55 Saves Lives

Fit for 55, the EU’s plan to reduce its 27 members’ greenhouse gas emissions 55% from 1990 levels by 2030, was adopted by the EU Commission yesterday. While the “jumbo package” is indeed comprehensive (as shown in the schema below), at core it ramps up lessons learned from the Emissions Trading System (ETS) in place since the early 2000s to transform the EU to a carbon neutral economy that much faster.

Key elements include:

EU watchers expect contentious negotiations as the EU Parliament negotiates with member countries, who must approve the plan. Pascal Canfin, chair of the Parliament’s Committee on Environment, Public Health and Food Safety, sees an ETS for buildings and road transport as “politically suicidal,” possibly triggering social unrest across Europe akin to the gilets jaunes movement that began as fuel price protests in France. Anticipating social impacts resulting from these mitigation measures, the EC proposes earmarking 25% of new ETS revenues for a Social Climate Fund. This fund would support building renovations and clean car buying by vulnerable families and small businesses, as well as temporary lump-sum payments to compensate for increased road transport and heating costs.

Yet many see the revised car emissions standards as relatively uncontroversial. The average lifespan of a car is 15 years; with full conversion taking place in 2035-2050, electric cars will only be that much more affordable. Several European carmakers have already announced their plans to end production of combustion engine cars by 2030.

Taking a step back, while Europe’s climate target is more ambitious than those of the U.S. and China, our friends at Climate Action Tracker (CAT) have determined that it is nonetheless “insufficient” to keep global warming below 2º C by the end of the century. CAT concludes that pledging a 65% reduction by 2030 and funding climate action abroad “would make the EU the first region with commitments compatible with the Paris Agreement.”

Gore on Greenwashing

As sustainable investment has moved from fringe to mainstream, Al Gore warns of a new “inconvenient truth.”

“We must be vigilant about the rising threat of greenwashing or risk derailing hard-won progress.”

Bloomberg Green, July 13, 2021

Gore, the former U.S. Vice President and Nobel Peace Prize recipient along with the IPCC, now serves as chairman of Generation Investment Management, a firm “guided by the simple belief that long-term investing is best practice and sustainability factors can materially affect long-term business profitability.” Generation Investment just published its fifth annual assessment of transitioning to a sustainable economy, the Sustainability Trends Report 2021 (STR2021). Amidst all the data-based reasons for celebrating progress on greening the economy, several data points flag the mismatch between rhetoric and action.

  • National consumer protection authorities estimate that 42% of environmental claims have been “exaggerated, false or deceptive,” and might even violate fair practice rules established by the European Union.
  • Carbon offset markets still present quality concerns, even those perceived to have stringent governing rules. One study concludes that California’s forest carbon offset program has overstated its climate benefits by some 29%, to the tune of $410 million.
  • Data from Climate Action 100+ indicates that 53% of the 159 companies analyzed lack appropriate short-term targets to meet net-zero emissions long-term goals. (Climate Action 100+ tracks 167 companies that account for over 80% of corporate industrial greenhouse gas emissions.)
  • This mismatch plays out in natural solutions investments too. Half of the Fortune 100 companies cite biodiversity in their reports. Yet only five made “specific, measurable and time-bound commitments on biodiversity.”
  • Consumers often face confusing and misleading claims about the benefits of sustainability.

In sum, STR2021 concludes that:

“The need for safeguards around sustainable investing is a key finding in this year’s report. There are several different types of challenges. Consumers face misleading claims online. Many companies are setting long-dated commitments with limited short-term plans. Studies continue to find major flaws in carbon-offset markets. Combining two of these concerns in one, some companies are even using offsets to claim that fossil fuels are green.”

