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Energy Management and Sustainability Conceptualizing Equitable Access to Sustainable Development – Rethinking Paradigms in Global Climate Talks 6th International Scientific Conference on Energy and Climate Change PROMITHEAS National and Kaposdistrian University of Athens October 10, 2013 Dr. Ariel Macaspac Penetrante Chair of Energy Management and Sustainability, Institute for Infrastructure and Resources Management, University of Leipzig, Germany Search for a Political Formula Energy Management and Sustainability Climate change negotiations require conceptual underpinnings to enable a robust negotiation framework Negotiations on technical issues often fail due to lack of guiding principles or due to lack of consensus on guiding principles as the negotiation process unfolds Guiding principles become evident only during the negotiation process “Consensus Diplomacy” on political formulas is necessary to structure the negotiation process. 2 Climate Change Negotiations and Decision-Making Energy Management and Sustainability 3 Structure Complexity: The North-South Divide Energy Management and Sustainability • The North-South Divide has been reinvigorated as a political axis in the climate change context and has implications for the negotiation process (see Penetrante 2011; 2012; 2013; Sjöstedt & Penetrante 2013)) • A new concept of the North-South divide has emerged in the climate change context identity-based concept Perspectives need to be seen in an integrated manner: For example, projections show that China, India and the rest of Asia will be the major energy consumers in the next 50 years (Prof. Mavrakis): Question? Aside from concerns on subsistence, when economies of these countries are dominantly export driven to ensure low prices of commodities in developed countries: Should we account this energy demand to these Asian4 countries? Structure Complexity: Rules and Procedural Justice Energy Management and Sustainability There are different burden-sharing rules for distributing GHG emission reduction targets between countries: Egalitarian rule: Principle of equal per capita emissions If the population of a country amounts to X% of global population, this country should receive X% of the global entitlements for GHG emissions. Grandfathering rule: Principle of equal percentage reduction of emissions If the GHG emissions of a country amount to X% of global emissions, this country should receive x% of the global entitlements for GHG emissions. 5 Structure Complexity: Rules and Procedural Justice (2) Energy Management and Sustainability Ability-to-pay rule: Principle of equal ratio between GDP and abatement costs If the GDP of a country amounts to x% of gross world product, this country should receive entitlement for GHG emissions such that it bears x% of the global abatement costs for reductions of emissions. Polluter-pays rule: Principle of equal ratio between production-based emissions and abatement costs If the production-based GHG emissions of a country amount to x% of global emissions, this country should receive entitlements for GHG emissions such that it bears x% of the global abatement costs for reduction of emissions. 6 Structure Complexity: Rules and Procedural Justice (3) Energy Management and Sustainability Consumer-pays rule: Principle of equal ratio between consumption-based emissions (i.e., production-based emissions adjusted by the net trade balance in emissions of a country) and abatement costs If the consumption-based GHG emissions of a country amount to x% of the global emissions, this country should receive entitlements for GHG emissions such that it bears x% of the global abatement costs for reductions of emissions. Rules distributing costs for adaptation (including climate refugees and food insecurity) 7 Equitable Access to Sustainable Development (EASD) Energy Management and Sustainability • Introduction of EASD in the Cancun Agreements in context of a timeframe for global greenhouse gas emissions • UNFCCC invitation: academic discourse on how the newly agreed principle can be conceptualized, implementented and how it can facilitate the negotiation process (e.g., facilitation of the NorthSouth divide) Start of informal consultation on EASD in Durban leading to the EASD workshop during the 15th Session of the Ad hoc Working Group on Long-term Cooperative Action under the Convention in May 2012 in Bonn. 8 Simulation Games between 2009 and 2012 • 20 simulation games with more than 300 participants (students and IPCC scientists) in 6 countries between 2009 and 2012 • Different types of justice that may complement or compete with each other Energy Management and Sustainability 9 The UNFCCC and the Question of Equity Energy Management and Sustainability • No clear articulation of the quantified