Modern MarrakeshDelegates attendingtalks will finda city ofalluringcontrastsPage 4

Morocco & COP 22Managing Climate Change

FT SPECIAL REPORT

www.ft.com/reports | @ftreportsThursday November 10 2016

Inside

Oil majors face up toexistential threatLeading hydrocarbonsuppliers are being

forcedto pondertheir futurePage 2

Emergency measuresScientists grapple withgeoengineering plans tohead off global disasterPage 3

Changing of the guardat UN climate bodyMexico’s smoothoperator takes on topUN role in leading driveto curb emissionsPage 5

B etween the rancorous USpresidential election cam-paign, growing divisions overthe UK’s Brexit vote and theprotracted turmoil in Syria,

the closing months of 2016 have hardlybeenashowcase forcalmco-operation.

The first two weeks of October, how-ever, were marked by a rare high pointof unity on a problem that global lead-ers have long struggled to resolve: cli-mate change.

In the space of 11 days, governmentsaround the world agreed to take threeseparate steps to tackle the rise of green-housegasemissions,amomentwith littleparallel in more than 20 years of fraughteffortstocombatglobalwarming.

First, so many countries rushed to

ratify or join the Paris climate accordadopted last December that on October5 the two thresholds needed for theagreement to enter into force were met:approval by 55 countries accounting for55 per cent of global emissions. It tookmore than seven years for the agree-ment’s predecessor, the 1997 Kyoto pro-tocol climate treaty, to come into effect.The architects of the Paris accord hadexpected a wait of at least another year.

Then, on October 6, governmentsstruck the first global climate deal foraviation, a fast-growing source of emis-sions long deemed too hard to include inUNaccordssuchasParisandKyoto.

Finally, in the early hours of October15 in the Rwandan capital of Kigali,another global deal was sealed — to

phase out hydrofluorocarbons, or HFCs.These planet-warming chemicals are

used in millions of air conditioners andrefrigerators and it is estimated that theKigali agreement could help avoid asmuchas0.5Cof futureglobalwarming.

As hundreds of delegates descend onthe Moroccan city of Marrakesh thisweek for the latest UN climate changetalks, it is hard to think of anotherperiod when so much internationalactionoccurredinsuchashort time.

Patricia Espinosa, the veteran Mexi-can diplomat recently appointed theUN’s top climate official, has seen noth-ing like it before. “I have spent a goodpart of my career in multilateral affairsand I can tell you it is really unprece-dented,”shesays.

Behind the bout of diplomatic activity,however, large questions remain aboutwhetheritisgoingtobepossibletomeettheParis agreement’s central aim of avoidingdangerousglobalwarming.

Some of the answers will come at thetwo-week Marrakesh meeting onNovember7-18.

It was expected to be a quiet affair buthas been galvanised by the Paris agree-ment coming into force sooner thatexpected, a step that means every coun-try ratifying the pact is now legallyboundbyits terms.

That has thrown the spotlight on theclimate action plans that countries havevolunteeredunder theaccord,knowninUN jargon as “nationally determinedcontributions”.

Countries are not legally obliged tomeet any emissions targets in theirplans but they do have to update themevery five years so that, ultimately, glo-bal temperature rises are kept “wellbelow” 2C compared to pre-industrialrevolution levels,and1.5Cifpossible.

Many decisions still have to be madeContinuedonpage5

Pressure risesto keep upmomentuminMarrakeshProgress on agreements to cut greenhouse gases hasraised the stakes for summit, writes Pilita Clark

Global warming: Patricia Espinosa calls for urgent action — Reuters/Youssef Boudlal

2 ★ FINANCIAL TIMES Thursday 10 November 2016

Morocco&COP 22Managing Climate Change

It was one of the most curious momentsin the run-up to the UN talks that sealedthe landmark Paris climate changeagreement lastDecember.

The chief executives of six large Euro-pean oil companies, including BP andRoyal Dutch Shell, declared that theyhoped the negotiations would lead to“widespread carbon pricing in all coun-tries”. In other words, they would behappy if it cost more to burn the fossilfuelsonwhichtheirrevenuesdepend.

Given the political difficulties govern-ments have faced when trying to intro-duce carbon pricing in a single country,let alone the entire world, the compa-nies’ callwasasafeonetomake.

Economists have championed a glo-bal carbon price for decades, arguingthat making it more expensive to buypetrol or electricity generated from coalis the most cost-effective way to cut theworld’s use of fossil fuels and the planet-warmingcarbondioxidetheyproduce.

But governments have been slow torespond. So far, around only 40 coun-tries and 20 or so cities, states andregions have put a price on carbon,WorldBankdatashow.

Most have used either a tax or a cap-and-trade scheme such as the EU’s 11-year-old emissions trading system, theworld’s largestcarbonmarket.

These schemes set a progressivelyshrinking cap on emissions and thendistribute or auction allowances — eachequal to a tonne of carbon — to factoriesand other polluters. Companies withoutenough allowances to cover their emis-sions can buy from other firms in a mar-ket thatsetsapriceoncarbonpollution.

The jurisdictions with carbon pricingin place account for only 13 per cent ofglobal emissions at the moment. How-ever, that figure could jump to morethan 20 per cent following China’spledge to start rolling out a nationalemissionstradingschemein2017.

