Download Response to Climate Change: The Paris Agreement and Vancouver

IT.CAN 20th Annual Conference
CleanTech for Technology Lawyers
Richard F.D. Corley
October 24, 2016
Overview
• Response to Climate Change: The Paris Agreement and
Vancouver Declaration
• The clean energy transition (carbon productivity challenge)
• Clean disruption by exponential clean technologies
• New business opportunities in clean energy technologies
• Commercial law implications of the clean energy transition
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Response to Climate Change: The Paris
Agreement and Vancouver Declaration
CO2 levels are now at historically record levels:
See: http://climate.nasa.gov/evidence/
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Response to Climate Change: The Paris
Agreement and Vancouver Declaration
CO2 levels have continued to rise at increasing rates:
See: http://www.saxifrages.org/eco/go61h/Atmospheric_increase_in_CO2_accelerating
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Response to Climate Change: The Paris
Agreement and Vancouver Declaration
• Sources of CO2 by Industry Sector
Source: IPCC Climate Change 2007 Synthesis Report
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Response to Climate Change: The Paris
Agreement and Vancouver Declaration
According to NASA, evidence of climate change includes:
•Global temperature rise
•Warming oceans
•Sea level rise
•Shrinking ice sheets
•Declining Arctic sea ice
•Glacial retreat
•Extreme weather events
•Ocean acidification
•Decreased snow cover
See: http://climate.nasa.gov/evidence/
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Response to Climate Change: The Paris
Agreement and Vancouver Declaration
Climate change is increasingly recognized as the most urgent
existential risk facing human civilization.
See: Op-ed: Climate Change Is the Most Urgent Existential Risk
http://futureoflife.org/2016/07/22/climate-change-is-the-most-urgent-existential-risk/
As stated by the U.S. Department of Defense, in its July 2015 “Response to
Congressional Inquiry on National Security Implications of Climate-Related Risks
and a Changing Climate”:
“… climate change is an urgent and growing threat to our
national security, contributing to increased natural disasters,
refugee flows, and conflicts over basic resources such as food
and water. These impacts are already occurring, and the scope,
scale, and intensity of these impacts are projected to increase
over time.”
See: http://archive.defense.gov/pubs/150724-congressional-report-on-national-implications-of-climatechange.pdf?source=govdelivery
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Response to Climate Change: The Paris
Agreement and Vancouver Declaration
The global unanimity on the necessity of action is reflected in the
unprecedented rapidity with which the Paris Climate Change
Agreement has been ratified and is to come into force in the
coming days. The Paris Climate Change Agreement:
 Is legally binding agreement (coming into force on November 4)
which requires each of the 195 participant countries to set targets,
report on them, and review and improve them every five years.
 Sets out a collective commitment to keep the rise in global
temperatures to “well below” 2 degrees Celsius compared to preindustrial levels, with efforts to limit the rise to 1.5 degrees Celsius.
 Aims to stop growth in global GHG emissions as soon as possible,
and to achieve net carbon neutrality on a global basis after 2050.
 Current Intended Nationally Determined Contribution (INDC)
commitments are inadequate and must be very substantially
strengthened to meet the global temperature commitment agreed to
in Paris.
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Response to Climate Change: The Paris
Agreement and Vancouver Declaration
A temperature increase of 2 degrees C roughly corresponds to:
 450 ppm of CO2; and to
 A global CO2 emissions budget of 3,000 GtCO2.
To date, approximately 2,200 GtCO2 had been emitted:
 Ongoing global emissions amount to about 35 GtCO2 per year.
 Canadians have already emitted about two or three times their total
per capita budget (around 900 to 1,300 Tonnes CO2 per capita).
 Canadians continue to emit, on a per capita basis, more than three
times the global average (around 16 Tonnes of CO2 per year, relative
to the international average of around 5 Tonnes of CO2 per year).
 Global per capita emissions equal to Canadians’ historical emissions
would have already resulted in global emissions in excess of 6,000
GtCO2, an amount expected to result in catastrophic global warming
in excess of 4 degrees C.
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Response to Climate Change: The Paris
Agreement and Vancouver Declaration
The current Canadian INDC:
 Requires Canada country to cut GHG emissions by 30 percent below
2005 levels by 2030.
 Was submitted by the previous Conservative government on May 15,
2015 and has been described by the current Liberal government as a
floor (and not as a ceiling).
 Has been criticized as the weakest INDC in the G7.
 Follows a series of previous Canadian climate change targets
(including under Kyoto) which Canada had not been met.
