Interview
Júlia Seixas: “With COP21, we enter a new
Planet phase”
Planet phase”
Published on December 7th, 2015
The 21st Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21), taking place in Paris until 11th December, could lead to a new global climate agreement. Speaking to Clima@EduMedia, Júlia Seixas, professor at the Faculty of Sciences and Technology of Universidade Nova de Lisboa (Faculdade de Ciências e Tecnologia da Universidade Nova de Lisboa), and researcher at the Centre for Environmental and Sustainability Research (CENSE) on energy and climate, discusses her expectations and says she is optimistic, but aware of the difficulties.
What do you expect from COP21? Do you believe a new global climate agreement is possible?
I am a very optimistic person. It is essential that a multilateral agreement involving developed countries, developing countries and emerging economies comes out of COP21, to jointly reduce the emission of greenhouse gases.
I think all conditions are gathered for an agreement. Let's see what kind of agreement is coming out because this process was quite different from previous ones, including the Kyoto Protocol.
The various countries presented voluntary commitments, that is, what each one is available to do to reduce greenhouse gases. But there are not very good news. Calculations have already been made, and when you add all these voluntary commitments, and assuming that they will be met, we will not have a sufficient reduction to ensure an average increase of 2°C on the planet by 2100 compared to the pre-industrial era. However, we will achieve an average of 3 to 4°C. The commitments that countries have made are relatively modest for this purpose. Nevertheless, countries think that these are quite ambitious commitments…
What is the major obstacle to more ambitious commitments?
Firstly, political will. Right now there are technological solutions to reduce greenhouse gas in all areas of the economy (housing, transport, industry).
The economy is to "energy-hungry"
Are countries aware of what is at stake? China, for instance, which is the biggest polluter in the world, with nine to ten billion tons of CO2 in 2013?
China, at this moment, is fully aware of what was an industrial development policy with little environmental care because its inhabitants feel it on their skin. In the last few days, China has issued an orange alert. Children are recommended not to leave their homes, and the visibility is incredibly low. From a public health perspective, this is very serious.
The truth is that the energy systems and economies as we know them today are very “energy-hungry”, that is, they consume a lot of energy. From the perspective of politicians, there seems to be some caution.…
Caution not to interfere with vested interests?
Interests change and evolve. One of the main consequences of this COP21 is to alter vested interests. Initiatives have been announced by major companies, like Amazon and Google, to duplicate research and development in renewables.
With COP21, we have started a new Planet phase, with a very clear awareness that fossils cannot get more money for new development and that they should channel this money to invest in renewables.
On the table is a fund of 100 billion dollars to help and assist projects in developing countries and so there is not much money available. It is necessary for all parties to be involved to have an agreement.
Concerning the goals, will the COP 21 make a significant difference for Portugal?
There is a European goal. This COP may further define the objectives. Portugal is part of the European Union, and this block has had, for several years, a very clear picture of mitigation, the 2030 climate and energy framework. The EU is an example. Although Germany continues to burn huge amounts of coal... Portugal continues to burn coal in power stations because it is, in fact, much cheaper.
I am a very optimistic person. It is essential that a multilateral agreement involving developed countries, developing countries and emerging economies comes out of COP21, to jointly reduce the emission of greenhouse gases.
I think all conditions are gathered for an agreement. Let's see what kind of agreement is coming out because this process was quite different from previous ones, including the Kyoto Protocol.
The various countries presented voluntary commitments, that is, what each one is available to do to reduce greenhouse gases. But there are not very good news. Calculations have already been made, and when you add all these voluntary commitments, and assuming that they will be met, we will not have a sufficient reduction to ensure an average increase of 2°C on the planet by 2100 compared to the pre-industrial era. However, we will achieve an average of 3 to 4°C. The commitments that countries have made are relatively modest for this purpose. Nevertheless, countries think that these are quite ambitious commitments…
What is the major obstacle to more ambitious commitments?
Firstly, political will. Right now there are technological solutions to reduce greenhouse gas in all areas of the economy (housing, transport, industry).
The economy is to "energy-hungry"
Are countries aware of what is at stake? China, for instance, which is the biggest polluter in the world, with nine to ten billion tons of CO2 in 2013?
China, at this moment, is fully aware of what was an industrial development policy with little environmental care because its inhabitants feel it on their skin. In the last few days, China has issued an orange alert. Children are recommended not to leave their homes, and the visibility is incredibly low. From a public health perspective, this is very serious.
The truth is that the energy systems and economies as we know them today are very “energy-hungry”, that is, they consume a lot of energy. From the perspective of politicians, there seems to be some caution.…
Caution not to interfere with vested interests?
Interests change and evolve. One of the main consequences of this COP21 is to alter vested interests. Initiatives have been announced by major companies, like Amazon and Google, to duplicate research and development in renewables.