The precise details of Beijing’s plansare still murky but one little-noticedsection of the Paris agreement offerscarbon pricing proponents hope of fur-theraction.

Article 6 of the agreement gives agreen light for countries to act a littlelike the factories covered by the EU’scarbon market, and trade emissionsallowances with each other to helpreach their targets. It says governmentscan use “internationally transferredmitigation outcomes” under a new UNmechanism, details of which are still tobedecided.

“Basically, what that says is govern-ments can transfer emissions reduc-tions between themselves,” says JeffSwartz, international policy director atthe International Emissions TradingAssociation. “This could open theopportunities forcarbonpricingbeyondanythingwe’veeverseenbefore.”

Much has to be decided in future UNtalks before anything goes ahead, notleast making sure accounting rules arein place to ensure emissions cuts arecountedinonlyonecountry,not two.

Reaching agreement on such provi-sions could be tricky. Countries such asBolivia have long opposed carbon mar-kets outright, claiming they “commod-ify” the environment. Others argue it

would be hard to devise rules ensuringinternational allowances are generatedby legitimate measures or projects thatactuallycauseoverallemissionsto fall.

But climate negotiators and privatesector groups have already begun infor-maldiscussionsaboutArticle6.

“It’s somewhat early days and I thinkpeople are getting their heads aroundthe issues,” says Elliot Diringer of theCenter forClimateandEnergySolutionsresearchgroupintheUS.

Article 6 sends a clear message tocountries that they are entitled to useinternational emissions trading to meetthe climate plans they submit under theParis agreement, Mr Diringer says.“There’s strong interest among manyparties indoingthat.”

Establishing clear ground rules forsuch transactions could help spur thegrowth and linkage of carbon tradingsystems,headds.

Whether this could lead to an interna-tional price on carbon, however, isunclear. “I do think there is significantpotential there in terms of facilitatingthe carbon market which perhaps someday will lead to a seamless system with aglobal carbon price. But I think that’spretty far down the road,” says Mr Dir-inger. “I don’t see any of this leadingvery quickly toward a global carbonprice.”

Meanwhile, existing carbon tradingschemes reveal the challenges of mak-ingsuchmeasureswork.

The share of global emissions coveredby carbon pricing systems has increasedthreefold over the past decade. But theEU scheme is suffering from such anoversupply of allowances that carbonprices have been as low as €4 a tonnethis year, not nearly enough to drive asweepingshiftawayfromfossil fuels.

At the same time, countries such asAustralia have backed away from plansfor a carbon tax while Kazakhstan thisyear temporarily suspended its emis-sions trading system, citing a need toimprove reporting and verification.Still, Canada’s centre-left governmentannounced a plan last month requiringall jurisdictions to have a price on car-bon emissions by 2018, starting at C$10atonne.

IfChinaendsupdeliveringaworkablenational emissions trading system, itwould probably create the largest car-bon market ever seen. But whetherthere will ever be a global price on car-bon that curbs climate change is stillveryfar fromclear.

F or decades, energy analystsargued over when the worldwould reach “peak oil” — a tip-ping point after whichreserves of hydrocarbons

wouldgo into inexorabledecline.Today, it looks like that was the wrong

question to ask. The new debate swirl-ing around the energy industry is whenthe world’s demand for oil and gas willpeak.

As uptake of renewable energy accel-erates in tandem with political efforts totackle climate change, it seems increas-ingly likely that demand for fossil fuelswill enter permanent decline longbeforesuppliesdo.

Projections issued last month by theWorld Energy Council, a network ofindustry leadersandpolicymakers,esti-mated that demand would peak in 2030at between 94m and 103m barrels a dayif uptake of low-carbon technologiescontinues to expand rapidly. This com-pareswith86mbo/din2014

Some think decline could set in evensooner — and this is not just the view ofthe many critics of the oil industry whoare willing it to happen. Simon Henry,chief financial officer of Royal DutchShell, Europe’s biggest oil major, saidthis month that “peak demand” couldbereachedasearlyas2021.

“We’ve long been of the opinion thatdemand will peak before supply,” hetold investors on a conference call afterthe company’s third-quarter results.

“And that peak may be somewherebetween 5 and 15 years hence, and it willbe driven by efficiency and substitu-tion.”

By “efficiency and substitution”, MrHenry meant the development of moreefficient internal combustion enginesthat consume less fuel, and the gradualreplacement of petroleum with alterna-tive fuels and electricity in the transportsystem.

These are precisely the sorts of devel-opment that policymakers are trying tobring about with incentives for invest-ment in clean energy and limits on car-bon emissions. To have even a 50 percent chance of keeping global tempera-ture rises to within 2C of pre-industriallevels — the limit targeted by interna-tional climate policies — scientists haveestimated that one-third of known oilreservesandhalfofgasreservesmustbeleft in the ground. This might be goodfor the planet, but it poses an existentialthreat tooilandgascompanies.

Fitch, the credit rating agency, lastmonth warned that the industry faced a“resoundingly negative” threat from apotential “leap forward” in batterytechnology that “could transform theviabilityofelectricvehicles(EVs)”.

