British Embassy Tokyo Seminar Aligning business to a low-carbon world: Leadership, strategy and change 30 June 2016

Paris Agreement: From Low Carbon to Decarbonization

Kentaro Tamura, PhDLeader, Climate and Energy AreaInstitute for Global Environmental Strategies (IGES)

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Paris Agreement

To achieve the temperature goal (Art.4)

Global peaking of GHG emissions as soon as possible A balance between anthropogenic emissions by sources and removals

by sinks of GHG in the second half of this century

Long-term temperature goal (Art. 2):

• Holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels

→Net zero = Decarbonization= Transformation

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What Does the 2/1.5°C Goal Mean?: Carbon Budget (1)

Cumulative total anthropogenic CO2 emissions from 1870 (GtC)

Tem

pera

ture

ano

mal

y re

lativ

e to

186

1-18

80

(deg

rees

C)

Cumulative total anthropogenic CO2 emissions from 1870 (GtCO2)

Cumulative total emissions of CO2

and global temperature response are approximately linearly related.

Source：IPCC AR5

790 GtC

515GtC was already emitted by 2011.

Carbon budget of 790GtC (2900GtCO2) is determined. The remaining carbon budget is 275GtC (1010GtCO2).

Two key messages:

The more we emit, the higher temperature is. = Net zero emission is inevitable, if we

want to stabilize the global warming at any level!

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What Does the 2/1.5°C Goal Mean?: Carbon Budget (2)

1010

The remaining 2˚C budget is much smaller than the total emissions from fossil fuel reserves.→Majority of fossil fuel reserves, in particular coal, should remain under

ground.

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Gap between • Emission path

consistency with the “well below 2℃”

• Emission levels under the current “intended nationally determined contribution (INDCs)

“Ratchet-up mechanism” to fill the GAP under the Paris Agreement

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Key Timeline prior to the Paris Agreement

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Now 2017 2018 2019 2020

• Facilitative Dialogue (“Mini” global stocktake)

• IPCC 1.5˚C Report

• Parties with 2025-timeframe INDC are to communicate new NDCs by 2020.

• Parties with 2030-timeframe INDC are requested to communicate or update 2030 NDCs by 2020.

• All Parties are requested to communicate their long-term low emission strategies by 2020.

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• U.S.-Canada Joint Statement on Climate, Energy, and Arctic Leadership (10 Feb 2016) “As we implement our respective INDCs, the leaders also commit to, in 2016, completing mid-century, long-term low greenhouse gas emission development strategies pursuant to the Paris Paris Agreement and encouraging this approach with members of the G-20”.

• U.S.-China Joint Presidential Statement on Climate Change (Sep. 25, 2015) “The United States and China underscore the importance of formulating and making available mid-century strategies for the transition to low-carbon economies, mindful of the below 2 degree C global temperature goal”.

Linking Short-term NDCs and Long-term Strategies

Origin and Recent Development

How will the US formulate its long-term low GHG emission development strategy and link the strategy with its successive NDC (2030 emissions reduction target) in a coherent manner?

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0

200

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1,200

1,400

1,60019

9019

9219

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9820

0020

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2020

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50

mill

ion

ton-

CO2e

3.8% reduction in 2020(against 2005)

80% reduction in 2050 (Base year is not specified)

26% reduction in 2030 (against 2013)

Global Warming Measures Plan • 2020 target• 2030 target • 2050 aspirational goal

Discussion about long-term vision for achieving 80% reduction will start under METI and MOEJ in parallel.

Basis for long-term low GHG emission development strategy

Japan’s GHG Emissions Trends and Short/Mid/Long-term Targets/Goal

Can it be used for updating of the 2030 target in 2020?

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Impacts of Thermal Power Plant Plans in Japan

[Mid-term]• Full construction of the current coal- and gas-fired power plants makes it impossible to meet the INDC assumption, unless

coal-fired and gas-fired plant utilization rates go down to 56% and 43%, respectively.• Otherwise, power companies have to make coordination among themselves to retire some of their thermal plants under

the voluntary framework. Is this really possible?

Source: Kuriyama and Tamura 2016

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Impacts of Thermal Power Plant Plans in Japan

[Long-term]• Lock-in effects are obvious. Amounting to 60%-66% of the Japan’s total emissions in case of 80%

reduction in 2050!

Source: Kuriyama and Tamura 2016

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Knowledge available from Scenario Analysis:Deep Decarbonization Pathways Project (DDPP)

Case Study of Japan was implemented by:• National Institute for Environmental Studies (NIES);• Mizuho Information & Research Institute, Inc. (MHIR); • Institute for Global Environmental Strategies (IGES)

• Decarbonization trajectories of world’s 16 highest emitting economies are developed;

• A common approach is applied (known as backcasting), which uses the 2050 goal as a starting point;

• Common tools are used to ensure transparency of the working hypotheses, including in sectors and technologies.

