COP21: We Heard the Promises, We Await the Actions

Meanwhile, global temperatures continue to shatter records. NOAA (The National Oceanic and Atmospheric Administration) and NASA (The National Aeronautics and Space Administration) released a startling report last week revealing that 2015 was the warmest year since recordkeeping began in 1880. With a 0.9°C deviation from 20th century norms, last year was 20 percent further from this benchmark than the previous record-holder for the warmest year ever, 2014. And according to climate experts, including the director of the Goddard Institute of Space Studies at NASA, the ongoing El Niño will likely make 2016 another particularly hot year, while 2017 is likely to also be another top-10 year. 

Background 

Over the past three decades, awareness of and discussion about climate change have progressed rapidly. In 1987, the discovery of a hole in the stratospheric ozone layer over the Southern Hemisphere prompted fears over the impact of human activity—specifically the emission of certain chemical compounds—on the environment.

At the 1992 Earth Summit in Rio, participants from around the world formally recognized these concerns and signed onto the UNFCCC treaty, which aims to stabilize the destruction of the ozone and mitigate its impact on climate systems, and formed the UNFCCC secretariat dedicated to the same purpose. 

The UNFCCC has held annual meetings ever since, known as the Conference of the Parties (COP), though only a handful have produced measurable results. The Kyoto Protocol is arguably the most important accord created through the UNFCCC at COP3 in Tokyo, as it defined greenhouse gas (GHG) limitations for a significant number of countries. With the Kyoto Protocol, the international community acknowledged that anthropogenic carbon dioxide emissions were contributing to climate change, and that climate change was  a major issue that needed to be addressed.

Last year’s COP21 is arguably the most significant push towards climate change mitigation since COP3. All 195 UNFCCC member countries, virtually every country in the world, came to an agreement on a short-term approach to tackling climate change.  After nearly two weeks of negotiations, including a one-day extension to continue discussions, representatives from these nations approved a thirty-one page draft, now known as the Paris Agreement.  Highlights of the agreement include: limiting global temperature increase to “well under” 2°C above pre-industrial levels; seeking efforts to keep temperature increase to 1.5°C above pre-industrial levels; working towards having GHG emissions peak as soon as possible in order begin reducing them; calculating emissions stockpiles and developing five-year plans from 2023 onward; investing $100 billion per year in climate finance by 2020; and designating specific areas, such as low-lying nations and poorer nations as priority regions.  The accord seeks to achieve these goals by requiring all parties to be bound by nationally determined contributions, or NDCs. Countries are required to regularly report their emissions and the progress they have achieved towards meeting their NDCs, and both are subject to international review.  

In order to enter into force, the agreement must be ratified by 55 of the 195 countries which signed on at COP21, and these 55 countries must represent at least 55 percent of total global emissions as a group.  A group of 55 countries can mean something very different to a group of countries representing 55 percent of emissions: China alone is responsible for 28 percent of GHG emissions, and when combined with the US, India, and Russia, the four account for nearly 55 percent of global emissions.  Cooperation from these countries is clearly paramount to not only the legal vitality of the Paris Agreement, but also to any meaningful effort to mitigate the effects of climate change. 

Feeling hot, hot, hot! 

Last week, NOAA and NASA jointly released analyses on 2015 global temperatures, and the results are sizzling. Once again, the world has likely broken its temperature record with a 0.9°C increase in global temperatures compared to the 20th century average.  NASA is 94 percent confident that 2015 was in fact the warmest year on record.  

Not only did 2015 break the previous heat record set in 2014, but it did so by 0.16°C, the widest margin on record.  In fact, 15 of the 16 warmest years documented have occurred in the 21st century, a sobering fact given that global temperature records date back to 1880.  Ten of 2015’s months set all-time global temperature records, though December in particular was in a league of its own. For the final month of the year, temperatures were 1.11°C higher than 20th century averages, surpassing the previous record-breaking month of October 2015 by 0.12°C. 

