Transcript Sustainability perspectives

Sustainability
perspectives:
technology, trade
and policy
Lecture 1 and L4
Issues
• Sustainability perspectives
• Capital based view
• Efficiency view
• Sustainable consumption and production
• Ecological tax reforms
Prof. Mazzanti – [email protected]
Sustainability
Development and capital accumulation
Decoupling from economic growth and resource efficiency
(dynamic) Resilience
Sustainable consumption and production
 Economics, Ethics, Technology, Policy…
Social and environmental Policy
targets
• EU 2030 targets for climate change: 40% cut in CO2 emissions
with respect to 1990.
• EU 2050 targets: 90% cut with respect to 1990
• Waste framework Directive
• Waste reduction. Not only recycling!
• R&D 3% of GDP
• … + Unemployment (by gender, age..)!
• Those are some key sustainability socio Economic targets
Capital based economic view
SUSTAINABLE SOCIETY IS AN ‘INVESTING
SOCIETY’
Capital shares at different income levels
human
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
manmade
natural
intangible
low income
medium income
income level
natural
high income
Man made
• The key role of Human capital for
development
• Intrinsic trade off to manage
• How to invest the income we get out of
Natural resources to create human
capital and knowledge
Holland vs Kenya capital stocks shares of
wealth
• Holland
• 78% Human capital + institutions
• Of which 36% schooling; 57% institutions, property rights
• 3% natural capital (of which 57% land)
• 19% produced man made capital
• Kenya
• 46% natural capital (1/2 crops)
• 13% man made
• 42% intangible including human capital
Ghana – decomposition of genuine
saving (2000)
Gross saving
Gross + education
minus depreciation
minus forest depletion
minus mineral depletion
minus CO2 = Adj Net Saving
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
% of GNI
SD  What matters is to accumulate an increasing
stock of total capital forms
• At the end of the day, we are
sustainable if we transfer to the next
generation a unit more of tangible
and intangible capital
• Capital derives from investments
• GDP = Consumption + Investments
Savings and accumulation
• Y=C+I
• I = S = ∆K
saving and accumulation (both Keynesian Harrod
Domar and Solow Model)
• ∆Kt = Kt – Kt-1
• SUSTAINABILITY RULE
• TOTAL CAPITAL T+1 ≥ TOTAL CAPITAL T, THUS
• ∆K >0 for any t
• GIVEN THAT K IS ASSOCIATED WITH AN INTRINSIC DEPRECIATION RATE α
• ∆K >0 if I=S > α
•
•
•
•
α
Constrains and defined whether an economy is sustainable
α
Makes necessary a given flow of I, which defines the
maximum C generation T can experience
• Weak Sustainability – the rule is applied on TOTAL CAPITAL
• Strong Sustainability – Rule eventually applied to critical
NATURAL capital (no substitution after a threshold e.g.
Amazon forest, species stock….)
SUSTAINABLE SOCIETY IS AN
‘INVESTING SOCIETY’
Investments moves societies into the
future….often difficult given social myopia
(Tiranny of the present)
World Bank (data)
• http://www.worldbank.org/en/news/feature/2013/06/05/acc
urate-pulse-sustainability
Efficiency view
(efficient
growth)
low-carbon economy requires a radical transformation…2050 EU
targets…
- 78-82%
- 93-99%
- 83-87%
- 42-49%
- 54-67%
- 88-91%
Source: Roadmap Impact Assessment SEC(2011) 288
May 2014
16
… but current policies are not equipped to deliver this transformation
Source: “A Roadmap for moving to a competitive low carbon economy in 2050” COM(2011)112
May 2014
Matthias Duwe, Ecologic Institute - Lessons from the current policy mix
17
MSW generation and landfilling
in the EU-27
Million tonnes waste
250
200
150
100
50
Municipal Solid Waste generation/landfilling
(million tonnes)
300
His torical
350
Projected
300
250
Estimated
recycling
Municipal W aste
generation
200
150
Incineration
100
Municipal W aste
landfilling
50
Estimated
landfill of BMW
Landfill
0
1980
1985
1990
1995
2000
Year
2005
2010
2015
2020
0
Note: Figures from 1980-2004 are data from Eurostat.
1980
1985
1990
1995
2000 BMW
2005
2010
2015
2020
Figures from 2005-2020
are
projections.
= biodegradable
municipal
waste.
Source:
EEA (2007).
