Landing the climate regime in Paris 2015

Laurence Tubiana

Professor Sciences po and Columbia University

What is at stake in Paris in 2015

• It is simple :• It is about changing economic and political

signals in favor of the low carbon economy• It is about the alignment of expectations of:– Governments– Local authorities– Businesses– Consumers and citizens

How we do that?

• This is not simple ! required : something like a sheepdog or a magic fluteThe notion of a centralized emission of the signal have disappeared together with time tables and targets model including a global

carbon price

Two pillars of the Paris compact

• The agreement between governments within UNFCC mandate : the sheep dog

• The actions of all supporting the UNFCCC agreement : the flute player

• And a cross-cutting innovation and R and D agenda

Two pillars of the Paris compact

• UNFCCC agreement : the sheepdog method

• Legal agreement on processes : the remaining top down elements

• Push and pull : national contributions as the center piece

Mitigation contributions

A fundamental shift from a ‘logic of targets’ to a ‘logic of pathways’.

Under a ‘logic of pathways’, countries would submit long-term, indicative low emissions pathways, combined with operational multi-sector, multi-timeframe target packages.

Four levels of uncertainties making comitments difficult

Level 1: uncertainty about the level and structure of future economic activityLevel 2 : uncertainty of actions of others Level 3: uncertainty on the reality of action: understanding the ‘signal’ of serious decarbonisation effort amid short-term uncertainty and inertiaLevel 4: capacity to deliver depending on costs, government capacity, availability of technologies

Mitigation structure

• Combining the short-term and the long-term perspective through a combination of short-term targets and aspirational long-term pathways.

• Align domestic policy processes and international negotiations through collective, predictable expectations about future negotiation cycles.

• Reflect the inertia of infrastructure by updating near-term targets by setting new targets for the next period. For example, in 2020 it would make very little sense to adjust a 2025 target. Rather, new ambition and reduction opportunities should be expressed by more ambitious 2030 and 2035 targets.

Reducing uncertainties

A Global goal : why and how keep 2°

• 2°C target : a directional reference to assess progress at the global level and national contributions.

• a risk management approach recognizing the imperative to avoid risks of higher concentration, delayed action scenarios:

• It should include more operational directional references than the current framing under the Cancun Agreements,

• key quantified conclusions of the IPCC regarding the global 2˚C trajectory as a directional reference point.

• iterations of nationally determined contributions should be taken in the context of the 2˚C target.

• An on-going process of reinforced action to address the gap. Ex sectoral policy efforts,

• Mainly R and D…

Updated contributions

The approach for a dynamic agreement should address three challenges:• Combining the short-term and the long-term perspective through a

combination of short-term targets and aspirational long-term pathways.

• Align domestic policy processes and international negotiations through collective, predictable expectations about future negotiation cycles.

• Reflect the inertia of infrastructure by updating near-term targets by setting new targets for the next period. For example, in 2020 it would make very little sense to adjust a 2025 target. Rather, new ambition and reduction opportunities should be expressed by more ambitious 2030 and 2035 targets.

• rolling, multi-period target framework combined with a long-term low emissions pathway, i.e. an indicative long-term low emissions development strategy.

• 2025/2030 …2050

• A combination of Targets and Pathways

Rolling targets

Three tier approach

• Tier one: absolute, economy-wide targets relative to a predefined base-year/period, including both absolute reduction or absolute growth targets (e.g. for emerging countries), or aspirational peaking targets;

• Tier two: relative, economy-wide targets against GDP (carbon intensity) or population (per capita) or against ex ante defined BAU;

• Tier three: quantitative or qualitative sectoral indicators, targets or policies organized around the major emitting sectors.

The second pillar : actions in support of UNFCCC agreement

• The flute player : • Cities, subnationals authorities • Businesse acting in local or global value chains• Financial institutions :• National development banks• Multilaterals development banks• Pension and Soverereign funds

How to organize ?

• Working on the time horizon

• Risk disclosure

• Long term visions

Its complex stupid!

A role for economists

• Work on this new reality :• Imperfect markets • No carbon price silver bullet solution• Inertia and lock in • Innovation • Co-benefits ….

GOOD LUCK FOR ALL OF US !