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Mixed Scenario Large-scale energy demand reduction by end users Decarbonization of power generation through a massive

deployment of CCS.

No-Nuclear Scenario A complete phase-out of nuclear power by 2050 (compared

with a remaining 5% share in the Mixed Scenario) Additional deployment of renewable energy and natural gas

equipped with CCS.

Limited CCS Scenario Limitations on CCS deployment A substantial increase of renewable energy, particularly solar

solar PV and wind power

In all scenarios, energy-related CO2

emissions decrease more than 80% by 2050 from 2010 levels.

Deep Decarbonization Pathways in Japan

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Three pillars of transformation Improvement in energy efficiency and conservation Electrification Decarbonization of electrification

Deep Decarbonization Pathways in Japan

Mixed Scenario

No-nuclear Scenario

Limited CCS Scenario

= Common to other 15 countries

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Economic impacts (Average investment and energy saving for three scenarios)

Source: SDSN and IDDRI (2015) Pathway to deep decarbonization in Japan

• Mid-term period: Investment > Energy saving • Long-term period: Investment ≒ Energy saving • “Investment” rather than “cost”

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Economic impacts (Average investments by sector )

Source: SDSN and IDDRI (2015) Pathway to deep decarbonization in Japan

• Major investment for mid-term period : Energy transformation (e.g. renewable energies) • Major investment for long-term period: Energy transformation and transport (EV and FCV)

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Transformation is inevitable. “Transformation always creates winners and losers. Those who doe not change will be losers.”

Royal DSM CEO at Dialogues on De-carbonized Economy in Paris COP21 Need to develop long-term business strategy for decarbonization, and act now!

Policy framework to create enabling environments is necessary. To make business to take risks posed by climate change in their operation more seriously, and

to capture emerging opportunities in decarbonisation more proactively

To avoid “carbon lock-in”

Public acceptance of decarbonization pathways needs to be promoted. Inclusive multi-stakeholder engagement process

Conclusion

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Mixed ScenarioThe long-term GHG emission reduction target is achieved by large-scale energy demand reduction by end users and decarbonization of power generation through a massive deployment of CCS.

OtherGeothermalBiomassSolar

Wind

HydroNuclear

Natural gasCoal w CCSCoal

Natural gas

Natural gas w/CCS

2010 2030 20502020 2040

Final elec.

Solid biomass

Pipeline gasLiquid fuelsCoal w CCSCoal

Final elec.District heating

Solar thermal

Pipeline gas

Liquid fossil

Hydrogen

Grid electricity Biofuel

Pipeline gas

Liquid fossil

Coal2010 2030 2050 2010 2030 2050 2010 2030 2050

Source: SDSN and IDDRI (2015) Pathway to deep decarbonization in Japan

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No-Nuclear ScenarioA complete phase-out of nuclear power by 2050 (compared with a remaining 5% share in the Mixed Scenario). In this scenario, an 80% emission reduction in 2050 is still feasible with additional deployment of renewable energy and natural gas equipped with CCS.

OtherGeothermal

Biomass

Solar

Wind

Hydro

Nuclear

Natural gas

Coal w CCS

Coal

Natural gas w/CCS

2010 2030 20502020 2040

Final elec.Solid biomass

Pipeline gasLiquid fuelsCoal w CCSCoal

Final elec.District heating

Solar thermal

Pipeline gas

Liquid fossil

Hydrogen

Grid electricity Biofuel

Pipeline gas

Liquid fossil

Coal2010 2030 2050 2010 2030 2050 2010 2030 2050

Source: SDSN and IDDRI (2015) Pathway to deep decarbonization in Japan

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Limited CCS ScenarioTo achieve the long-term emission-reduction target through a substantial increase of renewable energy, particularly solar PV and wind power.

OtherGeothermal

Biomass

Solar

Wind

HydroNuclearNatural gas w/CCSNatural gasCoal w CCSCoal

2010 2030 20502020 2040

Final elec.

Solid biomass

Pipeline gasLiquid fuelsCoal w CCSCoal

Final elec.District heating

Solar thermal

Pipeline gas

Liquid fossil

Hydrogen

Grid electricity Biofuel

Pipeline gas

Liquid fossil2010 2030 2050 2010 2030 2050 2010 2030 2050

Source: SDSN and IDDRI (2015) Pathway to deep decarbonization in Japan