Global Climate Governance after Paris

Delivering a safe climate in a world of populism, authoritarianism and fragmenting geopolitics

Nick Mabey, E3G, May 2018

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E3G 2

Introduction to E3G

E3G

• Independent, non-profit European organisation working to accelerate the transition to sustainable development. Based in London, Brussels, Berlin & Washington DC; working across the EU and in Western Balkans, Latin America, SE Asia and China.

• Programmes of work on climate diplomacy; climate security and risk; finance; energy and infrastructure systems; and just transition.

• Advises EC & EU governments, NGOs and charitable foundations.

My Background

• Engineer and academic economist working on energy/climate change issues.

• WWF-UK Head of Economics and Development: Kyoto; WTO; Development Policy.

• UK Foreign Office: Green Diplomacy Network; Sustainable Development; G8; WSSD.

• UK Prime Minister’s Strategy Unit: energy/climate change; security; organised crime.

Key Takeaways

• Climate change is a unique challenge to global governance requiring a transformation of all economic systems in all countries in two generations.

• We need strong international cooperation (and some luck) to avoid the worst impacts of climate change. Climate change illustrates the future of global governance as it is the first major global regime designed with emerging powers.

• Paris makes us safer but not safe. Paris has built shared goals, momentum and a platform for action but shifted the big politics of climate change ambition outside the UNFCCC. Climate change is now a shaper, not just a taker, of geopolitics.

• Barriers to ambition are political & institutional, not technical & financial. Climate politics are deeply entangled with globalisation, social cohesion & populism.

• Building effective governance of climate change can help support a sustainable system of broader global rules; if we invest in the diplomacy to create it.

Paris will not deliver itself. We have 6 years to use the political leverage it created to maintain a high likelihood of preserving climate security 3

Outline

• The challenge of climate governance

• What does Paris do?

• The politics of climate ambition

• The new governance of climate change

E3GOctober 2013

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Human civilisation has evolved in an unusually stable climatic period

February 2015 E3G 5

Rising CO2 emissions are pushing us into unprecedented risk areas

February 2015 E3G 6

By 2040 a 100 year global food crisis could occur every 30 years (or 10 years)

May 2017 E3G 7

Climate System Tipping Points become high risk above increases of 1.5-2C

February 2015 E3G 8

Source: Lenton, 2010

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Global stability and security depends on interplay of cooperation and climate sensitivity

High Climate Sensitivity

Low Climate Sensitivity

FailedCooperation

Successful Cooperation

Collapse and

Competition

6-8C

Defensive

Adaptation

2.5-4C

Crash

Response

3-5C

Robust

Regime

1.5-2.5C

Scenarios for 2050 based on global

agreement to keep temperatures well

below 2C

E3G

Climate matters to global governance

• Winning late is losing: Keeping climate change risks manageable requires unprecedented international cooperation against a ticking clock

• Security is Security is Security: failing to cooperate on climate change to protect economic or energy security will amplify move to power based and closed international relations;

• Global Systemic Risks: Climate and resource depletion could drive failure of major international systems of food, finance, water & energy trade amplifying stressors on vulnerable countries

• Charity begins at home: Resulting instability, conflict and unmanaged migration flows – especially into Europe – undermines shared security and could destroy humanitarian and human rights norms.

E3G 10

June 2014 E3G 11

How much risk will you take?

Outline

• The challenge of climate governance

• What does Paris do?

• The politics of climate ambition

• The new governance of climate change

E3GOctober 2013

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2C>> Transformation means by 2030.....

Global oil consumption

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2000 2010 2020 2030

MT

oe Shell Scenarios

IEA 450

June 2014 13

Peak oil demand around 2020

Global coal consumption

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2000 2010 2020 2030

MT

oe Shell Scenarios

IEA 450

Sharp decline in coal consumptionPercentage low carbon energy consumption

0%

5%

10%

15%

20%

25%

30%

35%

2000 2010 2020 2030

IEA 450

Shell Scenarios

…..And much more low carbon energy

$90 trillion in infrastructure investment

to 2030 needs to be made low carbon and

climate resilient; 80% in emerging economies.

