What I would like from Bali

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What I would like from Bali

• Tariq Banuri, SEI
• 2007

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Introduction

• Four opening points
• Climate change is real
• Happening not a time of our choosingunfinished
  global agendas could be on collision course with
  climate response
• Other complicating factors may make life more or
  less difficult
• Solutions do exist the obstacles lie elsewhere
• Not argue about adaptation, because what is
  needed is well known

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Tipping Points and Challenges
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The simple answer Reduce carbon emissions
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Not so Fast
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Climate and Development

• The development agenda is realand, like climate,
  will be ignored at our peril
• Mounting frustration over the inability of the
  development agenda to change anything of
  substance has been blunted by 2 factors China
  and India
• But frustration is mounting elsewhere
• Bottom line Protect the book-ends

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Back to Emissions
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A Simple Decomposition
Energy Emissions Population x Affluence x
Energy Intensity X Carbon Intensity E P (Y/P)
E/Y (C/E
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The Aggregate ChallengeEnergy Related CO2
Emissions
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Climate Options
Per Capita Income
Carbon Emissions
Concentration
Energy
Population
Energy Efficiency
CCS
Shift to Renewables
How much Is enough
Limit Population
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The Obstacles Lie Elsewhere
Some economists and development experts sic
criticised the Human Development reportthat a
quick, costly shift away from fossil fuels, the
main source of emissions, could actually
backfire, blunting the climb towards prosperity
that they say is a prerequisite for action to
improve environmental quality. Another reasonis
that risks are risingbecause population growth
in poor places is greatly increasing how many
people are exposed Robert O. Mendelsohn, An
aggressive mitigation plan is likely to be a
greater threat to growth than climate change
impacts. We do not yet have the technology New
York Times 28 November 2007
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Umm, Bob, we do have the technology
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With apologies to my French Friends
Economists are like Frenchmen. No matter what one
says to them, they immediately translate it into
their own language. And forthwith it becomes
something entirely different.
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Recognizing the two challenges
Source World Bank (1998) Marland, et al. (1998).
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The Bowl and the Stem
Growth is the only sure recipe short of a global
revolution to reduce inequality, establish human
rights, and eradicate poverty

• The inability to mobilize international action on
  climate is in part because of the inequality
• Current solutionseparate and equalproduces only
  a race between growth and catastrophe
• Only by integrating the twin goals (climate and
  development) can progress be made

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History I Common and Differentiated
PREAMBLE Emphasizes differentiated
responsibility, prevention of harm, differing
needs, vulnerabilities, capabilities and
resources. 12 out of 23 paragraphs
OBJECTIVES Calls for economic development to
proceed in a sustainable manner. PRINCIPLES
Each of 5 principles includes equity
considerations equity, special needs,
precautionary measures, right to sustainable
development, and developing country growth.
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History 2 Separate but Equal

• Voluntary Commitments (average 5.2 below 1990
  by 2008-12)
• Emission trading plus adaptation fund
• Equity disappears, financial and technological
  transfers still promised (but lose prominence),
  focus shifts to domestic action/options
• In retrospect, none of the commitments were
  fulfilled emission targets not achieved, finance
  and technology minuscule

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What Regime(s) would be best
Emissions Based e.g., (a) national targets (b)
national emission rights (c) per capita emission
rights (d) emission development rights Tax
Based Carbon-tax (comparable to
targets) Regulation-Based e.g., Immediate
moratorium on exploration and phased-in on
extraction. Investment-Based Global public
investment program Cross Cutting issue
Comprehensive solution or rolling regimes?
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Criteria for Regime Choice

• Development What will happen to development in
  fast growing countries, in other countries?
• Policy consistency Can we bind future
  governments? Will the private sector believe it?
• Simplicity How transparent and direct? Are
  ancillary measures needed? Is there adequate
  experience (especially in the South) to
  operationalize on significant scale?
• The trust deficit Aid? Conditionality?
  Partnership?
• Immediate action versus comprehensive solution?

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Why the singular focus on Emissions?

• Position over emissions are too far apart and can
  only lead to a stalemate
• Need for two separate strategies that can bring
  North and South as well as Climate and
  Development together
• Emissions and markets for North, investment for
  South
• Change in language from who did this to let
  the market do it to the public sector can lead
  this

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Kartha et als Formulation
80 global reductions by 2050
Whats left for the South?
90 by 2050 in the North
What kind of climate regime can make this
possible?
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How about the other way around?
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CDM Critique
Mommy, where do carbon offsets come
from? Well, you see, honey, when a polluter
and a consultant love money very, very much, they
come together in a very special way to produce an
extremely long piece of paper. Gar Lipow,
Systems Analyst and Peace Activist, 2006 Cited
in Carbon Trading, p. 61
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Policy Credibility

• Can we bind future governments, democratic or
  otherwise
• What about future uncertainties political chaos,
  donor fatigue, fortress world
• Are national policies credible?
• Can governments take a passive role (let the
  market do it), or do they need to take risks and
  make bets?
• Single or rolling plans?

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Investment
Investment Fund Global fund 1 per cent of world
GNP for climate transition allocated mainly by
population in the following areas hydrogen spine
for fuel cells, CCS, RD, building GR-type
network, sustainable cities
Financing progressive source by income rather
than country. Technology Transfer Support
inter-locking institutions for extension,
research, education, policy, inputs, credit,
marketing. Integrated Goals Sustainable
development as well as climate stabilization and
adaptation. North-South Trading for N.
Investment for S. Regulation No coal plants
without CCS. Suspend TRIPS. Moratorium on fuels
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What I hope from Bali

• Fulfill Kyoto targets EFT
• Deeper targets for rich countries for 2020
  (though still below what is needed)
• Adaptation fund (including emergency response
  fund/ agency)
• CBMs (Kyoto targets), other ODA, win win
  investments
• Investment in carbon free development plans
  institutions for South
• Negotiation platform on refining all above

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Beyond Rearranging Deckchairs