Year
We do need strong tech and
behavioral driven efficiency to
reduce waste and Co2
6.500
0,31
6.000
0,29
5.500
0,27
5.000
0,25
4.500
0,23
4.000
0,21
3.500
0,19
3.000
0,17
2.500
0,15
2.000
CO2 emission intensity of GDP
GDP per capita (1990 International Geary-Khamis dollars)
Efficiency was not enough.. CO2 still increasing worldwide…
More efficient… but Growth scale effect dominates
GDP per capita
0,33
19
5
19 0
5
19 2
5
19 4
5
19 6
5
19 8
6
19 0
6
19 2
6
19 4
6
19 6
6
19 8
7
19 0
7
19 2
7
19 4
7
19 6
7
19 8
8
19 0
8
19 2
8
19 4
8
19 6
8
19 8
9
19 0
9
19 2
9
19 4
9
19 6
9
20 8
00
000 metric tons of C per million $
CO2 emission per unit of GDP
CO2 emission intensity of GDP and GDP per capita: World, 1950-2000
IPAT framework
• In the IPAT Identity, technological progress T is the factor,
which compensates for population P and affluence A (scale)
effects on I (environmental impact).
• I= POP*A/POP*I/A=I
• I/A =Tech
STIRPAT
• Stochastic IPAT to be econometrically estimated
• Marin, G. & Mazzanti, M., 2013. The evolution of
environmental and labor productivity dynamics. Journal of
Evolutionary Economics, 23(2), pp.357–399.
• Martinez-Zarzoso, I., Bengochea-Morancho, A. & Morales Lage,
R., 2007. The Impact of Population on CO2 Emissions: Evidence
from European Countries. Environmental and Resource
Economics, 38, pp.497–512.
100
80
60
40
20
1990
1995
2000
year
CO2/L
SOx/L
Italian industry emissions
2005
NOx/L
2010
Delinking and Kuznets curves
(specific lecture 13!)
Turning point
Environ
mental
pressure
Policy
effect?
Absolute
delinking
Relative
delinking
Re-coupling (not
relevant for
waste)
(if any)
Economic drivers
.8
1
1.2
1.4
North America and Oceania, CO2 trends
.6
lco2pc
fitted_ramp93
fitted_ramp97
1960
1970
1980
year
fitted_step93
fitted_step97
1990
2000
EU south – CO2 trends
0
.5
1
Mazzanti & Musolesi 2014, Studies in non linear dynamic and econometrics
-.5
lco2pc
fitted_ramp93
fitted_ramp97
1960
1970
1980
year
fitted_step93
fitted_step97
1990
2000
1.2
EU North - CO2 trends
.9
1
1.1
Oil shocks? Policies?
.8
Growth
period
.7
lco2pc
fitted_ramp93
fitted_ramp97
1960
1970
1980
year
fitted_step93
fitted_step97
1990
2000
20
15
10
5
0
1970
1980
1990
year
Low
Medium-high
2000
2010
Medium-low
High
20
15
10
5
Figure 2 - CO2 emissions by technology classes
(UNIDO categories)
0
average co2 emission by technology level
Figure 1 – CO2 emissions by income level (World Bank categories)
1970
1980
1990
year
Low tech.
High tech.
Mazzanti et al. UNIDO Report, forth.
Medium tech.
2000
2010
30
20
10
0
1970
1980
1990
Year
Low tech.
High tech
2000
2010
Medium tech
0
5
10
15
20
Figure 5 – Environmental productivity (VA/CO2) by technology classes (UNIDO categories)
1970
1980
1990
Year
Low income countries
Medium-high income countries
2000
Medium-low income countries
High income countries
2010
Policy  (green) technological development
TECHNOLOGY AND POLICY
• Grafico waste da oecd
Kyoto?
A key Policy: environmental taxes (Polluter pays principle)
Carbon taxes, landfill and emission taxes,
resource taxes..
! 0.1% of
GDP!
1992 Delors white Book (chapter on Ecological tax reforms)!
25-30B€ potential revenue to be used to fund public goods, cut
labor taxes, etc..
.9
1
1.1
1.2
EU North - CO2 trends
.8
Growth
period
.7
lco2pc
fitted_ramp93
fitted_ramp97
1960
1970
1980
year
fitted_step93
fitted_step97
1990
2000
But…
• Some emissions of the EU might
be ‘exported’
• Delocalisation of production
• ‘natural’ fact of economic
development
Economic, ethics and policy
meets
Who’s responsible for the
emissions?
Sustainable Consumption
and Production Issue
• Marin, G., Mazzanti, M. & Montini, A., 2012. Linking NAMEA
and Input output for “consumption vs. production
perspective” analyses. Evidence on emission efficiency and
aggregation biases using the Italian and Spanish
environmental accounts. Ecological Economics, 74, pp.71–84.
