Transcript FE per capita [GJ] - Potsdam Institute for Climate Impact Research

Is there a mitigation trap?
Lessons learnt so far and next steps
Jan Steckel and Michael Jakob
Potsdam Institute for Climate Impact Research
April 20, 2012
Leapfrogging can currently not be observed
Energy 1971 - 2005
Developing countries
OECD countries
Emissions 1971 - 2005
Stronger
coupling of
growth and
energy
Weaker
coupling of
growth and
energy
Developing countries
OECD countries
Stronger
coupling of
growth and
emissions
Weaker
coupling of
growth and
emissions
‚Decoupling‘ should not be expected for
developing countries in the near to midterm
(Jakob et al. 2012)
Newly Industrializing Countries‘ growth drive emissions
Global emissions by countries/regions
Contributions to net annual emissions growth coming from
different characteristic factors [all in %]
Slower energy efficiency improvements and a
growth surge, not necessarily carbonisation,
explain China’s explosion of emissions
China’s large contribution
to recent global
emissions growth
(Steckel et al. 2011)
Steckel et al. (submitted to EcolEcon)
Energy thresholds
Threshold at around 40 GJ per capita
10 GJ per capita can be explained by subsidiary needs
10 – 20 GJ per capita can be explained by infrastructure needs
Cement
Steel
Climate Finance Curse
Climate Finance Range
[% of GDP]
Data
Resource Exports, FDI: Year 2009
Aid: Year 2008
ETS: ReMIND scenario Year 2020
Implications
Do developing countries face a tri-lemma?
1. Impacts of climate change most severe in developing countries
even though they are not responsible
2. Mitigation policy has the potential to delay their development
3. Compensation based on equity principles is difficult
Further ideas
- Threshold effects known to cause trap-like behaviour
- Understanding of nature of threshold essential
- Threshold externalities of energy at low development levels and
interrelation to emissions needs to be further understood
- Reasons for traps: special role of energy in development
processes (increasing returns to scale at low levels)
- Definition of trap not necessarily consistent, in any case, a delay
in development seems to be possible which is equally
inacceptable for developing countries
“Mitigation trap“ in a Solow model
Production function:
Y    k
[$]
Capital formation:

k  k  s(k )  Y  k
K0 KC
In the case of climate policy:
β decreases
The trap gets more likely in the
presence of climate policy in the
form of βK(s) [Independent from
the form of the function s(k)]
The resource curse in a coaltion model
-
MICA: Model of International
Climate Agreements
(Lessmann et al., 2009)
-
The creation and stability of a
coalition depends on the
regions‘ resulting welfare
welfare = discounted
consumption
-
Including a resource curse in
MICA changes welfare values
Example region: India
Production
Consumption
 Effect on coalition stability
Nahmmacher, Kornek, Lessmann, Steckel (in preperation)
Thank you very much!
Questions and discussion
http://www.pik-potsdam.de/members/jakob
http://www.pik-potsdam.de/members/steckel
Additional Slides
140
Cat 1+2
2050
80
Cat 1+2
2050
Cat 1+2
2030
Cat 3+4
2050
Cat 3+4
2030
Baseline
2050
Baseline
2030
FE per capita [GJ]
30
Cat 1+2
2030
100
Cat 3+4
2050
120
Cat 3+4
2030
140
Baseline
2050
Annex I
100
FE per capita [GJ]
Cat 1+2
2050
Cat 1+2
2030
Non Annex I
Baseline
2030
Cat 1+2
2050
160
Cat 1+2
2030
Cat 3+4
2050
Cat 3+4
2030
Baseline
2050
Baseline
2030
FE per capita [GJ]
55
50
45
40
35
30
25
Cat 3+4
2050
Cat 3+4
2030
Baseline
2050
Baseline
2030
FE per capita [GJ]
Model results
India
25
20
15
Europe
120
80
12
Energy and Infrastructure
• Investments and GDP are
highly significant for steel
and cement in developing
countries
• In OECD countries both
are less or not significant
•Population is also
important factor for both
inputs in developing
countries
•In OECD countries
population is only a
significant driver for cement
• R² are better for cement,
might be due to trade
patterns
Projections of Energy for Infrastructure
Decomposing Scenarios
BAU
450ppm CO2
China‘s role in global mitigation efforts
Energy and Infrastructure
• Investments and GDP are
highly significant for steel
and cement in developing
countries
• In OECD countries both
are less or not significant
•Population is also
important factor for both
inputs in developing
countries
•In OECD countries
population is only a
significant driver for cement
• R² are better for cement,
might be due to trade
patterns
Why is this important ?
GDP per capita [$]
BAU
$50
$30
$10
Final Energy per capita [GJ]
Aspects of development are usually not included into state of
the art energy-economy models (such as ReMIND by PIK)!
Mitigation costs might be underestimated.
India’s production and consumption without resource curse
350
300
250
200
domestic
production
w/o RC
150
100
50
2195
2185
2175
2165
2155
2145
2135
2125
2115
2105
2095
2085
2075
2065
2055
2045
2035
2025
2015
2005
0
120
100
80
w/o RC
60
HR w/o RC
CAP w/o RC
40
20
Emission trading and the resource curse
2195
2185
2175
2165
2155
2145
2135
2125
2115
2105
2095
2085
2075
2065
2055
2045
2035
2025
2015
0
2005
consumption
19
India’s production and consumption with resource curse
350
300
250
w/o RC
200
domestic
production
HR w RC
150
CAP w RC
100
50
2195
2185
2175
2165
2155
2145
2135
2125
2115
2105
2095
2085
2075
2065
2055
2045
2035
2025
2015
2005
0
120
100
HR w/o RC
60
HR w RC
CAP w/o RC
40
CAP w RC
20
Emission trading and the resource curse
2195
2185
2175
2165
2155
2145
2135
2125
2115
2105
2095
2085
2075
2065
2055
2045
2035
2025
2015
0
2005
consumption
w/o RC
80
20