At the end of 2015, Paris hosted a very important international conference by the name of COP 21, which was expected indeed in fact deliver commitments on the part of all the participating countries for action towards decarbonizing, reducing emissions, in this way protecting the world against climate change which is a major threat. In the previous unit, we discussed the evolution of the energy system in the concept of energy transitions. Now, I have with me my colleague Professor Manfred Hafner, who teaches a course on Decarbonization Scenarios, and participated in the conference. So my first question to him is can you tell us what was decided at the conference and why it is important. Well, first of all, the COP 21 in Paris was different from the previous COPs, and in particular the one of Copenhagen. In the sense that for the first time, we did not try to get an agreement, an intergovernmental agreement of countries top-down to try to get two degrees centigrade targets and impose to everybody to reach that target, but to have rather a more bottom-up approach in which every country would propose this what they called INDCs, the pledges, in order to pledge what they will do, in order to contribute as much as possible to decarbonisation agenda. When we look at all these pledges together, but first of all, 196 countries are represented in the UNFCC, and of these 196 countries, 184 presented pledges which represent 96 percent of all greenhouse gas emissions in the world. When we look at what these pledges represent, it does represent a decrease of the temperature increase in 2,100 compared to the pre-industrial level of compared to the business-as-usual which would be between five and six degrees down to 3.5 degrees which is not enough compared to what had been announced as the target which is two degrees or even what has been announced as the aspirational target which is 1.5 degrees. So to make a comparison, this is like a picnic in which the participants have been told bring something to eat and there has been no pre-established assignment. You bring the meat, he brings a fish and I bring the wine. But each one has been left to decide what they can bring, and altogether it seems from what you said at the end of the day, there was not enough food considering the expectations, the pledges do not allow to meet the target of containing global warming within two degrees centigrades maximum. That is correct but I think it was a big success in the sense that we did reach an agreement, among all the participants among all the 184 countries. The pledges do not at this point in time would be allowed to reach the target of two degrees which was announced as the target, but it has been announced and it has been decided that every five years they would renegotiate these pledges in order to push them progressively down to reach this two degree centigrade. The other thing which has been decided and this is very important is a bottom-down approach of validation and measurement of the implementation policies of these pledges. Okay, so the idea is that maybe there was not enough food this time but there might be enough food at the next edition which is five years and if not in five years in 10 years. But explain to us what might be the most important consequences on the energy system of this pledges and especially of the aspiration to limit global warming to less than two degrees, I mean, what necessarily has to change? Yes. Now, first of all, I think the novelty of this COP was that or particularity of the success of this COP was that the movement has been put in place and then we need to have this renegotiations every five years. Well, I mean, if we want to decarbonize and to reduce the increase of the temperature limiting to two degree centigrade, this means a total revolution, the industrial revolution, a fourth industrial revolution, as far as the way we produce and consume energy, we will need to progressively phase out fossil fuels, unless we have carbon capture storage available, we might need to go more for nuclear which is one way to decarbonize. We have obviously several options for renewable energies available, and most importantly and the cheapest way of doing a lot of this is energy efficiency, this is in the long run. In the short turn, a lot can be achieved relatively cheaply by fuel switching. For instance, from going from coal to gas, this is a very cheap way of decarbonizing or starting the process, and obviously energy efficiency. You said progressively phase out fossil fuels but what does that mean? Progressively phase out fossil fuels do you think we are going to still use oil in 2050, for example? Yes. The inertia of the energy systems are very long. It is not feasible to phase out oil in 35 years. But I mean if we continue on this decarbonization path, we need instruments. We need instruments to make this happen. You can have command control instruments like regulation or economic instruments. Typically, economic instrument would be carbon pricing. Now, if you have a proper carbon pricing in place, progressively with the technological progress of renewables, for instance, which are due to a learning curve which are supposed to become cheaper, and if you progressively tax further all fossil fuels, at a certain point in time, renewables will become cheaper than some fossil fuels. Now, what we need to understand is that all of this will become very expensive. We have done some modeling exercises, the shadow carbon price you need in order to decarbonize down to two degrees centigrades, by 2050, in 2050, is in the order of €500 per ton of CO2 which is huge. Part of this will be seen as a carbon price, part of this will be hidden, this is why we call it a shadow carbon price through regulation. But the cost will be high, but this is what we will need to pay in order to decarbonize, and the idea of doing that is that adaptation will be even more expensive than mitigation. Yes, but maybe the rich industrial countries will have the money and will pay for this very expensive transformation of the energy system. But what about the poorer developing countries, can they afford this? This was one of the big issues at the last COP, and this has been one of the big issues at all the different COPs in the past. How to share this burden of decarbonizing knowing that industrialized countries they have a historical responsibility because they have brought us where we are. But the future increase of demand, the future growth and economic activity is located in developing countries, and therefore the idea is that there is some help from the industrialized countries to the developing countries. But progressively, we can see that even China which in the past was reluctant to do something and to commit to something, now they are less reluctant, now they are more proactive for simple reasons that they are facing very strong local pollution issues and therefore when you start to address local pollution issues on the eastern part of China, people cannot breathe due to this huge increase of coal. Coal has increased tremendously over the last 10-15 years and 80 percent of this increase was due to China, 50 percent of the total coal demand in the world is China. If they want to reduce this by substituting it with gas for instance or China is the country which increases the most worldwide wind energy every year. So they are doing a lot and they are doing it because they feel that it's important for them locally, and also because they realize they want to be a very important country worldwide, and if they want to do so and to be so, they need to take up some responsibility worldwide.
