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Beyond Growth Beyond Borders: A Panacea

Joyashree RoyProfessor of Economics and

Coordinator Global Change ProgrammeJadavpur University

Kolkata, India

May 28, 2010 @WIOD Conference, Vienna

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What ails climate negotiation?

• Equity beyond Efficiency• Limited/Uncoordinated Information• Scientists, engineers, economists

coordinating at peripheral level• National interest over rides global

sustainability issue

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Current status • Activity - Emission mapping • Production approach (direct emission)Emission=Commodity Production x GHG Intensity

• World is divided on the issue of burden sharing • Denial and short coming of production approach• In favour of Consumption approach • Direct and Indirect emission

• Burden sharing, leakage: consumption and production approach

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Production approach

Res &building 8%

energy supply26%

transport 13%

industry 19%

agriculture 14%

forestry 17%

waste &waste water 3%

Res &building

energy supply

transport

industry

agriculture

forestry

waste &waste water

Source: IPCC 2007 (GHG inventory method: UNFCCC) (Mitigation at production process level)

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Need for more information

Beyond Growth, Beyond Borders

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B

C

Nationstates

AG

lobal comm

on future defined by GH

Gs stock

Global

Trade

Global carbon management

Emission from trade sector

flow

flow

flow

National Inventories(domestic)

mitigation

Avoided damage

Avoided damage

Avoided damage

SNA GHG a/cTrade a/c

Production and Consumption a/c to match

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What should world do?

Mitigation and

adaptation

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Projected impacts of climate change

1°C 2°C 5°C4°C3°C

Sea level rise threatens major cities

Falling crop yields in many areas, particularly developing regions

FoodFood

WaterWater

EcosystemsEcosystems

Risk of Abrupt and Risk of Abrupt and Major Irreversible Major Irreversible ChangesChanges

Global temperature change (relative to pre-industrial)0°C

Falling yields in many developed regions

Rising number of species face extinction

Increasing risk of dangerous feedbacks and abrupt, large-scale shifts in the climate system

Significant fall in water availability e.g. Mediterranean and Southern Africa

Small mountain glaciers disappear – melt-water supplies threatened in several areas

Extensive Damage to Coral Reefs

Extreme Extreme Weather Weather EventsEvents

Rising intensity of storms, forest fires, droughts, flooding, heat waves

Possible rising yields in some high latitude regions

Source: stern review

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SNA

through environment and trade lense

SEEA, STA

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Alternative mitigation options

• Comparing Mitigation potential and cost

– Through technology – Through lifestyle change – Through trade

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A-M

• Adaptation is Damage cost • Mitigation is Maintenance cost for the

Natural Capital • There is tradeoff• Early mitigation reduces adaptation cost

and vice versa• How to build into the various models

adaptation cost is also a major challenge

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Beyond Economic Growth

New Paradigm Sustainable Development

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Weak Sustainability Criterion

Genuine Investment

Manmade capital Human capital Natural Capital

Capital Portfolio

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Climate Forcing Pollutants

DaysWeeks and Days

Decades and Centuries

LOCAL to REGIONAL GLOBAL

•Cooling Aerosols•Heating Aerosols(transport over long distances)

O3

CONOx

SO2

1.56 Wm-2 CO2 1

0.47 Wm-2 CH4 21

0.14 Wm-2 N2O 310

HFC 140Little now SF6 23,900

PFC Large

ParticulatesShort Lived Gases

(Protocol) GHGs

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FAQs in FAQs in developing economiesdeveloping economies

**Can sustainable development Can sustainable development be achieved be achieved unilaterally?unilaterally?*Can nation states : *Can nation states :

plan their development pathway, plan their development pathway, organise activities with national organise activities with national perspectives? perspectives? maintain policy and institutional maintain policy and institutional

autonomy?autonomy?

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Growing challengesand growing complexities

• Traditional challenges of economic growth– Unfinished agenda– Non declining consumption goal

• New challenges – Non declining productive base– Non declining consumption

• National• Global

Panacea: Beyond growth , beyond boundariesInformation: Global connectivity

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National vs. global agenda

different combination of energy security and emission.

Fig 1a: Technologies for abating GHGs and improving energy security

Fig 1b: Trade off between GHG abatement and energy security

Source: Brown and Huntington (2008)

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Global externality

• New challenge • Complex problem

*Additional Risk to sustainability

*How to manage Risk Necessary condition?Non declining productive base?