Gro Intelligence interviewed Dr. Gavin Schmidt, Director of the Goddard Institute of Space Studies at NASA, on the significance of the recently released report. While 2015 was certainly notable, Dr. Schmidt expects 2016 to extend the record-breaking streak and become the warmest year on record.  Dr. Schmidt noted that in 2015, El Niño contributed roughly 0.07°C of the rise in global temperatures. It is important to note that even without the effects of El Niño, 2015 would still have set a new maximum global temperature record and still would have done so by the widest margin in history. He believes the effects of El Niño, which typically support warmer global temperatures given warmer ocean temperatures, will have an even greater impact on 2016 than 2015.  When asked if global temperatures will recede once El Niño subsides into a neutral oscillation or a La Niña, Dr. Schmidt noted that they would, but marginally, and that he believes 2017 will likely be another top-10 year.  

The warming that occurred in 2015 was astonishingly consistent around the world, with records being shattered in virtually every corner of the planet. Asia had its warmest year on record, as did South America, and Africa had its second warmest year, behind 2010.  Australia had its fifth warmest year on record and the month of October was the most anomalous warm month in Australian history.  The poles also set records, with the Arctic recording its smallest annual maximum extent, the time of the year when it is largest in size, and recording its fourth smallest minimum extent during the melting season.  Conversely, the Antarctic ranked its sixteenth largest annual maximum extent and its fourth largest minimum extent during its melting season.  Dr. Schmidt noted that warming by area is more or less matching expectations, with an exception of an area in the North Atlantic near Greenland,  where he notes “a cool anomaly developing over the last few years that might be related to an ocean circulation change.” 

COP21: A “monumental triumph” or “worthless words”?

The UN Secretary-General, Ban Ki-Moon, heralded the compact as “a monumental triumph for people and our planet,” while the Executive Secretary of UNFCCC, Christiana Figuere, lauded the agreement as a history-making triumph.  While the diplomacy required to have 195 countries agree on anything is in and of itself impressive, the Paris Agreement still has a number of shortcomings. It would take swift and strong global effort to reduce GHG emissions by the necessary 70 percent by 2050 to limit global warming to under 2°C above pre-industrial levels,  and the world at present does not seem ready to commit to such a goal. A number of climate prediction tools, including the Climate Action Tracker, have inputted the recent NDCs from the Paris Agreements and determined that under the new self-imposed limitations, global temperatures would rise by 2.7°C over pre-industrial levels by 2100.  While this is a notable improvement from the predicted 3.1°C rise over the same period based on dated NDCs,  an increase of 2.7°C would still have dangerous consequences for many. 

Though the difference between a 1.5°, 2°, and 3° temperature increase may seem marginal, the differences in the implications of each are in fact stark. At a 2°C increase over pre-industrial temperatures, it is estimated that global corn yields will decline by roughly 10 percent, and global spring wheat yields by more than 15 percent.  Should temperatures increase by 4°C, corn yield loss would be over 30 percent, and spring wheat over 20 percent.  An even starker difference is seen in habitats of plant and animal life. Given a 2°C increase scenario, over 20 percent of plant species around the world would lose half of their habitat—under a 4°C increase this figure is nearly 60 percent.  Mammals fare only slightly better: they would lose roughly 15 percent of their habitat under a 2°C scenario, and over 30 percent under a 4°C scenario.  

While it is clear that COP21 represents a step in the right direction, some scientists, such as Dr. Hansen, have valid critiques of the agreement. Dr. Hansen went as far as to call the progress in Paris “a fraud,” stating that there is no mention of action and that the accord is merely a list of promises.  The agreement,  for example, merely “urges” parties to communicate a new NDC by 2020, and to do so every 5 years thereafter—language that is hardly binding. 

The agreement promises to limit temperature increase to “well below” 2°C above pre-industrial levels and to “pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change.” The intent of UNFCCC members is clear, but the urgency and accountability of the agreement is less so. Much of the hesitation comes from concerns, real or perceived, about the economic implications of reducing GHG emissions: if one country is at a competitive disadvantage due to an accelerated pace of GHG emissions reduction, what incentives are there for it to limit the increase to 1.5°C? 

No taxation, no representation

There are several profound questions at the heart of international climate negotiations. Perhaps the most widely discussed controversy is the fact that wealthy countries, which have been burning high volumes of fossil fuels for decades and some of whom even owe their wealth to the practice, are now telling developing countries that everyone must take preventative measures against climate change. Many developing countries, therefore, resent that they are being tasked with cleaning up the messes created by wealthier countries, whilst being denied the very thing that has made many rich countries rich. Yet another contentious issue is whether or not to contextualize and develop policy around emission reduction based on aggregate emissions or on a per capita basis. The list could go on. 

