THE BILLION-TON SOLUTION - Europe's Chance to Lead on Climate Action through International Mitigation Partnerships
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THE BILLION-TON SOLUTION Europe’s Chance to Lead on Climate Action through International Mitigation Partnerships Andreas Dahl-Jørgensen | February 2015
The Billion-Ton Solution | Dahl-Jørgensen
Executive Summary
Never has the momentum for global climate action been stronger. For the first time, a global agreement
is within reach that includes climate action by all countries. China has agreed to peak its carbon
emissions by 2030 at the latest, and also to cap coal use by 2020 and achieve 20% clean energy by
2030. The United States has pledged to reduce emissions 26–28% below 2005 levels by 2025, and the
European Union has agreed to cut its internal emissions by “at least 40%” by 2030. However, though all
three pledges are arguably more ambitious than previous goals, they are still not ambitious enough to
put the international community on a path toward stabilizing the climate.
Given these three pledges, and with reasonable assumptions about the forthcoming pledges from other
key countries, Climate Advisers has estimated that the gap between the collective national pledges and
the emissions level required to limit the global average temperature rise to 2°C relative to the
preindustrial level will likely increase. In fact, the sum of the most ambitious national pledges considered
likely to be included in the Paris global climate agreement next year will only amount to about half the
reductions required to get on a 2°C path.
In contrast to previous climate mitigation pledges, most countries are currently focused purely on
pledging domestic mitigation. But this approach will not enable the numbers to add up. Moreover, it will
miss out on a large portion of the world’s most achievable and cost-effective emission reductions.
Paradoxically, out of mathematical necessity most of these reductions will need to happen in the
developing countries, whose capacity and historical responsibility are lower, but where all the growth in
emissions is currently happening. Leaving the developing countries to take sufficient action by
themselves would not only be unjust; it would also not realistically deliver the needed reductions.
Therefore, it is in the advanced economies’ interest to help the developing countries do more.
This paper argues that the most promising and politically realistic way to further increase climate
ambition in 2015 is for Europe and other advanced economies to make additional pledges for mitigation
that they intend to secure outside their borders. Doing so would reduce more emissions at a lower cost,
unlock large emission cuts in developing countries that would otherwise not occur, help ensure a global
climate agreement, facilitate the linking of regional systems and carbon markets, and deliver significant
development benefits.
The European Union’s goal of at least 40% internal emission reductions was a hard-fought political
compromise at a time of considerable economic difficulty. However, it is not compatible with climate
science. EU leaders should seek an internal agreement to go beyond 40% at home, but this will be
politically challenging. Leaders should also pursue a supplementary strategy: to pledge to reduce
emissions abroad — for example, up to 1 billion tons of CO2 per year in 2020-30 as part of a global effort
to narrow the mitigation gap. By pledging such “dual contributions” that not only highlight what the EU
will do at home but also how much mitigation it would help other nations achieve through international
mitigation partnerships, the EU would again demonstrate global climate leadership.
Through Germany’s chairmanship of the G7 this year Europe has an opportunity to encourage similar
pledges from other developed countries. If this is not feasible, the EU chould make its pledge conditional
on commitments from others in Paris. Once the U.S. EPA’s Clean Power Plant gets finalized just before
Paris, President Obama could be in a position to join a Europe-led initiative and make an international
mitigation pledge. Although he is unlikely to pledge large amounts of finance with a hostile Republican
Congress, he and the next president hold executive authorities that can mobilize U.S. efforts to secure
mitigation abroad. Similarly, Japan’s Prime Minister Abe is looking for new ways to lead on climate
change internationally following the Fukushima nuclear disaster.
2
The Billion-Ton Solution | Dahl-Jørgensen
Although the international mitigation pledge should be sector neutral to mobilize innovation in all sectors,
efforts to slow tropical forest loss through payments for verified emission reductions (so-called REDD+)
could meet a large portion of the EU’s international “1 billion tons pledge,” and would be a preferred
option if considering (1) cost-effectiveness, (2) the opportunity to leverage action by other countries and
the private sector, (3) development benefits, and (4) the EU’s own contributions to tropical deforestation
through commodity imports.
The mitigation potential from REDD+ is substantial. Although net forest loss accounts for about 12% of
global emissions, the mitigation potential from simultaneously addressing forest loss and forest
restoration is much larger. In September 2014, the EU endorsed the New York Declaration on Forests,
pledging to “put in place economic incentives commensurate with the challenge”—to halve natural
forest loss by 2020 and eliminate it by 2030, and restore an area the size of India by 2030. Meeting these
goals would reduce 4.5–8.8 billion tons of CO2 per year in 2030, more than the EU’s total emissions
today.
Never before has such a vision seemed feasible. The last year has seen a cascade of private sector
commitments to eliminate commodity-driven deforestation. The Consumer Goods Forum—whose
collective revenues exceed the GDP of France—has called for a climate agreement that includes REDD+
incentives, to help achieve the governance changes in forest-rich countries that are necessary for them
to meet their ambitious corporate pledges. Tropical forest countries are increasingly prepared to foot a
large portion of the bill on their own, as a contribution to global climate mitigation efforts and to pursue
the many local and national benefits. Still, REDD+ incentives, brought to scale, will be key to unlocking
all these forces.
