Cost of stabilizing climate much less than claimed
Cost of stabilizing climate 0.1% per year
mongabay.com
May 4, 2007
The Intergovernmental Panel on Climate Change (IPCC) released its long awaiting installment on climate change mitigation, arguing that the costs of offsetting global warming will be much lower than some claim. The IPCC estimates that emissions can be reduced rapidly using existing technology at a cost of 3 percent of GDP, or 0.12 percent per year over the next 25 years, though new technologies could further reduce this cost. While the projections are encouraging, they may be conservative. Some analysts, including the well-respected Amory Lovins of the Rocky Mountain Institute, have calculated that emissions targets that would stabilize the climate could be achieved at no net cost and possibly even a profit. Even McKinsey & Company, a leading management consulting firm, agrees, putting the net cost of reducing emissions by 46 percent at zero.
The new report states that greenhouse gas emissions must start declining by 2015 if the increase in global average temperature is to be capped at 2—2.4 degrees Celsius, the level which scientists say could be a tipping point for rapid environmental change including melting ice sheets, rising sea levels, shifts in ocean currents and wind patterns, and die-off of the Amazon rainforest.
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To meet the goals, the report recommends improvements in energy efficiency, taxes on carbon emissions, incentives for greener buildings and cars, reduction in deforestation and changes in land use, use of carbon storage and sequestration, and switching from fossil fuels to biofuels, renewable energy, and nuclear energy.
Reports from the negotiations indicate that China was particularly vocal in voicing concerns about the IPCC report. China, with the support of Brazil and India, wanted to relax emissions limits for developing countries, arguing that it was unfair to its impede economic growth by such restrictions. It noted that developed countries have been allowed to grow unhindered by regulations since the Industrial Revolution and that current climate problems are largely the result of their pollution, not that of developing countries.
The report noted that greenhouse gas emissions rose 70 percent between 1970 and 2004, including a 120 percent rise in emissions from transport, 65 percent from industry, and 40 percent from land use, land use change, and forestry. Emissions from agriculture grew by 27 percent between 1970 and 1990.
On a positive note, the report states that global energy intensity has improved steadily since 1970 meaning that today, significantly less carbon is used to produce a dollar of economic output than in 1970.
Quotes from the report, regarding approaches to reducing emissions:
Changes in lifestyle and behaviour patterns can contribute to climate change mitigation across all sectors. Management practices can also have a positive role. (high agreement, medium evidence)
- Lifestyle changes can reduce GHG emissions. Changes in lifestyles and consumption patterns that emphasize resource conservation can contribute to developing a low-carbon economy that is both equitable and sustainable
- Education and training programmes can help overcome barriers to the market acceptance of energy efficiency, particularly in combination with other measures.
- Changes in occupant behaviour, cultural patterns and consumer choice and use of technologies can result in considerable reduction in CO2 emissions related to energy use in buildings .
- Transport Demand Management, which includes urban planning (that can reduce the demand for travel) and provision of information and educational techniques (that can reduce car usage and lead to an efficient driving style) can support GHG mitigation .
- In industry, management tools that include staff training, reward systems, regular feedback, documentation of existing practices can help overcome industrial organization barriers, reduce energy use, and GHG emissions .
8. While studies use different methodologies, in all analyzed world regions near-term health co-benefits from reduced air pollution as a result of actions to reduce GHG emissions can be substantial and may offset a substantial fraction of mitigation costs (high agreement, much evidence).
- Including co-benefits other than health, such as increased energy security, and increased agricultural production and reduced pressure on natural ecosystems, due to decreased tropospheric ozone concentrations, would further enhance cost savings.
- Integrating air pollution abatement and climate change mitigation policies offers potentially large cost reductions compared to treating those policies in isolation
7. Changes in lifestyle and behaviour patterns can contribute to climate change mitigation across all sectors. Management practices can also have a positive role. (high agreement, medium evidence) - Lifestyle changes can reduce GHG emissions. Changes in lifestyles and consumption patterns that emphasize resource conservation can contribute to developing a low-carbon economy that is both equitable and sustainable .
- Education and training programmes can help overcome barriers to the market acceptance of energy efficiency, particularly in combination with other measures.
- Changes in occupant behaviour, cultural patterns and consumer choice and use of technologies can result in considerable reduction in CO2 emissions related to energy use in buildings .
