Climate, Development, Energy, and Finance

1
Climate, Development, Energy, and Finance

• Tariq Banuri
• Stockholm Environment Institute

2
Alternative Approaches

• The Climate Community Aim for a comprehensive
  solution
• Start with emission goals and work backwards
• Development Protect development momentum
• Start with development goals, and identify
  options, both domestic and international
• Finance Start with available financing
• Alternative instruments CDM (scale, structure),
  Carbon Tax, Clean energy financing
• Start with available financing and work forwards
• Is there a fourth possibility?

3
The Climate Community
4
Emission Trajectories for 450 ppm
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?
5
An Alternative Conception
6
Implications

• Targets are essential for both North and South
• Economic instruments will work only if targets
  are realistic
• Conceptions are often development-blind and
  financing-blind

7
The Development Community
8
Source UN/DESA, WESS 2006
9
(No Transcript)
10
(No Transcript)
11
Emissions and Income
Source World Bank (1998) Marland, et al. (1998).
12
The Five Development Crises

• Traditional development and MDGs
• Solution conventional financial flows
• The impact of climate change
• Solution Financial and support for adaptation
• Impact of OECD climate policies (e.g., carbon
  tax)
• Solution Policy coherence in North
• Impact of own climate policies (especially
  energy)
• Solution New and additional resources for
  mitigation and adaptation
• The growth conundrum Has the age of growth come
  to an end?

13
Energy is a Basic Human Need

• Main difference between rich and poor countries
• Strongly correlated with HD indicators
• Developing countries must expand electricity and
  transport infrastructure three to four times just
  to reach basic needs goals
• Expansion is constrained not by demand
  (efficiency, population) but by supply
  (investment capacity).
• Over 75 emissions from the energy sector
• Projected developing country energy growth (3 to
  5) means more emissions despite rising energy
  efficiency.

14
(No Transcript)
15
(No Transcript)
16
Developing Country Energy Deficit
Energy Consumption per capita
Developing Countries
17
(No Transcript)
18
The Development Finance Community
19
Policy Instruments

• The Carbon Market and CDM
• However, there are implicit assumptions pilot
  scale will give rise to cost reduction and
  voluntary action
• Can it respond to conceptions of climate and
  development communities, e.g., through larger
  commitments by Annex I?
• Carbon Tax
• However, impact through energy prices on
  developing countries
• Dual pricing and institutions

20
Scenarios Path Dependency of Crises

• The post-Manhattan Dedicated and timely global
  public investment in mitigation as well as
  building capacity for adaptation. Worst outcomes
  are avoided. By the time the issue begins to
  bite, costs come down for both north and south.
  Financing remains an issue, but not the dominant
  one
• The post-Titanic Mitigation delayed, impacts
  begin to emerge. Major climate impacts on North
  lead to anxiety, and public pressure for action
  on climate. High support for mitigation, but this
  leads to slowdown of OECD growth rate, and
  weakening of public support for adaptation
  funding or development aid
• The post-Tsunami North is relatively unaffected.
  Climate impacts in South lead to strong
  charitable contributions for rehabilitation and
  compensation.

21
An Integrated Perspective
22
The Case for CDGs

• From action to finance, and action to policy
• Build a global consensus on goals
• Integrate climate and development
• Enhance coordination between different actors
• Enable more effective monitoring the relation
  between challenge and response
• Give clear signals to private sector

23
UNs Role in MDGs

• Convening power to build consensus on the goals,
  i.e., Millennium Declaration.
• Translate the visionary agenda into practical
  goals and indicators of progress
• Mobilize expertise to design an action program to
  achieve the goals
• Continue to monitor goals

24
Illustrative CDGs

• Ensure equitable access to Modern Energy Services
  while reducing greenhouse gas emissions
• Shift to sustainable, efficient, and equitably
  distributed Transport services
• Ensure Food security through sustainable land use
  management, and sustainable water use
• Ensure adequate and well targeted financing
• Support technology development and cooperation
• Ensure sustained improvements in human health
• Enable critical ecosystems to adapt naturally
• Ensure effective disaster management

25
CDG1 Energy

• Coverage Universal coverage by 2030, or
  convergence in per capita availability between
  North and South
• Access and equity stable pricing fixed in
  relation to per capita income
• Portfolio Fix share of renewables
• Efficiency National targets

26
CDG4 Finance

• Win-win options Reserved for domestic financing
• International targets based on income, capacity,
  and responsibility
• Separate targets on conventional ODA (plus MDGs),
  mitigation, and adaptation
• Planning and Policy Making Support for plan
  development