Ontario Moves Beyond Coal

After being subjected to the taste of coal in the air and statements about the inevitability of continued coal use for almost two weeks, at last we have exciting news from the Canadian province of Ontario. The provincial government has just announced it will switch off its last active coal-fired power plant within weeks.

This will make Canada’s most populous province the first jurisdiction in the world to complete a coal phase-out. Just 10 years ago coal was 27% of the energy mix in Ontario’s power sector, with a total capacity of 7,500 MW. This week’s announcement is an example of how political will, spurred by public concern and combined with smart policies supporting energy efficiency and renewables, can help break coal addiction. As a result, smog, dust and mercury levels have already fallen substantially, and GHG emissions from the Ontario electricity sector were slashed by 75%, making this the largest carbon reduction project in North America.

Note that this feat was achieved despite a federal policy environment in Canada that is entirely hostile to climate action and has been moving the country in the opposite direction. Case in point: in the same period of the coal phase-out unfolded in Ontario, emissions from tar sands oil, a resource aggressively promoted by the federal Conservative government, soared by roughly the same amount that the Ontario coal phase-out saved. So in effect the additional emissions from tar sands exploitation have cancelled the gains from Ontario’s flagship climate action program.

Federally promoted tar sands growth is also the single biggest reason why Canada’s own estimated emissions growth is 20% above the target pledged in Copenhagen.

While it’s a good thing the new Canadian environment minister decided to attend the Warsaw COP, ECO wants to remind her that claiming to play a leadership role on climate is not the same as actually being a leader. Perhaps she should have a word with her Ontario counterpart. Here are some relevant ideas for real climate action: promoting renewables and energy efficiency, getting rid of fossil fuel subsidies, phasing out coal and reversing oil growth are all good.

At the same time we are celebrating the Ontario announcement as a clear sign that the end of the coal era is coming, there are also encouraging signs internationally.

Yesterday the UK announced they would build on the new US policy to end financing of coal-fired power plants abroad. As the energy and climate minister rightly pointed out, ‘It is completely illogical for countries like the UK and the US to be decarbonizing our own energy sectors while paying for coal-fired power plants to be built in other countries’. Now it’s time for Japan, Germany and other countries that continue to finance coal abroad to join this positive effort to phase out global fossil fuel subsidies.

Congrats, Ontario.

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The CCPI 2013 Performance Rankings

The new edition of the Climate Change Performance Index (CCPI), which ranks the climate protection performance of the 58 largest  emitting countries worldwide, was released by Germanwatch and CAN Europe this week. The report shows worldwide greenhouse gas (GHG) emissions continue to climb, and not a single country is on track to deliver their fare share of emission reductions.

But there are some rays of hope this year. There appears to be a slowdown in the rate of increase for global CO2 emissions. And China, the highest emitter on a national basis, improved its performance.

While no country performed well enough to earn a coveted top-3 ranking, Denmark led the league table, improving their score in nearly every sector. The UK took 5th place, up from 10th, due to an emissions decrease of 15% in the last 5 years plus improvements in energy efficiency.

But you won’t be surprised that Canada and Australia are the bottom ranked performers among industrialised countries, while Japan also dropped several notches. Australia is ranked 57th but its recent election produced a government that is backtracking even from there. Canada still shows no intention of moving forward with meaningful climate policy and remains at a humiliating 58th position. Only Iran (59), Kazakhstan (60) and Saudi Arabia (61) have worse ratings.

For the first time Germany has dropped out of the top ten, sliding from 8th to 19th position, one of the biggest losers in this year’s index. The main reason is the country’s dithering on EU climate policy. And to no one’s surprise, Poland’s overall performance (45th place) remains one of the worst in the entire EU.

Every country can endeavour to improve its CCPI ranking by addressing a few critical factors. Improvements in renewable energy must continue; efficiency levels must increase; countries must take bold national climate policy decisions; and effective coalitions between front-runner nations should be strengthened. Those are exactly the same actions needed to close the pre-2020 emission gap so that an international climate agreement worth the name can be finalised in 2015.

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A Down Under Daydream

ECO nodded off during the plenary and heard this:
 

Dear Ministerial colleagues:

It gives me great pleasure to be here with you at this High Level Roundtable on Market Approaches for Enhanced Climate Action. I want to report to you now that after 18 months Australia’s carbon market is working well.

After the first 12 months the carbon price, supported by other policies, delivered 7% emissions reductions from covered sectors. The proportion of renewables in the energy mix surged by 23%. Inflation impacts were almost exactly as predicted at 0.7%.  Auctioning revenues funded support  for low and middle-income households, leaving them better off than before the reform. Scare campaigns saying that entire cities and industries would be wiped out proved to be mere fear-mongering. 

Australia's carbon price and limit on carbon pollution was of course designed to give a long-term signal to drive investment decisions towards low-carbon technologies and projects. The next step includes an assessment of increasing our ambition based on science and comparative action. To that end, our statutorily  independent Climate Change Authority has released a draft recommendation for Australia's emissions reduction target, informed by work programs under the Convention.

