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Download 2017-03-27 Climate Citizens Lobby v2
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FACING CLIMATE CHANGE March 27, 2017 Citizens’ Climate Lobby Nancy Palardy, Senior Manager Climate Change Overview 1: Who is the ECO? 2. Why we are so passionate about climate change 3. What Ontario is doing 2 Who is the ECO? • Independent Officer of the Legislative Assembly • Guardian of the Environmental Bill of Rights, 1993 • Watchdog on: • Greenhouse gas emissions in Ontario • Energy conservation • Environmental protection 3 Reports on Various Issues ENERGY CONSERVATION CLIMATE ENVIRONMENT 4 Why are we so passionate about climate change 5 Your colleagues may know • 97% of climate scientists agree: • Climate change is: • Human-caused • Serious • Caused mostly by greenhouse gases in the atmosphere that keep solar heat from escaping • Primary GHG is CO2 from fossil fuels • Real 6 But do they know? • Climate change is: • • • • Here now and moving fast (last 12 months are “off the charts”) $ Trillions financial opportunity and threat Immense impact on environment and people Huge implications for Ontario infrastructure and economy • We’re running out of time 7 Highest ever CO2 emissions On our watch: 2015 emissions 63% higher than 1990 8 Source: Global Carbon Project, Carbon Budget 2016 Where does the CO2 go? (2006-2015) 16.4 GtCO2/yr 44% 34.1 GtCO2/yr 91% Sources = Sinks 31% 11.6 GtCO2/yr 9% 3.5 GtCO2/yr 26% 9.7 GtCO2/yr Source: CDIAC; NOAA-ESRL; Houghton et al 2012; Giglio et al 2013; Le Quéré et al 2016; Global Carbon Budget 2016 9 Highest Air CO2 in (Human) History • Humans until 1750 • 1750 • 1860 • 1988 • 2016 180 - 280 278 280 350 406 ppm • Now permanently above 400 ppm • Trapping extra heat Source: National Oceanic and Atmospheric Administration, Trends in Atmospheric Carbon Dioxide at Mauna Loa Observatory (full record), 2016. 10 Not just CO2 • ~50% more heat than CO2 alone • Methane • Nitrous oxide • Refrigerants 11 Source: National Oceanic and Atmospheric Administration, The NOAA Annual Greenhouse Gas Index (AGGI), 2016. Highest temperatures in human history 12 Only 1% of the Heat in the Air Source: National Aeronautics and Space Administration, Earth Observatory: 2010 Features – Global Warming, 2010. 13 93% of the Extra Heat is in Oceans, Lakes Warmer water takes up more space Source: BBC, Behaviour of matter: Expansion and contraction, 2014. Source: Intergovernmental Panel on Climate Change, Chapter 3: Observations: Oceans in Climate Change 2013: The Physical Science Basis (contribution of Working Group 1 to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change), 2013. 14 4% of the Heat to Ice 15 Higher Sea Levels, Wilder Storms 16 20th Century “Normal” is Gone 17 Source: National Oceanic and Atmospheric Administration, Climate Change – Global Temperature More Extreme Temperatures Deviation from mean 1951-1980 climate 18 http://www.columbia.edu/~mhs119/PerceptionsAndDice/ Ontario Warming Faster Than Average • Ontario frost-free season increasing by 1-13 days each decade • Warming differs by region • Latitude, topography, water 19 Source: LAMPS Climate Change Group, Ontario Frost Free Season Changes Analysis Ontario: When, not if • Milder winters • Ice roads, winter sports, snow cover • Wetter springs, faster melts • Hotter, drier summers • Storms, floods, droughts • Forest fire • Invasive species 20 2016 Drought Conditions as of July 31, 2016 21 Catastrophic Insured Losses - Canada Fort McMurray Fire, Windsor Floods Alberta and Toronto Floods Eastern Ice Storm Ontario Wind and Rain Quebec Floods 22 Source: Insurance Bureau of Canada, Lapo Calamai Ontario: When, not if • Health impacts, e.g. more: • Infectious diseases • Extreme weather events • Extreme heat • Poor air quality • Water stress 23 How Much Worse? Depends on Emissions 24 Source: Laboratory of Mathematical Parallel Systems (LAMPS) at York University, Temperature Change for 1900 to 2100 relative to 1986-2005 from AR5 CMIP5 subset, 2016. And they are still growing Source: BP 2016; Jackson et al 2015; Global Carbon Budget 2016 25 What else have we unleashed? • Permafrost • Soil carbon loss • Forest die-back • Ocean current changes • Loss of sea ice • What would a tipping point look like? 26 Global Sea Ice 27 Is it too late? • We are in for big changes • There is still a little time to have an impact on what’s coming • Our choices, right now, matter 28 What is Ontario doing? 