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Global Climate Consensus Forged in Paris

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By Sunny Lewis

PARIS, France, December 15, 2015 (Maximpact News) – “The Paris Agreement on climate change is a monumental triumph for people and planet,” declared UN Secretary-General Ban Ki-moon as delegates from 195 countries approved the world’s first universal pact to take common climate action.

“We have solid results on all key points,” said Ban. “The agreement demonstrates solidarity. It is ambitious, flexible, credible and durable.”

The Paris Climate Agreement is not a formal treaty. It doesn’t contain legally-binding carbon targets. Instead, each country has put forth its own voluntary proposals for ambitious carbon reductions.

The Paris agreement is built on these Intended Nationally Determined Contributions (INDCs) submitted by 187 countries in advance of COP21. The remaining countries are encouraged to issue their INDCs.

The proposals made to date will, at best, take the world about halfway to the target of 2 degrees Celsius or 3.6 degrees Fahrenheit, above pre-industrial temperatures.

World leaders agreed on the 2 degree goal at the UN climate conference in 2009, confirmed it in 2010, and enshrined in the Paris Climate Agreement on December 12.

But although commitments made under the Paris Agreement don’t meet the target goal, most stakeholders view the document as an effective instrument that will at least begin to limit the greenhouse gases responsible for planetary warming.

For one thing, the Parties put in language that requires them to work toward holding the increase to 1.5 degrees C, or 2.7 degrees F.

Scientists agree that we must hold total warming below 2 degrees to avoid dangerous climate change. Yet even at that level, island and coastal communities would be at risk of inundation by rising seas.

To date, average global temperatures have risen by about one degree Celsius, or 1.8 degrees F higher than 150 years ago. Most of the warming has happened in the past 50 years.

Keeping total warming 1.5 degrees is crucially important, countries agreed in Paris.

To approach the lower 1.5 degree target, the agreement calls on nations to assess their progress every two years. They agreed to come back together five years from now to build on those gains by setting even lower goals going forward.

Gaveling the agreement in with a green hammer Saturday evening, Laurent Fabius, COP21 president and the French foreign minister, announced the historic news – a moment greeted with loud applause and cheers, as the delegates rose in a standing ovation.

The jubilation followed two weeks of round-the-clock negotiations at the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21) and years of preliminary talks that finally bore fruit.

“I have been attending many difficult multilateral negotiations, but by any standard, by far, this negotiation … is the most important for humanity,” Ban said in the tense hours before agreement was reached.

The toughest outstanding issues – the target temperature limit, climate financing, and the differing roles for developed and developing countries – were resolved at last, if only with agreement to do more in the future.

For the first time, countries must take inventory of their major sources of greenhouse gas pollution and share that information with the rest of the world.

Countries must monitor carbon emissions, using standard measuring practices subject to expert international review, and report regularly on their progress in reducing those emissions.

Ban said that enforcement of the agreement will depend on the will power of the Parties to adhere to it.

“Governments have agreed to binding, robust, transparent rules of the road to ensure that all countries do what they have agreed across a range of issues,” he explained.

Highlighting the role of the private sector, the UN chief said business leaders came to Paris in unprecedented numbers and that “powerful” clean energy solutions are already available, while many more are to come.

“With these elements in place, markets now have the clear signal they need to unleash the full force of human ingenuity and scale up investments that will generate low-emissions, resilient growth,” said Ban.

The agreement supports the global transition to a low-carbon economy.

The fossil fuels – coal, gas and oil – that are driving global climate change account for roughly 80 percent of world energy use.

But that is changing quickly.

Financial experts estimate that $50 trillion will be invested in the global energy system over the next 20 years, much of it in clean, renewable energy like wind and solar and to systems to distribute and store the electricity generated.

In the United States, General Motors, Apple computers, Google, Walmart and 150 other major American companies have pledged to reduce their carbon footprint, invest in clean energy and otherwise work toward sustainable practices in a private effort to fight climate change.

The Bank of America, Goldman Sachs and Citigroup have said they would invest a minimum of $325 billion in clean energy technologies over the next 10 years.

The United States, France and 17 other countries that together account for 80 percent of global research and development in clean energy technologies have promised to double that investment over the next five years.

And Bill Gates of Microsoft, Mark Zuckerberg of Facebook, Jeff Bezos of Amazon.com and 25 other billionaire investors are creating a private-public initiative to help bring clean energy ideas to market.

Still, World Coal Association Chief Executive Benjamin Sporton is confident that coal will be burned for many decades to come and that carbon capture and storage (CCS) will help keep climate change under control.

“The foundation of this Paris Agreement are the Intended Nationally Determined Contributions submitted by countries in the lead-up to COP21,” said Sporton. “Countries must be supported in the implementation of their INDCs, which for many include a role for low emission coal technologies, such as high efficiency low emissions coal and carbon capture and storage (CCS).”

Taking all the INDCs into account, the International Energy Agency projects that electricity generation from coal would grow by 24 percent by 2040.

Sporton sees carbon capture and storage as the way of the future. “The increased ambition of this agreement underscores the need to speed up efforts to deploy carbon capture and storage. We call on governments to move quickly to support increased investment in CCS and through providing policy parity for CCS alongside other low emission technologies.”

The Paris Climate Agreement will take effect in 2020. The document will be deposited at the UN in New York and be opened for one year for signature on April 22, 2016 Earth Day.

The agreement will enter into force after 55 countries that account for at least 55 percent of global emissions have deposited their instruments of ratification, a standard UN percentage.

