Post on 27-Mar-2015
UNFCCC COP 13
Bali, 10 December 2007
The Business Day in PerspectiveThe Business Day in Perspective
Bali Global Business Day, 10 December 2007 2
Moderator
Claude Fusslerformer Program Director WBCSDSpecial Advisor to the UN Global Compact
Once upon a time…Once upon a time…
Voluntary initiatives
Type II partnerships
Walking the talk…
Now…Now…
state of happiness,the Creator, people and naturelive in harmony with each other.
state of happiness,the Creator, people and naturelive in harmony with each other.
It is about…It is about…
Business solutions
Policy framework
Inclusive, ambitious
OrganizersOrganizers
International Chamber of Commerce
World Business Council for Sustainable Development
PartnersPartners
BUSINESSEUROPEthe Confederation of European Business
International Emissions Trading Association
Federation of German Industries (BDI)
PartnersPartners
KADIN Indonesian Chamber of Commerce and Industry
Nippon Keidanren
International Council of Forest and Paper Associations
PartnersPartners
World LP Gas Association
International Council for Sustainable Energy
Our media partner
an extraordinary support froman extraordinary support from
and its great team!
No breaks
But refreshments available all the time in lobby
As of tomorrow:As of tomorrow:
www.youtube.com/balibusinessday
What do you mean by an
inclusive ‘policy framework?
Would you agree with me that
there are 5 key conditions.
First of all as I wrote in my
paper published for the
Nairoby confrence I cannot
agree with statements like the
one made in your opening
sesssion. How can you
possibly claim that the current
energy generation structure is
obsolete and
What do you mean by an
inclusive ‘policy framework?
Would you agree with me that
there are 5 key conditions.
First of all as I wrote in my
paper published for the
Nairoby confrence I cannot
agree with statements like the
one made in your opening
sesssion. How can you
possibly claim that the current
energy generation structure is
obsolete and
Question cards in your folderQuestion cards in your folder
Q & AWHAT DO YOU MEAN BYAN INCLUSIVE POLICY FRAMEWORK ?
WHAT DO YOU MEAN BYAN INCLUSIVE POLICY FRAMEWORK ?
Thank You!
Sorry!...Sorry!...
Bali Global Business Day, 10 December 2007 16
Biography In your conference pack
Solutions and enabling policiesSolutions and enabling policies
mitigationmitigationsession
Efficiency and demand management Efficiency and demand management
Carbo-neutral energy Carbo-neutral energy
Forests and technical capture and storage
Forests and technical capture and storage
Solutions and enabling policiesSolutions and enabling policies
mitigationmitigationsession
Development and cooperation
adaptation
The Bali StakesThe Bali Stakes
Keynote Speakers
Yvo de Boer
Secretary General, UNFCCC
Björn Stigson
President, WBCSD
Nobuo Tanaka
Executive Director, IEA
Bali Global Business Day, 10 December 2007 19
What can COP 13 deliver?What can COP 13 deliver?
Keynote Speaker
Yvo de BoerSecretary General, UNFCCC
Bali Global Business Day, 10 December 2007 20
Enhance business solutionsEnhance business solutions
Keynote Speaker
Björn StigsonPresident, WBCSD
Bali Global Business Day, 10 December 2007 21
Success factors for mitigationSuccess factors for mitigation
Keynote Speaker
Nobuo TanakaExecutive Director, IEA
Bali Global Business Day, 10 December 2007 22
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE© OECD/IEA - 2007
Nobuo TanakaExecutive Director
International Energy Agency
Bali Global Business Day 10 December 2007
Success Factors for Mitigation
Stimulating markets to outpace climate risks
© OECD/IEA - 2007
© OECD/IEA - 2007
The WEO Reference Scenario Our current trajectory: under-invested, dirty
and vulnerable Leads to a future even worse than projected
just one year ago Consistent with an increase in average global
temperature of up to 6°C
The 450 Stabilisation Case Coincides with the most ambitious of the
IPCC’s scenarios Would limit the increase in average global
temperatures to 2.4°C Unprecedented strong and immediate policy
action would be essential, associated costs very high
Achievable or Science Fiction ?
Two Possible Energy Futures
© OECD/IEA - 2007
Reference Scenario:
World Primary Energy Demand
Global demand grows by more than half over the next quarter of a century, with coal use rising most in absolute terms
0
2
4
6
8
10
12
14
16
18
1980 1990 2000 2010 2020 2030
billio
n to
nnes
of o
il equ
ivale
nt
0
2
4
6
8
10
12
14
16
18
1980 1990 2000 2010 2020 2030
billio
n to
nnes
of o
il equ
ivale
ntOther renewablesBiomassHydroNuclearGasOilCoal
© OECD/IEA - 2007
Global CO2 Emissions: Historical and Future
Although China and India produced just 10% of total global emissions since 1900 they will represent 56% of the increase to 2030. By that time per capita
emissions in China will approach those of OECD Europe.
