There’s a disjoint between the emissions cuts countries say they’re going to make and what needs to be done to avoid the worst impacts of climate change, according to the latest annual update to the United Nations Environment Programme’s (UNEP) Emissions Gap report.
To close the gap and limit climate change, the world is going to have to get a lot better at using energy smartly, it says.
Each year UNEP takes a different aspect of the world’s energy economy to examine, in order to show how emissions could be curtailed. This year, it’s the turn of energy efficiency. So what’s the calculus on how using energy more intelligently could get us closer to two degrees?
The impetus for this report is simple. Unless global emissions peak and decline in short order, the world will pass a point where global warming can be limited to two degrees.
The Intergovernmental Panel on Climate Change’s recent report calculated the remaining amount of carbon dioxide humans can emit and still have a likely chance of limiting global warming to less than two degrees. It comes to about another 1,000 gigatonnes of carbon dioxide.
In 2012, global emissions of greenhouse gases like carbon dioxide and methane were around 54 gigatonnes of carbon dioxide equivalent. To meet that “carbon budget”, UNEP calculates global emissions must be no higher than 44 gigatonnes in 2020, and 42 gigatonnes in 2030.
But current climate targets don’t stick within these limits. World leaders are currently committed to targets that imply global emissions will be 52 to 54 gigatonnes of carbon dioxide equivalent in 2020, and 56 to 59 gigatonnes in 2030. UNEP says that leaves an “emissions gap” between where we’re headed and where we need to be.
UNEP identifies a range of options for countries to cut their emissions and stay within the carbon budget.
In previous reports it has focused on reducing agricultural emissions or increasing renewable electricity generation. The 2014 report focuses on ways to use energy more efficiently, which is going to be vital if countries are going to avoid blowing the carbon budget, UNEP says.
UNEP says energy efficiency could be responsible for up to a fifth of the cuts countries need to make to stick to the carbon budget and have a range of benefits that go beyond avoiding the worst impacts of climate change.
Energy efficiency improvements could prevent 22 to 24 gigatonnes of carbon dioxide emissions between 2015 and 2030, UNEP estimates, with new energy efficiency policies reducing energy demand by about five to seven per cent.
There are a number of ways this could be achieved, UNEP suggests. Countries expecting to construct lots of new homes should ensure they are as energy efficient as possible by implementing building codes. Those with lots of older houses should commit to retrofitting the buildings with insulation and better heating systems.
Fuel economy standards could also ensure vehicles use as little fuel as possible, and governments should support the retirement of old power plants to be replaced by low carbon more efficient alternatives, UNEP says. Governments could also require companies to undertake regular audits to see where they can save energy and find a way to finance them to make the improvements, it suggests.
Making it work
That all sounds great. But there are some caveats to UNEP’s analysis. To make wide ranging new energy efficiency policies cost effective, there will need to be a strong carbon price of about $70 per tonne. That increases the value of each unit of energy saved due to efficiency policies, and makes them more cost effective.
This is a long way from the current European carbon price, which is sitting around €7 ($9). None of the world’s carbon markets currently operate with a price near UNEP’s level.
There’s also an issue with access to finance. Rolling out energy efficiency policies on a large scale relies on governments being able to persuade people and businesses to participate in and pay for the up-front cost of the schemes.
Nevertheless, those that stress the importance of energy efficiency will be encouraged by the findings of a recent report from the International Energy Agency that showed global efficiency policies have already saved a continent’s worth of energy. But policy success varies across different countries.
Germany’s policies are probably the most effective. Its public investment bank, KfW, spent €16 billion on grants and loans to improve energy efficiency in 2013. In contrast, the UK’s energy efficiency schemes have been struggling for years, with the government recently cutting one of its main home improvement schemes.
So while energy efficiency policies have tangible benefits, governments are yet to work out how to implement them to the extent UNEP says is necessary to keep within the carbon budget.
Negotiators are set to resume talks on a new global climate deal in Lima later this month. It may be that working out ways to use energy more efficiently will provide some rare common ground between developed and developing countries.
UNEP’s report is a useful annual reminder that whatever progress has been made on climate policy over the past twelve months, countries will need to do more on a number of fronts to cut emissions in the next couple of decades.