Transcript Directions to 2050: a new international framework

Directions to 2050
A New International Framework
 The scale of the challenge
 Post Copenhagen Architecture
 Sector based agreements
 Enabling large scale action
 A global CO2 market
Copyright: SIPC
David Hone
Group Climate Change Adviser
Shell International B.V.
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The way we
produce and
use energy
today is not
sustainable
A new
direction
is needed
3
Very demanding reductions are called for
Effective action requires:
•
Global emissions to fall by at least 50% relative to 1990 by 2050;
•
Global average per capita emissions that will – as a matter of
basic arithmetic – need to be around 2 tonnes (T) by 2050 (20 GT
divided by 9 billion people): this figure is so low that there is little
scope for any large group to depart significantly above or below it;
•
Agreement by developed countries to take on immediate and
binding national targets of 20% to 40% by 2020, and to commit to
reductions of at least 80% by 2050;
Key Elements of a Global Deal
Nicholas Stern
2050 "target"
India
China
Asia
Latin America
Russia
Middle East
Africa
EU-27
Japan
USA
non-OECD
OECD
World
Emissions, tonnes CO 2 per person
4
The implications are clear
20
18
16
14
12
10
8
6
4
2
0
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Key Levers in the Economy
CO2 emissions
=
Xx Xx
people
GDP
energy
person
unit GDP
CO2
x unit energy
Only four factors govern the outcome, being:
•
Population
Number of people
•
Standard of Living
GDP per person
•
Energy Intensity
Energy per unit of GDP (efficiency of the economy)
•
Carbon Intensity
CO2 per unit of energy (reflects the energy source)
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Pathways to 2050
450
Falling CO2
emissions per
unit of energy
400
Energy per capita, GJ
350
300
250
200
2008
2025
2050
Wealthy developed
Developed
Leading developing
Developing
Improving energy
efficiency
150
100
50
0
$0
$20,000
$40,000
GDP per capita, US$ 2000 (ppp)
$60,000
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The prospect of emission targets looms
350
“Developed” countries
with Kyoto Targets
300
Energy per Capita, GJ
Rapidly emerging economies in Asia
Singapore
Finland
250
200
Taiwan
Korea
150
Malaysia
100
Romania
China
Thailand
50
0
$0
$10,000
$20,000
$30,000
GDP per Capita, US$ ppp (2000)
$40,000
8
Two pathways to consider
Direct recruitment to
cadre of nations with
targets
2013 - 2020
No target under the Kyoto Protocol
Opportunity to respond to the
market through the Clean
Development Mechanism
National emission target
2018 - 2030
2008 - 2012
2013 - 2020
National action agreements
National policies and measures
Sectoral agreements
Funding via market mechanisms
Use of clean-technology funds
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The global abatement curve
Cost of abatement
€ /tCO2e
Abatement
GtCO2e per year in 2030
A
B
C
Energy efficiency measures,
land use practices, avoided
deforestation.
Large scale abatement
within the electricity sector.
Some land restoration.
Higher cost
technologies still
moving down the
cost curve
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The anatomy of a deal
Cost of abatement
€ /tCO2e
Abatement
GtCO2e per year in 2030
A
Developed
Developing
Less
Developed
B
Large scale action through cap-and-trade, transport measures
(vehicle efficiency, low carbon fuels etc.) and building regulations
Absolute targets
National policies and measures:
SD-PAMs, NAMAs, without access to
international project mechanisms.
C
Support for
Demonstration
programmes
globally
Large scale action in the electricity (and
transport) sector driven by international
project mechanisms and clean tech funds.