The Authority is chaired by a former head of Australia's central Reserve Bank, and its board includes Australia's chief scientist and the former head of the Australian Industry Group. It has recommended that Australia take a 15 to 25% emission reduction target by 2020 with up to 50% reduction by 2030. It identified these targets in relation to an overall carbon budget  and with a clear statement of our national interest in avoiding 2o warming.

Australia looks forward to working with you in increasing our collective targets and ambitions well in advance of COP 21. Finally, with the time-bound support for phasing out coal  power generators and the need for free permits for trade exposed sectors now almost completely irrelevant,   Australia would like to announce that 10% of the carbon price revenue will be directed to climate finance.

Thank you, Chair.

 

Well, it was a pleasant few moments anyway,  But then it was back to plenary reality . . . 

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Fossil of the Day

The First Place Fossil goes to India, Saudi Arabia, Pakistan, Malaysia, and China for proposing to delete the only reference to equity in para 9 of the ADP text.  Equity is key to the 2015 agreement and Parties must leave Warsaw with a clear understanding of how the ex ante review will be conducted.  We were shocked that with all the discussions here and in Bonn, equity did not yield more than a passing reference in the first version of the ADP text. The next iteration must expand and not ‘streamline’ references to equity.  To these members of the Like-Minded Group, we urge you to engage in the development of an ex ante review, rather than hovering over the delete button.

The Second Place Fossil goes to Australia, who along with some other developed countries is impeding progress towards setting up an international mechanism on loss and damage. Trying to keep out key text elements proposed by more than 130 developing countries, delaying negotiation progress through procedural manoeu- vres, and lacking a clear commitment to strong support provisions in the decision text is highly concerning.  Australia is the leader of those lacking constructive spirit.

We call on the other developed countries to work seriously for the needs of the most vulnerable countries and help in establishing an effective international mechanism on loss and damage here

 

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Can this finance ministerial create the much bigger change the world needs?

So here we are at the first ever finance ministerial.  With the ‘climate crunch’ rapidly exposing our economies to the risks of climate change and economic downturn, the stakes have been raised.  Parties have agreed on the need for action, put in place the institutions and frameworks, but there is one essential ingredient missing: finance.

Climate impacts are accelerating and multiplying as they rush through our global economic system.  We all know that the lack of finance is blocking progress – both in action on the ground and in  negotiating a stronger global climate  deal. 

The UNFCCC is the central multilateral framework for tackling climate change, and finance is key to powering the process. The refusal of developed countries to make clear commitments on finance is sapping the life out of the negotiations, just as much as the failure of the same countries to reduce their emissions.

For all countries to work together, regardless of their status as developing and developed, promises  must be upheld.  The finance gap is blocking progress on REDD+, draining down the Adaptation Fund, threatening  to make the GCF another empty shell, and  providing the perfect justification for ensuring the threadbare ADP text remains devoid of content. 

Of course, there is money in the system.  But it’s going in the wrong direction. Just as one example, this year the OECD told us that fossil fuel subsidies comprise 5 times the amount of funds provided for climate finance.

The promised mobilization of US $100 billion per annum by 2020 is a big step toward fulfilling the mandate of the Convention.  Without it, we cannot succeed.  At this historic moment, the first financial ministerial must demonstrate predictability, credible scaling up and commitment.  If all we see is a scattering of pocket change, we’re all wasting our time.  

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What is the proper role for private finance?

You may have noticed the developed countries’ increasing  enthusiasm for having private finance substitute for their direct support as part of meeting the the promise of mobilizing US $100 billion per year by 2020.

This year, two US-hosted ministerial meetings and the pre-COP finance discussions focused almost exclusively on the role of private finance, whilst the glaring uncertainties around the provision of public finance were barely discussed. And the invitation letter from the COP presidency to today’s finance ministerial encourages civil society organisations to ‘present their own ideas on possible ways of mobilizing sources of finance in the private sector’ as if to silence calls on the urgent need to scale up public finance.

So you be the judge: are developed countries sliding back on their side of the bargain and using private finance to sidestep the need to increase public finance?  Today’s Finance Ministerial is an opportunity to highlight that whilst private finance has a role to play in the global climate transition, it is not a substitute for scaling up  crucially needed public support.

Public finance has a critical role to play in mitigation by helping to catalyse larger private investments,. The real need is estimated to exceed $1 trillion globally,  if we are to limit the temperature increase below 2 degrees Celsius. Developed countries are kidding themselves if they think limiting the provision of public finance to a minor proportion of the $100 billion will leverage this scale of change.  If we are serious, it’s obvious that far more than $100 billion in public finance  is needed for mitigation alone. Now as for adaptation, the world’s poorest countries and communities will require public finance since private finance will favour mitigation. This will increase  the already neglected  adaptation gap in the world’s poorest countries.

Last month the US special climate envoy said, ‘No step change in overall levels of public funding from developed countries is likely to come anytime soon. The fiscal reality of the United States and other developed countries is not going to allow it’. 

But let us remind the developed country Parties of three other ‘fiscal realities’.  The first is the devastation caused by Typhoon Haiyan, which should serve as a wake-up call that scaled up public finance is vital to support resilience in the world's most vulnerable countries.

