Climate change in the news (Mar 13- 18, 2010)
Green growth has been in the news lately with much talk about greening the fiscal stimulus for a triple bottom line. Yet there are worries and the question remains as to whether green growth means slower growth with resources diverted to cleaning up the growth process. And what would happen to countries who unilaterally decide to impose domestic environmental regulations and/or a carbon price?. Will this lead to jobs moving abroad—to poorer or less-green countries that would become pollution havens?
|Photo © iStockphoto.com|
Unfortunately much of the green growth discussion has been of the proselytizing or the scare-mongering kind, with not enough analysis of the potential trade-offs between greening and growing, and not enough thought devoted to ways of minimizing these trade-offs.
In this context, a new paper by Philippe Aghion, Daron Acemoglu and two Harvard graduate students, on “The Environment and Directed Technical Change” (pdf) is a much needed contribution. It also makes for a fascinating read: do not let the large number of equations scare you off! As in all of Aghion’s work, the key insights of the papers are fully captured in crisp writing in the first few pages of the paper.
In his presentation at the World Bank on March 8, Aghion explained the motivation of the paper: most economic models looking at the trade-offs between acting aggressively or not on climate change assume technical change is exogenous—i.e., does not respond to changes in energy prices (for example through a carbon tax) nor to environmental regulation (like a cap on emissions). This results in green growth being slower than dirty growth, at least if the negative impacts of climate change are small, and/or results in the need for permanent subsidies.
|Photo © iStockphoto.com|
Hans Timmer, director of the World Bank Prospects Group which analyses the world's economic outlook, described recently a scenario in which only high-income countries would limit the emission of CO2 while developing countries would seize on energy-intensive manufacturing as a comparative advantage to rekindle medium-term growth.
"That is not a position a developing economy wants to be in," cautions Timmer. "Scarcity of energy supply had become one of the binding factors at the end of the boom that was suddenly interrupted by the global financial crisis. When you try to rekindle strong medium-term growth, you don’t want to be pushed into an artificial comparative advantage in energy-intensive production."
As my colleague Mike Toman noted recently, Geoffrey Heal of Columbia University said the following in a recent blog post:
"neither costs nor capital requirement will prevent us from decarbonising the electricity supply. The real obstacle to doing this largely with renewables is our current inability to store power, and as long as we cannot store power we will need to use non-renewable sources like nuclear and coal with carbon capture and storage."
However, this view does not factor in future technological innovation, which I think is very significant.
The IEA Energy Technology Perspective projected that renewable energy could contribute around 50% of the power mix by 2050 under their Blue Scenario to achieve a 450 ppm world. Many other global leading energy/climate scenarios have the same projections, including those from Shell. Of renewable energy resources, geothermal, hydro, and biomass can provide base-load power. Indeed, solar and wind are intermittent.
|Photo ©Simone D. McCourtie / World Bank|
Just eighteen days before Copenhagen, climate change was, not surprisingly, the central theme of Kerry’s remarks. While Kerry is a relatively recent advocate of climate action, his commitment to pushing climate change legislation in the U.S. was very evident, as was his grasp of the complexities of global action on the climate front.
“America needs to signal to the world that it is serious,” he said, in step with one of the main messages of the World Bank’s World Development Report 2010: Development and Climate Change, which calls upon rich countries to take the lead in reducing their carbon footprints and providing the funds for low-carbon technologies to be deployed in developing countries. Listing recent US achievements, he said that the country was committed to progress and that Copenhagen was vital.
Kerry referred to “energy poverty”— the lack of access to electricity faced by millions in the developing world—as a challenge interlocked with climate change. “No citizen of the developing world should be held back by lack of access to electricity,” he said, acknowledging, however, that the world was hurtling toward what he described as catastrophic and irreversible climate change.
“Solving energy poverty using old paradigms is a short-term bargain and a dangerous one,” Kerry said, stressing the need to find solutions that address both goals. “With its funding and intellectual leadership, the Bank can play a profoundly important role in shifting the balance toward climate solutions,” he said, listing several actions as critical for the Bank.