Historically, the international political response to climate change began with the adoption of the UNFCCC on May 9, 1992.

The UNFCCC sets out a framework for action aimed at stabilizing atmospheric concentrations of greenhouse gases to avoid “dangerous anthropogenic interference” with the climate system. The UNFCCC entered into force on March 21, 1994, and now has 196 parties.

Now the Paris Climate Agreement will take its place in history.

“When historians look back on this day, they will say that global cooperation to secure a future safe from climate change took a dramatic new turn here in Paris,” Ban said Saturday. “Today, we can look into the eyes of our children and grandchildren, and we can finally say, tell them that we have joined hands to bequeath a more habitable world to them and to future generations.”

“For today, congratulations again on a job well done,” Ban smiled. “Let us work together, with renewed commitment, to make this a better world.”


Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Featured Image: Laurence Tubiana, COP21 Presidency; UNFCCC Executive Secretary Christiana Figueres; UN Secretary-General Ban Ki-moon; COP21 President Laurent Fabius, foreign minister, France; and President François Hollande, France, celebrate the adoption of the Paris Agreement
Slide Show: 01. Applause rings through the Paris-Le Bourget conference center as delegates celebrate their approval of the Paris Climate Agreement, Dec. 12, 2015 (Photo courtesy United Nations) 02. US Secretary of State John Kerry gestures to emphasize a point, while UN Environment Programme chief Achim Steiner, green tie, listens. Paris, Dec. 8, 2015 (Photo courtesy Earth Negotiations Bulletin) 03. Members of the Like-Minded Developing Countries negotiating group huddle during the final negotiations at COP21 Paris, Dec. 12, 2015

 

COP21: One Day to Deadline, All Eyes on the Bottom Line

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PARIS, France, December 10, 2015 (ENS) – Finance remains the most contentious issue as climate negotiators from around the world approach agreement on an historic pact to control climate change that will apply to all nations.

Underlying the tension is “differentiation” between developed and developing countries. Who will be responsible for paying? Will the pool of contributors expand? Who will be the recipients of finance?

All these matters remain unresolved in the current text, issued today by French Foreign Minister Laurent Fabius, who is presiding over the talks, known formally as the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change, UNFCCC.

Fabius explained that the latest version of the outcome document, a 29-page text, contains three-fourths fewer brackets than the previous draft. It aims to provide an overview of progress made and identify clear options on three cross-cutting issues still to be settled at the political level.

As in all previous climate negotiations, the difference between rich countries and poor ones is the divide that makes agreement difficult.

The deal being hammered out in Paris would take effect in 2020. It will be legally-binding on all nations, but the form of the agreement is one issue still undecided.

If it takes the form of a treaty, the United States would not be able to implement it due to the opposition of the Republican majority in the U.S. Senate. Since the United States is the world’s second-biggest emitter of greenhouse gases, this could be an important sticking point.

Small island states and coastal developing countries have demanded that the agreement must restrict global warming to just 1.5°Celsius above the planet’s pre-industrial temperature.

The previous temperature target, agreed at the 2009 climate conference in Copenhagen, was a 2°Celsius limit.

The global mean temperature today is 0.74°C (1.33 °Fahrenheit) higher than it was 150 years ago.

In Paris, the United States and the European Union have joined with over 100 other countries, both rich and poor, in a “high ambition coalition” to work for an “ambitious, durable and legally binding” agreement that would be reviewed every five years.

They envision an agreement that would recognize the below 1.5-degree temperature goal, map out a clear pathway for a low-carbon future, and include a strong package of support for developing countries, including delivery of US$100 billion annually as previously agreed.

The lead U.S. negotiator Todd Stern, agrees that the 1.5-degree target should be recognized in the final pact.

“We need beyond the below 2-degree target; we need to have a recognition of 1.5 degrees in the agreement, and we need a very strong and balanced transparency article so everybody knows what we are all doing,” Stern said.

“This is our moment and we need to make it count,” said Stern.

 

On progress made to date, Fabius said compromise or significant progress has been made on capacity building, adaptation, transparency, and technology development and transfer.

He said that “initial progress” has been made on forests, cooperative approaches and mechanisms, and the preamble, and that progress on adaptation would enable parties to focus on loss and damage.

As for the remaining political issues, Fabius identified differentiation between developed and developing countries, financing and the level of ambition of the agreement.

He identified loss and damage, response measures, cooperative approaches and mechanisms, and the preamble as areas still requiring work.

On the crucial issue of financial support to help developing countries cope with both mitigation and adaptation, the G-77/China delegates, who represent the largest group of developing countries, lamented a lack of adequate reassurances on the means of implementation.

Angola, speaking for the Least Developed Countries group, stressed the need to ensure access to finance.

The EU emphasized that after 2020, countries “in a position to do so” should join in increasing financial flows to countries in need.

Saudi Arabia, speaking for the Arab Group, expressed concern about the phrase, “those in a position to do so.”

The developed countries appear to want to dilute their financial obligations by pushing for inclusion of the phrase “countries in a position to do so.”

This phrase invites even those developing countries that are currently financially stable to contribute to countries with fewer financial resources to help them meet their climate commitments under the new agreement.

The Arab Group warned that any goal that threatens their sustainable development, or their ability to eradicate poverty and ensure food security will not be acceptable.

China welcomed the latest version of the text as open and balanced, and indicated willingness to work towards an outcome that reflects fairness and ambition.

But the poorer countries are still not reassured. Delegates with the African Group noted their concern on the reflection of individual commitments without references to financial support.

