Steel and decarbonisation clubs at the Earth System Governance Conference 2019
Sectoral decarbonisation club in the steel industry
On 7th November, Lukas Hermwille, researcher on international climate and energy policy at Wuppertal Institut –part of the COP21 RIPPLES consortium- made a presentation at the Conference on Earth System Governance in Oaxaca, Mexico. At the conference, Hermwille raised the question of meeting the Paris targets on time, mentioning that meeting the well below 2°C target requires the decarbonisation of global economies and societies early in the second half of the century, with emission intensive industries playing a central role in meeting this monumental transformation challenge. This sector merits special attention also in terms of the provision of international governance.
The current situation of heavy industry in the decarbonisation process was summarised by Hermwille in the following points:
- Emission intensive industries are at the core of competitiveness concerns that have historically hampered ambitious climate policies.
- Sustainable alternatives are much less developed than e.g. in the power sector.
- Previous analysis has shown that the potential for international governance to support decarbonisation in the sector remains vastly underutilised.
Other shortcomings identified are the lack of an institutionalised dedicated sectoral vision/roadmap with a high degree of authority/legitimacy at the international level, low levels of transparency and accountability, global governance initiatives on innovation that rarely focus on emission intensive industries, and knowledge creation and dissemination provided by various institutions that does not meet the much greater demands (e.g. for R&D of decarbonised production technologies or low-carbon alternatives).
The aim of the COP21 RIPPLES study presented by Lukas Hermwille was to explore how and to what extent sectoral decarbonisation club(s) can contribute to closing those gaps towards decarbonising emission intensive industries. Based on a series of interviews with stakeholders from companies, trade associations, (sub-)national governments, and CSOs, Hermwille mentioned that the project is exploring different club goods that provide an incentive to join a club. Some cases mentioned were:
- the intensification and coordination of cooperation on technology and innovation
- risk sharing arrangements for high capex
- high risk investments in demonstration plants
- coordination on hydrogen infrastructure
- review potential roles for different actors.
On that basis, COP21 RIPPLES is preparing a template for a sectoral decarbonisation club.
To find out more about this study, join us at COP25 in Madrid at the side-event Acceleration of innovation for reducing CO2 emissions, on Friday 13th December at 13:15 at the European Pavilion.