Reporting live from COP17

 

Outcomes of COP 17: initial considerations

 

Published on 14.12.2011 by Helle Juhler-Verdoner, VP Global Affairs, Environmental Policies & Global Advocacy, Astom 

Alstom welcomes the fact that progress was made in the last days of the COP17 negotiations in Durban.

On specific areas, like the inclusion in the CDM of projects which reduce CO2 emissions by applying Carbon Capture and Storage (CCS), and on the establishment of a Green Climate Fund the decisions made are important contributions to the mitigation effort.

We are also happy to see that all countries, including USA and China, agreed on the so-called Durban Platform which we hope will result in a global agreement signed by all large emitters by 2015 committing emitters to reduce greenhouse gas emissions by 2020.

However, we cannot wait until 2020, we need to see significant actions now, on national and regional levels, in order to tackle climate change.

We have spent the last few days, and will spend more time in the next few weeks, assessing in more detail the decisions made in Durban and their the implications. 

To quote our Senior Vice President, Environmental Policies and Global Advocacy, Joan MacNaughton: "the glass is half full", but a lot remains to do.

Watch video "COP17 outcome: Initial considerations from business".

 

 

 

Business in action for low carbon growth

Published on 09.12.2011 by Damian Ryan, Senior Policy Manager, The Climate Group

 

Had they the time, negotiators looking for some inspiration would have been well advised to attend the joint side event from the Carbon Disclosure Project (CDP) and the Renewable Energy and Energy Efficiency Partnership (REEEP).

The presentations from the panellists highlighted some compelling facts and figures, including evidence from the CDP that the top companies that report to it are now beginning to consistently outperform their non-reporting competitors in share indices.

The CEO of Selco Solar Lighting, an Indian social enterprise, shattered any preconceptions about the ability of the worlds poorest citizens to access affordable solar lighting systems. He explained that these four billion people required completely different financial instruments to help them build sustainable financial eco-systems for ongoing wealth creation. 

A senior director from the IEA-supported CTI-PFAN (a private climate finance advisory network) added to this business success narrative by noting that for every dollar received from sponsoring governments, his network had leveraged a further one hundred in private capital. An impressive leverage ratio by any standard.
 

 

 

 

Catalyzing investment in low-carbon climate-resilient growth

Published on 09.12.2011 by Helle Juhler-Verdoner, VP Global Affairs, Environmental Policies & Global Advocacy, Astom

 

The issue of how to catalyze low-carbon investment was addressed at a breakfast hosted by OECD in which government representatives, Lord Stern, Columbias Environment minister, private financing institutions and development banks, companies etc. took part.

There was general agreement on the need for carbon pricing and the need to leverage private financing through risk-sharing, getting the balance right between risk and reward. It was clear that business still needs to work hard to educate Governments on how to mobilise investment in low-carbon technologies.

On behalf of Alstom, I pointed out that everyone seems to agree to the need of carbon pricing and leveraging private financing, but many developing countries are not comfortable about this talk, as they seem to think this is only about developed countries trying to avoid spending public money. The necessary investment is of such a size that we need all possible forms of investment. Sometimes, however, risk is too high for investors, but risk-sharing between public and private will widen the space for private investment to grow.

Furthermore, clear policy signals on the long term direction are the most important driver for companies like Alstom, utilities etc. when they develop and deploy low-carbon technologies which have a life of 50 years and beyond. And, as was the case for Alstom in India and South Africa, this will assist in local capacity building at the same time.

 

How is the outcome at COP17 linked to the Rio+20 Summit next year?

 

 

Published on 09.12.2011 by Helle Juhler-Verdoner, VP Global Affairs, Environmental Policies & Global Advocacy, Astom
 

There has been a number of speculations about how the Climate Summit at COP17, may or may not be feeding into the Sustainability Summit Rio+20 next June.

IETA hosted a panel on 7 December addressing the issue of how the two events may influence each other.
While the COP negotiations are only focussing on how to mitigate and adapt to climate change, the Sustainability Summits (or so-called Earth Summits) have the wider focus of sustainability including all three so-called pillars of development: environmental, economic and social development.

Suzana Kahn-Ribeira, State Environment Secretariat, Rio de Janeiro State Government, explained that a number of regional governments were getting together to demonstrate their actions and Rio+20 would be an opportunity to demonstrate solutions and push for regional, bottom-up initiatives as a way forward. She thought Rio could facilitate future COPs and show the way for a Green Economy Growth Path, where Public-Private-Partnerships will be very important.
 

