IISD- Mitigation Update: Sustainable Energy Systems Examined, Mexico to Launch ETS Pilot



17 August 2016: Recent weeks have brought news about our energy system as it grows and changes. A report on integrating solar and wind into the grid calls for taking whole system value into account. Kenya's counties are preparing and planning for sustainable energy systems, and solutions in the information and communications technology (ICT) sector are being highlighted. This Update also includes news on two approaches to mitigating greenhouse gases (GHGs) – through emissions trading in Mexico and peatlands in Mongolia.



How to Address a Growing Energy Demand


The International Energy Agency (IEA) has released data showing that global energy production and consumption continue to rise. Formerly, the Agency had produced two reports – one covering countries of the Organisation for Economic Co-operation and Development (OECD) and the other on non-OECD countries. Now combined into 'World Energy Balances' and 'World Energy Statistics,' the IEA's data reveal that non-OECD Asia is close to overtaking the OECD as the world's largest energy consumer. [IEA Press Release] [Key World Energy Trends: Excerpt from 'World Energy Balances']


In the electricity sector, growing energy consumption must be underpinned by the deployment of low- or no-carbon power generation if the world intends to stay within the Paris Agreement's temperature rise limits. However, a recent analysis by IEA underlines that the expansion of renewables must also be accompanied by a grid equipped to integrate them effectively into the power supply. The report calls for taking into account the full system value of renewables such as wind and solar. To ensure renewables' system value is positive, the IEA points to renewable energy forecasting, enhanced scheduling of conventional power plants, electricity storage, and more flexible generation and grid infrastructure as solutions. [IEA Press Release] [Next Generation Wind and Solar Power: From Cost to Value]


In Kenya, the UN Industrial Development Organization (UNIDO) organized a training to help counties develop sustainable energy plans. The five-day training was supported by the Kenya Council of County Governors and hosted 33 participants. Speaking at the opening, the Council's Infrastructure and Energy Committee chair, Governor Mandago, emphasized Kenya's bountiful renewable resources, which he said can bring down the cost of modern energy services in rural areas and mitigate climate change. The course was funded through a Global Environment Facility (GEF) project. [UNIDO Press Release]


Because of its high energy demand, the ICT sector is a major cause of global warming, approximately equivalent to that of the aviation sector at around 2% of global emissions. However, ICT can also play an important role in mitigating climate change, including through supporting the operations of a smart, flexible, sustainable electricity grid. The UNFCCC Secretariat is highlighting this and other initiatives in the sector through its Momentum for Change Initiative's Lighthouse Activities.


Among the innovative solutions highlighted are Mobisol Smart Solar Homes, Fairphone, Microsoft's carbon fee, the business network BSR's set of sustainability principles and Google's use of DeepMind artificial intelligence to manage its data centers and decrease energy usage by 15%. Using smart ideas like these, the Global e-Sustainability Initiative (GeSI) finds that ICT has the potential cut GHG emissions 20% by 2030. [UNFCCC Press Release]


Emissions Trading


Mexico is set to design a pilot emissions trading scheme (ETS) after the Ministry of Environment and Natural Resources (SEMARNAT), the Mexican Stock Exchange and MEXICO2 signed an agreement on 15 August. The three partners will undertake to develop the pilot as a key tool for fulfilling the country's commitment under the Paris Agreement to reduce GHG emissions 22% by 2030. Mexico's share of global emissions is approximately 1.6%, according to MEXICO2.


Noting that the cost of climate change could be up to 3.2% of Mexico's gross domestic product (GDP) by 2050, MEXICO2 stresses that an ETS is a cost-effective, market-based tool for reducing emissions. The pilot is intended to prepare companies for future environmental regulation. It will cover the electricity, oil and gas, petrochemical, aviation, and pulp and paper sectors, as well as the cement, glass, iron and steel industries.


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