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Framing the Post-Kyoto Debate: Options for Climate Policy After 2012 STEP Seminar Series Princeton University Princeton, NJ April, 2006. Jonathan Pershing Climate, Energy and Pollution Program World Resources Institute http://www.wri.org. Overview. An update on the science

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Framing the Post-Kyoto Debate: Options for Climate Policy After 2012STEP Seminar SeriesPrinceton UniversityPrinceton, NJApril, 2006

Jonathan Pershing

Climate, Energy and Pollution ProgramWorld Resources Institute http://www.wri.org


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Overview

  • An update on the science

  • Greenhouse gases and related indicators

  • Policy options

  • The international process: reviewing the state of play

  • Framing the debate on next steps

  • Conclusions



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2005 Temperature Records(Deviation from 1951- 1980 mean)

Source: NASA Goddard Institute for Space Studies Surface Temperature Analysis

at  data.giss.nasa.gov/gistemp/


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Changes in Ocean Circulation

  • Transect at 23º N latitude

    • Measurements taken in 1957, 1981, 1992, 1998, 2004

  • Indicates a 30% reduction in ocean circulation volume since 1957

Source: Ocean current figure: www.NASA.gov

Transect information: Bryden, Harry L. et al. "Slowing of the Atlantic

meridional overturning circulation at 25° N." Nature 438: 655-657. 1

December 2005


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DEPLETION OF SUMMER SEA ICE

Observed sea ice September 2003

Observed sea ice September 1979

These two images, constructed from satellite data, compare arctic sea ice concentrations in September of 1979 and 2003. September is the month in which sea ice is at its yearly minimum and 1979 marks the first year that data of this kind became available in meaningful form.

Source: ACIA, Impacts of a Warming Arctic, Climate Impact Assessment Report, Cambridge University Press, 2004



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Impacts follow temperature trends

Source: WashingtonPost.com, September 16, 2005, after Science Magazine

9


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Scenario of damages in 2050

Source: The Guardian, based on Pentagon report, February 2004


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Greenhouse Gases and Related IndicatorsNear- and Longer-Term Trends

11


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World GHG Emissions (2000)

Source: WRI, CAIT: http://cait.wri.org




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Largest Emitters: Developed & Developing


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Projected Future GHG Emissions Growth

% Percent change from 2000

Source: Baumert et al, 2005


World primary energy demand l.jpg

7 000

7 000

6 000

6 000

5 000

5 000

4 000

4 000

Mtoe

Mtoe

3 000

3 000

2 000

2 000

1 000

1 000

0

0

1970

1970

1980

1980

1990

1990

2000

2000

2010

2010

2020

2020

2030

2030

World Primary Energy Demand

Oil

Natural gas

Coal

Other renewables

Nuclear power

Hydro power

Source: IEA WEO 2004


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Electricity generation: fuel mix

% Share of Fuel Mix

Source: IEA Statistics, 2002 data

20


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GLOBAL CO2 EMISSIONS FOR IPCC/SRES SCENARIO GROUPS



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Population is likely to increase from 6 billion today to 10-12 billion

Economic growth is likely to expand, perhaps by a factor of 10

What will it take to stabilize the atmosphere?

Need to reduce greenhouse gases globally by

60-80 percent over the century


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Dealing with Climate Change

  • Policies cover all gases and all sectors -- but emissions are not evenly divided among these

    • Energy and CO2 are key

  • Policy Choices:

    • Emit less (be more efficient)

    • Emit differently (switch fuels or processes)

    • Sequester

    • Do without (change behavior)

    • Adapt (learn to live with it)

  • Policy actions include:

    • Market approaches (taxes, subsidies, cap-and-trade)

    • Regulations

    • R&D

    • Processes/outreach

    • Foreign Assistance


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Policies by Instrument (1999-2004)

Source: IEA (http://www.iea.org/dbtw-wpd/textbase/envissu/pamsdb/index.html)



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Policies by Sector (1999-2004)

Source: IEA (http://www.iea.org/dbtw-wpd/textbase/envissu/pamsdb/index.html)


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Reviewing the state of play

The International Process


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International Agreements: The UN Convention and Kyoto Protocol

  • Targets: national caps on greenhouse gas emissions; collective reduction of 5.2% below 1990 levels by the 2008-2012 timetable…for 38 industrialized countries and economies in transition (i.e. “Annex I”)

  • Market-based mechanisms: designed to achieve global emission reductions at the least possible cost (involves private entities, not just governments.)