With COP21, we have started a new Planet phase, with a very clear awareness that fossils cannot get more money for new development and that they should channel this money to invest in renewables.
On the table is a fund of 100 billion dollars to help and assist projects in developing countries and so there is not much money available. It is necessary for all parties to be involved to have an agreement.
Concerning the goals, will the COP 21 make a significant difference for Portugal?
There is a European goal. This COP may further define the objectives. Portugal is part of the European Union, and this block has had, for several years, a very clear picture of mitigation, the 2030 climate and energy framework. The EU is an example. Although Germany continues to burn huge amounts of coal... Portugal continues to burn coal in power stations because it is, in fact, much cheaper.
“We have a huge stock of energy efficiency.”
You were the coordinator of studies used to support the National Climate Change Programme, the Low Carbon Roadmap and Green Tax Reform, as well as other public policy measures. How can Portugal reduce the greenhouse gas effect?
There are two very important factors. One is the stock of energy efficiency. Portugal has a huge stock of energy efficiency in many sectors, but especially in buildings. This means that we have a set of buildings in the residential sector and also the services and trade, which can be improved in terms of isolation, for example, providing an improvement in thermal comfort without consuming energy or without consuming so much energy.
Energy efficiency means achieving energy service goals with less energy consumption and less emission of gases with greenhouse effect from fossil fuels.
But there is still a long way to go. We have energy efficiency targets of 25% by 2020 and 30% by 2030. This is achieved with very well-defined policies, for example in the field of rehabilitation. The construction sector, which can leverage the crisis, is very sensitive. Cities need attention!
And will there be money to invest in this area?
Currently, the financing of energy efficiency is one of the most innovative. There are some financial instruments. We have available structural funds for a few more years. The point is that the rules of rehabilitation should not neglect high standards of energy efficiency in the building envelope.
Must we legislate?
I think something needs to be adjusted. For new buildings, the energy efficiency requirements and indoor air quality are quite high, but in rehabilitation, for instance, these requirements should be stricter.
As to the industry sector, what can one do?
In industry, it is necessary to separate two realities: heavy industry (glass, ceramics, pulp, etc.), which is already part of the EU Emissions Trading System (EU ETS) and the industry that is not part of it.
Although this mechanism has not worked as brilliantly as expected because the value of the emission licences has been quite low - in any case it has risen in recent months, and is now above 8 euros per tonne [of CO2] - the EU ETS enables companies to develop solutions to reduce energy consumption.
How exactly does this mechanism work?
The principle is good. The principle is to attribute a price to CO2 emissions. Imagine an industry that consumes a lot of energy from fossil fuels and produces many greenhouse gases. When we do the math on the cost of production, we have to include investment in the furnaces, maintenance costs, etc. This mechanism introduces another cost, a cost associated with each ton of CO2 emitted.
By incorporating this cost within the global cake of company costs, it starts to make sense to think about energy options that do not have the costs associated with the issuance of each ton of CO2, the cost of carbon.
And has it been working?
What has happened is that industries began to put on the agenda of the industrial unit management the cost of CO2. There were cases where it was enough to change the way they were managing the production process by immediately reducing CO2 emissions. Many companies stopped using furnaces to start using other technologies with cogeneration systems, natural gas or biomass, significantly lowering costs by subtracting this portion that we have introduced. The refineries evolved towards improving the process efficiency and also decreased a little the emissions.
How is this calculated?
When calculating everything we have to bear in mind how much does it cost to reduce each ton of CO2, and compare it with its market value. If the value to reduce a ton is lower than the market price, it makes sense to invest in my industry. Because, over time, you need to set a ceiling, I can reduce the value below this ceiling and afford a reasonable market selling price (this mechanism is known as “Cap and Trade”). If the investment is higher than the market value, it pays to buy licences at the market to get to my ceiling.
“kWh is 60% renewable”
Can't this principle be distorted?
The principle can be distorted if the price is not too tight. For instance, in the United States, at a regional level, there are emissions trading mechanisms, but American economists prefer a global levy on CO2 in which everything that emits CO2 is taxed.
In Portugal, we also have a CO2 tax, through the green tax reform, from the last year, to which I was pleased to contribute. The issue of plastic bags was much more visible, perhaps because the tax of CO2, paid when filling up the tank, has an almost imperceptible influence and fuel prices have even decreased. Many Portuguese not even know they are paying, but they are!
I understand that trade in emissions and the CO2 tax in sectors that are outside the emissions trading should work in a complementary way. To be in this emissions trading, we need to meet very tight rules and have critical volume. Major emitters are the ones adhering.
In general, the fact that these companies are required to account for their emissions and are on the market leads them to think of new and more efficient solutions for electricity and heat production from cogeneration systems, to change biogenic fuels, and to go to electricity.
In industry, it is necessary to separate two realities: heavy industry (glass, ceramics, pulp, etc.), which is already part of the EU Emissions Trading System (EU ETS) and the industry that is not part of it.
