COP21 has produced an historic Agreement. My key take outs on the Agreement are below:
- Countries committed to keeping warming ‘well below’’ 20C with an aspirational goal of 1.50C.
- The ‘ramping’ mechanism was adopted. From 2018, countries will be submitting revised national emissions reduction targets every five years with the initial targets to apply from 2020 – the year the agreement comes into force. National targets for 2050 are to be set in 2020.
- The Agreement defines a pathway to establishing transparent and clear rules for disclosure and comparability but much more detail is required for this to be meaningful beyond 2020.
- The Agreement (http://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf) also contains several provisions around financing including establishing the previous $100 billion pledge as a ‘floor’ of financing commitments by developed countries beyond 2020.
- In my view, the main difference between this Agreement and previous agreements is the use of a ‘bottom up’ approach whereby national targets will be continuously set that are then ‘aggregated’ through the COP process.
So what does all this mean for Australia and the Australian electricity system. I think there are a few implications:
- Australia will need to continue to build large scale renewables to reduce emissions. But achieving this will require a sustainable energy market. This results in two key issues requiring resolution: energy market design; and closure of the oldest most inefficient plants. Many of the stakeholders I have spoken to in the past week have agreed that all over the world, individual nations are having to reconsider their energy market designs. And the IEA is projecting that 9% of emission reductions in one of their IPCC scenarios should come from closure with a greater proportion in the region of Asia-Oceania.
- Energy productivity will continue to be a focus. The recently announced Energy Productivity Plan will be crucial to ensuring emissions can be reduced at least cost.
For those of you following me on Twitter, you will be relieved that my Strava posts recording my cycling will be back from Tuesday.....