Try booking a train on Boxing Day in the UK and you’ll soon find out that none are running. Well, not entirely. One small railway line managed by indomitable Gauls still holds out: The Eurostar. And airports are still being served as plains are still flying. Obvs. If this is not just the present, but also our future, then Mia Mottley, Prime Minister of Barbados, is right: “We’re at 1.2 degrees now. If in 5 years we’re at 1.5, then we’re…. we’re…. I won’t use that word now.”
Apologies, I got carried away. Back to planes (flying), trains (not running) and automobiles (driving). These are symptomatic of the mess we’re in, but nothing compared to the mess we’re heading towards. And nothing compared to the mess others already find themselves in. If these current trends continues the number of refugees is set to increase from 21m in 2022 to 1bn in 2050 (Mia Mottley again). Many originate from Africa which is responsible for only 4% of global emissions (and 2% of historic emissions) and home to 600m without access to electricity.
While inanimate capital moves freely across borders, refugees are increasingly prevented from doing so. As their poverty and desperation grows in a warming world, their cost of borrowing increases as the World Bank uses per capita income as a proxy for borrowing conditions. Consequently, such countries (Least Developed Countries - LDCs) borrow at 12-14% while rich countries (the G7) borrow at 1-4%. According to Indian economist Joyashree Roy, these countries need 7% growth per year to escape their plight but if they are borrowing at +10% cost of capital, this growth will not be powered by renewables.
Neither will the focusing on the supply of renewables alone deliver Sustainable Development Goals (SDGs). Demand-side interventions are necessary to shift investment patterns and create new economic opportunities that are synergistic with SDGs. But all this depends on infrastructure access and empowerment to make the right choices, which in turn are determined by the flow of finance. To put on track for 1.5C, these flows need to quadruple to $4-6trn per year, according to Macky Sall, Senegalese President and current Chairperson of the African Union. IPCC Chair Hoesung Lee, goes one step further: access to capital is the key determinant of limiting global warming to 1.5C. Concessional access to finance was provided during COVID, as Mia Mottley pointed out, so why can it not be provided to prevent climate catastrophe?
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| Dr Colin Nolden (left) at COP27 with IPCC Chair Hoesung Lee and Dr Alix Dietzel |
On the plus side, outgoing COP26 President Alok Sharma suggests that 90% of global emissions are covered by a net zero target. Almost 1/3rd of the global population who accumulate 55% of global GDP are covered by Emissions Trading Schemes, according to Stefano de Clara, Head of the International Carbon Action Partnership. Then again, the current average carbon price stands at $6/t. This needs to increase to $75/t by 2030 to limit warming to 2C, not to mention 1.5C, according to Dora Benedek from the International Monetary Fund.
Without such a massive increase in the cost of carbon, emissions are expected to be only 12% (6GtCO2eq) lower in 2030 compared to today. What about magic??, you might interject at this point. Current Carbon Capture and Storage (CCS) and Direct Air Capture (DAC) capacities amount to around 4 hours of global emissions and are projected to amount to around 16 hours in 2030, according to Sven Teske from the University of Technology Sydney. To keep 1.5C alive, we need to reduce emissions by 30-50% in by 2030 (Dora Benedek again). So yes to magic, but only within the bounds of Kate Raworth’s famous doughnut.
And it’s both sides of that tasty doughnut that we need to bear in mind. On the outside, quick wins are possible regarding methane emissions which are responsible for around 0.5C of the 1.2C we stand above pre-industrial levels. Around 0.1C of warming can be addressed by cutting gas flaring and coal related methane emissions at no cost, according to US Deputy Climate Envoy Richard Duke. Addressing such emissions deliver invaluable co-benefits on the inside. 15% of all deaths (7million a year) are due to polluted air, according to Jane Burston of the Clean Air Fund. Companies are having to pay a pollution premium to attract talent to polluted cities.
It's both the out and the in-side of the doughnut we need to focus on for a just transition to happen. According to Heike Henn, of Germany’s Federal Ministry for Economic Affairs and Climate Action and whatnot, Article 6 is emerging as the mechanism to allocate those $100bn/a finance pledged in Paris which never materialised as well as the trillions needed to implement NDCs (Nationally Determined Contributions) and SDGs.
Not Article 6.2 though, which requires adjustments in GHG registries upon the transfer of a carbon credits (Internationally Transferrable Mitigation Outcome - ITMO) and is already seeing emerging economies lowering ambition in their NDCs. Article 6.4 is what I’m talking about. Although it will take years to be operationalised, its infrastructure is being developed as we speak. The Climate Action Data Trust, for example, can significantly lower transaction costs of carbon market transactions through automated Measurement, Reporting and Verification (MRV) and tokenisation to create digital carbon assets.
Now it’s down to ambitious countries to form alliances and agree on a sharing mechanism to convert the 1.5C target into demand for mitigation action distributed dynamically over time, and measure achievement and contribution using Article 6.4. “Getting to net zero is a heroic task”, according to Dirk Forrister of the International Emissions Trading Association, “and you won’t get there by going alone”.
Where does this leave 1.5C? “I find it hard to stay optimistic”, said Nichola Sturgeon on day 1 of COP27. I echo this sentiment. Yet we need to remind ourselves that the combined net zero targets, if implemented, can limit warming to 1.7C and increase, yes INCREASE, global GDP by 0.4% per year, according to Fatih Birol from the IEA. If we can’t sort this out, bins will be burning.
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This blog was written by Cabot Institute for the Environment member Dr Colin Nolden, Bristol Law School, University of Bristol.
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| Colin Nolden |