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National contributions provide entry point for the low-carbon transformation

While the currently submitted national contributions to the new global climate agreement do not yet put the world on track to limit warming to 2 degrees Celsius, they imply an unprecedented acceleration and consolidation of action against climate change in major economies around the world.

Moreover, they can serve as an entry point for the deep low-carbon transformation, if the Paris Agreement includes a mechanism to strengthen and broaden policy commitments by 2020 at the latest. This is shown by a report published today by a consortium of 14 research institutes. The scientists and economists provide a detailed analysis of the energy sector transformations required to implement the intended nationally determined contributions (so called INDCs), in major economies and at the global level in aggregate, and their potential for keeping the below 2 degrees goal within reach.

“As of October 19, the 123 INDCs, covering 150 countries, submitted to the UNFCCC represent 86% of global GHG emissions in 2012. Such wide coverage, with countries from all continents, levels of development and historic positions in the climate negotiations is in itself a major step forward for climate action and a signal of commitment to the Paris negotiations”, says Teresa Ribera, project leader and Director of the Institute for Sustainable Development and International Relations (IDDRI). “The criteria for judging INDCs is their capacity to unleash the deep decarbonisation of the energy sector by 2050. This report’s analysis shows that this transformation is emerging but not fast or deep enough. Future policies and targets must be defined to be coherent with deep decarbonisation by 2050, informed by concrete pathways to get there.”

The present analysis of INDCs was funded by the European Commission and conducted by leading research teams from Brazil, China, Japan, India, the United States and the European Union. By investigating the concrete implications of INDCs for the low-carbon transformation by and beyond 2030, from energy systems, buildings to transport and industry, it complements the upcoming cutting-edge assessments by UNFCCC and UNEP of the impact of INDCs on global emissions and the global temperature goal.

“While the climate pledges lay the foundation for a faster transition to a low-carbon economy worldwide, more is needed to bolster the commitment to the below 2 degrees goal”, explains Elmar Kriegler of the Potsdam Institute for Climate Impact Research. “The Paris Agreement should set a clear timeline for ramping up action. Mechanisms for strengthening INDCs by 2020 would send the required signal to investors in the energy sector and beyond, in particular through the announcement of further economy-wide climate policies.”

In the run-up to COP21, the report offers six key cross-cutting messages:

•    The report shows that INDCs imply an acceleration and consolidation of action against climate change in major economies around the world.

•    This is particularly true in the electricity sector, where INDCs will further drive the transition towards renewables and other low-emissions forms of electricity production. In the six major economies assessed individually, carbon dioxide emissions per unit of electricity production falls by about 40% between 2010 and 2030 and renewable electricity becomes the dominant source of electricity production at about 36% of the electricity mix. There are similar positive trends regarding energy efficiency, with the energy intensity of passenger transport, for example, falling by 30% in China, India, the EU, the US, Brazil, and Japan in aggregate. 

•    However, the report highlights that INDCs would imply uneven progress among the drivers of decarbonisation. Some crucial low-carbon solutions, like CCS, electric vehicles, advanced biofuels, sustainable urban planning, appear unlikely to be developed under the INDCs at the scale and speed required for a 2°C scenario. Likewise, the report highlights that INDCs would leave too much inefficient and unabated fossil fuel capacity online in 2030 to be coherent with a 2°C scenario. This highlights the risks of lock-in into a high carbon trajectory if action is not strengthened quickly.

•    The INDCs need to be strengthened to keep the 2°C goal within reach. The INDCs alone, as currently proposed, would imply the need for a dramatic and abrupt shift of course in 2030 and a technically challenging and economically costly rate of transformation thereafter, if the 2°C goal is to be maintained.

•    The Paris Agreement can build a bridge between INDCs and 2°C by establishing predictable and credible mechanism for regularly strengthening targets and policies, on a five yearly timeframe with the first strengthening taking place by 2020 at the latest. The report explores such a bridge scenario in which action is strengthened over time, beyond the level of ambition implied by the INDCs. In this scenario, a strengthening of policies and commitments by 2020 reduces emissions by more than 5 Gt CO2e in 2030 compared to the INDC level, allowing a less costly, more feasible trajectory towards 2°C. It also allows for a smoother reallocation of investment away from high-carbon towards low-carbon technologies and infrastructure, avoiding the risk of stranded assets and economic disruption. 

•    Strengthening climate targets and policies will be aided by the fact that INDCs can lead to significant co-benefits to climate mitigation. For the countries studied, the report found significant reductions in energy dependency and local air pollution. “We found that the INDCs will also have benefits beyond climate mitigation—they will help countries to reduce local air pollution and curb growing energy imports in the EU, Japan and China,” says Jessica Jewell, researcher at the the International Institute for Applied Systems Analysis (IIASA). “Such co-benefits can be a significant opportunity to develop ambitious national climate policies, as they would further increase with strengthening the INDCs,” she adds.

Report “Beyond the numbers: Understanding the transformation induced by INDCs”


Key National and Regional Findings

•    The United States submitted its INDC to the UNFCCC on March 31, 2015. The heart of that submission is an undertaking on the part of the U.S. “to achieve an economy-wide target of reducing its greenhouse gas emissions by 26%-28% below its 2005 level in 2025 and to make best efforts to reduce its emissions by 28%.” The U.S. expects to implement its INDC using existing legislative authority. We used the Global Change Assessment Model to examine the U.S. contribution including the U.S. Clean Power Plan. We found that successful achievement of the U.S. INDC would accelerate transition to low and non-emitting technologies, particularly in power generation and enhance more efficient end-use energy technology deployment. Significant uncertainty remains with this analysis to the year 2025, and the present suite of measures currently in place may need to be enhanced in the future for the U.S. to attain its goal.