Yvo de Boer, from KPMG and former UNFCCC Secretary General,  compared the first Rio Summit in 1992 with Rio+20 next year: while it was Rio 1992 that originated the UNFCCC (United Nations Framework Convention on Climate Change), Rio+20 is happening on the back of an economic crises and Millenium Development Goals that are not met, so clearly Economic and Social issues will have more weight than Environment, compared to 1992. He suggested that the private sector comes forward with a set of private sector commitments.

Alstom highlighted that COPs and Sustainability summits were different bodies, and that the fact that Rio+20 had a wider focus not only addressing environment but also addressing economical issues could enable a more fruitful debate and outcome than the COPs. From a business perspective, the need is the same for both COP and RIO: to have clear long terms signals on the policy framework and financing framework, to drive forward both the Green Economy and the Energy Access for All agenda that will be crucial to RIO+20.
 

Investments need to speed up to get to a low carbon future where a whole range of technologies - existing and in development - are needed to meet energy demand, so a range of financing instruments would be needed. I welcome the initiative of the regional governments outlined by Suzana: in the absence of clear global signals clearly national and regional commitments will be urgently needed, and could help bring some signal to industry.

Alstom has already submitted their positions to the UN on what outcome is needed for Rio+20 and we plan a significant presence and high level of activity at the Summit.

Link to our official submission: http://www.uncsd2012.org/rio20/index.php?page=view&type=510&nr=588&menu…

 

Toward scaled-up carbon markets

Published on 09.12.2011 by John L. Cohen, Vice President, Government Affairs, Astom 

 

Market mechanisms are proven policy tools to reduce carbon emission at least cost.  Policy makers around the world are looking to improve and employ new market mechanisms more broadly, but need direction from technical experts.  The challenge, as always with highly technical subjects, is to frame the relevant issues in concise terms that policy makers can understand and act on.
 

Joan MacNaughton met this challenge at an International Energy Agency seminar on the sidelines of the COP-17 climate negotiations.  Joan was asked to summarize and synthesize the presentations of carbon market experts participating in the seminar. 
 

The speakers were carbon market practitioners who discussed in technical terms needed improvements to market mechanisms such as the Clean Development Mechanism (CDM) and the potential design of new market mechanisms.  The summary Joan presented to seminar participants provided the following agenda of issues and challenges policy makers must address to improve and expand market mechanisms:
 

• Data quality is a critical practical challenge:  All market mechanisms rely on quality data to establish baselines and measure progress.  
• Build on existing market mechanisms:  Policy makers need to pay attention to improving and expanding existing market mechanisms such as CDM rather than focusing only on creating new mechanisms. 
• Fragmented markets can allow for flexibility:  A variegated approach to carbon markets allows for markets to advance at their own pace and be tailored to local or regional circumstances.   
• Key role for policy frameworks:  The right policies will allow markets to grow, and the wrong policies (e.g. price controls) will not promote private sector investment. 
• Continued role for CDM:  Many countries are not ready for scaled-up market mechanism and will still need to rely on the CDM. 
• CDM needs to be simplified:  Significant cost savings could be achieved by simplifying CDM and eliminating the significant transactional costs in the CDM process.  Additionally, new market mechanism designs need to avoid the complexity of the CDM process.
   

 

 

 

 

Carbon capture and storage (CCS) development important issue at COP17

Published on 08.12.2011 by John L. Cohen, Vice President, Government Affairs, Astom

 

Advancing CCS in developed and developing countries is a focus of discussion inside, and on the sidelines of, the COP-17 climate negotiations.  Alstom has been invited to present its point of view on finding the path forward for commercializing CCS technology to multiple forums during the COP.  Philippe Joubert headlined an event sponsored by the Global CCS Institute to provide a stock-take of CCS projects and identify the actions necessary to mobilize the resources required to return CCS technology to the critical path of commercialization.  

