Low Carbon Development Options and Green Jobs Opportunities for Asia: An Overview

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Low Carbon Development Options and Green Jobs
Opportunities for AsiaAn Overview
(Komara Djaja) Secretary General Ministry for
Economic Affairs Republic of Indonesia
Green Jobs for Asia Conference April 21 23,
2008 Niigata, Japan
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What Drives Emissions Growth? International(Aver
age Annual Growth Rates 1994-2004 - Fossil
Fuels Only)

• Fastest growing emissions
• Increasing energy intensity
• Unlike most developing and G5 Countries

• In many countries, GDP grows faster than fossil
  fuel emissions
• So emissions intensity (emissions/GDP) falls over
  time
• In LDCs emissions growth faster than GDP growth,
  emissions intensity increases
• Should explore ? decomposition analysis

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What Drives Fossil Fuel Emissions
Growth?(Average Annual Growth Rates)

• Emissions growing at gt 6 annually
• Will double every lt 12 years

• Emissions growth gt Energy growth gtGDP growth
• Especially for period 1994-2004 (incl crisis),
  but still true 1999-2004
• Emissions intensity decomposed into energy
  intensity of GDP, and carbon intensity of energy
• Increase in carbon intensity the main driver

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Fossil Fuel Emissions Change Over Time

• ? Energy consumption growing almost as fast as
  GDP
• ? Emissions growing faster than GDP and energy
• Lower-carbon growth
• ? Reduce energy intensity (energy per of GDP)
• ? Reduce carbon intensity (CO2 per unit of energy)

• Oil is Largest
• Coal is fastest growing
• Gas is leveling off

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Carbon Reduction Oppurtunities

• Significant potential to control carbon intensity
  while investing for growth
• ? Enhancing end-use energy efficiency
• ? Addressing policy distortions in the energy
  sector
• ? Developing geothermal, hydropower and
  renewable energy sources
• ? Developing alternatives and biofuels
  responsibly
• ? Providing alternative urban transport
• ? Reducing emissions from deforestation and
  deforestation
• ? Accelerating adoption of new technologies

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Low Carbon Strategy Options

• Options and Plans to
• ? Lower the carbon intensity of development path
  while maintaining acceptable levels of macro
  sectoral growth
• ? Identify oppurtunities (and potential
  trade-offs) for climate change mitigation and
  adaptation
• ? Estimate the financing needs, and economic
  impacts of shifting to cleaner carbon energy
  development paths
• ? Outline mechanisms for achieving it,
  investment, incentives, financial and economic
  policy initiatives
• ? Consult and raise awarness for informed
  national concensus for policy actions new
  investments

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Mitigation and Adaptation Options

• ? Aforestation, Reforestation Avoided
  Deforestation
• ? Renewable Energy and Clean Energy
• ? Energy Conservation and Incentives
• ? CDM (Clean Development Mechanism)
• ? Mass Rapid Transportation System,
  non-motorized, hybrid technology
• ? Municipality waste management (Waste to Energy
  Conversion)

• ? Agriculture Changes in planting season,
  crops, chemical inputs
• ? Infrastructure Revising Building Codes
  Improved drainage and sewerage systems
• ? Disaster Risk Management Early warning
  system Integrated watershed area management
• ? Anticipation of Increased Outbreaks
  Vaccination and preventaion campaign coal and
  medical support

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Objectives Support the Government to

• ? Develop a strategy for further lowering the
  carbon intensity of its development path while
  maintaning acceptable levels of macro and
  sectoral growth
• ? Indentify opportunites (and potential
  trade-offs) for climate change mitigation and
  adaptation through appropriate financial and
  economic policy initiatives
• ? Raise Awareness and facilitate informed
  consensus of efforts to address global climate at
  mitigation, adaptation, and financing.

