Liebreich: Climate Wars Episode IV – a New Hope for the 2020s?

By Michael Liebreich
Senior Contributor
BloombergNEF

Ten years ago, almost to the day, the climate world was stunned by the failure of the COP15 climate conference in Copenhagen. This month, COP25 in Madrid – moved there because of rioting in Chile – also ended in failure. Not complete collapse, a package of technical rules fleshing out the Paris Agreement were passed, but the big one, the attempt to recreate international carbon markets, was postponed for another year.

Looking back at the intervening decade since Copenhagen, it is not that climate diplomacy delivered no wins: the Paris Agreement, struck in December 2015, was a stupendous success. As I wrote in my analysis at the time, We’ll Always Have Paris:

“Paris is not posturing. Paris is not the world saying it wishes it weren’t trapped in an abusive relationship with the fossil fuel industry; Paris is the world’s economy serving divorce papers.”

And so it has turned out to be: over the past three years, the Paris targets have been progressively more deeply embedded into the political, social and business landscape in nations around the world.

Does anyone think that Boris Johnson’s election manifesto would have contained a commitment to reach net-zero emissions by 2050, if the Paris Agreement had not existed? Or that the EU would have followed the U.K.’s lead and endorsed a 2050 net-zero target? Or that businesses and investors would be engaged in intense debates about what it would take for their operations and portfolios to align with a “Paris Compliant” net-zero, 2C or 1.5C world?

President Donald Trump has, of course, initiated the process of withdrawing the U.S. from the Paris Agreement – without ever explaining how a deal based on voluntary commitments could disadvantage the American people. However, its citizens, states, cities and businesses are doing an end-run around him, effectively honoring the deal without the support of the Federal government.

The next U.S. Presidential election falls the day before the U.S. is due to leave the Paris Agreement; so in theory the next President’s first act could be to rejoin it. Your guess is as good as mine on how likely that is to happen.

One of the most unedifying episodes at COP25 in Madrid was the U.S. delegation arguing that, despite the fact that the U.S. was about to leave the agreement, it must be allowed to continue policing the ‘loss and damage’ provisions, so that they can never be used to seek compensation from U. S. fossil fuel producers. Once out of the Paris Agreement, all that will happen is the U.S. will lose its seat at the table.

One of the big mistakes of climate diplomacy of the past 40 years has been to treat it as an environmental issue, instead of what it is: industrial and trade policy. Should the U.S. actually leave the Paris Agreement, it will be absenting itself voluntarily from the world’s most vital economic and trade discussions.

What might the next decade of climate negotiations achieve?

At COP26 next year in Glasgow, the first item on the agenda will be the completion of Madrid’s unfinished business, namely rules for the international trading of emission credits. Many readers will remember the Clean Development Mechanism (CDM), created under the Kyoto Protocol in 2007, which blew up in 2012 when the value of its Certified Emission Reduction (CER) credits crashed to a few cents. Only time will tell whether the next version will ruin as many careers.

Attention will then shift to the next set of Nationally Determined Commitments. The U.K. – by then no longer in the EU, but keen to parade its post-Brexit environmental credentials – and EU countries will read their 2050 net-zero commitments into the Paris record as Nationally Determined Contributions, but will no doubt still be criticized by the developing world for not moving fast enough. What is less clear is how other major emitters – Japan, South Korea, China, India and so on – will respond.

There will also be endless discussions about money. In 2009 the developed world committed to “mobilizing jointly $100 billion a year by 2020 to address the needs of developing countries”. The Green Climate Fund (GCF) was set up to handle “significant portion of such funding” but it has done no such thing. It took six years for it to make its first investments, and while it has raised around $20 billion in two rounds of pledges (of which President Trump has held back $2 billion), it disburses only around $2.5 billion per year – just 2.5% of the annual $100 billion Copenhagen Commitment.

According to the OECD, total flows of climate finance from developed to developing countries reached $71.2 billion in 2017; multilateral institutions alone, according to the World Bank, provided $43.1 billion in 2018. Nevertheless, developing countries will continue to demand more direct, government-to-government funding for mitigation and adaptation, and developing countries will continue to push back – not just at COP26 in Glasgow, but throughout the next decade and beyond.

