Turning groundwater into farmers’ underground insurance against climate change

Robert Akam and Guillaume Gruère, OECD Trade and Agriculture Directorate. Follow the Global Forum for Food and Agriculture (GFFA)  at #GFFA

Despite the recent drought in California, farms have continued to supply water-intensive crops such as fruits and nuts to consumers both in the US and around the world. Doing so has not always been easy for farmers – or for the environment. Agricultural producers turned to groundwater to irrigate their crops, a change made so intensively that in some parts of the state the ground started sinking because the water table had fallen so much.

The south-western United States is not an isolated case. The green fields of India’s Punjab state hide a similar problem. Groundwater supplies around 60% of India’s water needs for agriculture but the country suffers from depletion and pollution of this water resource in approximately 60% of its states. In Punjab, India’s breadbasket, demand for water already outstrips supply by 38%.

These countries are only examples of a growing global policy challenge. The disruption that climate change poses to water supplies in many parts of the world only increases the importance of correctly managing this resource. Getting groundwater policy right could ensure that farmers have supplies of water to last them through dry periods.

The OECD and the International Food Policy Research Institute (IFPRI) have organised a panel discussion on groundwater and agriculture at the Global Forum for Food and Agriculture (GFFA) 2017 on Friday 20 January in Berlin. The speakers will discuss how this vital resource for agriculture around the world can be properly managed to ensure that policy decisions taken today will protection future food production. The outcomes of the discussion will feed into the following day’s GFFA meeting of agriculture ministers where the topic of water and agriculture will be discussed.

Groundwater supplies need to be properly managed because this resource has the potential to provide a reliable, on-demand source of water to irrigate crops, and has become central to agricultural production in a range of countries. Groundwater accounts for over 40% of global irrigation on almost 40% of irrigated land and has become indispensable for agriculture production in many countries. It accounts for half of South Asia’s irrigation and supports two-thirds of grain crops produced in China. OECD countries alone extract an estimated 123.5 km3 of groundwater each year to irrigate semi-arid areas.

This heavy use of groundwater has become unsustainable in many regions. High rates of extraction may boost production today but doing so also causes problems such as land subsidence, salinisation, and other forms of land and water quality degradation.

These knock-on effects may be putting global food security at risk.

Already a number of OECD regions are facing challenges in pumping water out of the ground. A quarter of surveyed irrigating regions in the OECD that use groundwater are seeing a major reduction in well yields as well as significant increases in pumping costs (see Figure 1).

Importantly, there are efforts that policy makers can implement that can ensure that groundwater can continue to feed billions of people around the world.

“You can’t manage what you can’t measure” has become a mantra for groundwater campaigners in California. The same approach must be applied in countries around the world. Greater information needs to be collected about stocks and flows over time – data without which it becomes almost impossible to implement effective management.

And where groundwater stresses are identified, governments must put in places measures that not only reduce water demand, but also take into account how surface and groundwater interact. These measures would go some way to preventing collapses in water supply for agriculture. Excess groundwater demand in Punjab could be curbed by providing information on best practice to farmers and by realigning economic incentives away from electricity and crop subsidies and instead encouraging sustainable irrigation systems.

A locally-focused package of regulatory, economic and collective-action approaches should be introduced in areas of intensive groundwater usage. This package should support a well-defined groundwater entitlement system, incentive efficient resource use and, importantly, involve the local users. In California, the state government introduced the 2014 Sustainable Groundwater Management Act, under which  local agencies are being formed that will develop regionally-specific and long-term water management programmes with defined sustainability objectives.

Groundwater has the potential to act as a natural insurance mechanism for farmers, so that they are not reliant on surface water to continue to produce in times of drought. This resource would support them in an increasingly volatile climate and allow us to keep producing the food demanded by a growing global population.

Useful links

More information on the GFFA panel discussion can be found here together with a list of the speakers.

The OECD’s review of groundwater policies in agriculture, which includes 16 country profiles, can be found here

An overview of the OECD’s work on water use in agriculture can be found here.

IFPRI’s work on water policy can be found here.