Bangladesh asked for special consideration of Least Developed Countries and Small Island Developing States to be reintroduced in Article 6, the section on finance.

Many of the climate commitments, known in UN-speak as Intended Nationally Determined Contributions, submitted by developing countries are conditioned on financial support from the developed countries.

The poorer countries are not willing to discuss other issues until there is a clear pathway to and assurance of the financial provisions post-2020.

The developing countries have expected that whatever financing is available to them would be in the form of no-strings attached grants from public finance. But developed countries want to include a basket of grants, credit, investments from both public and private sources.

The multi-lateral development banks have announced a US$100 billion annual pool of money for developing countries to work with in dealing with the impact of climate change.

In addition, the developed countries have pledged US$100 billion a year for the same purpose. They will channel much of that funding through the new Green Climate Fund.

That grant-making has already begun. In Paris, the Democratic Republic of Congo and the South American country of Guyana each signed a readiness grant agreement with the Green Climate Fund. These grants provide US$300,000 for capacity building to help the recipients prepare to access investment funding from the Green Climate Fund for mitigation and adaptation projects.


Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Featured/ Header image: The revised draft Paris outcome is distributed to delegates at COP21, December 10, 2015 (Photo courtesy Earth Negotiations Bulletin)
Slide Show: 01. Ali bin Ibrahim Al-Naimi, Minister of Petroleum and Mineral Resources, Saudi Arabia, addresses the delegates at COP21, December 7, 2015.  02. French Foreign Minister Laurent Fabius, is President of COP21, known formally as the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change, UNFCCC. 03. Miguel Arias Cañete, Commissioner for Climate Action and Energy, European Commission, addresses the delegates at COP21, December 7, 2015. 04. Edna Molewa, Minister of Water and Environmental Affairs, South Africa, speaks on behalf of the G-77/China, December 9, 2015 (All photos courtesy Earth Negotiations Bulletin)

Businesses Vow Action at Paris Climate Talks

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PARIS, France, December 10, 2015 (ENS) – Corporate actions on key climate issues such as carbon pricing, finance, responsible policy engagement and science-based emissions targets were announced on the 8th December at the Caring for Climate Business Forum, the official avenue for business at COP21 in Paris.

COP21 is shorthand for the 21st Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC).

At the Paris-Le Bourget conference hall, government negotiators toiled over the language of a legally-binding agreement that would require all nations to reduce their greenhouse gas emissions to levels that would keep global warming below 2 degrees Celsius above pre-industrial levels. This target was agreed at the 2009 COP in Copenhagen and made official at the 2010 COP in Cancun.

Meanwhile, during this parallel event, more than 450 CEOs from 65 countries across 30 sectors pledged to set emissions targets, report on progress and work with policymakers through the Caring for Climate initiative.

Participants from business, finance, government, civil society and the United Nations gathered for two days to advance the role of the private sector in combating climate change.

The UN Global Compact, UN Environment Programme and the UNFCCC Secretariat gathered the group under the banner of Caring for Climate, the world’s largest business coalition for climate change.

The event was attended by UN Secretary-General Ban Ki-moon, France’s Minister of Environment, Sustainable Development and Energy Ségolène Royal, and U.S. Secretary of State John Kerry.

Ban credited the business sector for its work in the global effort to limit damaging climate change. “The collective momentum among the private sector for climate action is growing daily. More companies and investors are leading on climate action than at any time in history,” Ban said.

“But to limit global temperature rise to less than two degrees we must go much further and faster,” said the UN leader. “We need 100 percent participation from the business community.”

On the issue of carbon pricing, he indicated that companies have been “instrumental” in ensuring that a price on carbon is recognized as a necessary and effective tool.

According to the Carbon Disclosure Project, more than 1,000 companies now say that they have set an internal price or plan to do so in the future. This compares to 100 companies a year ago – a 10-fold increase.

“The private sector can help to fill the gap between what has been committed by governments through the INDCs [Intended Nationally Determined Contributions] and what is needed to reach a carbon neutral economy by mid-century,” said Lise Kingo, executive director of the UN Global Compact. “The momentum is unstoppable.”

“The new targets announced at COP21, if achieved, will generate an estimated annual emissions savings of 93.6 million metric tons CO2e or more than the annual carbon emissions of Peru,” Kingo said.

Launched in 2000, at the turn of the millenium, the UN Global Compact is a leadership platform for responsible corporate policies and practices. It is the largest corporate sustainability initiative in the world, with over 8,000 companies and 4,000 non-business signatories based in 170 countries.

“Our job coming out of Paris is to mobilize the great majority of companies that are not yet part of this movement,” Kingo said.

U.S. Secretary of State John Kerry highlighted the support of 154 U.S. companies for action on climate change through their commitment to the American Business Act on Climate Pledge.

“As you leave Paris, carry a clear message that how we do business today will determine if we do business in the future,” said Kerry. “In the end, it’s business – the choices you make and the products you make – that will make the difference.”

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CEOs offered commitments to climate solutions:

65 CEOs with a total market capitalization of US$1.9 trillion across 20 sectors have integrated carbon pricing into corporate long-term strategies and investment decisions. They pledged to set an internal carbon price, report publicly, and call for carbon markets through the Business Leadership Criteria on Carbon Pricing.

114 companies have committed to set up processes to internally audit all activities that influence climate policy; work to ensure that all of this activity is consistent; and communicate policy positions, actions and outcomes.

114 companies committed to align their emissions reductions targets with the level of decarbonization required to keep global temperature increase below 2°C through the Science-Based Targets initiative.