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Indonesia Case
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Indonesia Low Carbon Development Options
? Main GHG source Forest land use change
potential gains from REDD ? One of fastest
growing fossil fuel energy demands and GHG
emissions of developing countries (IEA 2006) ?
Vast renewable energy resources geothermal,
hydro, solar, wind, biomass, biofuel ? Plenty of
low/no cost alternatives in gas flaring,
transport, energy efficiency ? Support national
goal to decrease dependence on oil, increase
energy efficiency, and enhance energy security
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Reducing emissions requires action across many
sectors
ENERGY EMISSIONS
NON-ENERGY EMISSIONS

• Total emissions in 2004 42 GtCO2e

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Trend Estimate of Future Emissions

• ? If trend from last 2 decades continues, by
  2030 total emission will be around four times
  2005
• ? Total emission grows by about 5 annually,
  while the emission from coal grows by about 7
• ? Alternative, lower-carbon paths? Costs?
• Implications for economy, poverty, resource
  use?
• International financing source to support
  alternative paths?

GAS
23
COAL
35
Mt CO2/yr
OIL
42
21
26
53
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What Can Be Done (1)

• ? For both REDD/Forest and Fossil Fuel/Energy,
  the issues and sectors have been analyzed for
  many years.
• ? CC GHG reductions add a new lens, but not
  different fundamental options or solutions
• ? CC angle offers incentives at margin for
  improvements, plus political will
• ? Opportunities for early successes (Low/No Cost
  alternatives)
• Forestry Management, Fire Control, Land Use
  Licensing
• Transport, Gas Flaring, CDM Innovations, Energy
  Efficiency
• Pilot projects, small scale at first for demo
  value capacity building
• (Could use intl comparisons and examples to
  build this case)
• ? These make sense even without fundamental
  policy reforms
• ? Longer term, can build a case on the
  increasing cost of policy and price distortions
  in the economy and the budget

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What Can Be Done (2)

• Forestry and Land Use
• Law enforcemt, mgmt governance needed for any
  REDD scheme
• Remember low/no cost opportunities forest and
  peat fires, new licensing, law enforcement
• Land use allocation/licensing, local govt roles,
  financial incentives are critical for large areas
  sources of emissions (e.g., peat and oil palm)
• Equity transparency for financing and
  distribution mechanism.
• Watchdogs are needed to ensure the rights and
  access of the poor
• Problems have to be solved to deliver REDD and
  reap payments

• Energy
• Emissions growing faster than GDP and energy use
  competitiveness efficiency?
• Remember low/no cost opportunities energy
  efficiency, transport options, gas flaring,
  abundant renewable options
• Incentives for new investment, conservation, or
  renewables are distorted due to pricing and
  subsidy issues
• Underlying fundamental issues create barrier to
  progress on GHG reductions
• Are there reasonable options to explore while
  subsidy remains in place (transformation fund?)
• Innovative financing to bridge investment gap

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GovernmentPolicy Tools Available for Influencing
ClimateChange Mitigation/Adaptation
Indirect influences Technology Policy Strategic
Industries Tech, Transfer RD, Trade, etc.
Intl Institutions Mechanisme IT Policies ,
Global Funds Carbon Markets, Debt Swaps

• By managing
• Investment climate
• Pricing (fiscal) policies
• Direct spending
• Risk and financial mkts
• Sectoral rules law

• Can influence
• Incentives
• Investments
• Industry
• Intl flows

• Financial / Investment Policies
• Invest Climate (attract Kap.)
• Banking Sector
• Non Bank Finance Insts
• Municipal Finance Rules

• Taxes / Subsidies
• Tax/Fees/Charges
• Royalties/Rent Capture
• Subsidies/Tax breaks

• Direct Regulation
• Enforcement incentives
• Zoning and Land Use
• Building Design Standard
• Vehide Emission Standard

• Expenditure Policies
• Strategic Budget Priorities
• Direct Investment
• Public Service Obligation
• Green Procurement
• Education-Awareness

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Thank You