Thursday, November 27, 2014

The Zero-Emissions Imperative

DAVOS – Our planet is warming dangerously. And, as the 2013 report by the Intergovernmental Panel on Climate Change makes clear, our carbon-dioxide emissions over the past half-century are extremely likely to be to blame. A more robust approach to global warming is needed if we are to avoid catastrophe. Unlike the recent financial crisis, there is no bailout option for the earth’s climate.

Three years ago, at the United Nations COP 16 climate-change meeting in Cancún, countries agreed to reduce their emissions by 2020 to a point that would prevent the average global temperature from rising more than 2°C above pre-industrial levels. However, UN estimates show that current trends would bring the world only 25-50% of the way to this target.

This is why I am calling on all governments to be more ambitious – to aim for zero net emissions from fossil fuels by the second half of this century. Nothing short of a wholesale transformation of the energy economy will suffice.

Just this week, the European Commission unveiled new energy and climate targets for 2030 – calling for a 40% reduction in the bloc’s greenhouse-gas emissions from 1990 levels, with 27% of energy to come from renewable sources. This is an extremely important step, and more countries should follow suit.

To be sure, we will encounter huge obstacles. Two-thirds of electricity generation, and nearly 95% of the energy consumed by the world’s transport systems, comes from fossil fuels. Our energy security is increasingly tied to the exploitation of unconventional fossil-fuel deposits like shale gas, especially in the United States. Carbon-intensive technologies remain more profitable than low-carbon alternatives in many cases. And cash-strapped governments continue to encourage oil and gas exploration, in part because the rents received by some account for a large part of their revenues.

But change is possible. There is a yawning gap between what governments promise to do about climate change and their often-inconsistent (if not incoherent) policies. Even when appearing to support greener technologies, governments are prone to sudden policy changes, sometimes retroactively, leaving businesses reluctant to commit to significant investments, or even take official statements seriously at all.

I believe we can make substantial and rapid progress by setting a clear direction on three issues:

Put a price on carbon. By pricing the cost of carbon, we can manage its use (or disuse). More than 40 countries have already implemented some form of carbon tax or emissions-trading scheme. Trading schemes are often politically more attractive, because they can be flexible (although their design and implementation could be improved in many cases). But we can be bolder. Several governments have successfully introduced carbon taxes without adversely affecting growth, and we should encourage more countries to follow their example.

Cut fossil-fuel subsidies. The OECD estimates that fossil-fuel subsidies in member countries amounted to $55-90 billion annually from 2005 to 2011. And the International Energy Agency estimates that in 2012 fossil-fuel subsidies worldwide grew to $544 billion. Most of these subsidies should be scrapped; the energy industry does not need more state aid to burn fossil fuels (and, in developing and emerging economies, subsidies are a grossly inefficient and probably unnecessary way to help the poor).

Clarify policies. Governments must address inconsistencies in their energy strategies, consider the links with broader economic policies, and stop sending mixed signals to consumers, producers, and investors. In particular, they must assess whether the right regulatory arrangements are in place to allow clean-energy investments to compete on a risk-return basis. This will be essential if investors are to redirect investment toward climate-friendly alternatives.

The OECD will play its part. In order to understand and compare countries’ performances more accurately, OECD Economic Surveys will now include data and analysis of climate policies. By mid-2015, we expect to have a clear picture of the progress being made and the challenges that remain in OECD countries and all major emerging economies – and to have advised these countries how they can realistically increase the ambition and cost-effectiveness of their policies.

These steps will signal that the price of emissions must rise substantially if we are to reach our goal of zero net emissions. The transformation will not be costless, and governments must be frank with their electorates about its social and economic impact. But a low-carbon, climate-resilient world will also offer new economic opportunities.

More important, the alternative – inaction, or too little action – would be far more expensive in the long run. Hurricane Sandy, for example, cost the US the equivalent of 0.5% of its GDP. The annual bill for flood protection in coastal cities worldwide is likely to rise above $50 billion by 2050. The consequences for developing countries are more dire: Typhoon Haiyan, which hit the Philippines in 2013, was a stark reminder of how vulnerable poor countries can be to climate change.