Thus when looking ahead to COP26 and beyond, Generation settles on “quality” and “safeguards” as the watch words for sustainable investment management and highlights that safeguards are most needed to ensure that:

  1. Companies place more emphasis on near-term cuts in emissions than carbon removals/offsets in their net-zero scenarios.
  2. Long-term governance over carbon removals, and monitoring and reporting programs, is effective.
  3. Financial innovation does not run ahead of safeguards and governance, by establishing accepted “guardrails” for nature-based solution.

Are we building back better?

The pandemic-era mantra of climate progressive countries sees the health-turned-economic crisis as an opportunity to “build back better” via Covid recovery packages. The shutdowns drove down global GHG emissions in 2020 as unemployed and virtual workers flew and drove less, and manufacturing and service demand slowed. In the US, for example, emissions in the second quarter of 2020 dropped 28% alone due to plummeting transportation use.

But the International Energy Association (IEA) has signaled that GHG emissions from global energy production in December 2020 were a full 2% (60 tons) higher than December 2019 levels. The IEA Executive Director Fatih Birol put it plainly:

“The rebound in global carbon emissions toward the end of last year is a stark warning that not enough is being done to accelerate clean energy transitions worldwide. If governments don’t move quickly with the right energy policies, this could put at risk the world’s historic opportunity to make 2019 the definitive peak in global emissions,”

Which brings us to the question asked in a study released today by Oxford’s Economic Recovery Project and the Global Recovery Observatory: Do current pandemic recovery strategies walk the talk of building back better on climate change? Analyzing over 3500 fiscal policies announced by leading economies through February 2021, the study’s short answer is a resounding but polite “not yet”. In 2020, of the $14.6 trillion of announced spending by the world’s 50 largest countries, $1.9 trillion (13%) was aimed at long-term “recovery-type” measures. Of those funds, only $341 billion (18%) was designated for green recovery initiatives. Overall only 2.5% of total spending went to green initiatives, mostly by a small group of high-income nations, as the graphic below illustrates. Deftly treating this low uptake as an opportunity to do more, the full report presents detailed analysis, including the high mitigation potential of building back better via green energy, transport, building, and R&D policies.

Reports like this one provide the baseline for devising and monitoring green recovery policies. Keep an eye on this space for my analysis of the upcoming relevant events.

  • March 31: IEA-COP26 Net Zero Summit, “to step up international efforts to turn net zero pledges into concrete energy policies and actions”
  • April: release of IEA’s Global Energy Review 2021
  • May 18: publication of IEA roadmap for energy sector net-zero emissions by 2050

China takes notice of Biden’s climate change agenda

President Biden campaigned on a promise to have the United States rejoin the Paris Agreement. On inauguration day, he signed an executive order doing just that, which should become effective on February 20, 2021. United Nations Secretary General Antonio Guterres welcomed the U.S. back, saying “We look forward to the leadership of United States in accelerating global efforts towards net zero.”

China also noticed. Speaking through action, China re-appointed Xie Zhenhua, a long standing negotiator who played a major role in structuring and writing the Paris Agreement. Just as Biden has appointed John Kerry (also a key player in Paris in 2015) the Special Presidential Envoy for Climate, the Chinese Foreign Ministry appointed Xie as special envoy for climate affairs on February 4th (my birthday, so I missed it!). Xie has been out of the international climate negotiations for the last two years, and is well past the official retirement age.

Xie Zhenhua at COP17 in Durban, the birthplace of the negotiations that led to the Paris Agreement.

Li Shuo of Greenpeace in Beijing sees Xie’s appointment as “clearly a tailored move toward the U.S., an effort to ensure the diplomatic channels are there. With his experience and contacts, Xie’s appointment will at least help reduce transactional cost in China’s climate diplomacy.”

Xie himself, as head of Tsinghua University’s Institute of Climate Change and Sustainable Development, pointed out last year that the U.S. and China have continued to work together despite the Trump Administration’s lack of engagement in the international climate negotiations.

“In fact, we have never lost contact with state governments, universities and enterprises in the U.S., we have been maintaining effective cooperation. Regardless of domestic situation in the U.S., we are always willing to carry out cooperation.”