Smaller scale clean development projects utilising the CDM
D Targeted systems for agriculture and deforestation
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Important for the CDM to Evolve
CDM / JI (Kyoto 2008-2012)
•
•
•
•
•
Small / Moderate scale
Development “dividend”
SD criteria
Additionality
Exhaustive project by project process
Clean Development Mechanism
•
•
•
•
Existing CDM rolls forward
Smaller scale than CTM
Development agenda
Focus on less developed economies
Clean Technology Mechanism
• Focussed on the higher end of the
abatement curve
• Principally clean electricity
• Recognises CCS
• Drives sector-based approach
Abatement
GtCO2e per year in 2030
Cost of abatement
€ /tCO2e
Possible Post-Copenhagen Architecture
Absolute
targets
Long
term
goal
Policies &
Measures
Verifiable
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Possible Post-Copenhagen Architecture
Absolute
targets
Long
term
goal
Policies &
Measures
Verifiable
Sector based
agreements
Sector based
agreements
Shifting the balance towards
absolute targets through large
scale packages of activity
Design of a sector based “satellite” agreement
Sector Based
Agreements
- Large scale preparatory step
towards absolute targets
- Clear purpose and end-point
- Built on the foundation elements
- Negotiated separately (by a limited
number of parties) as “satellites” to
the main agreement
- Typically focussed on a sector
- Technology capacity building,
funding and financing
- Best practice capacity building
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Emissions Mitigation Pathways
Only four pathways forward:
• Energy efficiency
• Renewables
• Nuclear
• Fossil fuels with Carbon Capture and Storage (CCS)
All four are essential and will be needed at scale:
• To meet energy demands this century
• To limit CO2 emissions into the atmosphere
CCS is a key focus area in Shell:
• A family of technologies all in use today
• Large scale end-to-end demonstration needs to happen
• Deployment need not be a distant dream
A “sector based” agreement that focuses on coal
use in the power sector
• EU-ETS
• US-ETS
CCS Project
Mechanism &
certification
processes
finalised
First large scale CCS
demo projects (e.g.
China)
2009
CCS
Standard
emerges
in some
countries
2010-2015
Clean technology
funding framework
emerges globally
$£¥€
2020
Initial CCS
roll-out in
developing
countries
Initial CCS
infrastructure
funded
directly
Funding flow
CCS Certs.
2025+
Emissions trading
adopted in many
developing country
power sectors
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Supporting CCS in the international framework
Key elements that need to be present in the near term:
•
CCS recognised within the UNFCCC Clean Development
Mechanism (CDM) or within a new post 2012 mechanism;
•
International CCS certification, that delivers a (tradable)
certificate for one tonne of CO2 stored underground and
supports the CDM;
•
A funding framework for the demonstration phase of CCS,
consisting of • Recognition of CCS within existing and new clean technology
funds (e.g. the fund recently proposed by the G8);
• Recognition of extra-national CCS demonstration projects
within national and regional funding arrangements.
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Positioning CCS in the evolution of the CDM
CDM / JI (Kyoto 2008-2012)
•
•
•
•
•
Small / Moderate scale
Development “dividend”
SD criteria
Additionality
Exhaustive project by project process
Clean Development Mechanism
•
•
•
•
Clean Technology Mechanism
• Focussed on the higher end of the
abatement curve
• Principally clean electricity
• Recognises CCS
• Drives sector-based approach
Existing CDM rolls forward
Smaller scale than CTM
Development agenda
Focus on less developed economies
Abatement
GtCO2e per year in 2030
CO2 Storage Certificate
Cost of abatement
€ /tCO2e
•
•
•
•
Recognises CCS globally
Certifies tonnes sequestered
Standardised rules
Potentially tradable
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A Global Carbon Market must evolve
New technology mechanisms evolve (e.g. for CCS)
China adopts CCS standard
CDM evolves to include clean electricity mechanism
CDM
Linkages develop
between all
systems and more
systems appear
Japan
technology
standards
Norwegian ETS
Expanding EU-ETS
EU-ETS
2000
2005
Pre-Kyoto
2010
2015
Kyoto
Post 2012
2020
2025
Linkage framework
New Zealand ETS
Danish-ETS
UK-ETS
Australian ETS
US National or North American “cap-and-trade”
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