Those of us who have been working on climate change over the years have witnessed a number of encouraging announcements as a run-up to the Paris COP, where the global community is gathering to agree on collective action to reduce greenhouse gas emissions beyond 2020. The two largest emitters have announced action, with China agreeing for the first time to peak its GHG emissions by 2030 (using a number of tools such as emissions trading), and the United States agreeing to cut its emissions to 26-28% below 2005 levels by 2025. The World Bank’s State and Trends Report on Carbon Pricing announced that about 40 countries and 23 cities, states, or regions have put a price on carbon emissions—explicitly internalizing costs of damage to the environment. This means that about 7 billion tons of carbon dioxide, or 12 percent of global greenhouse gas emissions are covered by some type of carbon pricing scheme. And countries continue to submit pledges to reduce GHG emissions—through the Intended Nationally Determined Contributions—in advance of the Paris COP.
In the energy world, there is equal excitement about recent developments. Renewable energy prices have significantly fallen over the years, in particular for wind and solar. The International Energy Agency (IEA) announced earlier this month that renewable energy will be the largest source of new power generation capacity globally—700 GW in the next 5 years. The IEA does not expect that the fall of oil prices to affect the growth in renewable energy, and expects the power sector to continue to lead the way in the global energy transformation. The IEA also estimates that the share of power generation from modern renewables (including hydropower) will increase from 22 % in 2013 to 26% in 2020.