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Greens take root

The momentum towards climate-change action is building, in defiance of White House policies

Despite the controversy and dismay following the Trump administration's actions and decisions, work continued globally to implement the Paris Agreement on climate change in 2017, and this will stretch into 2018. It will be a year of hard work behind the scenes at the international level, but there's likely also to be plenty going on a national level to sustain the public momentum.

The Paris Agreement faces its first major milestone in 2018, as the UN's Framework Convention on Climate Change launches a "facilitative dialogue" to gauge progress towards the pact's goal of net-zero emissions by the second half of the century.

At the end of 2018, nations should be able to finalise their Nationally Determined Contributions, which will represent their individual, formally recognised contribution to the global fight against global warming.

The goal is to create before 2020 a comprehensive "Paris rulebook" regulating how countries monitor and verify their progress, track financial flows and account for their reductions, so that when the Paris Agreement comes into effect in 2020 all 196 member countries are fully prepared.

The past year was a bad one for American climate-action advocates, as the Trump administration removed climate change from federal agencies' agendas. President Trump has ordered the repeal of the Clean Power Plan, while the Environmental Protection Agency is tasked with looking at ways to relax restrictions on the use of coal. So far, the Trump Administration hasn't presented a replacement climate policy.

But 2018 is likely to see a significant increase in local and state-level initiatives. Virginia, New Jersey, Washington and Oregon are all working on plans for emissions-trading systems that could link to existing regional markets, and others could join them.

Fuel economics are also weighing in. Natural gas-fired power has become cheaper than coal, and renewable energy costs are tumbling, leading to more and more coal plants being shut. The coming year could see the largest number yet of US coal-fired units close for good.

China, after becoming the world's largest emitter 10 years ago has banned the construction of new coal-fired power plants in several regions and is closely managing coal production. During 2018, the world's largest carbon market will open, when the People's Republic inaugurates its nationwide emissions-trading system. Planning for this cap-and-trade market hasn't gone smoothly, and speculation grew in recent months that the government would introduce a scaled-down version of its initial proposal, covering just the power sector, before rolling it out to other heavy industries.

According to a study by professional services firm EY, China has also become the world's most attractive market for renewable energy, topping India and the US. China plans to spend more than $170bn on solar and wind power in the next five years.

The EU is working on its 2030 climate policy, but the withdrawal of the UK in 2019 will complicate the task of turning these goals into actual targets. Britain is a net contributor to the bloc in terms of funding for emissions cuts, and the remaining 27 countries will have to agree how to fill that gap.

For its part, the UK has yet to present a post-Brexit climate policy, although domestic targets stretching beyond 2019 have already been established, including a ban on coal-fired power from 2025. It's still not clear, though, what sort of diplomatic relationship Britain will have with its former partner, let alone how it will coordinate—or not—on climate policy.

In Germany, hopes for an exit from coal are proving hard to fulfil. After September's federal elections Chancellor Angela Merkel is striving to create a governing coalition that includes the Green Party seeking a rapid phase-out of coal, and the Free Democrat Party, which supports a slower shift. This debate will play out during 2018.

More broadly, 2018 may also see countries seriously tackling transport-sector emissions. Already a number of major cities have tabled plans to ban fossil-fuelled cars, and China has proposed to end sales of such vehicles in 2030.

Transport accounts for about one-fifth of global carbon dioxide emissions, second only to the power sector. The growth of electric vehicles is significant: sales of plug-in cars rose 46% in the first half of 2017, according to the EVvolumes.com database, and the group forecasts that by 2030 eight out of 10 new cars sold will be electric. In 2018, though, that goal will still look distant.

This article is part of Outlook 2018, our annual book looking at energy market trends for the year ahead. To purchase a copy, click here

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