Energy

The challenge at hand is to reduce the wrong incentives

The last few days at COP16 have, in a low-key way, accomplished more than I have seen at the COP meeting for some time (and I have been attending them for over a decade now).

For example, there have been a series of business-led discussions and proposals on how to develop energy-efficiency master plans at all levels—company, municipality and country. An exciting aspect has been the presence of so many innovative industry partners and governments that have not only developed, but started practicing important renewable energy and energy-efficiency solutions. UN Secretary General Ban Ki-Moon in an electric vehicle. photo by IISD

I had the pleasure of moderating a stimulating event that the World Economic Forum hosted Monday that really got into the nuts and bolts of energy efficiency. This event included small NGO representatives, the venture capital community, Fortune 500 technology companies, utility CEOs from developing nations, and Energy and Environment Ministers from four nations. There have been fruitful discussions on specific mechanisms—from feed-in tariffs, community aggregation of clean energy purchase plans, to very large-scale government procurement of clean energy services.

Today was an exciting day in Cancun. For me, it marked a break from the rhetoric of negotiations to focus on the reality of action on the ground to combat climate change. This morning’s weather was picture perfect as the World Bank’s President, Bob Zoellick arrived at the Press Conference Centre in the Moon Palace to voice the Bank’s support for the concrete actions of the Alliance of Small Island States (AOSIS).

AOSIS consists of 43 island and low-lying countries that encircle the tropical belt around the globe. Given the very real threat posed by climate change, they have been attending international meetings on climate change for the last 20 years and are frustrated at the pace of progress and the lack of ambition. They are here in Cancun to fight for their survival and to call upon their partners and the international community to be ambitious. In the negotiating text, they want to see reference to 1.5 degrees, “loss and damage” and a legal form to the agreement. After 20 years of talks, AOSIS is going beyond negotiations and embarking upon concrete actions to lead by example: They are intent on entering an era of renewable energy and energy efficiency—hence today’s press conference.

Amidst a blaze of flashing cameras, a Memorandum of Understanding (MOU) was signed by the Prime Minister of Grenada in his capacity as chair of AOSIS, Dr. Lykke Friis, the Danish Minister of Climate, Energy and Gender Equality, Helen Clark, Administrator of UNDP and the World Bank President Robert Zoellick. Simon Billett of UNDP who had been stellar in his efforts joined me on stage as we facilitated the signing. This MOU calls for the introduction of renewables and energy efficiency into these island states with an initial injection of US$14.5 million from the Danish Government as part of their Fast Start financing pledge.

Photo credit: J. Tamelander The delegates and observers at the COP16 in Cancun are getting an earful about Blue Carbon—shorthand for atmospheric carbon sequestered in the earth’s coastal and nearshore environments. Oceans Day at Cancun will feature a session on Blue Carbon, and briefs, and blogs by ocean advocates are circulating on the net and at side events. The reason for the buzz is that coastal wetlands, including tidal salt marshes, estuaries and river deltas, mangroves and sea grass beds are highly efficient at taking up CO₂ from the atmosphere and converting it into organic material—then storing it in the soil. In fact, the root systems and sediment layers which build up as this organic material is generated, broken down and deposited, are up to ten times more rich in carbon than the biomass above the surface.

This makes coastal wetlands even better at sequestering carbon than tropical forests. And, unlike their counterparts on land whose net growth peaks when the forest matures, wetland vegetation continues to grow and sequester carbon in the soil as long as sediments are deposited and the environment remains healthy. This is why Blue Carbon is being brought into the international dialogue on carbon emission offsets and the domain of REDD+ eligible activities. A statement, signed by 55 marine and environmental stakeholders from 19 countries has been presented to the COP for action.

Esta tarde llegué a Cancún. El sol brilla. El mar es azul. El hotel Moon Palace –sede de las negociaciones– es un hermoso centro vacacional con playa propia de un kilómetro de extensión y arena blanca. Se insta a evitar el uso de chaqueta y corbata y muchos delegados visten las tradicionales guayaberas mexicanas.

