Carbon Negative Technology & Green Power Fundthe Kyoto Protocol Carbon Market

1. China’s sustainable development & COP21
Carbon Negative Technology
& Green Power Fund
the Kyoto Protocol Carbon Market
- reflections by its author -
Graciela Chichilnisky
Columbia & Stanford Universities & Global Thermostat
China U.S. Clean Air Conference
Beijing, China July 24, 2015

2. 2015 - Critical Global Climate Accord
COP 21
New Technology & Policy Solution• A
• 2015: UN COP21 the century’s critical global
climate negotiation – Paris December 2015
• Every year COPs stall in debate between Rich and
Poor nations – the North and the South – Who
Should Abate?
• This year for the first time there is a practical and
feasible policy & a technology – business solution
What is it?

3. A realistic solution for China
and the World
• Carbon Negative Technology
and
• The Green Power Fund
• Based on the EU ETS Carbon Market
• $200 Bn/yr Green Power Fund
• Carbon Negative Power Plants

4. Resolving Climate Change
• China created BRICS – starts operating 2016
• China can achieve global environmental leadership by
creating International Bank for Environmental Settlements
(IBES) - implementing $200 Bn/yr Green Power Fund for
Carbon Negative Power Plants
• Universal Carbon Market - expanded Carbon Negative
Technology - CDM
• Starting 2017
HOW?

5. The Problem &
The Solution

6. Human Dominated World
Human Beings are today the largest geological
force in the planet
We are changing the planet’s atmosphere, its
body of waters, and the complex web of species
that makes life on earth
Climate Change

7. Global Risks
• Climate Change
• Biodiversity Extinction
• Clean Water scarcity
• Life in the Seas going extinct
Avoiding Extinction

8. URGENCY
Why are we being called to respond to
The Climate Question

9. Catastrophic Risks
• Global sea level raise threatens the survival of 43 island
nations
• Polar Caps melt - accelerating warming trend
• Record breaking tornadoes, floods, droughts and
devastating fires
• 30 million climate migration in 2011
• National Security at Risk US Pentagon 2009
Oceans - the origin of life – going extinct

10. Are Humans Next?
• Need Action Now
• Waited too long
• Industrial economies 20% of world population cause
most of world’s C02 emissions
Energy from fossil fuels
is 45% of global emissions
Clean Energy is the Only Solution
2014: US Supreme Court reduces
emissions from power plants by 30%

11. The Anthropocene
The change we are producing is caused by economic forces – but
will be read in rock formations for thousands of years
A new geological era - the ‘Anthropocene’ – follows the Holocene –
it started in 1945
The Bretton Woods Institutions after
WWII led to
Globalization of Western Economics
World Bank IMF

12. A Brief History of Western
Economics
How an individualistic frontier society
Grows Interconnections & the Global Commons

13. So far Western economics
• Lacks connections between people
• Lacks connections between economy and
environment
• Lacks connections across generations
Sustainable Development
requires building connections
WHY?

14. Because humans
dominate the planet
• For the first time in recorded history
• Following an era of rapid globalization
Humans dominate Planet Earth
• We are connecting and changing the
planet’s atmosphere, its bodies of water, and the
complex web of species that makes life on Earth

15. This means natural resource limits
• As we reach natural resource and environmental limits
The survival of humankind is at stake
• Need connections with the ecology, between people
and with the future of our species
Can Western Economics adjust?
Can Markets become Sustainable?

16. Sustainable Economics
How to do it

17. Changes needed
• Change Economics – Sustainable
• Change GDP - environmental markets that
provide prices - value the global commons.
• Change International Law - UNFCCC KP process
We CAN DO IT

18. Changes Articulated by the
United Nations
Kyoto Protocol

19. The Missing Signal
• If we destroy all trees & make toilet paper our economy improves – why?
• Because Toilet Paper has Market Value & Trees do not.
We lack Market Prices
New Market prices = New Values
New costs and New benefits
The Carbon Market
Provides the Missing Signal
• 1997: UN Kyoto Protocol Placed Limits on industrial emissions
• 2005: KP Carbon Market became International Law – now in 4 continents

20. December 2011:
Kyoto Protocol extended 3 years
in Durban UN COP 17
• Existing KP limits valid until 2015
• New limits pledged for 2020
• UN COP 19 Warsaw 2013 confirms the North South
nature of the earth’s climate crisis

21. Who Should Abate?
• The rich nations of the North?
20% of the global population
consume most natural resources and caused the majority of the
global emissions
• The poor nations of the South?
80% of the global population
extract most of the world resources and export to rich nations
could cause most emissions in the future.

