Financing the Energy Transformation - Civic Exchange

Financing the Energy TransformationCivic Exchange’s 12th Energy Forumdeveloping world, what we call non-annex one countries, they would have nationally appropriatemitigation actions beyond what they are already doing. That means they will step up and do more.Thirdly, there would be clarity on financing and technology transfer that we just talked about. How do weget the funds to flow from the developed world to the developing world? What are the mechanisms thatwe are going to need?Fourthly, there has to be some governance structure. If everybody has got to put money in various funds,who is going to look after it? How is it going to work, and so on? These are the four things that you mightlike to jot down and think about as we go into Copenhagen.1.3. Reported Emissions Proposals for COP15What we have tried to do here is to do a chart of groups of countries or countries that so far have put outideas and proposals going into Copenhagen. For example, the first one, APEC, this is the one that HongKong has signed onto. That includes China, Hong Kong, US, and Canada. They talked about reducingenergy intensity by 25 per cent by 2030 using 2005 as a base. For those of you who understand the issue,this is not ambitious at all. But, in any case, this is what one group of countries has agreed to. If you look atthe US, which is what everybody is looking at. The Senate bill is going through Congress right now. The billproposes 20 per cent below 2005 by 2020.This list tells you what different countries have proposed. This is quite useful to have as a reference point sowe know what people are promising each other. All the countries have put ideas on the table but whatdoes it really mean? If we look at the science, the kind of talk that people are trying to grapple with is thatglobal temperatures should not rise above two degrees, the two degrees limit.1.4. Modelling SummaryWhat I am going to show you is a model that was done by some friends of ours in the US, called C-ROADS.When China caps at 8.8 gigatons, it is at 5.5 gigatons or thereabouts today. And when will it cap? Maybe at2035. This is what the Chinese leading thinkers are talking about. And this was unimaginable just a fewyears ago because China was certainly not thinking about capping at any time so soon. But in the last yearor so they are talking about what is the need for China to cap at 2035. It is actually a very aggressive planfor China. But doing that, it is still going to take us to 3.6 degrees if all the other countries do what they sayon that chart I have just shown you.If China caps at 8.8 gigatons at 2035 and starts to reduce one to two per cent annually, we are still notgoing to get to two degrees. For us to get to two degrees, what China will have to do, plus all the othercountries that put promises on the table is that they have to drop by 80 per cent by 2050. If China has todrop its greenhouse gas emissions by 80 per cent, that is a lot.What do these charts look like? This is the world “business-as-usual” trajectory (blue). The currentproposals (red), if we did that, we will get to four degrees. If China caps at 8.8 here (green), we get to 3.6degrees. These models tell us what we are doing is not quite good enough.1.5. China Scenarios TestedWe can now test the China scenario. We can play around with when it peaks and when it caps. So, this iswhat we see. The business-as-usual, if China caps, we get to that. If it starts reducing at one per cent, we5