CLIMATE CHANGE BUSINESS JOURNAL® Volume VII, No
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on for the Clim mati ate C for han In g ic e I g nd te u a s r t t r S y CLIMATE CHANGE BUSINESS JOURNAL® Volume VII, No. 10-12 Fourth Quarter 2014 Climate Change Service Climate Change Industry Drivers 2014 Providers Track Growth to While climate change continues to be discussed at the global, regional, national, Non-Regulatory Drivers state and local levels, distinct market drivers to propel growth in climate change industry segments remain few and far between. Nevertheless a number of corpo- he December 2014 Lima climate rate and government initiatives are keeping technology and services providers busy. change talks concluded with an outcome that was relatively Greenhouse Gas Reporting: Consultants help clients derive bottom line value Tsuccessful—as long as one didn’t expect from GHG and sustainability metrics; CPG and Retail focus on supply chains 4 a breakthrough agreement. Negotiators Climate Finance: The private sector favors mitigation projects, but consultants agreed on some key building blocks and see a trend towards funding more resilience and adaptation work. AECOM interim steps to prepare for the December Australia and independent consultant Michael Furniss refect on public and 2015 Paris meeting—most importantly, private sector fnancing for adaptation 9 that each country provide its Intended Nationally Determined Contribution Q&A With Climate Advisers: Andreas Dahl-Jørgensen, Managing Director (INDC) for greenhouse gas (GHG) of Climate Advisers, discusses the fast-moving development of corporate reductions by March 2015. commitments to source “zero-deforestation” commodities 14 At Paris in December 2015, nations Clean Power Plan will create demand for counsel, consulting and scenario planning: will agree on—or fail to agree on—post- CCBJ explores the opportunities with Analysis Group, Black & Veatch, Crowell and Mor- 2020 climate change mitigation and ing, ICF and Leidos Engineering 17 adaptation goals. Based on conversations ERM on carbon and climate risk management: CCBJ talks to ERM Principals with analysts and our own history of ob- Simon Aumonier and Gregg Demers 24 serving (from afar) climate negotiations, we’re confdent in predicting that COP 21 Mott MacDonald brands new Climate Resilience Division and sharpens its in Paris will yield nothing like a binding focus on adaptation work 25 agreement. KPMG South Africa sees the private sector knuckle down to GHG reporting and mitigation as carbon legislation approaches 28 Tere is little political support in the United States, Canada, Japan or Australia More cities take action on climate change 31 for a binding international agreement like Kyoto. Indeed, ratifcation of such a treaty by the U.S. Senate is a political impos- mutually agreed upon reporting method- Tis would be highly advantageous for sibility—and will likely remain so for at ologies, countries and NGOs will be able GHG mitigation, as investment would be least a decade if not much longer. to monitor how nations are performing drawn to the least-cost, highest-impact relative to their goals, and apply pres- Instead, Paris will almost certainly reduction measures. sure to meet targets that are missed and yield a commitment to continue the increase ambitions as targets are achieved. But while there’s a growing trend “pledge and review” process, in which toward creating national emissions trading countries commit to INDCs and then Whether an international carbon trad- schemes—more than 60 have been an- report their progress periodically. Trough ing scheme emerges is a major question. 2 Climate Change Business Journal Strategic Information for the Climate Change Industry 4th Quarter 2014 CLIMATE CHANGE BUSINESS JOURNAL® nounced or are in various stages of devel- gas turbine power—and potentially even opment—key nations and regional blocs nuclear power. See the story on page 17. have signaled that they intend to keep Vol. 7, No. 10/11/12 R5,--/,5)(5),*),.#)(-5.)5,*),.5 their markets domestic. None of China’s ISSN 1940--8781 and manage their GHGs has been grow- Fourth Quarter 2014 seven regional ETS pilots will allow for- ing from investors, NGOs, wholesale eign ofsets for compliance, while Europe customers and other stakeholders in re- Editor- in-Chief has signaled that it wants to end the use cent years; and a growing number of large Grant Ferrier of foreign ofsets for compliance. (Europe companies are measuring and reporting is still linked with New Zealand and had Senior Editor their GHG emissions, most of them to been expected to link with Australia until Jim Hight CDP, formerly the Carbon Disclosure that nation did an about-face on climate Project. Managing Editor policy in 2013). Lynette Thwaites Large consumer goods companies On the adaptation side, Lima provided and retailers in particular are becoming Contributing Editors an optimistic sound bite as pledges to the increasingly sophisticated in measuring, George Stubbs Green Climate Fund exceeded $10 bil- reporting and managing their GHGs— Brian Runkel lion. “Tis was an important