REDD+ incentive payments may be even more cost-effective than previously thought. Rather than
compensating for the forgone profits of individual landowners abstaining from agricultural expansion,
REDD+ payments should be viewed as a “political transition incentive” to mobilize the political will to
implement law enforcement and sustainable land use policies, replicating the success of Brazil. This
lower financial cost, combined with the many development benefits for forest-rich countries, suggests
that the EU should seek ways to avoid overpaying for REDD+ reductions whose price in a global market
would be set at the marginal cost of expensive energy reductions. This could be done by negotiating
bilateral deals—for example, at $5 per ton of CO2—while still finding ways for the European private
sector to pay for the emission reductions.
A separate international mitigation pledge that includes REDD+ on top of the already agreed-on
domestic goal would overcome ideological opposition from nongovernmental organizations that fear
REDD+ would otherwise compromise ambitious domestic action. It could be implemented in ways that
would enable a group of ambitious EU member states to take the lead. It is fully consistent with the
emerging “bottom-up” global climate framework. Most fundamentally, it would make the EU’s climate
policy compatible with a 2°C pathway.
3
The Billion-Ton Solution | Dahl-Jørgensen
Contents
Executive Summary ......................................................................................................................................2
Contents .......................................................................................................................................................4
Acknowledgments ........................................................................................................................................4
Introduction ..................................................................................................................................................5
Part I: The Case for a European Pledge for International Mitigation ............................................................5
1. Increasing Momentum – 2015 Is a Critical Year for Climate Action ....................................................5
2. Europe’s Opening Bid .........................................................................................................................6
3. The Widening Climate Ambition Gap ..................................................................................................8
4. Narrowing the Gap ..............................................................................................................................9
5. Europe’s Second Bite of the Apple: An International Mitigation Pledge ...........................................12
6. Conclusion.........................................................................................................................................18
Part II: The Case for International Forest Mitigation ...................................................................................19
1. The Importance of Forest Mitigation .................................................................................................19
2. What Would It Take to Stop Deforestation? ......................................................................................21
3. The Ongoing Supply Chain Revolution .............................................................................................23
4. The Role of REDD+ Payments ..........................................................................................................25
5. Ready for What? The Moving Goalpost of REDD Demand ...............................................................26
6. The EU’s Opportunity to Lead on Forests .........................................................................................27
Part III: Options for Inclusion in the EU’s Policy and Legal Frameworks ...................................................29
Conclusion..................................................................................................................................................31
Bibliography ...............................................................................................................................................32
Acknowledgments
This paper was made possible with the general support of the Blue Moon Fund and the
Climate and Land Use Alliance. Its individual sections have benefited from comments
by several colleagues. At Climate Advisers, I thank Michael Wolosin, Nigel Purvis and
Maria Belenky. Outside Climate Advisers, I thank William Boyd, Jonah Bush, Donna Lee,
Ruben Lubowski, Daniel Nepstad, Frances Seymour, and Charlotte Streck. All views,
and errors, are my own.
4
The Billion-Ton Solution | Dahl-Jørgensen
Introduction
This paper makes the case that the European Union should lead the world in an effort to raise global
climate ambition further by announcing a commitment to international climate mitigation on top of its
internal climate mitigation target. Part I takes stock of the recent climate goals announced by the EU,
China, and the United States and examines the expected global mitigation gap that will remain after all
the major economies have announced their post-2020 goals for reducing carbon emissions. It discusses
options for narrowing this gap, and lays out the benefits of a European pledge to reduce emissions
abroad.
Part II examines the potential to reduce emissions in the forest sector, arguing that international
mitigation through payments for reduced forest emissions in developing countries (REDD+) offers a
unique opportunity to deliver a large amount of mitigation at a relatively low cost, and that it thus should
be a core part of an EU international mitigation pledge.
Finally, part III presents a range of options for incorporating an international mitigation pledge into
European policy frameworks. It focuses particularly on those options that will allow the most ambitious
European nations to take on most of the new pledge.
Part I: The Case for a European Pledge for International
Mitigation
1. Increasing Momentum – 2015 Is a Critical Year for Climate Action
Never before has the momentum been stronger for global climate action. Climate science is more
conclusive than ever. News coverage of the climate issue is on the rise, and a majority of people in most
countries now strongly favor increased climate action. The cost of renewable energy is falling faster than
experts had predicted, despite weak climate policies. New technology and business models for solar
power, battery technology, energy storage, and energy efficiency are making a low-carbon future seem
more feasible than ever before. Despite weak or lacking policy signals in most economies, companies
are increasingly coming forward with ambitious climate actions voluntarily, and many are pricing in more
stringent climate regulations as part of their financial planning and investment decisions. New evidence
shows that climate action will be cheaper than previously thought, and only have a negligible additional
investment cost over business as usual. In addition, climate action brings substantial co-benefits beyond
avoided climate damages, such as improved public health, increased fuel savings, and strengthened
energy security.1 However, thus far most national climate policies have been insufficiently stringent to
ensure that this growing momentum is brought to bear at a scale that adequately addresses the problem
of climate change. This is even truer for global climate policy, which tends to reflect rather than influence
the ambition of national climate policies.
The next few months will set the global climate ambition for the next 10 to 15 years. By mid-2015,
in preparation for the new climate agreement to be adopted later this year at the UN climate change
conference in Paris and to take effect starting in 2020, all countries that are “ready to do so” are
supposed to put forward their climate goals for the period starting in 2020. Some countries have already
1
Global
Commission
on
the
Economy
and
Climate,
Better
Growth,
Better
Climate
(London:
Global
Commission
on
the
Economy
and
Climate,
2014).
