BOTH A MIRACLE AND A DISASTER

By Anders Wijkman, co-president of the Club of Rome

The Paris Agreement is a diplomatic achievement. A hitherto fractious world came together and acknowledged the seriousness of climate change. All the 195 countries present have agreed on the need ”for global emissions to peak as soon as possible” and to ”undertake rapid reductions thereafter.” The call to hold the increase in global average temperature ”well below 2°C and to pursue efforts to limit the increase to 1,5°C above pre-industrial levels” is no doubt very ambitious. The active engagement from many large companies, hundreds of cities, scientists of numerous disciplines and civil society organisations also bear witness of the strong momentum in and around the Paris conference.

Comments so far have been overly positive, if not euphoric. President Obama hailed the agreement as a historic breakthrough. Thomas Friedman from the New York Times referred to it as ”a big, big deal”. Comments from governments sources in China talked about ”a new beginning in international cooperation”.

But there have also been critical comments. Leading climate scientist Jim Hansen calls the agreement ”a fraud”. Naomi Klein says it is ”strange to cheer for setting a target that you know you will fail to meet.” Bill McKibben describes the deal as ” enough to keep both environmentalists and the fossil fuel industry from complaining too much”. He adds: ”While the deal did not save the planet, it may have saved the chance to save it”

George Monbiot summarized it the following way in the Guardian: ”The deal is a miracle by comparison to what it could have been – and a disaster by comparison to what it should have been”. He added: “The real outcomes are likely to commit us to levels of climate breakdown that will be dangerous to all and lethal to some.”

To me Monbiot´s comments are to the point. It was, indeed, an achievement to agree, not only to keep temperature increase ”well below 2°C” but also to aim ”to limit the increase to 1, 5°C”. However, hardly anything is said about what measures to take. No agreement was reached on the necessity of a global carbon tax. Nothing is said about the importance of the phasing out of fossil fuel subsidies. Furthermore, the pace foreseen in terms of emissions reductions in the years leading up to 2030 – a critical period to avoid accumulating excessive amounts of CO2 in the atmosphere – is modest, at best. Hence, there seems to be a serious disconnect between what is being done and planned for and what is required.

Regardless of the way one assesses the Paris deal, to reach the goal of ”well below 2°C” will be a huge challenge. The remaining carbon budget to be able to stay below 2°C – with a probablity of 66% – is somewhere around 800 GTons of CO2 eqv. This means no more than twenty years of GHG emissions at today´s level. To limit the increase to 1, 5°C would allow less than ten more years of emissions at current level. How likely is that?

To put it bluntly, the 1,5°C aspiration is meaningless as long as nothing is agreed upon how it should be obtained. As regards the 2°C objective, it is still within reach – but it will require an almost herculian effort. And such an effort muct start now, at maximum speed.

Too much reliance on BECCS

Carbon dioxide is long-lived in the atmosphere. The remaining carbon budget, as shown above, is extremely tight. It is therefore realistic to assume that CO2 emissions will overshoot. The question is by how much?

Almost all the 2°C pathways – not to speak of those for 1,5°C – do require a significant volume of negative emissions, starting well ahead of 2050 and continuing for the rest of this century.

To stay below the temperature target it will be necessary to remove CO2 from the atmosphere and sequester it indefinitely. A range of options have been identified, such as biochar, artificial trees, geoengineering and Biogenic CCS(BECCS). The one most often referred to is BECCS, i e the burning of biomass with carbon capture and storage(CCS).

While there are proven technologies both to capture and store CO2, the main challenge with BECCS is the scale needed. The following comment by Professor Kevin Andersson, deputy director of the Tyndall Centre, puts BECCS into perspective:

”The sheer scale of the BECCS assumption underpinning the Paris Agreement is breathtaking – decades of ongoing planting and harvesting of energy crops over an area the size of one to three times that of India. At the same time the aviation industry anticipates fuelling its planes with bio-fuel, the shipping industry is seriously considering biomass to power its ships and the chemical sector sees biomass as a potential feedstock. And then there are 9 billion or so human mouths to feed. Surely this critical assumption deserved serious attention within the Agreement?”

Add to that the logistical, legal and public acceptance questionmarks. The volumes of CO2 to be stored – to compensate for carbon overshoot – are extraordinarily large in most of the IPCC 2°C-pathways. Unfortunately limited efforts have been devoted to critically analyze whether such volumes are at all possible to obtain.

No doubt, strong efforts must be made to develop the CCS technology further. It will be needed to address carbon emissions both from power production – we can not think away coal in parts of the world in the foreseeable future – and from the production of steel and cement.

Why not a Marshal Plan for low-carbon investments?