Cumulative Energy-Related CO2 Emissions
0 100 200 300 400 500
United States
European Union
Japan
China
India
billion tonnes
1900-20052005-2030
© OECD/IEA - 2007
CO2 Emissions - 450 Stabilisation Case Achievable or Science Fiction ?
By 2030, emissions are reduced to some 23 Gt, a reduction of 19 Gt compared with the Reference Scenario
10
15
20
25
30
35
40
45
2005 2010 2015 2020 2025 2030
Gt o
f CO 2
CCS in industry – 3% CCS in power generation - 9% Nuclear – 13% Renewables – 20%Switching from coal to gas - 8%End Use electricity efficiency -17%
End Use fuel efficiency – 30%
Reference Scenario
450 Stabilisation Case27 Gt
42 Gt
23 Gt
Energy-Related CO2 Emissions
© OECD/IEA - 2007
Average Annual Power Generation Capacity Additions in the 450 Stabilisation Case, 2013-2030
A large amount of capacity would need to be retired early, entailing substantial costs
22 CCS coal-fired plants (800 MW)
20 CCS gas-fired plants (500 MW)
30 nuclear reactors (1000 MW)
2 Three Gorges Dams
400 CHP plants (40 MW)
17 000 turbines (3 MW)
0 10 20 30 40 50 60
Other Renewables
Wind
Biomass and waste
Hydropower
Nuclear
Gas CCS
Coal CCS
GW
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE© OECD/IEA - 2007
“We will act with resolve and urgency to meet our
shared multiple objectives of reducing greenhouse
gas
emissions, improving the global environment,
enhancing
energy security and cutting air pollution in
conjunction
with our vigorous efforts to reduce poverty“
-- from “G8 Gleneagles -- from “G8 Gleneagles Communiqué” Communiqué”
“We will move forward with timely implementation
of the
Gleneagles Plan of Action. We have instructed our
relevant ministers to continue the Dialogue on
Climate Change, Clean Energy and Sustainable
Development and report its outcomes to the G8
Summit in 2008” -- from “G8 St. Petersburg -- from “G8 St. Petersburg
Communiqué”Communiqué”
“Technology, energy efficiency and market
mechanisms, including emission trading
systems or tax incentives, are key to mastering
climate change as well as enhancing energy
security.”
-- from “G8 Heiligendamm -- from “G8 Heiligendamm Communiqué” Communiqué”
© OECD/IEA - 2007
In support of the G8 Plan of Action
Energy Usein the NewMillennium
Trends in IEA Countries
ENERGYINDICATORS
© OECD/IEA 2007
Energy Efficiency: Support the IEA’s I3 Initiative
Implement ! Implement! Implement !
0%
1%
2%
3%
1973 - 1990 1990 - 2004
Ave
rage
ann
ual p
erce
nt c
hang
e
Actual energy use
Energyefficiency
improvements
Actual energy use
Energyefficiency
improvements
Hypothetical energy use without energy efficiency improvements
Source: Energy Use in the New Millennium (IEA, 2007)
Energy Usein the NewMillennium
Trends in IEA Countries
ENERGYINDICATORS
© OECD/IEA 2007
Since 1990, the rate of energy efficiency improvement in IEA countries has been less than 1% per year – much lower than in
previous decades. We must - and we can - do better!
© OECD/IEA - 2007
Energy Indicators: Factors Affecting Manufacturing Energy Use, IEA19
-2%
-1%
0%
1%
2%
3%
4%
1990-1995 1995-2000 2000-2004 1990-2004
Ave
rag
e an
nu
al p
erce
nt
chan
ge
Actual energy use Activity Structure Energy efficiency
Energy Usein the NewMillennium
Trends in IEA Countries
ENERGYINDICATORS
© OECD/IEA 2007
There has been a strong decoupling of energy use from manufacturing output, particularly in metal products, chemicals, non-
metallic minerals and paper and pulp.
In support of the G8 Plan of Action© OECD/IEA - 2007
MindMind thethe GapGap
QuantifyingPrincipal-AgentProblems inEnergy Efficiency
Why Doesn’t Someone Pick up That 20 Euro Note On The Sidewalk?
Energy efficiency potential is trapped beneath these barriers!
“It looks like it’s monopoly money” market failures
principal agent problem asymmetric information
“I have a sore back” bounded rationality and limited energy
costs
“I’ll have to declare it on my income taxes” inefficient government laws and regulation
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE© OECD/IEA - 2007
CoalCoal
CO2 SequestrationCO2 Sequestration
NuclearNuclear
WindWind
Solar PVSolar PV
Replace 300 conventional, 500-MW coal power plants with “zero-emission” power plants, or ...
Replace 300 conventional, 500-MW coal power plants with “zero-emission” power plants, or ...