The climate scientist and the teacher

From Naudet, J (2000) Finding Problems to Fit the Solutions: Twenty Years of Aid to the Sahel, OECD Publishing, Paris
From Naudet, J (2000) Finding Problems to Fit the Solutions: Twenty Years of Aid to the Sahel, OECD Publishing, Paris

Laurent Bossard, Director, OECD Sahel and West Africa Club (SWAC) Secretariat

In the second of the SWAC/OECD Secretariat’s West African Papers series (“Climate Impacts in the Sahel and West Africa: The Role of Climate Science in Policy Making”), Carlo Buontempo and Kirsty Lewis of the Met Office UK consider the role climate science plays in policy making.

I had thought about calling this blog: “Don’t leave climate change policy solely to climate scientists!”. After all, the authors themselves stress that climate scientists are not necessarily fully equipped to identify what the key components of climate and climate change are in relation to a population’s needs. In the end, I resisted the temptation because I sincerely admire this profession whose daunting task it is to help us build a better future for the planet.

The question is: “how can the terabytes of data generated by the Intergovernmental Panel on Climate Change (IPCC) climate models be of use to African farmers?”. If a farmer is asked what they need, their reply will probably be for more accurate and local short-term weather forecasts to ensure that their seeds are sown at the right time. It would seem therefore that a distinction has to be made between meteorologists – who are likely to cater to the farmer’s request – and climate scientists.

The authors of this paper remind us that climate change is not just about a change in climate towards hotter, wetter, and drier conditions, but also about an increase in the variability of the climate, as well as in the number and severity of extreme events. So yes, it would be very useful to provide more accurate weather forecasts but, for all this, the need to factor in the structural dynamics associated with climate change would remain unaddressed.  Helping farmers to anticipate these dynamics and manage risk is what a “climate service” should be able to offer its African users.

Everybody seems to agree on this issue but the “how” is apparently still far from being resolved. The argument developed in this paper is that agricultural and rural communities should be listened to in order to understand how the “climate factor” fits in with their specific problems, opportunities and prospects.  The climate factor does not, therefore, replace all other issues faced by African farmers, but is an addition to them. The climate factor could thus be of central importance or less relevant, a triggering or aggravating mechanism, all depending on the context. As a result, importance should be placed upon defining the issues and asking the right questions.

I believe this message is important because it reminds us of the importance of the “human factor”. Back in 1967, a teacher named Lédéa-Bernard Ouedraogo, from Yatenga province in what is now Burkina Faso, decided to create a  “Naam group” in his village –  an adaptation of the traditional Mossi community association called Kombi-Naam, or “power to young people”. A form of agricultural and environmental cooperative, the Naam was constructed on the following five pillars which define its actions: its members, what they know, what they experience, what they know how to do and what they want. Accordingly, the Naam creates projects which are tailored to the environment, which meet the needs of its members and which are achievable. It is, in essence, a tool which promotes and develops local expertise.

The initiative has now spread throughout Yatenga province and the entire country. The National Federation of Naam Groups now comprises over 5 000 groups and over 600 000 members. Building on the Naam network, Lédéa Bernard Ouedraogo was one of the creators of the 6S Association (“Savoir se servir de la saison sèche en savane et au Sahel”) in 1976. The National Federation of Naam Groups and the 6S Association formed the basis for disseminating straightforward, effective techniques for what is now known as “climate smart” agriculture. As a result, we see that areas where climate scientists might once have said crops could no longer grow because of a lack of rain, are now using “Zaï” (30cm in diametre micro-basins scattered throughout the fields) and “boulis” (small catchments for storing water run-off).

During the 1980s when Niger’s Maradi region was severely affected by aridification, farmers had the idea of allowing trees to grow naturally in their fields. These trees help to protect against wind and soil erosion, enrich the soil with the manure of animals taking refuge in their shade, and limit temperature and evaporation, and thus effectively reduce the need for water.  According to the French Agricultural Research Centre for International Development, “assisted natural regeneration” has made it possible to regenerate hundreds of thousands of hectares of land not only in Niger but also in Burkina Faso, Mali and Chad.

