UNFCCC Executive Secretary at OPEC meeting

The Executive Secretary of the United Nations Framework Convention on Climate Change, Christiana Figueres, gave a speech at the 5th OPEC International Seminar, held at Vienna in June 2012.

I must say this was a brilliant move. Beginning by reassuring Oil Producing Countries that the demand for oil will continue to increase even with successful climate change mitigation policies in place, she proceeded to point out a strategic approach that represents a win-win solution for both OPEC and the fight against climate change:

“Our aim should be an economic system that strategically directs oil toward the highest margin specialty markets, generating the most amount of economic benefit for each barrel of oil’s emissions.”

Higher margins mean higher profits for oil producing countries. Although this was not voiced, higher oil prices are also vital to anticipate the arrival of a low-carbon future. Cheap oil has been undermining and delaying the further technological development and large scale deployment of alternative energy sources and energy carriers, such as solar energy and hydrogen, respectively.     

Christiana Figueres also took the opportunity to point that the optimization of the internal use of energy in Oil Producing Countries, through the implementation of energy efficiency measures, are a way to increase the availability of oil and gas for export.

Displaying a far-sighted vision, the UN Climate Change Conference at the end of 2012 will be held for the first time ever in the Gulf region, in Qatar.


Adapted from: UNFCCC, 2012.

Where does the European Union stand on GHG emission reductions?

Years ago, the Member States of the European Union committed themselves to reducing greenhouse gas emissions (GHG) by 20%, increasing the share of renewable energy to 20%, and increase the energy efficiency in 20% by 2020. According to the “Roadmap for moving to a competitive low carbon economy in 2050” (EU Commission, 2011), the EU is currently on track to meet the first two targets, although additional efforts are needed to achieve the energy efficiency target.

The European Union has been a champion pushing for more ambitious targets for the period after the Kyoto Protocol expires. In the UNFCCC conference in Durban, the EU voluntarily proposed to move from a 20% to a 30% reduction by 2020 compared to 1990 levels, provided that the other developed countries commit themselves to comparable emission reductions and developing countries contribute adequately according to their responsibilities and respective capabilities.

Previously, during contacts with the Intergovernmental Panel on Climate Change, the European Commission had already reaffirmed its intention to reduce EU's greenhouse gas emissions (GHG) by 80-95% by 2050 compared to 1990.

However, the EU represents little more than 10% of global emissions... it will not be able to tackle climate change on its own. Additionally, while setting an example, the EU is at the same time safeguarding its position. Committing alone would bring hardships to the Member States in the future, due to disloyal market competition and even from the displacement of large emitting companies to other regions of the Globe with less stringent climate protection frameworks.

I eagerly await for the next “episodes” of the negotiation of the emission reductions between Countries for the after-Kioto Protocol (the period beyond 2012), under the United Nations Framework Convention on Climate Protection (UNFCCC). 

 Sources:
- “A Roadmap for moving to a competitive low carbon economy in 2050”, European Commission, 2011;
- UNFCCC, http://unfccc.int/.

Who benefits with limited global action against climate change and just how far does the Kyoto Protocol go?

During the UNFCCC conference of parties in Durban, South Africa, nations came together to try to salvage the Kyoto Protocol beyond its first commitment period. Let us step back for a moment and question just how far the Kyoto Protocol goes, and see if saving it would be enough.

According to the IEA World Energy Outlook 2010 projections, the future fossil fuel prices will be significantly higher in a scenario of limited global action against climate change. So the answer to the first part of the title question is obvious: oil producing countries and corporations. Does the Kyoto Protocol reflect this reality? Clearly. 

Among the thirty largest oil producers (considering crude oil extraction and refinery products production), there are only six developed countries listed as Annex I parties to the Kyoto Protocol (Russia, USA, Canada, Norway, the United Kingdom, and Australia). Of those, the Kyoto Protocol only established GHG reduction targets beyond the 1990 emissions level to three: USA, Canada, and UK.

