Boldness and Low Carbon The Why and How of Low Carbon Societies in Developing Countries, or whether

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Boldness and Low Carbon The Why and How of Low
Carbon Societies in Developing Countries, or
whether boldness pays

• Jose Alberto Garibaldi
• Beijing, June 20th, 2009

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Who are we?

• A network of former negotiators/civil servants
  from Latin America and AP
• Co-organized three of these consultations in
  Asia, and three in LAC since 2005.
• Supported IFIs in the development of Low carbon
  instruments
• Supported LAC and Asian countries, authorities
  and former heads of state from Europe, Asia and
  LAC, around the UNFCCC negotiations since 2006.
• Exploring research on potential outcomes and
  opportunities of negotiations and instruments for
  DCs.

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An additional reason for LCS... Long term DCs
self interest on a good deal

• Why?
• Costs of high carbon societies in developed and
  developing countries far outstrip benefits
• High carbon societies world-wide will cause very
  severe long term impacts to Asia Pacific region
• Net DC reductions required but can be delivered
  with attached low carbon society co benefits.
• Reductions to stabilize are challenging but
  possible
• While taking advantage of carbon markets
• CC likely to still be quite costly for AP but
  less so...

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A View of Low Carbon Societies from Copenhagen

• LCS will operate within the UNFCCC Climate
  Regime.
• What is required for Copenhaguen
• Total current emissions?
• Aprox. 37.5 GT (1990)
• What is required to remain ...
• within 450ppm (2 degrees)
• 41 GT (Hohne Den Elzen 2006) 101 required
  for a 50 risk.
• With current offers (i.e. Aprox 45.4 GT, -21)
  between 41 and 61 requirie for a 50 risk
• within 500 ppm (aprox 2.5)
• 41 GT cover 115 of a 50 risk.
• 45.4 GT cover 70 of a 50 risk.
• Couldnt Low carbon societies contribute to
  achieve the scale of the required cuts?

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The Climate Regime Either bold or shy

• Commitments for action lead and expanded global
  carbon market, climate finance and technology
  transfer
• Dual equilibrium in climate regime
• Cautious and shy little if at all some
  contributions - diminished size for carbon
  market, and climate spoiled
• Bold and deep expanded contributions to carbon
  markets, climate might be saved
• Currently, most MIC DC parties cautious towards
  any further contributions of their own to the
  atmosphere wait and see...

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What if the resulting equilibria at COP 15...

• Is bold ?
• Carbon Markets increase in size and depth
• Associated financial markets grow
• Existing commitments increase their effectiveness
  less free riding and potentially, less costs
  (suplementarity)
• Climate improves
• Less regional costs

• Is shy?
• Regional costs increase ....
• Increase further for those already committed
  (e.g. The 2020 (1990) EU proposal
• Free riding potential for other less vulenrable
  also increase (A1 and NA1 increases)
• Less of an expansion of
• Climate might collapse and its regime as well
• Regional costs further increase

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The hypothesis

• If you are a middle income country, in general
• 1. The country is better off in a bold
  equilibria towards which it makes a net reduction
  contribution, than the reverse
• 2. To achieve this, it is better to argue for
  others that the country is willing to do x and
  ask others publicly to do X N
• 3. This should increase the global level of
  ambition, reduce impacts, increase carbon flows,
  while sustaining the principle of common but
  differentiated responsibilities.

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Why not globally evaluate some of this -
empirically? A view of the big picture...

• PAGE 2002 a probabilistic model to assess
  impacts
• Provides same results as TAR and Stern
• Evaluates expansion of gases with risk
  probabilities and economic and climate related
  costs (Montecarlo evaluation of results of 10,000
  runs by scenario).
• Calculates extreme events and probabilities of
  discontinuities
• Provides absolute mitigation volumes by regions
• Modelling carbon flows (ongoing)
• Carbon flows based on absolute reductions taken
  from PAGE 2002
• Use marginal abatement costs as a guide.
• Assess results with parallel calculations based
  on POLES model data.

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How to verify the hypothesis IMain hypothesis
Shy scenario low ambition
Bold scenario high ambition
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How to verify the hypothesis II
A central assumption
Regional Total costs I
Regional Total costs II
Secondary hypothesis I
Mitigation costs higher in II Adaptation costs
higher in I Carbon flows larger in II
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Low to bold the rangesAll reductions with
regards to 1990
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What I Already know The hypothesis does hold in
Latin America...
LAC ends up being far better off under high
ambition scenarios with net DC contributions
(including some from LAC) than under shy
scenarios with no DC contributions (including
none from LAC) The EU and Australia are within
the range of required A1 reductions for these
results -additional reductions would be required
from Japan, Canada, Russia, USA, and DCs to
achieve high scenarios. Reductions already
offered by Mexico, Peru and Costa Rica already
comply with a substantial amount of the required
level of LAC reductions for 2020 and 2040. The
magnitude of the required reductions are similar
to those which can be achieved with the current
type of reductions within the portfolio of
regional measures in LAC Benefits derive
crucially from fungibility of forestry within CM
and from the extent of sectors and
supplementarity of flexible instruments within
carbon markets Considering impacts, A1 (and
NA1 contributions) and market access are as
crucial as financing.

• All shy and medium scenarios result in regional
  costs, with very lo and low scenarios having very
  severe costs.
• Bold scenarios result in short term gains (and
  potentially mid term as well) but mostly costly
  in the long term.
• Bold scenarios have a relatively less costly
  impact on GDP than shy scenarios.
• In absolute terms, impacts generate costs of
  between 15,540 to 14800 USM for 2020, and
  between 60,300 and 50700 USM for 2040. The NPV
  cost goes from 19 to 12 trillion US from the
  boldest to the shiest scenarios.

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Would the hypothesis hold for AP?

• In a nutshell, believe it would... but will know
  for sure in two weeks time. Happy to make them
  available as published. What are we doing now?
• Modelling now proceeding on impacts and carbon
  flows in AP region
• Contrasting with country or region level costing
  magnitudes forem regional economics of CC
• Estimating Long term costs (i.e. Post 2050)
• Quid pro quos on negotiations
• Opportunities for new avoided carbon instruments
• Sub regional runs.
• Regional and Sub regional Distribution of
  efforts.

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In the meanwhile, what can be argued with these
results? or some conclusions

• LCS are crucial for developed countries
  delivering their own large scale reductions at
  the scale depth and time frame required.
• LCS could enable DCs in AP to re-direct its
  growth and development in a green and low carbon
  pattern
• Take advantage of regional competitive advantage
  in DCs forests, but also technology domestic
  green investment, but also carbon market
  expansion, etc.
• Insist on tough A1 targets, DC contributions, and
  MRV on both sides. MRV could conside progressive
  inclusion and 3rd party verification but no
  sanctions for NA1.
• Costs will increase in most scenarios in the long
  run LCS will be needed in both A1 and DCs
• Deeper cuts will be required in the mid to long
  term and DCs already have LC behaviour and
  lifestyles in many sector. How preserve them
  domestically and internationally while growing
  avoiding the A1 high carbon trajectory.

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More information?

• Josealbertogaribaldi_at_yahoo.com
• Tel. [phone]
• Skype Jose_alberto_garibaldi