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Some Basic Policy Analytics for Global Emissions Mitigation Jeffrey D. Sachs UNESCO

Some Basic Policy Analytics for Global Emissions Mitigation Jeffrey D. Sachs UNESCO “Building Green Societies” November 25, 2011. Green Growth Requires Breakthroughs on Five Dimensions: Low-Carbon Energy System Sustainable Food Supply: Land, Water, Nitrogen

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Some Basic Policy Analytics for Global Emissions Mitigation Jeffrey D. Sachs UNESCO

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  1. Some Basic Policy Analytics for Global Emissions Mitigation Jeffrey D. Sachs UNESCO “Building Green Societies” November 25, 2011

  2. Green Growth Requires Breakthroughs on Five Dimensions: • Low-Carbon Energy System • Sustainable Food Supply: Land, Water, Nitrogen • Urban Sustainability: Pollution, Public Health, Transport • Population: Rapid Growth, Migration • Resilience: Climate, Migration, Diversity • I will focus just on the first of these . . .

  3. Basic Relationship: CO2i = Popi x (GDP/Pop)i x (TPES/GDP)i x (CO2/TPES)i CO2i is CO2 emissions of country i Pop is Country Population TPES is Total Primary Energy GDP is GDP at Purchasing Power Parity

  4. Remarkable Consistency in TPES/GDP: World 0.19 tons of oil equivalent / $1000 GDP US 0.19 China 0.18 France 0.17 Japan 0.14 Sweden 0.16 India 0.15

  5. Differences in CO2/TPES depend on Energy Mix World 2.39 tons of CO2 per toe US 2.40 China 3.03 (coal based power) France 1.38 (nuclear based power) Japan 2.32 Sweden 0.92 (hydro based power) India 2.35

  6. For the World as a Whole Today: Pop 7 billion GWP/Pop $10,000 TPES/GWP 0.20 tons per $1,000 GWP CO2/TPES 2.4 tons per toe CO2 ≈ 7 x 10 x 0.2 x 2.4 ≈ 33.6 giga(billion) tons per year

  7. Each ton of CO2 emitted raises atmospheric CO2 by around 0.5 tons. Each GT of atmospheric CO2 raises CO2 concentrations by around 1/7.81 parts per million (ppm). Hence, current emissions raise CO2 concentrations by around 33.6 GT x 0.5 x 1/7.81, which equals: +2.2 ppmper year

  8. Pre-Industrial Carbon Dioxide = 280 PPM Current Carbon Dioxide = 390 PPM Safe Limits: Range is between 350 PPM and 450 PPM At the current rate of increase, we will reach 450 PPM By around 2036. In fact, emissions are accelerating.

  9. Global Growth: Per capita income is rising around 3 percent per year Population is rising around 1 percent per year With 0.5 – 1.0 percent per year reduction of TPES/GDP the rise in TPES is around 3 – 3.5 percent per annum.

  10. Now assume that the rich world grows by 1 percent of GDP per capita per year The rest of the world catches up with a catch-up Coefficient of 1.45 (Barro-Lee) [but faster for China, India] The growth of the rest of the world initially is 3 percent per person or roughly 4 percent total GDP

  11. On these assumptions, Gross World Product is: $70 trillion in 2010 $140 trillion in 2030 $250 trillion in 2050 The GWP therefore increases approximately 3.6X by mid-century (40 years)

  12. On plausible scenarios, the world must reduce emissions by at least half (to 16 GT per annum) by mid-century. This implies reducing CO2/GWP by (1/2) * (1/3.6) = (1/7.2)X Thus, instead of 0.45 tons per $1,000 PPP, we would need 0.06 tons per $1,000 PPP. Note that no country comes close to this rate today. Sweden is at 0.2, on the low end.

  13. The strategy must be both to: reduce TPES/GDP (efficiency) and to reduce CO2/TPES (de-carbonization) De-carbonization may include non-C primary energy and Carbon Capture and Sequestration (CCS). De-carbonization will tend to accompany a shift from direct combustion (ICE, boilers) to electrification (e.g. electric vehicles) and fuel cells (e.g. hydrogen)

  14. Hypothesis: The World Can Agree to Converge on low (CO2/GDP) by 2030-2050 Share best technologies Support low-income countries to achieve low CO2 energy systems

  15. Note: I am assuming that we will move beyond “historical responsibility” “equal per capita rights” “compensation” “single global policy regime” such as cap-and-trade and instead adopt a convergence framework

  16. Suppose that the world aims to converge at 0.06 tons per $1,000 GDP. Emissions profiles would be roughly as follows: 2010 2050 US 6T 1.4T China 7T 3.0T India 1.6T 2.0T

  17. GLOBAL POLICY FRAMEWORK • Each Country Commits to Converge on CO2/GDP • Each Country Describes its Profile in four terms: • CO2/TPES • TPES/GDP • Technology Framework • Policy Framework • Global Green Fund based on Carbon Emissions • Shared Global R&D on EVs, CCS, Renewables, Nuclear

  18. Global Green Fund Global Green Fund will fund adjustment by Low- Income Countries. Global Green Fund will collect CO2 levy on HICs and MICs Assessment (i) = CO2 Emissions (i) x CO2 Assessment Rate x GDP Factor (i) The Assessment Rate is expressed in $US/tons of CO2 The GDP Factor is as follows: High-income country (>$12,276): 1.0 High Middle-income country ($3,976-$12,275): 0.5 Low Middle-income country ($1,006-$3975): 0.25 Low-income country (<$1,005): 0.0

  19. Illustration of Revenues Raised Globally

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