The IPCC did not exist in the 1970s and early 1980s and when I read this paper, I wondered what the teacher and the climate scientist might have said to one another had they met in Yatenga. I believe that such an encounter between the science of mathematical models and the science of traditional knowledge would have been mutually beneficial and that the need to further co-ordinate efforts between disciplines, sectors and other fields of development is becoming increasingly essential.

Useful notes

OECD Sahel and West Africa Club (SWAC)

OECD Work on climate change

Carbon emissions all at sea: why was shipping left out of the Paris Climate Agreement?

Ship to surf John Valentine All rights reservedShayne MacLachlan, OECD Environment Directorate

Newcastle, Australia has the dubious honour of being the world’s largest port for coal exports. There’s even a coal price index named after it: The NEWC Index. Surfing Novocastrian beaches not only means “watching out” for great-white sharks, but also “being watched” by the lurking great-red coal ships out beyond the breakers, waiting to come in to port for their fill (see photo). Growing up accustomed to these ever-present leviathans, I never questioned what ships did to the environment and to our health apart from when they crash and leak oil. This all changed recently as I discovered a raft of statistics about the shipping industry that indicate we’ve been sailing too close to the rocks since the engine started replacing sails and oars in the early 1800s.

A stern warning for climate change, and our health

Shipping brings us 90% of world trade and has increased in size by 400% in the last 45 years. Cargo ships, tankers and dry-bulk tankers are an essential element of a globalised world economy, but they are thirsty titans and they won’t settle for diet drinks. There are up to 100,000 working vessels on the ocean and some travel an incredible 2/3 of the distance to the moon in one year. Some stats floating around state that the 15 largest ships emit as much as all the 780 million cars in the world in terms of particulates, soot and noxious gases. The International Maritime Organization (IMO) says sea shipping makes up around 3% of global CO2 emissions which is slightly less than Japan’s annual emissions, the world’s 5th-highest emitting country. Ships carry considerable loads so they’re reasonably efficient on a tonne-per-kilometre basis, but with shipping growing so fast, this “broad in the beam” industry is laying down a significant carbon footprint. And local pollution created by ships when they are moored and as they rev hard to get in and out of port can be severe as most use low-grade bunker oil, containing highly-polluting sulphur. Ships also produce high levels of harmful nanoparticles, but encouragingly we’ve seen IMO collaboration to raise standards on air pollution from ships.

Mal de mer with rudderless regulation

A recent estimate forecasts that CO2 emissions from ships will increase by up to 250% in the next 35 years, and could represent 14% of total global emissions by 2050. This could wreck our hopes of getting to a well-below 2°C warming scenario. Even though many, including Richard Branson, called for emission reduction targets for international aviation and shipping to be included in the COP21 Paris Climate agreement, we failed. The IMO has introduced binding energy-efficiency measures so by 2025 all new ships will have to be 30% more efficient that those built today, but in my view there are questions about stringency and seemingly they don’t go far enough.

projected-annual-co2-emissions-from-the-shipping-sector_9ecd

Navigating alternative routes to <2°C

As the Arctic ice sheet melts, a route across the North Pole would be about one-fifth shorter in distance than the Northern Sea route. But this isn’t what I have in mind for reducing shipping fuel consumption and emissions. We need to develop a copper-bottomed response to the challenge by further boosting investment in innovation and research. It’s great to all these sustainable shipping initiatives in the offing:

  1. Fit wind, wave and solar power such as kite sails, fins and solar panels. There’s some research into other energy sources underway such as nuclear cargo ships, but of course that presents another element of risk if something goes wrong.
  2. Increase carrying capacity of ships and future proofing of ships for a further 10-15 years with increased fuel efficiency by retrofitting vessels with more technologically advanced equipment.
  3. Use heat recovery technology to harness waste energy from exhaust gases to create steam, then mechanical energy, then electrical energy to power elements of the ship’s systems.
  4. Construct ships with sleeker design to reduce drag and install more efficient propellers.
  5. Use Maritime Emissions Treatment Systems (METS) in the form of a barge which positions large tubes over ships’ smoke stacks and captures and treats emissions from berthed vessels.

