Towards Cancun…Towards Cancun…

21 September 201021 September 2010

Dr Jeanne NgDr Jeanne NgDirector – Group Environmental AffairsDirector – Group Environmental Affairs

CLP Holdings LimitedCLP Holdings Limited

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Beyond The Science…

Experts consensus (over 2000 scientists from around the world who advise governments are on the IPCC)

Governments may/will legislate in accordance with scientific opinion and/or political agendas

Potential liabilities from regulations…regardless of whether the science is right or not…

3

COP 6 resumes(Bonn, Germany)Bonn Agreements

2001

COP 7(Marrakesh, Morocco)Marrakesh Accords

IPCC 3rd Assessment Report

published

COP 4Buenos Aires,

ArgentinaBuenos AiresPlan of Action

1998

COP 3Kyoto, Japan

Kyoto Protocoladopted

1997

INC adopts UNFCCC text& Convention open

For signature at Earth Summit in Rio

1992

1st Meeting Of theIntergovernmental

Negotiating Committee(INC)

1991

IPCC & 2nd WCCcall for global treatyon climate change

1990

UNFCCC Timeline

First World Climate

Conference(WCC)

1979

IntergovernmentalPanel on

Climate Change(IPCC)

1988

9 years

Conference of Parties (COP) 1

(Berlin, Germany)Berlin Mandate

1995

Convention entersInto force after

Russia’s signature(>55% emissions)

1994

COP 6(The Hague, Netherlands)

Talks based on Planbreakdown

2000

2002

COP 8(New Delhi, India)Delhi Declaration

COP 10(Buenos Aires, Argentina)

Buenos Aires Program of WorkOn Adaptation &

Response Measures

2004

2005

Kyoto Protocol enters into force /

COP11 & COP/MOP1(Montreal, Canada)

Montreal Action Plan

2006

COP12 & COP/MOP2

(Nairobi, Kenya)Nairobi WorkProgram on Adaptation

2007

COP 13 & CMP3(Bali, Indonesia)Bali Action Plan

COP 14 & CMP4(Poznan, Poland)

2008

COP 15 & CMP5(Copenhagen, Denmark)

Copenhagen Accord

2009

4

What Is The Kyoto Protocol? The United Framework Convention on Climate Change

(UNFCCC) is framework for international government efforts.

The Kyoto Protocol helps implement the UNFCCC. The Protocol calls for average of 5% reduction in

emissions relative to 1990 applicable:

First international environmental-related agreement of this kind.

2008 through 2012 only; developed countries only; developing countries have no reduction

targets.

5

What Is CDM?

Clean Development Mechanism (CDM) - mechanism under Kyoto Protocol by which clean energy projects in developing countries can sell carbon credits to developed countries.

CDM project pipeline: > 4200, of which 1539 are registered

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What Would It Cost?

Global Climate Impact Abatement Map, Vattenfall, McKinsey chart

Some measures will pay for themselves, but many are still not commercially viable today

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COP15 Aftermath – Copenhagen Accord

General was ‘noted’ as opposed to ‘adopted’ by the COP 15 developed and agreed to by 5 countries

Brazil, China, India, South Africa and USA circulated for adoption but received mixed reactions from different

countries but mostly supportive as a way forwardElements of the Copenhagen Accord include: Continuation of the AWG-LCA and AWG-KP working Groups Requiring submission to the UNFCCC Secretariat before 1 February

2010 From developed countries – reduction targets for 2020 From developing countries – nationally appropriate mitigation actions

(NAMAs) Developed countries to deliver new funding to developing countries:

total of USD 30 billion between 2010 – 2012 for adaptation and mitigation USD 100 billion a year by 2020 for mitigation (and adaptation)

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COP15 Aftermath – Copenhagen Accord

Additional mechanisms For REDD (including REDD-plus) Copenhagen Green Climate Fund as operating entity for the

financial mechanism and High Level Panel to investigate contributions of other possible sources of funding

Technology Mechanism to facilitate technology development and transfer

Improved representation of developing countries in governance structure for adaptation fund

Complete assessment of the implementation of the Accord by 2015

• Jun 2010: UNFCCC received submissions from 76 countries (37 industrialised, 39 developing)• 2 – 6 August 2010: Negotiating meetings in Bonn, Germany• 29 Nov – 10 Dec 2010: COP16 in Mexico

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Implications for COP16 in Cancun

More likely a weaker politically-oriented agreement will be reached by the end of 2010 at COP16 in Mexico (the minimal commitment that each country is comfortable with) Developing countries desire the continuation of mechanisms

under the Kyoto Protocol to continue Developed countries refuse to use ‘Kyoto Protocol’ term and

refer only to Copenhagen Accord Whether strong agreement or weak one, it will be the local

policies and regulations developed by and within each country that will impact business as it is business that will implement emissions reductions

Potential liabilities from local regulations and potential physical impacts…regardless of whether an agreement is reached or not…

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Towards Cancun & Beyond…

Businesses will need to engage local governments in the development and implementation of new policies and

regulations that reflect local priorities, realities and means for:

A clear strategy on how the committed long term carbon emissions reduction pathway will be achieved

Appropriately timed policies that can link up with economic investment decisions to avoid capital destruction

Incorporating the cost of carbon or climate change into goods and services

Provide incentives for the research and development of clean energy;

Valuing low carbon investments positively so as to provide a more level playing field

Educating the public on the costs and benefits of reducing carbon emissions and how this can be achieved in a fair and realistic way.