- Transport Demand Management, which includes urban planning (that can reduce the demand for travel) and provision of information and educational techniques (that can reduce car usage and lead to an efficient driving style) can support GHG mitigation .
- In industry, management tools that include staff training, reward systems, regular feedback, documentation of existing practices can help overcome industrial organization barriers, reduce energy use, and GHG emissions .
8. While studies use different methodologies, in all analyzed world regions near-term health co-benefits from reduced air pollution as a result of actions to reduce GHG emissions can be substantial and may offset a substantial fraction of mitigation costs (high agreement, much evidence).
- Including co-benefits other than health, such as increased energy security, and increased agricultural production and reduced pressure on natural ecosystems, due to decreased tropospheric ozone concentrations, would further enhance cost savings
- Integrating air pollution abatement and climate change mitigation policies offers potentially large cost reductions compared to treating those policies in isolation.
9. Literature since TAR confirms that there may be effects from Annex I countries action on the global economy and global emissions, although the scale of carbon leakage remains uncertain (high agreement, medium evidence).
- Fossil fuel exporting nations (in both Annex I and non-Annex I countries) may expect, as indicated in TAR23, lower demand and prices and lower GDP growth due
to mitigation policies. The extent of this spill over24 depends strongly on assumptions related to policy decisions and oil market conditions. - Critical uncertainties remain in the assessment of carbon leakage25. Most equilibrium modelling support the conclusion in the TAR of economy-wide leakage from Kyoto action in the order of 5-20%, which would be less if competitive low-emissions technologies were effectively diffused
10. New energy infrastructure investments in developing countries, upgrades of energy infrastructure in industrialized countries, and policies that promote energy security, can, in many cases, create opportunities to achieve GHG emission reductions compared to baseline scenarios. Additional co-benefits are country-specific but often include air pollution abatement, balance of trade improvement, provision of modern energy services to rural areas and employment (high agreement, much evidence).
- Future energy infrastructure investment decisions, expected to total over 20 trillion US$26 between now and 2030, will have long term impacts on GHG emissions, because of the long life-times of energy plants and other infrastructure capital stock. The widespread diffusion of low-carbon technologies may take many decades, even if early investments in these technologies are made attractive. Initial estimates show that returning global energy-related CO2 emissions to 2005 levels by 2030 would require a large shift in the pattern of investment, although the net additional investment required ranges from negligible to 5-10%
- It is often more cost-effective to invest in end-use energy efficiency improvement than in increasing energy supply to satisfy demand for energy services. Efficiency improvement has a positive effect on energy security, local and regional air pollution abatement, and employment .
- Renewable energy generally has a positive effect on energy security, employment and on air quality. Given costs relative to other supply options, renewable electricity, which accounted for 18% of the electricity supply in 2005, can have a 30-35% share of the total electricity supply in 2030 at carbon prices up to 50 US$/tCO2-eq
- The higher the market prices of fossil fuels, the more low-carbon alternatives will be competitive, although price volatility will be a disincentive for investors. Higher priced conventional oil resources, on the other hand, may be replaced by high carbon alternatives such as from oil sands, oil shales, heavy oils, and synthetic fuels from coal and gas, leading to increasing GHG emissions, unless production plants are equipped with CCS
- Given costs relative to other supply options, nuclear power, which accounted for 16% of the electricity supply in 2005, can have an 18% share of the total electricity
supply in 2030 at carbon prices up to 50 US$/tCO2-eq, but safety, weapons proliferation and waste remain as constraints - CCS in underground geological formations is a new technology with the potential to make an important contribution to mitigation by 2030. Technical, economic and regulatory developments will affect the actual contribution.
11. There are multiple mitigation options in the transport sector28, but their effect may be counteracted by growth in the sector. Mitigation options are faced with many barriers, such as consumer preferences and lack of policy frameworks (medium agreement, medium evidence).
- Improved vehicle efficiency measures, leading to fuel savings, in many cases have net benefits (at least for light-duty vehicles), but the market potential is much lower than the economic potential due to the influence of other consumer considerations, such as performance and size. There is not enough information to assess the mitigation potential for heavy-duty vehicles. Market forces alone, including rising fuel costs, are therefore not expected to lead to significant emission reductions [5.3, .
