Copyright of Royal Dutch Shell plc 112 / 2010

Structural Approaches to

Emissions Mitigation and the

Role of Business

David HoneSenior Climate Change Adviser

Group CO2

June 2011

A policy framework to consider

B CA

Abatement

MTonne CO2e

Carbon price policy drives project implementation

from left to right across the abatement curve

Cost of abatement

€ / tonne CO2e

Large scale abatement within the

electricity sector, transport fuels

and some areas of industry. Needs

a carbon price to drive deployment.

Energy efficiency measures,

land use practices - primarily

driven by standards and

regulation.

Higher cost technologies

still moving down the cost

curve. Needs a carbon price

with additional support.

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The Developing Global FrameworkGeneral overview

Medium / long-term

reduction

Developed

Country

reduction

targets

Developing

country

NAMAs

CDM /

improved

CDM

Other market

mechanisms

-Bilateral

-Green bond

-REDD+

Green

Climate Fund

Technology

Mechanism

Measurement, reporting & verification

Carbon price

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The Development of CCS in the EUGeneral overview

CCS plays a role in

reducing EU emissions

EU wants to

see CCS as

a core

technology

option by

2020

EU-ETS and

CDM / JI

Other pricing

mechanisms,

e.g. FQD

NER-300

Technology

learning and

knowledge

sharing

CCS legal framework / CCS Directive

Carbon price

Business and Government working together on CCS

Founded in 2005, the European Technology Platform for Zero Emission Fossil Fuel

Power Plants (ZEP) is a unique coalition of stakeholders united in their support for

CCS as a key technology for reducing emissions. ZEP serves as advisor to the

European Commission on the research, demonstration and deployment of CCS.

2 Government, 27 Companies,

2 NGOs, 7 Academia / R&D

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South African convened NDP, through which

business, academia and civil society acts to

advise government

The NAMA Development Platform(South African Example)

CDM / improved

CDM

Other market

mechanisms

• Bilateral

• Green bond

• REDD+

Green Climate

Fund

Technology

Mechanism

South Africa CCS

NAMA: By 2020

store 15 million tpa

of CO2 from coal

use.

Will require a

flow a CERs

via the CDM

May need a

carbon bond

structure to

underpin

projects

Will require

technology

choices and

access

Will need

additional

funding

from the

GCF

Copyright of Royal Dutch Shell plc 12 / 2010 7