Taking stock of progress to Paris : National emission reduction pledges continue to flow
Some 58% of global emissions are now addressed by Intended Nationally Determined Contributions (INDCs), covering 53 countries, ahead of the December conference to reach a Universal Climate Agreement (UCA). With 4 more country submissions, we are encouraged by the steady momentum towards Paris.
The story so far: INDCs outline national ambition on mitigation, timeframe and whether goals are absolute or relative (e.g to business-as-usual − BAU). The three largest emitters − China, the EU and the US − which accounted for 45% of total global emissions in 2012 (Chart 2), have submitted INDCs which met expectations and thereby support the prospects of an agreement in Paris , in our view. Chart 1 shows the emissions in 2012 of those countries which have submitted INDCs so far, in the order that they were released. Several of these countries (Switzerland, France, Sweden, Iceland and Ethiopia) already have relatively low-carbon power mixes, which means that other sectors − transport, buildings and industry - will also be targeted to deliver the required emissions reductions, in our view. We looked at the potential for the building sector to deliver emission reduction gains in Green buildings and climate (21 July 2015). So far, 10 INDCs have included adaptation as well as mitigation plans (see Table 1) and various countries have set financial requirements, totalling USD110bn.
Latest releases: Macedonia pledged a 30-36% cut from BAU CO2 from fossil fuel combustion by 2030, which implies a 31% increase from a 1990 base year (the year used by many countries, see Table 1). Since the country produces around 80% of its power from coal and is at a relatively early stage in development (GDP per capita was c.USD4,500 in 2012), we think the CO2 aims are meaningful for the global talks. The INDC set out the target areas for improvements across power, buildings and transport.
Trinidad & Tobago pledged a 30% reduction in GHG's in the transport sector relative to BAU emissions by 2030 versus a baseline of 2013, as well as a conditional aim (though the conditions were not disclosed) of an economy-wide GHG reduction of 15% below BAU. According to the INDC, the funding requirement to deliver the aims is USD2bn, to come partly from domestic sources and partly from international financing through the Green Climate Fund. We expect the 30% goal to be met since the vehicle replacement cycle will likely yield efficiency gains and the reduction aim is on a relative, not absolute, basis.