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Economy-wide Models in Integrated Assessment of

Climate Policy

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Technical change

• Endogenous technical change appears as R&D, LBD and combination

• Bottom up are more consistent than Top down in LBD

• Exogenous parameters: AEEI • Arbitrary, good guess, production model based?• CRS, DRS, IRS• Time trend, scale effect, R&D, LBD difficult to

separate and varies across functional forms

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baseline

• Population growth• GDP• Energy use• Crude oil prices USD 25-29• Non comparability of bottom up and top

down studies

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Key uncertainties• the mitigation potential projections

include:• Rate of technology development and

diffusion• Cost of future technology• Future energy and carbon prices• Level of activity • Policy drivers, both climate and non-

climate

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Indian EconomyIndian Economy

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Reference case: carbon emission

0

100

200

300

400

500

600

700

800

900

1990 2000 2010 2020 2030 2040 2050

Year

Car

bon

emis

sion

(ton

nes)

India(default)

India (derived)

Korea (default)

Korea (derived)

Brazil (default)

Brazil (derived)

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0

200

400

600

800

1000

1200

1400

0 5 10 15 20 25 30 35 40

Carbon abatement (%)

Car

bon

tax

(Rps

.)

Default elasticity values

Derived elasticity values

Marginal Abatement Cost (2030): India

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GDP growth

G DP in US D in B illion

0.0200.0400.0600.0800.0

1000.01200.01400.0

1950 1960 1970 1980 1990 2000 2010 2020

G DP inUS D

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Population Below Poverty Line

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Consumption Structure of Rural Households

0.0000

0.1000

0.2000

0.3000

0.4000

0.5000

0.6000

ROH RNASE RASE RAL ROL

Households

Shar

e

Food Products

Non-food Products

Fuel

Services

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Consumption Structure of Urban Households

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

USE UOH USC UCL

Households

Shar

e

Food Products

Non-food Products

Fuel

Services

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Three Pillar Approach

• Economic• Social• Environmental

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Diarrhoea

DiarrhoeaDengue

Gross Cropped Area

Air Pollution

Crime against Children and Women

PolioAir Pollution

MalariaDengue

Electricity Consumption

Whooping Cough, Asthma and Diarrhoea

Air Pollution

Whooping Cough and Asthma

DiarrhoeaCrime against

Women and Children

Whooping Cough, Diarrohea, Malaria, Aasthama

Whooping Cough

MalariaFiscal DeficitMalaria

Malaria

Malaria

Malaria and Diarrhoea

Crime against Children

Consumption of Pesticide Malaria

Whooping Cough, Diarrhoea & Asthama

Dengue and Diarrohea

Crime against Women and Children

DengueAir Pollution

Diarrhoea and MalariaConsumption of

Pesticide

Consumption of Pesticide

N

Classification Of PrioritiesEconomicEnvironmentalSocial

Map 2. Topmost Issues of Concern

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Assam

Gujarat

N

Electricity ConsumptionFiscal Deficit

Map 5. Recommended Top Economic Priorities

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Chandigarh

Uttar Pradesh

Madhya Pradesh

Maharashtra

GoaN

Crime against ChildrenCrime against Women and ChildrenPolio

Map 4. Recommended Top Social Priorities

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Jammu & Kashmir(Diarrhoea)

Himachal Pradesh(Diarrhoea)Punjab

(Dengue)Uttaranchal

Haryana

Rajasthan

Arunachal Pradesh(Malaria)Delhi

(Dengue)

Sikkim(Whooping Cough, Asthma, Diarrhoea)

Bihar

Nagaland(Whooping Cough,

Asthma)

West Bengal(Diarrhoea)

Meghalaya(W. Cough, Diarrhoea,

Malaria, Asthma) Manipur(Whooping Cough)Jharkhand

(Malaria) Mizoram(Malaria)

Tripura(Malaria)

Chattisgarh(Malaria)

Orissa(Malaria & Diarrhoea)

Daman & Diu Dadra & Nagar Haveli

(Malaria)

Andhra Pradesh(Whooping Cough, Diarrhoea, Asthma)

Karnataka(Dengue & Diarrhoea)

Tamil Nadu(Dengue)

Kerala

Andaman & Nicobar Islands

(Diarrhoea & Malaria)Lakshadweep

Pondicherry

N

Air PollutionConsumption Of PesticideDiseaseGross Cropped Area

Map 3. Recommended Top Environmental Priorities

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Reactive adaptation need assessment

Need Curve - Mahanadi Hotspot

0102030405060

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drin

king

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amag

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nsat

ion

Easy

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ion

Hea

lthFa

cilit

ies

Food

aid

Com

mun

icat

ion

links

PDS

Adaptation Service Demanded

No.

of h

hlds

.

Fig. 71 Need Curve – Mahanadi Hotspot

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Current Practice

Investment for Adaptation Nesds

0100000200000300000400000500000

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cilit

ies

Food

aid

Com

mun

icat

ion

links

PDS

Adaptation Service Demaned

Inve

stm

ent C

ost (

in R

s)

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India’s National Action Plan

on Climate Change

2009

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Jadavpur University

Thank you

Global Change Programmehttp://juglobalchangeprogram.org/