The Deputy Director of the Potsdam Institute for Climate Impact Research, Prof Dr Ottmar Edenhofer was in Australia some months ago to give a talk at the Energy Exchange Breakfast Series hosted by the University of Queensland’s Energy Initiative (Brisbane, Australia) and the Energy Policy Institute of Australia.

In his talk, Edenhofer identified important challenges that lie ahead of us post-Paris and argued that the global community needs to undertake some concerted efforts across policy if Paris agreements are to see any fruition. There are direct correlations not only between increases in global mean temperature and risks such as change of monsoon dynamics and the melting of glaciers, but also between average temperature and labour and economic productivity through impacts on agricultural, manufacturing and construction sectors.

Thus Edenhofer convincingly highlighted that unabated climate change was dangerous for various reasons to nations across the world. His concerns were essentially rooted in the fact that despite international discussions and several technological advancements, greenhouse gas emissions have continued to rise to the extent that the last decade alone has witnessed one of the highest growth rates in total emissions (2.2 % per year). To explain this growing rise in emissions, he outlined the role of a ‘coal renaissance’ that is currently underway across the world while policymakers (mostly European) continue to ignore it. This coal resurgence has gained important ground particularly in this past decade as low coal prices have allowed coal-fired power plants to replace gas-fired plants.

For a 2°C target, while the global carbon budget since industrialisation is approximately 3000 gigatonnes CO2, 2000 gigatonnes CO2 has already been expended, indicating that by 2050, globally GHG emissions need to be reduced by between 40–70 %. According to Prof Edenhofer, this may be achieved using technological advancements called ‘carbon dioxide removal technologies’ that allow CO2 absorption. An important part of this technology mix is Carbon Capture and Storage, or CCS.

In the immediate term though, a carbon price seems inevitable. Despite national voluntary commitments (or INDCs, made in Paris), countries are continuing to invest in existing and planned coal-fired power plants. Their environmental commitments in Paris are thus highly inconsistent with economic realities, highlighting that while Paris was a remarkable ‘diplomatic success’, it reiterates the ever-growing gap between aspirations and political and economic constraints. A powerful tool to reduce this gap and make meaningful progress towards the 2°C target is a carbon price, as it offers several advantages:

• It encourages the development and propagation of carbon-free and or carbon-neutral technologies;
• It uses carbon intensity as a measure to penalize the fossil industry; and
• Over the long term, it may well create significant revenues for investments to meet the current infrastructure gap in developing regions in areas of water, electricity, transportation and telecommunications.

Finally, Edenhofer used this opportunity to make a strong case for a carbon price and advocated that while a universal pricing mechanism would most definitely fail as nations have varied willingness to pay, a nationally binding carbon price that is complemented with conditional transfers from the international Green Climate Fund would provide a lasting solution to contain further increases in GHG emissions globally.

This summary article is drawn from: ‘The Paris Climate Aspirations and the Realities’. Talk by Professor Ottmar Edenhofer of the Potsdam Institute for Climate Impact Research at the UQ/EPIA Energy Exchange Series Breakfasts, 14 June 2016, Brisbane. Full presentation and video is available here.

Dr Vigya Sharma is a postdoctoral research fellow with the Energy and Poverty Research Group, University of Queensland, Australia.