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Revisiting Rachel:
The legacy of Rachel
Carson
Twitter:
#BL12
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTEUCL ENERGY INSTITUTEUCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
Economic Growth and the Environment: the Continuing Conundrum
The 2012 Burntwood LectureRevisiting Rachel: the Legacy of Silent Spring Fifty Years On Paul EkinsProfessor of Resources and Environmental PolicyUCL Energy Institute/UCL Institute for Sustainable Resources, University College London
St. Ermin’s Hotel, London November 22nd, 2012
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3
The Limits to Growth Debate (1)• Post-dates Rachel Carson by ten years• She “called for a change in the way humankind viewed the
natural world”.• Her message was based on the local impacts of human activities
on other life forms• “Limits to Growth”, a report by the Club of Rome in 1972,
expounded global limits to human economic aspirations. “If the present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next 100 years. The most probable result will be a sudden and uncontrollable decline in both population and industrial capacity.”
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The Limits to Growth Debate (2)• “Beyond the Limits” (1992): “Human use of many essential resources
and generation of many kinds of pollutants have already surpassed rates that are physically sustainable. Without significant reductions in material and energy flows, there will be in the coming decades an uncontrolled decline in per capita food output, energy use, and industrial production.” These conclusions constitute a conditional warning, not a dire prediction. “This decline is not inevitable. To avoid it two changes are necessary. The first is a comprehensive revision of policies and practices that perpetuate growth in material consumption and in population. The second is a rapid, drastic increase in the efficiency with which materials and energy are used.” http://www.context.org/iclib/ic32/meadows/
• Smithsonian, April 2012: “Turner compared real-world data from 1970 to 2000 with the business-as-usual scenario. He found the predictions nearly matched the facts. “There is a very clear warning bell being rung here,” he says. “We are not on a sustainable trajectory.”
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Understanding wealth creation
In the beginning was the world: the ecological cycle
+
BIOSPHERE
ENVIRONMENTAL FUNCTIONS
Resources (Source) Waste absorption (Sink) Ecosystem services (life-
support, amenity etc.)
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The ecological cycle and human well-being
+ -
BIOSPHERE
ENVIRONMENTAL FUNCTIONS
Resources (Source) Waste absorption (Sink) Ecosystem services (life-
support, amenity etc.)
HUMAN BENEFITS
Economy Health Welfare
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The economy as a sub-system of the biosphere
SOLAR ENERGY HEAT
BIOSPHERE
Eco-system services
Energy Energy
Source Sink functions functions
Materials Wastes
Materially growing economic sub-system,
leaving less space for nature
HUMAN POPULATION
AND
ECONOMIC ACTIVITY
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What kind of growth?
• Physical growth (growth in the amount of matter/energy mobilised by the economy: indefinite growth of this kind is impossible in a finite physical system subject to the laws of thermodynamics
• Economic (GDP) growth: growth in money flows/incomes/value added/expenditure: there is no theoretical limit on this kind of growth
• Growth in human welfare:– Dependent on sustaining environmental functions– Complex relationship to economic growth (although hard to
argue that, ceteris paribus, more money is not better than less)
– Dependent on many other factors (see below)
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The four capitals model of wealth creation• Capital is
– A STOCK, or asset, which has the characteristic of producing– A FLOW of income or some other benefit– The stock value is the net present value of the flow
• Four capitals model – Manufactured (or physical) capital– Human capital (health, skills, motivation)– Social capital (institutions, organisations, “the Big Society”)– Natural (or environmental, ecological) capital– Financial capital is a form of social capital with the power of mobilising the other
four capitals
• The four capitals generally need to be combined in a production process in order to generate their benefits (this is least true of natural capital which generates many benefits independently of humans)
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The four capitals model of wealth-creation Hu, SOu Wes Uh, Uso Wu ESu COu Ese Pu Stocks of capital, C Ees Ep Ic Mp Goods Lp Sp COc Bads Kp Wc Pc Dc Capital feedback effects
Natural Capital EC
Human Capital HC
Social/organisa-tional Capital, SC
Manufactured Capital, MC
Production process/ National economy P
Intermediate production, M
Investment I
Consumption CO
Wastes, pollution W
Depreciation D
Welfare, Utility U Environmental services
ES
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Human well-being/happiness• The ‘big seven’ (Layard 2005, Happiness) (first five in order of
importance)– Family relationships (importance of marriage)– Financial situation (relative income; “benefit of extra income is less
if people are rich” Layard 2005; people get less pleasure out of increased consumption than they thought they would – adaptation (Easterlin 2003))
– Work (employment)– Community and friends (trust)– Health– Personal freedom; Personal values (importance of religion)
• Inequality?– “Some groups like inequality” (Layard 2005 – because gives
opportunities for mobility, relative advantage)– “Equality is better for everyone” (Wilkinson and Pickett, 2009)
• What about the environment?