Now let us examine the energy consumption side. The top ten energy consumers are China, USA, India, Russia, Japan, Germany, Brazil, France, Canada, and South Korea (Global Energy Stastistical Yearbook 2011, Enerdata). Developing countries are not subject to the legally binding restrictions under the Kyoto Protocol (China, India, Brazil, and South Korea). Russia, undergoing the transition process to a market economy, does not have to reduce emissions beyond 1990 levels, sufficing to maintain them. Of these large energy consumers, and hence large GHG emiters, the Kyoto Protocol only established reduction targets beyond the 1990 emissions level to five: USA, Japan, Germany, France, and Canada. As is common knowledge, the USA never ratifyed the protocol, and Canada officially “droped out” in Durban. 

So to summarize, currently only three (Japan, Germany, and France) of the ten largest energy consumers, and only one (UK) of the thirty largest oil producers are legally bound to reduce their GHG emissions beyong 1990 levels under the Kyoto Protocol... We do need to go beyond the Kyoto Protocol. 

Nevertheless, this post ends with a positive keynote. During the UNFCCC conference of parties in Durban, South Africa, large emerging economic powers such as China, India and Brazil agreeded, for the first time in history, to set legally binding constraints to their greenhouse gases emissions (GHG). This is perhaps the recognition that the old development model reliant on cheap fuel consumption is no longer viable, for both economic, social and environmental reasons. Developing countries already share the vision of a low-carbon future, built on renewable energies and energy efficiency.

Sources:

- IEA World Energy Outlook 2010;

- A Roadmap for moving to a competitive low carbon economy in 2050, European Commission, 2011;

- Global Energy Stastistical Yearbook 2011, Enerdata;

- Kyoto Protocol (available at UNFCCC's website); 
- Financial Times, December 15, 2011;
- http://en.wikipedia.org/ (oil producing countries' data).

Wishes of lower carbon-intensity for 2012

The Kyoto Protocol and the United Nations Framework Convention on Climate Change share the ultimate objective to stabilize the atmospheric concentrations of greenhouse gases (GHGs) at a level that will prevent dangerous interference with the climate system.

Scientists have pin-pointed a 2 degrees Celsius rise in global average temperature from pre-industrial levels as the highest rise at which Humanity has a 50% chance of avoiding the worst effects of climate change.

Energy consumption is on the rise, despite the 2008 financial crisis and the economic crisis that followed. With the continuing growth of the population in developing countries such as China, already the world's largest energy consumer, and the growth of the global GDP, stabilizing the atmospheric concentrations of GHGs requires an alternative development paradigm with significantly lower Carbon-intensity.

As the oil reserves diminish, forcing the exploration of more difficult to access reserves and increasing the production costs, one thing is certain: the days of cheap oil and cheap energy are coming to an end. The lower Carbon-intensity economy will develop in the coming decades, it is inevitable. The question is whether it will deliver in time to avoid disastrous socio-economic and environmental effects of climate change.

I must say I am reasonably optimistic. Countries and corporations worldwide have two alternatives in face of the inevitable shift towards a lower Carbon-intensity economy. They can plan ahead and seize this challenge as an opportunity to become more efficient in energy production and energy consumption, thus increasing their competitiveness, or they can refuse to see ahead and pay the consequences for lagging behind a few decades from now.

These two currents are already emerging. As the USA and Canada walk away from the legally binding compromise to lower GHGs emissions under the Kyoto Protocol, China is stepping in for the second commitment period negotiations. Today, a Chinese State-owned company (China Three Gorges Corporation) signed an agreement to become the largest stakeholder of the Portuguese energy-utility EDP. EDP's subsidiary “EDP renewables” is a world leader in renewable energy, being the third largest wind energy operator in the world.

I for one am very curious to know what the future will bring us. For this coming year, my whish is that government and corporate leaders worldwide will have the vision and wisdom to embrace the efforts towards an economy of lower carbon-intensity. 

Happy New Year everyone!

Sources:
- UNFCCC (http://unfccc.int/);
- A Roadmap for moving to a competitive low carbon economy in 2050, European Commission, 2011;
- RTP1.