“Assessing the chances of a rapiddecline in oil demand due to EV growthis key to understanding the oil sector’sprospects,” Fitch said. “A market withstructurally falling demand will be a lotmore risky for all oil companies, with

long periods of low prices and invest-mentuncertainty.”

Companies are coming under pres-suretobemoreopenabouttheserisks—and to spell out their strategies forresponding. ExxonMobil, for example,is under investigation by New York’sattorney-general for allegedly conceal-ing from shareholders what it knewabout climate change as early as the1980s.

Some investors are already fleeing thesector. The Rockefeller Brothers Fund,thefamily foundationbuiltontherichesof John D Rockefeller’s Standard Oil, isin the process of divesting fossil fuelholdings and shifting money to cleanenergy.

For oil executives, how to respond tothese threats represents the biggestlong-termstrategicproblemfacing theircompanies. Several are beginning todiversify beyond hydrocarbons byinvesting ingreentechnology.

By far the most radical steps so farhave been taken by Dong Energy, the

Danish group built on North Sea oil andgas, which is now the world’s largest off-shore wind farm operator. Among thesupermajors, Total of France has gonefurthest with a combined $2.5bn ofinvestments in SunPower, a US solarcompany, and Saft, a French batterydeveloper.

Total was among 10 large oil compa-nies that last week launched a $1bn jointfund to develop low-carbon technolo-gies. Others included Shell, BP andSaudi Aramco, the Saudi Arabian state-ownedproducer.

The investment, co-ordinated by agroup called the Oil and Gas Climate Ini-tiative, reflects growing acceptancewithin the industry that a long-termshift away from hydrocarbons is una-voidable. However, there remains widedivergence in views on the pace andextentof thedecline.

Amin Nasser, chief executive of SaudiAramco, told a conference in Octoberthat, although fossil fuels would gradu-ally lose market share, the transition

would be slow and overall demand foroil and gas would continue rising. Thisreflects a view — shared with ExxonMo-bil and Chevron, the two biggest US pro-ducers — that uptake of electric vehicleswill be outpaced by growth in petrol-fuelled transportation in countries suchasChinaandIndia.

Fossil fuels currently meet about 80per cent of total world energy demandand Mr Nasser forecast the figure wouldstill be as high as 75 per cent of a biggermarket in2040.

Even if Shell’s more pessimistic out-look for oil proves correct, Mr Henrysaidthegroupwouldadaptbyaccelerat-ing its shift to natural gas and biofuels.Shell and other majors are betting thatgas will be a “bridging fuel” between thehydrocarbon and renewable era,because it emits half as much carbon ascoal when burnt to generate electricity.“Even if oil demand declines, itsreplacementswillbe inproducts thatweare very well placed to supply,” MrHenrysaid.

Energy curbsposea futuremortal threatto oil majorsHydrocarbon demandLeading suppliers considertheir role, writesAndrewWard

All pumped up:oil and gasproducers arebracingthemselves foran eventual fallin demandSpencer Platt/Getty Images

Scientistsestimateone-third ofknown oilreservesand half ofgas reservesmust be leftin theground

Calls mount for a global carbonprice but progress is slowEmissions trading

Adoption of the Parisclimate accord could spurmore action to limit fossilfuel use, says Pilita Clark

Storing up trouble: coal being readiedfor use at a US power station

Thursday 10 November 2016 ★ FINANCIAL TIMES 3

Morocco&COP 22Managing Climate Change

A shumanactivitiesraiselevelsof thegreenhousegascarbondioxide intheatmosphere, researchersarethinkingupwaysof

counteracting itswarmingeffectsthroughmethodsknowncollectivelyasgeoengineering.

Althoughmanytheoretical studiesandsmall-scaleexperimentshavebeencarriedout, scientistsandthewiderpublicarewaryofgoingaheadwithgeoengineering—definedasdeliberatelarge-scale intervention intheEarth’snatural systemstocounteractclimatechange.As investigationsbyauthoritiessuchastheUSNationalAcademyofSciencesandBritain’sRoyalSocietyhavefound, theriskofaction intheshort termisstill toogreat.

But theyadvocatewide-rangingresearchto laythefoundations forgeoengineering incase it isneededtofightaglobalemergency inthemoredistant future.Thiscouldberequired ifinternationalefforts toholddowncarbondioxideemissions failor theclimateturnsout tobemoresensitivethanexpectedtorisingCO2levels.

Thoughmanydifferentgeoengineeringtechniqueshavebeenproposed, theyfallbroadly intotwomaincategories.OneisbasedontheremovalofexcessCO2fromtheatmosphere.Theotherdependsonreflectingmoreof thesun’senergybackintospace.

Thesecondcategory, solarradiationmanagement, is riskierbutcouldbeimplementedmorequickly inanemergency.Several futuristicschemeshavebeenproposedthat includethebuildingofgiantsunshades inEarthorbit.But thetwomostrealistic ideasareto injectaerosolsof tinyreflectiveparticles intotheupperatmosphere—mimickingthecoolingeffectofa largevolcaniceruption—andto increasereflectivecloudcoverovertheoceans.