79 chief executives, representing US$2.13 trillion in revenue, announced that their companies would reduce environmental and carbon footprints, set targets to reduce their emissions, and collaborate with supply chains and across sectors.

140 companies with a total market capitalization of over US$100 billion, and nearly 30 institutional investment firms with assets estimated at US$2.5 trillion, committed to producing climate change-related information in their mainstream reports.

39 French companies pledged to combat climate change, committing at least €45 billion over the next five years for investments and financing in renewable energies, energy efficiency and other technologies accelerating the transition to a clean energy, low carbon future.

Global capital market leaders met separately to discuss how stock exchanges, investors and regulators can support the global climate agenda. The gathering of CEOs began with a special opening bell ceremony December 7 at Euronext Paris dedicated to the success of COP21.

Euronext is one of 11 stock exchanges that showed their commitment to sustainable capital markets, and their support for the evolving climate agenda, by becoming a United Nations Sustainable Stock Exchanges (SSE) Partner Exchange.

The SSE initiative now has participation from 47 stock exchanges across five continents, including four out of the top five largest exchanges in the world.

Addressing the stock exchange CEOs at a luncheon, economist Jeffrey Sachs, director of Columbia University’s Earth Institute, encouraged them to act boldly on climate, and congratulated them for work already accomplished.

“Capital markets will be the main driver of the transformation,” said Professor Sachs, “and we will be on the right track when stock markets say ‘shame on you,’ punishing those who continue to add stranded assets to their portfolios.”

Many other corporations are promising action and pressing governments to forge a strong global climate pact.

Citing droughts, temperature shifts and other impacts that will make apparel production “more difficult and costly,” the CEOs of seven top global apparel companies December 3 called on government leaders to reach a strong climate change agreement in Paris that will stop the growth of greenhouse gas emissions causing damaging global warming.

Top executives at Levi Strauss & Co., Gap Inc., VF Corporation, H&M, Eileen Fisher, Adidas Group and Burton Snowboards wrote, “We come together … to acknowledge that climate change is harming the world in which we operate. … Therefore, we call on you to reach a global agreement that provides the certainty businesses need and ambition climate science demands.”

Food company CEOs such as the heads of Coca-Cola, PepsiCo, the Hain Celestial Group Inc., General Mills, Unilever, Kellogg and Hershey’s announced in October that they signed a joint letter to U.S. and world leaders urging a robust international climate agreement in Paris.

The letter cites the growing impacts of drought, flooding and hotter growing conditions on the world’s food supply.

“Combating climate change is not simply about the environment. Promoting clean energy and conserving natural resources today will help create the thriving companies and societies of tomorrow,” said Indra Nooyi, PepsiCo chairman and CEO.

Muhtar Kent, chairman and CEO of The Coca-Cola Company, said, “As we face a resource-stressed world with growing global demands on food and water, we must seek solutions that drive mutual benefit for business, communities and nature. Companies who successfully balance social, environmental and economic values will be sustainably successful in the 21st century.”

Both the apparel and the food company statements were coordinated by Ceres, a Boston-based nonprofit mobilizing business leadership on global sustainability challenges.

Ceres President Mindy Lubber said, “Increasingly more companies, even long-standing competitors, are uniting at this pivotal moment to urge our political leaders to act swiftly and decisively on global warming.”

Ceres directs the Investor Network on Climate Risk, a network of more than 110 institutional investors with collective assets totaling more than $13 trillion.

Throughout the world, investors groups are paying close attention to the COP21 negotiations.

The Institutional Investors Group on Climate Change, based in London, says an agreement on temperature target of 1.5 degrees is “within reach.”

Big emitters, including China, the United States, Canada, and the European Union, have expressed support for the principle of a 1.5 degree Celsius global temperature target.

While this tightening of the 2 degree Celsius target is a key demand from vulnerable developing countries, small island nations and environmental groups, it is opposed by many big developing countries, which argue it would limit their ability to develop modern economies.

UN Secretary-General Ban, who has criss-crossed the globe tirelessly for years to bring about an effective climate agreement, said today, “Across the world, businesses and investors are standing up for a strong agreement in Paris that sends the right market signals. They are asking for a clear message that the transition to cleaner, low emissions energy sources is necessary, inevitable, irreversible and beneficial.”


Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Featured image: Human Energy à la Tour Eiffel à Paris by Yann Caradec (Photo courtesy Flickr)
Header image: UN Secretary-General Ban Ki-moon, left, and U.S. Secretary of State John Kerry open the Caring for Climate Business Forum, Paris, France, December 8, 2015 (Photo courtesy United Nations)
Image 01: Global capital market leaders gather in Paris to support UN climate talks. The stock market CEOs began their meeting with a special opening bell ceremony December 7 at Euronext Paris dedicated to the success of COP21. (Photo courtesy UN Environment Programme)

Climate Crisis! Energy Efficiency to the Rescue

PARIS, France, November 30, 2015 (Maximpact News) – “Mobilising energy efficiency is an urgent priority,” says Fatih Birol, executive director of the International Energy Agency (IEA).

“To transition to the sustainable energy system of the future, we need to decouple economic growth from greenhouse gas emissions. Energy efficiency is the most important “arrow in the quiver” to achieve this,” writes the Turkish economist and energy expert in the IEA’s new Market Report.

Encouragingly, the IEA report estimates that 40 percent of the emissions reductions required by 2050 to limit the global temperature increase to the world’s agreed target of less than 2 degrees Celsius above pre-industrial levels could potentially come from energy efficiency.

“energy efficiency is poised to be a key component of global inclusive growth along the transition to a sustainable energy system.”

