Post on 06-May-2015
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FEATURING
Andrew Steer President and CEO, WRI
(Photo: jdlasica/Flickr)
It’s been a great two decades . . .
↑100% real per capita income in developing countries
2 billion gained access to improved drinking water
↓50% people living on less than $1.25 per day
↓47% maternal deaths
↑58% girls enrolled in primary education in least developed countries
(United Nations, World Bank, 2012)
. . . Or has it?
3.3 million deaths per year from air pollution
13 million hectares of forest lost per year
↑2.9x cement production
↑50% CO2 emissions
(WHO, The Lancet, EU, US DOE, FAO)
0
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10
15
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25
30
35
40
1900 1920 1940 1960 1980 2000
Car
bon
diox
ide
emis
sion
s (b
illio
n to
ns)
0
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15
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35
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1900 1920 1940 1960 1980 2000
Car
bon
diox
ide
emis
sion
s (b
illio
n to
ns)
(US DOE, 2010; EU, 2012)
35 BILLION TONS (2012)
6 BILLION TONS (1950)
GLOBAL CO2 EMISSIONS ON THE RISE
3% (1800)
70% (2050)
50% (2000)
30% (1950)
14% (1900)
SHIFT TO AN URBANIZED WORLD
(UN DESA, 2012)
EXPLOSION OF THE GLOBAL MIDDLE CLASS
1 billion in 1990 2 billion in 2010 5 billion by 2030
(Photo: ben124/Flickr)
(WRI chart using World Bank data, 2012)
ARE WE RUNNING OUT? Price trends of major commodity bundles (real 2005 dollars)
Pric
e in
real
200
5 do
llars
250
200
150
100
50
1960 1970 1980 1990 2000 2010
Food Energy Timber Fertilizers Metals and Minerals
(Photo: MC-Leprosy/Flickr)
ENERGY MIX 1
1 WHAT ENERGY MIX? 1.3 billion people without access to electricity
(Photo: Martini DK/Flickr)
55+ U.S. coal plants shut down in 2012; 395 remain
COAL
4
5
6
7
8
2000 2002 2004 2006 2008 2010
Mill
ion
met
ric to
ns
4
5
6
7
8
2000 2002 2004 2006 2008 2010
Mill
ion
met
ric to
ns
(EIA, 2012)
COAL | GLOBAL CONSUMPTION INCREASING
(WRI, 2012)
COAL | PROPOSED NEW COAL POWER CAPACITY
COAL | PROPOSED NEW COAL POWER CAPACITY
(WRI, 2012)
INDIA
(WRI, 2012)
COAL | PROPOSED NEW COAL POWER CAPACITY
INDIA
CHINA
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2002 2004 2006 2008 2010 2012 2014
Rel
ativ
e to
200
2
EXPORTS
CONSUMPTION
COAL | U.S. COAL EXPORTS ARE RISING (2002 = 1.0)
(EIA, 2012)
WHAT TO WATCH 1. How many of the
proposed coal power plants will be built?
2. Will U.S. coal exports continue to grow?
(Photo: LHOON/Flickr)
NATURAL GAS | U.S. PRODUCTION INCREASING
(EIA)
0
5
10
15
20
25
30
1990 1995 2000 2005 2010 2015 2020 2025 2030
Trill
ion
cubi
c fe
et
OTHER NATURAL GAS
SHALE GAS
NATURAL GAS | SHALE GAS PUTS DOWNWARD PRESSURE ON NATURAL GAS PRICES
(EIA, 2009-2012)
0
2
4
6
8
10
1990 1995 2000 2005 2010 2015 2020 2025 2030
Aver
age
Hen
ry H
ub s
pot p
rice
($)
2009
NATURAL GAS | SHALE GAS PUTS DOWNWARD PRESSURE ON NATURAL GAS PRICES
(EIA, 2009-2012)
0
2
4
6
8
10
1990 1995 2000 2005 2010 2015 2020 2025 2030
Aver
age
Hen
ry H
ub s
pot p
rice
($)
2009
2010
NATURAL GAS | SHALE GAS PUTS DOWNWARD PRESSURE ON NATURAL GAS PRICES
(EIA, 2009-2012)
0
2
4
6
8
10
1990 1995 2000 2005 2010 2015 2020 2025 2030
Aver
age
Hen
ry H
ub s
pot p
rice
($)
2009
2010
2011
NATURAL GAS | SHALE GAS PUTS DOWNWARD PRESSURE ON NATURAL GAS PRICES
(EIA, 2009-2012)
0
2
4
6
8
10
1990 1995 2000 2005 2010 2015 2020 2025 2030
Aver
age
Hen
ry H
ub s
pot p
rice
($)
2009
2010
2011
2012
NATURAL GAS | SHALE GAS RESERVES
(EIA, 2011)
N.B. Estimates for Russia and the Middle East are not included
WHAT TO WATCH 1. Will U.S. shale gas boom
continue or will it level off?