Install 70 x current German wind generation in lieu of unsequestered coal
Install 70 x current German wind generation in lieu of unsequestered coal
Install 1090 x current US solar generation in lieu of unsequestered coal
Install 1090 x current US solar generation in lieu of unsequestered coal
Install 1000 Sleipner CO2 sequestration plantsInstall 1000 Sleipner CO2 sequestration plants
Build 140 1-GW power plants in lieu of unsequestered coal plants
Build 140 1-GW power plants in lieu of unsequestered coal plants
Efficient lightingEfficient lightingReplace incandescent lamps by CFLs = 0.5 GtReplace other lamps with efficient options = 0.5 Gt
Replace incandescent lamps by CFLs = 0.5 GtReplace other lamps with efficient options = 0.5 Gt
Adapted from Pacala & Socolow, Science 2004
Mitigation Policy & TechnologyAvoiding 1 billion tonnes of CO2 per Year
Early market signals and technology R&D canwork together to assist the market transition – Policies
and R&D are inseparable!
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE© OECD/IEA - 2007
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
1974 1978 1982 1986 1990 1994 1998 2002 2006
Mill
ion
US
$ (
20
06
pri
ces
an
d P
PP
)
-1%
1%
3%
5%
7%
9%
11%
13%
15%
Sh
are
of E
ne
rgy
R&
D in
To
tal R
&D
Energy efficiency Fossil fuels Renewable energy sources Hydrogen and fuel cells Other Nuclear Share of energy R&D in total R&D
Public Sector Energy R&D in IEA Countries
R&D investment is not adequate given the magnitude of the climate challenge. Government spending on energy R&D has fallen, while the private-sector is focused
on projects with short-term payoffs
INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE© OECD/IEA - 2007
The Institutional Challenge: What will be
required? The support and cooperation of industry
Good governance, as this will be critical to minimising risk and attracting investment
A post-2012 Framework that: Involves participation of all major emitters
Addresses cost uncertainty, promotes flexibility and accommodate differing national circumstances
Considers sectoral approaches, as these could:
• broaden greenhouse gas reduction actions
• ease concerns for trade-exposed energy-intensive industries
Appropriate bodies, such as the IEA, to provide advice and monitor and report against progress
In support of the G8 Plan of Action © OECD/IEA - 2007
ENERGYTECHNOLOGYPERSPECTIVES
Scenarios &Strategies
to 2050
2 0 0 8
INTERNATIONAL
ENERGY
AGENCY
Upcoming Publication: Energy Technology Perspectives 2008
How to get there:Research, Development and Demonstration
policiesTechnology learning and deploymentTechnology transitions Investment needs and policy costEnergy and CO2 emission indicators
(efficiency)Consequences for consumers
Scenario analysis Country level analysis for G8+5
The Bali StakesThe Bali Stakes
Keynote Speakers
Yvo de Boer
Secretary General, UNFCCC
Björn Stigson
President, WBCSD
Nobuo Tanaka
Executive Director, IEA
Bali Global Business Day, 10 December 2007 37
Opportunities in Energy Efficiency Opportunities in Energy Efficiency
Moderator
Teresa Presas, President, Confederation of European Paper Industries
Expert view: Low-carbon scenarios for Germany
Klaus Mittelbach, Head of Environment and technology, BDI
Panel
Paul Peeters, Senior Vice President, Philips Lighting Asia Pacific Region
Doug Musyka, President, DuPont Greater China
Gert-Jan Koopman, Director, DG Enterprise, European Commission
Frances Beinecke, President, Natural Resources Defense Council
Policy Review
Nick Campbell, Chair, ICC Task Force on Climate Change
Bali Global Business Day, 10 December 2007 38
Low Carbon scenarios for GermanyLow Carbon scenarios for Germany
Expert view:
Klaus Mittelbach
Head of Environment and Technology
BDI
Bali Global Business Day, 10 December 2007 39
Opportunities in Energy EfficiencyOpportunities in Energy Efficiency
Moderator
Teresa PresasPresident, Confederation of European Paper Industries
Bali Global Business Day, 10 December 2007 40
Opportunities in Energy EfficiencyOpportunities in Energy Efficiency
Panel
Paul PeetersSenior Vice President, Philips Lighting Asia Pacific Region
Bali Global Business Day, 10 December 2007 41
Opportunities in Energy EfficiencyOpportunities in Energy Efficiency
Panel
Doug Musyka,
President, DuPont Greater China
Bali Global Business Day, 10 December 2007 42
What do you mean by an
inclusive ‘policy framework?
Would you agree with me that
there are 5 key conditions.
First of all as I wrote in my
paper published for the
Nairoby confrence I cannot
agree with statements like the
one made in your opening
sesssion. How can you
possibly claim that the current
energy generation structure is
obsolete and
What do you mean by an
inclusive ‘policy framework?
Would you agree with me that
there are 5 key conditions.
