SEIZING THE GLOBAL OPPORTUNITY
SEIZING THE GLOBAL OPPORTUNITY PARTNERSHIPS FOR BETTER GROWTH AND A BETTER CLIMATE The Global Commission on the Economy and Climate Helen Mountford, NCE Program Director – 15 July 2015
0
The New Climate Economy project Better Growth, Better Climate (Sept. 2014) showed that economic growth & climate protection can be achieved together. Supported by numerous country reports and working papers.
Commissioned by 7 countries: Colombia, Ethiopia, Indonesia, Norway, Sweden, South Korea, United Kingdom Led by a Global Commission: 28 former heads of government, finance ministers, CEOs and heads of economic institutions. Overseen by an Economic Advisory Panel of 14 leading economists, chaired by Lord Nicholas Stern Seizing the Global Opportunity: Partnerships for Better Growth and a Better Climate: NCE 2015 report, focuses on how international and multi-stakeholder cooperation can catalyse better growth and a better climate. 1
Members of the Global Commission
Felipe Calderón (Chair) Former President, Mexico
Luísa Diogo Former Prime Minister, Mozambique
Nicholas Stern (Co-Chair) Ingrid Bonde IG Patel Professor at the CFO and Deputy London School of Economics CEO, Vattenfall and Political Science
Sharan Burrow General Secretary, International Trade Union Confederation
Dan Doctoroff S. (Kris) Gopalakrishnan Angel Gurría Former President Co-founder, Infosys Secretary General, and CEO, Bloomberg OECD
Caio Koch Weser Vice Chairman, Deutsche Bank
Ricardo Lagos Former President, Chile
Michel Liès CEO, Swiss Re
Eduardo Paes Mayor, Rio de Janeiro
Annise Parker Mayor, Houston
Paul Polman CEO, Unilever
Suma Chakrabarti President, EBRD
Chen Yuan Former Chairman, Chinese Development Bank
Helen Clark Administrator, UNDP
Chad Holliday Chairman, Royal Dutch Shell
Sri Mulyani Indrawati Managing Director and COO, World Bank
Naina Lal Kidwai Chairman, HSBC India
Takehiko Nakao President, Asian Development Bank
Ngozi Okonjo-Iweala Former Minister of Finance, Nigeria
Kristin Skogen Lund Trevor Manuel Director General, Former Finance Confederation of Minister, South Africa Norwegian Enterprise
Christian RynningTønnesen CEO, StatKraft
Jean Pascal Tricoire Maria van der Hoeven CEO, Schneider Executive Director, Electric International Energy Agency
Zhu Levin Former CEO, China 2 International Capital Corporation
The false dilemma:
VS
Promoting Economic Growth
Fighting Climate Change
It is possible to have better growth and a better climate at the same time 3
Main findings of Seizing the Global Opportunity • Better economic growth can close the emissions gap. The 10 key actions identified in the report can drive economic growth and achieve as much as 96% of the greenhouse gas emissions reductions needed by 2030 to prevent dangerous climate change. • Momentum is building for a low-carbon economy: renewable energy continues to get cheaper, carbon pricing is spreading, and leading businesses and investors are committing to low-carbon growth. • Cooperative, multi-stakeholder partnerships among national and local governments, businesses, investors, and civil society can catalyze growth and emission reductions. Can scale up technological change, expand markets, spread best practice, address concerns about international competitiveness. • The global level of ambition on climate change could be raised significantly through these economically-beneficial actions. National climate pledges (“INDCs”) should therefore be “floors to ambition, not ceilings”. • A strong international climate agreement is vital; and should be accompanied by wider forms of cooperation before and beyond Paris.
4
Momentum is building: in 2013, more low-carbon electricity capacity was added than fossil fuel capacity (GW)
Source: Liebreich, M., 2015. State of the Industry Keynote. Presented at the Bloomberg New Energy Finance Annual Summit, New York, 14 April. Available at: http://about.bnef.com/presentations/liebreich-state-industry-keynote/.