- Biofuels might play an important role in addressing GHG emissions in the transport sector, depending on their production pathway. Biofuels used as gasoline and diesel fuel additives/substitutes are projected to grow to 3% of total transport energy demand in the baseline in 2030. This could increase to about 5-10%, depending on future oil and carbon prices, improvements in vehicle efficiency and the success of technologies to utilise cellulose biomass
- Modal shifts from road to rail and inland waterway shipping and from low-occupancy to high-occupancy passenger transportation29, as well as land-use, urban planning and non-motorized transport offer opportunities for GHG mitigation, depending on local conditions and policies
- Medium term mitigation potential for CO2 emissions from the aviation sector can come from improved fuel efficiency, which can be achieved through a variety of means, including technology, operations and air traffic management. However, such improvements are expected to only partially offset the growth of aviation emissions. Total mitigation potential in the sector would also need to account for non-CO2 climate impacts of aviation emissions
- Realizing emissions reductions in the transport sector is often a co-benefit of addressing traffic congestion, air quality and energy security .
12. Energy efficiency options for new and existing buildings could considerably reduce CO2 emissions with net economic benefit. Many barriers exist against tapping this potential, but there are also large co-benefits (high agreement, much evidence).
- By 2030, about 30% of the projected GHG emissions in the building sector can be avoided with net economic benefit .
- Energy efficient buildings, while limiting the growth of CO2 emissions, can also improve indoor and outdoor air quality, improve social welfare and enhance energy security [6.6, .
- Opportunities for realising GHG reductions in the building sector exist worldwide. However, multiple barriers make it difficult to realise this potential. These barriers include availability of technology, financing, poverty, higher costs of reliable information, limitations inherent in building designs and an appropriate portfolio of policies and programs
- The magnitude of the above barriers is higher in the developing countries and this makes it more difficult for them to achieve the GHG reduction potential of the building sector .
13. The economic potential in the industrial sector is predominantly located in energy intensive industries. Full use of available mitigation options is not being made in either industrialized or developing nations (high agreement, much evidence).
- Many industrial facilities in developing countries are new and include the latest technology with the lowest specific emissions. However, many older, inefficient facilities remain in both industrialized and developing countries. Upgrading these facilities can deliver significant emission reductions
- The slow rate of capital stock turnover, lack of financial and technical resources, and limitations in the ability of firms, particularly small and medium-sized enterprises, to access and absorb technological information are key barriers to full use of available mitigation options .
14. Agricultural practices collectively can make a significant contribution at low cost to increasing soil carbon sinks, to GHG emission reductions, and by contributing biomass feedstocks for energy use (medium agreement, medium evidence).
- A large proportion of the mitigation potential of agriculture (excluding bioenergy) arises from soil carbon sequestration, which has strong synergies with sustainable agriculture and generally reduces vulnerability to climate change.
- Stored soil carbon may be vulnerable to loss through both land management change and climate change
- Considerable mitigation potential is also available from reductions in methane and nitrous oxide emissions in some agricultural systems
- There is no universally applicable list of mitigation practices; practices need to be evaluated for individual agricultural systems and settings .
- Biomass from agricultural residues and dedicated energy crops can be an important bioenergy feedstock, but its contribution to mitigation depends on demand for bioenergy from transport and energy supply, on water availability, and on requirements of land for food and fibre production. Widespread use of agricultural land for biomass production for energy may compete with other land uses and can have positive and negative environmental impacts and implications for food security
15. Forest-related mitigation activities can considerably reduce emissions from sources and increase CO2 removals by sinks at low costs, and can be designed to create synergies with adaptation and sustainable development (high agreement, much evidence)
- About 65% of the total mitigation potential (up to 100 US$/tCO2-eq) is located in the tropics and about 50% of the total could be achieved by reducing emissions from deforestation .
- Climate change can affect the mitigation potential of the forest sector (i.e., native and planted forests) and is expected to be different for different regions and sub-regions, both in magnitude and direction .
- Forest-related mitigation options can be designed and implemented to be compatible with adaptation, and can have substantial co-benefits in terms of employment, income generation, biodiversity and watershed conservation, renewable energy supply and poverty alleviation
16. Post-consumer waste is a small contributor to global GHG emissions (
