A framework for climate change and global equity

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Jeffrey Sachs Professor Jeffrey D Sachs, Director of The Earth Institute at Columbia University

With the world initiating new climate change negotiations in December 2007 to succeed the Kyoto Protocol expiring in 2012, there is still no shared framework for agreement between developed and developing countries. There has been a sea change in global attention to this issue in the past three years, reflected in this year’s 2007 Nobel Peace Prize which is shared by former Vice-President Al Gore and the Intergovernmental Panel on Climate Change. Yet there is still no consensus on how to proceed. This brief note sketches out a framework for action, building on the underlying core facts of the climate change challenge itself.

The 1992 UN Framework Convention on Climate Change (UNFCCC), under whose auspices the December negotiations will proceed, is a remarkably sound framework for global action. Fifteen years ago, the world’s nations agreed on the proper core objective, “to stabilise greenhouse gas concentrations at a level to avoid dangerous anthropogenic interference in the climate system.” They agreed that all countries must adopt plans of action consistent with this objective, but that the developed countries (called the Annex I countries in the Kyoto Protocol) must take the lead. The Treaty’s doctrine on cross-country responsibilities, familiar from other agreements as well, is one of “common but differentiated responsibilities.”

CARBON DIOXIDE IS INCREASING RAPIDLY

The basic arithmetic is roughly as follows. The current atmospheric concentration of carbon dioxide (CO2) is 380 parts per million (ppm). It is now rising by roughly two ppm per year, based on global emissions of roughly 36 gigatonnes (GtCO2) of manmade CO2 emissions. These 36 GtCO2 are divided between energy based emissions of 29 GtCO2, and seven GtCO2 caused by deforestation. While there are several other greenhouse gases that are important to control, including methane, nitrous oxide, and various industrial chemicals, carbon dioxide is at the centre of the story.

There is widespread agreement that the world will enter a very severe danger zone if the CO2 concentration reaches 560 ppm; indeed the threshold of safety could be 450 ppm or even lower. With CO2 concentration rising by two ppm per year, the current emission flow would take us past 560 by end of the century. Yet the threat is even more dire and immediate than that. The world economy is growing rapidly, at around five per cent per year, with energy growth of four per cent per year or higher. If this rate of growth is sustained for a half century, first as Asia booms, and then as other parts of the developing world, including Africa and Latin America, achieve rapid economic growth, total emissions will skyrocket. The world could easily reach 560 ppm by 2050 or even earlier.

DECOUPLING GROWTH WITH EMISSIONS

The core challenge is to combine the stabilisation, then reduction, of annual global carbon dioxide emissions without sacrificing the developing countries’ right to achieve significant economic growth, and presumably without affecting economic progress in today’s high income countries either. Decoupling economic growth with greenhouse gas emissions is the basic challenge. And the core solution will be technologies which reduce energy use per unit of GNP and carbon emissions per unit of energy. Such technologies exist, but need a global framework for their development and global diffusion.

A GLOBAL FRAMEWORK FOR TECHNOLOGY DEVELOPMENT

Here’s how this can work. Four sectors dominate as sources of CO2 emissions: electricity production at independent power plants, motor vehicles, heavy industry (steel, cement, refineries, and petrochemicals), and deforestation. These sectors account for approximately 80 per cent of total carbon dioxide emissions. Emissions directly from residential and commercial buildings (mainly for heating) account for another 10 per cent or so, and many lesser emitting industries make up the remainder. Our focus should be on the big four categories.

ENERGY EFFICIENCY AND ENERGY DE-CARBONISATION

Part of the answer will be energy efficiency. We can economise on energy at the end user, such as through better insulation to reduce home heating, low watt illumination, and greater kilometres per litre of gasoline, or through more efficient power plants, which use less primary energy per kWh of delivered electricity. These steps will be crucial, but they will not be enough. Indeed, if the world economy grows at five per cent per year, energy efficiency might reduce energy growth to two-three per cent per year, but would still mean a global increase of energy use of perhaps two to four times by 2050.

We must therefore combine energy efficiency with a de-carbonisation of the energy system. Part of the answer can be a shift to nuclear and renewable energy sources to produce electricity, perhaps rising from roughly one-quarter of the total energy for electricity production (with fossil fuels now constituting three-quarters), up to one-half by 2050. Even so, with overall electricity demand likely to rise five fold by 2050, the fossil fuel-based electricity production could well double or even triple despite a massive increase of renewable and nuclear power production.