2. What will happen with the development of shale gas in China? What about India, the UK, South Africa, and other countries?
(Photo: Giorgio Giorgetti/Flickr)
0
10
20
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70
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2004 2005 2006 2007 2008 2009 2010 2011 2012
Bill
ions
of d
olla
rs
Quarterly
RENEWABLES | WHERE NEXT FOR INVESTMENT?
(Bloomberg New Energy Finance, 2013)
N.B. Total values include estimates for undisclosed deals. Excludes corporate and government R&D.
2004 2005 2006 2007 2008 2009 2010 2011 2012
$268.7BN (2012)
RENEWABLES | COUNTRIES WITH RENEWABLE ENERGY TARGETS
(REN21, 2012)
With targets Without targets Map is illustrative; see REN21 for full list of countries
WHAT TO WATCH 1. Will countries make
progress on their commitments? Will new countries announce new energy targets this year?
2. How will this impact investments?
(Photo: Russian Reporter)
(Photo: Andreas/Flickr)
ENERGY MIX 1 “ECOLOGICAL PROGRESS” IN CHINA
2
2 TOWARD “ECOLOGICAL PROGRESS” IN CHINA?
CHINA DRIVES GLOBAL CONSUMPTION Share of the world total
48%
Iron
Ore
28%
CO
2 47%
Coa
l
45%
Stee
l
Cem
ent
53%
GD
P
10%
CHINA’S ENVIRONMENTAL DEGRADATION IS MASSIVELY COSTLY
0
2
4
6
8
10
Cos
t of e
nviro
nmen
tal d
egra
datio
n as
%
of G
DP
equi
vale
nt
9.2% OF GDP
(World Bank reports, 2005-2012)
755 air quality index in Beijing
BEIJING AIR POLLUTION
CHINA LEADS ON RENEWABLE ENERGY Renewable energy installed capacity
(Pew, 2012)
0
20
40
60
80
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China UnitedStates
Germany Spain Italy Japan India France Brazil
Gig
awat
ts
China U.S. Germany Spain Italy Japan India France Brazil
0
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4
6
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10
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16
2000 2005 2010 2015
GD
P gr
owth
(%)
2017 (8.5%)
2013 (8.8%)
CHINA’S GDP GROWTH: WHERE NEXT?
(IMF, 2012)
18TH NATIONAL CONGRESS OF THE COMMUNIST PARTY OF CHINA, NOVEMBER 2012 “We must fully implement the overall plan for promoting economic, political, cultural, social and ecological progress.”
- PRESIDENT HU
(Photo: Remko Tanis/Flickr)
WHAT TO WATCH 1. How much progress will
China make toward its energy targets?
2. Will China make progress on its carbon trading pilots?
3. Will China develop its massive shale gas potential, which could in part displace its dependence on coal?
(Photo: World Bank Photo Collection/Flickr)
(Photo: Alvise Forcellini/Flickr)
ENERGY MIX 1 AFRICA’S LIONS
3 “ECOLOGICAL PROGRESS” IN CHINA
2
3 HOW WILL AFRICA’S LIONS GROW?
(IMF, 2012)
BOOMING ECONOMIES National GDP growth, 2007-2012
Ethiopia 8.9%
Equatorial Guinea
8.0%
Rwanda 7.5%
Sierra Leone 10.2%
Ghana 8.2%
Angola 9.2%
7.5%+ 5-7.4% 2.5-4.9% 0-2.4% Insufficient data
65% currently live in slums
36% 67% urban population in 2010
37% increase in middle class from 2000-10
(African Development Bank, Deloitte)
48% currently live in absolute poverty
AFRICAN CITIES GROWING QUICKLY
AFRICAN MIDDLE CLASS GROWING
urban population in 2050
(Freedom House, 2012)
Improved No change Worsened Insufficient data
A MIXED BAG Change in Freedom House rankings, 2002-2012
50% foreign direct investment going to extractive industries
(Photo: ENOUGH Project/Flickr)
$16bn 2011 Chinese investments in Africa
(Photo: Oxfam International /Flickr)
400m people living in the dry lands
THE GREAT GREEN WALL
(NASA; Pan-African Agency of the Great Green Wall)
SEC Rules (Photo: Securities and Exchange Commission/Flickr)
DODD-FRANK LEGISLATION PASSED IN 2010
(Photo: TREEAID/Flickr)
WHAT TO WATCH 1. Will we see more
transparency from extractive industries?
