By HENRY OWINO (Senior Correspondent)
The year 2020 is crucial as countries must submit their updated Nationally Determined Contributions (NDCs). So far vulnerable countries have set the pace under the Climate Ambition Alliance, launched by the Chilean COP President at the UN Climate Action Summit in September 2019.
At least 59 countries have signaled their intention to submit an enhanced NDC by 2020. Pressure is increasing on major emitters to follow their lead and step up their ambition in 2020. While there have been positive signals in this regard, for instance, from the EU, China and India, South Africa is the only G20 country that has made a statement on enhancing its NDC by the end of 2020.
Those countries represent only about 8% of global emissions, including many of those most vulnerable to the impacts of climate change. Pressure is increasing on major emitters, to follow their lead and step up their ambition i n 2 020. While there have been positive signals in this regard, for instance, from the EU, China and India, South Africa i s t he only G 20 country that has made a statement on enhancing its NDC by the end of 2020.3
Next to enhanced mitigation ambition, it is equally important that governments address the existing finance gap in order to provide adequate support for climate action and resilience in countries at risk. Developed countries need to increase public finance commitments to meet the US$100 billion goal by and annually after 2020.
However, global climate action is characterized by opposing trends. Increasing pressure from civil society, backed by scientists, and promising technological developments (such as continued declining costs of renewable energy technologies; advanced storage solutions; and rapid growth in electric mobility), along with important signs of reform of the financial markets all constitute positive dynamics for the transformational change needed to face the global climate crisis.
While political progress is also visible in some parts of the world, but the resistance of some major economies to implementing the Paris Agreement and vested fossil fuel interests are slowing down the transition towards net-zero emission economies. As current commitments are far short of setting the world on track to keep global warming to 1.5°C, higher ambition and faster action are needed.
With increasing impacts of delayed climate action unfolding, political decision-makers need courage to address the climate crisis, build upon positive dynamics and push ahead with transformational change in a new wave of political momentum.
Magnitude of Global Climate Crisis
More events clearly show that climate-related risks are heavily impacting the most vulnerable countries. In many parts of the world, the impacts of climate change are not only expected, but are being felt. The unfolding impacts of 1°C of global warming observed in 2019 emphasize the urgency required to act and underline the message of the IPCC 1 .5°C Special Report that every tenth of a degree matters when it comes to conserving a liveable climate.
Many scientists are concerned about the risk of crossing tipping points, such as albedo change in Greenland and Antarctica and the melting permafrost, which might amplify temperature rises.
The year 2019 has seen an increasing severity of extreme weather events – Cyclone Idai devastating large parts of Mozambique in March, a record-breaking heat wave in India during May and June, and the destructive bushfires in Australia as a pre-summer heat wave hits the country. The climate crisis is also increasingly a security risk amplifier, disproportionally affecting those most vulnerable and least responsible for it.
At the Munich Security Conference in February 2019, climate security for the first time appeared prominently on the main agenda, showing increased awareness of the magnitude of humanitarian risks posed by the global climate crisis.
Change is coming: The ending economic viability of (conventional) fossil fuels
Changing energy economics underline that the shift to renewable energy makes sense, not only for the climate, but also for economies. The International Energy Agency’s (IEA) Renewables 2019 market forecast anticipates a 5 0% increase in renewable energy power capacity between 2019 and 2024 mainly driven by continuing cost reductions of renewable energy.
In many regions of the world the coal cost crossover, whereby renewable energy is becoming less costly than coal has been reached. For the US, analysis shows that about 74% of all coal-fired plants are producing electricity at higher costs than if they were replaced with renewable energy and this will increase even further to 86% of coal-fired plants by 2025.
Between 2011 and 2016, US coal companies lost more than 90% of their market value (from US$33 billion to US$150 million). Increased competition from renewables is one of the driving forces behind the retirement of coal-fired power plants. Between 2010 and the first quarter of 2019, US power companies announced the retirement of coal-fired power units with a total generation capacity of 102 gigawatts (GW).
In China, contradictory trends are observed: Although the increasing presence of renewable electricity in the system is challenging the profitability of existing coal power stations, across the country 148GW of coal-fired power plants, equivalent to the EU’s entire generation capacity, are currently under construction or likely to be revived.
For Japan, the undermined economic viability of coal puts US$71 billion of coal assets at risk, as off- and on-shore wind as well as solar photovoltaic could be cheaper than new and existing coal-fired power plants.
In the EU, 79% of coal generators are running at a loss, down about €6.6 billion in 2019 alone. The unviability of new coal power plants becomes even more pronounced with an increasing number of global insurers refusing to provide insurance for fossil fuel infrastructure including new coal projects and also oils sands.
While changing energy economics have as yet had a lesser effect on the oil sector, initial signs are of the declining market capitalization of big oil companies. In August 2019, ExxonMobil, one of the largest companies, for the first time was not listed among the top ten largest companies in the Standard & Poor’s stock market index.
Politics have a major role to play in further changing economics and moving away from fossil fuel production. The findings of the fossil fuel Production Gap Report underline the need for governments to manage the phase-out of fossil fuels.
Currently, countries are on target to extract 120% more oil, gas and coal in 2030 than is compatible with limiting warming to 1.5°C. At the same time, the IEA sees the possibility for a trend where renewable energy provides more than half of total electricity generation by 2040.