CARBON CAPTURE AND SEQUESTRATION

A central challenge, then, will be to use fossil fuels at a higher rate than now but in a manner that does not emit carbon dioxide. The most promising route for this is carbon capture and sequestration (CCS). The idea is to capture the CO2 emitted from fossil fuel combustion and then geologically dispose of it in stable underground deposits, eg in basalt rock, or saline aquifers, or under the ocean bottom. Most engineering is now working on CCS at the power plant site, capturing the carbon dioxide from exhaust gases. Another possibility is to capture the carbon dioxide directly from the air (at the low concentration of 380 ppm), decoupled from the production of the CO2.

The technological options will have to be used in combination. For example, today’s coal-fired power plants, at one-third energy efficiency, ie they use three units of heat energy as coal to produce one unit of delivered electricity, can be converted to power plants with much higher efficiency and which capture their CO2. The combination of higher efficiency plus CCS could reduce the emissions per kWh of electricity by 90 per cent or more. Probably the most promising technology is an Integrated Gasification Combined Cycle (IGCC) power plant with CCS capability.

Clean energy produced at highly efficient IGCC-CCS power plants would open up vast possibilities. For example, today’s hybrid vehicles, which already get 50 to 100 per cent more miles per gallon than conventional internal combustion engines, could be converted into plug-in hybrids, in which the automobile is recharged by connection to the power grid, which itself is fueled by low emitting electricity (combining renewable, nuclear, and IGCC-CCS power plants). As a result, by 2050 there could be an automobile that gets roughly five times the mileage per gallon of gasoline achieved today, and whose overall emissions are reduced by four to five times compared to today’s vehicles, taking into account the low emissions at the electricity plant.

Home heating could similarly be converted from home furnaces to electricity, using heat pump technology, and resulting in much lower overall emissions as long as the power grid is fed by low emission electricity. Industrial users would remain the big emitters in this scenario, and the largest industrial plants would be called upon to reduce their own emissions through CCS as well. In the end, every major energy using sector would contribute to achieve:

Broad efficiency gains in end use.
More efficient power plants.
A partial shift to nuclear and renewable sources.
CCS at the remaining coal and gas fired plants (or through air capture).
CCS at big industrial facilities.
Plug-in hybrids
Electricity based home heating.

Together, these steps could cut total emissions by a quarter or more compared with today, despite a four to six fold increase in the size of the world economy by 2050.

COSTS

The added costs of this low emission package are likely to be modest. Renewable and nuclear power are already cost competitive with coal-fired power plants up to a point, and their competitiveness will make possible a further partial move in their direction. CCS is unlikely to cost more than two or three cents per kWh of electricity, but this needs to be proved. Plug-in hybrids, or alternative high mileage and low emission vehicles, are within a few years of production, depending now on technical solutions mainly to battery performance and reliability. Direct and relatively low cost air capture of carbon dioxide may soon prove to be feasible. Back of the envelope calculations suggest that the overall package needed to keep total emissions below current levels as the world economy grows sharply, is likely to cost under one per cent of global income each year and, quite possibly, much less.

iven that the risks and known costs of unconstrained climate change will be vastly larger, cost-benefit logic should push the world strongly towards an aggressive demonstration and diffusion of low cost, low emission technologies.

TOWARDS A WORLDWIDE ADOPTION OF LOW EMISSION TECHNOLOGIES

How then can we best get to where we need to be: a worldwide adoption of low emission technologies? The following steps are vital. First, we recognise that all countries, both high income and developing, must participate in the transition, since the basic arithmetic shows that all regions of the world will have to play their part in a rapidly growing world economy. Second, the rich countries should pledge to the poor countries that no actions on the part of the developing countries will be made to jeopardise their legitimate aspirations for continued rapid economic growth. The global agreement must be against emissions, not against economic development.

Third, the world should agree on the 2050 targets, for example of emissions no larger than 20 GtCO2 through fossil fuel use (two-thirds of today’s target), and a concentration at or below 450 ppm of CO2, and then adopt a global framework of action to achieve those targets. Fourth, in addition to stabilising and reducing emissions from fossil fuels, deforestation and its resulting emissions should be ended, not only for the sake of climate change, but for the sake of the vast biodiversity now being threatened with extinction through the rampant destruction of tropical forests. Rich countries should help poor countries avoid deforestation through a system of incentive payments for taking forest land out of deforestation.