  • Compliance mechanisms: Emissions measurement standards; reporting requirements; review provisions; mandatory consequences for countries that do not comply.


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UNFCCC – State of Play

  • 1992: UNFCC

  • 1997: Kyoto Protocol

  • 1998 – 2001: Following Kyoto, negotiators spend several years developing rules to implement Kyoto agreement (i.e., Marrakech Accords)

  • 2004: Ratification and entry into force (with attendant agreement from Russia on gas and WTO)

  • Beginning of post-Kyoto discussions

    • 2003: New Delhi (Cop 9): focus on adaptation

    • 2004: Buenos Aires (Cop 10): consideration of post Kyoto commitments

    • 2005: SB 22: Seminar of Government Experts (SOGE)

  • Nov/Dec 2005: Montreal: COP/MOP 1


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Montreal Outcomes

  • Annex I parties continue discussions on post Kyoto regime – based on emissions markets

    • US and Australia largely oppose talks

    • However, at the state/local level, both US and Australia experimenting with emissions trading regimes

  • Non-Annex I parties reject any discussion of accepting binding emissions caps (language allowing discussion of next steps explicitly states it will “not open any negotiations leading to new commitments.”

  • Marrakech Accords adopted (with ET, JI, and CDM as well as rules governing forest activities).

    • News rules opening CDM to “programmatic” as well as “project” activities


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International Politics: the EU

  • “Climate Change is a major threat”

  • “While the Kyoto Protocol takes us in the right direction, it is not enough. We need to cut GHG emissions radically, but Kyoto doesn’t even stabilize them. It won’t work as intended unless the US is part of it.”

  • There are huge opportunities in environmental technology, and huge possibilities in sustainable development.”

-- Prime Minister Tony Blair, 2005


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International Politics: Developing Countries

  • “Climate change has, and for the foreseeable future will continue to have a profound impact on the development prospects of our societies.”

  • “The UNFCCC and the Kyoto protocol establishes a regime that adequately addresses the economic, social and environmental impacts of sustainable development.”

  • “The regime rests on differentiation of obligations among Parties…developed countries should therefore take the lead in international action to combat climate change.”

  • “The convention establishes economic and social development and poverty eradication as the first and overriding priorities of developing countries.”

-- Joint Declaration, Gleneagles, 2005

Brazil, China, India, Mexico, S. Africa


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International Politics: The US

  • “Climate change, with its potential to impact every corner of the world is an issue that must be addressed by the world.”

  • “The Kyoto Protocol was fatally flawed in fundamental ways.”

  • “We’re creating a National Climate Technology Initiative…”

-- President Bush, 2001




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Stringency is about how much…

Risk of increased temperature

Meinshausen, Malte. "On the Risk of Overshooting 2°C."

Proceedings from International Symposium on Stabilisation of Greenhouse

Gas Concentrations -- Avoiding Dangerous Climate Change,

Exeter, 1-3 February 2005 at www.stabilisation2005.com/programme.html.



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…and when. inaction…

Implications of delayed action

Source: Meinshausen, 2005



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EU and US emission market trends inaction…

EU ECX Price

US CCX Price

Source:http://www.chicagoclimatex.com/mktdata_ccfe/sfi/historical/Historical_Prices.xls


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CDM growing inaction…

  • Data based on 919 projects (compare with 716 in December 2005)

  • Strong growth started in last Q05 and continues

  • 1.3 billion credits expected pre-2012

Source: Scharf & Ellis (OECD), 2006


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But setting new post-2012 targets is difficult… inaction…

% Contributions to CO2 Changes

Source: Baumert et al, 2005



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Expectations for the Market Post-2012 inaction…

  • Some Annex I Parties continue with market development (likely to include US, but to exclude Russia)

    • Key is institutional capacity to manage market compliance, including adequate assurance of integrity of emissions reductions

    • Politics will dictate level of effort; US engagement critical

  • Some developing countries adopt market approaches and participate in global emissions trading market (e.g., Korea, Mexico)

    • China, depending on rate of institutional development, may engage over medium term (e.g., by 2020)