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Response to Climate Change: The Paris
Agreement and Vancouver Declaration
Changes in GHG emissions relative to 1990:
See: http://www.nationalobserver.com/2016/05/03/analysis/mind-climate-gap-mr-trudeau
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Response to Climate Change: The Paris
Agreement and Vancouver Declaration
The federal government, provinces and territories issued the
Vancouver Declaration on March 3, 2016 to map out the framework
for a pan-Canadian plan to dramatically cut Canadian greenhouse
gas (GHG) emissions. The Vancouver Declaration:
 Envisions the development of a concrete plan to achieve Canada’s
international commitments through a pan-Canadian framework for
clean growth and the transition to a clean growth economy, by
leveraging technology and innovation to:
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Create new jobs;
Develop globally applicable solutions and pursue export opportunities;
Grow our economy while reducing emissions; and
Create a strong and diverse economy.
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The Clean Energy Transition –
The Carbon Productivity Challenge
Canada’s relative carbon productivity:
See: http://www.saxifrages.org/eco/go87h/The_international_race_for_low-carbon_wealth
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The Clean Energy Transition –
The Carbon Productivity Challenge
Canada’s carbon productivity in jobs:
See: http://www.saxifrages.org/eco/go82h/Canadian_Jobs_per_tonne_of_climate_pollution
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The Clean Energy Transition –
The Carbon Productivity Challenge
Technology is required to drive Canadian energy transition:
See: http://www.nationalobserver.com/2016/03/02/analysis/visualizing-canadas-2030-climate-target-show-memoney
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Clean Disruption by Exponential Clean
Technologies
Resource economics (increasing marginal cost):
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Clean Disruption by Exponential Clean
Technologies
Exponential economics (decreasing marginal cost):
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Clean Disruption by Exponential Clean
Technologies
Exponential technologies (solar PV example):
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Clean Disruption by Exponential Clean
Technologies
The industrial era of energy and transportation is giving way to an information technology and knowledgebased energy and transportation era. The combination of bit-based and electron-based technologies will put
an end to conventional atom-based energy and transportation industries. The disruption will be a clean one
and have the following characteristics:
1.Technology-based disruption. The clean disruption is about digital (bit) and clean energy (electron) technologies disrupting
resource-based (atom-based) industries. Clean energy (solar and wind) is free. Clean transportation is electric and uses clean energy
derived from the sun and wind. The key to the disruption of energy lies in the exponential cost and performance improvement of
technologies that convert, manage, store, and share clean energy. The clean disruption is also about software and business model
innovation.
2.Flipping the architecture of energy. Just as the Internet and the cell phone turned the architecture of information upsidedown, the clean disruption will create an energy architecture that is different from the one we know today. The new energy
architecture will be distributed, mobile, intelligent, and participatory. It will overturn the existing energy architecture, which is
centralized, command-and-control oriented, secretive, and extractive. The conventional energy model is about Big Banks financing
Big Energy to build Big Power Plants or refineries in a few selected places. The new architecture is about everyone financing
everyone to build smaller, distributed power plants everywhere.
3.Abundant, cheap, and participatory energy. The clean disruption will be about abundant, cheap, and participatory energy.
The existing energy business model is based on scarcity, depletion, and command-and-control monopolies. The clean disruption is
similar to the information technology revolution that overturned the old publishing and information model and made information
abundant, participatory, and essentially free.
4.Clean disruption is inevitable. The clean disruption of energy and transportation is inevitable when you consider the
exponential cost improvement of disrupting technologies; the creation of new business models; the democratization of generation,
finance, and access; and the exponential market growth.
5.Clean disruption will be swift. It will be over by 2030. Maybe before.
Oil, natural gas (methane), coal, and uranium will simply become obsolete for the purposes of generating
significant amounts of electricity and powering the automobile. These energy sources will still have uses. For
example, uranium will be used to make nuclear weapons and natural gas will be used for cooking and
producing fertilizer. Obsolescence and clean disruption will not put an end to incumbent industries. We still
have vinyl records, sailboats and jukeboxes. These niche market products will survive, but energy and
transportation will not be the multi-trillion dollar energy heavyweights that they are today.
Seba, Tony. Clean Disruption of Energy and Transportation: How Silicon Valley Will Make Oil, Nuclear, Natural Gas, Coal, Electric Utilities and
Conventional Cars Obsolete by 2030 (p. 2). Kindle Edition.
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Clean Disruption by Exponential Clean
Technologies - Examples
 Renewable energy technologies (i.e., solar, wind, biomass, etc.): comprise a
majority of the new power production capacity on a global basis and continue
to fall substantially in price each year.
