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Wednesday, April 12, 2017

Ambitious plan to bend global emissions curve by 2020, while Australia continues Adani coal push

At Google HQ in London an ambitious plan was launched by former UNFCCC Executive Secretary Christiana Figueres to accelerate climate action and bend the global emissions curve down by 2020.

Figueres outlined six areas where action was needed to make 2020 a real turning point in the global emissions trend. For the last 3 years global emissions have been flat despite rising global GDP, a sign that economies are increasingly becoming disengaged from processes of carbon pollution.

While in Australia the Liberal National Party Federal Government lead by Prime Minister Malcolm Turnbull is keenly supporting the Adani Carmichael coal mine development, supported by the Queensland Labor Premier Annastacia Palaszczuk.

Here are the six areas of emissions reduction that need to happen in the near term, according to the 2020 Mission campaign.

  • Energy: needs to be at 30 percent global renewables by 2020, however we are already at 23.7 percent so this target appears quite achievable.
  • Transport emissions reduction: we need 25% of new vehicle sales to be zero emissions electric vehicles by 2020. Big ask, but already some countries have set targets and sales of EVs are rapidly increasing.
  • Land use change: in particular all deforestation needs to end by 2020, plus large-scale land restoration and agriculture shifts to earth friendly practices.
  • Heavy industry: needs to be implementing programs to reduce emissions. Cement Industry already finding alternative low emissions and even carbon negative cement products.
  • Cities: by mid century 70 percent of human population will be in cities. It is important cities and urban infrastructure be completely decarbonised by 2050. The C40 Cities Climate Leadership Group (C40), now in its 11th year, are already enacting programs to reduce emissions aiming for zero carbon cities by 2050.
  • Finance: Currently about $300 billion investment per year, this needs to be increased to at least $1 trillion investment by 2020 in clean technologies. Important that all financial institutions have a disclosed transition strategy.

In all six areas the report identifies goals that are either necessary, achieveable or desirable.

Here is an interview with Christiana Figueres after the launch:

For example, under Finance the report lists 7 items that need to be tackled:

  • 1. Invest at least $200 billion public and $800 billion private resources in climate action each year
  • 2. Increase the amount of philanthropic funding for the climate movement by ten-fold from 2016 levels
  • 3. Multiply the green bond market’s annual issuance tenfold from 2016 levels
  • 4. Ensure that institutions disclose climate-related financial risks and that credit ratings fully incorporate them
  • 5. Eliminate fossil fuel subsidies
  • 6. Cancel the capital expenditure for expanding coal, oil and gas production
  • 7. Implement a carbon pricing mechanism within and across all major economies

How is Australia doing on Finance, Fossil Fuels and carbon pricing?

Here in Australia we are still seeing new coal mines and expansion of existing mines taking place, as well as exploration and development of coal seam gasm to feed the three new LNG refineries at Gladstone for the export market. The report advocates Canceling the capital expenditure for expanding coal, oil and gas production. This should be ample reason for not proceeding with Adani's Carmichael coal mine.

Here is what the report concludes about fossil fuel development, and I quote it in full:

To align with emissions targets and the changing energy system, a much smaller supply of fossil fuels will be needed. Carbon Tracker’s analysis shows that over the next decade more than $2trillion of new investment needs to be cancelled. For coal, this means no investment in new coal mines. For oil, some investment is needed just to maintain production, but if emissions are to peak in 2020, the oil sector needs to adopt plans that do not involve further growth. High cost, energy intensive gas supply options such as unconventional Liquefied Natural Gas (LNG) exports are also inconsistent with Paris targets, tempering growth expectations for gas too.

Avoiding investment in fossil fuel assets, whether that is for extraction or power generation, is essential to avoid perpetuating high carbon activities. Shifting this capital deployment will also improve corporate financial performance, avoiding investments in assets that do not have a place in a low carbon future. Recent IEA/IRENA analysis suggests that $1-2trillion of stranded assets could be created in a 2°C degree scenario, with the level increasing the longer action is delayed.

Neither major side in Australian politics - Liberal or Labor - is willing to consider ending fossil fuel subsidies, yet this too must happen.

While the IPA says Fossil Fuel subsidies in Australia are a myth, Market Forces estimates that these tax-based fossil fuel subsidies amount to almost $11 billion per year federally. An international study published in November 2015 assessed that Australian fossil fuel subsidies were $5.6bn a year, according to RenewEconomy report (Read this Australian study, part of the Empty promises: G20 subsidies to oil, gas and coal production report).

In 2014 the Australia Institute reported on the plethora of state subsidies to fossil fuels in a report titled Mining in the Age of Entitlement. The report highlighted that over a six-year period, state governments in Australia spent $17.6 billion supporting the mineral and fossil fuel industries. In Queensland assistance totalled $9.5 billion, the largest in subsidies from any state, followed by Western Australia’s at $6.2 billion.

The need for carbon pricing is also articulated in the report. About 40 nations and over 20 cities, states, and regions are already pricing carbon in one form or another. This amounts to about 13 percent of global emissions. A further 100 countries (accounting for 58 percent of global greenhouse gas emissions) are planning or considering carbon pricing. There is a clear momentum here and the campaign challenge is to double the coverage of emissions subject to carbon pricing by 2020, and double it again within the next decade. Already in 2017 China is introducing a nationwide scheme that will double the amount of emissions covered to 26 percent.

Strangely, Australia implemented a carbon price for two years under the leadership of Julia Guillard, but became the first and only country to role back a carbon pricing scheme with the election of the Abbott Government.

