The Paris Agreement: No more chances to fail

The Paris Agreement is being viewed with cautious optimism by most observers. In this article, Milind Kandlikar, Professor at the Institute for Resources, Environment and Sustainability, University of British Columbia, argues that although the Agreement is not legally binding and largely silent on equity matters, it is in India’s interest to make a credible contribution to global emissions reduction. The twin problems of providing energy for all and growth in emissions may be less coupled than suggested by the Indian government’s position.

The Paris climate deal, the core architecture of which was agreed to in Lima in December 2014, is a purely voluntary one. Under the Lima Agreement all nations were required to submit their Individually Determined National Contributions (IDNCs) to a global emissions reductions plan. Though virtually all nations prepared and submitted INDCs, the Paris Agreement is not legally binding and thus has no mechanisms for enforcement. Consequently it provides no formal way to punish nations that do not meet their self-defined carbon emissions reduction targets. It also does not provide the means to force industrialised nations to meet their post-Paris funding obligations to developing nations. The 1997 Kyoto Protocol that was premised on negotiated targets and timetables failed to bring about a meaningful global emissions reduction effort. Eighteen years have gone by since Kyoto. Precious time and resources have since been lost as carbon emissions have skyrocketed. The Paris Agreement, a more ‘laissez faire’¹ approach to carbon reductions aimed at overcoming shortcomings of the Kyoto Protocol, is perhaps a final chance for nations to avoid dangerous, and possibly catastrophic, climate change.

A voluntary emissions reduction plan coupled with a lack of formal enforceability means that under the Paris Agreement, nations could choose to free-ride with few obvious consequences. Yet, there are reasons for optimism. As part of their IDNCs major carbon emitters, including the two biggest culprits, China and the US, have proposed fresh new measures. The US aims to reduce emissions by 26-28% from 2005 levels by 2025. China has promised to reduce the emissions intensity of its GDP (gross domestic product) by 60-65% of 2005 levels by 2030 at which time its emissions will peak and decrease thereafter. For the first time these two nations that together account for 45% of global emissions, appear to be backing their plans with actions. The Obama administration’s Clean Power plan lays out the rules by which states within the US can reduce their emissions through a range of policies including carbon pricing. The Chinese government is set to unveil a national cap-and-trade programme that will include power generation and energy-intensive industry. For its part India has pledged to reduce the emissions intensity of its GDP by 33-35% of 2005 levels by 2030, with a share of 26-30% of electricity generation from carbon-free sources.

Will it be enough? Will it be equitable?

The Paris Agreement commits signatories to a global average temperature change from pre-industrial levels to "well below" 2°C and further obligates them to pursue efforts to keep it below 1.5°C. This is an advance over the 2°C limit from past meetings but is a disappointment to the most vulnerable nations, especially small island states that face an existential threat from sea level rise, were hoping for a 1.5°C limit. Nonetheless, the Agreement sets an important benchmark to be met by current and future generations of political leaders.

There is however, a profound gap between the emissions paths that would keep us within the 2°C limit and the temperature paths implicit in the IDNCs. The climate system requires that aggregate carbon-equivalent emissions from here on be kept below 208 GtC (gigatonnes carbon) in order to meet the 2°C limit with a probability of 67% (Intergovernmental Panel on Climate Change (IPCC), 2013). To put this number in perspective the total emissions from pre-industrial levels (starting 1870) to date have been 792 GtC, that is, the entire future carbon budget available to all nations – poor and rich alike – is slightly over a quarter of that used, primarily by the rich nations, to power their growth to date. Peters et al. (2015) analysed the IDNCs of major players (China, US and EU) and concluded that IDNC commitments of the US and EU are close to the 2°C limit but only if sharing of the remaining pie was based on current per capita emissions shares and so lock-in current inequities. The Chinese plan was worse since it does not actually reduce emissions till beyond 2030. Overall Peters and co-workers found that the EU, US, and Chinese pledges leave virtually no room for other nations to emit under the 2°C constraint, and effectively require all other nations to move towards per capita emissions 7-14 times lower than the EU, US, or China by 2030. The message here is clear – the largest emitters will need to do more, a lot more, than proposed in their Paris IDNCs if a 2°C target is to be met and an equitable global arrangement is to be realised.

The Agreement acknowledges that the targets proposed in the IDNCs are insufficient to meet the 2°C goal and it aims towards global net-zero emissions in the future (sometime between 2050 and 2100). Barring provisions for the financing of mitigation and adaptation in developing countries, the Paris Agreement is largely silent on equity matters. It focuses instead on the processes by which future goals might be set and met. It establishes a process to increase the ambition of national emissions reductions over time that involves the "updating and enhancing" of national targets, starting with a 2018 "stakeholder dialogue" and stocktaking every five years thereafter. A transparent emission monitoring and reporting mechanism, that is, trusted across jurisdictions will need to be established.

