Global warming in an unequal world : A global deal for effective action Sunita Narain Commonwealth Finance Ministers Meeting, Georgetown, Guyana, October.

Global warming in an unequal world: A global deal for effective action

Sunita Narain

Commonwealth Finance Ministers Meeting, Georgetown, Guyana, October 16 2007

The crisis: the science of climate change

1. Climate change is real; it is already dangerous; heading towards catastrophe.

2. Climate change is urgent; it needs us to act quickly and drastically;

3. But how? Climate change is linked to economic growth. Can we re-invent growth?

Rapid increase of carbon dioxide concentrations in the atmosphere in last 150 years – from 280 ppm to 370 ppm.

Hockey stick science: Since 1900, climate warmed by 0.8ºC. Past 10 year temperature highest since records started

Is anthropogenic: caused by burning of fossil fuel; for our energy needs

The challenge: what is the least risky target?

1. If annual emissions remain at today’s level, greenhouse gas levels would be close to 550 ppm by 2050

2. This would mean temperature increase of 3-5°C

3. The difference in temperature between the last ice age (3 million years ago) and now is 5°C

4. The 2°C target is feasible; but still dangerous

Business as usual is 5°C; even if we stabilise at current levels; increase is dangerous

Impacts: devastation or can we cope?

1. Snow cover will contract. Indian glaciers are beginning to melt fast

2. Hot extremes, heat waves, and heavy precipitation events will increase.. (floods and droughts)

3. Tropical cyclones (typhoons and hurricanes) will become more intense

4. Sea levels are expected to increase – intense debate on how high will this be; and by when. But can we wait????

Insurance industry understands risk: economic losses

1. Katrina: $125 billion; insured US$60 billion;2. Mumbai floods 2005: (800 mm of rain in 12

hours): US$ 5 b; insured US$ 800 million;3. Oman cyclone June 2007: US$ 4 b; insured

US$ 650 million;4. UK floods June-July 2007: US$ 8 b; insured

US$ 6 b;Losses cannot be measured in economic terms

only. Human; Existential; Survival

3-truths: Climate change political and economic challenge

1. Is related to economic growth. No one has built a low carbon economy (as yet)

2. Is about sharing growth between nations and between people. The rich must reduce so that the poor can grow. Create ecological space.

3. Is about cooperation. If the rich emitted yesterday, the emerging rich world will do today. Cooperation demands equity and fairness. It is a pre-requisite for an effective climate agreement.

CO2 emissions linked to energy and linked to economic growth

Drastic reduction needed: For 450 ppm (2°C) reduce 85% by 2050

The gap: the challenge to re-invent what we mean by growth?

United States

21.13%

Europe

16.58%

Japan

4.36%

Rest of the world

57.93%

Sharing the ecological and economic space: CO2 emissions from fossil fuels in 2005

Historical emissions: A tonne of CO2 emitted in 1850 same value as tonne of CO2 emitted in 2005

Natural debt of nations: will it be paid or written off? At what cost?

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Per capita CO2: cannot freeze global inequity

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World average 4 tonnes per person per yearCan sustain 2 tonnes per person per year

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Reduce – to converge

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Increase to convergeClimate justice

1 US citizen =

107 Bangladeshis

134 Bhutanese

19 Indians

269 Nepalese

Unacceptable. Need to secure ecological space for growth

2007: High on rhetoric. Low on action

1. Need urgent action. We are running out of time. Need deep cuts: 50-80% over 1990 levels by 2050

2. Kyoto agreed to small change – 7% cuts3. Even that failed. US and Australia

walked out. EU emissions increased last year

4. Pressure on China and India..

Decreased 3% only because of decrease of economies under transition. Rich have increased

Only UK and Germany have cut.

But beginning to increase again.

Gas and reunification impact fading…

Big words and small change

No energy transition made Little to reduce energy emissions

Transport emissions upEnergy industry emissions upManufacturing down. Exported problem?

No more kindergarten approach

Framework for cooperation: 1. Industrialised countries to take deep cuts (30%

by 2020) minimum. US and Australia must join

2. Emerging rich and rest to participate, not by taking legally binding cuts but through a strategy to ‘avoid’ future emissions.

What is the framework for low-carbon growth strategy?

The avoid-leapfrog strategy

1996: Clean air campaign in Delhi.

1996-2002: a. Advanced emission norms by 8 years – went

from Euro-0 to Euro-II. b. Cleaned up quality of fuel (10,000 ppm to 500

ppm) c. Introduced compressed natural gas – 100,000

vehicles drive in Delhi on gas

Stabilised emissions: but challenges remain

PM10 at ITO Traffic Intersection (March 98-Jun 05)

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PM10 trend projection pre action

PM10 trend March 98-Dec 05 now

Can change pathway to growth

A KEY QUESTIONDo we have to go through the same stages of environmental management

that the West went through or can we leapfrog?

Pre-Euro I Poor diesel

Euro I Improved diesel

Euro II Natural gasEuro III

HydrogenEuro IV

The car has marginalised bus, not replaced it

Can avoid pollution, congestion and emissionsCan re-invent mobilityDelhi placing order for 6,000 new buses; building bus rapid transport corridor; building metro; investing in light rail..Finance ministers can reduce taxes on buses, increase on cars…

Options exist: re-invent growth. Avoid pollution

1. We can build “clean” coal power stations

2. Can build distributed power grid, based on renewable…

3. 18% emissions from land use changes. Can protect forests; Can plant new forests..

In our world; forests are habitats of people. Forests have economic value. Protecting forests needs paying for services; paying local communities to protect forests; benefit from its resourcesCountries cannot “keep” forests without getting economic valueCosts for carbon storage peanuts..

Options but..

The South will do what North has done 1. Will first get rich; add to pollution; then

invest in cleaning it up2. Will cut forests and convert to agriculture

and then depress the price of food

A low-carbon growth strategy will cost money. The South will need to invest in efficiency, pollution control and protecting forests as forests

This needs change in global framework

CDM instrument to make this transition. But designed to fail

1. Aim to get cheap emission reduction has lead to projects which do little. Low hanging fruits. Cannot pay for real change.

2. Designed for ineffective action – additional to policy – leads to nothing

3. Designed for mutual self-interest between private sector; not public interest;

Has become the ‘Cheap’ ‘Convoluted’ ‘Corrupt’ Development Mechanism

High end technology will cost money

No rocket science needed

1. Need framework for cooperation2. Need framework that can push for energy

transformation

Best option is to create per capita emission rights;Use the rights to create global create carbon

market;Use the market (with rules for public good) to

make the transition into low carbon economies

Finance ministers challenge

1. Emissions linked to economic growth2. Climate change will devastate

economies3. Need to find solutions to pay for high-

end energy transformation – reform of CDM or carbon market

4. Need to share benefits of growth equitably

Not acceptable

Politics for future

Cannot freeze global inequity;Cannot survive climate change – rich or

poor;Climate is not about the failure of the

market;It is about our failure to make the markets

work for public and common good…It is about politics..

Challenge to Commonwealth

1. Climate change is about the wealth of commons;

2. It is about setting rules for living together on one Earth

3. Commonwealth brings all together – rich and poor; emerging countries and small island nations..

4. Can lead the next negotiations. Can provide the answers the world needs desperately

Leadership for our common world

1. Industrialised countries to set deep and real cuts – UK, Australia, Canada

2. To pay for adaptation costs – Build global consensus on paying these crippling costs

3. To set framework for participation by rest of the world – built on equity and designed for real transition

Otherwise road to ‘common’ hell