Let’s sink fossil fuels

Innovation and efficiency is hardly a “cut and run” approach. And typically when an industry reduces fuel costs they use the savings to increase activity, meaning carbon reduction is limited. This “rebound effect” could happen in maritime shipping. Truly green shipping will require vessels that are 100% fossil-fuel free. To help drive down fossil-fuel use, a carbon charge for shipping (and aviation) has been proposed. The International Chamber of Shipping (ICS) queried the carbon price of $US25 per tonne. Indeed this is higher than the price on CO2 for onshore industries in developed countries. What’s needed is a system where emitters that aren’t linked to a country’s climate policies are accountable. At COP17 in Durban, delegates discussed a universal charge for all ships that would generate billions of dollars. The money could be channelled to developing countries’ climate policy action. Phasing out subsidies on bunker fuel used by ships is also needed to get us on the right course.

You can’t cross the sea by standing and staring at the water

Following Paris it’s time for specific shipping emissions targets. It appears we know the co-ordinates but the fuel tanks are full of the wrong stuff. Earlier this month, the Marine Environment Protection Committee (MEPC) of the IMO discussed emissions targets but only got as far as approving compulsory monitoring of ship fuel consumption. This is a key step if one day we introduce market-based mechanisms to reduce shipping emissions. What’s needed is accelerated action consistent with the Paris agreement.

In the doldrums of COP21, it seems shipping (and it’s by no means the only sector) is rather like that surfer, sitting on their board waiting for the next wave. At the same time it’s trying to avoid the lurking great white shark.

Useful links

International Transport Forum work on maritime transport

Did shipping just fail the climate test? ITF’s Olaf Merk on Shipping Today

Kiln have produced this interactive map showing  movements of the global merchant fleet over the course of 2012, overlaid on a bathymetric map with statistics including a counter for emitted CO2 (in thousand tonnes) and maximum freight carried by represented vessels (varying units).

COP21 was decades in the making, so how do we make future decades work for climate?

OECD-COP21Shayne MacLachlan, OECD Environment Directorate

Following the hand-wringing, relief-sighing and back-slapping in Paris after nailing the landmark agreement on climate change in December, I took myself off to a farm in rural England to enjoy the new year driving tractors and herding small children (not with tractors). Conversations with friends typically started with remarks about the unseasonably mild weather and often ended on climate change, and unsurprisingly, COP21. As a soundbite buff, I quickly got my lines sorted: “COP21 gave governments a giant shove in the right direction, an emotional rollercoaster ride of hope, expectation and promise”.

Given the years of preparation – and for some OECD colleagues, a life’s work – my hope (which later proved false) was for an enduring, ambitious text, helping us to avoid climate catastrophe. My expectation was far less grand, more closely aligned to the reality of getting 195 countries to adopt an agreement with legal force. The result and attendant promise, which far exceeded my modest expectations, can be described as historically significant and not only provides a mechanism for getting us onto a zero-carbon pathway, but also new approaches to the way we use the planet. So now back at the office and with winter finally arriving with a frosty thud, our attention moves to action on the agreement, or initially at least, a fuller digestion of it and the setting out of a working plan.