“We found that successful achievement of the U.S. INDC would accelerate transition to low and non-emitting technologies, particularly in power generation and enhance more efficient end-use energy technology deployment.”
Leon Clarke, Pacific Northwest National Laboratory (PNNL)

•    The analysis of Japan’s INDC shows that its implementation will require a significant restructuring of the energy system. Reducing energy consumption through energy efficiency progress means that Japan will have to further push the technology frontier for efficient equipment. Moreover, the huge growth in renewables announced by the INDC should drive global markets—but also poses a challenge given the geographical constraints in Japan. Such evolutions of the energy system bring about one major benefit, namely the reduction of energy imports; however, as it emerges from the Fukushima crisis, energy security and affordability will continue to be key issues for Japan.

“Beyond their national implications, the global success of Japan’s INDCs will rely on international cooperation around technological innovation and a clear process to revise and strengthen INDCs in the Paris Agreement.”
Mikiko Kainuma, National Institute for Environmental Studies (NIES)

•    The analysis of the European Union’s INDC shows that a significant transformation of the EU energy system is required in order to achieve the 2030 target. Continuous improvements in energy intensity (at higher rates than historical trends) provide a large part of the emissions reduction effort, especially in the transport and buildings sectors, which are rather inflexible in substitutions away from fossil fuels in the short term. The analysis also depicts that the decarbonisation of the electricity production sector (mainly through large-scale deployment of renewables) in combination with substitution of fossil fuels by electricity in stationary applications is a cost-efficient strategy towards effective implementation of INDC. The transformation of the EU energy system poses significant challenges due to increase investment requirements directed towards energy efficiency improvements, accelerated deployment of renewables and the replacement of ageing energy infrastructure. 

“The transition towards a low-carbon economy is challenging but yet quite feasible if the policies in place redirect funds towards clean energy investments.”
Leonidas Paroussos, Energy-Economy-Environment Modelling Laboratory (E3M Lab)

•    India’s INDC puts forward an ambitious renewable energy target of achieving about 40% cumulative electric power installed capacity from non-fossil fuel based energy resources by 2030. Specific targets include 175 GW generation capacity by 2022, including 100 GW solar from existing 4 GW solar. This would be the most ambitious renewable energy program anywhere in the world. There are also various programs for improving the specific energy consumption of large energy consuming plants, including 144 coal-based power plants. There is also a strong thrust for clean coal based power generation. There are also strong programs on appliance standards and labels, reducing transmission and distribution losses, and enhancing forest cover by another half million hectares along with planting trees along 140,000 km national highways. The overarching target is for 33-35% reduction of emission intensity of the Indian GDP over 2005-2030. India has called for international support for technology transfer and finances to help meet these ambitious targets. It is also noted that the per capita emissions of the Indian people are projected to remain below the global averages until 2030. The huge growth in renewables announced by the INDC should drive global markets including for technology innovation and deployment. 

“Beyond its national implications, the global success of India’s ambitious INDC will rely on international cooperation on technology transfer and financial support.”
Amit Garg, Indian Institute of Management Ahmedabad (IIMA)

•    Brazil has one of the cleanest energy systems and a low-carbon energy mix based on hydropower for electricity (around 70-80% of electricity generation over recent years) and a strong penetration of biofuels. There has been a significant rise in wind generation recently and new auctions for solar power generation. But recent studies indicate that, in the absence of mitigation efforts, the current Brazilian energy mix will continue on a trend of increasing carbon intensity. The depletion of the hydropower potential outside the Amazon region, and the vulnerability of existing hydro capacity to climate change means that other sources would take on increasing roles in meeting baseload demand, with results showing coal to be the least cost solution. The Brazilian INDC covers Land Use, Land Use Change and Foresty (LULUCF), Agriculture, and Energy sectors: it establishes absolute emissions targets of 1.3 GtCO2eq by 2025 and of 1.2 GtCO2eq by 2030, corresponding to reductions of 37% and 43%, respectively, compared to 2.1 GtCO2eq in 2005, and leading to per capita emissions of 6.2 tCO2eq in 2025 and of 5.4 tCO2eq in 2030. 

“Our analysis suggests that Brazilian INDC requires full implementation of ambitious measures against deforestation and to reduce emissions in the agriculture sector, and can help to avoid a growing climate footprint of Brazil’s energy sector under a business as usual scenario. Furthermore, our analysis suggests that some additional measures could be possible without significant extra costs in the energy sector.”
Roberto Schaeffer, Center for Energy and Environmental Economics (COPPE)

•    China submitted its INDC to the UNFCCC on the 30th of June 2015. China’s INDC includes an intention to peak CO2 emissions around 2030 and making best efforts to peak early, to reduce the carbon intensity of GDP by 60% to 65% from 2005 levels by 2030, to increase the share of non-fossil fuels in primary energy consumption to around 20% by 2030, and to increase the forest stock volume by around 4.5 billion cubic metres from 2005 levels by 2030. China’s INDC is framed in terms of CO2, however the discussion text implies action on other gases. China’s INDC also includes a comprehensive list of actions. Three China national modeling teams (Tsinghua University, NCSC/RUC, and ERI) assessed China’s INDC based on their own models. 

“We found that China’s INDC shows an acceleration of decarbonisation, particularly decarbonisation in energy sector and efficiency improvement in end-use sectors. This decarbonisation path is consistent with the possible scenario range with more than 50% probability of achieving 2°C goal from IPCC AR5 scenario database, if substantial and ambitious reductions are pursued after 2030 based on technologies that must be adequately prepared in advance.” 
Fu Sha, Renmin University and National Centre for Climate Change Strategy and International Cooperation (NCSC)

pik-potsdam.de | iddri.org

Potsdam-Instituts für Klimafolgenforschung und des Institut du développement durable et des relations internationales (Iddri) 2015

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