5The Billion-Ton Solution | Dahl-Jørgensen
come forward with their targets. In October 2014, European leaders were the first ones to do so, as they
finally reached a compromise on the European Climate and Energy Package, which aims to cut the EU’s
internal emissions by at least 40% below 1990 levels by 2030.2 Then, in a landmark joint announcement
by presidents Xi and Obama, China agreed for the first time to peak its emissions by a specific date—by
2030 at the latest, while seeking to do so sooner. It also announced that it would cap its coal use by
2020, and have 20% clean energy by 2030. Of these three goals, the coal use peak seems to be the
most ambitious. Analysts indicate that meeting the coal peak goal by 2020 implies peaking emissions by
2025 at the latest.3 At the same time, the United States pledged to reduce its emissions 26–28% below
2005 levels by 2025, doubling the annual de-carbonization rate compared with the period before 2020.4
All three pledges are more ambitious than previous goals. Yet, as described further below, they are still
not ambitious enough to put the world on a path to avoid dangerous climate change.
Although domestic political processes and pressure are the most important factors determining national
climate ambitions, the international process can help at the margin. For the first time, a global agreement
is within reach that will apply equally to all countries. The agreed-on timeline for putting forward national
climate targets will mobilize new commitments from some countries that have not previously had
national climate goals. Although the UN principle of “common but differentiated responsibilities and
respective capabilities” will still apply, it will now be up to each country to define for itself what climate
mitigation contribution it deems adequate and equitable, given its domestic politics and level of
development. Despite what some countries and most environmentalists would prefer, the national
targets will likely not be legally binding internationally but will instead be reflected in nonbinding national
annexes to the international agreement. Only the procedural elements, such as an obligation to regularly
update national climate goals and policies and to report on climate action, seem likely to become
internationally binding. There will likely be a very light-touch review by the international community of the
national offers, but it seems unlikely at this stage that agreement can be reached on a clear process for
closing the mitigation gap to limit global average warming to 2°C.
2. Europe’s Opening Bid
The European Union has a proud legacy of global climate leadership. Through its participation in the
Kyoto Protocol, the EU adopted an internationally legally binding climate target through 2012 (and later
extended until 2020). In Copenhagen in 2009, the EU took a leadership position by pledging to reduce
emissions 20% below 1990 levels by 2020 regardless of other countries’ efforts, and by offering to
increase its pledge to 30% in the context of an ambitious agreement. It put in place ambitious policies to
meet its 2020 goal, with the flagship EU Emissions Trading Scheme (ETS) at the core (covering about
half the EU’s emissions), complemented with separate targets for renewable energy deployment and
energy efficiency.
Recently, however, the EU’s leadership has been subsiding. The lack of an ambitious and binding
global climate agreement in Copenhagen in 2009 made it politically impossible for the EU to raise its
2020 target to 30%, as it had planned to do, and it got stuck with the 20% target even as circumstances
changed. The worldwide economic recession reduced the EU’s energy consumption and emissions,
making it easier and cheaper than anticipated to meet the 20% target. According to the European
2
See
http://ec.europa.eu/clima/policies/2030/index_en.htm.
3
See
http://switchboard.nrdc.org/blogs/jschmidt/china_evolving_to_coal_consump.html.
4
White
House,
“President
to
Attend
Copenhagen
Climate
Talks,”
http://www.whitehouse.gov/the-‐press-‐office/president-‐
attend-‐copenhagen-‐climate-‐talks.
6The Billion-Ton Solution | Dahl-Jørgensen
Commission’s own analysis in 2013, the EU is on track to reach 24% by 2020 without new policies, and
to reach 32% by 2030.5 The ETS suffered from a large oversupply of allowances driven by the recession
and mandatory energy targets for renewables. As a consequence, the price signal created by the ETS
became too weak to change investment decisions. One could make the case that the market worked
exactly as intentioned, and that the plummeting carbon price might have been necessary for the ETS to
survive the politics of a recession, in a way a fixed carbon tax could actually not have been. But the
sustained low carbon price – currently trading at about €7 per ton CO2 – is evidence that Europe could
pursue more ambitious targets at an affordable cost. The EU failed to adapt to these changing
circumstances by tightening its climate policies. (At the moment, the EU Parliament is discussing options
for reducing the oversupply through a market stability reserve to start sometime between 2017 and
2021). Although this may help avoid similar mistakes in the future and increase the European carbon
price in the medium term, it is unlikely to help much in the short term.)
In recent years, the United States has reduced its emissions more rapidly than the EU. This is
partly due to the shale gas revolution in the United States, which Europe has—at least so far—chosen
not to replicate at scale. Also, because Europe started taking serious climate action decades earlier, the
United States still has almost twice the emissions per capita as the EU, and therefore a much bigger
reduction potential today.
The EU’s new goal of a 40% reduction by 2030 is an important first step. It is slightly more
ambitious than the current path. The implied annual de-carbonization rate through 2030 (1.9%) is higher
than the U.S. annual rate through 2025 (1.6%).6 More important, the 2030 goal is an important sign of
political will at a time when many EU countries are in the midst of economic hardship. Getting a clear
and early policy signal for European business through 2030 was in itself an achievement. By being the
first out of the gate to set a goal for the post-2020 period, and by leaving room for this goal to be
strengthened before Paris, Europe also set an example. China and the United States did follow suit just
weeks later, though not as a consequence of the European announcement. (Indeed, the political
establishment in both China and the United States increasingly view the climate problem as a “Group of
Two” issue.) However, though the EU may not have triggered commitments from China and the United
States, a lack of leadership from the EU, as the traditional climate leader, would have had a negative
influence on other key countries.
