Addressing Climate Change With Development Imran Habib Ahmad, Visiting Fellow UKM & Lead Coordinator UNDESA WESS 2009 Presentation to ISIS/Lestari Forum.

Addressing Climate Change With Development

Imran Habib Ahmad, Visiting Fellow UKM & Lead Coordinator UNDESA WESS 2009

Presentation to ISIS/Lestari Forum on Climate and Development

Email: [email protected]

Luxury or development

Source: Google images

Context

• A combination of a legacy of mistrust, political inertia, procrastination, and the use of a framework that is designed to polarize and divide countries and people, prevents effective climate solutions

• A distorted global agenda on climate and development, not inclusive; an integrated approach based on sustainable development is urgently needed.

• How can you bridge the divide with a common agenda?• Development is a positive-sum game• Climate change is largely being viewed as a zero sum

game, and this inhibits cooperation and effective action • A development-based approach to climate change can

transform it from zero- to positive sum game

An interesting diagnosis……We've debated for years about who should control

emissions, by how much, when, and according to binding or non-binding commitments. Yet we can't settle these issues without also getting into the details about the deployment of low-carbon technologies, social behaviours and the quantitative realities of energy systems, transport technologies, food production, water scarcity, and population trends. We will continue to go around in circles until we are much more systematic in bringing scientific and engineering realities to the table. Our negotiations need much greater grounding in our true options and their costs (Jeffry Sachs, December 2009)

Climate Science – A Primer

• A robust science on anthropogenic climate change established

• CO2 concentrations currently around 390ppm• Political discussions on a 450ppm range; implies a 50-78%

probability of > 20C increase• Almost impossible to stabilize at 450ppm without reducing

global emissions by 80-90% by 2050; • More recent scientific analysis is pushing the boundary

towards 350ppm range (Rockstrom et al, 2009) • Under business-as-usual phenomenon, climate is set to

warm to 6 degree centigrade {(Global Carbon Project, IPCC(upper range)}

• many of the trends will accelerate, risks of abrupt or irreversible changes

Closing gap between science and politics

little controversy in the science; ad hoc incremental responses will no longer deliver safe outcomes

big damage in poor countries and communities from multiple threats; a warming world will be a much more unequal world

In the political debate there is insufficient recognition of the size and nature of economic adjustments involved in moving to low-emission development pathways

One planet; different histories

• if developing countries emulate rich countries carbon-fueled growth path climate goals will not be achieved

• that growth history has left a very uneven development picture: that growth trajectory cannot fully reconcile reducing current gaps and inequities with saving the planet

• common but differentiated responsibilities

Climate Justice/Equity• Rich countries presently nowhere near

meeting Kyoto commitments, let alone higher targets needed

• For every 10C rise in average global temperature, average annual growth in developing countries drops 2-3%, but little –ve impact on rich countries

• Climate justice: consider historical + current carbon emissions

Overarching Global Challenges

Trust deficitIntergovernmental Process responding to the needs

generated by recent science http://www.un.org/esa/policy/policybriefs/policybrief17.pdf http://epress.anu.edu.au/eaf/vol1/03/pdf/whole.pdf Reducing (hopefully eliminating) the lag among science,

policy and politics

Key Global Operational Challenges

Missing & needed elements

Development still on the margins http://www.un.org/esa/policy/policybriefs/policybrief24.pdf

Mainstreaming inertiaInsufficient finance –mobilization, governance and delivery Weak Capacity –institutions, technical, governance ++Disparity between global information and assessment and national

and regional level information

Legal status of Copenhagen AccordDeveloping an appropriate MRV framework that satisfies all partiesResponding to actual adaptation needs in light of increasing climate

impacts

A more promising approach

• Shift focus from emissions cuts to sustainable development, i.e. to full employment and energy security in North and to catch-up growth and energy access in South

• But also a much more frank and open discussion about burden sharing

• A solution based on a low-carbon, high-growth transformation of the global economy—a transformation that can keep temperature increases consistent with environmental stability, while at the same time fostering the strong growth and economic diversification in developing countries that would allow convergence of incomes worldwide is required.

Development Approach

• Joint Goals:

– North: full employment and energy security

– South: catch-up growth and energy access

• Elements: investment, policy guidance,

strategic direction

• Focus: Consensus, Momentum, Transparency

• Results:

– Enable developing countries to leapfrog

– Stimulate private sector in North as well as South

– Promote cooperation

Rising living standards driven by massive energy push

  1800 2000 Factor

Population (billion)

1.0 6.0 x6

GDP PPP(trillion 1990 $)

0.5 36.0 x72

Primary Energy (EJ)

13.0 440.0 x34

CO2 Emissions (GtC)

0.3 6.4 x21

Energy (for electricity, manufacturing and transportation)

Electricity and heat24%

Industrial processes3%

Agriculture14%

Land-use change and forestry

18%

Waste3%

Manufacturing and construction

11%Transportation

12%

Other fuel combustions

9%

Fugitive emissions4%

International bunkers2%

Investment is key to adjustment

• To break business-as-usual path needs long-term planning and investments that begin sooner not later

• Transforming energy services to substantially reduce carbon emissions is key

• The relevant technologies exist (energy efficiency; renewables), but costs are still a major constraint

• Essential to achieve scale and learning economies: avoid carbon lock-in: a “Big Push” is needed

• This will require policy shifts at macroeconomic and sectoral levels

• Investment+technology; need a climate technology programme with augmented R&D and flexible IP rules

Energy storyTwo-thirds to three-quarters of emissions from the

energy sector Energy challenge is different for developing countries

• Developing countries must expand electricity and transport infrastructure three to four times just to provide whole population with access and reach basic growth targets

• Expansion is constrained not by demand (efficiency, population) but by supply (investment capacity).