Los anfitriones han hecho un excelente trabajo de diplomacia y logística en la preparación de este evento. ¿Por qué parece, entonces, que los turistas lo están disfrutando más que los representantes de los países participantes?

Porque nadie sabe cuáles serán los resultados. Cada uno de los presentes cree que otra persona debería proponer algo más y algunos lo están expresando con mucho sentimiento. Se ha ido el entusiasmo por un posible acuerdo forjado en Copenhague el año pasado. No hay en el horizonte un jonrón, una clavada, ni un hoyo en uno a la vista. La analogía ahora pertenece al fútbol americano: se trata de hacer avanzar el balón con paciencia por el campo de juego con la esperanza de marcar un tanto el año próximo, el siguiente o dentro de cinco años. Sobre todo, no hay que dejar caer la pelota para no perder terreno rápidamente.

I just flew in to Cancun this afternoon. The sun’s shining. The sea is blue. The Moon Palace – the site of the negotiations – is a beautiful resort with its own one-kilometer white sandy beach. Jackets and ties are discouraged, and many delegates are wearing the traditional Mexican guayaberas.

The Mexican hosts have done an outstanding job –in diplomacy and logistics – in preparing for this event. So why do the tourists look like they’re having a better time than the delegates?

UNFCCC Executive Secretary Christiana Figueres speaking at the opening ceremony. Photo by IISD Because nobody knows how this will turn out. Everybody feels that somebody else should be putting more on the table, and some are expressing this with great emotion. The excitement of a possible deal last year in Copenhagen is gone. There is no home run, slam dunk or hole in one in the offing. The analogy is now from American Football: It’s about moving the ball patiently down the field with the hope of an eventual touchdown next year, the one after, or five years from now. Above all, don’t drop the ball, or we could lose ground fast.

But this cautious view short-changes what Cancun should achieve. The package of decisions that is being negotiated is highly consequential, and could significantly improve the prospects of a pro-poor climate-friendly future.

So, what would success look like at the end of this 12 day marathon? By the end of this meeting we could have the following:

1. Forests: The first globally agreed REDD+ partnership providing sufficient funding for investments, performance-based payments, and readiness for future carbon market inclusion – thus ensuring that forests are more valued alive than dead.

2. Adaptation: A framework for ensuring the fair and adequate allocation of resources for climate resilient growth, with special attention to the most vulnerable countries, and a process for ensuring lesson learning and technical assistance on this urgent agenda.

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.

This week marked another milestone in Bangladesh’s fight against climate change. Bangladesh with its long coastline and high poverty rates is among those countries most at risk from climate change. This week we got some good news on the climate front: Bangladesh was one of the three countries for which the Pilot Program on Climate Resilience (PPCR) was approved. The country will receive a total of US$50 million in grant and US$60 million in near zero-interest credits to pilot climate resilience strategies.

The PPCR was created to help highly vulnerable countries to pilot and demonstrate ways to integrate climate risk and resilience into core development planning. It is under the broader umbrella US$6.4 billion Climate Investment Funds (CIF), created in 2008 to finance climate resilience strategies. Today, it is one of just a handful of funds available for adaptation. The CIF’s partners—donor countries, funding recipients, and five multilateral development banks—were meeting in Washington this week.

Until now there has been a spotty history of funding for climate change adaptation. We’ve hardly seen anything of the pledges made in Copenhagen (US$100 billion annually in the long term and US$30 billion as a fast-start fund). Money for adaptation is not even a fraction of what is needed. In this context, PPCR funds provide something real and timely for countries like Bangladesh for which adaptation is key to meeting the Millennium Development Goals.

What do you get when you bring some 150 African mayors and city officials, urban researchers, and World Bank South African Country Director Ruth Kagia together to talk about climate change and African cities? In a word: Concern. All city officials and those who work with them are concerned about climate change.