29 Ontario is doing so much right Coal power plant closures Price on carbon Climate Change Action Plan Climate Ready update (adaptation) 30 Though still a long way to go 31 Cap and Trade Ready, Set, Go! 32 New Climate Act 250 Ontario GHG Emissions (Mt CO2e) • Carbon pricing to increase fossil fuel costs • Proceeds in Greenhouse Gas Reduction Account spent as per Action Plan • Enshrined targets into law • Reduce GHGs by 80%? Historical 200 Business As Usual 150 100 50 0 1990 Targets 2010 2030 Historical data: http://unfccc.int/national_reports/annex_i_ghg_inventories/national_inventories_submissions/items/9492.php 2050 33 Basic Theory – Polluter Pays • To reduce GHG emissions, we must put a price on them • GHG polluters would emit less if they had to pay for the privilege • For polluters to take action and make investments, they need policy stability and predictability 34 Recommendation: Ontario should follow the UK example and set legally binding carbon budgets well in advance, within which a cap and trade program would operate. 35 Carbon Tax vs Cap and Trade Carbon Tax: Cap and Trade: Gov’t sets price Gov’t sets cap Simpler to understand Lower cost GHG mitigation Faster to implement Doesn’t include the term tax 36 The Cap • Government issues capped number of GHG allowances Allowances Over Time 2.5 • Permits to pollute • Emitters must submit allowances to match emissions • Cap drops with time • Allowances become scarce, price rises • It becomes cheaper for emitters to reduce emissions than to buy allowances Price 2 1.5 Availability 1 $ $$ 0.5 0 Present Future 37 The Trades • How? Emitters buy or sell allowances or offsets in secondary market • Result? Lower economic cost for GHG reductions Excess Emissions Allowances Emissions • Some can reduce GHGs at lower cost than others • For high cost emitters, more affordable to pay others to reduce GHGs Excess Reductions Emissions Credit $ Emitter A Adapted from: http://wpmedia.ottawacitizen.com/2015/07/0725_cap_and_trade.jpg?quality=55&strip=all Emitter B 38 Cap and Trade Design Issues How high is the cap? How fast does the cap drop? Who needs allowances? Who must pay for them? Competitiveness and carbon leakage Stability and predictability Cost and fairness Linking 39 Key Evaluation Metrics? GHG emission reductions Economic efficiency/cost-effectiveness Market functioning Carbon leakage 40 Who Needs Allowances? Needs Allowances, Costs Passed on to Customers 100 Mt Liquid Fuel and Natural Gas Distributors Needs Own Allowances 40 Mt 80% Industry Does Not Need Allowances 31 Mt Agriculture & Waste 41 Who Pays, Who Doesn’t? >90% Free Allowances until 2020 Pays for Allowances Indirectly 100 Mt Liquid Fuel and Natural Gas Distributors 40 Mt 80% Industry Does Not Need Allowances 31 Mt Agriculture & Waste 42 Recommendation: Ontario should be more transparent about which entities are receiving free allowances, and why. 43 Ontario’s Design Choices Ontario’s cap and trade system is: • Reasonable • Appropriate for our economy Challenges: • It is complicated • It will take time to work • Needs longer-term certainty 44 Linking with California and Quebec Benefits • Cheaper for emitters (us) • Reduce carbon leakage • Market functioning Bigger, more liquid market Lower, more stable prices Consequences • Temporary outflow of Ontario cash: • $250+ million to California? • $250+ million less fossil fuel imports? • Lock in reliance on imported allowances? Lower prices Less GGRA, Action Plan funding In first years, Ontario emitters may find it cheaper to buy allowances / credits from California than to reduce emissions in Ontario 45 But can we count on California? • California’s program faces legal challenges • Litigation • 2016 May/August Auction failures • Reauthorization after 2020 • Won’t get benefit from federal Clean Power Plan 46 Recommendation: Ontario needs a contingency plan for the possibility that California’s cap and trade program may not continue to operate in its present form, and/or may not be reauthorized after 2020. 