Transcript Global Climate Change - Economics & Country Risk

Global Climate Change:
What Every Executive Should Know
Global Energy Services
May 2005
Summary of Major Points
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Global Climate Change is a major
business and policy issue
Convergence for much of the
scientific evidence; controversy
still remains on some aspects
“No regrets policy” to implement
mitigation programs needed
Viable options are available to
address the problem using current
technologies
Carefully developed programs can
be implemented with minimal
economic impacts
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We are at a Turning Point
Contrary to previous beliefs, there are
reasonable mitigation options that
can be adopted now without harming
the world economy.
While some aspects of the science
remain uncertain, the consequences
of doing nothing could be severe.
It is clearly prudent to adopt a costeffective set of carbon reducing
measures now.
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What Study Will Provide:
Global Climate Change:
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An integrated framework to structure the
problem and potential solutions
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An update on the state of the art in science
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A policy assessment model that enables
sensitivity analysis for every key
assumption
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Assessment of costs and effects of viable
mitigation options
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Time-phased cost effectiveness curves
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Well-defined public policy options
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Every Executive Needs:
Benefits of
Participation
 Participate
in the public
policy debate
 Anticipate
regulatory
changes
 Develop
enterprise
strategies and plans
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To Do This, Executives Must Be Fully Informed
About…
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Emission Trends,
Forecasts, and Drivers
The State of the Science
The Effects and Costs of
Mitigation Options
Policy Alternatives
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The Problem is Not Intractable
Viable Options for Reducing Carbon Emissions
Based on: S. Pacala and R. Socolow, “Stabilization Wedges: Solving the Climate
Problem, with Technologies Available Today,” Science, 305, August, 2004, pp 968-972
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Transition Targets Must be Established,
Such as…
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A declining schedule of carbon
dioxide emissions
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An increasing carbon dioxide tax
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An increasing schedule of auto
efficiency standards
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An increasing schedule of
appliance and building efficiency
standards
Initial inaction will prevent the
attainment of longer-term goals
at reasonable costs
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Long-term Gains at Reasonable Costs
100%
95%
90%
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30%
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Cost Effectiveness Curves Over time: Significant reductions can be achieved in the
long run at reasonable costs, but not in the short run. Steps must be taken now to
achieve these long-term reductions.
Percent Reduction
10 years
20 years
30 Years
40 Years
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50 Years
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95%
100%
90%
85%
80%
75%
70%
65%
60%
55%
50%
45%
40%
35%
30%
25%
20%
15%
5%
10%
0%
$/ton
Analytic Framework
Percent Reduction
10 years
20 years
30 Years
40 Years
50 Years
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Analysis Will Be Conducted on a Regional Basis
Using IEA’s World Energy Model Regions
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US and Canada
Mexico
Brazil
Other Latin
America
OECD Europe
Russia
Other Transition
Economies
Africa
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Middle East
China
India
Other South
Asia
OECD Asia
Indonesia
Other East Asia
OECD Oceania
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Overview of Policy Assessment Model
(Illustrates a single region)
Base case forecast of CO2 emissions
(Pop growth) * (GNP/Capita) * (Energy/GNP) * (CO2/Energy)
Target level of CO2 concentration in atmosphere
Science * Politics * Technical Feasibility
Possible solutions
Population * Leisure * Efficiency * Fuel switching and carbon sequestration
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Workshops and Agendas
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Interactive Workshops with Key Stakeholders
Workshops will bring together key stakeholders from a diverse
group of companies and organizations
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Industrial and Manufacturing
Utilities and Energy
Technology Providers
Policy Makers
Financial
There will be three parallel workshop tracks
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Europe
North America
Asia
The material for each regional workshop will be available to all groups. Regional
workshops will only be held if minimum attendance requirements are met.
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Deliverables
Four Workshops:
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Global Insight Presentations
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Discussions with Participants and Experts
Working Papers:
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Preparatory Materials for Workshop Participation
Summaries of Workshop Discussions
Policy Assessment Model:
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Forecasting Base Cases
Forecasting the Effects of Alternative Portfolio of Options
Cost-effectiveness Curves
Public Policy Alternatives
Executive Summary Report
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The Project Team
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Drawing from Years of Experience on This Issue
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We Practically Invented the Industry
Consistently Named Among the Top Economic Forecasters in the World
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Expertise Built Upon a Solid Foundation
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For Additional Information …
Gil Rodgers, Senior Director
Global Insight, Lexington, MA
781-301-9142
[email protected]
Peter Seager, Principal
Global Insight, London
+44 20 8544 7924
[email protected]
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