Transcript Low Carbon Development

Financial Transfers vs. Mitigation from a NorthSouth Perspective
Matthias Kalkuhl1 and Michael Jakob2
1Zentrum
für Entwicklungsforschung (ZEF), Bonn
2Potsdam Institute for Climate Impact Research
October 16, 2012
Motivation: The Moral Dilemma of Climate Change
Highest vulnerability vs. largest per capita CO2 emissions
Highest vulnerability towards climate change vs. largest CO2 emissions (from fossil fuel combustion
and cement production, and including land use change, kg C per person and year from 1950 - 2003)
Largest per capita CO2 emitters
Largest per
capita
emitters, and highest
social and / or agro-economic vulnerability
Highest
social
and CO
/ or2agro-economic
vulnerability
Highest per
social
and CO
/ or2agro-economic
vulnerability
Largest
capita
emitters, and highest
social and / or agro-economic vulnerability
Areas with highest ecological vulnerability
Background
• Basis for moral obligation for rich
countries to reduce their emissions to
prevent damages to the poorest
• Yet, it has also been argued that the
poor were better off if money were
spent on e.g. health, education,
infrastructure instead of climate
change mitigation (Copenhagen
consensus)
• Feasibility can be expected to crucially
depend on efficiency of transfer ->
Sachs (“End of Poverty”) vs. Easterly
(“White Man’s Burden”)
Research Questions
• What is the optimal mix of climate change mitigation and
providing financial transfers to poor countries?
• Which factors affect this optimal mix? Most importantly, what role
does the efficiency of providing a transfer play?
• How is it influenced by different concepts of equity?
The model
Per-capita consumption
Compensation Policy
Welfare Optimum
Constrained Welfare Optimum
Unconstrained Welfare Optimum
Unconstrained Welfare Optimum
Sign not unambiguously determined, depends on parameters
Numerical Application
alpha
E (optimal
emissions in rich
Temperature
countries during
increase (to pre2005-2195) [tC/cap] industrial level)
eta
T/CR (Transfer
compared to richcountries
consumption)
Transfers (discounted
2005-2195) [1000$/cap]
1
2
122,35
2,80
64,8096
0,1588
0,5
2
112,97
2,64
66,675
0,1641
0,2
2
92,18
2,29
42,7068
0,0993
0,1
2
74,91
2,00
0
0
1
1,01
122,36
2,80
64,8098
0,1588
0,5
1,01
113,25
2,65
32,5704
0,074
0,2
1,01
105,39
2,52
0
0
0,1
1,01
105,39
2,52
0
0
1
0,5
122,36
2,80
64,8098
0,1588
0,5
0,5
115,62
2,69
0
0
0,2
0,5
115,62
2,69
0
0
0,1
0,5
115,62
2,69
0
0
1
0 (DICE)
122,36
2,80
64,8098
0,1588
Callibrated on parameters from RICE (Nordhaus 2010), with Africa as poor region
Questions to the audience
• Do you think this is interesting/relevant?
• Compensation policy or welfare optimum?
• Which way forward? Extend, or rather make a short note out of
it?
Jan Steckel‘s current activities
•
“Economic growth, decarbonization and international transfers”
(with Michael Hübler from ZEW as 1st author) accepted in
Climate and Development
Jan Steckel‘s current activities
• Climate Finance curse and coalition stability (with Ulrike Kornek
and Kai Lessmann, both PIK)
• Infrastructure, economic growth, and energy thresholds (with
Narishima Rao, IIASA)