First of all as I wrote in my
paper published for the
Nairoby confrence I cannot
agree with statements like the
one made in your opening
sesssion. How can you
possibly claim that the current
energy generation structure is
obsolete and
Question cards in your folderQuestion cards in your folder
Q & AWHAT DO YOU MEAN BYAN INCLUSIVE POLICY FRAMEWORK ?
WHAT DO YOU MEAN BYAN INCLUSIVE POLICY FRAMEWORK ?
Opportunities in Energy EfficiencyOpportunities in Energy Efficiency
Panel
Gert-Jan Koopman,
Director, DG Enterprise, European Commission
Bali Global Business Day, 10 December 2007 44
Opportunities in Energy EfficiencyOpportunities in Energy Efficiency
Panel
Frances BeineckePresident
Natural Resources Defense Council
Bali Global Business Day, 10 December 2007 45
Opportunities in Energy Efficiency Opportunities in Energy Efficiency
Policy Review
Nick CampbellChair
ICC Task Force on Climate Change
Bali Global Business Day, 10 December 2007 46
Climate Policy and the PublicClimate Policy and the Public
Expert view
Doug MillerPresident, GlobeScan Incorporated
Bali Global Business Day, 10 December 2007 47
48
Participating Countries (21*)
22,000 in-person / telephone interviews - June-July 2007
* Urban samples in 8 countries
**Average of 21 countries. Asked in Egypt
POLL
49
Views of Action Needed to Reduce Human Impact on Climate Change
Average of 21 Countries, 2007
Base: Representative samples of 22,000 adults in 21 countries
M3. As you may know there is some discussion these days about whether it is necessary to take steps to reduce the impact of human activities that are thought to cause global warming or climate change. Which of the following . . .
50
Position Held on Limiting Climate Change Gas Emissions in Less Wealthy Countries
By Country, 2007
The white space in this chart represents “DK/NA."
Base: Representative sample of 22 000 adults in 21 countries
51
Wealthy Countries Provide Less Wealthy Countries with Financial Assistance / Technology; Less Wealthy Countries Limit Emissions of Climate Changing Gases along with Wealthy Countries
Average of 21 Countries, 2007
Base: Representative sample of 22 000 adults in 21 countries
52
Support for Higher Taxes on the Most Harmful Types of Energy So That Individuals/Industry Use Less
“Strongly” and “Somewhat Favour,” Average of 21 Countries, 2007
*Based on subsample results.
53
Support for Higher Taxes on the Most Harmful Types of Energy So That Individuals/Industry Use Less
2007
*One-half of respondents who said they “strongly” or “somewhat opposed” energy tax or did not give an answer were then asked whether they would support an energy tax if the revenues of the tax were devoted only to increasing energy efficiency and developing energy sources that do not produce climate change.
Base: Representative sample of 22 000 adults in 21 countries
54
Ready to Make Significant Changes to Lifestyle to Help Prevent Climate Change
“Agree” vs “Disagree,” by Country, 2007
The white space in this chart represents “DK/NA.”
Implications of Findings
• Unprecedented global constituency for immediate action on human causes of climate change
• Support for action by ALL countries in parallel
• Strong support for funding and technology transfer to support action in less-wealthy countries
• Pollster’s view: a well-designed and communicated carbon tax is saleable in all countries surveyed
• Citizens and consumers see themselves as part of the solution
• A world-wide FOLLOWERSHIP exists; a time for LEADERS
Details under “News Centre” on: www.GlobeScan.com
Towards Carbon Neutral EnergyTowards Carbon Neutral Energy
Moderator
Laurent Corbier, Chair, ICC Commission on Environment & Energy
Panel
Teruaki Masumoto, President, Tokyo Electric Power Company (TEPCO)
Andrew Richards, Executive Manager, Corporate Affairs & Government, Pacific Hydro
Prashant Modi, FICCI
Harlan Watson, Senior Climate Negotiator, US Department of State
Jonathan Lash, President, World Resources Institute
Policy Review
David Hone, Climate Change Adviser, Royal Dutch Shell
Bali Global Business Day, 10 December 2007 56
Towards Carbon Neutral EnergyTowards Carbon Neutral Energy
Moderator
Laurent CorbierChair, ICC Commission on Environment & Energy
Bali Global Business Day, 10 December 2007 57
What do you mean by an
inclusive ‘policy framework?
Would you agree with me that
there are 5 key conditions.
First of all as I wrote in my
paper published for the
Nairoby confrence I cannot
agree with statements like the
one made in your opening
sesssion. How can you
possibly claim that the current
energy generation structure is
obsolete and
What do you mean by an
inclusive ‘policy framework?
Would you agree with me that
there are 5 key conditions.
First of all as I wrote in my
paper published for the
Nairoby confrence I cannot
agree with statements like the
one made in your opening
sesssion. How can you
possibly claim that the current
energy generation structure is
obsolete and
Question cards in your folderQuestion cards in your folder
Q & AWHAT DO YOU MEAN BYAN INCLUSIVE POLICY FRAMEWORK ?
