To date, 149 countries, representing almost 90% of global greenhouse gas emissions, have pledged greenhouse gas reduction plans. However, these pledges, even if fully implemented, would not hit the global UN target of keeping global warming below 2°C.
Government ministers from around the world heard this news in Morocco in October 2015, ahead of the Paris climate conference in December. Nevertheless, they were told the pledges do have profound implications for national regulation, investment and business planning.
‘Countries have done serious work, approved at the highest political level, to design comprehensive climate strategies, many for the first time,’ commented the EU Commissioner for Climate and Energy, Miguel Arias Cañete. ‘This is unprecedented.’
The final goal is 200 governments committing to halving world emissions by 2050. The EU was the first major economy to put forward its contribution – a binding target to cut greenhouse gas emissions within the EU by at least 40% by 2030. As C&I went to press, the UN synthesis report on the aggregate effect of countries’ pledges was due to be published on 1 November 2015.
‘[In Paris] the new deal must show to the world that governments are united, determined and serious when it comes to fighting climate change,’ says Cañete.
The national pledges, if they are achieved, would only limit warming to 3°C by the end of the century, warns Jonathan Grant, sustainability and climate change director at consultants PwC. ‘Despite being a step change, these targets fall short of the 2°C goal, so the Paris agreement will need a process to review national progress and to raise ambition in future.’
‘Ceo engagement on the Paris talks is mixed, but if there’s anything they should focus on, it’s the national plans proposed in the lead-up to Paris,’ he adds. ‘The Paris targets will have profound implications in terms of national regulation, investment and business planning. There’s a big focus on targets but little on getting investment needed to achieve them.’
PwC expects the national targets to drive action in the power, transport and finance sectors. Many countries have put regulation of coal ‘front and centre’ of their plans and are setting targets for renewables and low emissions vehicles. But a significant shift in investments will be required to achieve these targets and build cleaner coal technology such as carbon capture and storage, it points out.
The financial services sector will need to mobilise investors and create new financial products that fund and insure these projects. The automotive sector could expect government support into low or zero carbon next-generation vehicles in countries such as Japan and South Korea, or face more stringent fuel efficiency targets in others.
If the world is to limit global warming to 2°C, then it must reduce or remove carbon dioxide from energy sources at a rate of 6.3% a year, according to PwC. Significantly, 2014 is the first year that more than one country - UK, France, Germany and Italy as well as the EU as a whole - has achieved this rate or above, according to PwC’s seventh annual Low Carbon Economy Index.
Meanwhile, global carbon emissions rose by just 0.5% in 2014, while world GDP rose by 3.2%. World carbon intensity – the amount of greenhouse gases emitted per dollar of gross GDP – fell by 2.7% in 2014, the steepest decline since 2000. The UK achieved a record-breaking 10.9% reduction in carbon intensity – due to a strong economy, lower coal use and a warmer winter.
Meanwhile, Hoesung Lee has become the new chair of the Intergovernmental Panel on Climate Change (IPCC). A professor in the economics of climate change, energy and sustainable development at Korea University Graduate School of Energy and Environment in the Republic of Korea, he is currently one of the IPCC’s three vice-chairs. In an interview with the Guardian newspaper, he signalled a change of direction for IPCC, moving from identifying the problems of climate change to identifying the solutions and focusing on opportunities; and says he wants to involve scientists from industry and finance in the production of the reports, as well as increasing the use of IPCC reports by business.