22. The Carbon Market
• What is it?
• What it is not

23. Emission Limits
are the basis of Carbon Market
How does it Work
CHANGES THE
ENTIRE
GLOBAL
ECONOMY
$25-60/TON
EMITTED
CARBON
PRICES ARE
THE Missing
Signal
Carbon Makes
Clean Energy
profitable
Dirty Energy
expensive and
Undesirable
Dirty pays
clean – ZERO
overall costs

24. The Carbon Market
• EU ETS trades $300 Bn/year
• Reduced 37% EU emissions since 2005
• Its CDM transferred over $100 Bn for clean
energy projects in poor nations

25. Carbon Market
Links to Global Economy
Everything is made with energy
Economic growth = Energy Use
Link to Energy
Carbon Market provides Missing Signal
New Market Prices = New Values

26. FOCUS of Carbon Market
• Capping Emissions
• We can’t get there without emissions
reductions
Markets for trading a Global Public Good:
Using the planet’s Atmosphere
Creating Equity with Efficiency

27. Where are We?
What comes Next?
Transforming
CAPITALISM

28. Transforming Capitalism
• Carbon Market
• $200 Bn/year Green Power Fund
• Funding Carbon Negative Power Plants for
Poor Nations
• Development that Cleans the Atmosphere
• New Markets for Water and Biodiversity
• New Markets transform Capitalism

29. Economy, the Earth and our Species
• Need to develop connections with the earth’s
resources, between people and with the future of
our species
Basic needs
• The Basic Needs of 80% of Humankind who live in developing
nations
• Undermined by resource intensive economics: over-extraction of
raw materials from the poorest nations in Africa and Latin America
• Resources exported and over-consumed by 20% of world
population in the industrial world

30. Women and Survival
• Women are the only Link to the Future
• War on Women: US Congress Law Violence
Against Women
• Threatens the Survival of the Human Species
• Women key to the New Economy
• Green Capitalism
• Survival of the Human Species

31. What to do?
• Change International Law
• Change Economics
We just have to do it
• For the survival of our Species

32. Change International Law
Basic Needs
• In 1974 I created the Bariloche Model of the
World Economy
• Based on my new concept of Basic Needs
• Was the basis of Sustainable Development voted
by 150 nations at the 1992 UN Earth Summit in
Rio Brazil
• Adopted by the G – 20 in 2009
Sustainable Development

33. Change International Law
The Carbon Market
• The Carbon Market I designed and wrote into the UN Kyoto
Protocol in 1997- international law since 2005
• Productive clean CDM transfers to developing nations $50
Bn since 2005
• EU ETS Trades $300 Bn/year, decreased 37% EU emissions
since became law in 2005
• Makes profitable the use of clean energy for the production
of all goods and services
• Changes the energy foundation of the Global Economy
• China ratified the Kyoto Protocol and since 2005 leads the
World in Solar and Wind markets
• US did not and we are left behind in clean technology

34. The Green Power Fund 2009
became international law in Durban SA
• I proposed it in 2009 Copenhagen COP15
• Was accepted and officially endorsed by Hillary
Clinton US Sec of State two days later at COP 15
• It is a $200 Bn per year Fund to build carbon
negative power plants in Africa, LA and Small
Island States - economic growth that cleans the
atmosphere
• The technology exists, and the funding exists in
the EU ETS trading system - $250Bn/year

35. COP 21 can make my Green Power
Fund a reality
• It is partly international law since Durban COP 17
2011 – Green Climatge Fund
• Must be linked to UN Kyoto Protocol to use the
$300 Bn/year to fund negative power plants in LA
Africa and AOSIS Lima 2014 Paris 2015
Key: promote new technology & new economics
create growth while cleaning the atmosphere

36. Changing Economics is Key
HOW?
• Provide Missing Connections
• Between people, with the environment
• Between the Present & the Future
Sustainable Development

37. The Present and the Future
• Cost Benefit Analysis and Optimal Growth theory exist
that do not discount the Future
A Formal Theory of Sustainable Development has been
developed that provides
Equal treatment for future generations
Connects the present and the future
I created the formal Theory of Sustainable
Development in 1996
Sustainable Development
(Chichilnisky 1996, 2000, 2006, 2009, 2010)

38. Formal Theory of Sustainable Development
Created in Chichilnisky 1996*
Axioms for Sustainable Development
A mathematical formulation
• 1. No Dictatorship of the Present
• 2. No Dictatorship of the Future
• 3. Continuity and Linearity
* Chichilnisky “What is Sustainable Development” Social Choice and Welfare,
1996

39. New types of Markets = New GDP
• Market economics can be made consistent with sustainable
goals
• But markets themselves must change
• Individualistic markets must evolve into new types of
markets that I postulated - markets for public goods –
which incorporate connections between people and value
Valuing the Global Commons
• They are slowly emerging due to new scarcities: carbon
market I created within the Kyoto Protocol, international
law since 2005 trading $200Bn/year; SO2 markets in CBOT,
new markets for water and for biodiversity (Chichilnisky (1992, 1996,
2000, 2002, 2009, 2010, 2011)
Global markets that value privately produced public goods
the Global Commons