Dr. Hansen argues that the current approach to climate change mitigation is top-down in nature, rather than being a “snowball” approach, which would be the result of a tax and dividend model.  In Dr. Hansen’s model, a tax on coal, oil, and gas would be collected at the first point of sale (or elsewhere along the value chain), and the entire tax would be redistributed equally to the public.  Because fossil fuel companies would want to pass along as much of the tax as possible to end-users, this tax would raise the price of carbon and help make renewables more attractive.  Additionally, consumers would be incentivized to use as few fossil fuels as possible in order to maximize the potential economic gain of the tax distribution.  

Dr. Hansen’s tax model has gained few supporters in the US Congress, though some states do operate similar cap-and-trade or dividend models. The Alaska Permanent Fund, which at over $51 billion is the largest trust fund in the United States, collects at least 25 percent of all royalties generated from oil and natural gas producers on state-leased lands and redistributes them to Alaskan residents.  California, on the other hand, operates a more traditional cap-and-trade model, in which a limit is placed on emissions, and permits for emissions are distributed by the state. This creates a market in which permits can be auctioned off, thus creating a “price,” per se, on carbon use.  

The pricing of carbon is a concept that is truly paramount to emissions. Climate experts and economists alike argue that the rampancy of fossil fuel use is the result of the failure to incorporate the societal costs into its price: prices do not reflect secondary impacts of continued emissions growth, such as less productive agriculture, or the creation of climate refugees. Without some form of taxation, whether through a straightforward tax or through another mechanism like cap-and-trade, these costs are not represented in the prices of fossil fuels, and thus, expecting a natural reduction in their use (and a reduction in emissions) is irrational. 

Davos ‘16 sends mixed signals on climate change 

The Annual Meeting of the World Economic Forum (WEF) concluded last week after bringing together thousands of leaders to discuss global issues. Our very own CEO Sara Menker participated in panel discussions there, highlighting her vision of the Fourth Industrial Revolution and Africa’s role in it. And with the forum occurring just a few weeks after many of these same leaders found themselves in Paris for COP21, climate discussions were a focal point of conversation.

While it is clear WEF‘16 attendees were discussing COP21 and how they are thinking about climate change, two surveys released at Davos revealed very different results of what leaders think about climate change. A PricewaterhouseCoopers (PwC) survey asked 1,409 CEOs from 83 countries across six continents what they viewed as the top threat to business, and 79 percent of respondents listed over-regulation.  Geopolitical uncertainty followed with 74 percent, and cyber-attacks rounded out the top-three at 61 percent.  Only half of the surveyed CEOs highlighted climate change as a threat to business, and not a single executive listed it as the top risk for business in his or her respective region.  

However, a separate annual survey, The Global Risks Report, conducted by WEF revealed quite the contrasting result. Indeed, the risk deemed as the most potentially “impactful” was the failure of climate change mitigation and adaptation, while water crises ranked third.  

Additionally, respondents to that survey feel there is a reasonable chance of environmental factors causing economic damage in 2016; those surveyed ranked extreme weather events, failure of climate change mitigation and adaptation, and major natural disasters second, third, and fifth among the top five global risks in terms of likelihood.  Interestingly, this survey was not distributed to a group of CEOs, but rather to 750 members of the WEF’s global multistakeholder community. This group includes CEOs, but many other leaders as well, including heads of state and philanthropists. 

The dichotomy in survey results certainly sparks inquiry as to why certain leaders view climate change as a more imminent risk than others. Perhaps part of the answer lies in the fact that the questions asked in the two surveys varied slightly in language: PwC asked what were the greatest threats to business, while WEF asked the greatest risks to broader economies. 

Looking ahead

While the international community is certainly making progress in climate discussions, 2015 made it clearer than ever before that mother nature demands concrete results—not just conversations. 

The open, non-restrictive language of the Paris Agreement creates little incentive for nations to take the agreement seriously. Economic incentives, such as taxes on carbon, are likely more constructive ways to reduce GHG emissions at a rate that can make a difference in the race against the clock on climate change. Words without actions are just another source of hot air, and we clearly already have enough of that.