Download Designing Future International Actions on Climate Change

Designing Future International Actions
on Climate Change
Ned Helme, Executive Director
Catherine Leining, Senior Policy Analyst
Center for Clean Air Policy
***
Bonn, Germany
Eighteenth Session of the Subsidiary Bodies
June 2003
About CCAP





Non-profit environmental think-tank
Founded in 1985 to develop, promote, and
implement innovative solutions to energy and
environmental problems
Involved in international climate change debate
for over ten years
Involved in design of CO2 trading system in EU
and trading workshops in accession countries
Strong record of bringing together key gov’t and
industry stakeholders to facilitate dialogue on
major issues
Overview of the
CDM/Future Actions Dialogue

Brings together negotiators from ~30 Annex I
and non-Annex I Parties for informal
discussions
» Design and implementation of the CDM
» International actions on climate post-2012


7 meetings since May 2000
Funded by Annex I governments
» Australia, Canada, Denmark, European
Commission, Germany, Japan, Netherlands, New
Zealand, Norway, Sweden, UK, USA
Partners & Collaborators





Foundation for International Environmental
Law and Development (FIELD), UK
Energy & Development Research Centre
(EDRC), South Africa
ECOFYS, Germany
World Resources Institute (WRI), USA
Additional research institutes and consultants
Stabilization Needs



Pre-industrial atmospheric CO2 concentration
= 280 ppm
Current concentration = 360 ppm
Future stabilization requires concerted effort
over short, mid, and long term
» Eventually, global emissions must fall below 1990
levels for stabilization
» Longer delay means higher stabilization level

Hedging strategy: Leave stabilization options
open (e.g., 450, 550 ppm)
Possible corridors to stabilization
Global anthropogenic CO2 emissions (GtC)
14
13
12
550
11
10
9
8
7
450
6
5
1970
1980
1990
2000
2010
2020
Source of stabilization paths: IPCC WGIII chapter 2, post SRES scenarios, CO2 only
2030
2040
Post 2012 Framework
“Three-legged” policy platform
1. Annex I Parties in KP - Targets
2. Annex I Parties outside KP - Responsibilities
3. Developing countries - Programs
Menu of Options – Annex I




Continue with Kyoto Protocol
Technological cooperation or technology
protocol
Carbon intensity reductions
Coordinated sectoral PAMs
Menu of Options - DCs






Technology transfer, CDM, GEF (current
options)
Sectoral CDM
Sustainable development policies and
measures (SD PAMs)
Reducing emissions footprint from Annex I
investments (e.g., MNC caps, ECA / WB shift)
Carbon intensity targets (sectoral, economywide) or sectoral targets
Absolute targets
Other Considerations






Menu or stepwise approach
Binding versus nonbinding (pledge & review)
Umbrella indicators versus target
Hybrid – use overarching voluntary carbon intensity
as indicator and combine with CDM, SD/PAMS, etc.
Holding developing countries harmless in terms of
cost of reduction or new technologies so their
development priorities are not compromised
Creating incentives for long-term transition to lowcarbon development and economic growth for both
Annex I and non-Annex I countries
Technology RD&D

2nd track to complement KP targets and
timetables
– RD&D “push” complements ET “pull”
– Critical for long-term solution, but not a panacea
– Could be based on Montreal Protocol model although
key differences exist

Pros of technology approach
– Compatible with economic growth
– Incentives to participate

Cons of technology approach
– Less environmental certainty
– Government picks technology winners
– Difficulty in setting standards
Mitigation Policy Time Frames
Short term
Mid term
Long term
Global
GHG
Emissions
Target
emissions
level for CO2
stabilization
2015
2030
Time
2050+
Annex I Emissions Footprint

Annex I GHG footprint in DCs is significant
» Particularly in the power generation sector

Climate protection may be possible via
institutions that generate financial flows
» Many complexities exist

Policy options
–
–
–
–
–
Pool of concessionary funding
Financial set-asides
Special lending provisions
Climate-friendly portfolio standard
Increased transparency




In 2000, about US$225 billion
Financial Flows to Developing Countries from
flows to developing countries
Industrialized Countries, 2000
from industrialized countries
Other
annually—about 4% of the GDP
Multilateral
International
Institutions
of developing countries.
Finance Corp.
4%
2%
These flows are the financial
Development
footprint of industrialized
Banks
6%
countries in developing countries
Bilateral Aid
and a means of influencing the
FDI
12%
technologies used in the future.
43%
Sources of financial flows are
both public (official) and private.
Export Credit Agencies (ECAs)
Other private
27%
are national financial agencies
that support exports of goods and
FDI covered
services from their origin
by ECA
investment
countries—$85 billion in 2000
insurance
6%
Sectoral CDM

CDM currently is project based
» Creates potential disincentive for proactive climate
PAMs in DCs (tougher baselines)
» Link between project baseline and sectoral policy can
be complicated

Enabling sectoral policies as CDM projects:
» Provide needed resources for policy implementation
» Larger volume of reductions possible with lower
transaction costs from aggregation
» Reduced potential for leakage
» Challenges of additionality assessment and monitoring
SD PAMs

DCs could undertake SD PAMs that reduce
climate impacts of development priorities
»
»
»
»


Could be harmonized or country-specific
Could be binding or nonbinding pledge
Could leverage climate and non-climate funding
Could be linked to trading system, or kept
separate
Challenges: defining SD PAMs, baselines/
measurement, monitoring, uncertainty of
emission reductions, capacity needs
Many DCs are doing this already
Carbon Intensity Targets


Different structure from hard caps; not more or
less stringent by definition
Two approaches
» Sector-specific (e.g, electric utilities)
» Multi-sector/economy-wide


Largest benefit is correlation between
emissions target and economic activity
Largest problems are lack of environmental
certainty, measurement difficulties,
transparency, and enforcement
“A La Carte” Menu

Annex I countries achieve absolute emissions
reduction
» With consideration of costs/benefits distributed
across constituencies

DCs determine best approach based on
national circumstances and capacity
» Rather than strict linear progression

Key Question
» How do we link “a la carte” approach to the need
for real global progress in the 2020 period?
Discussion Questions

How can we differentiate among
countries according to national
circumstances and capacity?
» Annex I (inside & outside KP)
» Non-Annex I

Interest in stepwise progression versus
“menu” approach for DCs over time?
Discussion Questions, Cont.

Interest in approaches that transcend the
Annex I and non-Annex I divide?
» Harmonized sectoral PAMs and SD PAMs
» Greening financial flows from Annex I countries to
non-Annex I countries

How can we create a structure that
incentivizes technological innovation and
implementation and engages developing
countries?
For more information….

Please contact:
Ned Helme or Catherine Leining
Center for Clean Air Policy
750 First St. NE #940
Washington, DC 20002 USA
Tel. +1 202 408 9260
[email protected], [email protected]
http://www.ccap.org