The EU must go beyond 40% to do its fair share of an effort to limit global warming to 2°C. Clearly,
the 2030 goal of at least 40% domestic reductions was a hard-fought and carefully crafted political
compromise between ambitious countries (mostly Western European ones) on one hand, and coal-
dependent, less affluent Eastern European countries on the other hand. This internal battle for ambition
is continuing. German chancellor Angela Markel was quoted as saying that the compromise provides
flexibility to increase the EU’s ambition in Paris.7 The UK had advocated a 50% reduction target. 8 The
UK took the lead in creating a powerful coalition of 14 EU countries, called the “Green Growth Group,”
had also called for deeper targets. The members of this group—which comprises the EU’s 7 largest
5
European
Union,
“EU
Energy,
Transport
and
GHG
Emissions:
Trends
to
2050,
Reference
Scenario
2013,”
2013,
http://ec.europa.eu/clima/policies/2030/docs/eu_trends_2050_en.pdf.
6
Michael
Wolosin
and
Maria
Belenky,
“Gap
Analysis
with
Paris
Pledges,”
2014,
http://www.climateadvisers.com/wp-‐
content/uploads/2014/12/Climate-‐Advisers-‐Paris-‐Analysis-‐Mind-‐the-‐Gap.pdf.
7
This
comment
was
not
reported
widely,
but
was
picked
up
by
the
journalist
Dave
Keating
(@Dave
Keating)
on
Twitter
on
October
23,
2014.
8
See
https://www.gov.uk/government/speeches/written-‐ministerial-‐statement-‐by-‐edward-‐davey-‐uk-‐negotiating-‐position-‐on-‐
the-‐eu-‐2030-‐climate-‐and-‐energy-‐framework
7The Billion-Ton Solution | Dahl-Jørgensen
economies and represents 88% of its GDP and 76% of its population—are still seeking even more
ambitious climate action. Following the Lima climate talks in December 2014, they stated:
We should be ready to consider raising the ambition of the [greenhouse gas] reduction
target and the level of EU action, including through the use of international carbon
market mechanisms, in the context of securing an ambitious, global and comprehensive
international climate agreement at the Paris Conference.9
There is a clear opening for the EU to increase its ambition before Paris. It is worth emphasizing the
difference between the EU’s 2020 and 2030 pledges. Before the Copenhagen climate talks in 2009, the
EU pledged to reduce emissions by 20% below 1990 levels by 2020, or 30% as part of an ambitious
climate agreement, with both targets including the use of international offsets. This time, learning the
lesson from Copenhagen, the EU has started out with an internal-only goal, leaving the door open to
increase its ambition in Paris either by strengthening its internal goal and/or through international
mitigation on top of its 40% (or more) reduction at home. European negotiators are advocating that the
new climate agreement include provisions for international carbon markets and partnerships, a clear sign
that they are at least considering the option of adding an international mitigation pledge.10
In the emerging bottom-up international framework, whereby pledges are nationally determined rather
than globally negotiated, this strategy makes sense. Several elements of this framework go against long-
standing European positions. For example, the EU has favored legally binding national targets
negotiated in a top-down fashion guided by science, with punishment for non-compliance. Yet, the EU is
widely expected to go along with the less-binding, bottom-up framework, given that this is the only
solution likely to maximize participation from key polluters like the United States, China, and India. It is
indeed in the EU’s interest to accept a relatively weaker legal agreement in order to make some
progress, and to focus its efforts on increasing global ambition over time within this politically feasible
international framework. Its primary tool for doing so is through the strategic design of the EU’s own
mitigation pledge. After describing the widening global ambition gap, the next sections propose how this
can be done.
3. The Widening Climate Ambition Gap
The EU and the rest of the international community have endorsed the global scientific consensus on the
need to limit global warming to at most 2°C relative to the preindustrial level to avoid unmanageable
climate impacts.11 The EU and all industrialized countries have also jointly recognized that meeting the
2°C goal will require a 50% reduction in global emissions and an 80% reduction in emissions from
developed nations by 2050.12 The EU aims to reach 80–95% reductions by 2050, and President Obama
has endorsed the 80% reduction goal for the United States.13
Unfortunately, even if implemented fully, the domestic climate plans that nations have put forward so far
for the period up to 2020 only total about 40% of the climate action needed to place the world on a
9
See
https://www.gov.uk/government/news/green-‐growth-‐group-‐ministers-‐statement-‐on-‐2030-‐energy-‐climate-‐policy-‐
framework.
10
See
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/envir/145508.pdf.
11
See
http://unfccc.int/key_steps/cancun_agreements/items/6132.php.
12
See
http://www.g8italia2009.it/static/G8_Allegato/G8_Declaration_08_07_09_final,0.pdf.
13
See
http://elections.nytimes.com/2008/president/issues/climate.html
and
http://www.whitehouse.gov/the-‐press-‐
office/president-‐attend-‐copenhagen-‐climate-‐talks.
