Download King`s College London

Decoupling Growth from Carbon:
Possibilities and Policies
Presentation to the
Economy and Environment Panel
Seventh European Forum for Science and Technology
Efficiency of European Science and its Global Competitiveness
Professor Paul Ekins
Professor of Energy and Environment Policy
King’s College London
Thursday 22nd May, 2008
University of Economics, Prague
1
The Challenge of Carbon Decoupling
• Decoupling: a decline in the ratio of the amount used of a
certain resource, or of the environmental impact, to the value
generated or otherwise involved in the resource use or
environmental impact. The unit of decoupling is therefore a
weight per unit of value.
• Relative decoupling: in a growing economy, the ratio of
resource use (e.g. energy consumption) or environmental impact
(e.g. carbon emissions) to GDP decreases
• Absolute decoupling: in a growing economy, the resource use
or environmental impact falls in absolute terms
• If GDP growth continues, climate stabilisation at levels of CO2
concentration that limit global average temperature increases to
2oC will require a degree of absolute decoupling of GDP from
carbon emissions that is outside all previous experience
2
UK Carbon Emissions – 2002
Total = 165 mtc
Aviation
11
Domestic
in home
47
88
18
Domestic
transport
Source: “The carbon emissions in all that we consume”, Carbon Trust, 2006
Business
Business and public sector emissions
(excluding transport, distribution and supply industries)
25 mtc
13
6
10
100%
e
g
o
t
u
A
t io
nera
gs
n
i
d
l
Bui tricity)
c
(ele
80%
60%
gs
in
uild
B
40%
20%
0%
Large Energy
Intensive Industry
Large Public SMEs
Non- Sector
Energy
Intensive
Source: “The UK Climate Change Programme: Carbon Trust, 2005
n
ct)
e
r
i
(d
800
Kyoto GGH Target
(2008 – 2012)
700
600
Domestic CO2 goal:
20% by 2010
500
26% - 32% “budget cut” by 2020
400
300
Domestic CO2 goal:
60% by 2050
200
100
0
1990
2000
2010
2020
2030
2040
2050
Climate Change
Bill Commitments
Millions of tonnes of CO2 equivalent
UK emissions targets
Categorisation of environmental
policies
6
•
Market/incentive-based (also called economic) instruments: include
emissions trading, environmental taxes and charges, deposit-refund
systems, subsidies (including the removal of perverse subsidies), green
purchasing, and liability and compensation (EEA (2006, p.13).
•
Regulation instruments, which seek to define legal standards in relation
to technologies, environmental performance, pressures or outcomes.
Can also include imposition of obligations, e.g. renewable and energy
efficiency obligations in the UK.
•
Voluntary/self-regulation (also called negotiated) agreements between
governments and producing organisations. Economic actors may enter
into these in order to forestall the introduction of market-based
instruments or regulation.
•
Information/education-based instruments e.g. Eco-labels, ‘smart’
meters, may be mandatory or voluntary.
Policies for carbon decoupling (1)
• Economic instruments: importance of resource and
emission prices, driver of efficient use, emission and
waste reduction
• Energy taxes: climate change levy (carbon reduced by 3.5 mtc
by 2010), fuel taxes (EU emissions half what they would have
been at US prices)
• Emissions trading: EU ETS; Carbon Reduction Commitment
7
Policies for carbon decoupling (2)
• Regulation
• Renewables Obligation
• Energy Efficiency Commitment (Carbon Emissions Reduction
Target)
• Integrated Pollution Prevention and Control (control of noncarbon emissions may increase carbon emissions)
• Voluntary agreements
• Climate change agreements
• EU fuel efficiency agreements (targets will not be met; targets
will be mandatory in future, i.e. Regulation)
• Information/education
• Energy efficiency labels for appliances (e.g. A-rated fridge
freezers 0-80% market share in 6 years)
8
Combinations of policy instruments
• Market transformation
• Result of the combination of a number of policy measures affecting
different actors, including: EU energy labelling; marketing campaigns
(e.g. Energy Efficiency Recommended branding and advertising) by
the Government and its agencies (e.g. EST); consumer advice from
Energy Efficiency Advice Centres; media coverage on climate
change; retail staff training and point of sale material from the EST;
EU Minimum Performance Standards; EEC funding for incentives for
consumers to purchase the energy-efficient models.