Thedownsidesofsolarradiationmanagementaretheunpredictabilityandpossibleside-effectsof theproposedtechniques,andthefact thattheywouldtemporarilymasktheproblemwithout tackling itscause.“Intheabsenceofcarbondioxidereductions[suchtechniques]wouldneedtobesustainedindefinitelyandatincreasingly largescales tooffsetwarming,withseverenegativeconsequences if theyweretobeterminated,”accordingtotheNationalAcademyofSciences.CO2removal, the firstcategoryof

potentialgeoengineeringsolutions, isgenerally lessdrastic thansolarradiationmanagementandaddresses

themaincauseofclimatechangeatsource.Howevertherearestillmanydoubtsabout itspracticalityandimpact.

“ManyCO2removal techniqueshavebeenproposed,”saysPhilWilliamsonoftheUniversityofEastAnglia,authorofarecentanalysisof thefield inthejournalNature.“Whetheranyofthemcouldworkat thescaleneededtodeliver thegoalof theParisagreement—limitingthe increase inglobalaveragetemperatureabovepre-industrial levels towellbelow2C—remainstobeseen.

“Large-scaleCO2removal,bywhichevermeans,willhaveknock-oneffects forecosystemsandbiodiversity,”

hewarns.“Therecouldbebenefitsbutdamageseemsmore likely.”

Challenges tobetackledusingthisbroadtechnique includehowfastCO2canberemovedandwhere itcanbestored,preferablypermanentlyandcertainly formanythousandsofyears.Carboncaptureandstorage (CCS)

technology isbeingdevelopedforpowerstations—extractingCO2fromsmokestackemissions,compressingandliquefying it,andpumping it intosuitablerockstratadeepunderground.Suchprogrammes,however,donotprovideanynetremovalofCO2thathasalreadybeenaccumulated inEarth’satmospherefromenergypreviouslygeneratedfromfossil fuels.

Growingbiomass cropsandburningthem inpowerplantsdeployingCCStechnologydoessequesterCO2.However, thecropsneededtomakeasignificant impactonclimate inthisscenariowouldcovermorethan500mhectares,which ishalf the landareaoftheUS,saysMrWilliamson:“Thiswould inturnaccelerate the lossofforestsandnaturalgrassland,withimpacts forwildlifewhilstalsohavingimplications for foodsecurity.”ExtractingCO2directly fromtheair

ratherthanfrompowerstationemissions isanotherpossibility.Thedifficulty is that, thoughhumanactivitieshaveraised itsconcentrationintheair to400partspermillion,CO2isstill toodilute tobecapturedeasilybychemical traps.

However, therewasgoodnewsthisyearabouttheprospects fordisposingpermanentlyofCO2,regardlessofhowit iscaptured.Anexperimentbyaninternational teaminIcelandfoundthatCO2pumpedundergroundintovolcanicbasalt rockwasalmostcompletelyconverted intosolidcarbonatemineralswithintwoyears—afar fasterprocess thananyonehadpredicted.Scientistshadfearedthatmineralisationwouldtakehundredsorthousandsofyears.

Becausebasalt strataarewidelydistributedworldwide,carbonmineralisationcouldbeapreferablealternativetopumpingCO2intoundergroundreservoirs fromwhichitmight leak.“Weneedtodealwithrisingcarbonemissions,”says JuergMatterofSouthamptonUniversity, seniorauthorof thestudypublishedinthe journalScience.“This is theultimatepermanentstorage—turnthembacktostone.”

Beforegeoengineeringgoesaheadonasignificantscale,practitionersarecalling foraninternationalcodeofconductandgovernance.Oxforduniversity’sOxfordGeoengineeringProgrammehassetoutkeyprinciplesforattempts toshapetheglobalclimate:geoengineeringshouldberegulatedasapublicgood,withpublicparticipation indecisionmaking; researchprojectsandtheirresultsshouldbepublishedopenly;andimpactsshouldbeassessedindependently.

Giant sunshades and carbon capture mootedEmergencymeasuresSchemes to controlglobal temperaturesremain unproven andrisky, says Clive Cookson

Blue skythinking:conceptualillustration oforbiting mirrorsaimed atreducing globaltemperaturesGetty Images/

Visuals Unlimited

Futuristicschemesproposedinclude thebuildingof giantsunshadesin orbit

4 ★ FINANCIAL TIMES Thursday 10 November 2016

Morocco&COP 22Managing Climate Change

Africa is not an obvious continent to pri-oritise in the race to replace fossil fuelswith renewable power. The 49 countriesof sub-Saharan Africa take a year toemit the amount of carbon belched outbytheUSin less thantwomonths.

Yet, this lack of carbon intensity —annual per capita CO2 emissions fromsub-Saharan Africa average 0.8 metrictonnes compared with 16.4 metrictonnes from the US — also represents anopportunity for thecontinent.

Whereas more developed regions ofthe world face the challenge of over-hauling deeply entrenched energy sys-tems based on fossil fuels, Africa’s rela-tive lack of development gives it achance to build new kinds of infrastruc-ture fromscratch.

Advocates for renewable power sayAfrica can become a global champion ofclean energy by harnessing the conti-nent’s plentiful solar, wind and geother-mal resources. “Similar to the waymobile phones leapfrogged over land-lines in Africa, the same can happenwith electricity,” says Kate DeAngelis,policy analyst for Friends of the Earth,theenvironmentalgroup.