  • The reaffirming of the 2°C objective in the Paris Agreement is an accomplishment but presents a huge challenge. The implementation of current Intended Nationally Determined Contributions (INDCs) would deliver an outcome of close to 3°C warming and won’t be sufficient to avoid climate risk, particularly for the most vulnerable. The ambition in 1.5°C is significant but achieving that would require the remaining carbon budget for the 21st century to be reduced by almost half that of the 2°C scenario and we would have to become carbon neutral some 10-20 years earlier. We need a rapid switch to low-carbon energy everywhere, requiring technology, innovation, capacity building and (obviously) finance. To make the transition to a low-carbon, climate-resilient world, the fundamental changes needed will be challenging for even the most developed economies. Developing economies will require support to achieve low-GHG and climate-resilient development pathways. Building on the work in 2015 on aligning policies, the OECD could support policy alignment and cost-effective action to implement countries’ own emissions reduction commitments.
  • The 5-year review cycle of country’s contributions to cutting emissions will inform future NDCs. This is an important element, allowing countries’ commitments to be updated and rolled forward. This “Global Stocktake” of progress sees the first report being undertaken in 2023 and every 5 years thereafter, ahead of setting each successive round of NDCs. This will be a key mechanism for attempting to make bottom-up NDCs consistent with the long-term goal. Common methodologies need to be developed for NDCs, each demonstrating a progression on the previous one. Support is needed for developing country parties for implementation of the review cycle. The OECD/IEA Climate Change Expert Group (CCXG) has undertaken work on mitigation goals, baselines and accounting that could support countries in preparing their NDCs.
  • Undertaking and strengthening adaptation action is in many of the INDCs submitted to date and governments agreed in Paris to provide continued and enhanced international support for adaptation to developing countries. Many countries pushed for the idea of “political parity” which means putting as much effort in terms of political momentum and financial resources into adaptation as to mitigation. Adaptation remains the activity for which a large number of developing countries require assistance, particularly the poorest (LDCs) and most vulnerable (Small Island Developing States – SIDS). Closing the climate finance gap for adaptation compared to mitigation and mobilising new funding sources is essential. The OECD is the ideal forum for the sharing of experiences between the public and private sectors and the work linking policy and economics could help governments move from planning to implementing smart adaptation.
  • The single framework to track progress has built-in flexibility which takes into account the different capacities of each of the parties. Countries will regularly report on emissions and progress toward their NDCs, adaptation actions and on the means of implementation supported including finance, technology and capacity building. However, significant gaps remain in terms of improving the transparency of information on climate finance, technology transfer and capacity building, both on the side of those who provide such support and those who receive it. Following on from the work on Climate Change Mitigation: Policies and Progress, the OECD’s data and policy analysis can support transparency. Additionally, the OECD engages directly with parties on technical policy issues within the UNFCCC process. This is a key component of the work of the joint IEA-OECD Climate Change Expert Group, which will be meeting in March 2016 to discuss key aspects of transparency of support and adaptation action.
  • The COP will set a new finance goal before 2025, with the existing commitment of USD 100 billion per year acting as a floor until then. The OECD-CPI report on climate finance provided an update on progress by developed countries in meeting their finance commitments ahead of COP21 and informed the debate within the negotiations themselves. Climate finance issues will now be addressed by the UNFCCC’s Subsidiary Body on Scientific and Technological Advice (SBSTA) with recommendations to COP24 in 2018. The OECD development statistics system

Instead of a climate march in Paris, thousands of silent but symbolic shoes found their way to Place de la République during COP21. There’s an old Italian proverb that says “between saying and doing, many a pair of shoes is worn out”. Indeed, we are in that period of reflecting on what’s been said and pursuing actions that make a difference. Paris matters tremendously – we got an agreement with legal force after all – but getting our actions to work to reduce the risks of climate change in future decades will probably matter even more.

Useful links

Post-COP21, what’s next? Conference with Richard Baron of the OECD Round Table on Sustainable Development, Tuesday 26 January 2016, 19:30 at The American Library in Paris

COP21 on the Insights blog

COP21 agreement: A decisive turning point

OECD COP21

Angel Gurría, OECD Secretary-General

The Paris Agreement at COP21 marks a decisive turning point in our response to climate change. I strongly applaud this historic commitment and the robustness of a deal that includes an ambitious target for limiting the global temperature rise, a five-year review cycle, clear rules on transparency, a global goal for resilience and reducing vulnerability and a framework for supporting developing countries.

Countries’ nationally determined contributions to emissions reductions post-2020 lay a pathway to a low-carbon, climate-resilient future that could safeguard the future health and prosperity of billions of people. But this is just the beginning of the road. The agreement is a framework for action, and governments now need to act.