5
The financial sector is paying greater attention to climate risks
The Bank of England is studying the impact of climate risks on the UK financial system
China is developing a “green financial system” including legal frameworks, fiscal and financial policy incentives, and information infrastructure
G20 Finance Ministers have commissioned an investigation of climate-related risks in the financial sector Sources: Bank of England; Financial Times; International Institute of Sustainable Development; Bloomberg; G20.org
6
The Global Commission recommends:
Next steps
Accelerate low-carbon development in the world’s cities In the key economic systems where growth & emissions are concentrated
Restore and protect agricultural and forest landscapes and increase agricultural productivity Invest at least US$1 trillion a year in clean energy Raise energy efficiency standards to the global best Implement effective carbon pricing
For the key drivers of growth & emissions
Ensure new infrastructure is climate-smart
In critical fields of business and finance sector activity
For sectors where cooperation can unlock lowcost emissions reduction
Galvanise low-carbon innovation
Drive low-carbon action through business and investor action Raise ambition to reduce international aviation and maritime emissions Phase down the use of hydrofluorocarbons
Source: New Climate Economy
7
1. CITIES: Accelerate low-carbon development
• Compact of Mayors: 80 cities have agreed to emissions reductions, a to track these using an agreed framework. • Low-carbon transport, buildings and waste sectors could save $17 tri in reduced energy and other costs by 2050. 8
2. LAND USE: Stop deforestation, restore degraded lands and increase agricultural productivity
-
Companies representing 90% of global palm oil trade have committed to deforestation-free supply chains by 2020 - Through land restoration, over 1M families in Niger have doubled their incomes and increased food security 9
LAND USE: The Tropical Forest Alliance 2020 – a new coalition to halt deforestation Public Sector
+ technology to monitor deforestation in near real-time
Norway, US, Indonesia, Liberia, the Netherlands, UK
Private Sector
Now: 90% of traded palm oil Next: soy, beef, pulp & paper
Civil Society
17 companies
25 organisations
Source: Tropical Forest Alliance 2020 website. See website for full list of partners.
10
3. CLEAN ENERGY: Invest at least US$1 trillion a year
Cooperation between public and private sectors to finance clean energy could drive down the cost of renewable electricity by 20% in developed economies and 30% in emerging economies 11
4. ENERGY EFFICIENCY: Raise standards to global best
-
It could boost economic output by US$ 18 trillion by 2035. Over 168 institutions and 145 initiatives around the world are focused on energy efficiency G20 countries produce 94% of vehicles – potential market shift if they agree higher fuel efficiency standards 12
5. CARBON PRICING: Implement effective carbon pricing
-
Coverage of carbon pricing schemes has tripled over the last decade More than 1,000 businesses and investors have signaled support for carbon pricing 13
CARBON PRICING: About 40 national and over 20 subnational carbon pricing schemes are underway
Source: The World Bank, 2015. Carbon Pricing Watch 2015: An advance brief from the State and Trends of Carbon Pricing 2015 report, to be released late 2015. Washington, DC.
14
Low oil prices present opportunity for fossil fuel subsidy reform In the last two years, 28 countries have launched fossil fuel subsidy reform efforts
Morocco: eliminated gasoline and fuel-oil subsidies in 2014; significantly reduced diesel subsidies
Mexico: gradually raised gasoline and diesel prices throughout 2013 and 2014 to reach international levels
Egypt: cut fuel subsidies by 1/3 in 2014; aims to eliminate them by 2020
India: deregulation of diesel prices underway
Ghana: abolished gasoline and diesel subsidies in July 2014
Indonesia: eliminated gasoline and reduced diesel subsidies in Jan 2015; also reformed LPG and electricity pricing
Source: IEA World Energy Outlook 2014
15
6. Ensure new infrastructure is climate-smart
16
INVESTMENT: Infrastructure investment needs in a lowcarbon scenario is comparable to under business-as-usual
Source: OECD (2006, 2012), IEA ETP (2012), modelling by Climate Policy Initiative (CPI) for New Climate Economy, and New Climate Economy analysis.
17
7. Galvanise low-carbon innovation
18
INNOVATION: Global partnerships drive development and deployment of new technologies
•
• •
Consultative Group on International Agricultural Research (CGIAR) is a collaboration between 15 research centers, the private sector, and other stakeholders Channels US$1 billion each year into developing more productive and resilient crop varieties Benefit-cost ratio of CGIAR crop research was estimated to be at least 2:1, potentially much higher
•
• •
Low Carbon Technology Partnerships Initiative aims to develop Public Private Partnerships to accelerate the deployment of new technologies Work areas include renewable energy, climate-smart agriculture, and energy efficiency in buildings Plan to deliver business-oriented technology road maps at COP21 in Paris
Sources: www.cgiar.org; Raitzer, D.A., and Kelley, T.G., 2008; lctpi.wbcsdservers.org.