  • Other countries continue to participate in CDM/project offset systems, including with “programmatic” CDM


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The alternative to markets: inaction…A policy approach

Source: David Victor, Presentation at RFF, February 2006


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Policies may not focus on climate… inaction…

Global Energy Poverty

Source: IEA WEO, 2002


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Other development challenges exist… inaction…

Motor vehicles per 1000 people, selected countries

Source: Bradley and Baumert, 2005, “Growing in the Greenhouse”


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Motor Vehicle Shares of Criteria Pollutants in Chinese Cities

…and are multifaceted…

Source: Schipper and Ng, 2005


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…including energy security as well as environmental issues Cities

Oil Production, Consumption and Imports for China

Source: Schipper and Ng, 2005


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Three scenarios for China: CitiesCarbon from Motor Vehicles

2003 Road

Oil Saved

Integrated Transport

Source: Schipper and Ng, 2005


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Considering a Sectoral Agreement Cities

Source: Baumert et al, 2005


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Sectoral “Fit” for Agreement Cities

  • ICAO has failed to reach conclusions on emissions reduction plan

  • EU proposals being considered include:

    • Fuel tax

    • Ticket tax

    • Slot auctioning

    • Emissions charge

    • Modal transfer incentives


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Sectoral “Fit” for Agreement Cities

  • Voluntary agreement through International Aluminum Institute (26 members with 80% of global production)

  • Key climate change targets include an 80% reduction in PFC emissions and a 10% reduction in smelting energy per ton of aluminum produced; to be reached by 2010 (using a 1990 base year).

  • To date have already achieved PFC reduction of 73%


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The technology chain Cities

Grubb, M. and R. Stewart, 2003. “Promoting Climate-Friendly Technologies: International

Perspectives and Issues.” Introductory paper for the INTACT High-Level Transatlantic

Dialogue on Climate Change


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Technology Penetration Cities

Source: http://www.aimpowergen.com/wind_power.html


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Thoughts on the PAMs approach Cities

  • Moving to scale is possible, but policies likely to differ from country to country.

  • Policies that incorporate development priorities can garner near-term engagement by developing countries, particularly large emitters such as India and China

  • Comparing level of effort will be difficult; no single metric is likely to provide robust method for evaluation.

    • Political agreements, involving complex negotiations, may address this concern

    • Public awareness to support national policies will likely require significant reporting on policies adopted– which, in turn will require international assistance.

  • Once sufficient capacity is built, countries may move to adopt GHG market systems


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A brief comment on adaptation Cities

Global Impacts of Natural Disasters, 1980 - 2004


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Adaptation in a future regime Cities

  • Money, money, money

    • Expected damages amount to several percent of global GDP, with preponderance of damages in developing nations

  • New international agreement(s) may provide “steer” for development assistance, but seems, at present, unlikely to establish significant new institutional arrangements to pay for impacts or their amelioration

  • Policies are mostly unlikely to be climate specific; key will be links to development

    • Water resources

    • Health care

    • Coastal zone management

    • Infrastructure development


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Conclusions Cities


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The post-Kyoto architecture (1) Cities

  • New scientific information compels more aggressive action

  • The Kyoto structure WILL continue

    • Emissions trading with new more stringent targets and some additional countries

    • Markets will provide stimulus to new technology research, development and diffusion

    • Current systems for financial transfer to developing countries will remain – albeit unlikely to grow significantly


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The post-Kyoto architecture (2) Cities

  • Kyoto is not likely to be the sole mechanism for future efforts

  • In parallel to the Kyoto market-based regime, countries (developed and developing) will adopt policies (including for sectoral and technology based approaches) driven by other concerns:

    • Energy security (leading to aggressive focus on energy efficiency, focus on indigenous supply and development of alternative fuel options such as biomass, nuclear, RE)

    • Local air quality (technologies such as IGCC, replacement of gasoline vehicles with hybrids and EVs or H2)

    • Key is how “climate friendly” these policies will be

  • Independent of international agreement, we are likely to see increasing energy investment – including some financial transfers to developing countries

    • Some new investment in climate friendly technology such as CCS


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The post-Kyoto architecture (3) Cities

  • We are not on a path to avoid significant climate change

  • The question is how hot things will get…

  • Adaptation will become a more central policy imperative over time

?


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