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Millennium Ecosystem Assessment (2005)
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Policies for increasing happiness(Layard 2005, except last two points)
• Monitor development of happiness• Rethink range of issues:
– Tax: restrains excessive status-seeking– Performance-related pay: encourages excessive status seeking– Mobility: weakens family/community, increases crime
• Help the poor (marginal utility of income)• Improve family life, subsidise activities that promote community life• Eliminate high unemployment (benefits conditional on working)• Spend more addressing mental illness• Reduce escalation of wants (curb advertising, especially to children)• Improve education• Reduce inequality? Yes (Wilkinson and Pickett, 2009)• Promote environmental sustainability (absent from well-being
literature) (see below)
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Core issues of sustainable development
• Sustainability entails maintenance of human welfare and therefore of the benefits which give rise to it and therefore of the capital stock which produces the benefits.
• Issues of substitutability between capitals: weak and strong sustainability
• Issues of benefit valuation - and therefore valuation of the capital stocks
• Difference between economic, social and environmental sustainability (capacity for continuance)
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Principles of economic sustainability• Borrow systematically only to invest, not to consume• Keep money sound: control inflation, public borrowing, trade
deficits, indebtedness• Establish transparent accounting systems that give realistic
asset values• Maintain or increase stocks of capital (manufactured, human,
social, natural) • As has become apparent every one of these principles has
been spectacularly broken over the last few years, even in the financial sector and mainstream money economy
• What prospect then for broader sustainability, particularly environmental sustainability? We must start by getting right the basic conception of how wealth is created and how the human economy relates to the natural environment
• What about social sustainability?
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What about social sustainability?
• It is apparent that at some level of crime, unemployment, family breakdown, widespread social breakdown (i.e. unsustainability) would occur
• The level at which this would occur is socially contingent , and highly uncertain and unpredictable
• Probably makes sense to think in terms of socially unsustainable trends rather than ‘sustainability limits’
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Environmental sustainability• Sustainability: capacity for continuance• Environmental sustainability: maintenance of important environmental
functions and the natural capital which generates them. Importance: Not substitutable, irreversible loss, ‘immoderate’ losses Maintenance of health, avoidance of threat, economic sustainability
• Any aspiration for sustainable economic growth must start from the recognition of the need for the sustainable use of resources and ecosystems, and be rooted in basic laws of physical science:
Indefinite physical expansion of the human economy on a finite planet is impossible;
All use of non-solar forms of energy creates disorder, and potential disruption, in the natural world
• Thermodynamics: at a certain physical scale, further physical growth becomes counter-productive.