The current federal government under Prime Minister Malcolm Turnbull is refusing to consider even an Energy Intensity Scheme as part of Federal climate policy, while continuing to support development of Adani's Carmichael coal mine and more unconventional gas exploration and development. Turnbull has just visited India and was granted a brief audience with Gautam Adani and told the coal baron native title issues will be 'fixed' to clear the way for Carmichael mine development. His support of the Adani development makes a mockery of his statements in 2010 and even at COP21 in 2015.

Queensland Labor Premier Annastacia Palaszczuk also recently visited India and was confronted by activists over her governments support for the mine at any cost, even the tourism industry based on the Great Barrier Reef. Her government has already approved a substantial subsidy in uncapped groundwater use rights for 60 years.

Subsidy for Adani's rail line

Adani is also holding out it's hand for about $1 billion in loan funds from the Northern Australian Infrastructure Fund to build the railway line from the mine to Abbot Point. Rail freight company Aurizon has also put in a competing bid for funding to build this rail line. This is despite most Australians oppose government's $1bn Adani loan for coal railway line.

Environment Justice Australia on April 6 2017 lodged a complaint with the Productivity Commission alleging any loan made for the railway line construction may be illegal.

"Funding Aurizon or Adani to build a coal railway would breach competitive neutrality principles. Our complaint alleges that NAIF is non-transparent, ineffective, inefficient and has an inadequate governance framework." said a statement by EJA.

Further legal advice provided to the Australian Conservation Foundation highlights that the NAIF directors must consider financial risks from climate change and that the requisite standard of care and diligence prohibits investment in the proposed Adani and Aurizon rail projects.

The directors of NAIF should take heed of the fiduciary duties of directors with the risks of climate change as well articulated in a speech by APRA executive board member Geoff Summerhayes in February 2017: Australia's new horizon: Climate change challenges and prudential risk.

“The Adani coal mine will fuel the global warming that is making the Reef sick, threaten 70,000 tourism jobs that rely on it, and divert urgent investment from renewable energy,” said ACF President Geoff Cousins. “If NAIF Board directors burn $1 billion of public money on coal infrastructure that will help destroy the Reef and jobs, then absolutely they should be held to account."

Cousins said the Australian Conservation Foundation would pursue all legal avenues to hold the directors of NAIF accountable for any funding decision for the coal mine or rail project.

“NAIF must consider climate risks. These are assets that will be useless within a decade. Investment in coal infrastructure risks public money and in the meantime helps to drive dangerous global warming. NAIF directors who support it should be held accountable.” said Cousins.

EJA lawyer David Barnden said NAIF directors if they support funding the railway line project would expose Australian taxpayers and themselves to substantial financial risks.

“Our analysis concludes NAIF directors will breach their duties if they support any rail project to cart coal from the Galilee Basin to the Great Barrier Reef coast,” Mr Barnden said. “Recent legal developments mean NAIF support for Adani’s coal project – which is incompatible with keeping global warming below 2°C – would put the NAIF directors in conflict with their duties.”

The years spent fighting over climate and energy policy have damaged business investment certainty and brought our electricity grid to the brink due to the need to invest in new electricity generation to replace ageing and polluting infrastructure.

It is clear that politicians are not listening to people on the ground or international forums on the need to phaseout fossil fuels and support for this industry. We need to start making decisions for the long term.

Cost of action far cheaper than cost of inaction - Professor Stern

In a media statement associated with the launch of the 2020 Mission campaign Figueres said:

“Everyone has a right to prosper, and if emissions do not begin their rapid decline by 2020, the world’s most vulnerable people will suffer even more from the devastating impacts of climate change. Science tells us this is our imperative, technology shows us we have what it takes, the economics are pointing us in the right direction and the benefits to humanity will be immense. This is no time to waver. What has been missing since Paris is a near term focal point for action,which is why we have brought together some of the best minds on the subject to collectively demonstrate that the arc of transformation to a fossil free energy system is possible. We have a collective responsibility to raise ambition, scale up our actions and move forward faster together to safeguard the sustainable development goals and protect the inalienable right to life of our and future generations. Let’s not be late.”

Nicholas Stern, one of the panelists at the launch, articulated that the cost of action is far cheaper than the cost of inaction. In fact, he said that his 2006 seminal report over-estimated the costs of action. The rapid fall in the price of renewables has made the cost of climate action much less than initially estimated.

“This report correctly identifies 2020 as a key milestone which will indicate whether we are on the path to realising the goals of the Paris Agreement. If the Paris target of holding global temperature increase to “well below 2oC” is to be met, there must be an acceleration around the world of the transition to low-carbon growth and development. This must occur at the same time as total infrastructure will likely more than double in the next two decades. Delay will increase the risks of lock-in to a high-carbon path that will make the Paris Agreement goals much more difficult and expensive to achieve. Leadership by national and local governments and businesses over the next three years can put us on the right path to a safer and more prosperous world. It is increasingly recognised around the world that there are potentially great attractive gains to growth and prosperity from a new low-carbon path, but the urgency for acceleration is intense.”

A number of organisations contributed to the analysis and preparation of the report underlying this campaign. These include Climate Analytics, The Potsdam Institute for Climate Impact Research, Carbon Tracker, Climate Action Tracker, New Climate Institute, Ecofys, and Yale University.

Professor John Schellnhuber, Founding director of the Potsdam Institute for Climate Impact Research (PIK) and chair of the German Advisory Council on Global Change (WBGU) said in a statement:

“Each and every scientific assessment demonstrates that limiting global warming to well below 2°C - as envisaged by the Paris Agreement - can only be achieved if we start decarbonising the world economy NOW. Geoengineering ourselves out of climate disaster later is nothing more than a dangerous illusion. Yet governments will only pursue aggressive mitigation if they have the full backing of the ‘new businesses’ who put long-term benefits above short-term profits.”

My storify on the launch event: Ambitious plan to bend the global emissions curve by 2020


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