Artur Runge-Metzger, Director of International Climate and Strategy, European Commission

Climate change agreement will happen in Paris - but the process continues

Birgitta Resvik, Board Member of Mistra Indigo and Vice President Corporate Relations at Fortum, Sweden shares her thoughts on the Mistra Indigo April 21st seminar. You can also view the seminar here. External link, opens in new window.

Looking ahead towards Paris was the title of an international high-level seminar organized by Mistra Indigo, the research organization Resources for the Future, RFF, and the Swedish Embassy in Washington on April 21st. In the beautiful House of Sweden more than 170 people gathered to discuss how the US, EU and China views the upcoming climate negotiations in Paris.

The discussions were optimistic and all speakers agreed that an agreement will be signed in Paris, but that it will not be enough. "We will not go to Paris and solve the climate problem – rather we are going there to prepare a policy that will last for the next 10-20 years. Much more work is needed", said Joseph Aldy, Harvard University and formerly advisor to the US president on Energy and Climate.

Things are happening in the United States. During Earth Day President Obama gave a powerful speech on climate change. United States submitted to the UNFCCC its bid to the climate negotiations through the so-called INDC, Intended National Determined Contribution. The numbers on emission reductions (26-28 per cent) were the same that were presented in the climate agreement with China in November. But now it is spelled out more concretely how this goal will be met. According to Phil Sharp, RFF, there is no doubt that the United States does not reach it yet. It is primarily the Clean Air Act legislation that provides the large reductions in US greenhouse gas emissions and the proposal now makes it possible for the entire energy sector to fall into the so-called Clean Power Plan Act.

This places new demands on emissions which basically prevent the construction of new coal plants, and it will also mean that smaller existing facilities will be closed. New regulation standards for buildings and new rules regarding truck emissions will be introduced as well.

One of the major issues for the American administration in future agreements are how the measurement, verification and reporting of emissions will be controlled. "It is by creating a transparent system that we can build trust between countries and the basis for this is that we trust the data", said Joseph Aldy.

As being one of the leading negotiators for the EU, Artur Runge-Metzger from the EU Commission presented a principally well-known message about how the EU’s bid is constructed. He expressed some disappointment that to date only six INDC have been submitted, but according to Anna Lindstedt, the Swedish Climate Ambassador, intensive work is in progress regarding this in all countries. The Commission stated that the EU is one of the most low-carbon regions and that they already have done a lot in the field. It emerged very clearly there is great skepticism by the Commission against international credits, such as the CDM, and the way those credits can support developing countries by enabling incentives for private capital to carry out investments.

“In Paris, it will be about getting an agreement on countries' emissions reductions. For example it is up to the Indian Government to formulate policies on the development of renewables in their country”, replied Runge –Metzger to my question about the future of the CDM or equivalent credits. I believe that this is a troubling attitude that makes it difficult to involve private companies, which most believe are a requirement in order to carry out the extensive investments necessary for coping with the challenges in the future.

China will according to climate ambassador Lindstedt submit its bid, INDC, in the end of June. The facts suggest that it will be in the size of that which was presented last fall, in connection with the agreement with the US, and reportedly it will be relatively well defined. Emissions trading will be an important part of the plan and also investments in renewable. The big question however is how China view measurement, verification and reporting, and what they will accept.

As I said, things are moving in the United States and an interesting comment was that situation could very well topple over to that the US eventually introduces economic instruments. They see how the EU and China are approaching each other with regards to emissions trading and if that is a success it may well mean that the US will follow.

“When it comes to climate policy, a lot is about keeping an eye on ones competitors”, said Joseph Aldy.

Mexico is one of the countries that have already delivered their INDC and where they clearly declare that they are prepared to adopt further commitments if there are international mechanisms available. This is something that the EU should listen to, and not close the door completely on these mechanisms.

The companies were also represented by Inge Horkeby, Volvo AB, who vigorously ruled that the harmonization of standards and price on carbon is essential for business. He also referred to the appeal from 43 CEOs, from very different parts of the business world, jointly asking for a price on carbon.

As previously stated, all the speakers were optimistic about Paris but they were also worried that any agreement will most likely be criticized and viewed as a disappointment.

The question is of course how this should be managed.

Birgitta Resvik, Board member of Mistra Indigo

Updated: 2015-04-29

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