Worlds News: Why green growth is a necessary goal (6 Dec 2013)

Why green growth is a necessary goal

Martin Wolf

06.12.2013

Speeding up decarbonisation will not happen by itself and needs a push from a higher carbon price and firm regulation

A low-carbon atmosphere is a global public good, argues Martin Wolf (Image by COP19/CMP9) 

 

Last week, it was Warsaw’s turn to host a disappointing meeting on climate change. Over the past two decades, many other cities have had this pleasure. This time, 195 countries painfully agreed to make a “contribution” to combating climate change, in place of a more robust “commitment”. The aim is still to reach a strong agreement in Paris in 2015. The chances of success must be negligible. Experience shows that.

What makes this depressing is that the world could probably eliminate the risks of catastrophic outcomes at limited cost, provided it acted quickly, effectively and in concert. In his new book, The Climate Casino, William Nordhaus of Yale, doyen of climate economists, argues that the cost of limiting the increase in global temperature to 2C would be 1.5 per cent of global output, provided the right action were taken. This is only half a year’s global economic growth. But abatement would be far costlier if countries responsible for half the emissions did not participate: keeping temperature increases to 2C would even be infeasible.

Professor Nordhaus, a moderate voice in this debate, explains why the world should accept the costs of action. The greenhouse effect is basic science. Emissions have risen rapidly. Atmospheric concentrations of carbon dioxide are now more than 400 parts per million – 50 per cent higher than before the Industrial Revolution and well above levels over the last 1 million years. Global temperatures have risen over the past 150 years. The recent temperature plateau is not exceptional. Climate scientists have been unable to find an explanation other than human activities for the increases in temperature.

Climate sceptics argue as if uncertainty means that the right thing to do is nothing. On a foggy road, the number and speed of other cars is particularly uncertain. But this very ignorance makes cautious driving essential. The same applies to climate. Given the uncertainties about the climate system, the wisest course is surely to drive cautiously.

A particularly important aspect of that uncertainty is tipping points. We know that the earth’s climate has changed sharply in the past. It is possible – even probable – that some insufficiently understood process could tip the world into another and perhaps irreversible state: the collapse of large ice sheets is such a possibility; another is large changes in ocean circulation; and yet another is positive feedback processes on warming. Moreover, while humanity might hope to manage the economic effects of such events, the same is not true for their impact on the oceans or on mass extinctions.

It is irrational to play in the climate casino without seeking to eliminate worst-case outcomes. Some people are excited about thepossibility of geoengineering. But that is to add yet another gamble. It is surely more sensible to limit excessive accumulations of greenhouse gases, provided it can be done at less than crippling costs.

Emissions, then, are a negative global spillover of economic activity. We do not know the cost of such externalities. But we can be sure it is greater than zero. Externalities do not fix themselves. In the absence of effective individual property rights they require government action, in this case the action of close to 200 governments. The simplest solution would be for every country to agree on a price. Each country would then levy a tax: Prof Nordhaus suggests this should be US$ 25 per tonne of carbon. The revenue would then stay at home. Negotiations would be only over that price. Meanwhile, high-income countries would focus on investing in research and development of relevant new technologies and in ensuring that the best technologies were available cheaply to emerging and developing countries. Why should they do this? The answer is: because a low-carbon atmosphere is a global public good.

It is by now impossible to be optimistic that anything like this will happen. This is partly because the needed agreement must be long-term and global. That, in turn, raises difficult questions of intragenerational and intergenerational equity. But the likelihood of failure is also because of the (successful) efforts of sceptics to muddy the intellectual waters and the understandable resistance of affected interest groups. Some industries – electric utilities and energy-intensive activities – will complain. But such complaints have to be kept in context. The loss of jobs in the politically powerful US coal industry might be 40,000 over a decade. Against what has happened to the US jobs market since 2008, this would be quite a small potato.

Beyond that, there are the understandable concerns of ordinary people that they would be far worse off if they could not treat the atmosphere as a free sink. It is also clear that low-carbon sources of energy are still expensive and some technologies are not proved at relevant scales. Moreover, a big effort requires an acceleration in the rate of decarbonisation. That will not happen by itself. It needs a push.

The combination of higher prices and support for fundamental research should deliver just such a push. Happily, the evidence suggests that, either because of ignorance or inertia, households and businesses are not currently optimising their energy use. The combination of higher prices for carbon and firm regulation might even deliver some unexpected benefits: lower carbon emissions without any loss in output.

Suppose that, despite all the logic, it proves impossible to achieve a relevant global agreement. Does it make sense for any country or group of countries to take determined action on their own? If the aim is to deal with climate change, the answer is: absolutely not, unless the countries are China or the US. Indeed, even if the countries were China and the US, it would not be enough, since they account together for only a little over two-fifths of global emissions. But it might be possible for a country to demonstrate proof of concept: that it is indeed possible for economies to grow fast while reducing emissions. In the process, such a country might even, as some argue, gain an important lead in some relevant new industries.

In any case, some countries have to try. Otherwise, as everybody hangs back, efforts at effective agreement must fail. We would then end up taking a gamble on the absence of any bad and irreversible outcome.

