert the catastrophic consequences of climate change.

While emissions trading programs around the world, like the ones we have looked at in detail, vary in their features, they all share the key insight that well-designed markets can be a powerful tool in achieving environmental and economic progress.

The countries, states, provinces and cities highlighted in this report, which are moving ahead with strong action on climate change, constitute a vital and dynamic world of “bottom-up” actions that complement multilateral efforts such as the ongoing United Nations climate negotiations.  Jurisdictions considering market-based approaches can use this new resource to learn from their growing number of peers already headed in that direction.

We expect the site will also be of value for policy makers, academics, analysts, journalists, and colleagues in the NGO community and beyond.

If you find the information in The World’s Carbon Markets case studies helpful, please share edf.org/worldscarbonmarkets with your networks.

Posted in Economics, Emissions trading & markets, News |: | 3 Responses