If the world is to avoid a collision with nature – one that humanity surely cannot win – we must act boldly on every front, particularly with respect to carbon pricing and the coherence of our economic and energy policies. And we must do so now.

Read more from "Direct from Davos"

  • Contact us to secure rights


  • Hide Comments Hide Comments Read Comments (10)

    Please login or register to post a comment

    1. Commenteddavid ursiny

      Well quit being stupid and build the permanent fields assemblies,inducted high voltage fields /field compression motor, a perpetual magnetic motor that uses permanent fields for motion thru repulsion and sustains that motion with inducted high voltage fields that are contained on those revolving field assemblies and are charged and discharged in timed mechanical sequences for powered magnetic perpetual motion ,turning an axle under its own power with no external costs and no need for fossil fuels anymore, an high voltage inducted field can do a mechanical work, it can shield a field assemblies field with a like high voltage field and its a field pole on the other side that can be turned on an off at the speed of light it does the attraction work to its next stationary field assembly repulsion driver where its discharged to ground for repulsion and induction mode wake up its not that hard. To invision

    2. CommentedQuantum Trains

      How CO2-emissions can be reduced several percentagepoints per year:

    3. CommentedQuantum Trains

      There truly is one solution which is to worldwide construct 100 % sustainable and fast transport by ET3;

    4. CommentedFilbert Lam

      The environmental sustainability conversation should be extending beyond the bounds of the developed nations. I see little merit in China's argument that the developed countries should cut more because of their emissions in the past. Obsessing over the past makes the present and future second-hand. China needs to take responsibility for its actions today, instead of throwing long gone red herrings into the conversation.

    5. CommentedJoshua Ioji Konov

      Poverty and Pollution

      How Inequality will destroy Earth!

      The tight lenders leach on the poor undeveloped countries creates hazardous issues that harm the Earth environment and potentially will destroy it. The use of coal and wood for heating, the driving of old vehicles, the garbage disposal and water contamination, the relentless woods destruction relates a lock of market i.e.economic development;
      Distribution of Wealth: Inequality in 21st Century
      The ability of Large Transnational Corporations and Investors to outsource and move industrial production, and invest globally has helped them gain profit in time of worst 2007-9 recession and post-recession accelerating and expending inequality;
      “Many corporations have a greater turnover than the GDP of most countries. Of the 100 largest economies in the world, 52 are corporations and 48 are countries, and these corporations have sales figures between $51 billion and $247 billion.
      Seventy percent of world trade is controlled by just 500 of the largest industrial corporations, and in 2002, the top 200 had combined sales equivalent to 28% of world GDP. However, these 200 corporations only employed 0.82% of the global work force.
      In the US, ninety-eight percent of all companies account for only 25 percent of business activity; the remaining two percent account for nearly 75 percent of the remaining activity. The top 500 industrial corporations, which represent only one-tenth of one percent of all US companies, control over two-thirds of the business resources in the US and collect over 70 percent of all US profits.
      According to the International Finance Corporation (IFC), inflows of foreign direct investment to the emerging markets have grown by an average of 23 percent per year between 1990 and 2000. The combined value of stock markets in emerging economies is set to exceed $5 trillion in 2006, and has more than doubled in the past decade.
      In 2005 the number of millionaires globally swelled to 8.7 million, 5.7 million of whom are based in North America and Europe. Forbes reported a 15% rise in the number of billionaires since 2005, who now have a combined worth of $2.6 trillion.”[ Share the World Resources
      While the middles class in developed countries has been deteriorating in numbers, and poverty has stricken many individuals and countries around the Globe.
      In current research we therefore extend the work reported in “Leveraging Inequality” (F&D, December 2010), which dealt with only the United States, to include an open-economy dimension. We find (see Chart 1) that what unites the experiences of the main deficit countries is a steep increase in income inequality over recent decades, as measured by the share of income going to the richest 5 percent of the country’s income distribution.
      This increase in inequality has contributed to a deterioration in the richest countries’ aggregate savings-investment balances, as the poor and middle class borrowed from the rich and from foreign lenders. This, along with the other factors mentioned above, can fuel current account deficits.
      Indeed, we find that as income shares of the top 5 percent increased between the early 1980s and the end of the millennium, current account balances worsened. For example, in the United Kingdom, an 8.7 percentage point increase in the income share of the richest 5 percent was accompanied by a deterioration in the current account–to-GDP ratio of 2.7 percentage points.[ Unequal = Indebted
      FINANCE & DEVELOPMENT, September 2011, Vol. 48, No. 3
      Michael Kumhof and Romain Rancière
      Distribution of Wealth: Inequality in 21st Century

