Paris and beyond: Next steps to a low-carbon future

by Hal Harvey, CEO Energy Innovation LLC

Now that the Paris conference on climate change has wrapped up, it is an ideal moment to take stock: Can we land the world on a reasonable climate future? What is required to do so?

The first question to consider is: what did—and did not—come out of the climate negotiations? Historically, the UN climate process has been home to a thousand broken dreams, and hundreds of thousands of negotiating hours, often chasing circular arguments about targets, responsibility for past emissions, funds for future abatement, and countries’ status (developed or developing). It is hard to look at the first 20 COP meetings and be optimistic.

Much of that noxious stalemate was transcended in Paris—partly in the ultimate text, but mostly in the individual country plans that were submitted before the conference and the political spirit evident there. What really matters is whether and how those plans are followed up on in the coming months.

The Paris Agreement

The text of the Paris agreement is a masterpiece of bridging differences—and therein lies both its strengths and weaknesses. There are deep tensions in the UN process, driven by legitimate issues. Consider the conundrums:

  • Payments: The brunt of climate change will be borne by poor nations and island nations, but the bulk of the emissions have come from rich countries. So the poor countries want payment for mitigation and adaptation. The treaty calls for $100 billion per year, but does not say who should deliver the funds (the rich countries, yes, but no names), who should receive them (poor, but again, no specifics), nor what should be counted (Aid? Loans? Private sector investments?). And it certainly does not look into the complicated domestic politics of, say, trying to pry funds from the U.S. Congress.
  • What kind of country is China? China is emblematic, if not unique, as a country in both the developed and developing worlds. As an industrial country with a middle class of some 300 million people, with the largest carbon emissions in the world, it looks like a developed nation. But with 450 million people in abject poverty, it looks like a developing nation. Because the UN process so studiously sorts responsibilities into these two bins, China works hard to maintain its developing nation status, even as it makes fairly heroic moves on carbon, technology, and international aid. The China conundrum exemplifies both what is wrong with the UN process and how to fix it.
  • Goal: The treaty calls for “holding the increase in the global average temperature to well below 2 degrees C and to pursue efforts to limit the temperature increase to 1.5 degrees C.” The lower target is ambitious and scientifically justified. This is rightly seen as a big step forward. But it does not contemplate which nations must cut emissions, and at what speed, to get there. Again, a global goal, but no individual responsibility.
  • National Plans: All carbon reduction and forest preservation must ultimately live in country-by-country domestic policy. The most significant aspect of the Paris conference is the suite of national plans submitted before the conference by some 195 nations. The treaty, however, recognizes these plans as non-binding, and the entire process nearly got hung up on determining whether there would be transparency and verification in reviewing the progress of these plans, and how often they must be updated. In the end, progressive negotiators prevailed, and determined there will be a review process every five years, and a single system for transparency and verification—though with some allowances for countries with poor technical capability.

While the treaty may not have the kind of handles that a lawyer, say, or engineer would wish to see—focusing on collective, rather than individual national goals; lacking explicit enforcement mechanisms; and obfuscating several key questions—the Paris treaty must be counted as an enormous success. Here’s why.

Crossing Thresholds

The world is reaching, and crossing, several key thresholds at once:

  • Political: It is fair to argue that Paris marked a turning point on climate politics. Nations were competing to offer stronger plans, stronger language, and stronger commitments. Dozens of heads of state made the trip, and made strong pronouncements. There was virtually no resistance to action, and deep commitments by many.
  • Social: Two out of every three Americans, more than ever before, are now concerned about climate change, and the same number support the U.S. joining an international treaty to limit greenhouse gas emissions. The 40,000 people in Paris—and millions more worldwide—calling for change were adding enormous power to the cause.
  • Technological: It is increasingly clear that a rapid transition of the electricity system to renewables is feasible and affordable, and to near-zero emissions in buildings likewise. Transportation and industry are tougher, but the progress is strong. The world has a very different set of options than even five years ago.
  • Economic: Accionna’s CEO, José Manuel Entrecanales, told us in Paris that his company, with 10 GW in renewables, recently bid wind at under three cents per kilowatt-hour, and solar at less than five. This compares to retail rates in California of around 15 to 20 cents. A number of studies, and increasing experience, are showing that it is actually cheaper to land on a low-carbon future than a fossil future, not counting environmental and climate benefits. Note, however, that without policy reform, the transition will not happen, and incumbent industries will fight hard to resist the low-carbon revolution.

That is a heartening amount of progress. It opens up vast potential. It is the result of many years of hard work on each front—and now it can be toted up as a suite of stunning achievements. It also demands a new approach to winning.

Walk through open doors

The essence of a new strategy is to help, with deep technical assistance and laser-shot political support, to design and pass the most important policies in the biggest nations.

There is an easy test to determine whether a climate strategy will succeed: Can you draw a bright line from the strategy to physical changes in our buildings, transportation systems, power plants, and factories? The only way to stave off climate change is to make these four big, physical systems far more efficient, and to power them with low- or zero-carbon energy. So the Paris treaty only works if it drives a better building code in China, or cleaner factories in Europe, or more efficient trucks in the U.S. This is physics, not politics.

This core reality begs the next question: Which policies are proven to transform these systems? What, specifically, can actually drive success? The answer, perhaps surprisingly, is that a small set of policies, only a dozen or so, can have a profound effect. A great building code can drive energy use in new construction to near-zero, or even zero. Fuel efficiency standards for cars are the killer app in transportation—and they need to be aggressively expanded to trucks, and put on track for continuous improvement. Putting a price on carbon is no panacea, but it is definitely important, and is the best policy for heterogeneous, price-sensitive industries.

The crucial message in solving climate change is this: If the 20 largest nations in the world adopt most of these policies, we win. And recent technology advances make this the cheapest choice, not counting the climate and air pollution benefits. So, the key action after Paris is to encourage national policies, especially in the big countries, that are properly designed and implemented to steadily reduce CO2 emissions. There is no other route to a reasonable climate future.

Here’s further good news: The templates for this work are mostly written. On the road to Paris, countries submitted non-binding Intended Nationally Determined Contributions (INDCs) to reduce greenhouse gas emissions, and many lay out their actions for doing so, such as cutting energy waste, increasing renewable energy, reducing deforestation, and taking care of other greenhouse gases, like leaking methane. Everyone from Andorra (contributes 0.00112 percent of global emissions) to China (produces about a quarter of global emissions) has submitted plans—and together they really add up.

If all the INDCs are met, the world will be about halfway from runaway destruction to a reasonable future. That is a really big deal. Halfway to salvation. They also set us up for the second half by driving down the price of clean technology, launching new businesses, and channeling massive capital to new industries.

Technical assistance is required to translate the INDCs into good national policy. Practitioners in the energy field have seen, repeatedly, the specter of good ideas ruined by bad policy design. In the last three decades, for example, Americans have overpaid for new technology by fixing prices instead of letting the market find them (California’s early electrical contracts); we have subsidized dead-end fuels strategies because they are politically useful (Iowa and ethanol); we have let industries stagnate (Detroit circa 2008). Today, we are propping up power plants built when Dwight Eisenhower was president (resistance to the Clean Power Plan). The list of policies requiring reform, globally, is very long, perhaps topped by the $500 billion the world still spends subsidizing fossil fuels each year.

So it is not automatic that good policy design will follow even the best of intentions. And that means that the required post-Paris action is to offer detailed, expert support for better national policy, combined with hard-hitting, laser-focused advocacy to get the policies passed and implemented.

Still and all: This is a great day for the planet.