Exam #3 (Governance-102) Flashcards
What is the Intergovernmental Panel on Climate Change (IPCC)?
The United Nations intergovernmental scientific body for assessing the science related to climate change.
It provides policymakers with regular scientific assessments on climate change, its implications, and potential future risks, as well as adaptation and mitigation options.
What is the United Nations Framework Convention on Climate Change (UNFCCC)?
The 1992 treaty that provides the overarching framework for coordinated global strategies to address climate change.
The term also applies both to the treaty itself, which in 2024 has 198 parties, and to the UN Secretariat that administers the ongoing implementation of this treaty in addition to ongoing negotiations on amendments and updates to it.
What are Annex 1, Annex 2, and Non-Annex Countries?
UNFCCC-designated categories of countries created to reflect the differing capabilities, responsibilities, and social and economic conditions of individual countries that are parties to the UNFCCC.
Annex 1 parties were industrialized or industrializing in 1992; Annex 1 parties are 1992 OECD (wealthy) countries assigned financial responsibilities; all others are non-Annex parties, including a subset of Less Developed Countries given special status because of their limited climate adaptation capacity.
What is the Kyoto Protocol?
An international agreement linked to the United Nations Framework Convention on Climate Change. The major feature of the Kyoto Protocol is that it set binding targets for 37 industrialized countries and the European community for reducing greenhouse gas (GHG) emissions.
A 2023 review of the protocol outcomes show that the parties reduced emissions by 17% compared to 1990, with the EU reaching 25%.
(https://unfccc.int/news/kyoto-protocol-paves-the-way-for-greater-ambition-under-paris-agreement)
What is the Paris Agreement (or Paris Climate Agreement)?
A legally binding 2015 international treaty on climate change … to limit global warming to well below 2°C, preferably to 1.5°C, compared to pre-industrial levels.
To achieve this goal, all 196 signatory countries agree to peak GHG emissions as soon as possible to achieve a carbon neutral world by 2050.
What are the
Nationally Determined Contributions (NDCs)?
Climate action plans containing targets that countries set for mitigating GHG emissions as well as adapting to climate impacts.
At COP 28 in 2023, parties reviewed progress reported in NDCs received by late 2022. The reductions achieved to date fail to make sufficient progress toward the Paris target.
What are
Short-Lived Climate Pollutants?
A class of chemicals with short atmospheric lifetimes and high global warming potential compared to carbon dioxide.
The chief examples are clorofluorocarbons, a class of chemicals with lifetimes of up to 270 years and 100-year global warming potentials as great as 12,400.
What is the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol)?
A landmark 1987 multiplateral environmental agreement that regulates the production and consumption of nearly 100 human-made, ozone-depleting chemicals.
The Parties to the Protocol have phased out 98% of ozone depleting substances globally compared to 1990 levels. Because most of these substances are potent greenhouse gases, the Montreal Protocol is also contributing significantly to the protection of the global climate system.
What is the
Kigali Amendment to the Montreal Protocol?
An international agreement to gradually reduce the consumption and production of hydrofluorocarbons (HFCs).
HFCs became the substitute of choice under the Montreal Protocol, but are potent GHGs. The Kigali Amendment seeks success akin to the Montreal Protocol in reducing CFC emissions, avoiding nearly 0.5 C of additional warming by 2100.
What is a Carbon Tax?
A tax placed on industries and businesses by a government entity on direct or indirect GHG emissions.
The tax sets a price per ton of GHG emitted that passes down through products and services, providing a market incentive for entities and individuals to lower their GHG emissions.
What is Cap and Trade?
A mechanism that sets an economy-wide cap or maximum amount of GHG emissions released per year. Governments auction emissions allowances to regulated entities based on the cap level, which declines on a set schedule. Regulated entities may trade allowances.
If an entity can cost effectively reduce their GHG emissions below their cap level, they can sell excess allowances to another emitter with greater reduction costs, achieving the same emissions reductions at lower cost. The resulting carbon price signal resembles that of a carbon tax.
What is Cap and Dividend?
An emissions reduction strategy through which a government entity sets an annual cap and subsequently auctions emissions allowances to businesses and industries that must obtain allowances to emit GHGs. The cap is lowered over time to encourage GHG reduction. The resulting revenue flows through the economy via tax rebates to businesses and consumers on a per-capita basis to offset the increased costs associated with the cap.
This resembles cap and trade, but differs by returning the auction revenue to businesses and consumers to offset their increased costs.
What are
Carbon Pricing Options?
All carbon pricing options create a carbon cost to incentivize emissions reductions. Cap and Trade and Cap and Dividend allow emissions trading for cost-effectiveness. For Carbon Tax & Cap and Trade the government keeps the revenue–which it may apply to reduce other taxes. For Cap and Dividend, the revenue returns to the economy on a per capita basis, preferentially reducing costs for low income consumers and incentivizing efficiency among high income consumers.
Key distinctions. A carbon tax provides greater certainty about cost, but not about emissions reduction. Either cap system ensures emissions reductions, but not costs. Cap and dividend redistributes costs.
What is Materiality?
Applied to corporate information, the concept that there is a substantial likelihood that a reasonable investor would consider it important in deciding how to vote or make an investment decision.
This is the criterion adopted by the U.S. SEC for guidance of corporate climate disclosures. It is obviously a subjective consideration, especially where it intersects with climate change. Its importance likely accounts for a long delay before the SEC issued new climate guidance in early 2024.
What is the
Renewable Portfolio Standard (RPS)?
A requirement that utilities in a U.S. state (or other governmental entity) must produce a certain percentage of their total power from renewable sources.
States adopt such standards to diversify their energy resources, promote domestic energy production, and encourage economic development.
