The United Nations Framework Convention on Climate Change (UNFCCC) conference stirred mixed emotions worldwide as leaders came to loggerheads on sealing a binding agreement aimed at dealing with the challenge of climate change. The outcome, dubbed the Copenhagen Accord, which is a 12-paragraph interim treaty that recognises the scientific need for keeping the global temperature rise to no more than 2 ºC, but which fails to contain binding commitments for reducing emissions, has led to questions about whether investments into clean technologies and low carbon solutions could be undermined or delayed.
In a statement released before the climate change conference, referred to as COP-15, global consultancy firm Frost & Sullivan said that without the legislation and international agreements, private companies would be timid in making large-scale investments in clean technologies. The firm reported that a failure to come to an agreement would slow down the battle against global warming and was likely to result in insufficient financing of low emissions projects.
World Wide Fund (WWF) for Nature head of the Living Planet Unit Saliem Fakir tells Engineering News that a fair, ambitious and binding agreement in Copenhagen would have created a more enabling environment for the clean technology revolution.
"Binding emission reduction targets would have formed the basis for national legislation that would support and give impetus to the uptake of clean technologies. The development and use of clean technologies is not entirely dependent on the outcome of the climate change negotiations, but the speed of uptake will certainly be impacted [on] by the failure to reach a binding agreement at COP15," he asserts.
But, given this cause for concern, Fakir adds that despite the financial downturn, in the last two years there has been positive growth in clean technologies, particularly in China and the US, driven by other factors, such as the cost of energy, new business opportunities, as well as social and other pressures emerging from nations heavily dependent on fossil fuels. "Many countries recognise clean technology as a new area for strategic industrial development and for diversifying the energy mix."
However, he says that the major effect on financing of clean technology is not in fact an international climate agreement, but rather the financial crisis. "This situation has resulted in greater caution amongst investors, limiting the supply of capital. In addition to this, the slowing down of economic growth has reduced the urgency for the development of new technologies. However, despite these factors, the clean technology sector performed very well compared with other technology investments."
The World Energy Council projects that global energy demand will double by 2050. This will create further pressure to invest in new electricity supply, particularly in renewables. Pressure to reduce carbon emissions and greater cost pressures as commodity prices increase for conventional, fossil fuels will force a more efficient use of these energy sources. "All of this can only be brought about by new technology or improving the performance and standards of existing technology," adds Fakir.
COP-15's effect on South Africa
Water and Environmental Affairs Minister Buyelwa Sonjica expressed her disappointment at the outcome of the climate talks, referring to it as weak, partial, and political rather than legally binding.
"South Africa put forward ambitious emission targets, contingent on a binding agreement and finance support from industrialised nations. Finance, together with technology transfer, would aid South Africa and other African nations to make greater use of clean technology as part of a climate change mitigation strategy," says Fakir.
Given that no such agreement has been reached, as yet, South Africa will have to rely on other sources, which is already under way. The Clean Technology Fund, managed by the World Bank, supports the development of clean technology in South Africa specifically around renewable energy.
"For South Africa to boost [its]clean technology uptake it must pass its own Climate Change Act. The new Air Quality Act, which sets emission standards, together with other complementary policies will enable a stronger push for clean technology. With the impending energy price hikes, we are likely to see greater investment in clean technology, within the energy sector specifically," he says. He believes that South Africa has a great deal of private equity firms interested in clean technology, but the investment environment will only improve with a stronger regulatory push.
Where to from Here?
The Accord also aims to provide $30-billion a year for poor countries to adapt to climate change from next year to 2012, and $100-billion a year by 2020. But, nothing is guaranteed in a treaty that is not legally binding.
"There is still much work to be done," says UNFCC executive secretary Yvo de Boer. "We must be honest about what we have got. The world walks away from Copenhagen with a deal. But, clearly ambitions to reduce emissions must be raised significantly if we are to hold the world to 2 °C."
WWF for Nature head of global climate initiative Kim Carstensen says, "Practically what leaders have put on the table adds up to 3 °C of warming or more, according to WWF estimates. Millions of lives, hundreds of billions of dollars and a wealth of lost opportunities lie in the difference between rhetoric and reality on climate change action," he adds.
The UN climate talks will resume in Bonn, Germany, in May.
" There is no real clarity at this stage on the process from now onto Germany and the next COP in Mexico. A meeting is required to review the Copenhagen Accord and to work out the format and agenda for finalising an agreement. Not all countries have agreed to adopt the Copenhagen Accord and certain political deadlocks will have be broken if we are to move forward. South Africa and other developing nations must be united in the call for binding and ambitious emission targets by industrialised nations and sufficient finance and technology support to enable us to implement effective mitigation and adaptation actions domestically," concludes Fakier.
>> The Copenhagen Accord aims to provide $30-billion a year for poor countries to adapt to climate change from next year to 2012, and $100-billion a year by 2020.
>>Millions of lives, hundreds of billions of dollars and a wealth of lost opportunities lie in the difference between rhetoric and reality on climate change action