After establishing that coal and gas generation would retain a significant share of power generation worldwide, Philippe Joubet stated that failure to deploy CCS on an ambitious schedule would increase by 70% the cost of decarbonizing power generation by 2050, according to the International Energy Agency.  He underscored that hard evidence from multiple CCS technology demonstration projects around the world prove that the technology works:  90% capture rates and 99% CO2 purity have been achieved; the energy penalty is moving below 20% on the way to 15%.  Additionally, an Alstom study measuring Cost of Electricity shows CCS on coal and gas plants is already cost competitive with carbon-free generation sources including wind, solar nuclear and hydroelectric generation.  

However, a critical roadblock to commercializing CCS technology is finding the financing for large scale CCS demonstration projects that are imperative to gaining the knowledge necessary to commercialize the technology and drive down the cost curve.  To return to the critical path of commercializing CCS technology, Philippe Joubert emphasized the need to establish a funding mechanism for large scale demonstration projects and advance policy frameworks that will mobilize investment in CCS projects.

Other speakers on the program highlighted key CCS demonstration projects that are advancing, including the Mongstad project in Norway that will demonstrate CCS on a gas plant using Alstoms Chilled Ammonia capture technology.  All speakers agreed that action to address the challenges facing CCS commercialization required urgent attention by policy makers. 
 

 

 

 

Technology Transfer and transition to the Green Economy

 

 

Published on 08.12.2011 by Helle Juhler-Verdoner, VP Global Affairs, Environmental Policies & Global Advocacy, Astom 

UNIDO, WIPO and WTO hosted an event on technology transfer and green economy. Gabriel Blanco, the chair of the UNFCC Technology Executive Committee explained the ambitions of the Technology Executive Committee (TEC) of the UNFCCC Technology Mechanism decided on at COP16 last year.

The Technology Mechanism has the mission to facilitate transfer of technologies and development, namely through Regional Technology Centres and Networks of a wide range of stakeholders, which will be launched in 2012.
 

Topics of discussion were:

• What is required to help developing countries benefit from innovation in green technologies
• lessons learned from previous national and UN experience
• resources and policies to support developing countries
• market development, role of SMEs and 
• special problems of Least Developed Countries and Small-Island-States
   

Alstom was able to bring to the table our national experience and lessons learned. In particular we talked about our experience with technology transfer based on our expansion of manufactoring and R&D activities in Vadodara, India, and building skills in the supplier chain in South Africa.

We found that we can transfer technology and improve capacity to regions where there are well-functioning, integrated markets, including basic infrastructure; where the policy framework is an enabler, promotes basic education our training can build upon, and last but not least protects our Intellectual Property Rights.
 

 

 

 

WBCSD-ICC-NBI Business Day on 5 December

 

Published on 08.12.2011 by Helle Juhler-Verdoner, VP Global Affairs, Environmental Policies & Global Advocacy, Astom 

The World Business Council for Sustainable Development, of which Alstom is a member, and the International Chamber of Commerce hosted their annual COP-event the Global Business Day with South Africas Business Association, National Business Initiative.

Deputy CEO Philippe Joubert was part of a panel to discuss what business needs from COP17, together with CEO of Eskom Brian Dames, Deutche Banks chairman Caio Koch-Weser, CEO of Arcelik Levent Cakiroglu and Andrew Steer from the World Bank.

Core to this debate was the role of carbon pricing versus other instruments and life-style changes. Philippe Joubert highlighted that around 60% of CO2 emissions comes from power generation and transport, deeply regulated sectors. The investments that are needed to meet the 2 degrees Celsius target will not materialise if policy makers dont provide a clear steer, including a significant and robust price on carbon emissions - and indeed Brian Dames explained how Eskom's investment decisions are based on analysis that already includes prospects of a carbon price.

Time is running short, we have to act quickly and behavioural changes take a long time to give results.
 

 

 

 

Eskom launches the Global Electricity Initiative

 

Published on 07.12.2011 by Helle Juhler-Verdoner, VP Global Affairs, Environmental Policies & Global Advocacy, Astom
 

Eskom hosted a breakfast to launch the Global Electricity Initiative (GEI), which gathers 25 utilities from around the world, incl. Eskom, EDF, AEP, ENEL, CLP and Vattenfall. They represent around 25% of global energy production, employ 2 million people and have around 300 million direct customers.

The members of the GEI are all committed to cleaner energy. Through GEI they are demonstrating their will to invest in clean energy, decarbonise electricity and enhance energy-efficiency. They will do this by sharing best practice and knowledge - a practical example of technology transfer but across all regions and countries and not just from developed to developing countries, as always posited by the COP 17 discussions. 