International Climate Regime ≠ UNFCCC

February 2015 E3G 14

Potential Functions of an International Climate Agreement

• Goal: agree threshold for “dangerous climate change”

• Impact: ensure aggregate mitigation efforts keep climate change below collective threshold

• Equity: allocate effort fairly among countries

• Transparency: ensure everyone keeps their promises

• Compliance: consequences if countries don’t deliver

• Assistance: help for countries to implement goals

• Resilience: support global and country resilience

E3G 15

Climate dropped off the public agenda catastrophically after Copenhagen

September 2013 16E3G

The Copenhagen Legacy lowered expectations for Paris

• Political elites and publics had not considered climate change since Copenhagen

• Climate fell out of political fashion in most countries

• Copenhagen's failure left a legacy assumption that climate change is too hard to solve

• This was re-enforced by a systemic decrease in global cooperative capacity in the post-crisis world

Why was Paris different to Copenhagen?

E3G 17September 2013

Global climate politics changed

• Power (and blame) in climate politics shifted. In 1990 China was 10% of fossil CO2 emissions in 2016 it was 30%. In 1990 per capita Chinese emissions were ¼ of the EU’s; in 2015 they were equal.

• Alliances changed: climate negotiations have seen rapidly shifting alliances such as the BASIC group (Brazil, South Africa, India, China). Growing shift from “North-South” dynamics to “climate makers vs takers” with vulnerable states growing their voice.

• Economic Opportunities grew: global low carbon economy grew to over $5 trillion in 2017. Clean energy costs were falling much faster than expected.

• Climate change impacts became more visible and costly in all parts of the world. Scientific evidence has strengthened on attribution of climate change contribution to the risk of extreme weather events.

Political risk of climate inaction grew, and the risks of action fell18July 2015

September 2010 E3G 19

And better diplomacy created conditions for compromise

• China committed internationally to decarbonise its economy because it feared being blamed for failure and the US at least accepted an emissions target.

• The US accepted a binding regime because China and India also agreed to be commitments that are (equally) internationally verifiable.

• Europe accepted a weak US commitment because it brought China into the agreement and agreed a binding MRV and review process

• Other developing countries agreed because of tougher overall goals (efforts towards 1.5C) and significant new public finance and cooperation for adaptation, forestry and clean energy.

• The “bottom-up” system of country pledges fails to deliver necessary reductions but “top down” goals and 5 year review and ratchet generates coordinated future “international moments” to increase efforts

Everyone moved their position to deliver a global deal

Paris hybrid “top down-bottom up” framework was better than expected

• Agreement has “legal force” (and strong political backing including from non-state actors)

• It contains commitments to limit emissions from all countries

• It has a binding system for monitoring and reporting

• Strengthens goal to “well below 2C” and efforts to reach 1.5C

• No backsliding clause and five yearly cycle of assessing progress and countries increasing mitigation ambition

• New goal of GHG neutrality in second half of the century

• Puts adaptation and resilience on equal footing to mitigation

Durable regime for next 20-30 years?E3G 20

Paris made the world safer but not safe. Emissions must be 40GT> by 2030

21Probability of > 4C reduced by 80%; 2.7C-3.5C likely outcome

What Paris didn’t give us

• Allocate necessary levels of emission reduction between countries to “ensure” overall Paris goals are met

– No ability to agree an “equity” formula or process

– “Not if but when”- all countries have a net zero goal

• A punitive mechanism for sanctioning countries who are non-compliant or non–joiners (but does give some cover for WTO sanctions to be used)

• A clear “social contract” between climate impacted countries and big emitters on compensation for “excess damage”

Countries agreed to do what is possible not what is necessaryE3G 22

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Paris keeps us in a cooperative scenario but science suggests higher climate sensitivity

High Climate Sensitivity

Low Climate Sensitivity

FailedCooperation

Successful Cooperation

Collapse and

Competition

6-8C

Defensive

Adaptation

2.5-4C

Crash

Response

3-5C

Robust

Regime

1.5-2.5C

Scenarios for 2050 based on global

agreement to keep temperatures well

below 2C

E3G

Paris

Outcome

Paris establishes a risky regime

• Politics of gaining agreement in Paris required a trade-off between inclusiveness and rigour

• The politics of climate ambition were shifted out of the UNFCCC to major power relations, disadvantaging smaller and vulnerable countries.

• Paris sets up coordinated 5 year political moments for national political debates on need for more climate ambition.

• Previous “ambition reviews” under the UNFCCC had in general failed to deliver more effort

Architects of Paris knew it was a platform for tackling climate change not a complete solution

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Outline

• The challenge of climate governance

• What does Paris do?

• The politics of climate ambition

• The new governance of climate change

E3GOctober 2013

25

Paris survived Trump 1 but mixed political context for greater climate ambition

• Technology Leads: global markets have reduced clean energy costs 15 years earlier than anticipated. Countries will deploy clean technology faster for national economic reasons.

