Energy, climate and prosperity - EIB...
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Energy, climate and prosperity Gaël Giraud Chief economist | AFD Senior researcher | CNRS Professor | ENPC Director | Chair Energy and Prosperity
Transcript of Energy, climate and prosperity - EIB...
Energy, climate and prosperity
Gaël Giraud
Chief economist | AFD
Senior researcher | CNRS
Professor | ENPC
Director | Chair Energy and Prosperity
I. CLIMATE : it’s serious!
4
Anthropogenic origin of climate change is now well understood
(IPCC http://www.ipcc.ch)
(NASA GISS Janvier 2014)
Business as usual leads to + 5°C. Too late for <+2°C.
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GIEC 2013
Climate Change Vulnerability Index
10
Adaptation capability
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Source : GAIN Index / readiness map
Abondance des poissons Atlantique nord en 1900
Christensen et al. (Fish & Fisheries, 2003)
Abondance des poissons Atlantique nord en 2000
Une mer sans poissons en 2050?
(Philippe Cury, Calmann-Lévy, 2008)
II. The Energy shift
World consumption of primary energy since 1850
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Consommation mondiale d’énergie primaire depuis 1850 Mtep
Why should we focus on the link growth/energy?
• Kaya’s equation:
• World average 1965 - 1981: 2.38% = 1.6% + 0.78%
• World average 1981 - 2013: 1.86% = 0.5% + 1.36%
• Japan 2000 - 2012: 0% = 0% + 0%
Réunion coordination climat - Pilotage des indicateurs climat
Decoupling?
22 janvier 2013 17
GDP elasticity wrt Primary Energy? Around 60%...
Réunion coordination climat - Pilotage des indicateurs climat
Decoupling? (II)
22 janvier 2013 20
Peak oil? Soon? W
orld
Oil
prod
uctio
n, m
b/d
0
25
50
75
10019
0019
1019
2019
3019
4019
5019
6019
7019
8019
9020
0020
1020
2020
3020
4020
5020
6020
7020
8020
9021
00
HistoricalURR 2100 GbURR 2500 GbURR 3000 GbURR 3500 Gb
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Source : Carbone 4 From Historical IEA, AIE, E&L, BP ; prospective The Shift Project with Hubbert extrapolation
2012
Les autres énergies fossiles suivront avec quelques décennies de retard
III. Coping with the possibility
of a collapse (1)
Meadows (1972) has not been
defeated (cf. Turner 2014)
Population
Pollution
Industrial Output
Food
A ce jour les projections faites dans les années 70 se confirment
Ressources
Meadows and the Energy shift
Resources
Population
Pollution
Industrial Output
Food
Trop de volatilité tue les prix.
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III. The Macro-economic
“New Normal”
Growth = employment ?
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IV. Coping with the possibility
of a collapse
GEMMES
General Monetary Macro-dynamics
for the Ecological Shift
40/99
⌅ Macroeconomic Model for Climate ChangeClimate module overview
Real Output
CO2Emissions
CO2Accumulation
Radiative Forcing
TemperatureChange
Figure: Diagram of the Economy-Climate interactions.
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⌅ Macroeconomic Model for Climate ChangeCO2 Accumulation
Layer ATAtmosphere
Layer UPBiosphere
Upper part of the oceans
Layer ATLower part of the oceans
Three-Layer Model of CO2 Accumulation
CO2 Emissions
Radiative Forcing
Figure: Diagram of the CO2 accumulation model.
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⌅ Numerical SimulationsThe Business-As-Usual Scenario
Employment Rate
Debt to Nominal GDP
Ratio
Wage Share
0,68
0,7
0,72
0,74
0,54
0,57
0,6
0,63
1,26
1,35
1,44
1,53
1,62
Figure: Trajectories of the main simulation outputs in the Business-as-usual case.
