DEVELOPMENT AND CLIMATE CHANGE

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May 18, 2010 - RADICALLY TRANSFORM ENERGY SYSTEMS. RADICALLY TRANSFORM ENERGY SYSTEMS. REMIND. IMAGE. MESSAGE. Mini-CAM line.
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