The second is that developed countries are subsidising fossil fuel energy with by at least $58 billion each year, which could instead be channelled for international climate finance.   The money is there, what’s lacking is the political will to drive  solutions forward.

Finally, developed countries urgently need to grasp the reality that their myopic focus on private finance will not help build trust and momentum. Instead, failure to scale up public finance is a source of considerable unease among developing countries, and risks derailing an effective 2015 outcome.

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Adaptation Fund due for replenishment

ECO wonders if developed countries are scheming to create suspense on the Adaptation Fund over the next couple of days, by orchestrating the announcements of their pledges to start with the lowest first: Norway’s  US $2.5 million was announced yesterday. While that doesn’t quite compare to Sweden’s  $30 million, we believe that every dollar counts. Perhaps we will now see a race to the top, with a string of pledges -- each one higher than the one before -- to reach and exceed the goal of $100 million before COP 19 is over. ECO is excited to see who will turn out to be the highest bidder.

Once again, falling short of the $100 million goal is simply not an option. Surely developed country ministers will want to make that possible, to demonstrate good faith and pave the way for the much larger goal of mobilizing $100 billion per annum in climate finance by 2020.

The argument has been made here and there that the Adaptation Fund is not quite empty yet.  Perhaps so for now, but not for long.  The Adaptation Fund Board predicts that it will run out of money over the course of the next year. And already there are stranded projects (see table nearby).

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Making the difference . . .

Fill the Adaptation Gap

Only a minor share of climate finance is currently being allocated to adaptation, meaning that vital support to the world’s vulnerable people and communities is lacking. Agreement must be reached to increase finance for adaptation, and a first step must be to improve the balance between mitigation and adaptation. COP 19 should agree that at least 50% of all public climate finance is allocated to adaptation.

Ensure Predictability

Predictability of finance through to 2020 is vital. This requires a global climate finance roadmap that sets out intermediate targets and planned collective action to mobilize additional finance. To complement that, developed countries should prepare national pathways showing how their contribution to the $100 billion promise will evolve over time, disaggregated by relevant types, instruments and channels. 

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Linking an FTT to scaled up climate action

Where is the Finance (WTF) to fill the gap? Here’s one of many answers to that question, the Financial Transaction Tax (FTT).

In early 2013, 11 EU Member States agreed to introduce an FTT that could generate revenues of €37bn a year or more, depending on its scope. While the FTT is still in in the design phase, ECO wonders whether France,  Germany and the other nine European supporters could not only finalise discussions on the scope of the FTT (on which scale of revenue will depend) but make a bold move: by allocating a big portion of the revenues to climate finance. This is a marvellous plan, as it would allow the EU – perhaps in time for the Ban Ki-moon summit in late 2014 – to assign a substantial amount to the very empty Green Climate Fund. 

It’s not a totally mad idea, It’s said France already is earmarking 10% of its FTT revenues to climate action. And we hear that Belgium supports the idea of  using part of the FTT revenues for development and climate action.

But what about the others, for instance Germany – where a new government is being formed even as the ministerial proceeds? One coalition partner had joined a grand campaign to allocate 33% of FTT revenues to climate action. Well, that was before the elections. Let’s see if they stay true to that promise.

Now it’s in the court of the EU-11 to bridge the gap with a bold FTT.  

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Hoisted from the Archives . . . Cancun – Wednesday 6th December 2010 - Time to Make It Happen: a Fair Climate Fund

Over 200 civil society organisations today launch a call for a fair climate fund to be established this week in Cancun. As ministers arrive to face the vital politi¬cal challenges around the continuation of the Kyoto Protocol, sufficient political time and energy must be spared to ensure substantive outcomes on issues that really matter to those suffering from climate change’s savage impacts.

As the Civil Society Call makes clear, poor people are losing out twice. They are being hardest hit by a crisis they did least to cause, but the are not being served by climate-related funds that should be helping them.

Most existing funds have benefited just a handful of developing countries, privileging mitigation over adaptation, and offering little scope for the meaningful participation of affected communities, especially women.

There is an urgent need to establish a new fair global climate fund to help developing countries build resilience to the impacts of climate change, protect their forests, and adopt low-carbon development pathways. Public finance is vital to meet these needs, while carbon markets are proving inadequate or inappropriate. To be truly equitable and effective, the new fund must mark a clear shift in the management of global flows of climate finance that delivers for poor people.

Ministers arriving this week must do more than just start a process to establish a new fund – they must take political decisions on the nature of that fund. At a minimum, they must ensure a fund which is established and designed under the UNFCCC, gives equitable representation to developing countries, ensures consideration is given to gender balance in its makeup and civil society and affected communities have a strong voice, guarantees at least 50% of the resources of the fund are channelled to adaptation and allows direct access to funds by develop¬ing countries. And ensures that vulnerable communities, especially women and indigenous communities, participate fully in decisions on uses and monitoring of finance at national level. The establishment of a fair global climate fund is long overdue. Ministers, don’t waste this opportunity to chart mark a new course for global finance governance that puts poor people at its heart.

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