19
8. BUSINESS: Drive low-carbon growth through business and investor action
-
Environmental and low-carbon goods market is worth $5.5 trillion. Major oil companies already use internal carbon prices of about $40/T 20
9. AVIATION AND MARITIME: Raise ambition to reduce emissions
-
Policies improving efficiency in shipping are expected to save US$200 billion in fuel costs annually by 2030 There was a 27% difference between the least and most fuelefficient US airlines in 2013 21
10. HFCs: Phase down the use of hydrofluorocarbons
Coca Cola has installed 1 million HFC-free refrigerators; reports a 40% improvement in efficiency since 2000 22
10 recommendations can almost close the 2030 emissions gap Buiness as Business as Usual Usual
69
Cities
3.7
Degraded Land and Forests
6.2 6.5
Clean Energy financing Energy Efficiency
5.7
Carbon Pricing
4.2
Business
1.9
Aviation and Maritime
0.8
HFCs
1.4
Overlap
-9.4
Impact of all Recommendation Impact recommendations
21 (16-26) 42
2 degree 2º Scenario
Gt
0
10
20
30
40
50
Source: New Climate Economy, 2015. Seizing the Global Opportunity: Partnerships for Better Growth and a Better Climate.
60
70
23
Examples around the world show growth decoupling from emissions British Columbia
Sweden GDP +58% Emissions -23%
GDP +8% Emissions -4%
(1990-2013)
(2008-2013)
Denmark GDP +38% Emissions -25%
US RGGI GDP +9.2% Emissions -18% (2009-2013)
(1990-2012)
Brazil GDP +101% Emissions -15% (1990-2013)
EU GDP +45% Emissions -19% (1990-2012)
For the first time in 40 years, in 2014 global GDP grew by 3% while emissions didn't grow 24
New Climate Economy
Download full report, country case studies, and working papers: www.newclimateeconomy.report
Sign up for our mailing list & get in touch: www.newclimateeconomy.net Follow us on social media:
Follow us on Twitter @newclimateecon Find us on Facebook: search New Climate Economy
25
0
The New Climate Economy project Better Growth, Better Climate (Sept. 2014) showed that economic growth & climate protection can be achieved together. Supported by numerous country reports and working papers.
Commissioned by 7 countries: Colombia, Ethiopia, Indonesia, Norway, Sweden, South Korea, United Kingdom Led by a Global Commission: 28 former heads of government, finance ministers, CEOs and heads of economic institutions. Overseen by an Economic Advisory Panel of 14 leading economists, chaired by Lord Nicholas Stern Seizing the Global Opportunity: Partnerships for Better Growth and a Better Climate: NCE 2015 report, focuses on how international and multi-stakeholder cooperation can catalyse better growth and a better climate. 1
Members of the Global Commission
Felipe Calderón (Chair) Former President, Mexico
Luísa Diogo Former Prime Minister, Mozambique
Nicholas Stern (Co-Chair) Ingrid Bonde IG Patel Professor at the CFO and Deputy London School of Economics CEO, Vattenfall and Political Science
Sharan Burrow General Secretary, International Trade Union Confederation
Dan Doctoroff S. (Kris) Gopalakrishnan Angel Gurría Former President Co-founder, Infosys Secretary General, and CEO, Bloomberg OECD
Caio Koch Weser Vice Chairman, Deutsche Bank
Ricardo Lagos Former President, Chile
Michel Liès CEO, Swiss Re
Eduardo Paes Mayor, Rio de Janeiro
Annise Parker Mayor, Houston
Paul Polman CEO, Unilever
Suma Chakrabarti President, EBRD
Chen Yuan Former Chairman, Chinese Development Bank
Helen Clark Administrator, UNDP
Chad Holliday Chairman, Royal Dutch Shell
Sri Mulyani Indrawati Managing Director and COO, World Bank
Naina Lal Kidwai Chairman, HSBC India
Takehiko Nakao President, Asian Development Bank
Ngozi Okonjo-Iweala Former Minister of Finance, Nigeria
Kristin Skogen Lund Trevor Manuel Director General, Former Finance Confederation of Minister, South Africa Norwegian Enterprise
Christian RynningTønnesen CEO, StatKraft
Jean Pascal Tricoire Maria van der Hoeven CEO, Schneider Executive Director, Electric International Energy Agency
Zhu Levin Former CEO, China 2 International Capital Corporation
The false dilemma:
VS
Promoting Economic Growth
Fighting Climate Change
It is possible to have better growth and a better climate at the same time 3
