IISD Reporting Services, through its ENB+ meeting coverage, is providing digital coverage of selected U.S. Center events every day during the Marrakech Climate Change Conference - November 2016.
The following side events were covered on Wednesday, 16 November 2016:
Photos by IISD/ENB | Liz Rubin
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Auctions to Attract Investment
Presented by the US Agency for International Development (USAID)
This event was moderated by Matt Austin, USAID, who underscored that many countries are using renewable energy auctions and that feed-in tariffs have not kept up with renewable energy price decreases.
Eric Postel, USAID, emphasized the importance of investing now in clean energy systems to achieve climate goals. He underscored the role of reverse auctions as an important instrument to foster competition and investment, and drive down costs. Highlighting renewable energy auctions in Mexico, Zambia, Afghanistan, Senegal and Ethiopia, he stressed that all countries can benefit from auctions.
Scott Cantor, World Bank, illustrated the design elements and functioning of renewable energy auctions with a game. Participants were given chocolates and Cantor conducted a live descending clock auction where he engaged in purchasing a limited amount of chocolate with the public trying to sell their chocolate and maximize their benefit. He underscored the importance of bidding guarantees to ensure performance of auctions, and inclusion of auctions in Nationally Determined Contributions (NDCs).
Claudia Octaviano, National Institute of Ecology and Climate Change (INECC), Mexico, explained the electric market structure in Mexico after the recent reform of the energy sector. She highlighted that Mexico has reached very competitive prices for electricity supply thanks to renewable energy auctions.
Ben Chee, NERA Economic Consulting, said that auctions are a very powerful tool, but just a tool. He noted the importance of contract design, performance-based purchases, long-term contracts, construction contingencies, and contract transferability in case of bankruptcy. Chee stressed the importance of bidding and construction guarantees to ensure project execution.
In the ensuing discussion, participants addressed, inter alia: best practices to avoid underbidding by developers, including guarantees and contract design; perverse incentives from declining prices to fulfill purchase power agreements; the need for specific regulation for small suppliers and distributed energy; the use of auctions for off-grid electrification; and the role of auctions for private procurement from large corporations.
The dais during the event
Scott Cantor, World Bank, conducted a live chocolate auction with the public to illustrate the functioning of renewable energy auctions.
Ben Chee, NERA Economic Consulting, said renewable energy is an “irreversible” investment.
Matt Austin, USAID
Claudia Octaviano, INECC, Mexico, highlighted the 2015 and 2016 clean energy auctions.
Participants ask questions to panelists.
Claudia Octaviano, INECC, Mexico, and Ben Chee, NERA Economic Consulting
The public playing a game emulating a renewable energy reverse clock auction with chocolates.
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North American Mid-Century Strategies for Low-Emission Development
Presented by the White House Council on Environmental Quality
The event, moderated by Laurence Tubiana, Climate Champion, focused on the progress the US, Canada and Mexico have made in developing their mid-century strategies for low-emission development, and their visions for decarbonization for the 21st century. She explained how the North American collaboration on low-carbon strategies provides a valuable example of the type of collaboration needed in long-term planning that will be crucial to achieve the goals of the Paris Agreement. Noting that the Nationally Determined Contributions (NDCs) agreed to in 2014 remain insufficient to reach the goals of the Paris Agreement, and that the NDCs need regular revisions, she explained why low-emission mid-century strategies are at the core of the Paris Agreement.
Stephen Lucas, Senior Associate Deputy Minister, Canada, presented on the Pan-Canadian Framework on Climate Change. Drawing attention to agreement on climate collaboration by the Heads of States of North America in June 2016 and Canada’s ratification of the Paris Agreement in October 2016, he focused on, inter alia; energy efficiency; short-lived carbon pollutants; and interprovincial and intercontinental cooperation on clean electrification.
Noting that Mexico was one of the first countries to submit its strategy to the UNFCCC, Rodolfo Lacy Tamayo, Undersecretary for Environmental Policy and Planning, Mexico, drew attention to Mexico’s establishment of a carbon tax in 2014 and its intent to establish a carbon market by 2018 to link with sub-national markets in Quebec, California and Ontario.
Underscoring that his country’s mid-century strategy will provide a long-term vision, and can be a tool and template to be replicated by other countries, Brian Deese, Senior Advisor to the US President, explained that the US strategy does not contain prescriptive policies for any specific administration nor does it set targets or predict the world of 2050. He also explained possible scenarios for lowering total emissions in the US, such as enhancing carbon storage on its crop lands, and accelerating reforestation efforts in the US to create new markets for its forest industry.
During discussions, participants addressed, inter alia: the influence of mid-century low-emission development strategies on the finance and investment community; green investment in infrastructure such as public transit; and the importance of collaboration and market signals in these “living” strategies.
Christine Dragisic (Coordinator)
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Around the US Pavilion
John Kerry, US Secretary of State, addresses delegates