Economics of global warming

Transcription

1 Economics of global warming Loose reflections on late news Klaus Mohn, Professor University of Stavanger Business School Rogaland Arbeiderpartis klimapanel, Stavanger, 24 November

2 Economics of global warming Loose reflections on late news The global energy situation IEA s WEO 2014 Assumptions and scenarios Climate issues New Climate Economy Drivers of change Strategy and action plan Discussion Implications for national policies and regional policies 2

3 Signs of stress in the global energy system Difficult road ahead Middle East and oil market Capital market tension Mixed climate signals Emissions still rising Cautious optimism for Paris 2015 Prepare for change Policy-based or event-based 3 Source: International Energy Agency.

4 Three scenarios New Policies Scenario Adopted policies and measurs Announced commitments Current Policies Scenario Business as usual baseline Only measures enacted by 2013 No further commitments 450 Scenario Climate policy requirements to limit global warming to 2 C 4 Source: International Energy Agency World Energy Outlook IEA. Paris.

5 Oil price assumptions Oil price assumptions by scenario Gas price assumptions New Policies scenario 5 Source: International Energy Agency World Energy Outlook IEA. Paris.

6 Price assumptions 6 Source: International Energy Agency World Energy Outlook IEA. Paris.

7 World total energy demand by scenario Mtoe 7 Source: International Energy Agency World Energy Outlook IEA. Paris.

8 Energy gravity moves to the East (NP Scenario) 8 Source: International Energy Agency World Energy Outlook IEA. Paris.

9 Energy demand by scenario (M toe) Energy mix 2012 Total: Mtoe Energy mix 2040 Total: Mtoe Coal Oil Gas Nuclear Renewables 9 Source: International Energy Agency World Energy Outlook IEA. Paris.

10 Liftetimes of fossil fuels and uranium resources 10 Source: International Energy Agency World Energy Outlook IEA. Paris.

11 2014 Energy-related CO 2 emissions (Giga tonnes) Giga tonnes 11 Source: International Energy Agency World Energy Outlook IEA. Paris.

12 Implementation of climate policies and carbon emission costs CO 2 price assumptions by region and scenario prices) EU CO 2 price assumptions by scenario prices) Current policies New policies 450 Scenario Source: International Energy Agency World Energy Outlook IEA. Paris.

13 Reduction in CO 2 emissions by region (450 scenario vs NP scenario) Giga tonnes 13

14 Reduction in CO 2 emissions by sector and region Giga tonnes 14 Source: International Energy Agency World Energy Outlook IEA. Paris.

15 Climate policies: Requirements, policies, and measures Global CO 2 emissions NP scenario and 450 scenario compared (Annual emissions; giga tonnes) New Policies Scenario 450 Scenario What will it take? CO 2 abatement efforts and potential by source (%) Activity 2% 2% End use efficiency 18% 13% Power plant efficiency 3% 2% Electricity savings 50% 27% Fuel and technology switching in end uses 2% 3% Renewables 15% 23% Biofuels 2% 4% Nuclear 5% 8% CCS 4% 17% Total (Gt CO 2 ) Source: International Energy Agency World Energy Outlook IEA. Paris.

16 The new climate economy report Three economic systems and key drivers of change The Global Commision of the Economy and Climate Commisioned by seven countries Colombia, Ethiopia, Indonesia, South Korea, Sweden, United Kingdom Work programme conducted by eight research institutes 16 Source: GCEC (2014). Better growth, Better climate: The New Climate Economy Report.

17 The new climate economy report Three economic systems and key drivers of change 17 Source: GCEC (2014). Better growth, Better climate: The New Climate Economy Report.

18 The new climate economy report Specific actions and measures 18 Source: GCEC (2014). Better growth, Better climate: The New Climate Economy Report.

19 The new climate economy report Global action plan 1. Accelerate a low-carbon transformation by integrating climate action and risk into strategic economic decision-making 2. Create the confidence needed for global investment and climate action by entering into strong, lasting, and equitable international climate agreement 3. Phase out subsidies for fossil fuels and agricultural inputs and incentives for urban sprawl 4. Introduce strong, predictable carbon prices as part of good fiscal reform 5. Substantially reduce the capital cost of low-carbon infrastructure investment 6. Scale up innovation in key low-carbon and climate-resilient technologies and remove barriers to entrepreneurship and creativitity 7. Make connected and compact cities the preferred form of urban development 8. Halt the deforestation of natural forests by Restore at least 500 million hectares of lost or degraded forests and agricultural land by Accelerate the shift away from polluting coal-fired power generation 19 Source: GCEC (2014). Better growth, Better climate: The New Climate Economy Report.

20 The new climate economy report Some critical remarks 20 Source: GCEC (2014). Better growth, Better climate: The New Climate Economy Report.

21 All opportunities carry a cost Climate challenge and economic activity Stylised picture Economic activity Successful climate policies No climate policies Time 21

22 Economics of global warming Loose reflections on late news The global energy situation IEA s WEO 2014 Assumptions and scenarios Climate issues New Climate Economy Drivers of change Strategy and action plan Discussion Implications for national policies and regional policies 22