May 18, 2010 - New finance new instruments and new .... Many climate change technologies are already financial viable. 27 ... http://blogs.worldbank.org/.
DEVELOPMENT AND CLIMATE CHANGE EPRI Global Climate Change Research Seminar: Issues in Climate Policy Issues in Climate Policy
Rosina Bierbaum Co‐director, WDR 2010 Dean, School of Natural Resources and , f Environment, University of Michigan May 18, 2010
New finance, new instruments and new New finance new instruments and new pressures are helping build momentum
CLIMATE CHANGE IS A THREAT TO DEVELOPMENT BUT A
CLIMATE‐SMART WORLD IS POSSIBLE IF WE…
Act now
Act together
Act differently
New finance, instruments and New finance New finance, new instruments and new new instruments and new pressures are helping build momentum pressures are helping build momentum
SCIENTIFIC CONSENSUS: SERIOUS AND IMMEDIATE 2007 assessment 2007 assessment
In ncrease in gglobal temperature since preind dustrial era (°C)
5 4 3 2 C over 2°C over preindustrial
2 1 0
T d Today = + 0.8°C 0 8°C
Risks to unique and threatened systems
Risk of extreme weather events
gg g Distribution Aggregate of impacts impacts
Risks of large scale discontinuities Source: Smith and others, 2009
DEVELOPMENT CONSENSUS: THE POOR WILL SUFFER MOST Historical cumulative emissions
Impact damage costs
20 36 80
64
High‐income countries
Developing countries
1.1 billion people
5.6 billion people
A CLIMATE‐SMART WORLD IS POSSIBLE… Annual public subsidies
Private funding for energy R&D
BUT TO MEET THE CHALLENGE, WE MUST • ACT NOW ACT NOW • ACT TOGETHER • ACT DIFFERENTLY
ACT NOW:
TODAY’S ACTIONS DETERMINE TOMORROW’S OPTIONS Inertia in the climate system feasibility
Inertia in the built environment built environment costs
Inertia in institutions and i di id l ’ b h i individuals’ behavior political momentum
ACT NOW:
OR WE ARE HEADED TO MUCH MORE THAN 2˚C Projected annual total global emissions (billion tons of CO2 equivalent)
ACT TOGETHER:
HIGH‐INCOME COUNTRIES NEED TO TAKE THE LEAD
ACT TOGETHER:
BUT ALL HAVE A ROLE TO PLAY TO MANAGE COSTS Marginal mitigation cost ($/tCO2e)
Advanced technologies: Gt of foregone mitigation Gt of foregone mitigation carbon capture and storage carbon capture and storage
120 100
Efficiency in buildings Land‐use and land‐use change, mostly in developing countries Additi Additional cost of l t f achieving 10 Gt of mitigation
80 60 40 20 0 0 ‐20
10
Small hydro and nuclear in developing countries
‐40 ‐60 ‐80 ‐100 100 ‐120 ‐140 ‐160
20
30
Renewable energy: Wind and solar
Efficiency in motors, , y cars, and electricity co‐ eneration
Negative costs: Long‐term savings outweigh initial t i h i iti l costs
Marginal cost, all countries Marginal cost, all countries Mitigation measure in a Marginal cost, only high‐income countries developing country Mitigation measure in a high‐income country
40
Mitigation Mitigation potential (GtCO2e/year)
ACT TOGETHER:
AND COOPERATION HELPS BUFFER SHOCKS Global food trade depends on very few countries
ACT DIFFERENTLY:
RAPID INNOVATION IN MITIGATION AND ADAPTATION Sector
Mitigation Adaptation Examples
Transport
√
Electric vehicles
Industry
√
Energy efficiency
Energy supply
√
Renewable energy
Waste management
√
Recovering/reducing methane from waste
Building
√
√
Storm‐resistant buildings, energy efficiency
Agriculture
√
√
Drought resistant crops
F Forestry t
√
√
P Processing and use of forest products i d ff t d t
Human health
√
Health monitoring and surveillance systems
Coastal adaptation
√
Geographical planning systems for coastal zones
Water
√
Non‐water based sanitation 12
ACT DIFFERENTLY:
RADICALLY TRANSFORM ENERGY SYSTEMS Global primary energy mix (exajoules) 1,400 1,200 1,000 800 600 400 00 200 0 2000
2020
2040
2060 Year
Energy efficiency
2080
2100
ACT DIFFERENTLY:
RADICALLY TRANSFORM ENERGY SYSTEMS Mini-CAM
IMAGE
MESSAGE
baseline
REMIND
450 ppm-e eq
Renewable
Energy efficiency
CCS
Nuclear
ACT DIFFERENTLY:
MASSIVELY SCALE UP CCS— CCS A TECHNOLOGICAL CHALLENGE
box figure 7.5 Edmonds, 2009
ACT DIFFERENTLY:
RADICALLY TRANSFORM ENERGY SYSTEMS
ACT DIFFERENTLY:
MAKE ROBUST RATHER THAN OPTIMAL DECISIONS
ACT DIFFERENTLY:
MANAGE CONTINGENCIES BETTER
ACT DIFFERENTLY:
MANAGE FOR MULTIPLE STRESSES
map FB.1
ACT DIFFERENTLY:
MAKE ROBUST RATHER THAN OPTIMAL DECISIONS
y
Infrastructure to withstand new “extremes” Infrastructure to withstand new extremes
y
Seed varieties that perform well in droughts/floods/heat
y
Pi ii l d Prioritize lands to preserve and manage multiple threats d li l h
y
Increased need for social safety nets / insurance
y
