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IPCC Finalizes Synthesis Report of the Sixth Assessment Report

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The Intergovernmental Panel on Climate Change (IPCC) announced the finalization of its Synthesis Report of the IPCC Sixth Assessment Report (AR6) during its 58th Session held in Interlaken, Switzerland, March 13-19, 2023. The IPCC also published a Summary for Policymakers (the Summary) in advance of the release of the Synthesis Report, as well as a Longer Report and a Presentation. The Synthesis Report integrates the main findings of the AR6 and provides an overview of the state of knowledge of climate change, its widespread impacts and risks, and climate change mitigation and adaptation. The Synthesis Report has been highly anticipated and is the last of the Sixth Assessment Report products, due for release in time to inform the 2023 Global Stocktake under the United Nations Framework Convention on Climate Change. It provides an unprecedented level of scientific analysis and indicates that there are numerous, feasible, and effective options currently available to reduce greenhouse gas (GHG) emissions and adapt to human-caused climate change. Media reports from the New York Times emphasized that the Earth is likely to cross a critical global warming threshold by 2030 without rapid and drastic reductions in global GHG emissions. Reuters, quoting from the Summary, noted that “there is a rapidly closing window of opportunity to secure a livable and sustainable future for all”. This bulletin briefly highlights key findings of the Synthesis Report included in the Summary. The Summary is divided into the following three sections: Current Status and Trends, which covers the historical and present period.  Future Climate Change, Risks, and Long-Term Responses, which addresses projected futures up to 2100 and beyond. Responses in the Near Term, which considers current international policy timeframes, and the time interval between now and 2030-2040. Current Status and Trends. The Summary notes that: Human activities, principally through emissions of GHGs have unequivocally caused global warming, with global surface temperature reaching 1.1°C above 1850–1900 in 2011–2020,…

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Canada Releases 2030 Emissions Reduction Plan

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Environment and Climate Change Canada (ECCC) today released the 2030 Emissions Reduction Plan (the Plan) under the Canadian Net-Zero Emissions Accountability Act (the Act; read our earlier bulletin on the Act here). The Plan sets out current actions, additional funding of $9.1B, and several new initiatives to meet Canada’s emissions reduction target of 40-45% below 2005 levels by 2030, as provided last year in an update to Canada’s Nationally Determined Contribution (NDC) under the Paris Agreement (read our earlier bulletin on Canada’s updated NDC targets here).   The Plan also sets a new interim objective of reducing GHGs by 20% below 2005 levels by 2026, noting that this interim objective is not an official target akin to Canada’s 2030 NDC, but that progress towards achieving the objective will be a cornerstone of progress reports associated with the Plan in 2023, 2025, and 2027.   This bulletin highlights key parts of the Plan and summarizes the newly announced funding and initiatives, across the following categories: Carbon pricing Clean fuels Clean growth funding Methane Buildings Electricity Heavy industry Oil and gas Transportation Agriculture Waste Nature-based solutions Clean technology and climate innovation Sustainable finance Jobs, skills, and communities Prime Minister Justin Trudeau launched the Plan in an address at the GLOBE Forum in Vancouver earlier today.  Carbon pricing. The Plan notes the measures undertaken to address economy-wide emissions including the federal fuel charge and the Output-Based Pricing System for industrial emitters under the Greenhouse Gas Pollution Pricing Act. Escalating the federal benchmark price to $170 by 2030 is meant to further support the 2030 targets of the federal government along with continued consultations on a possible border carbon adjustment (read our earlier bulletin here). Very significantly, the Plan puts forward the concept of investment approaches, like carbon contracts for differences, which enshrine future price levels in contracts between the federal government and low-carbon…

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Energy Charter May Put Paris Agreement at Risk