Main findings of Seizing the Global Opportunity • Better economic growth can close the emissions gap. The 10 key actions identified in the report can drive economic growth and achieve as much as 96% of the greenhouse gas emissions reductions needed by 2030 to prevent dangerous climate change. • Momentum is building for a low-carbon economy: renewable energy continues to get cheaper, carbon pricing is spreading, and leading businesses and investors are committing to low-carbon growth. • Cooperative, multi-stakeholder partnerships among national and local governments, businesses, investors, and civil society can catalyze growth and emission reductions. Can scale up technological change, expand markets, spread best practice, address concerns about international competitiveness. • The global level of ambition on climate change could be raised significantly through these economically-beneficial actions. National climate pledges (“INDCs”) should therefore be “floors to ambition, not ceilings”. • A strong international climate agreement is vital; and should be accompanied by wider forms of cooperation before and beyond Paris.
4
Momentum is building: in 2013, more low-carbon electricity capacity was added than fossil fuel capacity (GW)
Source: Liebreich, M., 2015. State of the Industry Keynote. Presented at the Bloomberg New Energy Finance Annual Summit, New York, 14 April. Available at: http://about.bnef.com/presentations/liebreich-state-industry-keynote/.
5
The financial sector is paying greater attention to climate risks
The Bank of England is studying the impact of climate risks on the UK financial system
China is developing a “green financial system” including legal frameworks, fiscal and financial policy incentives, and information infrastructure
G20 Finance Ministers have commissioned an investigation of climate-related risks in the financial sector Sources: Bank of England; Financial Times; International Institute of Sustainable Development; Bloomberg; G20.org
6
The Global Commission recommends:
Next steps
Accelerate low-carbon development in the world’s cities In the key economic systems where growth & emissions are concentrated
Restore and protect agricultural and forest landscapes and increase agricultural productivity Invest at least US$1 trillion a year in clean energy Raise energy efficiency standards to the global best Implement effective carbon pricing
For the key drivers of growth & emissions
Ensure new infrastructure is climate-smart
In critical fields of business and finance sector activity
For sectors where cooperation can unlock lowcost emissions reduction
Galvanise low-carbon innovation
Drive low-carbon action through business and investor action Raise ambition to reduce international aviation and maritime emissions Phase down the use of hydrofluorocarbons
Source: New Climate Economy
7
1. CITIES: Accelerate low-carbon development
• Compact of Mayors: 80 cities have agreed to emissions reductions, a to track these using an agreed framework. • Low-carbon transport, buildings and waste sectors could save $17 tri in reduced energy and other costs by 2050. 8
2. LAND USE: Stop deforestation, restore degraded lands and increase agricultural productivity
-
Companies representing 90% of global palm oil trade have committed to deforestation-free supply chains by 2020 - Through land restoration, over 1M families in Niger have doubled their incomes and increased food security 9
LAND USE: The Tropical Forest Alliance 2020 – a new coalition to halt deforestation Public Sector
+ technology to monitor deforestation in near real-time
Norway, US, Indonesia, Liberia, the Netherlands, UK
Private Sector
Now: 90% of traded palm oil Next: soy, beef, pulp & paper
Civil Society
17 companies
25 organisations
Source: Tropical Forest Alliance 2020 website. See website for full list of partners.
10
3. CLEAN ENERGY: Invest at least US$1 trillion a year
Cooperation between public and private sectors to finance clean energy could drive down the cost of renewable electricity by 20% in developed economies and 30% in emerging economies 11
4. ENERGY EFFICIENCY: Raise standards to global best
-
It could boost economic output by US$ 18 trillion by 2035. Over 168 institutions and 145 initiatives around the world are focused on energy efficiency G20 countries produce 94% of vehicles – potential market shift if they agree higher fuel efficiency standards 12
5. CARBON PRICING: Implement effective carbon pricing
-
Coverage of carbon pricing schemes has tripled over the last decade More than 1,000 businesses and investors have signaled support for carbon pricing 13
CARBON PRICING: About 40 national and over 20 subnational carbon pricing schemes are underway
Source: The World Bank, 2015. Carbon Pricing Watch 2015: An advance brief from the State and Trends of Carbon Pricing 2015 report, to be released late 2015. Washington, DC.