There are early signs that just such arevolution could be taking root.Between 2010 and 2013, installed solarcapacity across sub-Saharan Africa rosesevenfold from 40 megawatts to280MW, according to the InternationalEnergyAgency.

However, even that elevated numberwas equivalent to just one small conven-tional power station, and, for most Afri-cans, electricity of any kind remainselusive.

Only 43 per cent of people on the con-tinent have access to reliable power,leaving 635m people without, accordingtotheIEA.

This energy deficit represents oneof the biggest obstacles to economicdevelopment across the continent —a fact that has been attracting increased

attention from policymakers and activ-ists. While previous international aidefforts have focused on areas such ashealth, hunger and education, there isgrowing recognition that wider provi-sion of electricity is essential to drivingdownpoverty.

Barack Obama, during his time as USpresident, has led the way by launchinghis Power Africa initiative in 2013. Thiscampaign aims to add 30,000MW ofgenerating capacity by 2030, equivalentto almost a third of sub-Saharan Africa’sexistingsupply,atacostof$7bn.

However, threeyears intothescheme,only 374MW of new capacity is up andrunning. Further projects are due soonbut the slow progress demonstrates thedifficulty of fulfilling Mr Obama’s prom-ise to bring “light where currently thereisdarkness”.

Ms DeAngelis says Power Africa andits partners should focus more on small-scale renewables schemes for ruralcommunities, rather than large central-ised power stations and distributiongrids. “Power Africa needs to stopapproaching energy the way the US hasfor thepast100years,”sheadds.

This view is echoed by ThomasDuveau, head of business development

for Mobisol, a German company whichhas installed solar power systems in60,000 households in Tanzania andRwanda. “We put a solar panel on theroof, a battery in the house and a set ofelectrical appliances to run off thepower,”explainsMrDuveau.

Technology such as Mobisol’stransforms living standards by allowing

people to refrigerate food, watch televi-sion and charge mobile phones. Butanother key health gain is that it alsoeliminates the unhealthy pollution andfireriskfromsmokyparaffin lamps.

Local “distributed” electricity sys-tems such as household solar panelsprovide a faster and more affordableway to electrify Africa than the central-ised power networks typical in thedeveloped world, according to MrDuveau. “Fifty to 70 per cent of ruralareas in Africa will never see the grid,”hesays.

Despite initiatives such as PowerAfrica, far more investment is needed ifthe local successes of Mobisol and otherpioneers like it are to become morewidespread. According to the WorldEconomic Forum, it would take an extra$55bn per year until 2030 to lift the con-tinentoutofenergypoverty.

Ms DeAngelis says the little commer-cial investment which has been madehas tended to focus on traditional powerinfrastructure for urban areas — bene-fitingrelativelywealthyconsumerswithgridconnectionsandindustrialusers.

“Banksareriskaverseandoftenavoidfinancing unfamiliar projects,” she says.“Mini and off-grid projects unfortu-nately tend to fall into this category. Itcan therefore be difficult for distributedrenewalprojects togetoff theground.”

However, there are signs that thiscould be changing. Mobisol last monthannounced that Investec InvestmentManagement was taking a “significantshareholding” in the company, addingto existing backers including DeutscheBank and the EU’s European Develop-mentFund.

Mr Duveau reckons that, with a bigpush from local governments and inter-national donors and investors, Africacouldclose itsenergygapwiththerestofthe world much faster than most peopleimagine. “I think we can do it in 10years,”hesays.

African pathto avoidfossil fueldependencyEnergy supply

Technology advances canhelp developing countriesto leapfrog the west,reports Andrew Ward Charging ahead: a man using solar panels to power devices—Sia Kambou/AFP/Getty Images

Sub-SaharanAfrica takes ayear to emit the amount ofcarbon belched out by theUS in less than twomonths

When American writer and long-timeMorocco resident Paul Bowles visitedMarrakesh in 1961, he discovered atown painted with a “wash made of thepink earth on which it rests”, filled withdusty expanses and palm gardens.Today the pink walls remain but “la

ville rose” has morphed from a dustybackwater into Morocco’s second-biggest city. Set against thespectacular backdrop of the AtlasMountains, it has managed to retain aneasy-going charm and edgy exoticismthat make it a magnet for visitors fromaround the world.The city is roughly divided into

three parts: the walled medina —home to labyrinthine souqs, hiddenmansions and historic sites; asubstantial French-built new town,known as Guéliz; and the Palmeraie, an8km-long palm-filled oasis at the city’snorthern edge. Shopping, nightlife andrestaurants are concentrated in themedina and Guéliz. Resort hotels arelocated in the Palmeraie.COP 22 has given the authorities an

excuse for a spruce-up. New highwayshave been built, infrastructureupgraded, solar-powered street lightsinstalled and pink walls re-rendered.The conference is being held at a