So climate diplomacy will probably look very similar in 2030 to today: a growing consensus around the need for action, a growing body of rules, an increasing level of ambition and commitment, but a high level of frustration at the inadequate rate of progress.

In one major way, however, I do expect 2030 to look completely different from today, and that is in our understanding of climate science.

As I write this, Greta Thunberg has been announced as the Time Person of the Year. Nothing could better capture the recent sea change in public attitudes to climate change – the new determination that our politicians have to stop equivocating and take decisive action.

That determination, however, comes at a price. The price is that the public discourse is dominated by pessimism and distrust. At this month’s COP in Madrid, Thunberg gave one of her characteristically blunt speeches, saying “almost nothing is being done apart from clever accounting and creative PR”.

That is, however, simply not accurate, as I describe in the sister-piece to this article, in which I predict that the moment of peak emissions is closer than we think. Is enough being done? Of course not. Are politicians who ignore science and laugh at people’s fears despicable? Absolutely. But it is not correct to say almost nothing is being done.

It is also not correct to say that the world faces near-term climate collapse. This is not what the science says, and this will become increasingly apparent between now and 2030. The Intergovernmental Panel on Climate Change, or IPCC, has not helped itself, or the debate, by framing its most extreme scenario – one which energy experts find entirely implausible – as “business as usual”.

I need to be very precise here, because I don’t want to be misinterpreted. Today, the planet is almost one degree Celsius warmer than it was in pre-industrial times, and this is already having an impact on life and livelihood – you have only to look at the current catastrophic bushfires in New South Wales. The planet is inevitably going to warm more, based on inertia in our economic and physical systems, and that will worsen the consequences dramatically. We must take urgent action to reduce emissions as well as investing much more in adaptation.

Having said that, the most catastrophic consequences, which are described as baseline or business-as-usual by climate scientists, journalists and activists, are not where we are headed, but represent an extreme and highly implausible scenario. Discovering this was quite a shock to me, and it might be a shock to you. Let me explain.

The IPCC, as you will know, does not do original research; every six to eight years, it synthesizes the peer-reviewed science, by means of a long, transparent process, into a single, digestible Assessment Report (AR). In order to ensure that different teams of scientists around the world are producing comparable outputs, it encourages them to use a standard set of scenarios, called Representative Concentration Pathways (RCPs) framed around the level of “radiative forcing” (the imbalance due to the greenhouse effect between the energy hitting the planet and that being radiated away) by the year 2100. The scenarios range from 2.6 Watts per square meter in 2100 for RCP 2.6, to 8.5 W/m2 in 2100 for RCP 8.5, compared to the current level of around 2.0 W/m2

Historically, the IPCC did not choose between these scenarios, giving them all equal probability. However, for AR5 published in 2014 in the run-up to the Paris Agreement, this changed. It included this statement: “Past trends suggest that greenhouse gas emissions are likely to continue to increase. The exact rate of increase cannot be known, but between 1970 and 2010, emissions increased 79%, from 27 metric gigatons of GHG, to over 49Gt. Business as usual would result in that rate continuing.”

However, AR5 is far above that trend. In fact it looks like an extrapolation of the fastest few years of growth in coal use in history. So why on Earth have thousands of scientists, journalists and activists taken RCP8.5 as business-as-usual, when this is so implausible?

Despite stating in the glossary that “the term ‘BAU’ has fallen out of favor, it is used over 50 times in the report, including in the official foreword by the Secretary General of the World Meteorological Association and the Executive Director of the United Nations Environment Programme.

If you look in AR5 for a definition of BAU, you find this in the glossary: “BAU: See Baseline/reference”. And if you then look for what “baseline” means, you’ll find a range of no-mitigation scenarios between the high end of RCP 6.0 and the most extreme end of RCP 8.5, with a median that can be produced only by RCP 8.5.

