Transcript 幻灯片 1 - Unesco

Bridging climate change
mitigation & economic
development
Li Lailai
Stockholm Environment Institute
Paris, 26 October 2009
Outlines

Global targets urge large joint mitigation
actions.

Current global mitigation mechanism is
insufficient.

Inter-country joint mitigation plan (ICP), an
inclusive mechanism

ICP bridges mitigation and economy
Global targets urge large joint actions
Complexity of mitigation features following facts:

Concentrations of GHG have grown up to over 430ppm
CO2e today, being added at a rate of 2.5ppm per year.

Developed countries are responsible for 70% of carbon
dioxide accumulated in the atmosphere; developing
countries are catching up.

To reduce poverty, developing countries need to speed
up economic development while climate change is
hitting the poor the first and most.
Global targets urge large joint actions

Holding below 500ppm CO2e requires bringing
emissions down to below 20Gt CO2e, around 50%
of 1990 and 2000 levels (Stern 2009).

Given the global population will likely be around 9
billion by 2050, emissions have to be around 2 tons
per person in average.

Large-scaled reduction is needed urgently; joint,
collective actions from developed and developing
countries are the MUST.
Global targets urge large joint actions

Mitigation is estimated to require $100 billion each
year and aggressive dissemination and deployment
of available technologies.

Given the legitimate right of growth for developing
countries, a fundamental solution is the shift of the
pattern of growth toward low carbon.

Questions: Who will finance it, and where is the
money from? How can we bridge climate change
mitigation with shifting to a low carbon economy?
Current global mitigation mechanism
is not effective

CDM is the only mechanism for Annex 1 countries
and non-Annex 1 countries to take joint actions of
emission reduction.

It is marginal in global carbon market, primary
CDM making for 19% in 2006 and 12% in 2007.

Technology transfer is low: great disparity between
the national need of technologies for mitigation and
TT realized through CDM.

“Cap - trade” regime prevents developing countries
from participating in global carbon market.
Current global mitigation mechanism
is not effective – a case of China

China’s 5-year national plan with quantified
targets of reducing 20% energy intensity and 10%
pollution intensity is not recognized by the current
cap-trade regime.

Implementation of such targets in 2 more FYP
periods results in cumulative avoidance of 58.1
GtCO2e and peaks China’s emission b earlier
before 2030 or much earlier depending on the
growth rate without substantial slow down.
20
18
16
w ith 20% in each
of the FYPs
If GDP grows at 10.04% in the
11th FYP, and 7.67% in 12th
and the 13th FYP periods.
12
10
8
If GDP grows at 10%, 7.5%
and 5% respectively
6
4
2
0
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
GtCO2e
14
w ithout any
reduction
If GDP grows at 10%, 6% and
5% respectively
Current global mitigation mechanism
is not effective – a case of China

To meet the targets of “20%+10% energy and pollution
intensity reduction in 2006-2010, China has

Closed small power plants of 25.87 million Kw, production of
cements by 100 million tons, steel by 50 million tons, coke 30
million tons and paper 5 million tons in 2.5 years; invested
21.3 billion in 2006, ￥23.5 billion in 2007 and ￥27 billion in
2008, not counting social costs from unemployment caused.

In 2007, 1000 enterprises spent￥50 billion on technology
updating to fulfill the contracts of energy saving signed with
the Chinese government, in addition to ￥5.56 billion from the
government finance.
Current global mitigation mechanism
is not effective – a case of China

In the current “cap and trade” regime, these targets,
investments and contributions are not recognized,
which if continued would be the largest the climate
change mitigation program in the world.

The reality is that China is doing this alone by itself.
A crucial question is “can China alone afford to
continue this ambitious plan for 2 or 3 more 5-year
periods?” What if not?
Inter-country joint mitigation plan
(ICP)

Given the urgencies of large-scaled joint mitigation
actions, participation of developing country as
MUST, financial flow and technology TT, and so
little hope for a global deal to be agreed,

ICP is proposed as a middle-ground mechanism
that can be put in operation based on bilateral or
multilateral agreements.
Inter-country joint mitigation plan
(ICP)

Under the principle of “common but differentiated
responsibilities”, ICP has 3 pre-conditions:

The national voluntary intensity-based energy saving and
emission reduction targets from developing countries should
be recognised internationally.

Emission reduction targets, technology transfer and financial
flows built into an ICP reflect international monitoring,
reporting and verification (MRV) standards.

An international fund should be set up to fund the ICP.
Inter-country joint mitigation plan
(ICP)

ICP formed by a host (non-annex 1) country and one or
more partner (annex 1) countries.

The host country proposes an ICP featuring its national
intensity-based reduction targets and needs of technology
and finance inviting partner countries for joint
implementation through negotiations to reach agreement.