milestone to and letting the public and stakeholders Charles Helget both demonstrate the confdence of donor Andrew Paterson know about their eforts. Te story on countries in the GCF and build trust with Walter Howes page 4 describes the key trends and issues developing countries that the funds would Tom Aarts in this growing market. fow,” wrote a team of World Resources Research Analysts Institute staf members just after Lima R5)'')#.35-/**&#,-5(5'(/- Celeste Ferrier concluded. However, the United States’ facturers who source palm oil for their Jenny Christopher contribution of $3 billion will be difcult products are increasingly committing to to get through Congress. (For more on Subscriber Services zero-deforestation production standards, climate fnance, see story in this edition Moe Wittenborn which will have profound implications for on page 15). preserving and rebuilding carbon stocks Climate Change Business Journal® in tropical forest. A Q&A with a leading newsletter is published in quarterly Drivers in Absence of Coordinated expert in this topic on page 14 explains feature editions and special National or Global Policy supplements by Environmental why there’s reason for hope with this new Business International Inc., 4452 As CCBJ has been emphasizing for at corporate initiative. Park Blvd., Suite 306, San Diego, least fve years, however, there are robust R5!#)(&5Ŀ),.-5,5&-)5!#(#(!5#(5 CA 92116. 619-295-7685 or email and growing forces—completely inde- [email protected] signifcance, including not just states and pendent of global negotiations—driving provinces like California and Quebec © 2014 Environmental Business investment in climate change mitigation International Inc. All Rights Reserved. but also cities. Between the C40 Cities and adaptation: This publication or any part may Climate Leadership initiative and the not be duplicated, reprinted or R5.#)(&5(5,!#)(&5*)&##-5)(.#(- recently announced Compact of Mayors, republished without the express ue to gain strength, with the key examples at least 228 cities had GHG reduction written permission of the publisher. in North America being California’s goals that equate to an annual reduc- How to subscribe climate policy and President Obama’s ex- tion of 454 million metric tons of carbon Annual subscriptions are $995 for ecutive branch actions. In this edition, we dioxide-equivalent (MtCO2-e) by 2020 individual or single-use subscriptions; look at the early activity by electric power and a cumulative total of 13 GtCO2-e by corporate electronic subscriptions market participants and their professional 2050. Climate action by cities is covered start at $1,250 (up to 5 users). To service consultants and advisors to plan on page 31. order or for more information call for the EPA’s Clean Power Plan. (619) 295-7685 x 15, email info@ It is likely that many more cities and climatechangebusiness.com, or go While it’s still early in this game, and states will set GHG reduction targets, to www.climatechangebusiness.com, where you can also sign up for the key court decisions are looming, the Clean especially as NGOs and activists become complimentary CCBJ Weekly News. Power Plan will likely strengthen market more frustrated with the lack of progress drivers for renewable power, energy ef- in senates and parliaments and on the ciency, energy storage and combined-cycle international stage. 4th Quarter 2014 Strategic Information for the Climate Change Industry Climate Change Business Journal 3 20 Years Since COP 1; Still Not Much products necessary to create a low-carbon able diferences in segment growth rates. Policy Glue to Hold a Global Climate economy continues to grow apace. In low-carbon power, the decline in wind Change Industry Together energy installations dropped U.S. revenues When CCBJ frst started using the in spite of strong growth in solar, but 2015 will mark 20 years since the frst term climate change industry in 2007, global growth was sustained, albeit at a global climate meeting, the frst ‘Confer- the prospects for national and even global 6% rate that was 20 points lower than the ence of the Parties’ meeting or COP 1. policy were not as dim as they have been segment’s average growth the previous Te December 2014 meeting in Lima that past fve years. And while cohesive seven years. In carbon markets, the decline was COP 20 and also incorporated CMP policy around limiting or putting a price in EU carbon permit prices to below 5 10 or the tenth Meeting of the Parties to on carbon emissions would lead to a more euros/tonne and a decrease in volume the Kyoto Protocol. At COP 1 in Berlin, cohesive climate change industry, CCBJ contrasted with the nascent activity in negotiators committed to “protect the still believes it is valid to view the industry California and regions of China whose climate system for the beneft of present in its entirety as presented below, or at growth still has a long way to go to bal- and future generations of humankind, on least as a collection of loosely-connected ance the volumes in the more mature EU the basis of equity and in accordance with segments with some common drivers.