Minister of Public Enterprises, Malusi Gigaba, opened the gathering, putting the GEI initiative into perspective: the world is facing huge climate change and economic challenges. How we handle these challenges will determine the future of our race. This is an opportunity for participants to drive the economy in a green direction, with the electricity sector as key to change.
 

 

 

 

Carbon capture and storage (CCS) included in Clean Development Mechanism (CDM)

 

Published on 07.12.2011 by Helle Juhler-Verdoner, VP Global Affairs, Environmental Policies & Global Advocacy, Astom 

As we have been reported on several occasions over the last couple of days, we have been advocating the need of including CCS in CDM. CCS is a crucial part of the solutions to mitigate CO2 from fossil fuels and meet the 2 degrees Celsius target. Today it happened. The parties at COP17 agreed on the text which will ensure inclusion. This provides a clear signal that CCS is part of the solution to climate change and it means that CCS projects can now be developed under the CDM, providing a much needed income stream for CCS project funding.

The issue of liability in case of leakage after a project closes down was the main issue with the negotiations, but even Brazil, previously opposed, ended up supporting CCS in the CDM and providing constructive input to the final text, which allows the host party power of decision on long term liabilities, prior to approval of a project. 

Now the work continues with implementation of concrete CCS projects, and, though there is uncertainty about CDM post 2012, this decision will pave the way for CCS inclusion in a CDM-post 2012 or in whatever market mechanism that countries may decide will exist after 2012.

 

 

 

Africa: Generating a giant green leap

 

Published on 07.12.2011 by Helle Juhler-Verdoner, VP Global Affairs, Environmental Policies & Global Advocacy, Astom 

On Saturday 3 December during the World Climate Summit, SVP Joan MacNaughton was in a session about how Africa can invest to ensure economic development. As a country, they have a significant opportunity to display the best of sustainable development. In the panel with Joan was Juan van Dongen from Philips Africa, Norbert Behrens Group General Manager of Sasol and others.

Joan took the opportunity to explain how Alstom in co-operation with Eskom has retrofitted Arnot, upgrading the 6 units from 350 MWe to 400 MWe, around 30% of which increase is pure energy-efficiency gains through improved turbines, generators etc.

Joan pointed out that only 8% of Africas economically and technically viable hydro power has been harnessed so far, due to a combination of lack of financing, policies and absorptive capacity, including skills.  To leverage a country's energy endowments you need sustainable energy policies that drive the green economy.

 

 

 

Partnership for market readiness (PMR): carbon markets as a solution for climate mitigation

Published on 07.12.2011 by Sandra Parthie, Director EU Regulatory Affairs, Alstom

 

Hosted by the World Bank Group the PMR event discussed the carbon market as a solution to climate mitigation. The PMR was founded last year in Cancun to provide a forum for exchange on carbon market mechanisms between developed and developing countries and to discuss and develop the next generation of carbon market mechanisms. Today, 25 countries are members, 10 developed and 15 "receiving countries".

While speakers and participants agreed that CDM were and are important for developing countries, they also stated that in the mid- to long- term, in particular for emerging economies the project and off-set based CDMs cannot be scaled-up sufficiently to achieve low carbon growth. Depending on the development level, new mechanisms might be necessary. The debate with panelist from Mexico, Brazil, Denmark, Australia and South Africa centered around domestic emissions systems such as set up in Australia, plans to introduce a carbon tax in South Africa and ongoing analyses by Brazil on the potential introduction of carbon mechanisms (results are planned to be presented in March/April 2012).

PMR stands ready to exchange on best practices and to pilot new market mechanisms. It's ultimate goal is to work towards an international carbon market and a global carbon price. In the meantime momemtum will gather, while the "carbon market family is growing" as guest speaker Connie Hedegaard put it.

 

 

 

Negotiations moving into the 2nd week

 

Published on 06.12.2011 by John L. Cohen, Vice President, Government Affairs, Astom 

The UNFCCC Executive Secretary Christiana Figueres was very upbeat after the first week of COP-17 about the consensus around the need for something to follow the Kyoto Protocol and the continuation of climate change efforts past the expiration of the first commitment period in 2012. This view about the extent of consensus is far from universal. Where some key insiders do share Figueres optimism is around the report on the Green Climate fund.

