1. Developing
Countries
in
the
Context
of
Climate
Change
Mi<ga<on
and
Energy
System
Transforma<on
Rio
+
20
Workshop
/
DAAD
Webinar
Potsdam,
November
27,
2012
Dr.
Jan
Steckel
1

2. Outline
of
the
talk
• Introduc<on
• Economic
development,
energy
use
and
CO2
emissions
• The
energy
system
transforma<on
in
the
context
of
global
jus<ce
• Climate
policy
and
energy
–
reframing
model
results
• Some
final
thoughts
on
climate
policy
and
growth
2

3. Introduc2on

4. Where
do
we
stand?
–
GHG
emissions
by
country
today
4
(World
Bank
2010)

5. Wealth
and
carbon
emissions
5
(
Füssel
2007)

6. Economic
Development,
Energy
Use,
and
CO2
Emissions

7. Role
of
developing
countries
in
mi2ga2ng
climate
change
Global
emissions
BAU
550
ppm
CO2-­‐e
scenario
Based
on
data
from
Luderer
et
al.
(2012)
Non
Annex
I
countries
will
need
to
bare
a
major
share
of
the
reduced
emissions
!
7

8. The
scope
of
the
challenge
(WDR
2010)
Key
ques<on
for
developing
countries:
Is
leapfrogging
possible?
8

9. Empirical
rela2onship
between
economic
and
emissions
growth
and
energy
consump2on
in
developing
countries
Energy
1971
-­‐
2005
Emissions
1971
-­‐
2005
Developing
countries
Developing
countries
Stronger
Stronger
coupling
of
coupling
of
growth
and
growth
and
energy
emissions
OECD
countries
OECD
countries
Weaker
Weaker
coupling
of
coupling
of
growth
and
growth
and
energy
emissions
‚Decoupling‘
should
not
be
expected
for
(Jakob
et
al.
2012)
developing
countries
in
the
near
to
midterm
9

10. Who’s
driving
emissions
?
1971-­‐2007
Annual
effect
on
CO2
growth
-­‐ Global
emissions
growth
in
recent
years
mainly
by
newly
industrializing
and
developing
countries
-­‐ China’s
role
outstanding
i. High
GDP-­‐growth
ii. Slower
improvement
of
energy
intensity
iii. Scaling
effects
of
tradi<onal
coal
use
in
China
10

11. Understanding
emissions
growth
GDP
E
CO2
Kaya
Iden<ty:
CO2
=
pop
x
x
x
pop
GDP
E
China
India
NICs
USA
Europe
(OECD)
OECD
(all)
11

12. Drivers
of
global
emissions
Decomposition of Carbon intensity
(updated from Steckel et al, 2011)
Global
Economic
Crisis
12

13. Renaissance
of
Coal?
(IMF 2011)
13

14. Fossil
Fuel
Scarcity
vs.
Limited
Atmospheric
Space
14

15. Conclusions
1st
part
• Leapfrogging
is
not
taking
place
• Economic
growth
par<cularly
in
newly
industrializing
countries
drives
CO2
emissions
15

16. The
Energy
System
Transforma2on
in
the
Context
of
Global
Jus2ce

17. Fossil
Fuels
Dominate
the
World
Energy
System
Traditional biomass 6%
Modern bioenergy 4%
Shares
of
Primary
Energy
Supply
2008
17

18. Transforma2on
of
the
Energy
System
(Luderer et 18
2011)
al.,

19. Transforma2on
of
the
Energy
System
models
MERGE
TIMER
POLES
REMIND
E3MG
Baseline
Many
different
pathways
to
transform
the
energy
system
400 ppm-eq

Different
possibili<es
to
reach
low
stabilisa<on
(Knopf
et
al.
2009)
 400ppm
can
be
achieved
by
all
models
19

20. Renewable
Energy
Poten2als
(Edenhofer
et
al.
2011)
20

21. Costs
of
Renewable
Energy
(Edenhofer
et
al.
2011)
21

22. Costs
of
mi2ga2on
(
Edenhofer
et
al.
2011)
Costs
hinge
cri<cally
on:
• The
stabiliza<on
target
• The
biomass
poten<al
• The
availability
of
technologies,
RE
and
CCS
in
par<cular
22

23. Mi2ga2on
costs
in
developing
countries
Global
NA-­‐I
countries
Luderer
et
al.
2012
Mi<ga<on
costs
in
developing
countries
rather
moderate;
however
this
is
due
to
financial
transfers
from
developed
countries
23

24. How
to
finance
mi2ga2on
in
developing
countries?
Non-­‐market
based
mechanisms
to
disburse
climate
finance:
Coverage
of
incremental
investment
costs
Coverage
of
total
mi<ga<on
costs
Market-­‐based
mechanisms
(Interna2onal
Emissions
Trading):
Grandfathering,
or
alloca<on
propor<onal
to
GDP
Equal
per
capita
alloca<on
of
permits
Contrac<on
and
Convergence
24

25. Non-­‐Market
Transfers
(Jakob et al, submitted.)
25

26. Emission
Trading
per capita per capita
(Jakob
et
al,
submioed.)
26

27. Transfer
payments
and
long
term
growth
Nega<ve
influence
of
resource
rents
on
Sachs
and
Warner,
2001
GDP
/
capita
1970
-­‐
1989
long
term
growth
conceivable
(“Resource
Curse“)
Resource
exports
in
%
of
GDP,
1970
Climate
Finance
Range
[%
of
GDP]
• Climate
rent
comparable
to
resource
rent
• Transfers
might
be
in
the
same
order
of
magnitude
Data:
• Ins<tu<onal
quality
of
receiving
Resource
Exports,
FDI:
Year
2009
Aid:
Year
2008
countries
is
cri<cal
ETS:
ReMIND
scenario
Year
2020
27