Negative emissions will also be needed, and BECCS is an option here. But everything must be done, in my opionion, to limit the scope. Until recently BECCS was looked upon as a fallback strategy – sort of a Plan B – if everything else failed. But after Paris and COP 21 it has become a central component in the strategy of implementation. The main reason is that governments so far have failed to give mitigation measures the much needed boost in the immediate future. COP 21 was no exception. So in my view, the huge reliance on ”negative emissions technologies” is dangerous. It tends to give us a false sense of security that we will be able to engineer our way out of the climate problem

Instead of agreeing on something like a Marshal Plan to invest in low-carbon technologies – which would have been possible both from a technological and economic point of view – the Paris agreement assumes that mitigation measures in the period leading up to 2030 would only deliver reductions in the range of 2 % p a. If we believe climate change is a serious threat – and the Paris agreement says it is – prudence would compel us to take much stronger action in the immediate future and not leave it for later. Absent that, the reliance on negative emissions – first and foremost BECCS – would be dangerously high.

Step up action now

The main hope for the post-Paris agenda is that different actors – governments, cities, companies, financial markets and civil society organisations – will take the challenge seriously and do everyting possible now to help support a strengthening of mitigation efforts across the board. Strong action by individual governments, states or cities do matter. The world is in desperate need of good examples. Let us not forget the sentiments by Konrad Adenauer many decades ago: “When the world seems large and complex, we need to remember that great world ideals all begin in some home neighbourhood.”

The industrialised countries must take the lead. Some people contend that action is already effectively under way, not least in the EU. I do not want to belittle the climate policies of the EU. The support programs for renewables, for instance, have been of great importance. Without them both solar and wind technologies would be nowhere in terms of performance and cost reduction. But overall we have only seen the beginning. To cut emissions by 20-30 % was relatively easy. To move societies close to zero emissions before 2050 is a daunting task .

This being said, we know it can be done. We have both the knowledge, the financial resources and the technologies to move towards a low-carbon society. With learning curves for solar and wind – and more recently for energy storage – being extraordinarily positive there is no longer any excuse for not taking strong action. But lower costs alone for new technology will not make it, in particular not in a situation when the price of oil is plummeting. Policy frameworks have to be changed to incentivize the necessary technology shifts. In addition, public sector support for research, innovation and demonstration projects has to increase significantly. Also important will be to support investments in low-carbon infrastructure and material efficiency. Done the right way a co-benefit from such investments would be substantial gains in employment.

The EU should take the lead

Industrialised countries have to strengthen their reduction targets as well as their policy frameworks. For obvious reasons I will restrict my comments primarily to the European Union. But many of the suggestions made will be of relevance for most of the OECD countries.

I am happy to be able to refer to my own country, Sweden, as an example that action as a direct response to the Paris deal is already happening . The Swedish Government Task Force on Climate Change – involving representatives from altogether seven political parties – has recently submitted an unanimous proposal to the government to significantly strengthen climate policy in Sweden. The most important elements are the enactment of a climate law and setting a goal of cutting GHG emissions by at least 85% no later than 2045 – a more amibitious goal than was envisaged before. The introduction of a climate change act – in tandem with the more ambitious emissions reduction target – will improve carbon management and help the transition towars a low carbon economy. The spirit of Paris meant a lot for the outcome of our deliberations.

To speed up action at the EU level, the Emissions Trading System(ETS) – covering almost half of carbon emissions in the EU – has to be radically reformed. The carbon price is curently far too low to drive innovation in new low-carbon technologies. Furthermore, the lack of flexibility in the ETS and the inability to adjust to radical changes in the economy threaten to undermine the efficacy of the whole system.

One thing seems crystal clear. GHG emissions in the ETS sector are not likely to be phased out as a consequence of carbon prices alone. The elimination of carbon emissions from the production of both steel and cement, for instance, will require serious efforts in terms of R&D to spur technology shifts or in the form of targeted funding for the improvement of CCS . The public sector will have to play a role.

The burning of coal for power production constitutes a special problem. Here again, it is difficult to see that the ETS alone would bring about the necessary phase-out quickly enough. Environment performance standards – like the ones being considered in the US – could be one way of addressing the issue.

For the rest of the economy – the non-trading sectors – a number of things have to happen, such as:

Introduce fiscal incentives, like increased carbon taxes, to help stimulate the electrification of the transport sector. For the short and medium term the development of advanced biofuels will help to bridge the transition, first and foremost for heavy trucks. Hydrogen may be part of the solution.
The development of an EU-wide recharging infrastructure to facilitate E-mobility. Moreover, a key element in the electrification strategy must be to go beyond ownership, by the promotion of carsharing. Also important will be to expand and make more convenient public transport.
Scrap remaing fossil fuel subsidies and increase support for clean energy where renewables are not yet competitive.
Address emissions from food production – and promote the build up of carbon in the soil – by testing new farming techniques such as low-tilling and perennial crops. To limit consumption of meat, different kinds of economic instruments may be introduced, like increased taxes (eg differentiated VAT) and parallel to that lower prices on healthy foods like fruit and vegetables.
Introduce a tax on waste incineration as a component of a move towards a circular economy (see below).
Introduce a carbon reporting obligation on financial institutions.

