Last year ended badly for the coal industry. Global economic growth slowing, unemployment and layoffs rising, coal prices sharply down. The world's efforts to tackle global warming fared just as badly, with little progress at the meetings of the UN climate treaties in Poznan (Poland) in December 2008.
The way that governments have chosen to handle the financial crisis compared to the threat of global warming could not be more different. Governments have rightly identified the financial crisis as something requiring quick, concerted and substantial action and responded immediately - not with rhetoric but with action. Half a billion dollars within the first weeks; trillions by the end of 2008; more on the way.
The financial crisis is far from over; but it has demonstrated how quickly governments can act when they believe in the seriousness of the crisis before them. Most governments have tagged climate change with the same rhetoric but they have collectively failed to match their rhetoric with the leadership and action required to effectively address it.
Imagine where the global response to climate change would be if a fraction of the amount spent over the end of 2008 on the financial crisis had been spent at any time between 1990 and 2008 on global warming. Imagine a fraction of that money having been invested over that time in any of the mitigation technologies the world needs to tackle climate change: wind power, solar power, carbon capture and storage.
Instead, governments have 'demonstrated' their commitment to tackling climate change not through substantive action but through participating in what can sometimes seem like the 'travelling circus of climate change: the annual Conferences of the Parties to the climate change treaties - Montreal (2005), Nairobi (2006), Bali (2007), Poznan (2008), and this year Copenhagen, where a successor agreement to the Kyoto Protocol is to be agreed.
What happened at Poznan?
What happened at the latest talks in Poznan? Not a lot. At that meeting Parties had the opportunity to include Carbon Capture and Storage (CCS) projects under the Clean Development Mechanism, alongside other mitigation strategies.
The Intergovernmental Panel on Climate Change (IPCC) published a Special Report on CCS as far back as 2005. Among other things, that indicated that CCS had the potential to provide as much as 55% of the effort needed by 2050 to keep global warming below a 2 degrees rise.
The International Energy Agency (lEA) had called the inclusion of including CCS under the CDM a 'litmus test for the seriousness of climate change negotiators'.
The Parties themselves had set in train a process to consider this issue involving submissions from government Parties, industry, NGOs and others. However, because the process is based on consensus rather than majority, at the end of the day, after three years of negotiations, Brazil, supported by a handful of other countries, managed to insist that no conclusion was reached by the committee considering it! This means a number of things:
1. developing countries do not have access under the CDM to the full suite of mitigation technologies that the IPCC and other experts say are needed to effectively address climate change;
2. CDM is the key international mechanism for the transfer and deployment of low carbon technologies and its continued exclusion is a significant barrier to CCS deployment. Without CCS, mitigation costs will be 70% higher; and
3. as these countries include the new heavy greenhouse gas emitting nations of China, India and Brazil, it reduces the possibility of keeping global warming below 2 degrees centigrade this century.
Reasons to be cheerful?
Against this gloom, there was hope as 2008 ended and 2009 began. Firstly, while climate change negotiators in Poznan were considering CCS, Chris Davies, a Member of the European Parliament, was shepherding through the first substantive mechanism for finding CCS in the European Parliament.
Under this initiative, 300 million Emissions Trading Scheme (ETS) allowances will be made available to first of a kind CCS demonstration projects (and other innovative renewable projects). At €20/tonne this would equate to funding of € 6.0 billion.
The European Parliament is to be congratulated on this first step in financing the revolution needed in energy infrastructure. Secondly, the Australian Government established the new A$ 100 million a year Global CCS Institute. The focus of the GCCSI will be to deliver 20 CCS power plants to jumpstart the widespread deployment of CCS.
The Australian Government is to be congratulated on its leadership in establishing the GCCSI; uniquely, the GCCSI includes industry and stakeholders as equal partners from the word go. The WCI is a founding member and looks forward to this organisation catalysing action on CCS.
Finally, there is great hope in President Barack Obama and the appointments he has made to his new administration. Both President Obama himself and Secretary of State Hillary Clinton pledged funding for CCS in the election campaign and appear to appreciate the desire of the American people to maintain their energy security and living standards while still vigorously confronting global warming. CCS is one of the key technologies they'll need to balance those objectives and they appear to recognise this.
Obama has also nominated in his Energy Secretary, Steven Chu, a man not only well-versed in the science of climate change but a co-chair of a significant report released this month by the Asia Society and the Pew Center on Global Climate Change which calls firstly for a major collaborative effort between China and the USA to deploy low emission coal technologies, particularly demonstration projects covering the spectrum of CCS technologies.
These are major new events in the race to deploy low emissions technologies: the European CCS financing package, the Australian-initiated Global Institute, and the arrival in Washington of a new team explicitly committed to backing CCS. 2008 ended badly for the coal industry and for the global economy; but there Is reason for hope in 2009.
(The writer is Chief Executive of the World Coal Institute.)
Courtesy: World Coal Institute