Katowice’s compromise rulebook criticised for ‘gaping holes’; WBCSD highlights progress by private sector on climate issues; and investor coalition urges governments to phase out fossil fuel subsidies in Oliver Balch’s sustainability roundup
LIFE IN Katowice is slowly getting back to normal after a frenzied December, when close to 25,000 delegates descended on the Polish city for the United Nations’ annual climate policy jamboree. The driving ambition of the two-week event, known as COP 24, was to decide on the nitty-gritty of getting the 2015 Paris Agreement implemented.
After a one-day extension, as delegates to the United Nations Framework Convention on Climate Change (UNFCCC) squabbled over carbon credit markets, a compromise agreement was struck by the 196 participating countries. The terms for implementation can be found in a 144-page document referred to as the Paris rulebook or, more simply, as the rulebook.
Every delegate was cognisant of the findings of the Independent Panel on Climate Change (IPCC) special report published back in October, which pointed the finger squarely at human activities for increasing global temperatures by between 0.8°C to 1.2°C when compared with pre-industrial levels.
The UNFCCC warned that achieving this target would require “rapid and far-reaching” transformation in energy, land, urban and infrastructure, and industrial systems, something that the global governance body admitted even prior to COP24 was “unprecedented in terms of scale”.
Most commentators acknowledged that the rulebook was better than no rulebook, but even the most upbeat optimist struggled to define the final agreement signed in Katowice as conforming to either of the UNFCCC’s descriptors. Environment group Friends of the Earth said the meeting ended with “weak action” and a rulebook that had “gaping holes … for meeting climate targets”.
Greenpeace criticised the rulebook for giving “no clear promise of enhanced climate action”, although it did welcome the accord’s explicit “support for multilateralism”. This last point provided the World Business Council for Sustainable Development (WBCSD) with a crumb of comfort. WBCSD’s Karl Vella singled out the Talanoa Call For Action as reflecting “positively on the strength of the multilateral governmental process” when it comes to climate change. The initiative, which was adopted during the second week of the UN climate summit, calls on nation states to work with “all societal actors” outside government. It explicitly cites business leaders as potential “agents of change”.
Private sector on parade
“THE SCIENCE is clear: If we don’t act now, the world will surpass 3°C as early as 2100, with devastating consequences.” So warned the World Business Council for Sustainable Development (WBCSD) in the opening paragraph of a frank report released on the eve of the COP 24 meeting. The business-led group used the publication to highlight progress by the private sector on climate issues and to call on policymakers to follow suit. It drew particular attention to the We Mean Business Coalition’s Take Action platform, which has seen more than 800 corporations make commitments to address climate change since the Paris Agreement in 2015.
These signatories collectively represent $16.9trn in market capital. Among the other positive developments flagged up in the 42-page report is the Natural Climate Solutions programme. Comprising 16 companies, the initiative seeks to mobilise investment in natural carbon sinks. If implemented today, these solutions could capture 37% of the emissions reductions needed for achieving the Paris Agreement, according to WBCSD.
One area where tangible action is already in evidence is around corporate renewable power purchase agreements (PPAs). Around 50 WBCSD members in Argentina, India, Brazil and the European Union have signed such agreements under the REscale programme. The average annual volume of renewable energy contracted under PPAs stood at 8.7 gigawatts (GW), roughly equivalent to the electricity demand of Portugal. More than one quarter (26.5%) of all electricity generated now comes from renewable sources (up from 21.7% in 2012). According to the IPCC, however, between 70-85% of electricity generation needs to come from renewable sources by 2050 if climate targets set under the Paris Agreement are to be met. Despite evidence of progress, the WBCSD is realistic about the challenges ahead. It notes, for example, that 2015-2017 were the hottest years on record and that 22.5 million people have been displaced by climate change over the last decade.