The results of ICP count toward the emission targets of
the participating countries based on the responsibilities
committed.
Inter-country joint mitigation plan
(ICP)

The partner countries have two to three
basic responsibilities or rights to an ICP:

sharing the targets of emission reduction,

transferring the needed technologies required
for realizing the target, and/or

allocation of finance required for realizing the
target through investment or other forms.
Inter-country joint mitigation plan


Role of an UN body:

In assessing ICP proposals,

To support and facilitate negotiations, and

To evaluate ICP implementation.
Assessment of ICP proposals focusing on

Targets, joint actions of delivery, responsibilities
and commitments, resources required, milestones
and benchmarks for monitoring and evaluation.
ICP bridges mitigation and economy –
incentives for participation

For host countries:

ICP places in the centre the national interests of
sustainable development strategy, from which emission
reduction targets are drawn.

ICP applies to particular sector, resulting in a shift to low
carbon industrial sector through technology progress and
infrastructure upgrading, in addition to emission reduction.

Operation of ICP enhances the capacity of economic
coordination, which will benefit the economic
development in a long run.
ICP bridges mitigation and economy
– incentives for participation


For partner countries: they gain

Low reduction costs in the host country

Large technology markets in the host country

Long-term leverage on CO2 emissions reduction with joint
research for new technology demonstration programs
For both sides:

Operated transparently, the results of emission reduction,
technology transfers and financial flows are measured,
reported and verified.
ICP bridges mitigation and economy
– incentives for financial flow

Open policies and market incentives in the host
countries will attract needed technologies and
investment, supporting an ICP – China’s 30 year
reform.

Chain’s GDP soared from about USD$52 billion in
1978 to USD$3615 billion in 2007.

During 1979-2007, use of foreign capital in China
reached $138.7 billion, of which FDI account for
about $111 billion invested in 632298 projects.
ICP bridges mitigation and economy
– incentives for technology transfer

By 2005, 750 R&D centres had been set up by
foreign companies in China (Jiang X, 2007).

The percentage of foreign companies doing so
increased from 6.7% in 2000 to 17.1% in 2007.

61.8% of transnational corporations selected China
as their overseas R&D locations during 2005-2009
(UNCTAD).
It is not just the costs of in-action but opportunities of
actions that will convince the actions. ICP provides them.
Thanks
Lessons from CDM: 55% of the projects
>100,000tCO2e
Projects by
scales (million
tCO2e)
%
Estimated
annual tCO2e
reduced
%
3
0.19%
31,358,570
9.64%
1-9.99
37
2.38%
93,840,466
28.85%
0.5-0.99
58
3.73%
40,974,773
12.60%
0.1-0.49
599
38.55%
115,151,841
35.41%
0.05-09
402
25.87%
28,929,069
8.90%
<0.05
455
29.28%
14,970,865
4.60%
Total
1554
100%
325,225,583
100%
# of
projects
>10
Lessons from CDM: Technology
transfer level is very low
# of
projects
% of
projects
Estimated
annual tCO2e
reduced
% of tCO2e
reduced
Hydro
803
72.67%
83462645
62.73%
Wind
237
21.45%
27,342,691
22.57%
49
4.43%
9,401,993
7.76%
Power from
methane
5
0.45%
238,570
0.20%
Wastes to
electricity
8
0.72%
936,230
0.49%
Solar stove
3
0.27%
107,461
0.09%
1105
100.00%
121,151,000
100.00%
Types of new or
renewable energy
Bio mass
Total
Lessons from CDM: One time deal at
company level
Estimated annual
tCO2e reduced
%
Carbon funds, dealers or traders
218,170,545
67.08%
Banks or financial institutions
58,344,639
17.94%
Energy or power companies
44,744,010
13.76%
One-side projects
2,902,295
0.89%
Governments
1,064,094
0.33%
325,225,583
100%
CDM buyers
Total
Lessons from CDM: it is marginal in global
market
2005
Volume
(MtCO2e)
2006
Value
(MUS$)
Volume
(MtCO2e)
2007
Value
(MUS$)
Volume
(MtCO2e)
Value
(MUS$)
Allowances
EU ETS
321
7,908
1,104
24,436
2061
50097
New South Wales
6
59
20
225
25
224
Chicago Climate
Exchange
1
3
10
38
23
72
UK-ETS
0
1
na
na
328
7,971
1,134
24,699
2,109
50,394
Sub total
Project-based transactions
Primary CDM
341
2,417
537
5,804
551
7426
Secondary CDM
10
221
25
445
240
5451
JI
11
68
16
141
41
499
Other compliance
20
187
33
146
42
265
Sub total
382
2,894
611
6,536
874
13,641
TOTAL
710
10,864
1,745
31,235
2,983
64,035

Thirty years after the trip, the average annual disposable income of
Chinese urban residents grew 6.5 times from 343 yuan (50.4 U.S.
dollars) in 1978 to 13,786 yuan in 2007.

Over the past 30 years, China has maintained an average annual
GDP growth rate of 9.8 percent, more than three times the world
average, President Hu said.

Gross domestic product (GDP) soared from a mere 360 billion yuan
(about 52 billion U.S. dollars) in 1978 to 24.95 trillion yuan in 2007,
making China the world's fourth-largest economy.

The country's poor population was reduced from 250 million in 1978
to 14.79 million in 2007.

The President said China's GDP had soared from more than 360
billion yuan (about 52 billion U.S. dollars) in 1978 to 24950 billion
yuan in 2007, making China become the world's fourth largest
econom