Impact Of UNFCCC Meeting Decisions On US Energy Policy (Essay).

1. Summary of decisions regarding climate change and energy policy in United Nations Climate Change Conference 2015, COP 21

1. Summary of decisions regarding climate change and energy policy in United Nations Climate Change Conference 2015, COP 21.
2. Framework of Energy Policies in the United States.
3. Impact of decisions from UNFCCC Meetings Conference of Parties on the energy policy of United States.
4. Key global challenges and issues faced the world oil and gas industry.

The United Nations Framework Convention on Climate Change (UNFCCC) is an international environmental treaty. It was formed to stabilize the concentrations of greenhouse gases within the environment so as to avoid unsafe interference in the climate. UNFCCC serves as the formal meeting of the Conference of Parties (COP) to consider the development while dealing with the climatic change. In 2015, the United Nations Climate Change Conference, COP 21 was held in Paris. The negotiations resulted in the adoption of the Paris Agreement, which would govern the climate change reduction measures from 2020 (United Nations Framework Convention on Climate Change, 2015). In order to support the Paris Agreement only 55 countries make at least 55 percent of the greenhouse gas emissions.

The report analyzes the framework of the energy policies along with the key global challenges and issues faced by the oil as well as gas industry of United States. This report critically evaluates the impact of the Paris Agreement decisions on the energy policy of the United States. Further, recommendations are given to overcome the challenges and issues in the oil as well as gas industry. 

The primary purpose of the Paris Agreement, based on the negotiations of the UNCCC of 2015 was to limit global warming to less than 2 degree Celsius.  In addition to this, the agreement also aimed at attaining zero net anthropogenic greenhouse gas emissions by the latter half of the 21^st Century. The decisions that were taken in the conference regarding climate change and energy policy are the outcomes of the UNFCCC. Firstly, it takes the decision to control the rise of global temperature and maintain it below 2 degree Celsius. Secondly, it commits all the countries to report on the carbon emissions to achieve nationally determined contributions. Thirdly, it extends a mechanism in order to address loss and damage resulting in climate change, which serves as a basis for liability or compensation (United Nations Framework Convention on Climate Change, 2015). Fourthly, this agreement calls for a mechanism, which is similar to Clear Development Mechanism under the Kyoto Protocol, which enables in reduction of carbon emission.

2. Framework of Energy Policies in the United States

The Paris Agreement makes the latest step in the evolution of the UN climate change with the acceptance of the Framework Convention. This agreement articulates two long-term emissions goals such as peak emissions and goal of neutrality of net greenhouse gas. Burns (2015) opined that the agreement also establishes a new method to succeed the Kyoto Protocol Clean Development Mechanism, which generates tradable emission offsets. The main objective of UNFCCC is to stabilize  greenhouse gas absorptions within the atmosphere to an extent so as to reduce dangerous repercussions of climate change. At the Paris meeting, the international agreement decides to reduce the emission of carbon dioxide. It was agreed to aim for a temperature increase below 2 degree Celsius as well as aim for less than 1.5 degrees. Moreover, it proposes that the government initiates mitigation actions to lower the carbon emissions (Carbonwatch.com, 2015).

The principles discussion in the UNFCCC conference has influenced the energy policy of United States, which has direct to the Framework Convention on Climate Change (UNFCCC) as well as the Kyoto Protocol. In the year 2015, the Paris Agreement consolidated the years of negotiations with an agreement along with 188 countries in order to connect the emissions of carbon dioxide. The agreement based on change in climate will emphasise the reduction of carbon emissions (Carbonwatch.com, 2015). The policy is measured to meet both the obligations as well as objectives of the Paris Agreement that have been executed at the national level (Lind et al. 2013). The ultimate goal of the energy policy of US is to seek the lowest price of the energy with the implication that the environmental consequences should not be tailored as a part of the cost. The other goal of the energy policy of US is to reduce the burning of fossil fuels and replaces the fossil fuels energy with nuclear power (Jenner and Lamadrid, 2013). The main goal is to develop all the sources of energy to ascertain that they are available at reasonable prices. It is called “all of the above” strategy. The energy policy of US would not matter except for factor such as the supply of fossil fuel is additional than 80 percent of the world’s energy. Due to burning of fossil fuels, most of the regions of US are induced with climatic change (Miller, Richter and O’Leary, 2015). The country has less time to reduce the carbon emissions in order to avoid the risk of catastrophic climate consequences.

3. Impact of decisions from UNFCCC Meetings Conference of Parties on the energy policy of United States

 Due to the adoption of the Paris Agreement, it gives a major impact on the energy policy of United States. In order to achieve the aim of limiting the global warming to 2 degree Celsius, US require reducing their emissions by 95 percent approximately with additional changes. The countries fulfil their commitment jointly, and it improves the competence of compliance throughout flexibility mechanism. Although the countries those are following the Kyoto Protocol, it has reduced their emissions nationally (Onat, Kucukvar and Tatari, 2015). There are three mechanisms that have been recognized to improve the financial efficiency of reductions and they are emission trading, clean development mechanism as well as joint implementation. 