The IEA’s 2015 Energy Efficiency Market Report shows how businesses, households and policy-makers generate the investments that drive the energy efficiency market and how this market impacts the world’s energy system.

As negotiations to achieve a universal climate protection agreement open today in Paris, Birol says “energy efficiency is poised to be a key component of global inclusive growth along the transition to a sustainable energy system.”

Energy efficiency is a way of managing and restraining the growth in energy consumption. Something is more energy efficient if it delivers more services for the same energy input, or the same services for less energy input.

For example, when a compact florescent light (CFL) bulb uses one-third to one-fifth less energy than an incandescent bulb to produce the same amount of light, the CFL is considered to be more energy efficient.

The International Energy Agency is pursuing many strategies to improve energy efficiency both among its 29 member governments and with partner countries.

Per capita energy consumption in the IEA countries has dropped to levels not seen since the 1980s, yet income per capita has never been higher, according to the Market Report.

“The ongoing, steady improvement in energy efficiency over the past four decades has been one of the most pronounced and significant changes to the global energy system, yet its impacts go largely unnoticed,” writes Birol in his Foreword to the report.

“Per capita energy consumption in IEA countries has dropped to levels not seen since the 1980’s yet income per capita is at its highest level and access to energy services is continually expanding. This is why energy efficiency is so important. It is improving prosperity with a domestic, clean ‘source’ of energy,” he writes.

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The IEA Market Report states that energy efficiency investments over the last 25 years are the primary reason for this uncoupling of energy consumption from economic growth.

These investments have enabled consumers in IEA countries to spend US$5.7 trillion less on energy, while at the same time receiving higher levels of energy service.

The returns from energy efficiency investments have not been limited to financial gains. The report examines the strategic returns to consumers, industries, utilities and governments from improvements in energy productivity and energy security as well as reductions in greenhouse gas emissions.

In 2014, the estimate of avoided total final consumption (TFC) from energy efficiency investments increased to over 520 million tonnes of oil equivalent (Mtoe).

The IEA reports that “the energy efficiency market is anticipated to grow in the medium term – even in the current context of lower oil prices,” if this market is supported by policies that deliver “strategic returns.”

Energy Efficiency Market Report 2015 highlights

  • The energy intensity of countries belonging to the Organisation for Economic Co-operation and Development (OECD) improved by 2.3 percent in 2014. OECD energy consumption is now as low as it was in 2000, while GDP has expanded by US$8.5 trillion, an increase of 26 percent.

“This suggests that these countries have successfully decoupled economic growth from energy consumption growth, with energy efficiency being the main contributing factor,” the report states.

  • Energy security in IEA countries is improving with increased energy efficiency. In 2014 alone, at least 190 Mtoe of primary energy imports were avoided in IEA countries, saving US$80 billion in import bills.
  • Energy efficiency improvements in IEA countries since 1990 have avoided a cumulative 10.2 billion tonnes of carbon dioxide (CO2) emissions, helping to make the 2 degree warming goal more achievable.
  • Investments worldwide in energy efficiency in buildings, which account for more than 30 percent of global energy demand, are estimated to be US$90 billion (+/- 10 percent) and are set to expand.
  • Electricity consumption in IEA countries has flattened partly as a result of energy efficiency improvements. In the face of flat electricity demand, many electricity utilities are diversifying into energy efficiency services businesses to increase profits.

National governments are increasing their energy efficiency.

For instance, in March, President Barack Obama issued an Executive Order setting new targets for the U.S. Government to cut greenhouse gas emissions by at least 40 percent from 2008 levels by 2025.

U.S. federal agencies have developed strategies to cut their emissions by reducing energy use in their buildings, making their vehicles more efficient, using clean energy sources like wind and solar, and employing energy savings performance contracts.

In the European Union, the 2012 Energy Efficiency Directive establishes a set of binding measures to help the EU reach its 20 percent energy efficiency target by 2020. Under the Directive, all EU countries are required to use energy more efficiently at all stages of the energy chain from its production to its final consumption.

EU countries were required to transpose the Directive’s provisions into their national laws by June 5, 2014.

New national measures have to ensure major energy savings for consumers and industry alike. Energy distributors or retail energy sales companies have to achieve 1.5 percent energy savings per year through the implementation of energy efficiency measures. Large companies must audit their energy consumption to help them identify ways to reduce it.

The IEA reports that subnational governments such as cities and states are emerging as key actors in the efficiency market. The agency gives four examples:

In Paris, France actions taken by the city since 2008 under the Paris Climate and Energy Action Plan have resulted in the saving of about 130 gigawatt hours of power. The Plan stimulated investment of €640 million, creating 1,300 local jobs and 420 jobs elsewhere, according to the IEA report.

The U.S. state of Massachusetts invested US$680 million in energy efficiency programmes in 2013. The state estimates that its main efficiency programme, Mass Save, generated US$2.8 billion in benefits in 2013 through almost 3.3 million programme participants. This supported a state-level energy efficiency labor market of over 65,000 jobs.

Seoul, Korea’s “One Less Nuclear Power Plant” plan reduced municipal energy consumption by 2 Mtoe between 2012 and 2014. The plan promoted energy efficiency as a means to avoid the same volume of energy as could be supplied by a new nuclear plant. Energy efficiency efforts have leveraged over US$1 billion in private energy efficiency investment since 2008.

Tokyo, Japan has implemented transport policies that added 4.9 billion passenger-kilometres while reducing transport energy consumption by 35 percent. Investments in energy efficient public transport in tandem with dense residential and commercial developments have allowed the city to achieve some of the lowest energy intensities of buildings and transport in the OECD.