40. The Carbon Market Changes
the measurement of GDP
• Carbon Market puts a (new) economic value
to a clean atmosphere that changes GDP
• With the carbon market, in two identical
nations the one that produces clean energy
has a much higher GDP

41. New Markets change Capitalism
• Markets trading privately produced public
goods are new
• They combine equity with efficiency
Connecting People
• They require limits on resource use
Connecting Economics with
Ecological Systems

42. Transforming Capitalism
in the 21st Century
• The basis exists: international law and
economics
• Theoretically and in practice
• New markets for the global commons, new
growth theory, new cost benefit analysis and
new GDP measures, new international law
• Need to implement it through carbon market
and Green Power Plants through UN COP

43. The Global Commons
New Economics
From maximizing profits to
economic progress
that ensures survival of our species

44. Technology Urgently Needed
• To Reduce Carbon from the Atmosphere
• In a Profitable Way
The Word needs Energy
CLEAN ENERGY FOR DEVELOPING
NATIONS

45. Global Thermostat Pilot Plant, SRI International - Menlo Park California
February 2011

46. What is a Carbon Negative Solution
Global Thermostat Company Confidential Page 46
Carbon Neutral is not enough
• Neutralizing emissions does not prevent
further increases in atmospheric CO2
• Even the most aggressive efficiency
improvements and renewables adoption
are unlikely to keep CO2 concentration at
the generally agreed 450ppm to avoid
catastrophic climate risk
Negative Carbon is the solution1
• Air capture enables direct and rapid
reduction of CO2 concentration
• GT allows for the capture of even more CO2
than we are loading into the atmosphere or
that the earth’s systems can absorb –
Negative Carbon
GT’s technology directly reduces
carbon concentration in the air,
making carbon negative possible
0
100
200
300
400
500
600
700
800
CO2PartsperMillion(PPM)
Reducing CO2 Concentrations in
the Atmosphere
Business as Usual
Constant Growth
Wedges
Approach /
Stabilization
Global
Thermostat
Hazardous Level
450 ppm
1 United Nations Headquarters, New York, November 12, 2009. Presentation by G.
Chichilnisky on"The Rising Tide at Copenhagen:
A Win-Win Solution for Industrialized and Developing Nations"

47. Closing the Carbon Cycle
• GT Technology Captures Carbon from Air
• Inexpensive: Uses Low Process Heat
• Cogenerates Power Production withCarbon
Capture
• The More Power is Produced – the More Carbon
is reduced
• Makes Coal Plants Carbon Negative
• Makes Solar Power Plants even more Carbon
Negative

48. GT’s Air Capture Technology
Three-Step Process Produces Concentrated CO 2 Stream
Step 1
Air Input
Transport and
Injection
Compression Other
Applications
Key to GT’s
technology is
cogeneration using
low temperature
process heat to
capture CO2 Subsequent steps are shared by all CO2 capture methods
though pipelining costs can be reduced by co-locating
where CO2 is stored or used
Step 2
CO2 Capture
Step 3
CO2
Regeneration

49. Absorbing CO2
Pipes to oil well or algae
UP

50. Releasing CO2
Pipes to oil well or algae ponds
DOWN

51. Applications & Markets for Captured CO2
Global Thermostat Company Confidential Page 51
Storage Enhanced Oil
Recovery*
Algae-Based
Biofuels*
Hydrogen-
Based Fuels
Products cement,
fertilizer, plastics,
greenhouses
*EOR and Algae-based
biofuels represent most
significant opportunities
for commercial applications
of CO2 captured using
GT’s technology

52. GT Pilot Plant at SRI - October 1, 201
Global Thermostat Company Confidential Page 52

53. 2nd GT Carburetor Demo Plant – January, 2013
– Uses heat, and captures CO2, from SRI’s power plant
5
Global Thermostat 53Confidential, May 2013

54. Strategic Partners

55. Global Thermostat & Algae Biofuels
Global Thermostat Company Confidential Page 55
Desalination
CO2
Waste
water
Algae
Production
Dewatering
Fuel
Production
Fuels,
Electricity &
Biochar
Treated
Wastewater
Drinking
Water
• Produces carbon negative transportation fuels (gasoline diesel)
• Treats municipal wastewater and produces drinking water
• Generates green electricity and biochar fertilizers
GT is developing fully-integrated biorefinery
Provides critical municipal services while producing energy
As Green As It Gets
Solar
Energy

56. Closing the Carbon
Cycle
Carbon Negative Power Plants – reduce 45% of the global CO2
emissions caused by power plants
Green Power Fund provides PPA to build Carbon Negative Power
Plants
Channel EU ETS $250Bn/year funding to poor nations through
Carbon Market CDM
Carbon negative fuels – the more you drive and fly the cleaner is
the atmosphere
Economic Growth that cleans the atmosphere

57. Creating the Future
COP21
The carbon market
Implement Sustainable Development
Existing Funding from Carbon Market
Green Power Fund
Can build carbon negative power plants
and fuels globally
Avert Catastrophic Climate Change