8The Billion-Ton Solution | Dahl-Jørgensen
trajectory to limit global warming to 2°C.14 Regrettably, the gap between what science requires and what
nations plan is soon likely to grow even larger. By the first half of 2015, most major economies will have
followed the example of the EU, China, and the United States and have instituted new climate goals for
the period starting in 2020. Based on what is known today about the new emission reduction pledges,
and based on best estimates of upcoming pledges from others, Climate Advisers estimates that the
emissions mitigation gap will likely continue to grow through 2030 in absolute terms, and that even
pledges at the stronger end of what is expected would only deliver 50% of the mitigation required (see
figure 1).15 In short, though nations are finally poised to take stronger climate action than ever before,
they are not moving quickly enough to achieve the 2°C goal.
Figure 1. Expected Mitigation Gap Based on Known and Expected National Pledges
Source: Michael Wolosin and Maria Belenky, “Paris Analysis: Mind the Gap,” 2014,
www.climateadvisers.com/mindthegap.
14
United
Nations
Environment
Program,
The
Emissions
Gap
Report
2013:
A
UNEP
Synthesis
Report
(New
York:
United
Nations
Environment
Program,
2013),
http://www.unep.org/publications/ebooks/emissionsgapreport2013/.
15
Michael
Wolosin
and
Maria
Belenky,
“Paris
Analysis:
Mind
the
Gap,”
2014,
www.climateadvisers.com/mindthegap.
9The Billion-Ton Solution | Dahl-Jørgensen
4. Narrowing the Gap
The primary objective of international climate diplomacy should be to eliminate or at least
significantly narrow the global mitigation gap by 2030, rather than locking in a scenario that
would actually make it larger and the climate crisis more unmanageable. At the moment, neither
international nor European climate policy is aligned with this goal. As figure 2 shows, the developed
countries’ emissions may already have peaked and begun declining, though this progress is the
combined result of both policy action and economic contraction, and thus is fragile and potentially
reversible. In contrast, the developing countries’ emissions are increasing rapidly, making up all the
current and future growth in global annual emissions. Even if rich countries brought their emissions to
zero, the world would still exceed 2°C warming without significant new climate action by developing
countries. In order to limit warming to 2°C, global emissions will need to peak in the next few years,
plummet 40–70% from 2010 levels by 2050, reach net zero by 2055–70, and become negative by
2100.16
Figure 2. Global Emissions by Region
Source: United Nations Environment Program, The Emissions Gap Report 2014: A UNEP Synthesis Report (New
York: United Nations Environment Program, 2014),
http://www.unep.org/publications/ebooks/emissionsgapreport2014/portals/50268/pdf/EGR2014_LOWRE
S.pdf.
16
Intergovernmental
Panel
on
Climate
Change
(IPCC),
Fifth
Assessment
Report:
Summary
for
Policymakers
(Cambridge:
Cambridge
University
Press,
2014),
https://www.google.com/?gws_rd=ssl#q=IPCC+AR5+%282014%29%2C+Summary+for+Policy-‐Makers;
United
Nations
Environment
Program,
The
Emissions
Gap
Report
2014:
A
UNEP
Synthesis
Report
(New
York:
United
Nations
Environment
Program,
2014),
http://www.unep.org/publications/ebooks/emissionsgapreport2014/portals/50268/pdf/EGR2014_LOWRES.pdf.
10The Billion-Ton Solution | Dahl-Jørgensen
Deepening countries’ pledges to get on this trajectory will be extremely challenging. In simple
conceptual terms, as sketched in figure 3, there are three ways to narrow the global gap: (1) The
developed countries could pledge to do more at home; (2) the developing countries could pledge to do
more on their own; or (3) the developed and developing countries could pledge to do more together
through international partnerships and mechanisms whereby the developing nations would agree to do
more as long as the developed nations were willing to shoulder a portion of the additional costs.
Figure 3. Three Ways to Reduce the Global Emissions Gap
Source: Climate Advisers analysis.
Few countries are expected to deepen their domestic post-2020 goals in the next year before Paris. The
EU may be the best candidate to do so, given the way it formulated its current goal, and the clear signal
from key European leaders that they would consider doing so. Both the United States and China
signaled that they would try to overdeliver, but it is unclear whether this would be reflected in deeper
targets. The United States could, for example, say that it would aim for the higher end of its announced
26–28% goal, while China could pledge to move its peak year forward to 2025 to be consistent with its
2020 coal peak year. It should be noted that the United States has signaled clearly that it does not
intend to increase its target before Paris, and has encouraged all nations to put forward their best bid
this year, rather than expecting international pressure to increase national ambitions.
It seems possible that some countries could be able to increase their post-2020 ambitions by modest
amounts over the next five years, as the current momentum in the real economy continues and low-
carbon opportunities continue to seem more feasible, and political pressure for climaet action increases.
But given the large mitigation gap, it is unrealistic to expect that the pledges would be strengthened
sufficiently to get on a 2°C pathway. Securing significantly deeper and faster emission reduction pledges
from the developed countries could be costly, and politically very challenging. With the right policy tools,
some additional reductions seem possible at a moderate cost. Going much deeper would in some cases
require explicit or implicit carbon pricing up to and beyond $100 per ton of CO2, far beyond the current
political will.
Similarly, expecting the developing countries to unilaterally pledge do more than they will have already
determined is in their self-interest and to assume responsibility for a dramatically larger share of global
11The Billion-Ton Solution | Dahl-Jørgensen
emission reductions seems unrealistic, given their level of development, limited capacity for action, and
still relatively lower (though rapidly increasing) historical emissions. This would be politically unrealistic in
any case, but even more so in the absence of far deeper pledges from the rich countries.