• There is little doubt that except from a very short-term perspective this scale has now been exceeded
• What is the optimal physical scale of the human economy? Operating within environmental limits (cf social sustainability)
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A safe operating space for humanity: Rockstrom et al. 2009, Nature
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Closing the Sustainability Gap
Environ-mental stress
(ES)
Sustain-ability
standard(SS)
Sustain-abilityGap (SGAP)
(ES-SS)
Normalised SGAP(100*SGAP/SS), EPeq
Years tosustain-ability
1980 1991 1980 1991 1980 1991Climate change,Ceq
286 239 10 276 229 2760100
229083
54
Ozonedepletion, Oeq
20000 8721 0 20000 8721 na na 8.5
Acidification,Aeq
6700 4100 400 6300 3700 1575100
92559
16
Eutrophication,Eeq
302 273 86 216 187 251100
21786
71
Dispersion, Deq 251 222 12 239 210 1992100
175088
80
Waste disposal,Weq
15.3 14.1 3 12.3 11.1 410100
37090
102
Disturbance,Neq
46 57 9 37 48 411100
533130
never
TOTAL na na na na na 7399100
608582
51
Table 3.2: Various Sustainability Measures for the Netherlands
Source: Ekins, P. & Simon, S. 2001 ‘Estimating Sustainability Gaps: Methods and Preliminary Applications for the UK and the Netherlands’, Ecological Economics, Vol.37 No.1, pp.5-22
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The imperative of decoupling physical from financial growth• Decoupling: a decline in the ratio of the amount used of a
certain resource, or of the environmental impact, to the value generated or otherwise involved in the resource use or environmental impact. The unit of decoupling is therefore a weight per unit of value.
• Relative decoupling: in a growing economy, the ratio of resource use (e.g. energy consumption) or environmental impact (e.g. carbon emissions) to GDP decreases
• Absolute decoupling: in a growing economy, the resource use or environmental impact falls in absolute terms
• If GDP growth continues, climate stabilisation at levels of CO2 concentration that limit global average temperature increases to 2oC will require a degree of absolute decoupling of GDP from carbon emissions that is outside all previous experience
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Decoupling of CO2 and other air pollutants in some OECD countriesTable 2: GDP and Domestically Produced Emissions Indices, selected OECD Countries, 2005 (1990=100) GDP SOX NOX Particulates CO VOC CO2
France 132 35 66 67 50 52 98
Germany 123 10 50 10 33 35 82
Ireland 258 38 95 106 55 58 126
Japan 120 76 94 67 88 107
Portugal 135 69 104 133 70 94 143
Turkey 173 128 166 92 184
UK 143 19 55 53 29 41 85
USA 155 63 74 81 62 69 116
Shading = no absolute decoupling Source: Everett et al. 2010, p.22 Note: International aviation and shipping emissions are excluded from the ‘territorial’ emissions figures, but the economic benefits from aviation and shipping are included in GDP.
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The necessary improvements in energy/resource productivity
• Energy productivity = GDP/energy; energy intensity = energy/GDP
• Carbon productivity = GDP/carbon; carbon intensity = carbon/GDP• Carbon intensity of energy = carbon/energy
• Carbon emissions = Population * GDP/capita * energy/GDP * carbon/energy• Carbon emissions = Population * GDP/capita * carbon/GDP
• To achieve 450ppmv atmospheric concentration of CO2, assuming ongoing economic and population growth (3.1% p.a. real), need to increase carbon productivity by a factor of 10-15 by 2050, or approx. 6% p.a.
• Compare current increase in carbon productivity of 0% p.a. over 2000-2006, i.e. global carbon emissions rose at 3.1% p.a.; also
• Compare 10-fold improvement in labour productivity in US over 1830-1955, must achieve the same factor increase in carbon in 42 years
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An unprecedented policy challenge
The Stern Review Policy Prescription for climate change
• Carbon pricing: carbon taxes; emission trading
• Technology policy: low-carbon energy sources; high-efficiency end-use appliances/buildings; incentivisation of a huge investment programme
• Remove other barriers and promote behaviour change: take-up of new technologies and high-efficiency end-use options; low-energy (carbon) behaviours (i.e. less driving/flying/meat-eating/lower building temperatures in winter, higher in summer)
• The basic insights from the Stern Review need to be applied to the use of other environmental resources (water, materials, biodiversity [space])
• In a market economy, pricing is the key to resource efficiency, investment and behaviour change. If it was politically feasible to increase resource prices to the necessary extent (through, for example, environmental tax reform (ETR)), what would this do to economic growth?
