Energy and Sustainable development mechanism

An inclusive energy transition ?

Global low carbon strategies and their discontents

University of Cambridge

22 June 2017

Perumal Arumugam Pillai, Team Lead, MRV, UNFCCC

Scope

Objectives of the Paris Agreement

Where we are against Paris agreement objectives

Why energy sector is KEY

How Paris agreement responds to energy consideration?

Feature of the Market mechanism under the Paris Agreement?

Challenges faced by International regimes

Policy solutions.

• The Paris Agreement reflects global political acceptance of the scientific realities of climate change

• Long-term goals: o Limiting temperature increase to well below 2oC, pursuing 1.5oC

(Art 2)

o Aiming to achieve a balance between emissions by sources and

removals by sinks of GHG in the second half of the century (Art

4.1)

• All Parties have committed to limiting their aggregate long term emissions to achieve these long-term goals (expressed through NDCs)

Objectives of the Paris Agreement

How will PA work to meet its Objectives?

Context of sustainable development

Strengthened long term temperature limit 21.5 C

Global peaking rapid reductions in line with

science climate neutral or ‘balance’

Global adaptation goal: enhance adaptive capacity,

strengthen resilience, reduce vulnerability

Financial flows = low GHG and climate resilient

development

Enhancing implementation of the Convention, including its Objective

Climate action by all

International cooperation and support

Assessing progress

Informing action and Support

Enhancing international cooperation

Transparency of action and support

Emission gap – Where are we against Paris Goals

Source : http://climateactiontracker.org/global/173/CAT-Emissions-Gaps.html

"Comparison of global emission levels in 2025 and 2030 resulting from the

implementation of the INDCs and under other scenarios";

Emissions trajectory consistent with achieving the goals of the Paris Agreement

Why Energy sector is Key ??

49 GT 21 GT

0 50 100 150

Energy

waste

Agriculture

LULUCF

Industrial product and product use

INDC submissions and sectoral coverage

Energy Feature in Nationally determined contributions submitted

by countries

• Recognises that Parties may cooperate in the implementation of their NDCs to allow for higher ambition

• Provides a basis for the voluntary use of:o Transferred mitigation outcomes between authorizing Parties from

cooperative approaches – Article 6.2

o A mechanism to contribute to mitigation and sustainable

development – Article 6.4

o A framework for non-market approaches to allow for holistic

integration of differing aspects of action and support – Article 6.9

• Provides Parties with tools for the achievement of the long-term goals of the Agreement

Feature of mechanism under of Paris agreement

What are feature of the Article 6 Approaches and Mechanism

• Voluntary cooperation in the implementation of NDC

• Allow for higher ambition in their mitigation and adaptation actions and to

promote sustainable development and environmental integrity.

• Unlocking finance to our climate reality .

• Identify and enable the opportunities to make climate smart investments.

• International cooperation aspect that can ensure coherence and stability and

more dependent on other parts of the global community for their everyday

needs.( Public, National, sub national, province, Private, Public, Investors etc)

• Forms of cooperation under Article 6

Emission trading

Linking of carbon markets

Generation of emission reductions for uses other its origination.

Carbon pricing,

Establishment and removal of inefficient subsidies,

investment risk reduction

Technical and sectoral cooperation approaches,

Standards and regulations (appliance efficiency standards, and even

adaptation financing) support.

Results-based climate finance

What are feature of the Article 6 Approaches and Mechanism

Contribution of the UNFCCC market mechanism in Energy transition

Source : Wuppertal and GFA

Contribution of the UNFCCC market mechanism in Energy transition

Source : Wuppertal and GFA

Challenges

• Climate Finance

• Technology

• Capacity building

• International and development co-operation

• Keep the momentum for progressive ambition

• Socio-economic and political challenges

Possible solution through the SDM and why it happens??

• Stimulates investment in low carbon energy technologies and practices.

• Provide opportunity beyond the direct environmental benefits.

• Additional economic and employment gains

• Creates a business case for increased investment in low carbon technologies.

• Policies of SDM can create indirect positive impacts for private investment by

generating significant public revenues that translates into

a) the capacity to provide public investment where needed (that will attract and

multiply private investment) and

b) reduced cost of capital for private investors resulting from an avoided

crowding out effect of public borrowing and debt financing

• Address carbon leakage

Conclusion : Policy options by other instruments in UNFCCC

• Shifting investment to large-scale deployment of low carbon electricity to avoid

dependence on fossil fuels;

• Supporting the extension of access to sustainable energy services for poor and

underserved communities; and

• Supporting small off-grid renewable energy projects in rural areas

• Work on the in country capability;

• Developing and/or upgrading effective policies and regulatory frameworks;

• Stimulating robust private sector involvement and investment through effective business

models; and

• Ensuring the broad participation of stakeholders.

• Extensive energy market reforms, and stringent low-carbon and energy efficiency

mandates

• Mobilizing public and private investments

THANK YOU

A.K. Perumal

Team Lead – Programme officer (MRV)

UNFCCC

parumugam@unfccc.int

+49-151-4556-1637