PPA Sustainability Summit 2015 Demystifying the Paris Climate Summit 8 th October

PwC The Draft Agreement

PwC

How does business connect with the COP? 7

PwC CEOs are motivated to take action on climate change for both altruistic and hard-headed business reasons “In the context of an ambitious climate deal, CEO’s will need to align their desire to do right for future generations with formulating strategies that will make their own business more resilient and adaptable”

PwC COP21 summit in Paris: A binding agreement is not the main driver for climate change action

PwC UN Climate Summit – 23 September 2014 Raise ambition & awareness Bold pledges – business & government Forests Energy sector emissions RE100 Risk & resilience Invest & divest 8 Road to Paris S&CC Lunch and learn Section 2 – Road to Paris: New York, Lima and Paris

PwC The National Targets – INDCs 11

PwC Low Carbon Economy Index – 12 th October “Conscious uncoupling” 12 INDC analysis 1.Progress in Paris targets – a step change in effort 3.Implications for business

PwC Australia’s carbon intensity 13

PwC Australia’s GDP & emissions forecast 14

PwC Australia’s BAU vs Target vs 2 degrees 15

PwC What’s in the INDCs? 16

PwC Implications of INDCs for business – 3 themes emerge 1.Coal is in the firing line: standards and carbon pricing 2.Deployment of low carbon infrastructure: renewables, transport & grid 3.Lots of targets, little on investment. Reform in finance sector – capital markets vs project finance 17

PwC What would be a successful outcome of COP21? Paris is already a success (and a failure) INDCs & clear, investment grade plans to achieve them Process to review progress and raise ambition Finance and market mechanisms (carbon pricing) to deliver it 18

PwC To find out more… #Paris2015: html Low Carbon Economy Index: 12th October 2015 CEO Survey: Contacts: Jonathan Grant: This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PwC, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2015 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

PwC20 April 2014 Low Carbon Economy Index 2015 | Conscious uncoupling? The 7th annual Low Carbon Economy Index (LCEI) tracks the rate that G20 countries are decarbonising their economies Our 3 main conclusions are:

PwC21 April There was a rapid uncoupling of emissions from economic growth in The global average annual reduction in carbon intensity since 2000 is 1.3%, but this jumped to 2.7% in 2014 (when global GDP grew by 3.3% and emissions grew by only 0.5%). The EU, China and Australia all had rapid reductions in carbon intensity last year; the EU benefitted from a warm winter and China curbed coal consumption. The UK is at the top of our Index this year with the fastest reductions in carbon intensity we've seen since we started the LCEI seven years ago. The UK's economy grew while it reduced emissions and so prompted our title this year: "Conscious uncoupling".

PwC22 April The chart shows that the Paris targets are ambitious – achieving them will require a step change in effort – but they fall short of the two degrees goal governments have agreed. In some respects Paris has already been a success because so many countries have made pledges, even if they don't add up to two degrees collectively. Already they are changing the negotiating landscape with a shift away from the black and white Kyoto world of developed vs developing countries. We have compared the ambition of countries' targets, looking at how much they differ from business as usual. We think the change in decarbonisation rate is more relevant to business than the emissions trajectory (or even the actual carbon intensity). By our measure, Canada's target is more ambitious than the EU's and China is more ambitious than India.

PwC23 April National regulation introduced to achieve the Paris targets will have big impacts on business. Obviously, in many of the INDCs, coal is being targeted (through efficiency and emissions standards and carbon pricing) and low carbon infrastructure is being supported (energy mix & capacity targets). But the national plans are less clear how the financial services sector will deliver the investment needed to achieve these goals. It is as if they assume that having set targets, the finance will just show up. In addition to the G20 analysis we have taken a closer look at 10 national plans: 5 developed countries (US, EU, Canada, Australia and Japan) and 5 emerging economies (China, India, Brazil, South Africa and Mexico). These short summaries set out how the regulations and incentives proposed will really impact on business. The report and videoclip on our website at:

PwC24 April 2014

PwC25 April 2014