• EU Integrated Product Policy
• SCP; state aid; voluntary agreements; standardisation; environmental
management systems; eco-design; labelling and product declarations;
greening public procurement; encouragement of green technology;
and legislation in areas including waste and chemicals.
• SCP (see next slide)
9
UK SCP Strategy
Products
Production
10
Strengthening domestic and international measures to improve the
environmental performance of products and services, including
improved product design
Improve resource efficiency and reduce waste and harmful emissions
across business sectors
Consumption
Influence consumption patterns, including proposals for new advice
for consumers
Procurement
Sustainable procurement in the public sector, to make the UK a leader
within the EU by 2009
Innovation
Support for innovation to bring through new products, materials and
services
Sustainable
business
Increase transparency, corporate responsibility and skill in business
and other organisations
Waste
Increased emphasis on reducing waste at source and making use of it
as a resource
Environmental Tax Reform (ETR)/
Green Tax and Budget Reform
• EC 1993, Chapter 10: “An insufficient use of labour
resources and an excessive use of environmental
resources”, leading to the conclusion “If the twin
challenge of unemployment/environmental pollution is
to be addressed, a trade-off can be envisaged
between lower labour costs higher pollution charges”.
• Green taxes/charges are levied on resource use or
polluting environmental emissions
• Revenues from green taxes (or from reducing
environmentally harmful subsidies) allow other taxes to
be reduced
• Some portion of the revenues can be used for
essential environmental spending (e.g. on
infrastructure) that is otherwise difficult to finance
ETRs in Europe
• Denmark, Finland, Germany, Netherlands, Sweden and UK – all
very small; different tax base (energy, CO2, sectors), tax rates,
revenue recycling, exemptions; all have exemptions because of
competitiveness fears (COMETR)
Economic and environmental effects of ETR
• Green taxes reduce environmental resource use
• Green taxes achieve efficient resource use and environmental
improvement at least cost by promoting
•
•
•
•
Static efficiency (equal abatement cost)
Dynamic efficiency (incentives for innovation)
Awareness of inefficient resource use
Abatement technologies can lead to new industries
• Reduction of other distorting taxes reduces net cost of abatement
(revenue neutrality)
• If innovation, awareness, industrial cost reduction, reduced
distortions are greater than abatement costs, then environmental
improvement can be achieved at net gain to the economy – green
economic growth (double dividend)
Policy conclusions
• Relative, but not absolute, carbon decoupling
(carbon emissions have risen in UK since
1977, despite Climate Change Programme
policies)
• (Much) More stringent application of policy
instruments (especially price-based to avoid
rebound effects) is required
• Environmental tax reform (ETR)
• Political feasibility
• Implications for economic growth
13
Growth in UK living standards:
business as usual
GDP per capita 2006=100
300
2.4 times
current
level
225
150
75
100
0
2006
2020
2030
2040
2050
Source: HM Treasury Assumption of 2% per annum productivity growth, Long-term Public Finance Report, December 2005
Growth in UK living standards: with
60% emissions cut
GDP per capita 2006=100
300
0.3 –
2.0%
lower
225
150
100
75
0
2006
2020
2030
Business as usual
2040
2050
60% emissions cut
National Industrial Symbiosis Programme
(NISP)
• What is ‘Industrial Symbiosis’ ?
“Industrial symbiosis engages traditionally separate industries and
other organisations in a collective approach to competitive advantage
involving physical exchanges of materials, energy, water and/or
by products together with collaboration on the shared use of
assets, logistics, experts and knowledge transfer.”
