Wednesday, November 7, 2018

‘Peak emissions’ prove elusive

CO2 discharges from energy have turned up again

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By Wai-Shin Chan

Head, Climate Change Centre of Excellence

A 1.4% rise in greenhouse-gas energy emissions last year reverses the recent flat trend. It increases the tensions between countries’ policies for slowing global warming and meeting the Paris Agreement target of limiting temperature rises to 2°C.

Energy-based carbon-dioxide emissions reached a new high in 2017, according to the International Energy Association’s ‘Global Energy & CO2 Status Report’. Energy discharges, which account for around three-fifths of global greenhouse-gas emissions, had remained broadly flat since 2014 but rose 1.4% last year.

So the hope that ‘peak emissions’ had been achieved in recent years has proved false.

In our view, as the impacts of climate-change become clearer and the jaws of the ‘emissions gap’ widen slightly, the tension will only increase between the adequacy of countries’ policies and pledges, and those required to limit warming to 2°C, as demanded by the Paris Agreement on climate change.

According to the International Energy Association, demand for fossil fuels increased – driven by coal-fired power generation, oil in transport and petrochemicals, plus demand for gas resulting from coal-to gas switching.

Renewable power grew fastest of all energy sources – comprising a quarter of energy demand growth as well as a quarter of electricity generation. However, the resultant emissions rise outweighed efforts from decarbonisation and energy efficiency, where annual gains were the weakest since 2011 because of slower interventions from new policy.

Many countries are in the midst of preparing the ‘mid-century, long-term low greenhouse-gas emissions development strategies’ that are due by 2020. However the task of balancing appropriate levels of climate ambition over increasingly urgent timeframes is not easy.

We think governments will face even stronger calls to raise ambition levels and enact tougher policies more quickly as more non-state actors – including cities, provinces, business and civil society - step up their climate action.

Meanwhile, the “global peaking of greenhouse-gas emissions as soon as possible” demanded by the 197 parties that adopted the agreement negotiated in Paris in December 2015 remains elusive, even as renewables penetration accelerates.

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The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s) whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Wai-Shin Chan

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