2. How will Africa respond to drought and food security issues? Will we see an expansion of efforts at regreening?
(Photo: CIFOR/Flickr)
ENERGY MIX 1 AFRICA’S LIONS
3 “ECOLOGICAL PROGRESS” IN CHINA
2 THE WORLD’S FORESTS
4
4 ARE WE TURNING THE CORNER ON FORESTS?
Forests provide $720 billion to global economies
13m hectares of forest lost per year
2.8 2.6 12
.5
2.6
Indonesia 23%
Other 42%
Brazil 35%
SHARE OF TROPICAL
DEFORESTATION, 1990-2010
BRAZIL AND INDONESIA: VITAL PLAYERS
(FAO)
WHAT TO WATCH 1. Will President
Yudhoyono extend the moratorium?
(Photo: CIFOR/Flickr)
0
5
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15
20
25
30
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Thou
sand
s of
squ
are
kilo
met
ers
(National Institute for Space Research, Brazil, 2012)
DEFORESTATION IN BRAZIL IS ON THE DECLINE
WHAT TO WATCH 1. How will Brazil’s new
legislation, signed by President Rousseff impact the dynamics?
(Photo: Neil Palmer/CIAT)
ENERGY MIX 1 AFRICA’S LIONS
3 “ECOLOGICAL PROGRESS” IN CHINA
2 GREEN INVESTMENT
5 THE WORLD’S FORESTS
4
5 WILL GREEN INVESTMENT SURVIVE THE SQUEEZE?
(Photo: Francisco Diez/Flickr)
-3
-2
-1
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2002 2004 2006 2008 2010 2012 2014
Rea
l glo
bal G
DP
grow
th (%
)
-3
-2
-1
0
1
2
3
4
5
2002 2004 2006 2008 2010 2012 2014
Rea
l glo
bal G
DP
grow
th (%
)
(World Bank, 2012)
UNCERTAIN TIMES – RISK AVERSION Change in global GDP
(CPI, 2012; Bloomberg, 2012)
GLOBAL ANNUAL CLIMATE FINANCE
$1 tr
illio
n WHAT IS NEEDED
2010-11
$364
bill
ion
(Photo: BIS)
FINANCIAL RULES | UNINTENDED CONSEQUENCES
Basel III Full compliance by 2019
(Photo: theverb.org/Flickr)
Green Climate Fund What role will it play?
PUBLIC SECTOR FINANCE | DE-RISKING MECHANISMS
(Photo: Michael Oko)
$175bn sustainable transport commitment
MULTILATERAL DEVELOPMENT BANKS | SEEDING NEW DEVELOPMENT
(UPS, Unilever, Johnson & Johnson)
CHANGING MINDSETS
NEW FINANCING STRUCTURES, NEW PLAYERS
(Photo: David Blaikie/Flickr)
WHAT TO WATCH 1. Will new funding
mechanisms emerge to de-risk the markets?
2. Will companies recalibrate risk and adopt longer-term perspectives?
3. Will new financing structures and new players emerge?
(Photo: Windwärts Energie GmbH)
(Photo: Barack Obama/Flickr)
ENERGY MIX 1 AFRICA’S LIONS
3 “ECOLOGICAL PROGRESS” IN CHINA
2 OBAMA AND CLIMATE CHANGE
6 GREEN INVESTMENT
5 THE WORLD’S FORESTS
4
“The issue of climate change is one that we ignore at our own peril.”
- Senator Barack Obama, 2006
6 WILL OBAMA LEAD ON CLIMATE CHANGE?
(Bloomberg Businessweek, 2012)
(Photo: NASA Goddard/Flickr)
EXTREME WEATHER 2012
2012 to be the hottest year on record for the contiguous United States
67% of global losses occurred in the U.S.
$60+ billion in damage from Hurricane Sandy
1% of GDP lost from drought
AMERICANS’ EVOLVING BELIEFS ON CLIMATE CHANGE
1 Pew, Oct 2012 2 Rasmussen, Nov 2012 3 Yale-George Mason University, Oct 2012
67% believe there is solid evidence of the Earth’s warming1
68% of likely voters say global warming is a serious problem2
74% believe global warming is affecting weather in the United States3
WHAT TO WATCH 1. Will we see more political leadership
on climate?
2. Who will President Obama appoint to his cabinet?
3. Will the Obama administration be a go-getter on climate change?
(Photo: Randy Le’Moine Photography/Flickr)
(Photo: National Park Service)
1 WHAT ENERGY MIX?
6 WILL OBAMA LEAD ON CLIMATE CHANGE?
3
HOW WILL AFRICA’S LIONS GROW?
4 ARE WE TURNING THE CORNER ON FORESTS?
5 WILL GREEN INVESTMENT
SURVIVE THE SQUEEZE?
2 TOWARD “ECOLOGICAL
PROGRESS” IN CHINA?