Sector strategies are not enough

Climate policy has to be comprehensive and cover all sectors of society. But sector strategies will not be enough. There are cross-cutting issues that need urgent attention as well. Let me adress two or the most important ones:

Rethinking the way we measure progre

For too long has growth in GDP been used as the main indicator of progress. GDP growth is a deeply flawed measure of well-being. High growth does not guarantee shared wellbeing. Furthermore, growth rates tell us very little about levels of waste and emissions and the health of our most important ecosystems. As long as governments insist on maintaining GDP growth – a quantitative indicator – as the main indicator of societal progress, there is little hope we can steer development towards sustainability. There are alternatives to GDP in the form of indicators that highlight qualitative improvements. It is high time we adopt them.

Moving towards a circular economy

The main focus of climate mitigation so far has been on energy use. But the material flows in society are just as important, and the two are intimately related. Industrial society was essentially built on linear resource flows. Energy and materials were cheap and companies did not have to pay for pollution. The logic of business was built around as rapid turnover of consumer goods as possible.

There are three serious problems, however: Pollution, depletion and wastefulness. Emissions to air and water are directly proportional to the energy and material throughput in society. Moreover, most of the products and components that are thrown away today represent significant value and could be used again – and again. For some materials – finite as well as renewable – the risk of depletion in a world with rapidly growing populations and economies is for real. Fisheries, fresh water, tropical forests, soils and rare earth metals are the resources most often referred to.

The production of raw materials account for almost 20% of global GHG emissions and the waste sector represents another 3-4 % . Switching to renewables and improved energy efficiency in the production processes will help. But just as important will be to reduce material throughput through activities like reuse, remanufacturing and recycling. To extend product life would be another important measure to consider.

We need a new business logic. More circular business models must replace the linear economy, featuring practicies like: Multi-storey buildings built of wood; electronics designed for longer life, and for components to be used again; car plants, like is the case with Renault, taking back old engines, renovating them and making use of them in new vehicles; tyre manufacturers, like Michelin, offering tyres for lease, charging per km of use; clothing companies, like Mud Jeans and Houdini offering clothing for rent and lighting companies, like Philips, providing lighting as a service.

A new report from the Club of Rome has studied the likely macro-economic effects by moving towards a more circular economy. Five countries – Finland, France, the Netherlands, Spain and Sweden – were analysed using a traditional input / output model. The question posed was: How would the economies have performed today if they were 25% more energy efficient, had reduced the use of fossil fuels by 50% in favor of renewable energy and achieved a far more efficient use of materials?

The result is very promising. If the countries studied were to introduce all the three actions in parallel, the effects would be substantial: CO2 emissions would be between 65 and 70% lower. The impact on jobs would be highly positive as well: an estimated 75 000 additional jobs in Finland, 100,000 in Sweden, 200,000 in Holland, 400,000 in Spain and half a million in France.

The result should not come as a surprise. An economy giving priority to caring for what has already been produced – through repair, maintenance, upgrading and remanufacturing – is more labour-intensive than both mining and manufacturing (often in highly automated and robotized facilities).

A circular economy will not happen by itself. Policy measures – as well as targeted investments – will be needed. The scope here is too limited to dwell into this. Product design issues come into play as well as taxation. A tax shift would seem obvious – – reducing taxes on labour and increasing taxes on pollution and the use of natural resources. Moreover, to let recycled materials be exempt from VAT would be an effective measure to promote the use of secondary materials and help correct a situation where it is often less expensive to use virgin materials as compared to recycled ones.

To sum up. We need much more swift action to meet the Paris temperature targets than what is being envisaged. The alternative would require a large-scale deployment of “negative emissions technologies”, whose implications we do not really know.

Industrial countries are of course just part of the puzzle. Whether the Paris targets will be met or not will to a large extent be decided by developments in the developing world. But developing countries depend a lot on progress in the industrialised countries – in terms of finance and technology but, as well, in terms of good examples that welfare and wellbeing can be achieved in a low-carbon economy.

The financial support so far agreed to low-income countries – 100 Billion US yearly from 2020 – to assist their transition to a low-carbon infrastructure and their adaptation to an increasingly changing climate is pathetic. The global subsidies to fossil fuels alone amount to five to six times as much. If we include the indirect costs, as well, the sum according to IMF is ten times bigger. It is beyond belief that the industrialised countries so far have not been ready to allocate significantly larger funding to help support investments in low-carbon technology in the developing countries. Such investments would benefit all of us and the sooner we realise that the better.