Notes From Copenhagen
Katherine Hamilton, president of GridWise Alliance is attending the climate change conference in Copenhagen this week, and sends her takeaways to this editor, as follows:
Today began for me with a side event held by the World Energy Council (WEC) moderated by Fiona Harvey of the Financial Times. The first speaker was Pierre Gadonneix, Chair of the WEC, who spoke about their 2009 assessment on world energy.
The report deals with two main issues—public policy around energy and key lessons learned from those policy discussions. He talked about the energy sector needing to be part of the solution rather than part of the problem. He said effective public policy must deal with climate change, security of supply, and fuel poverty, reconciling those environmental, economic, and social issues. The main lesson learned is that energy policies need to be long-term since energy business entities need several decades to implement change. Gadonneix said COP-15 outcomes should have clear, long-term, specific commitments. He went on to say that underpricing energy leads to underinvestment in energy infrastructure and energy efficiency. He thinks we need guidelines to keep costs in check while mitigating emissions. He advocates tailoring policies to the maturity of the technology and supports public-private partnerships, demonstrations, and international cooperation. He also thought that there should be initiatives specifically designed to educate citizens. The next WEC report will be released at their meeting in Montreal in September 2010.
The second speaker was Jean Rozwadowski, Secretary General of the International Chamber of Commerce . He began by stating some of the issues around energy—the need for poverty alleviation in developing countries; that energy is one of our basic needs, of which is global and mult-sectoral; and that there is a climate as well as economic crisis. Each nation has different energy resources, legacy investments, and national policies. The WEC assessment is critical because it gives careful consideration and takes a holistic view of policies and practices. There are significant long-term challenges facing all sectors; broadening the energy mix will be important. He suggested that renewable energy development would increase local supplies of energy as well as export markets but was firm in stating that all energy options should remain open. Public-private partnerships are critical and sectoral-based approaches should be expanded. The ICC sees Copenhagen as the first big step along a path to address all climate change issues. He supports the UNFCCC process but reiterated that the private sector needs clear, predictable framework for investments. It was clear from the presentation that the International Chamber of Commerce sees climate change as a more serious crisis than does the U.S. Chamber.
Peter Brun, Senior Vice President at Vestas , the world’s largest manufacturer of wind turbines, spoke next and mentioned that with 30 years of experience producing wind in nine countries, wind energy should be considered a “mature newcomer” to the energy market. A wind turbine installed outside of the Bella Center generates energy for these COP-15 meetings. The wind Industry needs clarity on policy; technology investments are held up otherwise. There is consensus in the entire energy sector that there needs to be a clear framework and conditions surrounding proper wind implementation. While the power sector accounts for 40% of carbon emissions, it is generally highly regulated so that there is more potential to control it. The price of carbon needs to be set high enough to factor in investments. EU learned that it had set prices too low and in 2013 will move to a 100% auction system with a higher price on carbon. Brun also stressed that we need increased transparency in the discussion.
Andrei Marcu, Senior Vice President of Energy Policy for Marcuria Energy , has been operating carbon markets for a number of years. He said that COP-15 is an unprecedented meeting with a feeling of urgency and need to contribute. Kyoto was just a warm-up. The mechanism is key, but has not been finalized. With a staggering price tag, it will be critical to tap into both the public and private sectors. One piece of the framework will be carbon markets as key to deployment. There needs to be a carbon finance market that guides the energy market into lower carbon sources. To accomplish that we need a carbon price for developed countries and finance flows for undeveloped countries as well as a credible off-set program. The Clean Development Mechanism (CDM) is capricious and picks low-hanging fruit rather than making technology neutral instruments available to all countries.
The audience’s questions included several about the viability of nuclear energy, carbon capture and sequestration, and energy efficiency (with an emphasis on needing clear policies rather than assuming it will happen on its own). I asked whether the panel considered smart grid—a technology set not mentioned by any of the speakers—important in linking clean supply technologies and energy storage with demand response, energy efficiency, and distributed generation. Mr. Marcu and Mr. Brun both jumped in and declared that smart grid is indeed key to enabling all of these other technologies. An issue, however, is that people don’t know exactly what smart grid is.
Coming up Friday: Meeting with Secretary Locke, Copenhagen Business Day, Bella Center Coffee Sponsorship, Cool Dinner with World Business Council on Sustainable Energy. Stay tuned.
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