14
Low oil prices present opportunity for fossil fuel subsidy reform In the last two years, 28 countries have launched fossil fuel subsidy reform efforts
Morocco: eliminated gasoline and fuel-oil subsidies in 2014; significantly reduced diesel subsidies
Mexico: gradually raised gasoline and diesel prices throughout 2013 and 2014 to reach international levels
Egypt: cut fuel subsidies by 1/3 in 2014; aims to eliminate them by 2020
India: deregulation of diesel prices underway
Ghana: abolished gasoline and diesel subsidies in July 2014
Indonesia: eliminated gasoline and reduced diesel subsidies in Jan 2015; also reformed LPG and electricity pricing
Source: IEA World Energy Outlook 2014
15
6. Ensure new infrastructure is climate-smart
16
INVESTMENT: Infrastructure investment needs in a lowcarbon scenario is comparable to under business-as-usual
Source: OECD (2006, 2012), IEA ETP (2012), modelling by Climate Policy Initiative (CPI) for New Climate Economy, and New Climate Economy analysis.
17
7. Galvanise low-carbon innovation
18
INNOVATION: Global partnerships drive development and deployment of new technologies
•
• •
Consultative Group on International Agricultural Research (CGIAR) is a collaboration between 15 research centers, the private sector, and other stakeholders Channels US$1 billion each year into developing more productive and resilient crop varieties Benefit-cost ratio of CGIAR crop research was estimated to be at least 2:1, potentially much higher
•
• •
Low Carbon Technology Partnerships Initiative aims to develop Public Private Partnerships to accelerate the deployment of new technologies Work areas include renewable energy, climate-smart agriculture, and energy efficiency in buildings Plan to deliver business-oriented technology road maps at COP21 in Paris
Sources: www.cgiar.org; Raitzer, D.A., and Kelley, T.G., 2008; lctpi.wbcsdservers.org.
19
8. BUSINESS: Drive low-carbon growth through business and investor action
-
Environmental and low-carbon goods market is worth $5.5 trillion. Major oil companies already use internal carbon prices of about $40/T 20
9. AVIATION AND MARITIME: Raise ambition to reduce emissions
-
Policies improving efficiency in shipping are expected to save US$200 billion in fuel costs annually by 2030 There was a 27% difference between the least and most fuelefficient US airlines in 2013 21
10. HFCs: Phase down the use of hydrofluorocarbons
Coca Cola has installed 1 million HFC-free refrigerators; reports a 40% improvement in efficiency since 2000 22
10 recommendations can almost close the 2030 emissions gap Buiness as Business as Usual Usual
69
Cities
3.7
Degraded Land and Forests
6.2 6.5
Clean Energy financing Energy Efficiency
5.7
Carbon Pricing
4.2
Business
1.9
Aviation and Maritime
0.8
HFCs
1.4
Overlap
-9.4
Impact of all Recommendation Impact recommendations
21 (16-26) 42
2 degree 2º Scenario
Gt
0
10
20
30
40
50
Source: New Climate Economy, 2015. Seizing the Global Opportunity: Partnerships for Better Growth and a Better Climate.
60
70
23
Examples around the world show growth decoupling from emissions British Columbia
Sweden GDP +58% Emissions -23%
GDP +8% Emissions -4%
(1990-2013)
(2008-2013)
Denmark GDP +38% Emissions -25%
US RGGI GDP +9.2% Emissions -18% (2009-2013)
(1990-2012)
Brazil GDP +101% Emissions -15% (1990-2013)
EU GDP +45% Emissions -19% (1990-2012)
For the first time in 40 years, in 2014 global GDP grew by 3% while emissions didn't grow 24
New Climate Economy
Download full report, country case studies, and working papers: www.newclimateeconomy.report
Sign up for our mailing list & get in touch: www.newclimateeconomy.net Follow us on social media:
Follow us on Twitter @newclimateecon Find us on Facebook: search New Climate Economy
25
