Day Five: Meetings so far, and the Green Climate Fund
The negotiations are in full swing and our limited time here is beginning to add a bit of urgency. The big news from yesterday came in the form of a curveball from Australia. After Prime Minister Tony Abbott recently described the green climate fund as a “Bob Brown bank on an international scale” he has transformed from climate villain to hero and offered it $200m. Together with a contribution from plucky Belgium of $62m the green climate fund has hit the elusive $10bn goal - cue dancing on the streets of Peru. Yet all is not as clear cut at it may seem. More on the green climate fund to follow, but first an update on meetings.
Good meeting with WWF. The full team included UK Director David Nussbaum, Scotland Director Lang Banks and Head of Climate Policy Leo Hickman. We were in broad agreement on the need to move toward a carbon economy.
Our discussions ranged over a series of mitigation measures, from the future of coal and Carbon Capture & Storage (CCS)to the role of intermediate energy sources such as gas on the journey to zero carbon emissions. We also touched upon the challenges of balancing energy security within the EU with the ambitions of a low carbon economy. We all recognised that the EU is no longer alone in the vanguard of climate change leadership, with China and the US now claiming their rightful place.
WWF are committed to a decarbonised economy by 2050 and have long advocated for renewables to take a larger share of energy production in Scotland and the UK. We have arranged to sit down back in Scotland to see how we can work closely together on some of the challenges.
CCS was also a topic for discussion with climate and energy expert David Hone of Shell. David is a COP veteran, and like me is blogging his way through the week http://blogs.shell.com/climatechange/. He is convinced that CCS is crucial to reducing emissions from coal based energy production. The abundance of coal in the world, much of it in Africa, has barely been explored. Botswana alone has an estimated resource of 200 billion tonnes of coal, which if burned would take up one quarter of the atmosphere’s theoretical carbon capacity.
Europe too is sitting on vast coal resource (see my Day 3 blog). Poland is increasingly concerned about energy security and the activities of its neighbour Russia.
How to reduce the world’s CO2 emissions is a crucial question at this year’s COP and a particularly relevant one to Europe as the EU seeks to reform it’s failing flagship emissions reduction policy the Emissions Trading System (ETS). The ETS is a ‘cap and trade’ mechanism where the amount of carbon that can be emitted into the atmosphere in a year is capped and then divided into tonnes that can be traded among industry in the form of ‘allowances’. However, an oversupply in tradable allowances following the economic slowdown which followed the crash has meant the ETS is something of a lame duck. The European Commission has come up with a Market Stability Reserve to fix the ETS and make it more responsive to market fluctuations. The plan is to bank the oversupply of allowances and releasing them later as demand grows. As the Conservative shadow of that market stability reserve I am following the proposal closely. For anyone interested in learning more about reducing CO2 emissions, David Hone’s book ‘Putting the Genie back in the Bottle’ is a good a starting point.
UK Department of Energy & Climate Change (DECC)
DECC’s climate finance team provided an update on the Green Climate Fund - the key tool for financing climate change mitigation and adaption across the world. After reaching its initial goal of $10bn yesterday the fund will receive another boost from Japan which has pledged to up it’s contribution to 15% of the overall total should the $10bn mark be hit during the COP gathering.
Going forward, the GCF is intended to raise funds of $100 billion every year from 2020 onwards. Just how that money will be raised, from whom, the balance of private and public money remains to be fleshed out. There is still a long way to go to get an agreement on financing as the GFC board has sidestepped the tricky decisions so far. One notable in the area of climate finance is old hand and Liberal MP Norman Baker, who helped pioneer a model of ‘leveraging up’ public investment to secure private financing of climate change. As the UK Government see it, private money is the only way we will ever reach the $100bn per year target, but some developing countries remain sceptical and fear ‘tied aid’ will become institutionalised once more.
We talked also around issues of governance, and the challenges that exist in selecting projects and countries to benefit from the money. In current plans, Mexico with it’s rising sea levels and drought ridden desserts is set to be the biggest beneficiary, but there are noises from countries such as France that ‘francophone’ nations should benefit more (as if speaking French is qualification enough for climate change funding). In order to avoid politicking like this, I was assured the board would have a series of tests and safeguards in place to ensure the decision making process was fair. Just what these steps are remains to be seen…
So on to day six, and there are rumours that a mass protest is about to descend on the streets of Peru. What a difference a day makes.