Each country must spell out a credible roadmap for action consistent with the goal of holding the average temperature increase to well below 2 °C above pre-industrial levels and pursuing efforts to limit the increase to 1.5 °C. The timescale and sequencing of actions will vary across countries, reflecting their different circumstances, but this goal requires the full engagement of all major economies. Sustainable development and climate goals must be mutually reinforcing and advanced economies must fulfil their promises to support developing countries in addressing climate change with finance, technology and capacity building.

Strong and coherent domestic policy is essential to drive the changes we need, including putting a meaningful price on carbon, eliminating fossil fuel subsidies, spurring investment in green technologies and innovation and tackling the policy misalignments that impede climate action. Effective policies will unleash the transformational capacities and capital of the private sector and will allow investors, and other actors such as cities and regions, to plan with confidence. The low carbon transition requires little more money than the trillions already being invested today. But it requires a massive shift towards low-carbon, energy efficient and climate-resilient systems. We welcome the recognition that Article 2 of the Agreement gives to making finance flows consistent with this goal.

A key role of the UNFCCC will be to monitor and review country performance against commitments, not only in emissions reductions but also in climate finance. The Agreement provides mechanisms for regular reporting, review and updating to check whether national targets and pathways are consistent with our collective climate goals. International organisations like the OECD can provide data and analysis to support transparency and accountability in many of these areas and we stand ready to support all countries in this process. The OECD will continue to work with governments to help remove the barriers to climate action that are built into existing policies from the fossil fuel age in everything from investment, taxation, electricity land use and transport.

This is a watershed day for the world and especially heartening for the OECD as one of the first international bodies to call for zero net emissions in the second half of the century, for a price on carbon and for greater efforts to channel finance into the low carbon economy.

I would personally like to congratulate the French President François Hollande, the COP President Minister Laurent Fabius, French Environment and Energy Minister Ségolène Royal, Ambassador Laurence Tubiana and their team on helping steer us to a successful outcome. The Paris Agreement builds on the considerable efforts by previous COP Presidencies, notably the Peruvians who laid the groundwork for this agreement in Lima a year ago and made subtle, inclusive and tireless efforts to support an agreement over the subsequent year. We owe a great debt of thanks to Christiana Figueres, the Executive Secretary of the UNFCCC, and her team for their exceptional commitment, energy and leadership over the past many years.

Useful links

Two secrets concerning a value chain approach to corporate climate change risk-management

MNE_4li-72dpi_17may13Roel Nieuwenkamp, Chair of the OECD Working Party on Responsible Business Conduct (@nieuwenkamp_csr)

This coming week the world’s leaders will gather in Paris to discuss approaches to addressing climate change, kicking off the 21st annual meeting of countries which want to take action for the climate, otherwise known as COP 21.

A well-hidden secret is that under the OECD Guidelines for Multinational Enterprises (‘the Guidelines’) businesses are expected to do their due diligence on environmental impacts such as climate impacts. This concerns not only their own negative environmental impacts, but also the impacts in their value chain. Another – less well-kept – secret is that the OECD Guidelines include a unique grievance mechanism known as National Contact Points (NCPs) that could also be utilized for climate-related grievances concerning multinational enterprises.

The Guidelines expect companies to behave responsibly through making a positive contribution to economic, environmental and social progress with a view to achieving sustainable development. Besides, the 46 adhering governments expect companies to avoid causing or contributing to negative environmental impacts. In addition the Guidelines expect companies to seek to prevent or mitigate adverse climate impacts directly linked to their operations, products or services by a business relationship. To achieve this, businesses are called upon to carry out due diligence throughout their value chains to identify, prevent, mitigate adverse impacts and account for how they are addressed.

Due diligence, importantly, applies not only to actual impacts but also to risks of impacts. This is particularly relevant in the context of greenhouse emissions as the extent of climate impacts and what they will mean for a company’s bottom line are as of yet not precisely known.