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⌅ Numerical SimulationsThe Business-As-Usual Scenario
0,00
0,01
0,02
0,03
0,04
0,05
0,0
0,2
0,4
0,6
0,8
1,0
2000 2050 2100 2150 2200 2250 2300
Employment Rate Inflation Rate (right axis)0,0
0,5
1,0
1,5
2,0
-0,04
-0,02
0,01
0,03
0,05
2000 2050 2100 2150 2200 2250 2300
Real Ouput GrowthLabor Productivity GrowthPopulation GrowthDebt to Nominal GDP Ratio (right axis)
1
6
11
16
21
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
2000 2050 2100 2150 2200 2250 2300Real Output in $ 2010Emissions per Capita in tCO2 (right axis)
0,0
0,2
0,4
0,6
0,8
1,0
0123456789
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2000 2050 2100 2150 2200 2250 2300Atmospheric Temperature Change in °CDamage to Real Output Ratio (right axis)
Figure: Trajectories of the main simulation outputs in the Business-as-usual case.
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⌅ Numerical SimulationsThe Burke et al. (2015) Scenario
0,00
0,01
0,02
0,03
0,04
0,05
0,0
0,2
0,4
0,6
0,8
1,0
2000 2050 2100 2150 2200 2250 2300
Employment Rate Inflation Rate (right axis)-1,0
0,0
1,0
2,0
3,0
4,0
5,0
-0,04
-0,02
0,01
0,03
0,05
2000 2050 2100 2150 2200 2250 2300
Real Ouput GrowthLabor Productivity GrowthPopulation GrowthDebt to Nominal GDP Ratio (right axis)
1
2
3
4
5
6
7
8
050
100150200250300350400
2000 2050 2100 2150 2200 2250 2300Real Output in $ 2010Emissions per Capita in tCO2 (right axis)
0,0
0,2
0,4
0,6
0,8
1,0
0
1
2
3
4
5
6
7
2000 2050 2100 2150 2200 2250 2300Atmospheric Temperature Change in °CDamage to Real Output Ratio (right axis)
Figure: Trajectories of the main simulation outputs in the Burke et al. (2015) case.
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⌅ Macroeconomic Model for Climate ChangeDamage Function (2/2)
0,0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
1,0
0 1 2 3 4 5 6
Dam
ages
(fra
ctio
n of
out
put)
Temperature increase (°C) Nordhaus Weitzman Dietz and Stern
Figure: Comparison of the proposed Damage functions as percentage of output.
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⌅ Numerical SimulationsThe Dietz-Stern Scenario
-0,07
-0,05
-0,03
-0,01
0,01
0,03
0,05
0,0
0,2
0,4
0,6
0,8
1,0
2000 2050 2100 2150
Employment Rate Inflation Rate (right axis)-4,0
1,0
6,0
-0,04
-0,02
0,01
0,03
0,05
2000 2050 2100 2150
Real Ouput GrowthLabor Productivity GrowthPopulation GrowthDebt to Nominal GDP Ratio (right axis)
1
6
11
16
0
100
200
300
400
500
2000 2050 2100 2150Real Output in $ 2010Emissions per Capita in tCO2 (right axis)
0,0
0,2
0,4
0,6
0,8
1,0
0
1
2
3
4
5
6
7
2000 2050 2100 2150Atmospheric Temperature Change in °CDamage to Real Output Ratio (right axis)
Figure: Trajectories of the main simulation outputs in the Dietz-Stern case.
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⌅ Numerical SimulationsObjective +1.5�C
Sensitivity of 1.5 Sensitivity of 2.9Init. price of 15 Init. price of 80 Init. price of 15 Init. price of 80
Price in 2015 18.58 86.27 65.50 144.32Price in 2020 23.00 93.04 286.02 260.35Price in 2050 82.93 146.35 xxx xxx
Table: Price in order to prevent the temperature anomaly to reach the + 1.5� ceiling in 2100, pricesare in 2005 US$/t CO2.
V. Some “solutions”
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The four pillars of decarbonization
From The World Bank, Decarbonizing Development Report, p 32
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Money is already there
Central Banks printing money
Pension Funds lacking
long term investment opportunities
Real economy lacking
infrastructure assets
A unique macro-economic opportunity
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Policy: making a low carbon economy work
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A carbon floor-price to boost the EU carbon market
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Thank you for your attention.
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