Fifth, rich countries should immediately finance a dozen or so large scale demonstration power plants with CCS technology in China, India, Indonesia, Brazil, the US, Europe, Australia and other major coal producing and coal using countries. We need to know that CCS is viable, both technically and economically. The technology looks great on paper, but we’ll never know its real possibility and performance until it is tried in many parts of the world. Furthermore, countries such as China and India will not agree to sharply binding targets on emissions until they are confident in low cost solutions, such as CCS that will enable them to preserve their rapid economic growth. Sixth, rich countries should immediately undertake a major scale up of public funding and public private partnerships for other key technologies, such as plug-in hybrids, cellulosic ethanol (which does not directly compete with arable land for food production), concentrated solar power and others.

Seventh, each country should be prepared to put economic incentives to work around the adoption of low emission technologies. A global tradable permits system is unlikely to be the way to go. It would be highly cumbersome and very difficult to regulate, and it would miss the point that the vast bulk of solutions can come through a focus on adoption of a few key technologies. Success is more likely if countries each adopt a subsidy on carbon sequestration and a tax of some sort on carbon emissions, combined with global agreements on basic minimum industrial standards in emissions at power plants, automobile mileage, and performance at steel mills, cement factories, refineries, and other high CO2 emitters. A realistic starting point would be a US$30 per tonne subsidy on carbon sequestration, and a small tax, perhaps US$10 per tonne, on carbon emissions (amounting to roughly one cent per kWh for delivered electricity), which would rise gradually over time.

Eighth, at the same time that the world is adopting a strategy to curtail emissions, it must also adopt a strategy of adaptation to the climate change that is already underway, and will intensify in the future. Specific and crucial measures will be needed in the face of growing threats of droughts and floods, extreme weather events, temperature stress on crop productivity, the expanded range of malaria and other tropical diseases, and the loss of biodiversity. As with mitigation, the rich countries will have to bear the bulk of the financial responsibilities for funding adaptation measures.

LOOKING FORWARD

The world is entering the new round of negotiations looking for a ‘grand bargain,’ a single agreement that will chart the new course on emissions reduction and adaptation. This is probably the wrong mind set, as it could lead to years of frustrating negotiations without a global agreement. Just as with the Doha Trade Round, the world could miss its target by several years and fall into worsening finger pointing and acrimony. An alternative approach would be to view the climate change challenge as a matter of global problem solving, in which a sequence of steps is adopted year by year, based on the emerging evidence and technological possibilities.

In this approach, the world would agree on certain less controversial matters now, and reserve some of the other detailed and crucial matters for later years. As an example, the world’s governments could agree now to the following: a fund to avoid deforestation; the launch of several CCS demonstration plants; an increased global R&D effort around a set of core technologies; a mid century objective of keeping CO2 below 450 ppm; the launch of a new adaptation fund to help the poorest countries. We could agree to set country-by-country emissions trajectories until 2030 within the coming three to five years, based on the evidence on best performance low emissions technologies, especially the early results on CCS and plug-in hybrid technologies.

Surely the world would rally with enthusiasm to early and concrete measures now, even in the absence of a complete and overarching framework. The good news for the world is a framework that combines emissions reduction at modest economic costs, and allows the world to combine its twin objectives of sustainability and development is feasible. Now is the time for constructive agreements and a fair sharing of responsibilities.

Author

Jeffrey D Sachs is the Director of The Earth Institute, Quetelet Professor of Sustainable Development, and Professor of Health Policy and Management at Columbia University. He is also Special Advisor to United Nations Secretary-General Ban Ki-moon. From 2002 to 2006, he was Director of the UN Millennium Project and Special Advisor to United Nations Secretary-General Kofi Annan on the Millennium Development Goals, the internationally agreed goals to reduce extreme poverty, disease, and hunger by the year 2015. Sachs is also President and Co-Founder of Millennium Promise Alliance, a nonprofit organisation aimed at ending extreme global poverty.

For more than 20 years Professor Sachs has been in the forefront of the challenges of economic development, poverty alleviation, and enlightened globalisation, promoting policies to help all parts of the world to benefit from expanding economic opportunities and wellbeing. He is also one of the leading voices for combining economic development with environmental sustainability, and as Director of the Earth Institute leads large-scale efforts to promote the mitigation of human-induced climate change.

Organisation

The Earth Institute’s overarching goal is to help achieve sustainable development primarily by expanding the world’s understanding of Earth as one integrated system. We work toward this goal through scientific research, education and the practical application of research for solving real world challenges. With 850 scientists, postdoctoral fellows and students working in and across more than 20 Columbia University research centers, The Earth Institute is helping to advance nine interconnected global issues: climate and society, water, energy, poverty, ecosystems, public health, food and nutrition, hazards and urbanization. With Columbia University as its foundation, The Earth Institute draws upon the scientific rigour, technological innovation and academic leadership for which the University is known.

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