Developing countries too are making energy efficiency efforts. As fast-developing countries such as China and India grow, “their energy efficiency markets may have the most promise and greatest importance” for limiting climate change, finds the report.

“As this report describes, the breadth, scale and effect of the energy efficiency market is sizable but it is still only a start,” writes Birol. “We need more more investment, but also more political will and leadership at all levels to grow this market.”

“The potential is there, the benefits are ready to be realised, and the imperative to act is clear,” he writes. “Energy efficiency is poised to be a key component of global inclusive growth along the transition to a sustainable energy system.”

International Energy Agency Member countries: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Korea, Luxembourg, The Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States


Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Featured image: Compact fluorescent bulbs come in many colors (Photo by AZ Adam under creative commons license via flickr)

Slide images: A. ThermoLift, recipient of a grant from the U.S. Energy Department’s Buildings Technology Office, uses thermal energy from natural gas to heat and cool efficiently, reducing energy costs by up to 50 percent. (Photo by Matty Greene / U.S. Department of Energy) B. At the 2015 IEA Ministerial meeting Chair U.S. Energy Secretary Ernest Moniz picks out the next speaker, with IEA Executive Director Fatih Birol and Deputy Executive Director Paul Simons to his left and US Department of Energy Assistant Secretary for the Office of International Affairs Jonathan Elkind to his right.

Image 01: IEA Executive Director Fatih Birol with Prime Minister Shinzo Abe of Japan during their meeting in Tokyo, September 15, 2015. (Photo courtesy IEA via Flickr)

Green Grow the Climate Awareness Bonds

By Sunny Lewis

LUXEMBOURG, October 29, 2015 (Maximpact News) – The European Investment Bank is the first issuer to link its individual green bonds to the projects they finance for the sake of transparency and accountability ahead of the Paris climate talks.

As the planet warms, growing cities and developing countries need airports, roads, buildings, water systems and energy generation that can withstand rising temperatures and extreme weather.

Green bonds, called Climate Awareness Bonds or CABs, are a new and increasingly popular source of climate-friendly funding for these expensive projects.

Green bonds were created to increase funding by accessing the $80 trillion bond market and expanding the investor base for sustainable projects. They are dedicated exclusively to climate mitigation and adaption projects, and other environmentally beneficial activities.

The EU’s nonprofit long-term lending institution, the European Investment Bank (EIB), the world’s largest issuer of green bonds, has just announced that it is enhancing the transparency of its reporting on Green Bonds by showing bondholders precisely what their money does.

The bank is going this direction to be in step with the Paris Climate Summit set for November 30 through December 11. There, world leaders will sign a legally-binding universal agreement to limit global warming to 2 degrees Celsius above pre-industrial levels.

Bertrand de Mazières, director general of finance, European Investment Bank, said, “Ahead of the Paris climate conference, COP 21, EIB is supporting EU’s leadership in climate policy through innovation in the green bond market.”

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“Green bond issuance has grown substantially, and has the potential to contribute significantly to addressing the 2 degree Celsius target,” said de Mazières.

Transparency and accountability are key themes of the European Union’s position for the Paris climate conference, as adopted by the EU Council on September 18.

“The Paris Agreement must provide for a robust common rules-based regime, including transparency and accountability rules applicable to all Parties…” the EU Council declared.

In harmony with this declaration, earlier this month the EIB extended its transparency effort by reporting on the allocations of proceeds from individual CABs to individual projects, beginning with allocations made in the first half of 2015.

De Mazières explained why, saying, “Granular transparency on the allocation of the CAB-proceeds helps this process by bringing investors more precise insights and promoting best practice.”

The disclosure of the allocation of individual CAB-proceeds to individual projects establishes a direct link between the two.

EIB can deliver this level of information due to an upgrade of its internal procedures and IT-infrastructure following extensive due diligence in 2014 and 2015.

Today, the bank records CAB-eligible disbursements and allocates CAB-proceeds to them on a daily, first-in first-out basis.

This enables detailed monitoring and reporting of allocations, and helps to complete the set of information available to investors.

Eila Kreivi, EIB’s director and head of Capital Markets, said, “Investors are increasingly eager to receive clear information on the use of proceeds and the impact of eligible projects. EIB’s launch of detailed reporting in these areas this year has established an important reference.”

“Transparent management and reporting are essential to further grow the green bond market,” she said. “At the same time, one must be careful not to overload issuers with administrative hurdles. Striking the right balance will be a key challenge for the market.”

EIB’s first Climate Awareness Bond pioneered the green bond segment in 2007 and the EIB is the largest issuer of Green Bonds to date.

In September 2014, together with other multi-lateral development banks, the EIB committed to maintaining a developmental role to spur further sustainable growth of the green bond market.

In response to a recommendation in the Green Bond Principles “to help establish a model for impact reporting that others can adopt and/or adapt to their needs,” the African Development Bank, International Bank for Reconstruction and Development and the International Finance Corporation (IBRD) have joined EIB in a first harmonization proposal for bonds that fund renewable energy and energy efficiency projects. It is now being circulated for discussion.

Meanwhile, the EIB is popularizing its CABs across the world, entering the Canadian market for the first-time this week.

The Climate Change Support Team, working for United Nations Secretary General Ban Ki-moon has described green bonds as very attractive to institutional investors, with demand for green bonds much larger than the supply.