WHAT DO YOU MEAN BYAN INCLUSIVE POLICY FRAMEWORK ?
Towards Carbon Neutral EnergyTowards Carbon Neutral Energy
Panel
Teruaki MasumotoPresident, Tokyo Electric Power Company (TEPCO)
Bali Global Business Day, 10 December 2007 59
Towards Carbon Neutral EnergyTowards Carbon Neutral Energy
Panel
Andrew RichardsExecutive Manager, Corporate Affairs & Government, Pacific Hydro
Bali Global Business Day, 10 December 2007 60
Towards Carbon Neutral EnergyTowards Carbon Neutral Energy
Panel
Prashant ModiFICCI
Bali Global Business Day, 10 December 2007 61
Towards Carbon Neutral EnergyTowards Carbon Neutral Energy
Panel
Harlan WatsonSenior Climate Negotiator
US Department of State
Bali Global Business Day, 10 December 2007 62
Towards Carbon Neutral EnergyTowards Carbon Neutral Energy
Panel
Jonathan LashPresident
World Resources Institute
Bali Global Business Day, 10 December 2007 63
Towards Carbon Neutral EnergyTowards Carbon Neutral Energy
Policy Review
David HoneClimate Change Adviser
Royal Dutch Shell
Bali Global Business Day, 10 December 2007 64
What’s the same? What’s different?
The Technology Pathway
Bali Global Business Day, 10 December 2007 66
Competing technology
More cost competitive
Number of installations / Products
Tec
hnol
o gy
c os t
Incentive
Earlier deployment
Discovery and DevelopmentDiscovery and Development
Demonstration phaseDemonstration phase
Deployment phaseDeployment phase
0
20
40
60
80
100
1 10 100 1000
The iPhone
Bali Global Business Day, 10 December 2007 67
Competing technology
More cost competitive
Number of installations / Products
Tec
hnol
o gy
c os t
New features
Earlier deployment
R&D is very well funded in the high technology sector;
• Extreme competition• Spinoffs from other government initiatives.
R&D is very well funded in the high technology sector;
• Extreme competition• Spinoffs from other government initiatives.
Early adopters pay for thisEarly adopters pay for this
Cool new features drive early deploymentCool new features drive early deployment
0
20
40
60
80
100
1 10 100 1000
New Energy Technologies
Bali Global Business Day, 10 December 2007 68
Competing technology
More cost competitive
Number of installations / Products
Tec
hnol
o gy
c os t
Not many early adopters so the demonstration phase will need help.
Not many early adopters so the demonstration phase will need help.
Purchase incentives and/or CO2 price
Purchase incentives and/or the CO2 market drive(s) early deployment
Purchase incentives and/or the CO2 market drive(s) early deployment
Earlier deployment
Probably need to refocus and expand R&D for energy.
Probably need to refocus and expand R&D for energy.
0
20
40
60
80
100
1 10 100 1000
A focussed policy approachPower Generation /
Industry & Manufacturing
Transport Commercial & Domestic (Buildings)
Discover & Develop • Support for infrastructure
(e.g. grids & pipelines)• Support for advanced
fuel development• Urban planning decisions.
• Education and awareness.
Demonstrate • Fiscal support for large-scale CCS demonstrations
• Fiscal support for early 2nd generation biofuel manufacture.
• Public transport
• Encouraging radical design
Deploy • “Cap-and-Trade”
• CCS rules and recognition
• Renewable Energy Certificates
• “Fast-track” planning
Policies Focus on;
• Vehicle efficiency
• New fuels (e.g. biofuels)
• Consumer behaviour and vehicle use
• Efficiency standards (appliances, air-con)
• Use of project mechanisms linked to GHG market.
• Encouraging “electrification”.
Broad energy production and use R&D support
Lunch Break Lunch Break
Bali Global Business Day, 10 December 2007 70
Short !
13:00 to 14:10
Buffet
Dr. Mari Elka Pangestu Minister of Trade
Indonesia
Session 3 Focus
14:20 – 15.30 hrs Large Scale Carbon Control
• Opportunities in conserving natural carbon sinks and in long-term capture and storage techniques
Bali Global Business Day, 10 December 2007 71
Session 3 Participants
Moderator: James Griffiths, WBCSD
Panelists: Business Solutions & Policy Options:
• Ernesta Ballard, SVP Weyerhaeuser - capture via sustainable forest management & forest products
• Preston Chiaro, CEO Energy Products Group Rio Tinto – industrial CCS projects
NGO perspective: Toby Janson-Smith, Senior Director Conservation International
Government perspective: Prof Emil Salim, Advisor to President of Indonesia, Head of Delegation
Policy Reviewer: Ian Emsley, Group Advisor Anglo American & Chair ICC UK Committee on Environment & Energy
Bali Global Business Day, 10 December 2007 72
Context – Natural Carbon Sinks
IPCC 4th Assessment Report:15-20 % of global CO2 emissions caused by
land use change, primarily deforestation for agriculture
Yet forestry can make very significant contribution to low cost mitigation that provide synergies with adaptation & sustainable development, and mitigation options such as storage in harvested wood products, product substitution & bioenergy
Bali Global Business Day, 10 December 2007 73
Context – Biomass energy
WBCSD – Sustainable Forest Products Industry, Carbon & Climate Change – key messages for policy-makers
“Biomass energy is fundamentally different from fossil fuel energy because biomass recycles carbon to the atmosphere, whereas fossil fuels introduce “new” carbon. This is why biomass from sustainably managed forests is called “carbon neutral”.