Just transition opportunity in West Virginia

A Glimpse Into the Life of a Modern Day Coal Miner | WVPB

West Virginia coal miners have been the object of political debates about the renewable energy transition needed to address climate change in the US. Candidate Hillary Clinton offered a retraining plan in 2016 that got lost in Donald Trump’s promises to grow these jobs by doing away with the Clean Power Plan. While West Virginia went for Trump again in 2020, coal mining there continued to shed jobs during his four years in office. And that was before the pandemic accelerated this decline.

A new report, West Virginia’s Energy Future, explains why and how the state’s coal industry should pivot under the incoming Biden Administration. Takeaways include:

  • Electric utilities should ramp up renewable energy (RE) and energy efficiency (EE) because RE is cheap and only getting cheaper, customers want it, and looming carbon pricing regulation will drive up the cost of coal-fired electricity.
  • Lenders and investors are decreasing investments in utilities sticking with emission-heavy energy resources.
  • Increasing RE and EE in West Virginia over the next fifteen years would be more cost-competitive than the status quo of continued dependence on coal.

West Virginia’s ramping up of renewable energy and energy efficiency should be complemented with a federal reinvestment in miners, coal communities, and our new energy economy.

Assessing global risks on Earth Day 2020

As the world takes its next steps in the COVID-19 pandemic, the World Economic Forum’s 2020 Global Risks Report provides context.

For the first time in the history of the Global Risks Perception Survey, environmental concerns dominate the top long-term risks by likelihood among members of the World Economic Forum’s multistakeholder community; three of the top five risks by impact are also environmental.

The graphic at right paints this picture starkly and colorfully. Whether measured by likelihood or impacts, the blue economic risks that dominated survey results from 2008-2012 have given way to a solid wall of green environmental risks in 2020. These environmental risks include:

  1. climate action failure
  2. biodiversity loss
  3. extreme weather
  4. natural disasters
  5. human-made environmental disaster

The World Economic Forum is not a tree-hugging organization. It is a members only group of some 1,000 companies that “engages businesses in projects and initiatives – online and offline – to address industry, regional and systemic issues.” Members work in all sectors of the economy: from aerospace to banking, manufacturing to agriculture, IT to insurance, mining to retail. Most of us know of the Forum’s posh annual meeting in Davos. Likely fewer of us noticed its new manifesto on the “universal purpose of a company in the fourth industrial revolution” and its core tenets:

  • “The purpose of a company is to engage all its stakeholders in shared and sustained value creation.”
  • “A company is more than an economic unit generating wealth. It fulfills human and societal aspirations as part of the broader social system. Performance must be measured not only on the return to shareholders, but also on how it achieves its environmental, social and good governance objectives.”
  • “A company that has a multinational scope of activities not only serves all those stakeholders who are directly engaged, but acts itself as a stakeholder – together with governments and civil society – of our global future.”

Chapter 3’s title does not sugar coat climate change: A Decade Left, Confronting Runaway Climate Threat. It relies on the most recent reports of the IPCC, UNEP, and IRENA, as well as those of insurance giant Swiss Re and the Bank of England, to conclude that “climate change is striking harder and more rapidly than
many expected
.” Businesses feel this impact, whether from the costliness of delaying the transition away from fossil fuels, uncertainty and riskiness of relying on geoengineered emissions mitigation, or failure of multilateral political cooperation to settle fair rules for all. Ending on this “geopolitical unsettling” that affects environmental, economic, and social wellness, the 2020 Global Risks Report reminds us that

Powerful economic, demographic and technological forces are shaping a new balance of power. The result is an unsettled geopolitical landscape—one in which states are increasingly viewing opportunities and challenges through unilateral lenses. … Beyond the risk of conflict, if stakeholders concentrate on immediate geostrategic advantage and fail to reimagine or adapt mechanisms for coordination during this unsettled period, opportunities for action on key priorities may slip away.

