Also discussed here: Paris, give us carbon pricing, but give us market mechanisms too! (Joan MacNaughton, World Energy Trilemma, World Energy Council, Sep. 23, 2015)Today we review a report and recommendations from the World Energy Council, aimed at the COP21 climate conference to take place in Paris in December 2015. Among the important factors that need to be considered in setting a global goal to remain below 2 C warming target is the need to recognize different energy dependencies in various countries and sub-regions, the need to have carbon pricing in place, in order to allow the successful implementation of carbon capture and storage (CCS) without which achievement of the goal is impossible and the major role for the private sector, especially in controlling emissions from the supply chain. For example, the differences between the carbon pricing strategies of fossil fuel provinces in Canada ( Alberta, Saskatchewan, Newfoundland) and low carbon energy producing provinces (British Columbia, Ontario, Quebec) and the mix of carbon tax and cap and trade approaches show how local situations lead to different low carbon solutions.
Key Quotes:
“it is vital that policymakers in Paris don’t just put a price on carbon, but also allow for market mechanisms as part of any international climate agreement. Preferably, these mechanisms should be linked to each other and allow for forms of offsetting, so that companies can buy credits if they can’t reduce emissions.”
“To be truly carbon neutral, companies must address their supply chains. In the UK it is estimated that 80% of a company’s carbon footprint resides in its supply chain which is likely made up of companies of a variety of different sizes.”
“Produce an agreement: keep it simple, keep it measurable” “Until we get the environment, energy and commerce ministers in one room we won’t get good climate decisions” “Policymakers must drive a sense of ambition by setting a courageous target that allows people to become creative”
“Don’t go backwards and make sure that if you are ambitious, you understand the consequences”
“A fossil-fuel oriented economy may choose to focus on energy efficiency and demand management measures, and expanding research and development on building efficiency, clean vehicles and advanced coal technology. In contrast, a country that relies on fossil-fuel imports may choose to focus on a combination of energy-efficiency and demand-management measures. Carbon pricing could also be a means to levelling the playing field among different technologies and increasing the share of renewable energy sources.”
“Canada is a net exporter of most energy commodities and a significant producer of conventional and unconventional oil, natural gas, and hydroelectricity. On a sub-national level, the country is very diverse. Large oil and gas resources drive the economies of Alberta, Saskatchewan, British Columbia, and Newfoundland and Labrador whereas in British Columbia, Québec, and Ontario, hydroelectric power is an abundant, cheap energy source that has enabled the creation of several important industries. These differences on a sub-national level lead to very different GHG emission profiles on a provincial level and strategies to reduce them.”
“If we don't have CCS [carbon capture and storage] commercial in the next five years, we will not reach the 2 degrees goal…It is estimated that 30 large-scale projects would be needed by 2020, capturing and storing 50 million tonnes (Mt) of CO2 per year, to achieve the 2 degree target agreed on the Copenhagen Accord at the UN Climate Change Conference in 2009…”
“Unless there is a meaningful price on carbon, CCS will not happen, except if government RD&D really steps up.” “It would be important to have a long-term process that you do not have to renegotiate every few years.”
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