G20 2017 Climate and Energy Action Plan

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Among the many topics discussed at this year’s G20 Summit, was climate and energy. The summit culminated in the issue of a joint declaration summarising the agreements reached and the plans adopted by the G20 leaders. With respect to climate and energy, the declaration was decidedly split between the “G19” and the US, acknowledging the US’ desire to pull out of the Paris Agreement and its continued support for the use of fossil fuels, albeit “more cleanly and efficiently”.

As part of the summit, the G20 leaders also adopted the G20 Hamburg Climate and Energy Action Plan for Growth. The Action Plan  identifies six key areas of development, which include developing strategies for long-term low greenhouse gas emissions; creating a reliable and secure framework for the transition of the energy sector, which involves the promotion of energy efficiency and the scaling up of renewable and other sustainable sources of energy; realising access to modern and sustainable energy services for all; and aligning finance flows.

Although only the last-mentioned area of development specifically refers to finance, a recurring theme throughout the whole Action Plan is the need to secure more private and public investment. And this seems to be one of the biggest hurdles to meeting the Paris Agreement targets and to transitioning to clean energy.

The Action Plan identifies that significant levels of investment, both private and public, will be required to modernise infrastructure in line with the Action Plan’s goals and to continue the scaling up of renewable and sustainable energy. In addition to achieving climate and energy goals, such investment is likely to also generate local growth, employment and help with poverty eradication. Addressing several Sustainable Development Goals at the same time!

The Action Plan specifically notes the role played to date by Multilateral Development Banks (MDBs) in mobilising “climate finance” and calls on them to further enhance their involvement. In 2015, the following MDBs, the African Development Bank, the Asian Development Bank, the European Bank of Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank and the World Bank Group, issued a joint statement at COP21 committing to work together to “substantially increase climate investments from public and private sectors to support”. This existing commitment is applauded but the Action Plan further encourages the MDBs to cooperate and coordinate efforts to finance ambitious energy and climate adaptation and mitigation projects and new technologies, and to identify how the private finance sector can assist with meeting the 2030 Agenda objectives and the Paris Agreement goals.

The investment question has also be considered in detail in the UN Green Finance Report published on 14 July 2017 by the UN Environment Programme (UNEP). The report identifies that the G20 in particular has made significant progress in mobilising private and public capital for climate and clean energy developments and initiatives. An example, is the recent joint commitment by eleven global banks to develop tools for assessing climate-related financial risks and opportunities; and to make more disclosures in relation to climate investments, making the sector more transparent. The banks are ANZ, Barclays, Bradesco, Citi, Itaú, National Australia Bank, Royal Bank of Canada, Santander, Standard Chartered, TD Bank Group, and UBS.

Commenting on the new Green Finance Report, the Executive Director of UNEP, Erik Solheim said: “This new research […] shows encouraging progress in this regard. From a record number of new green finance measures to ambitious plans for green finance hubs, we are seeing the smart money move to green financing.” He further added: “The challenge now is to rapidly increase capital flows to investments that will support our sustainable development objectives and create commercially viable green businesses for decades to come.”

The challenge has been set and the rewards are great economically, environmentally and socially. So let’s hope the investment starts to flow in the right direction!

BF(O)G – big friendly oil & gas

oil-rig-2191711_1920I have always believed that a clean energy revolution can only be achieved with support and buy-in from the big oil and gas companies. It seems that many such companies are now starting to agree.

A few years ago, 10 major oil and gas companies, between them responsible for over 20% of world oil and gas production, came together to form the Oil and Gas Climate Initiative (OGCI), an “initiative which aims to show sector leadership in the response to climate change“. The ten companies are BP, Total, Statoil, CNPC, eni, Pemex, Reliance Industries, Saudi Aramco and Shell.

The initiative’s mission is to work together to achieve notable reductions in greenhouse gas emissions from the oil and gas industry, while still meeting world energy demand. At present, the OGCI is focussing its efforts on three working groups – Low Emissions Roadmap, Carbon Capture, Utilisation and Storage, and Managing Methane Emissions.

It has also prepared an interesting matrix which maps actions identified by the IEA as having the potential to reduce greenhouse gas emissions sufficiently by 2040 to remain on track for a 2°C scenario against the oil and gas industry’s ability to influence such actions. This matrix is reproduced below (source: OGCI):

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In November 2016, the companies behind the OGCI finally put their money where their mouth is and set up OGCI Climate Investments, a partnership with a committed US$1 billion of funding to be invested over the next decade in innovative technologies and start-ups which propose solutions to substantially reducing greenhouse gas emissions. The partnership will operate out of Imperial College London’s White City Campus, bringing it into direct contact with the Better Futures initiative recently launched by the Mayor of London (see my blog on this). OGCI Climate Investments appointed its first CEO, Dr. Pratima Rangarajan, in May 2017 which hopefully means that it will now come into full operational mode.

I hope that both the initiative and the investment partnership will actively push ahead with their stated aims and that we will begin to see the fruits of their labour in the not too distant future. I also hope that other oil and gas companies will join their cause.

 

 

Better Futures for London

panorama-947410_1920On 12 June, London Mayor Sadiq Khan, launched a £1.6m clean technology incubator at London’s Tech Week.

