The bumpy road from Paris

The ink has now dried on the Paris Accord and plans embodied in the INDC’s need to begin to be implemented. However, the road ahead for implementation may not be that straight forward, as recent developments with three of the largest global emitters suggest.

In the USA one of the key components of their plans to reduce greenhouse gas emissions in the power sector is the Clean Power Act. The central aim of this plan was to cut carbon emissions from power plants 32% on 2005 levels by 2030. However, the US Supreme court recently ruled that the role out of the plan to curb emissions cannot proceed until all appeals from the US States and industry had been heard. This now means it will come back to the senate under a new administration in 2017. There is therefore a risk that the new administration may not be as receptive to the idea of curbing power plant emissions. However, the picture is not as bad as first impressions give though, as some states like California are pressing ahead with their plans under the Clean Power Act, and Oregon has become first US State to pass a law to phase out coal use for power generation.

In Europe, it is not expected that the EU member states will agree the details before 2017 to 2018 to formally accept the Paris accord, despite the fact that the EU will sign the agreement in the coming months. It is noted that the EU2030 package agreed in 2014 for emissions cuts of “at least” 40% from 1990 levels – was based on an earlier, less demanding 20C threshold. Heads of member states are set to discuss on 17 and 18 March 2016 whether to review the 2030 package in light of the Paris agreement. It will be interesting to see if the EU states agree to update the package following the Paris agreement to aim towards below 20C. Watch this space!

Similarly the current proposals for the reform of the EU ETS are not in full alignment with the Paris agreement. Reform of the EU ETS is not proceeding well with significant opposition from Poland for faster removal of allowances from the market place to drive up the price of the ETS allowances. Delays in implementation of the ETS reforms and the fact that the ETS only kicks in, when renewable energy and efficiency targets end in 2020. It is suggested could lead to an overshoot in CO₂ emissions as high as 2bn tonnes. The debate on the reform of the EU ETS is on-going and we will probably not know what has been agreed until September 2016 at the earliest. So there is a lot of bargaining that is going to be going on over the summer and into the autumn.

The latest news suggests that Chinese CO₂ emissions may have already peaked which is great news and shows the significant progress China has been making in RE implementation and reducing coal burn to reduce pollution. However plans to expand the coal to liquids/chemical sectors in China could result in increased coal burn and raise CO₂ emissions. The low price of oil might be currently holding this booming market back. Such plants have significant high purity CO₂ emissions but if fitted with CCS any future impact could be minimised

More fundamentally it seems that a fundamental difference of opinion between the EU and Morocco, the hosts of COP22, means that EU support to host the COP may be off the table. There’s some real diplomatic bartering, on issues not related to climate change, needed in that case.