The need for speed on climate change

This new article in the Bulletin of the Atomic Scientists underscores the need – and potential – for action on short-lived climate pollutants (SLCPs). While the 2050 net zero pledges made in NDCs (discussed in this recent post) are important, the three authors argue that

… the climate battle could be lost long before 2050; it might even be lost by 2035.

They advocate for SCLP actions that will start by 2023 at the latest, be mostly implemented in 5-10 years, and “produce a climate response within the next decade or two.

Building new business models for the coming renewable energy transition

Can cooperatives become a major player in the renewable energy transition? Non-Profit Energy Cooperatives as the Catalyst of the Movement of People to Renewable Electricity, a webinar hosted by the Environment, Energy and Natural Resources Center at the University of Houston Law School, sets out this ambitious mission:

The renewable energy revolution poses a once in a lifetime opportunity for co-benefits of democracy, bringing electricity to those who lack it, and equity. This transition has the potential for widely shared prosperity, not just a decrease in suffering. To unlock that potential, however, we also need to disrupt business as usual in the dominant business model. The co-benefits are more likely if the institutions that lead the way are democratically owned and managed with the explicit goal of bringing the benefits of ownership to those who have been traditionally marginalized by the current economic and energy system.

Panelists Melissa Scanlan, who has blogged about her research on cooperatives in Spain as a Fulbright Scholar, and Gabe Pacyniak provided background on energy cooperatives, case studies in the US and Spain, and perspectives on what is needed to scale them up to fuel the needed transition to clean sources of energy.

Cooperatives have a long history as a business form for selling goods and services. Driven by values as well as profit, coops are owned by their members, not shareholders. They are governed democratically, meaning 1 vote per member (not per $ of investment, as with shares); reinvest profits in the coop or its members through dividends; and tend to keep economic and social benefits in the communities where they are established. In the US, food, farmer/agriculture, water, and electricity coops are the most common. Melissa observed that there are more coop members in the US than there are corporate shareholders.

Renewable energy (RE) coops are electricity coops that are acting on their shared values to address their environmental impact, both on climate change and local air pollution. To understand how they function requires understanding the 4 steps for moving electricity from the point of production to you. They are:

  1. generation (of wholesale electricity)
  2. transmission (of wholesale electricity via a grid)
  3. distribution (from grid substations to consumers on lower level wires, where 800 coops currently account for 13% of all electricity sales), and
  4. consumption (getting it to consumers and billing them).

Gabe has studied New Mexico’s 19 rural electricity coops, some of which are looking to transition to renewables. He described how the New Deal fostered the creation of US electricity coops, and planted the seeds of both success and current constraints. By 1930, only 10% of rural households were electrified, and the for-profits that furnished urban electricity were hobbled by the Depression. With the creation of the federal Rural Electrification Administration (REA), $2.7 billion was funneled to coops (most in distribution, but some in transmission). A decade later, the US had achieved 90% electrification. These coops were fit for purpose in the 1930s, when relatively little was known about fossil fuels and climate change, and the goal was to bring electricity to the rural poor as inexpensively as possible. But now, in our carbon-constrained world, their origins in 90% coal-fired electricity generation make transitioning to renewables a challenge.

Melissa provided case studies from Spain, which per EU legislation, achieved 29% of electric generation from renewable sources by 2010 with a combination of generous subsidies and legal reforms. Those reforms opened electricity generation, transmission, and distribution to new entities and established national laws for certifying electricity origins, which fostered growth and commercialization. (STAY TUNED for the publication of her book in progress.) Both subsidies and policy support created the conditions for coops to act on their values to fuel the renewable energy transition.

But her case study from Georgia, Cobb EMC, merits more attention. Cobb EMC is the third largest electricity coop in the US with 200,000 members. It installed one of first utility scale solar installation in eastern US and produces the most megawatts of any energy coop – all within a state that has taken no policy and legal steps to incentivize green energy. It provokes the question: Can coop values alone propel this renewable transition?