3.1 Emission trading

 It is a business sector based approach, dealing with the environmental objectives permitting the United States to diminish the emission of greenhouse gases (Jasper, 2014). It is done to increase reductions to balance the emission at another source, inside as well as outside the nation. Smyth and Narayan (2015) opined that trading happens at worldwide, intra-organization as well as domestic levels.

3.2 Clear Development Mechanism

This mechanism is proposed by the developed countries to reduce the emission of carbon in developing countries. Axelrod and VanDeveer (2014) argued that the developed countries earn authorized emission reduction divisions that used beside the country's reduction obligation. This method is focused on the expansion aid as well as emission reduction.

3.3 Joint implementation

One urbanized the country with emission caps work with another in a project-based method. It is done to decrease the emissions as well as share their resulting emission reduction units (Goldemberg and Guardabassi, 2015).

Due to Organization of the Petroleum Exporting Countries (OPEC) Production levels, the prices of oil have dropped resulting in the boom in the U.S. oil as well as other factors. The prices if oil and gas become the determining factor to understand whether the reserve is cost-effectively reasonable (Axelrod and VanDeveer, 2014). The operational cost is also a risk in oil and gas industry. The companies are struggling to retain qualified workers, as they require during the boom times. Therefore, the payroll also rises to add another cost to the entire companies (Bohringer, 2014). However, the oil and gas industries have a high capital-intensive with very few players at the time. These are key challenges that are faced by the oil as well as gas industry. Podobnik (2015) argued from the two months that the trend of extended upward pressure on the price of oil was a dominant feature of spring 2004. Additionally, production of OPEC increases, the commercial crude oil inventories have risen to the secured levels (Smyth and Narayan, 2015).  The following are the key issues and challenges in the oil and gas industry:

4. Key global challenges and issues faced the world oil and gas industry

4.1 Energy demand and supply

The crude oil demand is superior to its supply. Due to economic as well as population growth, the global demand of energy has doubled in the first half of the century (Sabel and Victor, 2015). The global oil supply company will struggle to keep pace with the demand due to declining output in mature fields by 80 percent in the year 2035.

4.2 Increase the production of the liquid fuels

Oil as well as gas industry faces a vital challenge of the storage of liquid fuel in this period (Anuar and Abdullah, 2016). The American Petroleum Institute points towards the fact that the production of oil sand limits in 2014 due to a scarcity of pipelines leading from the refineries towards the market. The rising demand of the oil as well as gas can meet by expanding the fuel mix with the hi-tech technologies. It is only achieved by increasing the contribution of the bio fuels. As the bio fuels are highly beneficial so they are compatible with the existing infrastructures of the organization.

4.3 Fluctuate crude prices

Due to political stability as well as efforts in different regions of the world, it leads to fluctuation in the price of fuel. The issues that lead to fluctuation of crude oils are slow approval of new capital projects and acquisition of the activity (Westphal, 2016). It is required to maintain an effective operation to maintain the margin in the environment. In order to overcome with this challenge, the oil as well as gas industry should atomize the drilling mechanism as well as robotic technology.

4.4 Cost of services

The increase in the cost of services is a vital disruption for oil as well as gas industry. This increased cost cuts the value chains from exploration to the production and refining (Brook and Bradshaw, 2015). It results in a higher price of a commodity as well as it is driven the industry action to point the service industry lacks the capacity in order to respond. Both the server as well as desktop virtualization manages the cost of the services.

The following are the recommendations to overcome the key global issues and challenges of the world gas and oil industry:

Implementation of Energy Efficiency Strategies: The administration of the United States ought to keep up their ways towards secure sustainable energy system by supporting the execution of energy efficiency strategies with an emphasis on transport and also building segments.

Completion of Quadrennial Energy Audit: Completing the procedure lead to the quadrennial energy audit and, in addition, it is required to re-set up a stable and vital coordinated standpoint for the energy sector.

Providing Bio-fuels: The rising demand of the oil and gas expands the transportation fuel mix with the hi-tech technologies. It is attained by raising the contribution of the bio-fuels. This is extremely beneficial as it is compatible with the existing infrastructures.

Assertion of Robotic Drilling System: The oil and gas industries should assert use of new Robotic Drilling System, which establishes a raised security and is a cost-effective preparation for drilling activities both offshore, and on the land.

Implementation of Modern Supply Chain Management Technology: Supply chain modern technology should be utilized by the oil and gas industry so that the system can access the computational web servers with superior speed to access the data. It allows the administrators to handle the improved supply of crude oil. This supply system optimizes the possible advantages of the collaboration among the oil and gas industry as well as its vendor organizations. 

Conclusion

It is concluded that from the past two decades, the United Nations Framework Convention on Climate Change (UNFCCC) meetings which were held at the Paris in 2015 aimed to find the solution for the impact of global warming which refers to change in climate. The Paris agreement establishes a new method to succeed the Kyoto Protocol Clean Development Mechanism, which generates tradable emission offsets. However, technologies, as well as collaboration, are the key factors to upstream the reserves growth. Regarding the change in advanced technology and environmental threats, the industries are also changing so rapidly. Even from the internal as well as external critics, it is seen that United States is locked in their national-level energy policy. However, the decisions, which are taken in the agreements, give a high impact on the energy policy of the oil and gas industry.

References

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