Global Climate Action Summit Recap
Growth-friendly climate action, carbon markets emerge as preferred solutions, sub-national actors driving climate ambition.
A star-studded event for climate advocates, Governor Jerry Brown’s Global Climate Action Summit (GCAS) drew thousands to San Francisco to boost climate action and renew momentum for broad and diverse climate action. During the kick-off event on carbon pricing, Governor Brown set the tone for the week: “Carbon Markets are only one solution. We still need renewables, electric vehicles, energy efficiency, carbon capture and innovation, and technologies that don’t even exist yet.”
Supported by more than 300 side events, the summit covered the full range of climate issues from agriculture to environmental justice, carbon markets and, of course, Carbon Capture and Storage (CCS). Johan Rockstroem, Executive Director of the Stockholm Resiliency Center, and Christiana Figueres, former Executive Secretary of the UNFCCC, explained the IEA’s zero-emissions scenarios at the beginning of the summit’s main stage event: “Whether you like it or not, carbon capture is part of the scenario.” At the summit a plethora of companies, governments and organizations announced commitments to climate and sustainability action. For example, Allard Castelein, President and CEO of the Port of Rotterdam Authority, emphasizing the port’s investments in CCS, launched the World Ports Climate Action Program which unites the ports of Barcelona, Antwerp, and Los Angeles – among others – to deliver deep emissions reductions through efficiency and technology.
While discussions and events covered a range of solutions and ideas for climate action, certain key messages emerged. For example, policymakers and the business community alike agreed that any measures to address climate change must not stifle global economic prosperity but should rather focus on accelerating growth. Heavy-emitting industries, while encouraged to reduce emissions as effectively as possible, should not be penalized. Lord Nicholas Stern, IG Patel Professor of Economics and Government at the London School of Economics and President of the Royal Economic Society, presented the findings of the New Climate Economy’s Report which includes CCS as the only way to decarbonize cement. The report argues that climate action by governments and businesses could catalyze up to $26 trillion in economic growth over the next decade.
Fueled by Governor Jerry Brown’s support for California’s historic SB100 Law that puts the state on track for emissions-free electricity by 2045, many conversations were characterized by a new discourse focusing solely on the question: How does the world eliminate carbon? In particular, the business community emphasized a preference for and the benefits of technology-neutral solutions to climate change. “If we focus on the result, that is eliminating carbon, we can get there much faster and cheaper”, said Exelon’s Senior Vice President David Brown, citing evidence from a new MIT study that argues that accelerating the deployment of so-call of “firm low-carbon resources” such as nuclear power or natural-gas plants that capture carbon dioxide—rather than relying on 100% renewables supported by batteries—could cut electricity costs by up to 62 percent.
Carbon markets, such as cap-and-trade, as well as a carbon tax, were discussed by the policy community, lawmakers and business representatives alike as market-friendly and politically feasible mechanisms. Cities and states, among others, represented a strongly growing formation of non-state actors pushing for and implementing ambitious climate goals. Shell’s Chief Climate Advisor David Hone explained Shell’s Sky Scenario Analysis and highlighted the importance of carbon markets for CCS. Gerard Mestrallet, former chairman of Engie and Suez and CEO of the Carbon Pricing Leadership Coalition, represented the business community’s view by advocating for a stable carbon price as a pre-condition for strong CCS deployment.
The law firm Kilpatrick & Townsend hosted a discussion on Private Sector Investments in Climate Technologies - Return on Investment and the New 2018 US Tax Credit for Carbon Oxide Capturing Technologies assembling experts Brent Constantz, Chief Executive Officer at Blue Planet, Marcius Extavour, Senior Director, Energy & Resources at XPRIZE, Damien Gerard, Commercial Director at Oil and Gas Climate Initiative (OGCI) Climate Investment LLP, Steve Oldham, Chief Executive Officer at Carbon Engineering Ltd. and Heather Preston, Partner at Kilpatrick Townsend & Stockton LLP. The panel was moderated by Siegmar Pohl, who is a partner at Kilpatrick Townsend & Stockton LLP. The discussion focused on how the reformed tax credit of $50/t for geologic storage of CO2 and $35/t for CO2 used for enhanced oil recovery improves the market outlook. While different ideas and business models to capture and use carbon were discussed, deployment at scale was identified as the industry’s key challenge and businesses are increasingly uncertain about the stability of the policy environment. Gerard proposed to start with commercial facilities in the United States’ Midwest which are venting pure CO2 into the air. “There are 250 facilities venting 80 million tonnes of pure CO2 in the air. Let’s start there.” The panel’s conclusion: The world will be continuing to burn fossil fuels around the world. Carbon capture is essential. 45Q is a needed tool to bring down the cost, but the project pipeline has to follow.