EIB’s issuance of €2.7 billion equivalent in Green Bonds this year to date has brought total CAB issuance to over €10 billion and confirms EIB’s position as the world’s largest issuer of Green Bonds.


Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Featured image: shutterstock – royalty-free stock images
Slide Show images: a) Gemasolar, a 15 MW solar power tower that uses molten salt for receiving and storing energy, is located in the city of Fuentes de Andalucia, Seville, Spain. (Photo by Markel Redondo/Greenpeace under creative commons license via Flickr). b) Wind turbines generate electricity at Europoort, an area of the Port of Rotterdam and the adjoining industrial area in The Netherlands.  (Photo by Frans de Wit under creative commons license via Flickr)
Image 01: Bertrand de Mazières, director general of finance, European Investment Bank (Photo by Crédit Agricole, sometimes called the Green Bank, a French network of cooperative and mutual banks)

China Plans World’s Largest Carbon Market to Curb Climate Change

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By Sunny Lewis

BEIJING, China, October 7, 2015 (Maximpact News) – Within two years China will open a national market-based cap-and-trade system to limit greenhouse gas emissions from some of its largest industrial sectors, President Xi Jinping announced late last month during his visit to the United States.

Carbon emission levels will be capped and companies will have to pay for the right to emit carbon dioxide, the most abundant climate-warming greenhouse gas.

China is the world’s top emitter of greenhouse gases, is the top oil importer after the United States and is struggling with a public health crisis caused by severe air pollution in its largest cities.

China’s new carbon emissions trading system will cover key industry sectors such as iron and steel, power generation, chemicals, building materials, paper-making and nonferrous metals.

The carbon market – similar to the European Union’s and also similar to two regional markets in the United States – is part of an effort to help China meet its climate targets and move toward energy supplies based on nuclear power plants and renewables.

President Xi said China will implement a “green dispatch” system to favor low-carbon sources in the electric grid.

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In a U.S.-China Joint Presidential Statement on Climate Change issued on September 25, the two nations describe a common vision for a new global climate agreement to be concluded in Paris this December. It is scheduled to take effect from 2020.

President Xi said, “We have decided to continue to work together to tackle global challenges and provide more public good for the international community. We, again, issued a joint announcement on climate change. We have agreed to expand bilateral practical cooperation, strengthen coordination in multilateral negotiation, and work together to push the Paris climate change conference to produce important progress.”

President Obama said, “When the world’s two largest economies, energy consumers and carbon emitters come together like this, then there’s no reason for other countries – whether developed or developing – to not do so as well. And so this is another major step towards the global agreement the world needs to reach in two months’ time.”

The Joint Statement builds on last November’s historic announcement by President Obama and President Xi of ambitious post-2020 climate targets.

In their Joint Statement, the two leaders expressed a concrete set of shared understandings for the Paris agreement. On mitigating the impact of climate change, they agreed on three elements of a package to strengthen the ambition of the Paris outcome.

First, they recognized that the emissions targets and policies that nations have put forward are crucial steps in a longer-range effort to transition to low-carbon economies. They agreed that those policies should ramp up over time in the direction of greater ambition.

Second, the two presidents underscored the importance of countries developing and making available mid-century strategies for the transition to low-carbon economies, mindful of the goal that world leaders agreed at the UN’s 2009 climate conference in Copenhagen to keep the global temperature rise below 2 degrees Celsius as compared to pre-industrial levels.

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Third, they emphasized the need for the low-carbon transformation of the global economy this century.

These announcements complement the recent finalization of the U.S. Clean Power Plan, which will reduce emissions in the U.S. power sector by 32 percent by 2030.

Both countries are developing new heavy-duty vehicle fuel efficiency standards, to be finalized in 2016 and implemented in 2019.

Both countries are also stepping up their work to phase down super-polluting hydrofluorocarbons (HFCs) used as refrigerants. Besides destroying the stratospheric ozone layer, HCFCs are greenhouse gases many times more powerful than carbon dioxide.

China’s government has been planning to implement a carbon trading market for years.

The cap-and-trade system will expand on seven regional pilot carbon trade programs that China began in 2011.

Rachel Kyte, World Bank Group Vice President and special envoy for climate change, has been working closely with China in providing technical support to the pilots.

“As China began to pilot through different ways of creating emissions trading systems or emissions reductions systems, we have, through what is called a partnership for market readiness, provided a mutual platform for techno-crafts from different economies in the world to share their experiences of introducing emissions trading systems so that we can all learn from each other,” she said in an interview with China’s state news agency Xinhua on September 30.

“An emissions trading system has existed in Europe for some time. Now we have an auction in California. We have pilots in China. We have a trading system in Korea. Some countries are putting carbon taxes in place,” Kyte said. “We provide a mutual technical platform to let these experiences be exchanged.”

“China is ready to learn from those pilots and move to a national system,” Kyte said, “This will immediately create the largest carbon market in the world. Other carbon markets in the world will want to link with China. This does put China in a leadership position in helping the global economy move to low-carbon growth.”

To ensure a successful carbon trading system, Kyte emphasized the importance of setting the right prices.

“The prices must be set in such a way that the prices reflect the ambition, that the emissions are reduced, that the poor people are treated fairly, that they are transparent and that they can be understood by the consumer,” she said.

China says it will set an absolute cap on its carbon dioxide emissions when its next five-year plan comes into force in 2016.