• Without investing in renewable energy, projected developing country energy growth per year (3% to 5%) means more emissions even with rising energy efficiency

• At 10 cents per kWh, even a household with an income of $10 per capita per day could not achieve energy security

• Investment and consumption will need to be subsidized initially

Understanding Energy Focus

• Contribution to human progress

• Energy access

– Strongly correlated with HD indicators

– 3-4 fold expansion needed in developing countries

– Affordability (Energy share, HDI)

• Over 75% emissions

– Rising faster than aggregate emissions, especially

developing country because of energy growth (3 to 5%)

outrunning rising efficiency

• A sector over which there is consensus,

momentum, transparency, and clarity

Energy consumption & HDI

Energy Affordability at various income levels

Moving Forward

Pressure on developing countries to mitigate—

by some calculations more than developed

countries.

• Challenge is to reconcile this demand with the

need to maintain growth

• Two approaches:

– Sovereign commitments: The Adjustment Model

– Joint commitment: The Investment Model

Strategy

Sovereign Commitments: The unifying strategy

under this approach is to raise conventional

energy costs (by raising carbon costs (carbon

tax or cap and trade).

• Joint commitment: Since developing countries

need to lower the costs of energy especially

for low income groups to address energy

poverty and HD, the unifying strategy is the

promotion of investment.

A Win-Win Option

• Environmental Investment as Driver: Enable• developing countries to leapfrog—not “pollute• first clean up later”.• Set common targets for renewable energy• investment costs ($1/W!)

How to lower costs

How to make renewable energy affordable• Global partnership on RE

The Global Feed in Tariff Approach

• Definition of feed in tariffs policy

– Guarantee that any renewable energy generated

will be purchased (“fed into”) by the power grid at

given rates (tariffs), different for different

technologies, and declining in future years

• Over 50 countries have such policies

• In developing countries, low final energy prices

require subsidies, but these are constrained by

limited public resources

• A global regime will supplement national

commitments with global resources

Clear Advantages

• Common and shared goals

– Renewable addresses economic and human

development goals as well as climate objectives

– Global subsidy pays only incremental costs

– Reduction in unit costs helps both North and South

• Demonstrable results

– Output based funding: payment is made only when

renewable energy is delivered to consumers

• Time bound commitments

– As unit costs fall (depending on how quickly scale is

ramped up) and incomes rise, subsidy disappears

Global Finance

• There is broad agreement over the need to scale up existing funds and combine with innovative new sources of financing. Options include:

• Official development assistance• Carbon credits (but need higher emissions

commitments to bring about deeper cuts)• International taxes (e.g., on financial speculation,• aviation, or a progressive global levy on incomes)• Reallocation of existing spending

A new Green Deal

• Global Feed-in-Tariffs: Support for all technologies,

and poor consumers. A fund of $100 bn annually

2010-20. Channeled through energy systems on the

basis of output delivered.

• Global Climate Corps: Patterned on the Civilian

Conservation Corps during the New Deal and the

Peace Corps from the 1960s, a cadre of professionals

to support energy efficiency and renewable energy

initiatives

• National Support: Patterned on the Green Revolution,

support for institutions of research, extension, credit,

and inputs provision in the energy sector.

WESS Key messages

• lower emissions and rising living standards are necessary and feasible; long-term, integrated, inclusive and sustainable approach to resource management

• but big adjustments involved; these must not hold back development goals

• can’t rely on markets need a revitalised public policy agenda (and more active states)

• a global investment programme for both mitigation and adaptation

• finance is key to marrying climate and development agendas; predictable and significant

• Strategic public investment to crowd-in private investment through integrated policies

• Concentrate the international transfers (finance + technology) on the big push

Analysis of Climate Policy Integration literature

• Climate Policy on its own will not solve the climate problem, future research has to increasingly focus on development (IPCC 4AR) ;

• Case for mainstreaming/integration established in literature - incorporation of climate across policy sectors

• A lot of research is required at the local and national levels to identify policy options that work best within the context of specific regions, countries and localities (IPCC 4AR)

Research is needed to establish the conditions under which the process of mainstreaming can be most effective (Lein et al 2003).

Thank youWorld Economic and Social Survey 2009:

Promoting Development, Saving the Planet

Please visit the following websites:

UN-DESA www.un.org

Research papers, policy briefs, others

Acknowledgements:

UN system contributions, especially DPAD, DSD, FfDO, FoFO

Richard Kozul-Wright, Tariq Banuri,, Robert Vos

Manuel Montes, David O’Connor, Australian National University, UN system, WWF, UKM, ISIS and many others