Gabe would say no. Coops comprise a limited proportion of the current RE market, with for-profit energy companies dominating this sector. He sees power coops struggling to shift from their coal-fired roots, in part because they cannot take advantage of federal tax incentives. He also points to light federal oversight and exemption from clean energy regulations (like state Renewable Portfolio Standards) having led to relatively unrigorous resource planning. Potential solutions are policy support for stranded assets (to retire those old coal-fired plants), more oversight of coop planning, and new wholesale rate models akin to those happening in the private sector.

For renewable energy coops to have a larger scale impact in the US, both panelists see the need for a modern new deal to fuel energy coops. The potential for post-pandemic infrastructure investments by the US government seems high, and harkens back to the Depression era solutions that created electricity coops in the first place. These case studies provide timely, persuasive examples of the kinds of policies needed to promote the economic, environmental, and social benefits of RE coops.

SLCPs: A potent link between air pollution and climate change

What are short-lived climate pollutants (SLCPs) and how do they affect climate change? Panelists on this webinar from WRI, Enhancing NDCs: Short-lived Climate Pollutants, make the case for why reducing SLCPs can give an immediate boost to lowering the global temperature while also decreasing local air pollution and improving human health.

Black carbon aka soot.

The main SLCPs are black carbon, methane, hydrofluorocarbons, and tropospheric ozone. Black carbon is a leftover of incomplete combustion of fossil (oil, coal, natural gas) and wood fuels. Because air pollution standards in North America and Europe have decreased these emissions significantly, the majority of black carbon currently comes from Asia, Africa, and Latin America, mostly from household cooking and heating and transportation. Black carbon lives in the atmosphere for less than 12 days (vs. CO2 lingering for a century), but has a high global warming potential. Methane comes primarily from agriculture (livestock and rice cultivation), coal mining and oil and gas production (gas flaring), and waste management (landfills). Methane lives in the atmosphere for only 12 years, but is more than 80x more powerful at warming the atmosphere than CO2. Hydrofluorocarbons (HFCs) are industrial chemicals used in air conditioning and refrigeration that remain in the atmosphere for 15-29 years and are more than 1000x more powerful than CO2. They are quickly increasing, having been created to take the place of other cooling chemicals that were banned because they deplete the stratospheric ozone layer. Tropospheric (ground level) ozone, a secondary gas that results when sunlight interacts with hydrocarbons (like methane) and nitrogen oxide (NOx), lives in the atmosphere for just a few weeks.

Taken together, eliminating these SLCPs has the potential to reduce warming by .6 degrees in a short period of time. Given that these pollutants also foul local air quality and cause lung and heart disease, they have the potential to build local and immediate political will that can produce global and longer term benefits. Hence the strategy of specifically including actions to reduce and eliminate SLCPs in the Nationally Determined Contributions (NDCs) required under the Paris Agreement. The first round of NDCs submitted in 2015 and 2016 did little on SLCP mitigation. With revised NDCs expected this year and the focus on closing the emissions gap by 2030, there is a full court press to include SLCPs this time around.

The Climate and Clean Air Coalition (CCIC) is an alliance of 69 countries, 18 IGOs, and 60 NGOs focused on how SLCPs contribute to both global warming and air pollution. Its work with developing countries in particular highlights the opportunity for short-term reductions to have immediate impact on atmospheric warming and local air-borne illnesses. CCIC also stresses the impact on local food security because of SLCPs’ impact on agriculture production. The bottom line, says CCIC, is that

there is no way to the Paris goal without addressing SLCPs.