 Energy storage technologies (i.e., batteries, hydrogen, compressed air,
thermal, etc.): enable the seamless integration of renewable energies as
primary energy sources and the use of electricity for transportation, and other
applications, for which fossil fuels had previously been the only viable option.
 Electric power technologies (including high efficiency electric motors and
heat pump technologies): provide energy efficiencies which are typically a
multiple of those provided by fossil fuels. For example, electric cars are
typically five or six times as energy efficient as gasoline-powered cars and
heat pumps typically provide three or four Watts of heat energy for each Watt
of electrical power that they use.
 Energy management information technologies: enabled by ubiquitous Internet
access, include smart sensors and control devices, big data analytics, and
autonomous control systems. These technologies provide the data, the
analytics and controls required to maximize the efficiency gains and
environmental benefits made possible by renewable energy, storage and
efficient energy conversion technologies.
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Clean Disruption by Exponential Clean
Technologies - Examples
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New business opportunities in clean
energy technologies
• Canada’s cleantech industry is bigger than you think
• It employs more people than the forestry, pharmaceutical or
medical devices industry.
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Commercial Law Implications of the
Clean Energy Transition
• Substantial GHG reductions will require fundamental changes to
the Canadian and global economies, including:
 Adoption of renewable energy technologies in place of carbon-based
(coal, oil, gas) technologies
 Implementation of Smart Grid intelligent power distribution and
management systems
 Replacement of carbon intensive industry processes
 Dramatic changes to forestry and agriculture
 New transportation infrastructure
 Low energy buildings and manufacturing
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Commercial Law Implications of the
Clean Energy Transition
• Rapid economy-wide change, involving fundamental process
changes and re-engineering in all sectors is required
• Massive new investments in technology development and
implementation (globally, multi-trillion dollar investments)
• Infrastructure development and funding
• Technology joint ventures and licensing
• GHG determination, reporting and disclosure functions
• GHG regulation (cap and trade, taxes, etc.)
• Carbon trading markets and exchanges
• Protection of newly developed intellectual property
• Tax and trade issues
• Outsourcing as tool for the low carbon transformation
• Commercial terms to address climate change
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Commercial Law Implications of the
Clean Energy Transition
Role to be Played by Outsourcing
•Requirements for GHG reporting and rapid transformation to
post-carbon processes are emerging challenges for every
organization
•All business processes and activities must be carefully assessed
in terms of GHG emission contributions and then modified to meet
GHG reduction requirements
•The required rate of transformation is vastly greater than any
previous industrial revolution – trial and error will not be fast
enough
•Outsourcing is an efficient vehicle for the development, testing
and widespread dissemination of expertise in new technologies
•There is the opportunity (and necessity) for use of outsourcing to
develop and implement proven best practices to respond to new
regulatory requirements for GHG reporting and reductions
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Commercial Law Implications of the
Clean Energy Transition
Functions Which May be Outsourced
•While the range of functions which organizations may wish to
procure on an outsourced basis to meet GHG reporting and
reduction requirements is unlimited, such functions could
include:
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GHG reporting, management and planning functions
Energy from renewable sources or cogeneration
The retrofit and management of building and facilities
Logistics and the distribution of products
The transformation and operation of industrial processes
Waste management
Travel, and low GHG alternatives to travel
IT and telecommunications (ICT) functions
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Questions?
Richard F.D. Corley
Partner
Goodmans LLP
Direct: 416-597-4197
[email protected]
Richard Corley is a Partner at Goodmans and leads the Outsourcing and Cleantech
practices. He has more than 25 years of experience working closely with technology
companies in Canada. He has acted as lead counsel to major corporations in complex
outsourcing transactions, joint ventures, technology acquisitions and licensing, cleantech
transactions, and in a variety of other technology-related commercial and corporate law
matters. He was recently named a member of Canada’s 2016 Clean50, a program honouring
leaders who are advancing the cause of sustainability in Canada.
Richard is recognized as a leading lawyer in numerous publications including: The Legal
500 Canada - Leading Individual, Technology, Media and Telecoms, Chambers Global Guide
to the World’s Leading Lawyers for Business (IT: Band 1 ranking), Law Business Research's
The International Who's Who of Business Lawyers and Legal Media Group's The Best of the
Best (IT), The Lexpert /American Lawyer Guide to the Leading 500 Lawyers in Canada
(Computer & IT Law), The Canadian Legal Lexpert Directory (Technology Transactions and
Computer & IT Law), The Lexpert Guide to the Leading US/Canada Cross-border Corporate
Lawyers in Canada and The Best Lawyers in Canada (IT, and Technology Law).
For more information, see www.goodmans.ca
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