• But politics still matters: lower costs alone will not retire fossil infrastructure fast enough, or remove the barriers to clean solutions from incumbent interests. Poor social management of transitions will present opportunities for populists to toxify national climate politics.

• Climate geopolitics become harder: global politics will continue to fragment into regional blocks with rising security, trade & investment frictions. Stronger state-to-state diplomacy is needed to manage these tensions; keeping climate cooperation strong & markets open.

• “Success” in 2020 masks risks for 2025: Cheaper technology, strong energy efficiency – & inflated baselines – likely to deliver aggregate over-achievement of Paris pledges in 2020. With leadership from key countries & non-state actors this could keep Paris on track politically in 2020.

• Need to prepare politics of deep decarbonisation now: in 2023 countries must consider deep cuts in sectors with no easy fixes such as industry & agriculture. Weak US action (Trump 2?) and “rogue” states will make global alignment on deep decarbonisation much harder in 2025.

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Ambition Politics will be increasingly driven by Perceptions of Trends and Events

• Falling technology costs and multiple national/local benefits

• Climate risks integrated into the financial system

• Climate impacts shifting public opinion and growth of attribution science

• Non-state actor commitments and momentum around local coal/ICE phase-outs

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Tailwinds

• Rising nationalism & instability in fragile regions undermines cooperation and leadership

• Growing authoritarianism suppresses non-state actor influence

• Incumbent asset owners & inertia in regulatory frameworks

• Poorly managed social & industrial transitions & costs/distraction of climate impacts

Headwinds

Less supportive and active in structural change

More supportive and active in structural change

Less active in climate diplomacy

More active in climate diplomacy

Russia Turkey Australia

Saudi Arabia

IndonesiaSouth Korea

JapanArgentina

Mexico

USA

BrazilSouth Africa

Canada

China

India

EU

Mapping of Major Power Dynamics

28Source: Summaries based on

E3G PEMM mapping

MtCo2e <500500-1,000

1,000-2,000>2,000

National Conditions

Political System

Supportive

Divided

Against

• Countries’ political system

positions are based on

analysis of balance of

government, business and

public stakeholders

• Countries’ national

conditions are based on

analysis of alignment of

economic, energy,

technology, public goods

and fiancé interest with

moving to a low carbon and

climate resilient economy

Business as usual results in little pressure on G20 to increase ambition in 2020. This can be changed.

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• Blocked Greens: high level political engagement can encourage more leadership from countries who’s national interests are aligned with climate ambition but have mixed or negative internal politics; Japan, South Korea, Mexico are key G20 targets.

• Weak Champions: partnership for low carbon reform and maximising national co-benefits can help shift countries with strong or mixed politics but contested national interests; China, India, Brazil, Canada, Argentina. Outliers South Africa & Indonesia are dependent on high carbon industries and will need strong support to provide credible low carbon alternatives.

• Political Blockers: engagement on broader geopolitical issues – and private sector restrictions on high carbon financing – could help shift countries with negative political views but mixed real economy incentives to a more neutral position; Turkey, Australia, USA (if a 4 year Trump)

• Fossil Rogues: Russia & Saudi are not powerful enough to block progress towards 2C>> on their own. An active US and/or a Trump re-election could change this resulting in a coalition of fossil dependent states significantly disrupting progress; India, Turkey & Japan are at risk.

Bigger is not always better. Non-G20 countries are deploying major fossil investments and have key role in demonstrating transformational climate transitions.

Climate Ambition Politics

Real Economy Change

Climate & Energy

Diplomacy

What changes are needed now to support deep

decarbonisation?

Structural Reform

Over-Achievement

Where can decarbonisation

trends be accelerated?

How can collective

action make countries do

more?

How to build national

politics for greater action?