The webinar panelists describe several approaches to revising NDCs that include SLCP mitigation with other greenhouse gas emission targets. They include:

  • incorporating analysis of local air pollution into national climate change analysis, using the data collection and analytical methodology and tools developed under the UNFCCC;
  • approaching emission reductions by sector, because high CO2 producing sectors usually align with high SLCP production;
  • focusing on key high emission sectors, like energy and transport; and
  • aligning NDC targets with other environmental and sustainability goals, like decreased air pollution under national laws and HFC reductions under the Kigali Amendment to the ozone treaty

Ongoing NDC revision in Mongolia, Nigeria, and Cote d’Ivoire were featured in the webinar. Mongolia’s Prime Minister declared the country’s air pollution an economic development challenge in its Sustainable Development Goal review. The eight sectoral mitigation contributions in its revised NDC targets an overall 23% GHG reduction and is built on the country’s current air pollution reduction strategy. Nigeria’s NDC revision focuses on the priority sectors of energy (oil and gas), agriculture, industry, and transport, and is linking some 35 donors to support individual targets. Cote d’Ivoire has worked five years to integrate SLCPs into national planning, mapping key sectors where they are produced (household energy, transport, waste, agriculture, oil and gas production), and now establishing baselines and reduction measures for inclusion in their 2020 NDC revision.

NEWSFLASH: COP26 postponed due to COVID-19

While thinking and writing more broadly about the pandemic and its implications for climate change, I pause to share this news just announced by the COP26 presidency. The UK says that COP26 will be delayed until sometime in 2021, still taking place in Glasgow, Scotland and with the pre-COP still being held in Milan, Italy. The mid-year “intersessional” meeting, called SB52, scheduled for Bonn in early June, has been tentatively rescheduled for October 4-13, 2020.

UN Climate Change Executive Secretary Patricia Espinosa said:

COVID-19 is the most urgent threat facing humanity today, but we cannot forget that climate change is the biggest threat facing humanity over the long term. Soon, economies will restart. This is a chance for nations to recover better, to include the most vulnerable in those plans, and a chance to shape the 21st century economy in ways that are clean, green, healthy, just, safe and more resilient.

The Guardian reports that COP26 President elect, Alok Sharma, “held crunch talks” with the key COP players, including the COP Bureau, the UNFCCC Secretariat, and UK and Italy representatives. While all recognize the extraordinary conditions of the pandemic, many climate change leaders opposed rescheduling, especially this far in advance.

Nicholas Stern had urged Boris Johnson to keep the negotiations on track. “At the moment we must just get on with the preparation. This is such an urgent challenge and there is so much to do, and so much valuable work that is being done, that we can’t afford to lose the momentum.” Yvo de Boer, COP15 president, agreed, observing that “if it is going to be cancelled, that should only be done at the last possible minute – in October.” Christiana Figueres, former UNFCCC Executive Secretary, had lobbied for keeping COP26 on track, given the need to peak emissions this year to stay within the 1.5C goal and to maintain pressure on member countries to “ramp up their targets in line with the steep emissions decline we need to see in this decisive next decade.”

But several climate change insiders see a silver lining. Some had observed the late start of the UK presidency – long before the pandemic – on the diplomatic push needed to succeed at COP26. Others pointed to the cancellation or shifting on-line of COP sub-body meetings in March and April and its knock-on effect of slowing down technical work. Giving the UK and Italy time to cope with COVID-19 and reset diplomatic and logistical preparations into 2021 could only help. (Of note: the COP26 venue, the Scottish Events Campus, is currently set up to serve as a temporary hospital for pandemic patients.)

Several point specifically to opportunities coming down the pike between now and a 2021 COP26. John Sauven of Greenpeace UK underscores the potential for government stimulus packages enacted between now and COP26 to “advance progress on tackling the climate emergency.” Many unnamed activists see the potential for a new US president elected on November 3, 2020 to bring the US back into the Paris Agreement. New scientific data will also be available in early 2021. Working Group I’s contribution to the IPCC’s new assessment report, AR6, is due to be published in April 2021.

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