Bali Global Business Day, 10 December 2007 74
Forest carbon sinks - policy options
1. Protect the economic value of trees
2. Mandate certification to sustainable forestry standards
3. Demand mutual recognition among different certification systems.
4. Reduce financial risk
5. Credit sustainable forestry and value chain products.
6. Let the marketplace work.•Bali Global Business Day, 10 December 2007
75
Context – Long term Carbon Capture & Storage
IPCC Special Report:
By 2050, given technical limitations, around 20-40 % of global fuel CO2 emissions could be suitable for capture, including 30-60 % of electricity generation and 30-40 % of industrial CO2 emissions
IEA Technical Report:
CCS in power generation sector has the potential to contribute to reductions of about 4.4 GT CO2 by 2050
Bali Global Business Day, 10 December 2007 76
2. Preston Chiaro, Rio Tinto
Business solutions
• Energy efficiency
• Low carbon energy (renewables, CCS)
• Adaptation
Bali Global Business Day, 10 December 2007 77
Policy Options - CCS
• Comprehensive (all sectors, all solutions, global)
• Governments must set CO2 pricing framework(s)
• Set level playing field
Bali Global Business Day, 10 December 2007 78
Non Governmental Perspective
Toby Janson-Smith, Conservation International
Bali Global Business Day, 10 December 2007 79
• 18%-25% of global GHG emissions
• Forestry must supply ~35% of required offsets to keep <+2°C by 2030 at <€40 per tCO2 (McKinsey, 2007)
• Community ecosystem service + biodiversity benefits
• Developing-country emissions reduction commitments
• US Lieberman-Warner bill: 2.5% set aside for RED (~$1b/yr)
• Project-based RED must complement national-level schemes
Opportunities for Reducing Emissions from Deforestation
• Key issues: – Additionality– Leakage– Measurement & Monitoring– Permanence– Ancillary social & environmental impacts
• Climate, Community & Biodiversity Standards
• Voluntary Carbon Standard
Importance of Forest Carbon Standards
• The defining issue for AFOLU and CCS projects
• Temporary credits not well received/used
• Immature market for insurance products
• VCS pooled buffer approach could point the way– Credible (atmospheric integrity)– Workable (simple, inexpensive & easy to administer)– Project-friendly (only ~5-10% loss of discounted carbon
revenues)– Investor-friendly (fungible credits + no performance risk/liability)
Addressing the Permanence Challenge
Government perpective
Professor Emil Salim,
Head of Indonesian Delegation, Advisor to the President of Indonesia
Bali Global Business Day, 10 December 2007 83
Discussion
Bali Global Business Day, 10 December 2007 84
BUSINESS OPPORTUNITIESTO COMBAT CLIMATE CHANGE
By Emil SalimHead of the Indonesian DelegationNusa-Dua, Bali, 10 December 2007
esalim@rad.net.id, emilsalim2002@yahoo.com
PUBLIC & PRIVATE FUNDING1. GEF has allocated US$7.4 billion with co-financing
of US$ 29 billion for 1,980 projects in 160 developing countries;
2. Kyoto Protocol’s market-based mechanisms is the clean-development-mechanism (CDM) that enables green-house-gas reducing projects and contribute to sustainable development to earn “certified emission reduction” (cer) credits; There are 840 registered CDM projects in 49 countries with 1,800 projects in the pipe line
Bali Global Business Day, 10 December 2007 85
TO MEET THE INCREASING NEEDS FOR FUNDS1. To combat climate change, emission of annual
CO2e must be stabilized at 450-550 ppm at an estimated cost of 1% global GDP;
2. Developed countries must make “deeper cuts” in CO2e emissions and developing countries must create co-benefits reducing CO2e emissions through sustainable development;
3. Technology transfer and innovative funding is required through public and private funds;
BUSINESS OPPORTUNITIES
1. Boost CDM in energy conservation/efficiency, promote adoption of renewable energy, reduce long term costs of low GHG emitting energy technology, promote sustainable transport;
2. Simplify Forestation CDM procedure for small scale projects; enhance reforestation projects;
3. Introduce “reduction of emissions from deforestation, conservation and degradation;
4. Explore Carbon-Capture-Storage technology;
PROMOTE BUSINESS INVOLVEMENT
1. Developing countries can reduce emissions of CO2epath by following path of sustainable development through transfer of technology;
2. CDM is a tool of transfer accompanied by P-to-P cooperative arrangements to cut time horizon to re-invent the wheel;
3.Technology transfer with capacity building must be implemented simultaneously to create co-benefits reducing CO2e through sustainable development.