If this COP does not secure progress beyond issues like the Technology Mechanism, the Green Climate Fund, except perhaps for a commitment to agree a deal by 2015, it is likely that the politicians will still proclaim it a success, but the market reaction will probably be less enthusiastic.
 

 

 

Glass half full for carbon markets

Published on 06.12.2011 by John L. Cohen, Vice President, Government Affairs, Astom, Inc.
 

China is advancing seven carbon market pilots that will cover 20 million people.  Australia has a carbon price mechanism covering all sectors as the law of the land.  And the EU, the largest and most mature carbon market in the world (100 Euro market value), is a learning laboratory for 15 developing countries around the world working to tailor carbon markets that could most efficiently achieve carbon reductions and help facilitate clean energy investment.  These were the facts presented at a high-level roundtable event moderated by Joan MacNaughton and sponsored by the Center for Climate and Energy Solutions (formerly Pew Center on Climate Change) on the sidelines of the COP-17 climate negotiations.

Big challenges remain to establishing carbon markets, particularly in emerging economies, including poor and often scarce energy data, which makes establishing baselines and verifying emissions reductions very difficult.  However, this and other challenges are manageable and can be resolved with time and experience.  For example, the EU is making important improvements to its ETS based on lessons learned, including improving security by moving to a single registry.

Some round table participants questioned whether governments were losing faith in market mechanisms and pointed to some governments using non-market regulatory approaches to achieve environmental goals.  In response, a strong point was made that market and non-market mechanism are not mutually exclusive.  Regulatory initiatives can supplement market mechanisms, particularly in periods when market prices are low.

There was general agreement after the discussion that while many challenges remain to expanding and improving carbon markets, there are facts on the ground to suggest that the glass may be half full for robust carbon markets in the future.
 

 

 

Half way through COP17 and still far to go

 

Published on 05.12.2011 by Helle Juhler-Verdoner, VP Global Affairs, Environmental Policies & Global Advocacy, Astom 

Is Durban confounding the low expectations many had of it?  Our assessment of the first week of talks, based on feedback from Christiane Figueres and negotiators from Japan, Australia, US, Canada and Denmark, is that there is still hope for some real progress to be made.  Despite well-reported difficulties with some of the headline issues, quiet progress has been made on some areas of detail.

The tough issues

• As expected, discussions about a second Kyoto Commitment Period have raised tensions between developed and developing countries over GHG emissions targets after 2012.  These difficult discussions could still threaten to overshadow other issues on the agenda
• Separately, discussions have addressed the long-term framework for a global agreement to replace the Kyoto Protocol and again, the issues of GHG reductions and monitoring, reporting and verifying emissions reductions have proved to be stumbling points
• Discussions of the role of carbon markets have also failed to deliver much clarity so far.

So any light at the end of the tunnel?

• In UNFCCC terms, progress on the Green Climate Fund has been breathtakingly swift. In the one year between Cancun and Durban, a Transitional Committee of 40 government officials from both developed and developing nations has produced a design for the Fund.  The hope is that that design can be adopted quickly to enable attention to move towards implementation and many delegations support this objective.  But it will still leave more contentious issues for discussion, notably how the Fund will be funded.  A pragmatic outcome in Durban could be a series of workshops in 2012 to discuss potential sources of funding.  But this remains a defining issue for COP17 and, as such, it has been placed under the leadership of the President of the COP, the South African Foreign Minister. It is a key issue to watch in the final week: if the GCF is not established, then COP 17 will be considered a failure.
• Good progress has also been made in negotiations on the establishment of the Technology Mechanism.  Issues of institutional design aside, Alstoms perspective is that it will be essential that the Mechanism should adopt an all technologies approach, without picking winners or losers. The second week of negotiations may also see further unhelpful discussion of the weakening of IPR protections for innovators a regrettable prospect if it distracts attention away from the real issues of supporting investment, capacity building and endogenous growth.
• After a year of detailed discussions, the terms of inclusion of CCS in the Clean Development Mechanism have almost all been settled.  The remaining sticking point is on handling of liability for leakage of CO2 from storage and whether this should fall to developed countries (as buyers of credits from CDM projects) or to developing countries (as hosts of the projects).  The pragmatic compromise put forward is that the host should decide for themselves, prior to approval of projects.  The final decision will be made by the Meeting of the Parties to the Kyoto Protocol hopefully pragmatism will win the day. 