The most politically realistic way to significantly narrow the gap in the near to medium term,
therefore, is through international partnerships, in which rich countries see that it is in their self-
interest to help reduce emissions in poor and emerging economies, where emissions are growing
and low-cost mitigation opportunities are abundant. The EU’s climate policy and diplomacy need to
be aligned with this insight in order to ensure that the world and the EU are doing what needs to be done
over the next decades.
5. Europe’s Second Bite of the Apple: An International Mitigation
Pledge
As stated above, the EU has two ways to increase its climate mitigation ambition and to align its climate
policy with the global 2°C goal. It could seek to reach an agreement among its leaders in 2015 to go
beyond 40% internally. The EU can and should do even more than 40% at home, and could potentially
do so at limited additional cost. 17 Given the political horse-trading that preceded the “at least 40%”
compromise, however, it will be challenging to deliver more than a few additional percentage points
before Paris.
As a complimentary and additional strategy – on top of whatever mitigation ambition EU member
states can agree to do internally – the EU should commit to reduce up to 1 billion tons of CO2 per
year outside its borders in 2020-30. Increasing mitigation ambition through such a “dual commitment”
could be politically more realistic, especially if it could be done in a way that allows the most ambitious
EU member states take on more of the additional ambition. It is not a question of either or, but of
maximizing European political will on both fronts.
Why 1 billion tons? This number is suggested as a reasonable EU contribution to the effort to narrow
the global mitigation gap. The UN Environment Program estimates the gap to be about 8–10 billion tons
per year by 2020.18 Climate Advisers’ recent analysis—which takes into account the recent post-2020
pledges by the EU, the United States, and China—estimates that the 2030 mitigation gap will increase to
7–14 billion tons per year by 2030, depending on the strength of the yet-to-be-announced national post-
2020 climate pledges.19 The average gap during the decade is 7.5–12 billion tons per year. Halving the
mitigation gap would require about 4–6 billion tons per year in additional mitigation. An additional 1
billion tons from the EU, as the world’s largest economy, is therefore not unreasonable.
The EU could, as part of its pledge, set a maximum carbon price to limit the financial liability and
uncertainty. As we will see in part II, mitigation from REDD+ is highly cost-effective, probably even
more so than assumed so far. It seems reasonable to assume that the EU could set a fixed price at, say,
€5 per ton, and still get up to 1 billion tons of credible supply from REDD+. alone. At a price of € 5 per
ton, the total cost to the EU would be €5 billion per year, or less than €10 per EU citizen per year to keep
the 2°C option alive, and if REDD+ is includded, to save most of the world’s remaining tropical forests, at
17
The
EU’s
Low
Carbon
Roadmap
from
2013
estimated
that
40-‐44%
reductions
by
2030
was
the
lowest
cost
trajectory
to
a
pathway
to
79-‐82%
reductions
by
2050.
See
https://www.gov.uk/government/publications/analysis-‐of-‐eu-‐2030-‐greenhouse-‐
gas-‐emission-‐reduction-‐target-‐options.
18
United
Nations
Environment
Program,
Emissions
Gap
Report
2014.
19
Wolosin
and
Belenky,
“Paris
Analysis.”
12The Billion-Ton Solution | Dahl-Jørgensen
a direct benefit to the EU that would likely far exceed the cost. A total of €5 per ton would be about one-
third the price paid for Certified Emission Reductions under the Clean Development Mechanism in 2008,
when the price of EU allowances was high enough to stimulate fuel-switching away from coal in the EU.
Politically within the EU, the focus needs to be on the results, not the finance. Certainly, some
would see €5 billion as a lot of money to transfer abroad. It is about twice the annual “fast-start finance”
provided by the EU in 2010–12. Given the magnitude of the climate impact and the additional benefits,
however, this sum is arguably very small. The fast-start finance was meant to provide initial funding to
prepare for much larger amounts of climate finance to come. In contrast, the €5 billion per year for the
international mitigation commitment would drive large-scale global mitigation, and could be designed to
come from both public and private sources. It should therefore be regarded as a purchasing
commitment required to (1) contribute to narrowing the global mitigation gap, and (2) to getting a deal in
Paris. It should be framed politically—accurately—as a precondition for the EU to regain global
leadership on climate change and make EU policy consistent with a 2°C goal. Given that the EU holds
25% of the world’s GDP, this would not be an unreasonable contribution from the EU—in particular,
given the $100 billion a year that the developed countries have pledged to “mobilize” international
climate financing by 2020. The political focus should be on “1 billion tons” (and the additional mitigation
it would trigger), not on the €5 billion. This pledge should be conditioned upon the conclusion of a
meaningful climate agreement in Paris, and—of course—on the environmental integrity of the tons
available for purchase. The proper perspective is “what would it cost to achieve this ambition, which is
given, through other means,” not “how does this compare with previous climate-related ODA flows.”
The impact of the international mitigation pledge would likely far exceed 1 billion tons. It is
reasonable to assume that large-scale carbon demand from the EU would help developing countries do
more self-financed emission reductions. Though the EU would of course not be in a position to formally
take credit for this additional self-financed effort by developing countries, it would be credited as the
indispensable partner in a global partnership leading to possibly the most significant contribution to
increased global climate ambitions in the next two decades.
A demand signal for the period 2020–30 delivered in 2015 would likely also lead to significant
additional emission reductions before 2020, at no additional cost. A clear forward demand signal
would be a major boost to current mitigation efforts, and give countries time to prepare for large-scale
demand. Current official development assistance (ODA) programs could be used to kick-start the
“market” through various mechanisms (perhaps even rheoufh advance market commitments, auctioning
of put options, reverse auctions, or open tenders).