47 Offsets – Major Potential • Possible Offsets, e.g.: • • • • • • • • Ontario Emitters within Cap • Competitive? Offset Credits Emitters Outside Ontario Mine methane Landfill gas ODS / refrigerants N2O / fertilizer Forest / afforestation Urban forests Livestock Conservation cropping… Ontario Emitters Outside Cap • If so, can keep money and GHG reductions in Ontario • Maximum? • 8% of emissions (not cap) • 11.4 Mt in 2020 48 Adapted from: https://openknowledge.worldbank.org/bitstream/handle/10986/23874/ETP.pdf?sequence=11&isAllowed=y Recommendation: The government must prioritize the approval of offset protocols to enable the creation of a timely and ample supply of high quality Ontario offsets. 49 What will it cost if you change nothing? 50 http://www.enviroeconomics.org/single-post/2016/05/17/Impact-Modelling-and-Analysis-ofOntario%E2%80%99s-Proposed-Cap-and-Trade-Program Spending the Money Greenhouse Gas Reduction Account 51 Greenhouse Gas Reduction Account • $1.8 billion per year? • Mostly from everyone who buys petroleum products and natural gas • Limited impact to Large Final Emitters and electricity sector (90% fossil free) $ Emission allowance auction $ Dividend $ Greenhouse Gas Reduction Account Ontario Consolidated Revenue Fund $ Initiatives “that are reasonably likely to reduce, or support the reduction of, greenhouse gases” or for related government expenditures Climate Change Action Plan? 52 Climate Change Action Plan 53 5 Year “Action Plan” • More of a direction than a plan • No precision in the numbers • Compromise document • After 44 drafts, several leaks • Details being worked out after 54 Good Ideas That Will Take Time • Land use and transit • Green bank • Cleantech companies • Reductions: • When? • Where? • How big? 55 Big Claims for 2020 • Subsidizing the Global Adjustment – 3 Mt • Per ECO - no plausible additional reductions -Not Plausible • Renewable fuel regulation – 2 Mt • Per ECO - plausible, requires careful regulation of environmental effects • Could have high per tonne cost • Industrial transformation - 2.5 Mt • Per ECO - no clear mechanism; cannot quantify 56 Compliance Gap 30 25 Mt CO2eq 20 Other Action Plan Cap and Trade 15 10 How will Ontario meet the 2020 target? • Reductions? • Offsets? • California allowances? • Early reduction credits? 5 0 Compliance Gap 57 After Action Plan: Still lots to do • Mitigation • How to build a low-carbon economy? • Adaptation • What will make Ontario resilient? • Many risks, opportunities and co-benefits 58 Knowledge + Action = Hope No one can do everything, but everyone can do something 59 Lots of Progress • Encouraging international, national, and provincial progress • Paris Agreement – came into in force on November 4, 2016 • Kigali Amendment to Montreal Protocol – hydrofluorocarbons • Carbon Offsetting and Reduction Scheme for International Aviation • Pan-Canadian Framework • Despite U.S. election and recent news… 60 What Can I Do? • Climate cannot be left entirely up to government Reduce your carbon footprint (food, transportation, building, travel) Get ready to adapt Speak up and speak out (both to politicians and friends) Put your money where your mouth is (consumption and investments) • It’s not too late 61 Questions? Download the Facing Climate Change report and the Introduction to Cap and Trade in Ontario document: eco.on.ca Contact us: [email protected] 62