• A North ‘versus’ South approach does not help
• Sharing responsibility
• Sharing knowledge (autarchy is not a solution)
• Taking into account that countries are on different
development stages
RESILIENCE
• The green economy targets are shocks..
• … additional to the 2009 economic downturn…
• Firms and institutions may proactively react..leader and
laggards.. One risk along the eventual sustainable transition
is to increase gaps
• Across sectors, regions, states….
• Economic, innovation and environmental differences
• We ve to manage the transition and tackle divergences, ‘natural’
but problematic if irreversible and not temporary
Eco Innovation to abate CO2 in the EU
0.4500
0.4000
0.3500
0.3000
0.2500
ECOCO
0.2000
0.1500
0.1000
0.0500
0.0000
0.0%
R&D
0.5%
1.0%
1.5%
Are EU countries diverging?
2.0%
2.5%
3.0%
3.5%
4.0%
Recycling per capita
(kg, 2008)
(Irreversible)
divergences?
Hot spots…
Ecological tax reforms
ECOLOGICAL TAX REFORMS AS POLICY SHOCKS TO SPUR
SUSTAINABILITY AND GROWTH BY INNOVATION
EU south
0
.5
1
Co2 trends and TIME RELATED EVENTS
-.5
lco2pc
fitted_ramp93
fitted_ramp97
1960
1970
1980
year
fitted_step93
fitted_step97
1990
2000
.8
1
1.2
1.4
North america and Oceania
.6
lco2pc
fitted_ramp93
fitted_ramp97
1960
1970
1980
year
Mazzanti & Musolesi FEEM paper 2010
fitted_step93
fitted_step97
1990
2000
1.2
Co2 trends, EU North
.8
.9
1
1.1
ETR? In
Scandinavia,
UK, Holland..
.7
lco2pc
fitted_ramp93
fitted_ramp97
1960
1970
1980
year
fitted_step93
fitted_step97
1990
2000
After 1995, env policy in the EU did not hamper exports, often there is a + correlation…
Costantini & Mazzanti, 2011, Research Policy
Ecological tax reforms ETR
• Shift fiscal burden from labour to ‘things’ and assets
• Carbon tax and other taxes may generate 2-3% GDP in
revenue
• Andersen et al. (EEA) Estimate overall 35 billions in Italy (event on
ETR next week at the Treasury!)
• (false) problems
– Inflationary?
– Regressive? (VAT..)
– Reduce competitiveness….
Energy intensity
110
105
100
95
EU (27 countries)
Germany
90
France
85
Italy
80
United Kingdom
75
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
70
GHG
110
105
100
EU (27 countries)
95
Germany
90
France
85
Italy
80
United Kingdom
75
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
70
GERD total
2.75
2.55
2.35
2.15
EU (27 countries)
1.95
Germany
France
1.75
Italy
United Kingdom
1.55
1.35
1.15
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
0.95
Two options
 Labour oriented reycling
 Increase labor demand of
unskilled and young
through cuts.
 Not a long run growth fact
 Innovation oriented
reycling.
 Energy efficiency stimulus
 Through creation of trusts
and funds that finance
innovation
 General technological
innovation (recyling on the
basis of energy use..) or ex
ante defining the type
(tender on specific issues)?
A paradise for ETR
implementation !
Fiscal stimulus is needed!!
!!!!!
•Total environmental and energy taxes (% GDP); source: Eurostat
•Share of GDP, total Energy taxes
•Share of GDP, environmental & resource taxes
ETR: national and decentralised levels
 National levels of taxation (Sox, Co2 taxes on non ETS sectors, ETS
auctioning)
 Regional and local levels
 Landfill taxes, PM taxes, water resource taxes,
other resource taxes on minerals, aggregates…
 They could abate IRAP, the ‘hated’ regional tax on
economic activity, around 30 billions
 Issue of ‘Resource taxation reform’ RTR
Environmental externalities still at the heart of
ETR rationale
• Muller, Mendelshon,
• Transport, energy,
Nordhaus (2011),
agriculture, much more
Environmental Accounting
pollution intensive than
for Pollution in the US
manufacturing (very
economy, AER, 1649-75.
low in E/VA: 0.01 vs 0.1
• Definition of gross and net
transport)
external damages
• Transport and
• Gross external damage of
US economy 182 billions $
manufacturing both
• Net external damage (GED –
account 10% of total
regulation costs, tax
•
Intuitive
figure
for
Italy:
payments)
20-25 Billions €.
EEA report 2011 on air pollution costs in
the EU
• ‘Revealing the costs of air pollution from
industrial facilities in Europe’
• 10000 facilities generate between 102169 billions € of damages (health and
environment)
• 50% caused by 191 sites out of 10000
(easier policy making)
• www.eea.europa.eu