Discussion
Q & A Panelist
Q & A Participants
Bali Global Business Day, 10 December 2007 89
Policy Review
Ian Emsley, Anglo American & ICC UK Committee on Environment & Energy
1. Forest & Forest Product Carbon
2. Carbon Capture & Storage
Bali Global Business Day, 10 December 2007 90
Policy Review
Forests & Forest Products Carbon
1. Adequate supplies of wood and recovered fiber
2. Forest products value chain benefits
3. Bio mass-based technologies
4. Reduce cost of capital
5. Remove regulatory barriers to combined heat & power potential
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Policy Review
Forests & Forest Products Carbon
6. Avoid unintended policy consequences
7. Recognized carbon stored in forest products
8. Minimize land competition
9. Encourage sustainable forest management
10. Market forcesBali Global Business Day, 10 December 2007
92
Policy Review
Carbon Capture and Storage Many countries depend on coal and
will continue to use it CCS is needed if coal is to be used in
a climate-friendly manner Early action on CCS is needed to
avoid carbon ‘lock-in’ and will not happen without policy support
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Policy Review
Requirements for CCS early action:1. Regulatory Framework Incentives (carbon credits, price
guarantees, feed-in tariffs, capital grants, etc)
Legal Clarity Safety, health and environmental
regulation in place Site selection and monitoring / reporting
protocols Assumption of long term carbon liabilities
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Policy Review
2. Demonstration Projects
Needed for: Technology reliability Cost reduction Infrastructure development Public acceptance
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Development and CooperationDevelopment and Cooperation
Moderator
Andrei Marcu, President, International Emissions Trading Association (IETA)
Panel
Rudi Fajar, President Director Riaupulp, APRIL Group
Dr. Gail Kendall, Director, Group Environmental Affairs, CLP Holdings Limited
Fernando Tudela, Under Secretary for Planning and Environmental Policy, Ministry for Environment and Natural Resources, Mexico
Katherine Sierra, Vice President for Sustainable Development, World Bank
Peter Goldmark, Program Director, Climate & Air, Environmental Defense Fund
Policy Review
Adam Kirkman, Program Manager, Energy and Climate Focus Area, WBCSD
Bali Global Business Day, 10 December 2007 96
Development and CooperationDevelopment and Cooperation
Moderator
Andrei MarcuPresidentInternational Emissions Trading Association (IETA)
Bali Global Business Day, 10 December 2007 97
What do you mean by an
inclusive ‘policy framework?
Would you agree with me that
there are 5 key conditions.
First of all as I wrote in my
paper published for the
Nairoby confrence I cannot
agree with statements like the
one made in your opening
sesssion. How can you
possibly claim that the current
energy generation structure is
obsolete and
What do you mean by an
inclusive ‘policy framework?
Would you agree with me that
there are 5 key conditions.
First of all as I wrote in my
paper published for the
Nairoby confrence I cannot
agree with statements like the
one made in your opening
sesssion. How can you
possibly claim that the current
energy generation structure is
obsolete and
Question cards in your folderQuestion cards in your folder
Q & AWHAT DO YOU MEAN BYAN INCLUSIVE POLICY FRAMEWORK ?
WHAT DO YOU MEAN BYAN INCLUSIVE POLICY FRAMEWORK ?
Development and CooperationDevelopment and Cooperation
Panel
Rudi FajarPresident director Riaupulp, APRIL Group
Bali Global Business Day, 10 December 2007 99
Development and CooperationDevelopment and Cooperation
Panel
Dr. Gail KendallDirector, Group Environmental Affairs
CLP Holdings Limited
Bali Global Business Day, 10 December 2007 100
Development and CooperationDevelopment and Cooperation
Panel
Fernando TudelaUnder Secretary for Planning and Environmental Policy, Ministry for Environment and Natural Resources, Mexico
Bali Global Business Day, 10 December 2007 101
Development and CooperationDevelopment and Cooperation
Panel
Katherine SierraVice President for Sustainable Development
World Bank
Bali Global Business Day, 10 December 2007 102
Development and CooperationDevelopment and Cooperation
Panel
Peter GoldmarkProgram Director, Climate & Air
Environmental Defense Fund
Bali Global Business Day, 10 December 2007 103
Development and CooperationDevelopment and Cooperation
Policy Review
Adam KirkmanProgram Manager, Energy and Climate Focus Area
WBCSD
Bali Global Business Day, 10 December 2007 104
UNFCCC COP 13Bali, 10 December 2007
Policies to enhance business participation and investment
Evolution of the Debate - 2000
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Mitigation
Adaptation
Post-2012 debate in 2007
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How do we attract private capital?