30-hectare site adjacent to Bab Ighli,on the town’s southern edge.Delegates will have access to electriccars and minibuses to ferry them backand forth from key points in the town.Those looking for a break from the

proceedings are spoilt for choice.Wandering the streets of the medina isone of the joys of Marrakesh, and awell-enforced ban on unofficial guidesmeans aggressive touts who used toharass tourists have gone.The city may not have as many

historic sites as some others inMorocco, but a number of them areclustered inside the old city walls notfar from the conference site.Highlights include the ornatelydecorated Saadian tombs, which dateback to the 16th century; the ruinedBadi palace, with a spectacular 90mpool and sunken gardens; and the

alleyways of the Mellah, the historicJewish quarter. A little further away isthe Ben Youssef Medersa, a religiousschool established in the 14th centurywhich has echoes of Spain’s Alhambra.The medina’s spiritual — if not

physical — centre is Djemaa el-Fna. Avast, chaotic square filled with marketstalls, Berber hawkers, snakecharmers, musicians playing exoticinstruments and the aroma of grilledmeat, it is an anarchic emblem of thecity that cannot be missed.Passages off the north side of the

square lead into Marrakesh’s colourfulsouqs. Morocco nurtures itshandicrafts — there is even a ministrydevoted to artisanship — and theirrange and quality is on exuberantshow in the souq’s winding alleys andcolourful stalls. Bargaining is expectedand is part of the fun.The city’s tradition of artisanship

has attracted Moroccan and Europeandesigners, who have also made theirmark — most famously Yves StLaurent, who bought the park ofJardin Majorelle in Guéliz to stop itbeing sold to a hotel developer.Food in Marrakesh is as varied as

the offerings in the souk. Many of thecity’s riads (old mansions or housesthat have been turned into boutiquehotels) offer Moroccan or European-Moroccan fusion dishes to non-residents if they call ahead.The fashion crowd’s long love affair

with Marrakesh has also helped fostera lively, atmospheric nightlife.Finally, there is the age-old

Marakshi pleasure of sipping sweetmint tea on a rooftop under the stars.While the dusty expanses of 50 yearsago have disappeared, some things inthe pink city remain unchanged.Siona Jenkins

Modern MarrakeshThe city is an alluringcombination ofeasy-going charmand edgy exoticism

A stall in the souk of the medinaU ntil this year the Moroccantown of Ouarzazate wasbest known for its ancient-looking kasbah façades,used as an exotic backdrop

in many Hollywood movies. But now ithas a very 21st century landmark: theworld’s largest concentrated solarpower(CSP)plant.

With 500,000 parabolic mirrors, theplant—Noor1—hasageneratingcapac-ity of 160 megawatts — equivalent tothat of a conventional single gas turbinepower station. It is the first of three CSPplants at the site that will eventually becapable of generating more than500MWatpeakoutput.

Noor is the most high-profile compo-nent of Morocco’s ambitious push forrenewable energy, which will be show-cased when the country hosts COP 22 inMarrakesh. The government has com-mitted to an unconditional 17 per centreduction in greenhouse emissions by2030 compared with business as usual,and has adopted a multi-pronged plancombining renewable energy develop-mentandimprovedenergyefficiency.

Energy independence has been themain impetus for the programme.Morocco lacks significant fossil fuel sup-plies of its own. However, electricitydemand is growing at 5-6 per cent a yearas the country pushes its long-term pro-gramme to wean its economy off adependence on agriculture towardsindustry.

In2009, thestatesetanambitioustar-get to produce 42 per cent of its electric-ity from renewable sources by 2020 — agoal that officials say they are on trackto meet. This was then extended lastyearat theCOP21summit inParis,whenKing Mohammed VI announced a newgoalof52percentby2030.

The country has received plaudits forboth the scale and success of its pro-gramme. Michael Taylor, a seniorenergy analyst at the International

Renewable Energy Agency, saysMorocco has been helped by factorsincluding strong institutions, fundingfrom bilateral and multilateral agenciesand ample supplies of wind and sun.“It’s kind of a confluence of influencesthat have allowed them to step up earlyand, of course, they’re reaping the bene-fits of those renewables now, earlierthanothers,”hesays.

Moroccan officials say they can offerlessons for other countries looking toincreasetheiruseofrenewables.

“It’s not just about money. It’s muchmoreamatterofcapacitybuilding, tech-

nology transfer and the right policies,”says Said Mouline, director-general ofthe Moroccan Agency for Energy Effi-ciency (AMEE). “We have a sustainableenvironment approach for all sectors.It’s inourconstitutionandthere iswill atthehighest levelofthestate.”

Over the past seven years this hastranslated into 54 action plans coveringall economic sectors. They go beyondinstalling renewables to cover agricul-ture, land use, forestry, waste, andindustrial policies. As well as establish-ing a nascent renewables industry, sub-sidies on fossil fuels have been phasedout and energy efficiency encouraged.“We have a low price in renewables, wehave industrial integration, and we havejobcreation,”saysMrMouline.

The Noor project has caught theattention of energy analysts around theworld. The plant uses mirrors thatreflect sunlight to heat liquid, which canpower a turbine. Unlike onshore windand solar photovoltaic schemes, CSPplants can store energy in superheatedliquid that can be used later to drive tur-bines. This makes it one of “the keytechnologies for unlocking those veryhigh levels of renewable power genera-tion,”saysMrTaylor.