The two-week climate summit in Katowice saw the launch of a spate of other reports, including an assessment by the C40 Cities initiative about what the Paris Agreement target of 1.5°C means for the world’s metropolises and those in charge of planning them. Although the authors admit that “time is running short”, they highlight urban mitigation options ranging from solar photovoltaics associated with battery storage through to ecosystem restoration. According to C40, the world’s largest 80 cities are home to over 550 million people and generate one quarter of global economic activity. A related report came from RegionsAdapt, an initiative of the Network of Regional Governments for Sustainable Development (nrg4SD). Its 2018 Brief Report highlights 260 actions that 38 regional governments from 16 countries have recently taken to adapt to real and pending climate risks.
Using data from the CDP’s states and regions platform, the report finds that extreme rainfall events are the most common climate-related risks identified by regional governments (71% define it as a risk). Other top concerns include more frequent and/or intense heatwaves (54%) and more frequent and/or intense droughts and more hot days (both 51%). In total, the report references 185 physical risks, 69% of which are classified as serious and 17% as extremely serious.
Another interesting report focused on the role of investors in responding to the risks of climate change. The energy sector alone needs an estimated $3.5trn per year in investments between now and 2050 to rein in global temperature rises, the International Renewable Energy Agency calculates. By way of comparison, investors stumped up a mere $1.8bn in 2015. This new report – produced by scholars at the Grantham Research Institute on Climate Change and the Environment, and the Harvard Kennedy School’s Initiative for Responsible Investment – sets out the rationale for investor action. Their arguments cover issues such as systemic risk, fiduciary duty, material value drivers, and alignment with the Paris Agreement. The report’s findings are backed up by more than 100 investment firms, which control assets under management worth over $5trn. The report’s partners include the UN-backed initiative, Principles for Responsible Investment.
Investors push for carbon pricing
INTERNATIONAL CLIMATE summits have become popular platforms for corporations to announce new initiatives. One of the most significant at Katowice came from the Investor Agenda coalition. Representing 415 investors with over $32trn in assets-under-management, the coalition called on governments to phase out thermal coal power and fossil fuel subsidies. In a two-page statement, the investors in the alliance also gave a strong public endorsement of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures.
The measures form part of a more general call by the global investor group to accelerate the transition to a low-carbon economy, the full details of which appear in a longer briefing paper. The paper also includes a plea for legislators to promote more effective carbon pricing policies. The document’s signatories note that nearly three-quarters of emissions covered by carbon pricing are priced at less than $10 per tonnes of carbon dioxide equivalent (tCO2e). Citing the CDP’s Carbon Pricing Corridors initiative, the 415 investors argue that the figure needs to reach between $38-$100/tCO2e by 2035 if the temperature goal of the Paris Agreement is to be met.
In another move, five global banks committed to quantify the climate alignment of their lending portfolios. As part of the public commitment, ING, BBVA, Société Générale, Standard Chartered and BNP Paribas also pledged to steer their core lending towards the goals of the Paris Agreement (as per Article 2.1c). The coalition says it will develop open-source methods to support such investment alignment. Global Climate Action (known as NAZCA) provides an inspiration for such an open-source approach.
Representing “non-Party stakeholders” in the UN climate process (ie businesses and civil society organisations), NAZCA runs a web portal charting nearly 20,000 climate actions by over 12,000 stakeholders. Of these actions, 2,431 are by businesses. The highest proportion of these occurred, or are occurring, in the US (530), followed by Japan (241) and the UK (215). The site includes an interactive map that was updated in time for the Katowice summit so as to allow users to differentiate actions according to their target date (pre-2020, post-2020 or no target).
Other headline pledges at COP24 include: shipping firm Maersk said it would become net carbon zero by 2050; a coalition of global fashion brands (including adidas, Gap Inc, Hugo Boss, H&M, Levi Strauss and Puma) committed to reduce their aggregate greenhouse gas emissions by 30% by 2030; five large companies (BT Group, E.ON, Schenker AG, Ontario Power Generation and Genesis Energy) pledged to electrify their fleets by 2030 as part of The Climate Group’s EV100 initiative; and US conglomerate 3M added a Sustainable Value Commitment (relating to features such as reusability, recyclability and water savings) to all its new products as of the beginning of this year.
Cheatsheet Katowice Cop 24 Carbon Pricing Paris Rulebook IPCC Investor Agenda We Mean Business C40