Will this voluntary scheme work? We do not yet know. The success of the Agreement relies on future cooperation among the (high-emitting) parties and a willingness to embrace stringent carbon controls in the decades to follow. The hope is that the success of initial efforts, and technological change spurred by policy and energy R&D (Research & Development) will create a ‘virtuous circle’ path to a zero net-carbon global economy. In any case it is the only game in town, so the future health of the planet depends on its success. We have no choice but to make it a success, or face the consequences of dangerous climate change. Climate change poses a special dilemma to India’s policymakers. Climate change will hurt people in poor nations like India more than it will hurt wealthier ones, so India will need to seriously engage in the global process. At the same time Indian policymakers believe that the Indian economy needs fossil energy to grow, so are worried that calls for a fossil-free global economy will leave India behind.

India: Growth or development?

Over the past two decade India has staked out a position consistent with the economic growth aspirations of its growing population. Though it is the fourth largest emitter globally India’s per-capita carbon emissions are a fraction of the top-three – China, US and EU – a point that India has repeated often in climate negotiations. India’s IDNC focused not on absolute emissions but on reducing carbon intensity of its GDP to roughly a third of 2005 levels. India’s focus on relative reductions is not surprising, since reductions in absolute emissions are seen as too large since India needs the ‘carbon space to grow’². By comparison, the timing of Paris has been kind to the other large emitter. Recent discovery of domestic shale gas has been a primary driver in the recent slowdown in US emissions. China’s peak emissions targets have come after an unprecedented run in coal investment for the past two decades, so a peak emissions target merely grandfathers in this increase. India’s economy depends heavily on coal, and unlike the US and China that have access to domestic and/or regional natural gas resources, India’s natural gas options are limited. India’s argument for carbon space is premised in part on the continued use of coal, albeit in high efficiency coal-fired power plants. The discussion around the use ‘green coal’ in India’s energy policy can be seen in a recent I4I article here.

Many of the arguments used by India in making its case have economic and ethical validity. Indian economy does need to grow to remove hundreds of millions out of poverty, and it will be difficult to rapidly wean off coal. Yet, repeated justification that India’s poor, who lack basic access to electricity, will be penalised under a carbon-constrained regime hides a fundamental truth about India’s carbon budget. Like income and wealth, carbon emissions are also distributed in a grossly unequal manner within Indian society. Chakravarty and Ramana (2011) use 2003 data to show that the top income decile of India’s urban population had per-capita carbon emissions that were 15 and 27 times those of the bottom income decile of urban and rural respectively. By comparison, the top 10% earned 8.6 times the income of those in the bottom decile (2008 United Nations Development Programme (UNDP) data). In other words, energy poverty in India (as measured in carbon emissions) is even more acute than income poverty.

The consequences of energy poverty for development are enormous. The lack of access to electricity supply hinders the use of basic conveniences that most urban dwellers take for granted, and precludes all but the most rudimentary economic activities. World Health Organization’s (WHO) Global Burden of Disease project estimates that indoor air pollution from the use of biomass for cooking kills over 1 million people annually - mostly rural women and children. My own back-of-the-envelope calculations show that moving all of India’s energy poor to some basic level of electricity and clean cooking fuel will result in net releases of 0.07 GtC/year, a little over a tenth of India’s current emissions; this a small number considering that India’s carbon emissions are expected to more than double by 2030. In other words, despite a large population, solving the problem of acute energy poverty in rural India will make a negligible contribution to India’s future carbon emissions.

The twin problems of development through access to basic ‘clean’ energy for all, and growth in carbon emissions may be less coupled than the Indian government’s position would have us believe. Herein lies a broader message: as India goes forward it needs to pay attention to the many ways in which lives of its citizens can be improved while reducing or holding carbon emissions steady. There are myriad such examples: the automobile sector is a bright light in the Indian economy, yet congestion effects from cars usage are slowly choking economic activity in Indian cities, and air pollution from vehicles is choking their denizens. A ceaseless focus on public transit and pedestrian infrastructure may reduce demand for automobiles with knock-on effects on growth, but it will also make Indian cities livable and stop their devolution in urban dystopias. Solar power provides a second example. India’s target of 40 GW (gigawatt) peak installed capacity by 2030 is commendable, but much of the focus is on utility-scale projects aimed at industrial and urban consumers. In the excitement over utility-scale solar, it may be easy to lose sight of the administrative and technical challenges of distributed solar power. Microgrids and off-grid solar will have a large impact on the tens of millions who do not have grid access or are underserved by the grid, and should be a subject of dogged technology R&D and policy focus.

The Paris Agreement is voluntary and gives developing nations like India latitude in the ways in which they design and meet their emissions reductions targets. However, India should not take the commitment to keep global temperature change to well below 2°C lightly. 20% of the world’s poorest people live in India (World Bank data, 2104) and they collectively form the largest group of individuals who are acutely vulnerable to climate change. Arguments about equity notwithstanding, it is in India’s interest to make a credible contribution to global emissions reduction. By taking a leadership role in climate mitigation it can demand the same of the other signatories, and by focusing its emissions reduction policies on development-oriented projects it can dramatically improve the lives of its own people – poor and rich alike.

Notes:

Laissez faire here refers to a ‘philosophy or practice characterised by a usually deliberate abstention from direction or interference especially with individual freedom of choice and action’ (Miriam Webster Dictionary)
For example assuming a projected economic growth of 7%, India’s carbon intensity would need to reduce by 64% from current levels in order to stabilise emissions at a 2030 peak.