      ]The Earth environment has suffered farther deterioration by being polluted through burning coal and wood, by cutting woods and destroying rain forests, by driving old vehicle, by disposing of garbage and row sewer and etc.
      Mongolia is the world’s most polluted country and also home to one of the world’s most polluted cities — Ulaanbaatar. The country’s main sources of pollution are its traditional coal-fuelled stoves and boilers used for heating and cooking, as well as congested traffic and old cars. Heating is essential for the survival of its people for about eight months of year. The country uses everything from coal, wood to refuse, such as black tar-dipped bricks and old car tires to fuel stoves and boilers.[
      Neither of the top 10 polluted sites are in the U.S., Japan or western Europe. However, a lot of the pollution in poorer countries has to do with the lifestyles of richer ones, noted Stephan Robinson of Green Cross Switzerland—for example, a tannery in Bangladesh that provides leather for shoes made in Italy that are sold in New York City or Zurich. “The pollution we see is not coming from the major global industrial companies, it’s all from small mom-and-pop shops, which prepare the raw materials that we then later use,” Robinson said. Or, in the case of Agbogbloshie, Ghanaians are polluted by the electronic devices Westerners have already used. Local people in such areas, Robinson added, “are very often polluting their environment not because they think it is fun but because it is a question of survival.[

      The most developed countries are taking prompt action to improve their environment through investing and tax initiatives to boost green energies and through enforcing strict environmental laws and regulations. However, it is not possible to take on some consistent environmental protection policies on just national level. To prevent from farther harmful environmental deterioration long-term Global policies should be implemented by the International Financial Institution of WTO, WB, and IMF widely supported and financed by the most developed economies of the US, EU, China, and Japan. But, most important, the ways the global marketplace “business as usual” should evolve into more engaging ways to promote a Green Market Development for many if not all undeveloped markets i.e. economies. An end of the budgetary debt economics that relates economic growth to productivity and investment only, by keeping firm hand on borrowers: individuals or countries alike, is necessary. Even from purely historical stand point of view the system that had performed well in North America, Western Europe, and Japan until the beginning of the 21st Century has been tipping off: :
      the Globalization enveloped the entire globe with a very few exceptions,
      the Internet and rising Productivity made outsourcing and moving of industrial production much easier,
      and China has emerged as a great economic industrial power
      Developments that have distorted the market equilibrium in many developed and undeveloped markets alike (with the exception of China, Germany and Japan after the Abenomocs) by bringing longe-term high unemployment and underemployment, debt accumulation, falling standard of living, and rising inequality that were shaking the foundations of the Capitalism, which short term relatively high lending rates, low market security, weak business and intellectual property laws, weak consumer protection and environmental protection laws that were suppose to boost productivity, investment, and growth have established conditions for bubbles and recessions, instead: the 2001 $ 2007 Recessions followed by sluggish recoveries exemplify it.
      The conception of using market i.e. economic agents and tools in an “as it comes; as it goes” attitude to prompt Market Development i.e. economic growth is called Market Economics. It has become possible for short-term in History: since the turn of the new century, which brought some new capability for industrial overproduction by the same development that distorted the existing Capitalism. Whereas the technologies that improve Productivity, the Globalization, and China that utilized at best these new opportunities could become the market i.e. economic agents to offset the possibilities for shortages and inflation to allow long-term market development.
      The Market Economics utilizes on such counterproductive for the Capitalism developments to prompt Market Development into targeted Environmentally friendly industries that could prevent from further pollution causal of an industrial production, productivity and investment approach, and in the same time create employment, replenish fiscal reserves, and allow a more balanced market approach in economics.
      The economic agents in Market Economics are flexible parameters that adjust most recent fluctuations on “as it comes; as it comes” probability principle. A high Market Security is paramount to improve the investment transmission-ability, whereas less developed and undeveloped markets, and small businesses and investors are given access to relatively fair market competition. Targeted into Environmentally friendly industries and technologies capital infusion should be adjusted to the Inflation (not to the budget). On local for the developed countries e.g. Detroit and international for the International Financial Institutions the “invisible hand” should prevent from pollution, wasting of resources, destruction of woods, wetlands, etc.
      Joshua Ioji Konov 2014