 

 

 

Uncertainty about inclusion of CCS in the CDM

Published on 05.12.2011 by Helle Juhler-Verdoner, VP Global Affairs, Environmental Policies & Global Advocacy, Astom

 

Carbon Capture and Storage (CCS) is a crucial technology if the world is to meet the 2 degrees Celsius target. The world does and will continue to use fossil fuels, so only a combination of energy-efficient power generation and CCS can reduce emissions to a sufficient degree, and at a lower cost: the International Energy Agency has estimated that the cost of total GHG emissions reductions in a 2 degrees Celsius scenario will be 70% lower with CCS.

CCS needs support to compete against unabated fossil fuel options. One way of supporting it is to reward every ton of CO2 that is not released in the atmosphere but safely stored. One way to do this is by including CCS projects in the Clean Development Mechanism, where every ton of CO2 not released into the atmosphere, from industrial projects based in developing countries, turns into an asset that can be sold as CO2 credits.
 

Excluded for many years, at COP16 CCS was conditionally included in the CDM. Since then, work has continued to address the conditions for inclusion of CCS in the mechanism, but we are far from an agreement.

One particularly difficult issue for the negotiators is liability: what if CO2 starts leaking after a CCS project is closed and carbon credits have been issued?

Three options are under discussion: Brazil, one of the key opponents to CCS in CDM, has argued for liability to rest with developed countries as buyers of the carbon credits; by contrast, the EU has maintained that liability should remain with the developing countries hosting CCS projects instead.  A likely compromise emerging could leave the host country to decide how to handle liabilities prior to approval of projects. 

Alstom supports inclusion of CCS in CDM. It can provide a vital income stream to encourage CCS projects where they will be most needed: in countries that will continue to rely on fossil fuels to deliver rapid expansion of energy access to poor communities.   It would also send an important signal to markets of the importance and political commitment to CCS as a key abatement technology.
 

 

 

 

President Zuma at World Climate Summit

Published on 03.12.2011 by Gwen Andrews, VP Environmental Policies & Global Advocacy, Asia & Oceania, Alstom

 

President Jacob Zuma of South Africa gave the opening speech at the World Climate Summit in Durban on 3 December.  The WCS is a gathering of top business people, held in conjunction with COP 17.
 
President Zuma stressed the need for a climate regime to come out of the international negotiations that is "fair, credible, balanced, inclusive and effective.  He spoke from the perspective of a developing country that is intending to follow a Green Economy, Green Growth path>  He emphasised that this path is also about equity. He stressed the importance of poverty alleviation in South Africa, and noted that growth itself does not necessarily overcome exclusion and marginalisation.
 
South Africa has published a new Growth Path Framework, in which employment is central.  Its climate change response strategy focuses on implementation of cleaner technology.  At Copenhagen, South Africa pledged to reduce its emissions by 34% from business as usual by 2020, and by 42% by 2025, in the context of a legally binding international agreement and financial support from the international community.  The President said that they are not waiting for these measures to emerge, but forging ahead with the program.  He cited as an example South Africa's target to scale up to 18 GW of renewable energy in its electricty mix within 20 years, while noting that coal will remain an important fuel source.
 
President Zuma plans to launch a key initiative during COP 17 - the South Africa Renewable Energy Funding Instrument - in conjunction with global partners.  He said the instrument will focus on funding of large scale renewable energy through innovative funding solutions, including low cost loans and time limited pay for performance grants.  He noted that other policy proposals would impact on the business sector through putting a price on carbon and other pollution via taxes,. national resource charges or tradable permits.
 
President Zuma concluded by saying it was vitally important for nations to come to an agreement at COP 17 that assists emerging nations and allows a focus on green growth, jobs and a better life for all.

 

ZEP panel on carbon capture and storage (CCS)

Published on 03.12.2011 by Gwen Andrews, VP Environmental Policies & Global Advocacy, Asia & Oceania, Alstom
 

 

Europe's Zero Emissions Platform sponsored a panel on CCS at the World Climate Summit in Durban on 3 December.  It was hosted  by David Hone of Shell, and Philippe Joubert was one of the panellists.  Others included Brad Page, CEO of the Global Carbon Capture and Storage Institute, Brendan Beck who heads the South African CCS Centre, and Bruce Hart from the World Wildlife Fund.