Earlier this months, in partnership with France’s AFD and the Development Bank of South Africa, met to follow up the Fifth Urban Research Symposium held in Marseille last year (Cities and Climate Change: Responding to an Urgent Agenda). This local dissemination workshop held in South Africa focused on climate change in African cities. When you look at climate change through the lens of African cities, impacts appear closer, and more dire–climate variability is expected to be severe and the ability to respond often weak. With Africa’s current pace of urbanization, the number of people already living in informal communities, and the infrastructure backlog (e.g. the per capita installed electricity supply in Nigeria is less than 1% of the average OECD country), all participants agreed that climate change will only add to the problems and that an urgent response is needed.

For those of us who analyze the energy sector, the publication of the International Energy Agency’s (IEA) Annual Energy Outlook is a much anticipated event. It is the gold standard for the assessment and forecasting of the world energy system, albeit from the perspective of the High-Income OECD countries. For the past two years it has focused on the energy policies needed to curb climate change. This year I find its message very alarming.

In its 2009 Energy Outlook, the IEA developed a scenario that shows how the world’s energy system could evolve to the year 2035 so as to keep carbon dioxide (CO₂)concentrations from exceeding 450 parts per million CO₂ (equivalent). This is the plateau level consistent with an increase in global temperatures of at most 2⁰C. Last year this novel analysis showed that such a “450 Scenario” would require a massive shift in energy policies and investments. It gave me pause for thought. A year later, as the IEA develops its assessment, I am very worried.

Between the lines of its careful appraisal of the global energy situation, the IEA all but says that achieving the changes needed to hold global average temperature to a 2⁰ C increase is almost impossible in the current global context. The IEA states that such a goal is still not “completely out of reach.” But, in a sentence that should be chilling to anyone familiar with the inflexibility of the world’s energy system, the IEA says: “the speed of the energy transformation that would need to occur after 2020 is such as to raise serious misgivings about the practical achievability of cutting emissions sufficiently to meet the 2⁰C goal.” In other words, unless global energy policies and investments undergo a huge and unprecedented change over the next few years, our energy system may be too far gone to allow us to curb climate change to levels that are generally agreed to be manageable.

What would support for climate change adaptation look like if it were designed to meet the needs of those most vulnerable to the effects of climate change?

It might, for example, offer guaranteed wage employment to the rural poor in India or Ethiopia, in return for their labor in creating check dams, and water-harvesting structures – precisely the kinds of public works that can also help to increase landscape-wide resilience to climate change, improve the livelihoods of those dependent on rainfed agriculture, and even contribute to retaining soil carbon. Or it might provide a social protection floor for nomadic herders in Mongolia for when livestock losses during periodic bouts of harsh winter/spring weather conditions known as dzud exceed the level that can be covered under a commercial livestock insurance program.

Last Tuesday Andrew Steer blogged from the opening of the “Down2Earth”conference in The Hague, where he held out to 1000 participants from 100 countries the tantalizing yet fully achievable promise of a ‘golden triple win’ on agriculture, food security and climate change.

Just before the closing plenary session in The Hague, I chaired a side event hosted by the World Food Programme on the role of social protection and safety nets in helping to foster both food security and pro-poor adaptation to climate change. We heard about the above examples from Ethiopia, India and Mongolia, among others, and came away convinced that while there are promising programs already under way, there is much more to be done to scale up such approaches in practice, perhaps through harnessing new sources of climate finance.

Energy

The challenge at hand is to reduce the wrong incentives

Small islands show the way on clean energy

The buzz around blue carbon

¿En qué consistiría el éxito de Cancún?

What would success look like in Cancun?

Billions without power can now think low-carbon

Bangladesh, a beneficiary of adaptation funding

African cities: Moving beyond concern

Time is running out on climate change, says a new report

Adaptation through the eyes of the most vulnerable

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