    6. CommentedJason Gower

      With the assumption that climate change is real, at this stage of the discussion it is probably more useful to debate how the world can solve this massive prisoner’s dilemma of sorts. It is no longer useful to paint this idealistic picture without examining the reasons why we are still at this point of relative inaction. Very simply the world is changing. Demographics are shifting and growth is now at an absolute premium in the developed world. Similarly, emerging economies have growing populations that will require growth to maintain their trajectory of increasingly expected improvement of living conditions. So, in this environment who is going to take the lead and what will be the impetus for them to do so? Politicians exist to get elected and corporations ultimately are driven by the profit motive. With the higher costs inherent in doing “the right thing” to save a potential catastrophe in the future, who will be willing to sacrifice their
      short-term best interests to benefit the long-term best interests of this planet? Sadly given human nature, we already know the answer as we have made minor, if any, progress on a global scale at realistically reducing GHGs. If I had the answer right now I would certainly share it but I think it is better to begin discussing along these lines than to continue to paint this idealistic world that is and always will be constrained by reality.

    7. CommentedZsolt Hermann

      The aspirations are commendable, there is only one problem.
      We make plans, we want to achieve this and that, but at the end of the day we are still shooting in the dark.
      We still try to "fix the world" according to our understanding, according to our limited, subjective perception.
      How do we know that zero emission is truly what is right in the natural system?
      How do we know that our "green strategies" are not more harmful than what we already have?
      We already had so many "certain" policies, inventions that later on turned out to be even more destructive than the ones we replaced them with.
      In short until we start perceiving the system of nature as it is, becoming integral part of it, we have absolutely no chance of making right decision, right policies, we might get lucky sometimes, other times we might destroy even what we have so far preserved.
      Humanity needs to integrate into the vast system of nature through "equivalence of form" meaning taking on the exact form of the general balance and homeostasis nature possesses.
      And before we can manage that we need to build a template that resembles such a balance and homeostasis, and such a template we have to build within the global, interconnected human society.
      Until we become a single, united and integral human "organism" we cannot find the key into the balance and harmony within nature.
      And for humanity to become a single, united integral "organism" we have to adjust our inherently self-centered and egoistic, greedy nature.
      And in order to do that we need to establish a completely new education for children and adults alike so we can create a completely new human environment, society.
      Until then we are playing Russian roulette with ourselves and the natural environment.

    8. CommentedJames Goodman

      The key point here is that non-carbon energy alternatives need to be competitive enough to replace carbon based energy. This is what government subsidies need to get off the ground, but that is it. In addition to fossil-fuel subsidies, what needs to be cut immediately - right now - is subsidy of carbon-based "renewables" such as environmentally disastrous crop-based biofuels.

    9. CommentedProcyon Mukherjee

      The future of energy utility companies is uncertain to say the least and the European Commission is still far away from designing any system that could make carbon trading a viable proposition where the cost of saving carbon could be minimized through the trades; the persistent problem is that the electricity providers end up with higher permits from use of renewables that has virtually crashed the carbon spot price per ton (Euro 5) as supply glut continues, while cutting of emissions need thirty times the cost through use of renewable sources. This would get worse when imports of shale rise and European utility companies face a non-level playing field; the erosion of their market capitalization in the last five years is truly punishing. In such a state it is only to be expected that high energy consuming manufacturing (like Aluminum, Steel, etc) would have all doors closed for Europe.

    10. CommentedPaul Mathew Mathew

      NEVER going to happen - because it is not possible