Although this mechanism has not worked as brilliantly as expected because the value of the emission licences has been quite low - in any case it has risen in recent months, and is now above 8 euros per tonne [of CO2] - the EU ETS enables companies to develop solutions to reduce energy consumption.
How exactly does this mechanism work?
The principle is good. The principle is to attribute a price to CO2 emissions. Imagine an industry that consumes a lot of energy from fossil fuels and produces many greenhouse gases. When we do the math on the cost of production, we have to include investment in the furnaces, maintenance costs, etc. This mechanism introduces another cost, a cost associated with each ton of CO2 emitted.
By incorporating this cost within the global cake of company costs, it starts to make sense to think about energy options that do not have the costs associated with the issuance of each ton of CO2, the cost of carbon.
And has it been working?
What has happened is that industries began to put on the agenda of the industrial unit management the cost of CO2. There were cases where it was enough to change the way they were managing the production process by immediately reducing CO2 emissions. Many companies stopped using furnaces to start using other technologies with cogeneration systems, natural gas or biomass, significantly lowering costs by subtracting this portion that we have introduced. The refineries evolved towards improving the process efficiency and also decreased a little the emissions.
How is this calculated?
When calculating everything we have to bear in mind how much does it cost to reduce each ton of CO2, and compare it with its market value. If the value to reduce a ton is lower than the market price, it makes sense to invest in my industry. Because, over time, you need to set a ceiling, I can reduce the value below this ceiling and afford a reasonable market selling price (this mechanism is known as “Cap and Trade”). If the investment is higher than the market value, it pays to buy licences at the market to get to my ceiling.
“kWh is 60% renewable”
Can't this principle be distorted?
The principle can be distorted if the price is not too tight. For instance, in the United States, at a regional level, there are emissions trading mechanisms, but American economists prefer a global levy on CO2 in which everything that emits CO2 is taxed.
In Portugal, we also have a CO2 tax, through the green tax reform, from the last year, to which I was pleased to contribute. The issue of plastic bags was much more visible, perhaps because the tax of CO2, paid when filling up the tank, has an almost imperceptible influence and fuel prices have even decreased. Many Portuguese not even know they are paying, but they are!
I understand that trade in emissions and the CO2 tax in sectors that are outside the emissions trading should work in a complementary way. To be in this emissions trading, we need to meet very tight rules and have critical volume. Major emitters are the ones adhering.
In general, the fact that these companies are required to account for their emissions and are on the market leads them to think of new and more efficient solutions for electricity and heat production from cogeneration systems, to change biogenic fuels, and to go to electricity.
Transport is the major problem
What is the main obstacle to mitigation in Portugal?
The main mitigation problem in Portugal has to do with the transport sector. There is a very large obstacle to the introduction of the electric vehicle, which is the price.
The production of electricity with photovoltaic solar panels was very expensive. In five years, a technology that was available to few became available to everyone. The price fell tremendously between 60 to 80%.
There is a paradigm shift. Previously, producing electricity with thermal power plants or wind farms would involve very heavy investments. Today private investment of families in this technology is exploding. The investment is very much atomised, which is interesting.
Will the same happen with the electric car?
Exactly. I think it's a matter of time. Currently, the electric vehicle is a luxury item. It is indeed very expensive. But the “shift” is coming very soon, same as with photovoltaics. The price will start to fall in the next five to ten years. All or nearly all brands of the world have electric vehicle production lines. The market knows what will happen. They still need to dispose of many conventional vehicles. It was the same with the “LEDs”. The companies would not lower market prices because they first had to drain compact light bulbs. The same is happening with electric cars. In Portugal, as our electricity is generally clean, it makes sense to adopt the electric car.
What is the main obstacle to mitigation in Portugal?
The main mitigation problem in Portugal has to do with the transport sector. There is a very large obstacle to the introduction of the electric vehicle, which is the price.
The production of electricity with photovoltaic solar panels was very expensive. In five years, a technology that was available to few became available to everyone. The price fell tremendously between 60 to 80%.
There is a paradigm shift. Previously, producing electricity with thermal power plants or wind farms would involve very heavy investments. Today private investment of families in this technology is exploding. The investment is very much atomised, which is interesting.
Will the same happen with the electric car?
Exactly. I think it's a matter of time. Currently, the electric vehicle is a luxury item. It is indeed very expensive. But the “shift” is coming very soon, same as with photovoltaics. The price will start to fall in the next five to ten years. All or nearly all brands of the world have electric vehicle production lines. The market knows what will happen. They still need to dispose of many conventional vehicles. It was the same with the “LEDs”. The companies would not lower market prices because they first had to drain compact light bulbs. The same is happening with electric cars. In Portugal, as our electricity is generally clean, it makes sense to adopt the electric car.
By: Cláudia Azevedo