With so much build-up to the United Nations Framework Convention on Climate Change (COP21) in Paris, the pressure not to fail is as great as it has ever been. This conference of parties (COP) follows the Kyoto Protocol in achieving agreements that are binding for the 190 countries represented. As it comes at a time that is dire for our climate future, an urgent and momentous outcome is needed.
As of Monday there will be more than 40,000 delegates at the conference. I will be reporting from the conference venue at the Parc des Expositions in Le Bourget, just to the northeast of Paris.
The media interest in this summit is greater than it has ever been. Six-thousands journalists applied to go; only 3000 places are available. What such interest signifies is the sense that Paris will provide a collective recognition that we are drawing so close to losing control over the climate.
The conference will not by itself create the change that is needed to address climate change, except in one respect: it rallies every nation to get on board in what has to be a collective effort. The question here is: how sincere will each nation be in keeping their promises?
The two degree guardrail is advanced as a measure of the fact that anything more and humans lose control over being able to do anything about climate change. But for more radical climate assessments, to aim for a guardrail that is so close to UN-defined consensus limits is high risk – especially when considering that the pledges that have been made by participating nations around the world are pointing toward 2.7℃.
And, as had transpired, the importance of the conference has not been held hostage to the terrorist events of mid-November. Instead some have sought to point out that the climate summit that millions will march for this weekend is also a peace summit.
There is, after all, no way that humans are going to peacefully co-exist when dealing with so many new forms of existential threats, extreme weather, climate migration, food shortages – all of which become destabilising threat multipliers for military conflict also.
According to this thesis, a circle was actually closed by the terror attacks of November 13. That is, climate-induced drought in Syria led to civil war, which has led to a power vacuum, providing a base for Islamic State to conduct training for international terrorism, such as was witnessed in Paris.
Paris will be different from Copenhagen in at least three respects.
First, all of the nations represented at the conference have been asked to submit “Intended Nationally Determined Contributions” in advance. So far 167 of the participating nations have done this, so there is already a baseline commitment to work with, and a way of evaluating the collective impact of such pledges as a basis for negotiation.
Second, there is the fact that since Copenhagen, climate change has been mainstreamed. As Erwin Jackson from the Climate Insitute has put it:
Climate change is not just an issue that is discussed in environment ministries any more, its now being discussed in treasuries. It is being discussed in defence departments.
Third, there is the enormous renewables boom since Copenhagen. The Climate Council in Australia has just launched its latest report:
The report details how, since Copenhagen, the number of nations locking into renewable energy targets has doubled. Nearly five million new jobs worldwide have been created since that time. The cost of solar power modules has fallen 75% in that time and wind power dipped by 30%.
This all adds up to countries being able to back their pledges because an alternative to fossil fuel in now available. And around the world, US$270 billion in renewable investments were made just last year, according to a UN report.
Such investment lags behind annual investment in fossil-fuel energy industries, but the difference is that such investment is in year-on-year decline. An open letter will be published today in New Scientist and The Guardian, signed by world-leading economists and scientists who have called for a moratorium on the building of new coal mines.
At the same time, the fossil fuel industry has a toe-hold on the Paris conference itself. GDF Suez (now Engie), the co-owner of Victoria’s Hazelwood coal mine, one of Australia’s dirtiest coal mines, is one of the event’s fossil fuel “sponsors”.
I will be interested to learn, while at the conference, precisely what such companies gain from being sponsors, in an age where greenwash can dramatically mask the sincerity of the promises that nations are about to make to change the world.
The Organisation for Economic Co-operation and Development (OECD) countries have agreed to limit subsidies for the export of inefficient coal-fired power plant technologies.
Export credit funding will be limited to coal-fired power generators using only the most efficient, and least polluting, “ultra-supercritical” technologies. The deal will come into force in January 2017 and be reviewed in 2019. This will limit the public financing of coal-fired power generation worldwide.
Australia unfortunately continued its role as a climate laggard by negotiating for the inclusion of a clause allowing for exceptions.
Due to the clause tabled by Australia and South Korea, developing countries can receive funding for the construction of smaller (500 megawatts or less) less efficient “supercritical” coal-fired power plants. Regardless, the deal will encourage movement away from inefficient coal-fired power generation towards the most efficient technologies and substitutes such as renewable energy.
The timing of the deal two weeks before the Paris climate summit was probably an intentional move to help further build international momentum towards an ambitious deal.
While Australia does not finance coal plants through these schemes, other major economies such as Japan devote billions to them. In the past five years OECD export credit agency funding has provided around US$11 billion for coal power plants.
How will the deal affect coal production worldwide?
This agreement is likely to add to several existing trends to undermine coal demand and investor and government confidence in coal production. Early estimates suggest that the agreement could cut OECD export credit financing to coal plants by around 80%.
Exceptions and the allowance of funding for efficient technologies undermine the impact of the deal. This is not the end to OECD coal subsidies that many were calling for. But in any case, it is a significant step in the right direction. Ultra-supercritical plants are both more expensive in up-front costs and more efficient in their coal usage, meaning that the agreement is likely to result in reduced demand for thermal coal.
The deal could undermine up to 850 coal plant projects that were previously eligible for subsidies.
This adds to a number of other factors, including the plummeting price of renewable energy sources such as solar PV, which will work to constrain worldwide coal demand and production in the coming years.
Could it affect coal production in Australia?
This agreement will add to other structural changes that are undermining the feasibility of new coal mine construction and expansion in Australia. Australia is already likely going to need to prematurely retire some thermal coalmining assets due to overinvestment during the mining boom.
Two of Australia’s largest export markets, India and China, have plans in place to limit thermal coal imports and prioritise domestic coal use over the coming years.
A successful Paris agreement would likely further compound this restriction in coal export demand and strengthen the case for limiting coal mine construction and expansion in Australia.
This agreement contributes to a number of growing forces which all have one clear signal: the future of coal production in Australia is bleak.