28. How
to
Avoid
a
Climate
Finance
Curse?
• Possible
problems
with
financial
inflows:
vola<lity,
Dutch
disease,
rent-­‐
seeking
• Higher
risk
of
climate
finance
curse
with
emissions
trading;
but
problem
to
efficiently
deliver
non-­‐market
transfers
• Transfer
of
rents
can
be
limited
by
appropriate
choice
of
alloca<on;
but
might
conflict
with
no<ons
of
equity
• Properly
designed
ins<tu<ons
can
reduce
risk
of
climate
finance
curse
(e.g.
price
corridors,
sovereign
wealth
funds,
civil
society
involvment)
28

29. Conclusions
2nd
part
• Leapfrogging
is
not
taking
place
• Economic
growth
par<cularly
in
newly
industrializing
countries
drives
CO2
emissions
• A
structural
transforma<on
of
the
energy
system
is
possible
at
modest
costs
(according
to
state-­‐of-­‐the
art
models);
but
without
historical
precedent
• How
to
design
climate
policy
in
developing
countries
is
a
key
issue
29

30. Climate
Policy
and
Energy
–
Reframing
model
results

31. Energy
Access
(Edenhofer
et
al.
2011)
Number
of
people
(millions)
without
access
to
electricity
31

32. Energy
and
Human
Development
Index
i. Do
countries
need
to
meet
a
certain
level
of
Very
high
energy
consump<on
High
to
reach
high
development
levels?
ii. What
does
that
mean
for
climate
mi<ga<on
targets?
Low
Threshold
at
around
40
GJ
per
capita
10
GJ
per
capita
can
be
explained
by
subsistence
needs
Decoupling
of
energy
consump<on
and
development
not
oberserved
in
the
past
32

33. Energy
and
development
in
scenarios
BAU
$50
$30
$10
GDP per capita [$]
GDP per capita [$]
Final Energy per capita [GJ] Final Energy per capita [GJ]
• Decoupling
of
energy
and
development
is
seen
in
mi<ga<on
scenarios
• Energy
threshold
is
however
ignored
33

34. Energy
and
Human
Development
Index
i. Do
countries
need
to
meet
a
certain
level
of
Very
high
energy
consump<on
High
to
reach
high
development
levels?
ii. What
does
that
mean
for
climate
mi<ga<on
targets?
Low
Threshold
at
around
40
GJ
per
capita
10
GJ
per
capita
can
be
explained
by
subsistence
needs
Decoupling
of
energy
consump<on
and
development
not
oberserved
in
the
past
34

35. Infrastructure
needs
can
explain
parts
of
the
gap
Cement
Developed
Countries
Developing
Countries
will
catch
up
(Scenario
data
in
blue)
Steel
Developed
Countries
A
per
capita
energy
demand
of
10
to
20
GJ
in
developed
countries
seems
to
be
stable
given
today’s
technologies.
35
(Steckel
et
al.
submioed)

36. Energy
and
Human
Development
Index
Very
high
High
Low
Threshold
at
around
40
GJ
per
capita
10
GJ
per
capita
can
be
explained
by
subsistence
needs
10
–
20
GJ
per
capita
might
be
due
to
infrastructure
uptake
and
maintenance
36

37. Conclusions
3rd
part
• Leapfrogging
is
not
taking
place
• Economic
growth
par<cularly
in
newly
industrializing
countries
drives
CO2
emissions
• A
structural
transforma<on
of
the
energy
system
is
possible
at
modest
costs
(according
to
state-­‐of-­‐the
art
models);
but
without
historical
precedent
• How
to
design
climate
policy
in
developing
countries
is
a
key
issue
• Infrastructure
can
next
to
subsidiary
needs
explain
an
energy
threshold
for
development
• Models
predic<ng
modest
costs
do
not
take
this
into
account
or
make
strong
assump<ons
37

38. Some
final
thoughts
on
climate
policy
and
growth
38

39. Drivers
of
emissions
growth
Annual
emissions
growth
1980
–
2008
[%]
Annual
poverty
allevia<on
1980
–
2008
[%]
Worldbank
Data
(2012)
Regions
with
the
highest
success
in
poverty
East
Asia
incl.
China
allevia<on
also
show
high
growth
rates
in
emissions
39

40. Can
climate
policy
impact
growth?
Growth
is
beneficial
for
the
poor!
(Dollar and Kray, 2002)
40

41. Mi2ga2on
trap
in
a
Solow
model
Produc<on
func<on:
[$]
Capital
forma<on:
(Steckel 2012)
K0
KC
In
the
case
of
climate
policy
β
can
decrease.
The
trap
gets
more
likely
in
the
presence
of
climate
policy
in
the
form
of
βK(s)
[Independent
from
the
form
of
the
func<on
s(k)]
41

42. Conclusions
• Impacts
from
climate
change
will
hit
developing
countries
hardest
• Mi<ga<on
burden
is
equally
high
(or
even
higher)
for
developing
countries
• Technologies
might
help
to
mi<gate
climate
change,
but
…
• low
carbon
technologies
are
s<ll
more
expensive
than
fossil
fuels
• Models
see
that
mi<ga<on
costs
are
comparably
low
for
developing
countries
• Transfers
to
developing
countries
might
impose
nega<ve
effects
on
long
term
growth
• Mi<ga<on
might
impose
a
poverty
trap
under
certain
circumstances,
but
further
research
is
needed
!
42

43. Thank
you
for
your
a^en2on!
hop://www.pik-­‐potsdam.de/members/steckel