The incubator, known as “Better Futures“, aims to provide funding and other technical and business support to over 100 technology start-ups in London which focus on clean technology innovation, low-carbon solutions and combatting the problem of climate change. It is hoped that the incubator will spur on the creation of a clean technology hub in London.

The incubator is being funded by the European Regional Development Fund and is a collaboration between the Mayor of London, Imperial College London, Imperial College London Consultants, OPDC (Old Oak and Park Royal Development Corporation) and Sustainable Bridges C.I.C.

Indeed, as part of the incubator package, some qualifying start-ups will be given the opportunity to pursue their research at Imperial College’s Centre for Cleantech Innovation.

In addition to launching the Better Futures incubator, the London Mayor also announced his desire to transform London in the world’s leading smart city. According to a recent report by IESE Centre for Globalisation and Strategy, London is already Europe’s leading smart city, and is second only to New York in the global rankings. The Mayor was quoted as saying: “The potential for cutting-edge technology to tackle a host of social, economic and environmental challenges is immeasurable.  From air pollution and climate change to housing and transport, new technologies and data science will be at the heart of the long-term solutions to urban challenges.”

Initiatives such as the incubator and the drive to make London the world’s leading smart city are crucial at this time as London begins to find a role for itself in a new, post-Brexit role. More of the same, please, Mr Khan!

 

“We’ll always have Paris”…continued

IMG_2427aIn my original post about Trump’s withdrawal from the Paris Agreement, I discussed Michael Bloomberg’s efforts to replace the outgoing USA with a new signatory consisting of a coalition of American states, cities and companies. Positive steps have now been taken in this direction.

The coalition has issued an open letter entitled “We are still in“, pledging allegiance to the Paris Agreement. It now boasts over 1400 signatures.

During a G-7 environment meeting in Bologna, Italy earlier this week, Patricia Espinosa, executive secretary of the United Nations Framework Convention on Climate Change, announced that she will work towards enabling regions, cities and other sub-national players to join the Paris Agreement officially.  It is still unclear how this would work in practice, but the political will is there to ensure that even if America withdraws, the efforts and contributions being made by its states, cities and companies are not ignored.

In a bold move on 6 June, Hawaii passed legislation affirming its dedication to the Paris Agreement. It is the first state to officially confirm its position and hopefully, this will pave the way for other states to join.

The G-7 meeting concluded with the issue of a communique signed by all ministers, other than the US (whose representative only attended one session of the two day event). This communique reaffirmed international commitment to the Paris Agreement and also addressed other sustainability issues, including ocean pollution, energy efficiency and the need for increased funding to assist with reaching the sustainability goals.

 

“We’ll always have Paris”

IMG_2427a…So goes the iconic phrase from the end of Casablanca. However, on 1 June 2017, President Donald Trump announced the US’ withdrawal from the widely respected Paris Agreement on climate change. What implications could this have for the agreement’s success? Unlike Ilsa and Rick from Casablanca, could it be that we will not always have Paris?

The Paris Agreement, adopted on 12 December 2015 and, as of today, ratified by 147 out of 197 signatories, is a commitment towards a sustainable, low carbon future. Its key aims are to curb global warming to 2 degrees Celsius above pre-industrial levels and to equip countries to deal with the consequences of climate change.

According to President Trump, the agreement is at odds with his “America First” mantra as complying with its terms could result in an apparent loss of 2.7 million US jobs. However, President Trump’s decision, somewhat counter-intuitively, may have actually galvanised support for the Paris Agreement around the world and given it an even greater impetus.

In Europe: Immediately on the back of President Trump’s announcement, Italy, Germany and France issued a joint statement reiterating these countries’ commitment to the Paris Agreement, stating that “We deem the momentum generated in Paris in December 2015 irreversible and we firmly believe that the Paris Agreement cannot be renegotiated, since it is a vital instrument for our planet, societies and economies“.

In America: Tesla’s Elon Musk and Walt Disney’s Bob Iger have announced their intentions to resign from White House advisory councils. And even more impressively, Michael Bloomberg is now spearheading the creation of a coalition of thirty American cities, three American states, and over 100 American companies which pledges to uphold America’s obligations under the Paris Agreement and even attempt to replace it as a signatory, once America fully withdraws. The coalition is currently in negotiations with the UN to be accepted as a signatory entity. This blog will follow the developments of this coalition.

In China: China also made it clear at the recent EU-China summit in Brussels that it considered President Trump’s actions to be an error. Although the summit was expected to produce a formal statement of cooperation on climate change between the EU and China, disagreements over trade intervened. Nevertheless, China has proven that it has an appetite for renewable energy with US$102.9 billion worth of investments into renewable energy in 2015* (however, falling to US$78.3 billion in 2016*) and with its Longyangxia Dam Solar Park becoming the world’s largest solar farm earlier this year. Here’s hoping therefore, that a formal cooperation statement between the EU and China will be forthcoming in the not too distant future…let’s watch this space.

In conclusion: President Trump’s withdrawal from the Paris Agreement does inevitably deal a blow to its ambitions. However, signatories and stakeholders around the world do not seem phased by his actions and indeed seem to have used his stance as a uniting counter-point. So yes at this stage, I think it is fair to conclude that we will always have Paris and in the words of Emmanuel Macron, there is substantial international commitment to “make the planet great again“.