Stronger climate ambition in 2020 relies on creation of positive feedbacks between real economy progress, political interests and diplomacy

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“Building

Shared

Leadership”

Sharing &

Supporting

Models of

Climate Action

Showing

Progress in

the Real

Economy

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Support for Deep Structural Changeo Long term strategy e.g. 2050 Roadmapso Oil & Gas orderly decline strategieso ICE phase-outo Mission Innovation/CEM focused on

energy intensiveso Food, diet and land use reformso Regulatory cooperationo Learning and capacity buildingo Deep resilience cooperationo Clean energy integrated into trade and

investment agreements

2020 Ambition Coalitionso NDC Delivery Supporto Coal Phase Out/Moratoriao Public climate funding/GCF etco Development Bank Reformso Climate Disclosure/Divestmento National Green Finance Reform cooperationo City and Company 2C>> Pledgeso Kigali implementationo Implementation of avoided deforestation

Climate and Energy Diplomacyo Building stronger diplomacy

around climate risko UNFCCC Rulebook and Ambition

Processo High Ambition Coalition 2.0o Technical assistance and

financial supporto Building sub-national ambition

diplomacyo Common approach for dealing

with low ambition stateso Regime for geo-engineering &

negative emissions

Climate Politicso Aligning climate with

geopolitical interests e.g. security, trade, investment, SDGs etc

o Aligning national climate goals with broader development debates and objectives

o Managing transition politicso Aligning regional interests with

climate change, including energy security

Wide range of interventions. Critical to focus on the most impactful areas with key partners.

Climate Ambition Politics

Real Economy Change

Climate & Energy

Diplomacy

Structural

Reform

Over-Achievement

Enabling transitions & building strategic trust needs three level diplomacy

• Regime Politics 2018/19: building renewed alliances between vulnerable countries and OECD progressives to deliver credible (undifferentiated) rulebook, manage finance issues and avoid disputes over 1.5C fracturing govt & non-govt progressive coalitions.

• Politics of 2020 Ambition: build “shared leadership” approach to climate ambition with China and major economies. Build a “critical mass” of countries who can enhance/increase NDCs and deliver mid century goals/plans to 2020. Use country & sector partnerships (coal phase out, Green Finance, MDB reform, resilience etc) to increase confidence in national benefits of low carbon transition.

• Politics of Deep Decarbonisation: invest in demonstrating solutions in difficult sectors: heat, smart infrastructure, construction, heavy industry, agriculture etc. Build deeper engagement on low carbon economic reforms & social transition for deep decarbonisation. Build shared understanding of the security & geopolitical risks of failing to deliver Paris Goals in 2025 between EU, China, India etc

Requires aligned govt and non-govt diplomacy & more diplomatic capacity 32

Outline

• The challenge of climate governance

• What does Paris do?

• The politics of climate ambition

• The new governance of climate change

E3G 33

Paris Agreement-led climate regime is not sufficient to deliver 2C>> let alone 1.5C

• Geopolitics of climate ambition depends on synergies with other global regimes.

• Open enough global markets & supply chains to lower clean energy costs & drive technology diffusion

• Resilient enough international food, water management, finance & migration management systems to reduce climate instability “contagion”

• Deep enough global cooperation to support transitions in all countries to net zero climate resilient economies

Major powers must believe that effective global rules are critical to deliver their national security and prosperity

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Is there a grand EU-China alliance on “Clean and Green” Belt & Road?

• Coal plants planned in BRI countries would break Paris carbon budget

• Public funding coming from China, Japan and Korea

• China discussing “green” BRI. Japan, Australia and US discussing fossil investment alliance?

• Can EU support China’s BRI on climate without undermining broader foreign policy goals?

E3G 35

E3G 36

China plans dominance in EVs. How to manage trade & keep open markets?

May 2017

EU car industry employs 12.6m people – 5.7% of workforce. Need perception of fair competition and transition to keep public support.

Flat oil prices, lower demand & climate risks undermine EU fossil supplier stability (Russia?)

E3G 37May 2017

UN system is not climate risk ready

• UN system is critical for improving global climate resilience on food, health, water, migration

• UNSC should have oversight of critical climate security risks including tipping points

• No capacity in UN system to analysis climate security threats & prioritise reform

• Launch major reforms at UNSG Summit in 2019?

E3G 38

“To solve a problem make it bigger”

• Global rules-based governance faces fundamental challenges based on its legitimacy, effectiveness and enduring support from Major Powers

• Climate change is a shared challenge that requires stronger international cooperation across all global governance systems

• Poorly managed climate change will impact the fundamental security and prosperity of all states

• The imperative of climate change provides a strong political impetus to reform and strengthen global governance

E3G 39

Thank You & Further Information

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https://www.e3g.org/docs/United_We_Stand.pdf

https://www.e3g.org/docs/E3G_-_EU_foreign_policy_in_a_changing_climate_-_June_16.pdf

https://www.e3g.org/showcase/degrees-of-risk

https://www.e3g.org/docs/E3G_-

_Understanding_Climate_Diploma

cy.pdf