Emergency response plans, early‐warning alert systems
y
Information systems / best practices y / p
y
Weather and climate monitoring / regional assessments
MAKING IT HAPPEN
Act now
Act together
Act differently
New finance, instruments and New finance New finance, new instruments and new new instruments and new pressures are helping build momentum pressures are helping build momentum
MAKING IT HAPPEN:
NEW RESOURCES
MAKING IT HAPPEN:
THE FINANCING CHALLENGE |
Critical to reconcile equity and efficiency
|
Requires massive scaling up: y Costs: some $200 Costs: some $200‐275 275 Bn Bn in 2030 in 2030
Financing: up to $550 bn in associated mitigation finance y
|
Can be done: Can be done: y Costs = 0.4% of high‐income country GDP to 2100 y Financing = 3% of current global investments y But requires all options available But requires all options available
MAKING IT HAPPEN:
THE FINANCING CHALLENGE: IMMEDIATE NEEDS |
Reform carbon markets: Reform carbon markets: y y y
Reform project‐based CDM REDD Land emissions and soil carbon? Black Carbon? Land emissions and soil carbon? Black Carbon?
| Leverage private finance: y y y y
Better information on climate trends and risks Investment climate conducive to low carbon investments Limited potential for public–private partnerships? Risk finance (e.g., cat bonds, insurance) g
| Allocation mechanism for adaptation finance
MAKING IT HAPPEN:
NEW INSTRUMENTS To support communities and decisionmakers | Low‐tech and high‐tech |
MAKING IT HAPPEN:
INCREASE THE PACE OF INVENTION
figure 7.4
MAKING IT HAPPEN:
INCREASE THE PACE OF INNOVATION / / PENETRATION |
Many climate change technologies are already financial viable
27
Source: World Bank (2009) World Development Report 2010
MAKING IT HAPPEN:
S SUPPORTING O G POLICIES O C S Abatement cost
New Technologies
Renewable Energy E Energy Efficiency Effi i 0
Energy pricing reforms Energy pricing reforms
Policy Tools l
•Regulations and financial incentives •Financing mechanisms •Institutional Institutional reform reform
•Feed‐in Tariff or Renewable Portfolio Standard •Tax Tax on fossil fuel on fossil fuel
Abatement potential
•Support for R&D •Financing incremental cost •Transfer Transfer technologies
MAKING IT HAPPEN:
NEW PRESSURES |
We’ve come a long way y y y y
|
Drumbeat of science Drumbeat of science Politics are changing Cities, states and countries are taking action Individuals, business and organizations are responding
More is needed to turn awareness into M i d dt t i t the needed actions y
“ Soft” policy tools – communication and education; social norms
17% reduction 65% reduction $791 million saved
25% reduction $100 million saved
69% reduction $2 billion saved
WDR 2010 SUGGESTS THAT A CLIMATE‐SMART WORLD IS POSSIBLE, IF WE…
Act now
Act together
Act differently
New finance, instruments and New finance, new instruments and new pressures are helping build momentum h l i b ild t pressures are helping build momentum
WDR 2010 SUGGESTS THAT A CLIMATE‐SMART WORLD IS POSSIBLE, IF WE…
Break high carbon habit Manage scarce resources
Act now
Reduce vulnerability
Act together
Act differently
New finance, instruments and New finance, new instruments and new pressures are helping build momentum h l i b ild t pressures are helping build momentum
WDR 2010 SUGGESTS THAT A CLIMATE‐SMART WORLD IS POSSIBLE, IF WE…
New technologies
Act now
Act Manage costs & buffer together shocks
Anticipatory adaptation
Act differently
New finance, instruments and New finance, new instruments and new pressures are helping build momentum h l i b ild t pressures are helping build momentum
WDR 2010 SUGGESTS THAT A CLIMATE‐SMART WORLD IS POSSIBLE, IF WE…
Climate-smart policies
Act now
Act together
Act differently Plan, prepare, protect
Robust decision-making
New finance, instruments and New finance, new instruments and new pressures are helping build momentum h l i b ild t pressures are helping build momentum
WDR 2010 SUGGESTS THAT A CLIMATE‐SMART WORLD IS POSSIBLE, IF WE…
Act now
Act together
Act differently
New finance, instruments and New finance, new instruments and new pressures are helping build momentum pressures are helping build momentum pressures are helping build momentum
“It is our collective responsibility p y to find ‘unselfish’ solutions and fast before it’s too late to reverse the damage caused every day.” g y y Maria Kassabian, age 10, Nigeria
http://blogs.worldbank.org/ climatechange/ http://worldbank.org/WDR2010
High‐income countries need to significantly reduce emissions…
Making it happen:
The Technology challenge The Technology challenge