The Guidelines also include a specific chapter on environment which outlines recommendations for responsible business behaviour in this context. For example businesses are encouraged to continually seek to improve corporate environmental performance at the level of the enterprise and, where appropriate, of its supply chain, by encouraging such activities as: development and provision of products or services that reduce greenhouse gas emissions; providing accurate information on greenhouse gas emissions and exploring and assessing ways of improving the environmental performance of the enterprise over the longer term, for instance by developing strategies for emission reduction. Furthermore, the disclosure chapter of the Guidelines also encourages social, environmental and risk reporting, particularly in the case of greenhouse gas emissions, as the scope of their monitoring is expanding to cover direct and indirect, current and future, corporate and product emissions.

These expectations suggest that enterprises should not only be concerned with their direct emissions and impacts on climate change, but that they should also be aware of their carbon footprint throughout their supply chains and that their due diligence efforts should be targeted accordingly. A value chain approach is particularly important in the context of climate change issues as often the majority of emissions will be generated throughout supply chains rather than direct emissions. For example, Kraft Foods, one of the world’s largest food and beverage conglomerates, found that value chain emissions comprise more than 90 percent of the company’s total emissions.

However the supply chain approach has yet to be mainstreamed in the field of corporate emissions management. For example a recent OECD report, Climate change disclosure in G20 countries: Stocktaking of corporate reporting schemes, found that most of the mandatory corporate emissions reporting schemes among G20 countries only require companies to report on direct greenhouse gas emissions produced within national boundaries, whereas significant volumes of emissions are often produced lower down on a company’s supply chain, and often in jurisdictions where that do not have reporting requirements. Likewise a survey conducted by CDP and Accenture in 2013 found that only 36% of 2,868 companies responding report emissions throughout their value chains (known as Scope 3 emissions) and only about 11% set either absolute or intensity Scope 3 targets.

Identifying risks is a primary element of due diligence and therefore the limited amount of supply chain reporting in this context is worrisome and suggests that currently companies are not collecting the information they need to effectively prevent and mitigate risks.

This is problematic not only with respect to the expectations of business to act responsibly but also because increasingly investors are seeing fossil fuel dependence as a systemic risk. For example, the CDP reports that currently 822 institutional investors request climate change disclosure from investee companies. Assets managed by these investors comprise up to a third of all global financial assets. However, this demand had not been reflected in generation of useful information. Research on the top 500 global asset owners found that only 7% of them are able to calculate their emissions, only 1.4% have reduced their carbon intensity since 2014, and none of them has yet calculated its portfolio-wide fossil fuel reserves exposure.

As of yet climate change due diligence has not been considered by the NCP network. However as corporate responsibility to mitigate against climate impacts becomes increasingly prominent, continued industry inaction could lead to a complaint being brought on this subject.

The upcoming two weeks will bring thousands of participants together to brainstorm solutions to perhaps the greatest global crisis facing us today. We hope that the event will prove to be historic and that the implications of corporate value chain approaches and due diligence will be adequately considered.

Useful links

OECD COP21

The Haze Surrounding Climate Mitigation Statistics

Suzi Tart, OECD Environment Directorate

How have CO2 and greenhouse gas (GHG) emissions changed since 1990? Three different visuals tell three very different stories. Which perspective offers the most clarity?

Perspective #1:

Perspecctive 1

This first visual shows the percent increase or decrease of GHG emissions.[1] It is pretty predictable, telling us the story with which we are most familiar. The bubbles of China and the US are the obvious giants in the room. Together they contributed 35% of global GHG emissions in 2010.

China conspicuously dominates the map with a 178% increase in its emissions from 1990-2010. Much of China’s explosive economic growth has been dependent upon coal, so this is not surprising. India and Indonesia’s bubbles pale in comparison with that of China’s—yet their growth rates of 108% and 73% are still significant, leaving Asia with an average 95% increase in emissions. Oceania also witnessed a fairly significant increase of 22%, yet compared to Asia, this seems miniscule.

The giant bubble on the other side of the room represents the United States. Unlike China, which has a relatively small yellow core compared to its red layer, the U.S. has a relatively large core and small red layer. While both countries have increased their emissions over time, the United States has witnessed slower growth, and its GHG emissions have been on a declining trend since 2007.