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Mexican Public-Private Sector Dialogues

Mexican Government decided to host public-private sector dialogues in the run up to Cancun in December Launch event in July in Mexico City 1st Dialogue on Financing in early September in Geneva 2nd Dialogue on Carbon Markets in late September in Paris 3rd Dialogue on Technology likely in November in India

On 17 May 2010, Christiana Figueres (Costa Rica negotiator) appointed as new UNFCCC Executive Secretary, to replace Yvo de Boer in July

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Beyond Copenhagen – CLP’s Position

1. The Copenhagen Accord includes an emphasis on Nationally Appropriate Mitigation Actions (NAMAs) in reducing global emissions. This is aligned with CLP's experience and practice …and in light of the uncertainty about the future of the CDM, following Copenhagen, this remains a prudent and appropriate approach.

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Beyond Copenhagen – CLP’s Position

2. Since the Bali Declaration of December 2007, CLP's investment in renewable energy grew very substantially, in line with that increase in national support. If such support continues, or even increases, following

Copenhagen, then we would expect CLP's investments in clean energy to continue on their upwards trajectory.

In that respect, we note that none of the developing countries, including India and China in which CLP has substantial renewable energy businesses, has indicated any intention to cut back on such support following Copenhagen.

However, if dissatisfaction with the Copenhagen Accord leads to a slowdown or pause in the strength of national policy support to clean energy investments or the project, then the growth in CLP's own investments and projects will likely slowdown or pause in synchronisation.

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Beyond Copenhagen – CLP’s Position

3. A broad-based, credible carbon price plays a critical role in any successful policy on climate change. Without clear emissions reduction targets for 2020 or a framework for the carbon market, the Accord failed to provide a price signal for carbon. CLP has not based its investments in clean energy on

assumptions about the continuation of the CDM or the large scale of the financial transfers that it might bring.

Nonetheless, a stable carbon price would kick-start much needed investments in clean energy.

CLP will continue to wait for clarifications on emission liabilities and international abatement mechanisms as they affect clean energy innovation on a global scale.

We urge leaders to design national policies that… allow for a “smooth transition” to a low-carbon economy in a cost-effective and efficient manner…

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Beyond CopenhagenDeveloping National Policies

COP15 should not strive for a “one size fits all” solution – need to allow for ‘common but differentiated responsibilities’

Policies and initiatives that support accelerated deployment of clean energy infrastructure and technology should include: Economic viability and sustainability The availability of capital Supporting infrastructure Governance and regulatory stability Recognising the demarcation between the responsibilities of

governments and those of the private sector Governments should engage the private sector in their

development and implementation of local climate-related policies and regulations

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Governments should engage the private sector in their development and implementation of local climate-related policies and regulations that: Establish a clear strategy on how long-term carbon emissions

reduction will be achieved; Factor economic investment decisions, capital stock, and the

preservation of energy security into consideration; Incorporate the cost of carbon or climate change into goods and

services; Provide incentives for the research and development of clean

energy; Value low carbon investments positively so as to provide a more

levelled playing field; and, Educate the public on the costs and benefits of reducing carbon

emissions and how this can be achieved in a fair and realistic way.

Beyond CopenhagenDeveloping National Policies

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Slow Progress Comes Down To…

The low or no carbon technologies that we need still hundreds of billions of $$$ away – so much $$$ that not any one company or even one country can bear the cost

Given the current financial downturn: Developed countries

will find it difficult to justify sponsoring clean development in developing countries

that need to renew their infrastructure anyway could make the decision to invest domestically on new low carbon infrastructure or lock themselves into new cheap carbon intensive infrastructure

Developing countries will receive less “aid” from UNFCCC, etc that are emerging may receive more private funding and investment

and such funding could be directed to new low carbon infrastructure or lock themselves into cheap carbon intensive infrastructure

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Constrained resources

Add Global Financial Crisis…

Impacts Government decisions

Governments ofDeveloped CountriesPolitical pressure to

•Increase domestic funding•Decrease external funding

Governments ofPoor Developing Countries

Potential•Increase domestic exports•Decrease foreign funding

Less political will for financial aid to poor countries

Potential•Decrease in

carbon intensive energy

development•Increase in low carbon energy development

Potential•Increase in

carbon intensive energy

development•Decrease in low carbon energy development

OR

No /little development

Potential•Increase in

carbon intensive energy

development•Decrease in low carbon energy development

OR

Contribution to climate change

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Global Financial Crisis Could Benefit Climate Change…

If an individual/organisation moves towards…

Increasing efficiency – producing the same or more with less

Decreasing consumption – changing lifestyle

Changing decision-making to achieve the above

Purchasing only what is ‘necessary’

Deliberate planning of less consumption

Purchasing more efficient/multi-use goods/appliances

Better planning of resource use (e.g. $$, time, etc.) We tend to change habits only in a crisis…so this is the time for change!

Thank YouThank You ! !