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1. Understand how and why business invests
2. Recognise that raising money is not the problem – directing the flow toward the development, demonstration and deployment of clean energy technologies is the key
3. Align policy, mechanisms, tools with commercial conditions in which business invests
Need to understand how and why a business chooses to invest
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Decision made in dynamic, highly differentiated, competitive market
Every decision relies on commercial returns Money always flows to quickest returns Low carbon projects among more complex and
risky forms of investment Different screening mechanisms, risk appetites,
appraisal criteria Whole host of risks to be taken into account A great opportunity for one investor can be a
step too far for another
Harness the power of the markets
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Political risks, legal frameworks, structures all influence pace of investment in the market
In markets confidence is important Determines potential participants and scope of
investment Policy uncertainty increases risks of achieving
a commercial return While uncertainty prevails bulk of capital will
flow to traditional energy sources, or remain uncommitted until definitive policies emerge
What policy is needed?
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International policy effort must align with the long range business investment horizon
Supportive regulation and governance to encourage business to invest for the long term
Dismantle trade barriers affecting the diffusion of technologies
Manage IPR issues to balance the need to incentivise innovation and support investment
Clear and strong expectation of CO2 price Create predictable future demand for key
technologies to drive innovation and competition
What can governments in developing countries do?
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Build institutional capacity to translate energy and climate strategies into integrated development plans
Stable and transparent regulatory regimes Expand and aggregate (project portfolios) to
standardize and streamline Support investment in SMEs so they can own
and operate projects and support deployment Technology cooperation through competitive
business to business transactions to scale up
What can we do together - public and private
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Less developed countries need innovative Clean Energy Investment Frameworks
Engagement in G8 Gleneagles Dialogue MDBs – High potential to leverage private sector
investment in developing countries Public-private financing mechanism to develop
pipeline of clean energy projects buy down incremental investment costs grants and concessional loans increase creditworthiness of the future carbon cash flows
through partial guarantees
Have to get this right….
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Must get technologies into developing world Rich countries need to help poor countries Business has capacity to help but needs
policy certainty that brings stability, confidence in markets and facilitates long-term investment
If we get it right it can be used to alleviate poverty, create jobs and build sustainable wealth
Reduces emissions, protects and conserves energy resources, and crucially the ecosystems of the developing world
www.balibusinessday.org
Climate Policy, Climate Policy, Business Engagement, Progress Business Engagement, Progress
Moderator
Claude Fussler, former Program Director, WBCSD
Closing exchange
Yvo de Boer, Secretary General, UNFCCC
Steve Lennon, Delegation Chairman, ICC
Mohamad S. Hidayat, President, Indonesian Chamber of Commerce and Industry (KADIN)
Björn Stigson, President, WBCSD
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Climate Policy, Climate Policy, Business Engagement, ProgressBusiness Engagement, Progress
Yvo de BoerSecretary General, UNFCCC
Bali Global Business Day, 10 December 2007 117
Climate Policy, Climate Policy, Business Engagement, ProgressBusiness Engagement, Progress
Steve LennonDelegation Chairman
ICC
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Climate Policy, Climate Policy, Business Engagement, ProgressBusiness Engagement, Progress
Mohamad S. HidayatPresidentIndonesian Chamber of Commerce and Industry (KADIN)
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Climate Policy, Climate Policy, Business Engagement, ProgressBusiness Engagement, Progress
Björn StigsonPresident
WBCSD
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Up to the challenges? Up to the challenges? Or not yet?Or not yet?
Dr. Gro Harlem BrundtlandUN Special Envoy on Climate Change
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Closing StatementClosing Statement
Rachmat WitoelarMinister Of Environment
Republic of Indonesia
Bali Global Business Day, 10 December 2007 122
Caring for Climate dinnerCaring for Climate dinner
18:30 Cocktails
19:30 Dinner
A few last minuteregistrations possible
www.balibusinessday.orgwww.balibusinessday.org
UNFCCC COP 13Bali, 10 December 2007
Thorsten ArndtThorsten Arndt
Lucy JasminLucy Jasmin
Mary KellyMary Kelly
Kija KummerKija Kummer
Marisa LowMarisa Low
Christian KornevallChristian Kornevall
Carlos BusquetCarlos Busquet
Stephanie HeldStephanie Held
Wendy PoultonWendy Poulton
Neil FranklinNeil Franklin
Tina LaunoisTina Launois
Jacqueline CoteJacqueline Cote
Norine KennedyNorine Kennedy
Marcel EngelMarcel Engel
Jonathan WootliffJonathan Wootliff
Michael MartinMichael Martin
Anne Catherine WernerAnne Catherine Werner
MusicMusic
state of happiness,the Creator, people and naturelive in harmony with each other.
state of happiness,the Creator, people and naturelive in harmony with each other.
May you all share it!