comm-appendix-support-cross

3- February 29,2016
describes what [the Company] calls the low carbon/2 degree scenario" and is evidence that the
Company in 2014 "had a clear sense of what it understood the 2 degree scenario to be."
However, despite the 2014 Report's reference to a "low carbon scenario" as a scenario where
world temperature increases do not exceed 2 degrees Celsius above pre-industrial levels, by
2100, the 2014 Report never claims to predict the specific policy actions likely to be taken by
governments around the world to meet such a scenario or the timing for implementing them.
These are the exact variables that make the 2 degree scenario, and how to reach it, uncertain
and vague within the context of the Proposal; For example, it is one thing to limit global
temperature increases to 2 degrees Celsius by 2100 if significant measures are implemented
immediately to reduce the growth in global greenhouse gas emissions; but it is an entirely
different scenario if such measures are not put into place until later in the century. 3 The 2014
Report thus cannot and does not indicate a "clear sense" on the Company's part of policy steps
to be taken to achieve a 2 degree scenario. It is the very difficulty of predicting specific future
policy actions to be taken by hundreds of different governments around the world that leads the
Company to use a proxy cost of carbon in its investment planning - which is intended to capture
the expected cost of the wide range of actions governments might take to restrict carbon in the
future—rather than attempting to predict Which among a wide range of potential policy scenarios
might be chosen.
2. The Proposal is vague and indefinite because current and future public policy related
to a 2 degree target is vague and unclear.
The Prdponeht Letter inaccurately claims '^enough is known about the general direction of
public policy related to the 2 degree target" and claims that there is a clear meaning to the
Proposal's reference to such public policies. Global solutions and approaches to meeting the 2
degree target remain highly uncertain and encompass a wide range of possibilities as described
in more detail in the Company No Action Letter. The most recent indication of such global public
policy is the results of the 21st Conference of Parties to the United Nations Framework
Convention on Climate Change, which led to an agreement on December 12, 2015 (the"Paris
Agreement") in which 195 governments agreed to take steps including setting and reporting
"intended nationally determined contributions {the "intended reductions") with the aim of
achieving a 2 degree target. However, as demonstrated in the Company No Action Letter, the
Paris Agreement itself indicates that the intended reductions submitted by the parties to date are
insufficient to meet the 2 degree target. Further, the Paris Agreement itself is inconsistent in the
specific temperature goal it sets; in places, it refers to the need to limit temperature increase to
"well below" 2 degrees, and in other places it refers to simply limiting increases to "below" 2
degrees. Given that another aspirational target set in the Paris Agreement is to limit temperature
increase to. 1.5 degrees, the difference between "well below" and "below" 2 degrees could be
quite substantial.
In additibn, the Paris Agreemerit has not yet been ratified and so is not binding, and even
assuming it is ratified by sufficient nations in the future, the intended reductions of each nation
will not be binding, and there will be no legal enforcement mechanism to force signatories to
comply with their intended reductions. Further, the U.S.'s intended reduction relies heavily on
the "Clean Power Plan," a set of regulations aimed at reducing carbon dioxide emissions from
3
Indeed, as pointed out in the Company No Action Letter, organizations such as the Intergovernmerital
Panel on Climate Change have revised their estimated time at which global greenhouse gas emissions must
peak to meet the 2 degree target by 2100, demonstrating the uncertainty surrounding this target.
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