Schroders: Climate change matters: roundup of events in July

Paving the way for a global deal

The international negotiation machine is on, setting the foundations for the climate change conference in December. With a view to facilitating intergovernmental dialogue, the UN has designed a document that streamlines the negotiating text which will form the basis of a universal agreement. In the meantime, a French government document was released which said that a global deal is edging closer. The ministers of 60 countries met for an informal meeting in Paris in order sharpen the UN’s negotiation stance.  Although it is now unlikely that the final accord will be enough to slow global warming,  the commitment of countries to this negotiation process is strong evidence that governments do not want to reproduce the failure of the Copenhagen summit in 2009. The French paper acknowledged some uncertainties however, including the channelling of funds from rich countries to developing nations.

Update on Intended Nationally Determined Contributions (INDCs)

More country pledges to reduce carbon emissions were announced last month. At the time of writing (early August), 58.8% of global emissions are now covered by submitted INDCs. However, a number of significant emitters are yet to formally pledge including India, Brazil, South Africa, Indonesia and Australia.

China made its pledge on 30 June, committing to a peak in carbon dioxide emissions by 2030 with “best efforts” to peak earlier. The country also aims to source 20% of its energy from low-carbon sources by 2030 and to cut emissions per unit of GDP by 60-65% of 2005 levels by 2030. This represents a 2% annual decline from now until 2030. The Chinese submission is the first pledge from an Asian country and contained 15 broader policies, most of which already existed. These cover the long-term strategy for low-carbon development, controlling coal consumption, the build-out of nuclear and renewables capacity, getting strategic emerging industries to account for 15% of GDP by 2020, and the roll-out of a national carbon trading scheme.

Although criticised for not articulating the level at which emissions are expected to peak, the formal commitment of the world’s largest greenhouse gas emitter (responsible for nearly a quarter of such emissions) could increase the pressure on other nations to be part of the global deal.

Shortly after the Chinese announcement, South Korea submitted its own pledge to cut greenhouse gas emissions by 37% from 2030 business-as-usual (BAU) levels.  This was seen as a modest pledge, and not much more of a carbon reduction commitment compared to the country’s prior 2020 target.

Kenya and the Marshall Islands both submitted their INDCs in July. Kenya pledged a 30% greenhouse gas reduction from BAU by 2030 subject to international support in technology, finance, investment and capacity building. The Marshall Islands submitted a main target of 32% below 2010 levels by 2025 and an indicative target of 45% by 2030. The Islands face high risks from rising seas which explains why their plan will include climate-resilient public infrastructure.

New Zealand committed to a 30% reduction by 2030 on 2005 levels, which is equivalent to an 11% cut from 1990 levels. This is conditional upon confirmation of accounting rules in Paris that will allow it “unrestricted access” to global carbon markets, as well as a settlement on accounting rules for the forest and land sectors.
Finally, Singapore pledged a 36% reduction in emission intensity by 2030 compared to 2005 levels with emissions to peak “around 2030”.This is to be delivered through both renewable and energy efficiency efforts.

National policies

In Europe, July saw the UK government announce a budget that has been criticised for perceived inconsistencies with the previously articulated support for the global climate deal in December. The government announced the end of a series of subsidies and policies in favour of the low-carbon economy, arguing that decarbonisation should be achieved at low-cost through enterprise and competition. These measures could make it more challenging for the UK to meet its emission reduction targets.
In the US, the Environmental Protection Agency (EPA) – which requires states to draft plans to lower emissions from power plants - has announced it will allow an extra two years (until 2022) for states to start cutting carbon emissions from power plants under a final Clean Power Plan. It still calls for them to meet emission goals by January 2030, but extends the time they have to craft plans, requiring an initial state plan by September 2016 and a final state plan by September 2018. Some believe that this flexibility could strengthen support for Obama’s climate change policies.

A worst-case scenario study

The UK Foreign and Commonwealth Office recently released a report that assesses the likelihood of temperature rises of up to 10 degrees over the next few centuries.  According to the authors, climate risks should be approached in a similar way to national security or public health risks – by evaluating the likelihood of the worst case scenario.  The study found that increases in temperature of more than 4 degrees were as likely as not by the end of this century or into the next. It also projects that extreme events (e.g. fatal heat stress, serious crop failure, zero yield events) will become statistically more frequent as temperatures rise. With this in mind, the report emphasised the importance of adaptation to climate change.

New Climate Economy report

A new report from the Global Commission on the Economy and Climate listed ten actions to help countries achieve 96% of the emissions reductions that are needed by 2030 in order to limit temperature increases to less than 2 degrees, whilst providing economic benefits:
 
1) Accelerate low-carbon development in the world’s cities
2) Restore and protect agricultural and forest landscapes, and increase agricultural productivity
3) Invest at least US$1 trillion a year in clean energy
4) Raise energy efficiency standards to the global best
5) Implement effective carbon pricing
6) Ensure new infrastructure is climate-smart
7) Galvanise low-carbon innovation
8) Drive low-carbon growth through business and investor action
9) Raise ambition to reduce international aviation and maritime emissions
10) Phase out the use of hydrofluorocarbons
 
Hottest June on record

NASA has reported that June was the hottest on record, making it even more likely than 2015 will land up being the hottest year on record. El Nino is said to have been behind the hot temperatures and it is expected that this could be one of the strongest El Ninos in 50 years. July has already experienced its hottest day on record, and a group of international climate scientists (who are part of a programme led by Climate Central, a US-based science journalism organisation) have said it was “virtually certain” that climate change increased the likelihood of such heat waves in Europe.

The impact of climate change on marine life

A new study written by twenty marine scientists focused on the changes in marine life as a result of oceans heating up, losing oxygen and becoming increasingly acidic because of carbon dioxide.  According to the research, the ocean has absorbed 30% of the carbon dioxide that has been produced since 1750, making it more acidic. It has also acted as a buffer for the earth by absorbing over 90% of the additional heat created by society since 1970. However, the extra heat makes it harder for the ocean to hold oxygen.  This is having an effect on ocean ecosystems and organisms, with potentially dramatic negative consequences, as oceans provide us with food, energy, minerals and drugs, and half of the oxygen in the atmosphere.  The authors are hoping that their research can put oceans and their ecosystems back on the table at the UN climate change negotiations in December.