meaning of equity • Diffuse term and its interpretation often subordinated to national interests • Mere classification of countries –> Annex and Non-Annex countries which is relevant for the Kyoto Protocol 10 Going to Basics: Equity and Equitable Condition Energy Management and Sustainability • Equitable Condition: •Optimal situation or equilibrium where actors will no longer experience distress, that is, when they are convinced that the ratio of their input and output is generally acceptable. •Inputs are each participant’s contribution to the relational exchange which entitles one to rewards and benefits (e.g., time, effort, resources, commitment and various forms of liabilities. •Outputs are positive and negative externalities incurred as a consequence of this relational exchange when achieving a common goal (e.g., financial gains, recognition, achievement of pre-determined goals, co-benefits or “side-effects”). • Actors seek to maximize outputs based on their inputs and the failure to do so brings “distress”. •When actors encounter distress, efforts are conducted to restore equity within that relationship. 11 Concept of Equity Energy Management and Sustainability •Equity is highly contextual and is determined only as the decisionmaking/negotiation process unfolds: It therefore requires a dynamic approach •It requires a system to manage complex information that is needed by actors to compare inputs and outputs role of epistemic communities very crucial •Similar ratio among actors manifest equity, whereas actors do not need to contribute equal amounts of inputs in absolute terms nor do they need to receive equal rewards •Equity covers individual capacities in contributing inputs. Distress occurs when one actor sees another actor with similar capacities but lower contributions and receiving similar or greater outputs from the common project. •More distress arises when non-contributing free-riders harvest common benefits. 12 Concept of Equity (2) Energy Management and Sustainability • Distress leads to the necessity of finding efforts to restore equity, for example, in global climate talks, where differentiated inputs are expected among countries – depending on their level of economic development as well as their historical responsibility and where benefits and rewards are considered global common goods under conditions of non-exclusivity and yet rivalry. 13 Equity from the Negotiation Perspective Energy Management and Sustainability Four conditions for Equity: •When inputs and outputs are comparable. •When fair procedures are present when establishing mechanisms for compliance and verification. •When equitable behavior is more profitable than inequitable behavior. •When there is no free-riding to ensure just and therefore effective outcomes. 14 Global Climate Optimum vs. National Climate Optimum Energy Management and Sustainability TMC (mitigation) = TMC (damages) • Global Climate Optimum as situation where the total marginal costs of preventing global temperature change from surpassing 2°C correspond to the total marginal costs caused by climate damages • National Climate Optimum as situation where the total marginal costs of national climate protection measures match the total marginal costs of climate damages in one specific country 15 Outcome Complexity: Dealing with Uncertainty in Global Climate Agreements Energy Management and Sustainability "We know there are known knowns: there are things we know we know. We also know there are known unknowns: that is to say we know there are things we know we don't know. But there are also unknown unknowns — the ones we don't know we don't know." Former U.S. Defense Secretary Donald Rumsfeld 16 Outcome - Complexity Energy Management and Sustainability The Known Standard Provision The Known Unknown The Unknown Unknown Contingency TRUST and Provisions Cooperation 17 Bridging the Gap Energy Management and Sustainability - Between marginal social costs and marginal private costs - Internalizing negative and positive externalities to prevent free-riding: - allocating values to common goods - exact attribution of costs to these actors causing externalities - Compensatory character of internalizing externalities: moving from an economic to a political paradigm: distorted internalizing 18 The EASD Principle Energy Management and Sustainability • Relating EASD to the global climate talks: focus not only on the fairness of procedures and on providing the basis for just outcomes BUT also on participation as social peers • Access to resources is equitable when individual conditions that inhibit inclusion are identified and remedied in a compensatory manner. 