My foray into climate change in the World Bank Group started with the drought-affected regions in Andhra Pradesh, India in 2003. The WB had just started thinking about adaptation to climate change and was trying to begin a dialogue with developing countries dealing with overwhelming challenges of poverty. With my colleagues in India, we began looking at drought-proofing in Andhra Pradesh without labeling this a `climate change’ study. In many ways, this was probably the first attempt to integrate adaptation into a Bank rural poverty reduction project. Two years later, the study was well received and became the pilot for drought-adaptation, to be linked to India’s National Rural Employment Guarantee Program.
This experience served as a laboratory for us to learn lessons that have helped mould Bank’s engagement with climate change. It went on to shape the key features of the Strategic Framework on Development and Climate Change (SFDCC) that was approved a year ago. Connecting with client countries and listening to their concerns became the cornerstone for the SFDCC. The Framework was formulated through an extensive global consultation with both World Bank Group staff and external stakeholders. It was the process itself that helped build ownership for climate change work inside the Bank Group and among client countries.
300 miles. Starting September 26, about 200 cyclists, including myself, will embark on a 300 mile, 5-day ride from New York City to the steps of the Capitol in Washington, DC to promote awareness for climate change and to raise money for rails-to-trails conservancies and clean energy NGOs (http://www.climateride.org/). If I were to drive the same distance, using my beloved '93 Ford Probe (Ford Mustang Lite), my gas consumption would produce about 100 kilograms of carbon dioxide.
After more than a year of research, consultation, and writing, I’m happy to announce that we have just released a “pre-press” version of our report: World Development Report 2010: Development and Climate Change. While the printed books won’t be ready until the end of October, the advance files (subject to correction and change) are now available on our website, so please feel free to download them and let us know what you think via comments on this blog!
The report, which is the latest in the World Bank’s long-running series on development, emphasizes that developing countries are the most vulnerable to the negative impacts of climate change. In fact, they face 75 to 80 percent of the potential damage from climate change. The latest and best scientific evidence tells us that at global warming of more than 2°C above pre-industrial temperatures—an increase that will be extremely difficult to avoid—more than a billion people could face water scarcity, 15 to 30 percent of species worldwide could be doomed to extinction, and hunger will rise, particularly in tropical countries. So it’s overwhelmingly clear that developing countries need help to cope with these potential impacts, even as they strive to reduce poverty faster and deliver access to energy and water for all.
Sub-Saharan African countries are bracing for dramatic impacts of climate change. As Andrew Simms of the UK-based New Economics Foundation has aptly put it, they are “caught between the devil of drought and the deep blue sea of floods.”
Africa’s greenhouse gas emissions have been minimal because of its low levels of industrial output. Yet African countries are likely to suffer disproportionately from global warming. They are therefore right to demand that international climate negotiations be based on principles of historical justice.
But behind this seemingly dismal outlook lies a unique opportunity for Africa to lead the way in adopting low-carbon growth strategies. The region is not too heavily committed to the same damaging industries that its industrial counterparts are having difficulties abandoning. African countries therefore need to complete their demand for historical justice with the design of climate-smart policies.
|Photo © Julia Bucknall/World Bank|
The Gulf News is reporting that oil-rich United Arab Emirates is among the few developing countries to host a major international organization. Abu Dhabi will be the interim headquarters for the International Renewable Energy Agency, appealingly named IRENA. That fact is remarkable enough, but what is really surprising is that it was chosen over environmental powerhouses Germany, Austria, and Denmark.
The World Development Report is full of recommendations – transform agricultural subsidies in rich countries, make US$ 50bn a year in additional funding available for adaptation in developing countries – that readers may be tempted to dismiss as politically impossible. Yet political transformations are possible. Ten years ago would anyone have thought that Abu Dhabi could become a leader in sustainable development? The transformation reaches deep. Consultants making recommendations about the UAE's drinking water tell us that reform of the tariff structure is now being considered at the highest levels - not because it would improve water management, but because the efficiency gains predicted would reduce the country's carbon footprint.