Also noteworthy is Russia’s green bubble (representing a decrease, see page 51 of the linked publication). Keeping in mind that Russia transitioned to a market economy and experienced a collapse of its carbon-intensive industries in the 1990s, it is not that surprising. Nor are all those tiny green bubbles dotting the European Union, which has been championing climate change action. While the colour of the bubbles is important to note, so too, is their size. Although Russia is green like the rest of Europe, its fugitive emissions from the oil and gas sector alone amount to more than the total GHG emissions of Spain.

Perspective #2:

Perspective 2

The second visual tells a more intriguing story. This one depicts CO2 emissions in relation to population size. Here, China’s bubble appears quite small…even smaller than that of Hong Kong. What is even more striking is how big the bubbles in the Middle East are. Qatar leads the world on this map, with the United Arab Emirates, Kuwait, Bahrain, Oman and Saudi Arabia not far behind. Rich in oil and with high demand for energy and transport, these countries have larger bubbles than they did on the previous visual.

Another significant trend is the relative size of the bubbles for some island and port economies. Singapore and Chinese Taipei stand out. Trinidad & Tobago also appears unusually large and isolated. The country has strong petrochemical and power generation sectors, which are behind these massive relative emissions. Some have noted that foreign companies largely own these industries, and that most of their production is exported. Such issues open the debate as to which countries’ bubbles should actually represent the emissions—those where the emissions are produced, or those where the emissions are consumed. While it is interesting to think about this in terms of the global economy, the United Nations Framework Convention on Climate Change (UNFCC) ruled on this matter in the 1990s, deciding once and for all that emission inventories would be based on production.

Once again, Europe is covered with green (declining) bubbles, although they are bigger in this visual. Luxembourg, which enjoys the second highest GDP per capita in the world and has low taxes on road fuels, has much larger per capita emissions than many other European countries. The high per capita emissions also applies to the Eastern Europe, Caucasus and Central Asia (EECCA) region, where many of the bubbles are not that much smaller than the bubbles of the United States and Canada.

Perspective #3:

Perspective 3

The third and final visual is strikingly green. Every continent has achieved an average negative rate of emissions per unit of gross domestic product using purchasing power parity rates (GDP PPP). That’s great news for the planet—you’d almost be fooled into thinking we’re winning the war on emissions. It indicates that most nations are now successfully decoupling GHG emissions from GDP growth. Technology has allowed countries to continue to grow while producing fewer emissions.

At first glance, Zimbabwe seems to be leading the pack. Unfortunately, the size of its bubble is most likely related to the hyperinflation it experienced in the early 2000s, and larger economic woes that have affected it as a result. EECCA shows up yet again, even more so than in the second visual. This testifies to the dominant coal, oil and gas industries in many of these countries, with the shrinking bubble sizes evidence of their efforts to clean up these industries—alternative energy production and energy efficiency targets are on the rise in many of these countries.

Does bubble size really matter?

As COP21 edges closer, accusations will fly faster, and fingers are sure to be pointed with greater passion. Yet this is a global problem and we all pollute and breathe the same air, so it is much like the right hand pointing at the left. Equity issues always arise during climate change negotiations. Some countries pollute a lot, others only a little. Some countries are producers, others consumers. Industrialised countries that burned fossil fuels in the past have contributed most to the situation we are in today. Developing countries seem to be the ones paying the biggest price yet are starting to burn more fossil fuel.

These maps show that all countries can play a role in limiting climate change. In fact, it will be impossible to combat climate change unless the world’s economies are fully committed. The sheer quantity of emissions is a crucial factor to consider in the negotiations; yet so too, is the amount of effort countries put into solving the issue of climate change. Perhaps if we used the colour and size of countries’ bubbles to assess effort, the world might see greater results.

Useful links

OECD on the road to COP21

[1] Data is taken from the EDGAR database, which includes partial coverage of emissions from land use, land-use change and forestry (direct emissions from forest fires, emissions from decay of aboveground biomass that remains after logging and deforestation, emissions from peat fires and decay of drained peat soils).