At a stroke, RCP 8.5 – developed by extrapolating a rate of emissions growth that we have only ever seen during China’s extraordinary two decades of industrialization – became “business as usual”.

But get this: RCP 8.5 is completely implausible. In order to reach 8.5W/m2 of radiative forcing, concentrations of CO2 in the atmosphere would need to reach 1,100 ppm by 2100 (that’s just CO2; if you include other greenhouse gases, it would be 1,370 ppm). We are currently at 411 ppm of CO2, up from 315ppm in 1959. If you extrapolate linearly, you get to a concentration of 540ppm. If you extrapolate and adjust for the fact that annual increases in concentration have been accelerating, you get to about 650ppm, somewhat ahead of the 545-580 ppm in RCP 4.5 (or 4.5W/m2 of radiative forcing by 2100) and nowhere near RCP 8.5.

Ask any professional energy modeller, and you’ll find there is no plausible scenario in which the burning of fossil fuels gets you to 1,100 ppm by 2100. You would need global per capita coal consumption to grow by a factor of seven, but the fact is that coal use in the electrical system has peaked, and perhaps even started to fall.  Even in the International Energy Agency scenarios, which I and others have spent the better part of 15 years arguing are too pessimistic, we are headed to RCP 4.5.

What about carbon cycle feedbacks? The difference between 650ppm and 1,100ppm by 2100 would require many hundreds of gigatons more CO2 to be released. There are no feedbacks I have found in the literature that can deliver this amount in the 80 years between now and 2100: not methane releases, not boreal forest diebacks, not oceans ceasing to absorb CO2, not seagrass diebacks. Carbon cycle feedbacks are terrifying, but fact is that their main impacts are going to be felt in hundreds or thousands of years, not before 2100.

Now please don’t get me wrong. The world under RCP 4.5 is an ugly, ugly place, with warming by 2100 of 2.0C to 4.5C. We must try to do all we can to bend the arc towards the lower end of that range, or below. But we must be honest: we will not see the 3.3 to 7.4C of climate change by 2100 which drives almost all of the catastrophe scenarios about which we read in the press.

If we still have to act just as urgently, which does this matter? There are two reasons. The first is that in order to build a robust coalition for climate action, we must remain science-based, not build on foundations of sand. Come 2022, when the next IPCC Assessment Report (AR6) appears, it will come under intense scrutiny by forces who are not naturally disposed to taking action on climate – to put it mildly. They will have huge budgets. They will play dirty. And they will seize on the fact that RCP is implausible to undermine the entire basis on which any consensus for climate action is built.

The second reason to stop depicting RCP 8.5 business-as-usual or baseline is that it is immoral. There may be practical argument for using fear as a motivator for climate action. But there is no moral argument for using invented fears. There is a name for that: it is called populism.

But back to 2030. At some point during the next 10 years, it will become clear that RCP 8.5, an utterly terrifying, high-end scenario when it was first mooted in 2007, can no longer be considered plausible, much less base case. Growth in emissions will have levelled off, partly because China’s coal-fired surge is over, but also because of the hard work of millions of people around the globe in the energy and transport sectors. We must allow ourselves to celebrate that fact, not cover it up.

We will still be tracking a medium-range scenario which would produce horrendous climate impacts, and there is still a lot of uncertainty, particularly about the very long term, after 2100. But it will be clear that we have broken the back of this problem, and we will have line-of-sight to achieving the Paris goal of 2C of climate change.

In summary, therefore, by 2030, I believe we will be starting to see a glimmer of hope at the end of the climate change tunnel. We will have narrowed the range of outcomes, averted the worst, and seen the back of peak emissions.

Not a perfect outcome, by any means, but a much better place to be than where we are today.

(On December 19, BNEF corrected this article. The new version corrects for the fact that the date on which the U.S. will leave the Paris Agreement falls after the next Presidential election, but before Inauguration. It clarifies the difference between ppm of CO2 and ppm CO2eq in the different scenarios. And provides more detail on how RCP8.5 is framed as BAU in the IPCC’s 5th Assessment Report.)

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