A “dual commitment” is likely most politically realistic, while also offering the largest climate
benefits. Pledging to mitigate 1 billion tons might be preferable to a pledge of, say, 10% additional
mitigation below 1990 levels. The latter would be a lower volume (approximately 0.5 billion tons per year
in 2030, and lower initially), yet is—perhaps ironically—likely to trigger even more political resistance
among the EU’s member states. Some countries that were opposed to do 40% at home would feel
threatened by the ambitious 10% number (because 10% at home—the natural association—is a very
significant effort). At the same time, many NGOs would see a 10% pledge as a premature step toward
the inclusion of REDD in the ETS.
A “dual commitment” could garner broad support from stakeholders. A separate international
mitigation commitment not linked to the EU’s internal mitigation target would avoid the ideological
resistance to carbon markets and offsets. By being truly additional to domestic efforts, it would get the
full support of the environmental NGO community. There is significant ideological opposition, in
13The Billion-Ton Solution | Dahl-Jørgensen
particular when it comes to linking REDD+ to carbon markets, most of which is arguably misguided. But
there are practical reasons for keeping a REDD+ commitment out of the ETS, or at most testing a partial
and gradual inclusion. Including REDD+ in the ETS at this stage, with a large oversupply of credits for
the foreseeable future, would probably be ill advised—even setting aside the ideological opposition. But
a separate commitment to pay for international emission reductions, including from REDD+, would have
broad support. In fact, it would be almost identical to the proposal made by Greenpeace’s of a “Tropical
20
Deforestation Emission Reduction Mechanism” ahead of the Copenhagen talks. The critical aspect for
delivering international mitigation generally, and REDD+ particularly, is predictable and significant
demand, measured in tons of CO2 rather than euros. It is less important whether it is linked to an offsets
program. In essence, a separate international mitigation pledge would create a separate market for
REDD+ and other international mitigation credits.
An international mitigation pledge would generate additional benefits that domestic action would
not. It would achieve a higher level of ambition from the EU at a relatively lower cost; mobilize more
action from both the developed and developing countries; mobilize climate finance and secure a robust
global climate agreement; facilitate future linking of carbon markets; deliver tremendous development
benefits; and serve the EU’s foreign policy interests. The additional benefits are elaborated further
below:
• Achieving a higher EU ambition at a lower average cost. Although more climate action could
have been undertaken within Europe at a reasonable cost, a significant increase in ambition—of,
say, 10–20%—would likely entail a significant additional cost, at least in the short and medium
term. The EU Commission already estimates that carbon prices of €50–60 per ton in 2030 and
€100–370 per ton in 2050 will be needed to meet the EU’s climate goals.21 In contrast, there are
abundant cost-effective emission reductions to be achieved in developing countries that could
support such an ambition. The UK has estimated that for a 50% reduction target, access to 5%
through international offsets would reduce costs by 32%, while 10% would reduce costs by
44% compared to purely internal mitigation.22 As is shown in the forest sector analysis below,
the EU could potentially secure a large portion of an international commitment at a cost as low
as $5 per ton.
Given the strain on public budgets and the recent agreement to generously compensate the
Eastern European countries for accepting the goal of reducing the EU’s internal emissions by at
least 40% by 2030, achieving political acceptance among a group of front-runners to also
pledge mitigation internationally will surely be a challenge. Conversely, the European leaders are
more likely to be favorable to additional policies framed as a concrete and measurable solution
to narrow the global mitigation gap rather than as a proposal for additional public finance. What
is more, as is shown in the final section, there are ways to pass on the cost of an international
mitigation pledge to the private sector, in accordance with the polluter-pays principle.
• Unlocking the large mitigation potential of the developing countries. Most emission
reductions to meet the 2°C goal will need to take place in the emerging and developing
countries. Although they are increasingly taking on commitments and responsibility for action,
20
See
http://www.greenpeace.org/international/Global/international/planet-‐2/report/2008/3/tropical-‐deforestation-‐
emissio.pdf.
21
EU
Commission,
Summary
of
the
Impact
Assessment:
A
Roadmap
for
Moving
to
a
Competitive
Low-‐Carbon
Economy
in
2050
(Brussels:
European
Union,
2011),
http://eur-‐lex.europa.eu/legal-‐content/EN/TXT/PDF/?uri=CELEX:52011SC0289&from=EN.
22
UK
Department
of
Energy
and
Climate
Change,
Analysis
of
EU
2030
greenhouse
gas
reduction
target
options,
28
October
2013,
https://www.gov.uk/government/publications/analysis-‐of-‐eu-‐2030-‐greenhouse-‐gas-‐emission-‐reduction-‐target-‐options
14The Billion-Ton Solution | Dahl-Jørgensen
they will need massive support to meet their full cost-effective mitigation potential. They cannot
be reasonably expected to cover the full cost of their maximum effort. This is not just a question
of fairness, but of feasibility.
At the 2014 climate talks in Lima, 14 developing countries came forward with a joint “Lima
Challenge,” where they committed to coming forward in 2015 with a combination of
unconditional (self-financed) and conditional emission reduction targets, whose conditional
portion indicates the level of ambition they would offer on top of their maximum domestic
efforts, if sufficient economic incentives were to be made available.23 These conditional
reductions would be left on the table unless they were matched by a commitment from the
developed countries to help finance them. As an example, in 2009 Indonesia pledged to reduce
its emissions 26% compared with its business-as-usual trajectory by 2020 on its own, or 41%
with support. The conditional portion of this pledge amounted to almost half a billion tons of
CO2.
