It's been two months now since the historic climate change conference, COP21, wrapped up in Paris, concluding with 195 countries pledging to take actions to keep global warming to under 2 degrees Celsius. This is an unprecedented achievement in the long history of international climate policy.
Compared to past negotiations, there was a different atmosphere in Paris. The negotiators were determined to find common ground rather than draw insurmountable lines in the sand. Investors lined up with billions of dollars in new financial commitments in addition to the suggested roadmap for developed nations to contribute to the needed $100 billion annually for mitigation and adaptation efforts.
And the private sector was more active and visible than ever before: CEOs from industries as far ranging as cement, transportation, energy, and consumer goods manufacturers announced their own climate commitments in Paris to decrease their carbon footprints, adopt renewable energy, and improve natural resource management.
This enthusiasm was especially apparent during the CEO panel that IFC, the organization I represent, convened during the Caring for Climate Business Forum by UN Global Compact. CEOs from client companies in India, Turkey, Thailand, and South Africa discussed their innovative climate change initiatives, investments, and technologies, and the challenges of scaling up their climate business.
low carbon growth
I have some good news to share on the energy front from the experience of two tiny communities of 1,100 people on Nicaragua’s Atlantic coast. Results of a study published November 26 in Science Magazine demonstrate that low-carbon rural energy services can be delivered at cost savings in cases where communities utilize isolated, diesel-powered, electricity grids.
The rural Nicaraguan communities of Orinoco and Marshall Point were dependent on the diesel micro-grid for their electricity. In 2009, they partnered with the national government and an NGO to implement energy efficiency measures including metering, prompting residents to reduce wasteful use of electricity. Compact fluorescent light bulbs were also introduced, as well as more efficient outdoor lighting, and replacement of part of the diesel power with biogas from dung.
After the government installed meters, energy use dropped by 28%, and people’s electric bills dropped proportionately. The NGO, blueEnergy, based in San Francisco, which offered the compact fluorescent light bulbs (CFL), was able to cut household energy use by another 17%. The net result was reduced burning of diesel, even though the community’s reduced energy needs allowed the local energy supplier to run its generators two extra hours each day, providing longer service to customers. In the month after the conservation campaign, energy costs per household had dropped by 37 %.
These conclusions emerged from calculations based on a marginal abatement cost curve, or MAC, an analytical tool developed in 2008 by McKinsey & Company. The same tool was used by a team of experts headed by the World Bank, studying Mexico’s climate challenges.