Climate Deals Need Effective Institutions; Climate Response Needs Practical Tools

Dr. Arunabha Ghosh, Council on Energy, Environment, and Water

The second season of Years of Living Dangerously premieres on 30 October. For the first episode, I had the privilege of explaining India’s energy challenges and transition to David Letterman. I argued that here was the world’s largest democracy, soon to have the biggest population and the second or third largest economy, making a democratic choice to have a cleaner energy system. In a big push for renewables, India plans to install 175 gigawatts of capacity by 2022, creating one of the world’s largest renewable energy markets. This is just one sign of a more vigorous global response to climate change.

After a quarter century of glacial pace in climate negotiations, the past ten months have witnessed frenetic deal-making. The Paris Agreement (under the UN Framework Convention on Climate Change) was negotiated in December 20015, opened for signature in April, crossed the minimum threshold for ratification in October and will come into force on 4 November 2016. In September this year, the International Civil Aviation Organization finalised a deal to reduce emissions from civil aviation. And in October, 197 parties to the Montreal Protocol on Substances that Deplete the Ozone Layer agreed to the Kigali Amendment, which would phase down hydroflurocarbons (HFCs), refrigerant gases thousands of times more potent than carbon dioxide. This deal alone could reduce global average temperature rise by up to 0.5 degrees Celsius. Despite some unmet expectations among all parties, the fact that such progress could be made so rapidly (after years of preparations) is remarkable.

The climate regime is fragmented. In lieu of one overarching top-down climate agreement, governments have shifted from institution to institution, seeking sector-specific solutions. This kind of “forum shopping”, while it has helped to find consensus, has also raised concerns about the coherence of rules. Will all institutions have equal force in enforcing compliance or have rigorous monitoring and verification of efforts and outcomes?

There is another concern about differentiation between countries that bear more versus less responsibility for causing climate change. Recognising rising climate risks, all countries have stepped up with commitment of action. “Dynamic differentiation” has become a guiding norm, wherein countries undertake greater effort to reduce emissions as their economies (and emissions) grow. Yet, the principle of historic responsibility is still valid but getting gradually undermined. By focusing only on future emissions and targets, historic polluters are trying to avoid “polluter pays” principle. This will become a growing source of tension.

The real excitement around the response to climate change lies beyond the deals. The focus is increasingly shifting to practical tools to implement solutions. First among these is the effort to scale renewable energy, particularly with a focus on finance. The cost of finance for solar projects, in many developing countries, is often prohibitively high. The International Solar Alliance, jointly promoted by India and France, envisions that collective measures can facilitate the flow of over USD 1 trillion into solar projects, by aggregating demand within countries, standardised asset structuring across countries, and establishing an ecosystem of financial instruments to mitigate some of the investment risks. Within India, the Council on Energy, Environment and Water (CEEW) has been instrumental in supporting ISA’s work programme and worked with partners, government and the private sector to conceive the creation of green banks, the value of certifying green bonds, de-risking investments, counting renewable energy jobs and mapping skills.

The second lever is technology. Mission Innovation, launched by the United States with participation from 20 other countries, aims to double R&D spending in each country on clean energy technologies. Bilateral technology cooperation between U.S. and Indian institutions is now focusing on solar, energy efficiency in buildings, and second-generation biofuels. New partnerships have been launched on energy storage technologies, and (again via ISA) on scaling solar applications in rural areas, such as water pumping, milk chilling, etc. Connecting climate technologies to energy access, rural development and poverty reduction is the best kind of co-benefit — and spurs cross-border trade and investment.

The third enabler is transparency to support negotiations and compliance. CEEW and Vienna-based IIASA undertook the first emissions modelling of HFC emissions in India and the first estimate of costs of transition. This kind of pioneering research created the conditions for informed decision-making at home and proactive negotiations abroad. Elsewhere, CEEW has also collaborated with other think-tanks to launch a civil society portal on India’s greenhouse gas emissions across sectors. CEEW conducted an assessment (using data from more than 200000 industrial units) to build a much more robust picture of industrial emissions, far more detailed than official estimates. More accurate sub-sectoral emissions trends would assist in measuring the impact of policy interventions — and become the basis of a dynamic monitoring, reporting and verification system. If emissions data could become democratised like this in other countries as well, it could revolutionise domestic climate action and deepen trust in international agreements.

In short, the spate of deal-making in climate negotiations needed effective institutions in many areas. Effective climate response now rests on continuous innovation in practical tools — finance, technology, trade, data — for a low-carbon transformation in our societies.

Dr. Arunabha Ghosh is CEO, Council on Energy, Environment and Water, among the world’s 20 best climate think-tanks. He featured in Years of Living Dangerously in season 2’s first episode focusing on India’s energy transition. Follow @GhoshArunabha.