 

Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Featured image: China’s President Xi Jinping and U.S. President Barack Obama at the White House, September 25, 2015 (Photo by Huang Jingwen courtesy Xinhua)
Image 01:Chinese President Xi Jinping (L) and U.S. President Barack Obama meet with the press after their talks in Washington, DC, September 25, 2015. (Photo by Huang Jingwen courtesy Xinhua)
Image 02: This parabolic solar-thermal power plant is adjacent to a large-scale wind farms in China’s north central Shanxi Province. It came online in 2011. (Photo courtesy Shanxi International Electricity Group Co Ltd.)
Image 03: The Fangchenggang nuclear power plant is under construction in China’s Guangxi Province. Operated by China General Nuclear Power Group Co Ltd., it is expected to come online in 2016. (Photo courtesy China General Nuclear Power Group Co Ltd.)

Biggest Banks Back Strong Global Climate Deal

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Image: Bank of America Tower in the fog, New York City, May 2014 (Photo by David Phan creative commons license via Flickr)

 

By Sunny Lewis

NEW YORK, New York, October 2, 2015 (Maximpact News) – Six of the largest U.S. banks have called for a strong, legally-binding universal climate agreement to emerge from the United Nations Paris climate conference in December.

The big six – Bank of America, Citi, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo – said in a joint statement released Monday, “While we may compete in the marketplace, we are aligned on the importance of policies to address the climate challenge.”

“Over the next 15 years, an estimated $90 trillion will need to be invested in urban infrastructure and energy,” the banks stated. “The right policy frameworks can help unlock the incremental public and private capital needed to ensure this infrastructure is sustainable and resilient.”

Matt Arnold, managing director and head of social and sustainable finance at JPMorgan Chase, said, “Significant investments in urban infrastructure and energy will need to be made over the next two decades.”

“Governments need to take the lead in sending clear and timely policy signals to ensure these investments support and enhance sustainable economic growth and development, which includes addressing climate change,” said Arnold.

From November 30 to December 11, France will be hosting and presiding over the 21st Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21).

COP21 will be a crucial conference. There, world leaders are expected to achieve a new international agreement on the climate, applicable to all countries, with the aim of keeping the increase in global warming below 2°Celsius as compared to pre-industrial times.

“We call for leadership and cooperation among governments for commitments leading to a strong global climate agreement,” the American banks stated jointly. “Policy frameworks that recognize the costs of carbon are among many important instruments needed to provide greater market certainty, accelerate investment, drive innovation in low carbon energy, and create jobs.”

“Morgan Stanley believes that the capital markets can and must play a positive role scaling solutions to global challenges,” said Audrey Choi, managing director and CEO of the Morgan Stanley Institute for Sustainable Investing.

“The demand for financial tools that address climate change is strong and growing,” said Choi, “and we are committed to continued leadership across a range of climate-focused capital markets activity, including financing for clean-tech and renewable energy businesses, underwriting green bonds, and ensuring our wealth management clients have options to align their portfolios with their environmental goals.”

As the bank executives offered their views of a universal climate agreement to be signed in Paris and take effect in 2020, the word “opportunities” arose repeatedly.

“Climate change presents enormous challenges for global business, but addressing it also offers tremendous opportunities,” said Alex Liftman, global environmental executive at Bank of America.

Valerie Smith, director of Corporate Sustainability at Citi, said, “We are increasingly working with our clients across various sectors to not only manage and mitigate risks but also recognize opportunities associated with addressing climate change.”

“Businesses across the spectrum are evaluating the risks and opportunities associated with a changing climate – and taking action,” said Mary Wenzel, head of Environmental Affairs at Wells Fargo.

The banks said they are committing “significant resources” toward financing climate solutions but that these resources are not sufficient to meet global climate challenges.

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Image: Susan Crowley of Multilateral Consulting LLC, left, and Kyung-Ah Park of Goldman Sachs (Photo courtesy United Nations Association creative commons license via Flickr)

Kyung-Ah Park, head of the Environmental Markets division at Goldman Sachs, said, “One of the critical roles financial institutions play in helping to address climate change is to harness market mechanisms to mobilize much needed capital to facilitate the transition to a low carbon future and build greater physical resiliency. Governments can help markets by establishing a clear, stable policy framework that creates value for these investments and facilitates innovation.”

Across the Atlantic Ocean, the European Bank for Reconstruction and Development (EBRD) is scaling up its contribution to the global fight against climate change with an increase in green financing over the next five years.

Endorsed by the EBRD’s Board of Directors September 30, the bank’s new Green Economy Transition approach aims for green financing to total some €18 billion over the next five years. So, the EBRD would deliver as much green financing in the next five years as it has in the last ten.

The EBRD aims to increase its green financing to around 40 percent of total annual investments by 2020 compared with a target share of 25 percent over the previous five years.

EBRD President Sir Suma Chakrabarti said, “The international community has a unique chance this year to deliver a decisive set of measures to combat climate change. With its long experience as a leader in climate finance, the EBRD is making an important contribution to this collective stand through its Green Economy Transition approach.”

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Image: Sir Suma Chakrabarti, president of the European Bank for Reconstruction and Development in London, September 2013 (Photo courtesy Foreign and Commonwealth Office creative commons license via Flickr)

Across the Pacific Ocean, Asian Development Bank (ADB) President Takehiko Nakao announced September 25 that his bank will double its annual climate financing to US$6 billion by 2020, up from the current $3 billion. Nakao said ADB’s spending on tackling climate change will rise to around 30 percent of its overall financing by the end of this decade.

Featured Image: City lights of the United States, December 2012. Keeping the lights on while limiting greenhouse gases emitted by burning fossil fuels to produce electricity is the climate challenge. (Photo courtesy NASA Goddard Flight Center creative commons license via Flickr)

Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.