Modified from Chertow, Yale 2000
Connecting Industry – Creating Opportunity
Through the Intelligent Use of Information
Industrial Symbiosis for a circular economy
Linear system
Natural
resources
Circular system
Products
Waste (to disposal)
Products
Natural
resources
Waste to resource
Products
Waste to
resource
Natural
resources
What is NISP?
Regionally Delivered, Nationally Coordinated
•
12 regional offices across the UK
- England, Wales, Scotland, & N. Ireland
•
12 Business led Programme Advisory Groups (Corus,
Veolia, Lafarge, BMW, Bombardier etc)
•
Independent Board (Governance)
•
Funding £8.5M 2007/8
•
90 + Practitioners
Who are NISP’s 9500+ Members?
PAG Members
Corporates
SMEs
Micros
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Corus
Marley Eternit
NEC Ltd
ConocoPhillips
Anglian Water Services
Ltd
Associated British Ports
SITA
RIX BioDiesel
Scottish & Newcastle
Shell
Peel Investments
Foster Yeoman
Bombardier
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Premier Automotive
Group
BOC
Clancey
IKEA
Johnson Matthey
Wedgwood
Sainsburys
Rentokil
Millennium
Chemicals
Lafarge Cement
Coors Brewers
Severn Trent
Veolia
Tarmac
•
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B.C.R Company
G&P Batteries
Overtone Recycling
Premier Waste
Renewable Energy
Growers
Pennine Fibre
Industries
Firth Rixson Castings
Country Chef
The Cheese Co.
Green BioDiesel
Alutrade
Betts
Kingpin
Auto Waste Solutions
KEY POINTS
• Business led
• 9500 + members (Sept ‘07)
• All sizes: Multi-nationals, SMEs, Micros, Entrepreneurs
• All sectors dealing with all resources
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Link Waste
Arrow
Environmental
Marches Wood
Energy Network
Akristos
Kito Engineering
Solutions
Facility Water
Management
Enviro (Grimsby)
Clarkson Enterprises
Sustainable
Resources
Advantage Waste
Brokers
UK Recycling
Analytichem
NISP Vision
“Bring about long term business culture
change through profitable actions that
result in measurable environmental
and social benefits making a significant
contribution to international
sustainability”
What NISP achieves …
NISP INCREASES
NISP REDUCES
Jobs
Use of Virgin resources
Sales
Use of potable water
Learning
Hazardous waste
Bottom line
CO2 emissions
Innovation
Transport
New business
Pollution
Inward investment
Landfill
Knowledge transfer
Costs
Utilisation of assets
Risk
NISP helps create real business opportunity
NISP Outputs so far …
Metrics… April 2005 – March 2008
Increased sales
Delivery
Per £ inv
£123.4m
£49.36
£89.2m
£35.68
£110.1m
£44.04
Virgin raw material savings (tonnes)
5.99m
2.4t
Carbon savings (tonnes)
4.43m
1.77t
Water savings (tonnes)
9.22m
3.69t
Waste diverted from landfill (tonnes)
3.39m
1.36t
333,188
-
1870
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Cost savings to business
Private Capital Investment
Hazardous Waste (tonnes)
Jobs Created / Safeguarded
• Some words on stats  verified, understated, England only
• Future capacity enormous …
NISP International Impact
Awards…
• Ranked Defra No.1 BREW project 2005/6, 2006/7, 2007/8
•
European Exemplar project of Eco-Innovation
International outreach
• USA
• Chicago
• US EPA meeting October 2007 in Washington
•
Europe … Potential for roll out via the European Environmental
Technologies Action Programme (ETAP) … Romania, Eire, Portugal
•
Yunnan Province, China 2007, Mexico City 2007+ UNIDO + World Bank
•
Sustainable Development Dialogues – Mexico, China, Brazil, South
Africa, India
National Industrial Symbiosis Programme
(NISP)
•
NISP as a (still small-scale) exemplar
•
Programme Director: Peter Laybourn
•
Operational Director: Ian Bryan
•
National Chairman: Professor Paul Ekins
Phone :
+44 121 433 2650
E-mail :
[email protected]
Web :
www.nisp.org.uk
www.international-synergies.com