Copyright The Financial Times Limited 2013

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Events: IGES Side Event at Smart City Week 2013 "Introducing Low Carbon Cities in Asia" organized by IGES on 22 Oct 2013

• 

   IGES Side Event at Smart City Week 2013

  "Introducing Low Carbon Cities in Asia"

This seminar looks at ways to facilitate economic growth in Asia while improving living standards. Representatives from cities across the region will discuss leap-frogging and environmentally-friendly strategies when transitioning to a low-carbon and recycling based society. The aim is to develop a network that will allow knowledge transfer between cities, introducing Japan's low-carbon technologies and a new Japanese crediting mechanism (i.e. Joint Crediting Mechanism.)

This meeting intends to:
(1) introduce successful case studies on low-carbon city developments that were made possible through city to city partnerships (e.g. Surabaya City in Indonesia, Ho Chi Minh City in Vietnam, Iskandar City in Malaysia);

(2) offer insights into assistance given to Japanese businesses overseas by Japan's national and local governments, as well as the respective learning platforms for academia, municipalities and the business community;

(3) discuss barriers and countermeasures when promoting technological transfer for low-carbon development.

• Date and Time	Oct. 22 2013  9:00-12:00 (Reception 8:30 -)
  Venue	PACIFICO YOKOHAMA, Conference Center 5F 1-1-1 Minato Mirai, Nishi-ku, Yokohama 220-0012, Japan >>access
  Organisers	Institute for Global Environmental Strategies (IGES) Ministry of the Environment, Japan
  Registration	Public participants are requested to register prior to the event. Please send an E-mail stating your full name, position held, organisation,  and contact information (email or telephone) to: IGES Climate Change and Energy Area at mm-info@iges.or.jp
  	Closing Date: Oct. 16, 2013
  Capacity	150
  Fee	Free of charge
  Language	English /Japanese with simultaneous interpretation
  Related Links	Smart City Week 2013

For more information: http://www.iges.or.jp/en/climate-energy/20131022.html

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New Books: Greening India's Growth Costs, Valuations and Trade-offs Edited by Muthukumara Mani (26 Sep 2013)

Greening India's Growth

Costs, Valuations and Trade-offs

Edited by Muthukumara Mani

Routledge – 2014 – 194 pages

Descriptions:

India’s sustained and rapid economic growth offers an opportunity to lift millions out of poverty. But this may come at a steep cost to its environment and natural resources. This insightful book analyses India’s growth from an economic perspective and assesses whether India can grow in a "green" and sustainable manner. Three key issues are addressed.

The first is the physical and monetary costs and losses of environmental health and natural resources driven by economic growth. The authors undertake a monetary valuation and quantification of environmental damage, using techniques that have been developed to better understand and quantify preferences and values of individuals and communities in the context of environmental quality, conservation of natural resources, and environmental health risks. The second part estimates the value of ecosystem services from the major biomes in India using state-of-the art methods with a view to preserving them for the future. The third section provides a menu of policy instruments to explore trade-offs between economic growth and environmental sustainability using a Computable General Equilibrium approach with particular attention to air pollution.

The conclusions focus on the way forward in terms of policies, measures and instruments as India has to balance the twin challenges of maintaining economic prosperity while managing its environmental resources.

Contents:

1. Growth vs. Environment Debate

2. How much does it Cost?

3. How to Value?

4. What are the Trade-offs?

5. Way Forward: Striving for Green Growth

Annex 1: Methodology of Environmental Health Losses Valuation

Annex 2: Methodology for Estimating the Cost of Natural Resource Degradation

Annex 3: Details of the Meta-Analysis Functions used in Estimating Value of Ecosystem Services

Annex 4: Description of the CGE Model

For more information: http://www.routledge.com/books/details/9780415719353/

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Chinese Updates: China's environment index measures green growth (23 Sep 2013)

China's environment index measures green growth
2013-09-23

China's Green Development Index Report for 2013, measuring green development in 30 regions and 100 cities was released on Sunday .

The top 10 areas in green development include Beijing, Fujian, Hainan, Inner Mongolia, Jiangsu, Qinghai, Shaanxi, Shanghai, Tianjin and Zhejiang,

Seventeen provinces are below the national average. Green development in the eastern provinces is better than that of the central provinces.

Among the 100 cities, the top ten are Haikou, Shenzhen, Karamay, Wuxi, Yantai, Qingdao, Zhanjiang, Yan'an, Beijing and Weifang.

The report did not primarily aim to rank green development, but to promote the transformation of local economies and economic growth patterns.

Li Xiaoxi, vice director of the academic committee of Beijing Normal University, emphasized the importance of structural analysis of urban green development and accelerating the transformation of the economic development pattern.

The index consists of three parts, the degree of green economic growth, the potential of natural resources and environment, and support of government policies.

Beijing Normal University, Southwestern University of Finance and Economics, and the National Bureau of Statistics have jointly produced the China Green Development Index Report annually since 2010.

Source: http://english.mep.gov.cn/News_service/media_news/201309/t20130923_260667.htm

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