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The Globe and Mail reports on growing support in Europe for withdrawing from the Energy Charter Treaty (ECT) as the threat of multibillion-euro lawsuits by fossil fuel investors intensifies. The increasing costs associated with claims under the ECT may also put the ambitions of the Paris Agreement at risk if signatories choose to allow fossil fuel companies to continue to emit greenhouse gases (GHGs) instead of paying compensation for lost investments.   The ECT was drafted and signed, as the Soviet Union was dissolving, to protect European energy firms entering Russia and former Soviet Republics. The intent of the ECT was to allow investors to sue governments for policies affecting their new investments. The ECT is quickly becoming a vehicle for claims by fossil fuel companies to attempt to recoup losses from their investments as a result of climate action and the decarbonization of economies across Europe. It is estimated that claims brought by fossil fuel companies seeking compensation for climate policies could reach €1.3 trillion by 2050. Remaining subject to the compensation mechanism of the ECT could result in large payouts to fossil fuel companies unless countries choose to allow them to continue to emit GHGs for at least another decade under the terms of the ECT.   Four claims have already been brought under the compensation mechanism of the ECT, with a combined total of more than €2.5B.  A similar claim, against the US government for $15B USD, was brought by TC Energy for the cancellation of the Keystone XL pipeline as a NAFTA legacy claim. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

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IPCC Releases Report Indicating Global Temperature Rise to Exceed 1.5-2ºC

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The Intergovernmental Panel on Climate Change (IPCC) yesterday released the IPCC Working Group 1 report, “Climate Change 2021: The Physical Science Basis” (the Report), part of the Sixth Assessment Report, providing an updated assessment of the physical understanding of the current state of the climate system and climate change. The Report predicts that global temperatures are likely to continue to increase beyond the 1.5-2°C target of the Paris Agreement without widespread and steep global reductions in greenhouse gas (GHG) emissions. This bulletin summarizes the Report’s key findings. The current state of the climate. The Report reiterates that the warming of the atmosphere, oceans, and land are human-caused, with rapid changes being observed in the atmosphere, ocean, cryosphere, and biosphere. In addition, the Report confirms that anthropogenic climate change is globally affecting weather and climate extremes, with increased heatwaves, heavy precipitation, droughts, and tropical cyclones more readily attributed to human influence. Possible climate futures. According to the Report, under all emissions scenarios, global surface temperatures will continue to increase until mid-century, with temperatures predicted to exceed 1.5-2°C this century without deep reductions of GHGs. As the climate warms, changes in climate systems will become larger, increasing the frequency and intensity of hot extremes, marine heatwaves, heavy precipitation, droughts, intensity of tropical cyclones, and reductions in Arctic sea ice, snow cover, and permafrost. The Report indicates that changes in the ocean, ice sheets, and global sea levels, resulting from past and future GHG emissions, will likely be irreversible for hundreds of years. Climate information for risk assessment and regional adaptation. The Report indicates that all regions are expected to increasingly experience concurrent and multiple changes in climatic impact-drivers amplified at 2°C compared to 1.5°C, with greater increases at even higher global temperatures. The Report also indicates that even “low-likelihood” outcomes such as…

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U.S. Democrats Unveil Border Carbon Adjustment Legislation

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U.S. Senator Chris Coons and House Representative Scott Peters, both Democrats, earlier this week unveiled the “Fair, Affordable, Innovative, and Resilient (FAIR) Transition and Competition Act” (the Act), which, if enacted, would establish a border carbon adjustment (BCA) to be imposed as a fee on imports, starting on January 1, 2024. This follows the recent release of climate and emissions reduction proposals by the European Commission which also include BCAs for imports into the European Union. This bulletin briefly outlines the key provisions of the Act. Sectors. The Act would apply to industrial facilities that produce the following products: Steel; Aluminum; Cement; Iron; and Any product which is composed of over 50 percent of any of the above products. Determination of domestic environmental cost incurred. The Act would empower the Secretary of the Treasury (the Secretary) to annually determine the domestic environmental cost incurred for each sector or the average cost to produce a covered fuel (natural gas, petroleum, and coal), to comply with federal, state, regional, or local law, regulation, policy or program which, inter alia, is designed to limit or reduce greenhouse gas (GHG) emissions, including cap-and-trade systems, carbon taxes, and fees. Border carbon adjustment. The Secretary would administer the BCA through regulation and guidance. The Secretary of State and the United Stated Trade Representative would engage with other countries to reduce global GHG emissions and ensure fairness in the application of the emissions-based tariffs. A fee would be applied to any covered good (either a covered fuel or product produced within a sector) to be determined based on the domestic environmental cost incurred multiplied by the production of GHG emissions of the product or the upstream GHG emissions of the covered fuel. The BCA would not apply to (i) countries on the Least Developed Countries list of the OECD and (ii) countries that…

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