Qatar summit - expect the unexpected ...

We have learnt to expect surprises at the annual UN climate change summits. At Durban, a year ago, there was the unexpected, but welcome, agreement to begin negotiations on a new legally binding instrument involving all major emitters of greenhouse gases, to be finalised by 2015, and to take effect in 2020.

At Copenhagen and Cancun, in 2009 and 2010 respectively, negotiators, (to the surprise of many), abandoned ‘Plan A’ for an international emission control agreement in favour of ‘Plan B’ (proposed by the Danish Prime Minister) including 2020 ‘pledges’ and a solid information exchange agreement between countries about their present and future emissions. This proved to be a prerequisite for the effectiveness of the platform subsequently agreed at Durban.

The 'unexpected' may also be in store this year with Qatar, as host, probably looking for a big initiative to underline its growing credentials on the world stage. The summit, from November 26 through to December 7, represents an unparalleled opportunity to engage Gulf States. With their oil-wealth and growing technological and research strengths, the Gulf States could transform the international climate change strategy.  Yet, as a group, they have been largely ignored to date by the rest of the world.

So what might a ‘game changing’ contribution from Qatar and the Gulf States to the climate negotiations look like?

Fossil fuels – the basis of the wealth of Gulf States - are likely to remain a major part of the global energy supply for decades. The Gulf States could lead the development and funding of Carbon Capture and Storage (CCS) technology to capture and store the greenhouse gas exhausts from the combustion of fossil fuels and prevent their emission into the atmosphere.

CCS is important. There is no credible scenario, without this technology, under which emissions can be sufficiently reduced over the next 30 years, a requirement for limiting global average temperature rise to within about 3 degrees Celsius by 2100, which is well above the agreed UN goal of 2 degrees Celsius. Other technologies such as nuclear will progressively make a larger contribution to meeting this goal. 

Storage of carbon dioxide in rock where oil and water have been extracted is well established, particularly in the oil industry. Although plans are being discussed in many countries, only a few, including China and Norway, have experience of industrial level pilots for extracting carbon dioxide from exhaust gases from power plants.   

The overall costs of CCS have been estimated as comparable to the extra costs of renewable energy; but CCS has the advantage of not being dependent on the weather, and is particularly applicable in countries that rely on coal like China and India.

In the long-term, CCS will only be viable in market economies if sufficient costs are imposed on installations that emit carbon.

Estimates suggest that, once CCS technology is mature, a carbon price of between $44 and $103 will be sufficient to make CCS viable.  The current price of carbon in the EU (the world’s major carbon market) is much lower. 

However, a tightening of the cap on emissions from 2013 means that the EU carbon price is on an upward trajectory and, conceivably, could reach this critical price band.  Moreover, recent laws and proposals to set up carbon markets in Australia, China, Mexico, South Korea and California indicate a world-wide trend towards pricing carbon as a policy tool. 

Achieving CCS in the short- to medium-term requires big capital investments to build the commercial scale demonstration projects that will help to bring down the costs. With uncertainty about regulations and about the future price of carbon, together with fiscal constraints on most governments and businesses, investments have not been forthcoming.

However, this could be about to change in a dramatic way.

First, the regulatory outlook is now more certain. The Kyoto Protocol has been extended and it is more likely than before that there will be stricter carbon constraints on all major countries after 2020, reducing the long-term regulatory risk of investment in CCS.

Second, Gulf States have a growing incentive to commercialise CCS, possibly using their massive Sovereign Wealth Funds. Because it eliminates emissions of greenhouse gases, CCS potentially makes fossil fuel markets environmentally sustainable, even in a highly carbon constrained post-2020 world. Once commercialised, CCS technology will be exportable around the world, boosting low carbon industry and creating jobs.

Third, there is fossil-fuel dependent China.  In the world’s second largest economy, while its emissions are still growing, strategies and studies are underway to have a clear timetable for reductions in emissions under a post-2020 international climate change deal.  It is in China's interest to commercialise CCS and other advanced technologies.  With rapid economic growth leading to a high rate of construction of fossil-fuel power stations, that are mostly coal-fired, the large demand for CCS should soon bring down its costs. 

As well as China and the Gulf States, it is likely that the European Union (with the world’s largest carbon market) would also support progress on this CCS agenda.  This would help tackle the issue of significant carbon emissions from coal in some countries, like Poland and the Czech Republic, that act as a brake on much of Europe’s overall ambition on tackling climate change.  

The opportunity for Gulf States, and also China, is crystal clear. And, if Qatar is looking for something big to showcase its credentials on the world stage, this may be it.

Lord Hunt is Visiting Professor at Delft University and former Director-General of the UK Met Office.

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