The EU could help create a “race to the top” by deciding that only countries or jurisdictions that
pledge ambitious mitigation on their own would be eligible to receive payments for verified
emission reductions through international mitigation partnerships with the EU, EU member
states, or EU-regulated entities.
When countries pledge ambitious self-financed action, there will always be a risk that pledges
will not be met. If provided with an incentive to go beyond those targets, countries are more
likely to also deliver on their unconditional target. Similarly, if they expect international incentives
to become available after 2020, they are also likely to take more concerted action before 2020,
to prepare for such incentives. Hence, international mitigation commitments can mobilize even
more mitigation from the developing countries than the portion directly supported.
• Securing higher ambition from the United States and Japan. If the EU were to establish a
norm that climate leadership must be demonstrated not only through a country’s domestic
climate ambition but also through its contribution to mitigation abroad, it is possible that other
developed countries could be convinced to follow suit and adopt an international mitigation
pledge of their own. The United States, for example, is unlikely to change its domestic emissions
reduction goal before Paris—President Obama’s pledge to reduce U.S. domestic emissions 26-
28% by 2025 from 2005 levels.. And with Republican majorities in both the Senate and the
House of Representatives, President Obama has limited capacity to make new pledges for
additional U.S. government funding for international emissions mitigation in developing nations.
President Obama, however, does control a range of tools that—assuming he had the will to do
so—could create new financial incentives from the U.S. private sector for international mitigation
relying solely on the President’s existing executive authorities.24 President Obama, therefore,
could pledge that the United States would adopt new greenhouse gas regulations that would
incentivize U.S. companies to mitigate emissions outside the United States on top of the 26-
28% U.S. domestic goal. President Obama’s primary climate legacy and number one
environmental priority for the remainder of his term is formalizing the Clean Power Plan, which
would regulate emissions from existing power plants and will only be finalized just before Paris.
23
Andreas
Dahl-‐Jørgensen,
“Forest
Countries
Challenge
World
to
Increase
Climate
Ambition,”
December
9,
2014,
http://www.climateadvisers.com/forest-‐countries-‐challenge-‐world-‐to-‐increase-‐climate-‐ambition/.
24
For
an
elaboration
of
U.S.
options
see
forthcoming
paper
by
Dahl-‐Jørgensen,
Purvis
and
Wolosin,
Increasing
U.S.
Climate
Ambition
Through
International
Mitigation
Partnerships.
15The Billion-Ton Solution | Dahl-Jørgensen
Once that important regulation is finalized late in the year, President Obama might be convinced
to join a European-led effort to articulate new pledges for emission cuts outside developed
countries.
Other developed countries could also be convinced to adopt an international mitigation pledge.
For some, it would make sense to keep domestic and international commitments separate, as
the EU would. Others would perhaps want to use international mitigation as a way of increasing
their overall ambition while keeping the share of each flexible. For example, Japan is facing
significant uncertainty about its future energy mix while all its nuclear plants are going through
safety reviews, and it would likely maximize the flexibility to take action abroad. Indeed,
ambitious pledges for international mitigation is likely the primary option for Prime Minister Abe
to show international leadership on climate change.
• Mobilizing climate finance and securing a robust global climate agreement. A commitment
to international mitigation by the EU would help seal a meaningful global climate agreement, by
increasing mitigation ambition, providing credible commitments to high-quality climate finance,
and possibly getting concessions on other aspects of the agreement.
Key parts of the Paris agreement are already coming into view. To some degree, there is no
longer a deal to be lost, in the sense that the ambition question is being formally kept out of the
agreement, while negotiations are centering on the legal form, how to differentiate between
countries at various stages of development, and the provision of finance. The one remaining
sticking point that could derail the Paris agreement is the level of international climate finance
from rich to poor countries, both for mitigation and adaptation. In Copenhagen in 2009, the EU
joined the other developed countries in pledging that they would jointly mobilize—from both
public and private sources—$100 billion per year in climate finance to the developing countries
by 2020.
If the EU were to secure 1 billion tons of CO2 a year abroad—at a cost of around €5 per ton, for
example—this would provide around €5 billion per year to the developing countries for climate
mitigation. Depending on how this is mobilized (see part III), this could potentially free up more
of the scarce public foreign assistance finance to be spent on adaptation and resilience in some
of the poorest and most vulnerable countries, which is a high political priority for a large number
of countries in the climate negotiations.
Critically, a pledge to international mitigation—measured in tons rather than euros—would
deliver quantified results in ways that other types of climate finance (e.g., through the Green
Climate Fund) would likely not do. At the moment, climate finance is seen by most developed
countries as a political problem—as a necessary concession to “get a deal”—rather than as a
strategic tool to deliver the policy reforms and investmetns needed to solve the climate crisis. An
international mitigation pledge could create sectorial or even economy-wide price signals in
developing countries that mobilize and redirect private investments on a large scale toward low-
carbon opportunities, in a way that a fund seeking up-front cofinancing from the private sector
for specific projects will not be able to do.
• Advancing international carbon pricing. The EU has led the way globally on emissions trading,
and countries all over the world—and increasingly, developing countries—are now replicating
the EU’s early leadership. Already, 39 countries and 23 subnational governments have
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