But it is the project’s funding modelhas been singled out as one of Morocco’skey achievements. “They’ve been agame changer,” says Anne Lapierre,partner for energy and projects with lawfirm Norton Rose Fulbright. She wasinvolved in advising Masen, the govern-ment agency behind the venture, on the

tendering process, which gave it tightcontrol over all aspects of the pro-gramme and allowed it to keep costsdown.

Masen was able to use funds bor-rowed by the government from multi-lateral agencies and banks and thenlend the money on to the project com-pany. “It was the first IPP [independentpower producer] where the bidderswere meant to bid fully-financed. So thewinning bidder was accessing thefinancing, which is a total disruption,”MsLapierresays.

Through Masen, the government alsobecame a minority shareholder in allthe project structures. “We had to sim-plify things as much as possible. Themost complicated things can be realisedif they are simplified,” Mustapha Bakk-oury, head of Masen, told the FT aheadofNoor1’s launchearlier thisyear.

After a restructuring last year, Masenis now responsible for the developmentof all Morocco’s renewables. It also hasthecapacityto investabroad.

Other countries, particularly in sub-Saharan Africa, have shown an interestin the country’s approach and Ms Lapi-erre believes the Noor funding anddevelopment model could work as atemplate for futurerenewableprojects.

Venue blazes solar power trailRolemodelsThe host ofthe global talks hasemerged as a pioneer inrenewables and funding,says Siona Jenkins

Rays of hope: the Noor 1 solar power plant in central Morocco —Fadel Senna/AFP/Getty Images

‘We have a low price inrenewables, we haveindustrial integration,andwe have job creation’

Thursday 10 November 2016 ★ FINANCIAL TIMES 5

Morocco&COP 22Managing Climate Change

W hat is it about Spanish-speaking women intheir fifties and climatechange?

For the past six years,theUN’stopclimateofficialhasbeenthefeisty Costa Rican, Christiana Figueres,a driving force behind the successfuladoption of the Paris agreement lastDecember.

When she decided to leave after herterm ended in July, the UN chose toreplace her with Patricia Espinosa, aformer foreign minister of Mexico andanaltogetherdifferent typeofdiplomat.

Ms Espinosa has had a foreign servicecareer spanning 35 years and was livingin Berlin as Mexico's ambassador toGermany when the news came throughthat she had been selected to replace Ms Figueres.

“I was very happy,” she says, but there

was no wild celebration to mark thenews, just a quiet night with her daugh-ter and husband, a businessman. “Wehad a nice dinner,” she says, concedingsomechampagnehadbeeninvolved.

Her appointment meant a shift fromBerlin to Bonn, home of the UN's cli-mate secretariat, and a busy workagenda now that the Paris agreementhas reached the threshold for comingintoforcemuchearlier thanexpected.

The secretariat has been partlyshaped by the last international climatetreaty, the 1997 Kyoto protocol, whichrequired only a relatively small group ofwealthycountries tocutemissions.

Now all countries are obliged todeliver some sort of climate plan underthe Paris accord, which Ms Espinosasays will entail changes for the way thesecretariatoperates.

“Yes absolutely, we need to makesome adjustments,” she says. There willbe a lot more focus on supporting“action on the ground”, she adds,though the basic structure of the organi-sationwill remain intact.

Ms Espinosa is an experienced diplo-mat but she has a lower public profilethan Ms Figueres, who took on the jobshortly after the disastrous failure of the2009climatesummit inCopenhagen.

When Ms Figueres was asked at herfirst press conference if she thought aglobal climate deal was possible, sherepliedabruptly:“Not inmylifetime.”

It is hard to imagine Patricia Espinosadeliveringsuchabluntassessment.

“She’s very calm, very under control,”says Laurence Tubiana, France’s envoyto the COP 21 meeting that delivered theParis accord and a veteran of climate

negotiations. “She’s not an outspokencampaigner.”

That is likely to stand her in goodstead now that the Paris agreement hasbeen sealed, says Ms Tubiana, becausethere needs to be a firm focus on ensur-ing it isproperly implemented.

Ms Espinosa has spent relatively littletime in UN climate negotiations, thoughthe experience she has had was impor-tant. Mexico hosted the first UN talksafter the failure of Copenhagen and MsEspinosa, then foreign minister, chairedthe two-week talks that were held inCancúnin2010.

Against tradition, she held negotia-tions on Sundays, speeding up the oftentardy process, and gavelled down pro-tests from Bolivia that threatened toderail the final agreement. “I also took alot of care in providing in Cancún a goodatmosphere so that people were alsopersonally feeling comfortable,” shesays.

She is familiar with the inner work-ings of the UN, having spent time closeto the organisation at various points ofher career, including a stint in Mexico'smission to the UN in Geneva, where sheworkedoneconomic issues.

She says her work as a Mexicandiplomat on multilateral agreements

covering issues such as drug traffickinghas given her a good understanding ofhowtooperate incomplexnegotiations.

That experience could be importantwhen it comes to helping steer climatetalksstarting inMarrakeshthisweek.

The Paris agreement says decisions ona raft of rules governing its implementa-tionshouldbetakenbyabodyknownbythe unwieldy name of the Conference ofthe Parties serving as the Meeting of theParties to the Paris Agreement (orCMA).

