I’m much less grumpy today.
I can at least now get into the plenary sessions which means that I get to hear new announcements first hand. I’m still not able to listen in on the really detailed negotiation sessions but, perhaps, that’s not surprising. I may have been given the wrong impression by the subsidiary-body talks back in May.
My day started with a session in the Science Pavilion where the 2021 carbon-budget was presented. This was formally published in a scientific journal yesterday and gives a snapshot of the current state of human-caused carbon dioxide emissions. There is some good news with the overall emissions now showing a clear levelling off despite more bounce-back after Covid than expected.
The detail is quite interesting with a levelling-off of coal-based emissions but rapid rises in both cement related emissions and those due to burning of natural gas. It’s clear that, at the moment, coal-power may be in retreat but it’s being replaced by natural gas. It’s a step forward but not a permanent solution.
Emissions due to land-use change are also encouraging with a continuation of a steady fall that’s been going on since the 1960s. One final issue, though, is that natural take-up of carbon dioxide by plants and oceans are showing signs of becoming less efficient. The effect is small but still worrying.
After that I headed for a plenary and was able to see our own Kwazi Kwarteng announcing that the UK has extended funding for the Energy Transition Council for another 5 years. The council helps to finance the early closure of coal-fired power stations that I mentioned yesterday. I lost count of how many times I heard the phrase “just transition” and this feels like real progress.
On a similar theme, I moved from there to the Green Climate Fund Pavilion where finance for developed nations was being discussed. This was an eye opener for me. I had been thinking about the $100 billion per year of finance for developing countries as justified compensation for the problems developed countries have caused. I now think this is the wrong way to look at it.
Developing countries are perfectly happy to borrow money to finance their green transitions but they’d like to be able to do it on the same terms as richer nations. At the moment they face interest rates that can be up to seven times higher!
It’s also about CAPEX versus OPEX. For those not familiar with the jargon (like me until recently) I heard a great analogy in this meeting. It’s like buying an EV. EVs are better for emissions and cheaper overall but the up-front cost is high and this stops less well off people from buying them. In exactly the same way the overall cost of renewable energy is lower than fossil-fuel electricity but the up-front costs (CAPEX=capital expenditure) is high and so less well off nations cannot afford it. The $100 billion per year finance package helps to reduce risks to lenders (so they drop their interest rates) and can get round the problem of high up-front costs.
OPEX is operating costs, by the way.
So, enough economics lessons already, and apologies to all those who already knew all this.
November 4th 2021
Pictured above: Plenary Session at COP26