In his presentation, Philippe Joubert highlighted Alstom's experience with pilot and demonstration projects, and confirmed that the company will be ready to offer capture systems with commercial guarantees by 2015.  He noted that the technology is well proven on both the capture and the storage side, though there will be a need for detailed storage characterisation for each project.  He emphasised our ability to capture more than 90% of CO2 with a purity of 99%, and the decreasing energy penalty of our CCS technologies, which is now below 20%.  He encouraged South Africa to speed up its plans for deploying CCS.

In his presentation, Brendan Beck noted that 25% of South Africa's population currently has no access to electricity and there was little if any reserve in the system.  More electricity was critical, and it was likely to be based on coal since it was an indigenous resource and South Africa had the experience to build and operate coal plants, more than they had with renewable energy.  The plans currently are for South Africa to undertake a test injection in 2016, a pilot project in 2020, and move to commercial deployment by 2025.
 

 

 

 

Financing climate mitigation and adaptation Can a Green Climate Fund contribute?

Published on 01.12.2011 by Helle Juhler-Verdoner, VP Global Affairs, Environmental Policies & Global Advocacy, Astom
 

On 1 December Alstom SVP Joan MacNaughton was in a panel organised by the International Emission Trading Association (IETA). Under the title "Calling out the Emperor With No Clothes? Private Sector Perspectives on the Green Climate Fund (GCF)", Joan MacNaughton together with Henry Derwent (IETA), Joelle Chassard (World Bank) and others discussed the GCF.

There was general agreement to Alstoms message that the report from the Transitional Committee (TC) (see attachment) about how the design of the GCF should be, held many good elements, though some clarity was required. It was also a good thing that the design of the GCF at this point was flexible. There was support for the focus on money being spend based on results and performance criteria which Alstom in its advocacy effort towards members of the TC has highlighted the need for.

The panel discussed the need for risk-sharing between the public and private sector when providing up-front financing for low-carbon activities, and how especially policy changes in subsidies etc. can undermine investment incentives.

Joelle Chassard from the World Bank (WB) highlighted the fact the WBs various funds were under transition towards climate financing, and in this context it was of particular concern that the GCF wasnt ready to take off.

The lack of focus on carbon markets role in the TC report was agreed to be of concern, since this is a crucial element in leveraging private financing. However, the report doesnt exclude to give carbon pricing a role which is positive.

On the private sector engagement there was general agreement that negotiations offered business to engage in particular to make clear that the GCF needed to support all low-carbon technologies.

 

 

Continuation of the Clean Development Mechanism (CDM)

 

Published on 01.12.2011 by Gwen Andrews, VP Environmental Policies & Global Advocacy, Asia & Oceania, Alstom 

The Ad Hoc Working Group on the future of the Kyoto Protocol (AWG-KP) is debating probably the most critical issue of the Durban conference, the issue which divides developed and emerging economies. Will there be a second commitment period under the existing Kyoto Protocol? But within this debate is a second question that is of equal concern to business - if no agreement is reached at Durban on a second commitment period, what happens to the market mechanisms under the Protocol, particularly the CDM?

The AWG-KP is considering three options at this point. The first is being pushed strongly by those parties that believe a strong signal on the continuation of market mechanisms is necessary to underpin investment in mitigation actions. The second option comes from those parties that want participation in the CDM to be available only for those developed countries that agreed to a second commitment period under the Protocol. The fall back option is to say nothing at all, and let market participants decide how to proceed.

Alstom strongly supports the need for parties to send a positive signal about the continuation of market mechanisms, whether or not agreement can be reached on a second commitment period. Business is already dealing with a serious lack of clarity on climate change policy; we cannot afford more uncertainty in investment scenarios. Should it not be possible for the AWG-KP to agree on such a statement, then the next best option is to say nothing. We do not agree that CDM participation should be restricted only to parties that agree to a second commitment period under the existing Protocol, and we do not see how such a condition could be enforced given that a number of jurisdictions are making independent decisions on what level and types of CDM credits to include in domestic trading systems.

Let us remember the purpose of the Protocol and the market mechanisms established under it - to reduce emissions of greenhouse gases. The CDM has been successful in this, and delegates should be making every effort to secure its continuance.

 

 

 

 

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