However, the agreement was notexpected to enter into force as quicklyas it did. So, although the CMA will meetin Marrakesh, it cannot make decisionswithout excluding dozens of countriesthathaveyet toratify thedeal.

It is therefore expected that this gov-erning body will meet but then be sus-pended until at least 2018, leaving coun-tries to bicker over rules but take noconcretedecisionsto finalise them.

Ms Espinosa is not fazed by the pros-pectofsuchanoutcome.

“The holding of the first CMA willmark really this very unprecedentedprogress towards this low carbon transi-tion at the global level,” she says. “Thatin itself will be in my view a very signifi-cantmoment.”

UN climate chief takes softly, softly approachDiplomacyMexico’s PatriciaEspinosamust buildon the legacy of herpredecessor, writesPilita Clark

Handover: Patricia Espinosa (left) and predecessor Christiana Figueres —AFP/Getty

about the rules guiding exactly what isin these updated plans. The first batch,made ahead of the COP21 meeting inParis, would still put the world oncourse for at least 2.9C of warming thiscentury, theUNsaid lastweek.

Collectively, these plans amount to ahotchpotch of pledges, from buildingwind farms to planting trees, with anarray of different targets for bringingdownemissions.

The US, for instance, has proposed anemissions cut of up to 28 per cent on2005 levels by 2025, while the EU isplanning a 40 per cent cut from 1990levels by 2030. China has no goal for anoutright cut at all, but instead says itsemissionswillpeakby2030.

The Paris accord stipulates that a newgoverning body for the agreementshould decide “at its first session” onrules for common timeframes in cli-mate plans and other measures makingit easier to compare each country’sactions. That includes more commonstandards for reporting greenhouse gasemissions in a timely and accurate fash-ion, for instance.

The EU, the US and other developedcountries have generally submittedemissions data to the UN for at least theyear 2013. But some of China’s latest fig-ures date back to 2005 while those of othercountriesare fromthe1990s.

Poorer countries also want to seemore transparent reporting of thefinancing commitments wealthiernations have pledged to deliver to helptackleglobalwarming.

Because the agreement is coming intoforce unexpectedly early, its new gov-erning body can technically hold its firstsession in Marrakesh. But dozens ofcountries have yet to formally ratify thedeal, meaning they cannot take part intheearlyshapingofanydecisions.

As a result, it is expected the newbody will convene and then be sus-pended, leaving time for more countriesto join.

At a minimum, many governmentswant the Marrakesh meeting to set adeadline of 2018 for agreeing on the“rulebook”neededfor theParisaccord.

That still makes the meeting impor-tant for investors, says Zoe Knight,managing director for climate change atHSBC.

“More clarity on how the aims set outin country plans will be measured andmonitored allows a more effective cli-materiskassessment,”shesays.

More than 600 companies have

Continued frompage1

already said they expect to change theirstrategy as a result of the Paris agree-ment’s adoption, says Paul Simpson,chief executive of the Carbon DisclosureProject, a non-profit body that compilescompany environmental data for hun-dreds of investors. Some plan to adoptan internalcarbonprice;otherssaytheywill use more renewable energy. Butcorporations will still be watchingclosely to see how countries implementthe agreement’s rules, as will climatescientists.

Temperatures have already risennearly 1C since the industrial revolu-tion, following a fossil-fuelled boom incarbon dioxide emissions, and some sci-entists think the goal of limiting the riseto2Cwillbehardtomeet, letalone1.5C.

Average global CO2 levels in theatmosphere reached 400 parts per mil-lion in 2015 and surged to new recordsthis year on the back of a powerful ElNiño weather system that is likely tomake2016thewarmestyearonrecord.

Experts at Oxford university held aconference inSeptembertoconsider theParis agreement’s 1.5C goal. Someattendeeshadsoberingviews.

“The very first year at 1.5C could be inabout 10 years time if we happen to getan extra warm year on top of the long-term warming trend, like we had withthe recent El Niño event,” said ProfessorRichard Betts, head of climate impactsat the Met Office Hadley Centre in theUK. The prospect of hitting this thresh-old so soon illustrates the challenges ofmeetingtheParisdeal’s targets.

The good news is that there has been“remarkable” progress in the growth ofrenewable energy alternatives to fossilfuels, saysAndrewSteer, chiefexecutiveof the World Resources InstituteresearchgroupintheUS.

The International Energy Agencyrecently reported a record-breakingnumber of installations of wind andsolar power last year that has led torenewables overtaking coal to becomethe world’s largest source of installedpowercapacity.

“We’ve got a lot to be enthusiasticabout,” Mr Steer says. But there is noroom for complacency, he adds. “We arestill a long, long way off from getting towhereweneedtoget to.”

Pressure risesto maintainmomentuminMarrakesh

TheParis agreement hasreached the threshold forcoming into forcemuchearlier than expected

ContributorsPilita ClarkEnvironment correspondent

Andrew WardEnergy editor

Siona JenkinsCurated content writer and editor

Michael KavanaghCommissioning editor

Steven BirdDesigner

Alan KnoxPicture editor

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Commuters add to carbon emissions

6 ★ FINANCIAL TIMES Thursday 10 November 2016