Transcript Chris Dodwell presentation

The Golden Age of Global Low Carbon
Policy Making?
Chris Dodwell
Knowledge Leader – International Climate & Energy
UKELA – Climate Change and Energy Working Group
Climate Change and Energy – Science, Law and Politics
24 April 2012
Leading Global Environmental Consultancy
AEA delivers over $120 million annually of energy, environmental, transportation,
and climate policy support and program implementation services to:
UK Government
US Government
European Commission
International Institutions
…. energy efficiency, clean energy, transport, GHG inventories, air quality, carbon
management, climate change strategies, adaptation, resource management ….
OUTLINE
•
Global challenges: climate, energy, investment
•
Policy responses: economic signals & risk reduction
mechanisms
•
Role of international climate regime
•
UK policy response
•
Application of lessons learned
Inaction is not an option
2020 action: significant but not enough
1. Implementing 2020 pledges is vital
2. Action before 2020 must be strengthened
3. Policy and investment groundwork for post-2020 reductions must be laid
UNEP Bridging the Gap 2011
IEA World Energy Outlook 2011
Investment challenge: redirecting “investment as usual”
• IEA ETP Baseline scenario requires investment between 2010 and 2050 of
US$270 trillion
•Total investment requirements under ambitious scenario increase by 17% to
US$317 trillion
• IEA: Annual investment in low carbon $750b by 2030, to £1.6t by 2050
• Bloomberg NEF: clean energy investment $263b in 2010 ($52b in 2004)
but Q1 2012 lowest since 2009
Policies for supporting low carbon technologies
Combining policy and financial instruments effectively
Economic signals – (a lot of) work in progress
Reducing risks – international perspective
Country risk
Make country risk
guarantees more
explicit to institutional
investors
Low carbon policy risk
Offer low carbon risk
cover
Currency risk
Establish currency funds
offering foreign
exchange hedging
products
Deal flow problems
Create low carbon
project development
companies
Difficulty evaluating
multiple, overlapping
risks
Public sector takes “first
loss equity position in
funds
Adapted from UNEP & partners/Vivid Economics 2009
Reducing risks - blooming of many flowers
Measure
o What contributions should be
counted as “climate finance”?
o How to tackle private sector
flows?
Report
o Distribution: where is climate
finance going?
o What forms of finance, data,
format, methodologies, etc ?
Verify
Tracking climate finance & learning lessons
o Scale of support
o Effectiveness of support
o Cost-benefits of activities or
wider benefits of investments
International negotiations: not all or nothing
The Durban endgame: “the huddle to save the world”
“a protocol, another legal instrument
or an agreed outcome with legal force”
Lessons learned: UK policy response
Economic signals
Reducing investment risk
Long term perspective - both policy and investment
Lessons learned: DECC 2050 Calculator –
balancing energy and climate goals
Lessons learned: UK Low Carbon Institutions
• Climate Change Programme 2001 to deliver voluntary target 20%
CO2 reductions by 2010 (tougher than UK’s Kyoto target)
• Climate Change Program Review (CCPR) initiated in 2004 to put UK
back on track but failed to achieve objectives
• Political opportunity to strengthen low carbon institutions
• NGO campaign + business community traction on climate change
• Political competition – parties taking a strong stance on climate
change
• Reframing of climate change as an economic issue - Stern’s
review for HMT of the Economics of Climate Change
• Engaged political owner within government
• Outcome: Office of Climate Change (2006) →Committee on Climate
Change (2008) →formation of DECC (2008)
Why a golden age for policy makers?
1. Countries across the world now facing up to the challenge of
implementing their Copenhagen pledges
2. Loud, long, legal economic signals needed ... alongside new ways
to crowd in private finance
3. Tailored to national circumstances ... supported by international
sources
4. No need to wait for a global agreement – international action is
already under way
5. Real potential to build effective policies using lessons learned from
successes and failures to date
AEA
Chris Dodwell
Knowledge Leader – International Climate Change & Energy
AEA
6 New Street Square
London EC4A 3BF
United Kingdom
E: [email protected]
W: www.aeat.com