19 The EASD Principle Energy Management and Sustainability • How climate protection (CP) measures such as GHG emission reduction can produce benefits for sustainable development, particularly when tensions between sustainability and development arise. • It also addresses how the link between SD and CP can become self-evident as a standard which raises the costs of non-participation through network effects 20 [1] [2] Starting year 1850, excluding historical LULUCF, data source: CAIT (WRI, 2009, 2012) Source: (Khor, 2012) EASD: Quo Vadis? Energy Management and Sustainability Table 1: Analysis of Shares and Entitlements Actors (countries) Issues Number of countries (percentage to total no. of countries) Percentage to total no. of countries Share of population Historical Emission (18502000) in accumulated numbers, in GtC Historical Emission (18502000), contribution in percentage to total concentration Cumulative global emission per capita (1850-2008) Developed Countries (Annex) 41 countries Developing Countries (Non- Total Annex) 154 countries 195 [BASIC: 5 countries (3.2% of all developing countries)] 21% 79% 100% 25% 75% 100% 210 55.44 [BASIC: 27] 20% [BASIC: 50% of developing countries’ historical emissions] 336 Gton (28% of total) (fair share with 75% of global population: 904 Gt) 265 80% 878 Gt (72% of total) (fair share with 25% of global population: 310 Gt) 21 100% 1214 Gt [1] [2] Starting year 1850, excluding historical LULUCF, data source: CAIT (WRI, 2009, 2012) Source: (Khor, 2012) EASD: Quo Vadis? Energy Management and Sustainability Table 1: Analysis of Shares and Entitlements (2) UNFCCC (legal Structures framework) Processes Parties Parties 192 parties (191 countries and 1 regional organization) Industry norms and Medium or highly standards on environmental advanced protection Low or highly advanced Negotiation mode (bilateral No clear preference on and multilateral) negotiation mode General preference on multilateral negotiation mode. Tendency for BASIC to conduct bilateral negotiations Coordination Regional organizations (ASEAN, MERCOSUR), coalitions (G77+China; BASIC, AOSIS) Regional organizations (e.g. EU), coalitions (G8,G20) 22 [1] [1] [2] [2] [3] Source: (Meinshausen, 2009) Starting year 1850, excluding historical LULUCF, data source: CAIT (WRI, 2009, 2012) Source: (Meinshausen, 2009) Source: (Khor, 2012) Source: (Den Elzen and Höhne, 2008) EASD: Quo Vadis? Outcomes (emission reduction, carbon budget) Achievement of 67% probability of limiting temperature rise to within 2°C (2010-2050) Achievement of 67% probability of limiting temperature rise to within 2°C (2010-2050) Cumulative total CO2 emissions. 2000-2049 (with 25% probability of exceeding the 2°C temp. increase limit) Cumulative total CO2 emissions. 2000-2049 (with 50% probability of exceeding the 2°C temp. increase limit) AWG-KP’s wording of the level of its ambition (August 2007) Energy Management and Sustainability 21% entitlement: 157.5 Gt 25% entitlement: 187.5 Gt 79% entitlement: 790 Gt 75% entitlement: 562.5 Gt < 750 Gt 21% entitlement: 126 Gt 25% entitlement: 150 Gt 79% entitlement: 474 Gt 75% entitlement: 450 Gt < 600 Gt 21% entitlement: 210 Gt 25% entitlement: 250 Gt 79% entitlement: 790 Gt 75% entitlement: 750 Gt 1000 Gt 21% entitlement: 302.4 Gt 25 % entitlement: 360 Gt 25% to 40% emission reduction below 1990 levels in 2020 79% entitlement: 1137.6 Gt 1440 Gt 75% entitlement: 1080 Gt “Deviation from baseline” 23 emissions peak by 2017 to 2022 and at least 50% emission reduction of the 2000 level by 2050 Conclusion Energy Management and Sustainability - A „“pure“ technical formula for distributing emission rights is not possible Only a negotiated formula. Therefore, integrating various perspectives is inevitable to ensure just outcomes through equitable participation. 24 Energy Management and Sustainability Maraming Salamat Danke schön ευχαριστίες شكرا • • • • • Thank you Gracias спасибо 謝謝 Penetrante, A.M. (Forthcoming 2014) Strategic Facilitation of Complex Decision-Making. How Process and Context Matter in Global Climate Change Negotiations, Wiesbaden: Springer. Sjöstedt, G. and Penetrante, A.M. (2013) Climate Change Negotiations – A Guide to Resolving Disputes and Facilitating Multilateral Cooperation. London: Routledge Penetrante, A.M. (2013) Common But Differentiated Responsibilities – The North-South Divide in Climate Change Negotiations, in Sjöstedt, G. and Penetrante, A.M. (eds.) Climate Change Negotiations – A Guide to Resolving Disputes and Facilitating Multilateral Cooperation. London: Routledge, pp. 249-276. Penetrante, A.M. (2012) Simulating Climate Change Negotiations. Lessons from Modeled Experience. Negotiation Journal, 27(3), pp. 279-314. Penetrante, A.M. (2011) Entanglement of Climate Change in North-South Relations: Stumbling Blocks and Opportunities for Negotiation, in Richardson, K., Will, S., Liverman, D. (eds.) Climate Change Global Risks, Challenges and Decisions, Cambridge: Cambridge University Press, pp. 356-359. 25