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The costs of increasing resource productivity
• Optimists:• ‘Costs’ are really investments, can contribute to GDP growth• Considerable opportunity for zero-cost mitigation• A number of resource-efficient technologies are (nearly) available at
low incremental cost over the huge investments in the economic system that need to be made anyway
• ‘Learning curve’ experience suggests that the costs of new technologies will fall dramatically
• Resource efficiency policies can spur innovation, new industries, exports and growth
• Pessimists:• Constraining resource use is bound to constrain growth• Cheap, abundant energy and other resources are fundamental to
industrial development
• Issue has been most studied in respect of reduction of carbon emissions
24
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The (micro)economic cost: global cost curve for greenhouse gas abatement
Source: A cost curve for greenhouse gas reductions, The Mckinsey Quarterly, February 2007
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Technological potential: the Socolow Wedges
Source: Professor Robert Socolow “Stabilisation Wedges”, Met Office Symposium, 3 rd February 2005
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Potential “wedges”: cuts of 1Gt of carbon per year in 2054• Efficient vehicles: Increase fuel economy for 2 billion autos from 30 to 60 mpg.
• Nuclear: Tripling of capacity to 1050 Gwatts.
• Gas for coal substitution: 1400 Gwatts of electricity generation switched from coal to gas.
• Carbon capture and storage: Introduce CCS at 800 Gwatt coal stations
• Wind power: 50 times as much wind power as at present.
• Solar PV: 700 times 2004 capacity
• Hydrogen: Additional 4000 Gwatts of wind capacity or additional CCS capacity
• Biomass fuel: 100 times the current Brazilian ethanol production
Source: Professor Robert Socolow “Stabilisation Wedges”
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Cost evolution and learning rates for selected technologies
Source: IEA, 2000, Stern Review, Chapter 9
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
Estimating the macro-economic cost of carbon reduction• Models are essential to integrate cost data in a
representation of– The energy system (MARKAL): energy system cost, welfare
cost, GDP cost– The economy : macro-econometric/general equilibrium models– Good models are ‘garbage in – garbage out’; getting the inputs
right• Stern’s conclusion (p.267)
– “Overall, the expected annual cost of achieving emissions reductions, consistent with an emissions trajectory leading to stabilisation at around 500-550 ppm CO2e, is likely to be around 1% GDP by 2050, with a range of +/-3%, reflecting uncertainties over the scale of mitigation required, the pace of technological innovation and the degree of policy flexibility.”
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UK MARKAL• MARKet ALlocation dynamic optimization model• 100+ users in 30+ countries under IEA ETSAP network• A least cost optimization model based on life-cycle costs of
competing technologies (to meet energy service demands) • Technology rich bottom-up model (e.g. end-use
technologies, energy conversion technologies, refineries, resource supplies, infrastructure, etc)
• An integrated energy systems model– Energy carriers, resources, processes, electricity/CHP, industry,
services, residential, transport, agriculture• Range of physical, economic and policy constraints to
represent UK energy system• Extension to MARKAL-Macro (M-M), MARKAL Elastic
Demand (MED)
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CO2 emission reductions - UK MARKAL MED
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
Final energy demand – UK MARKAL MED
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
20
00
35
-B
35
-CFH
35
-CLC
35
-CA
M
35
-CS
AM
50
-B
50
-CFH
50
-CLC
50
-CA
M
50
-CS
AM
PJ
Final Energy demand by fuel Others
Heat
Biomass
Manufactured fuel
Bio diesels
Ethanol/Methanol
Hydrogen
Jet fuel
Diesel
Petrol
Coal
Gas
LPG
Fuel oil
Electricity
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
GDP % changes – UK MARKAL MACRO
Change in GDP - 60% CO2 reduction
-1.6%
-1.4%
-1.2%
-1.0%
-0.8%
-0.6%
-0.4%
-0.2%
0.0%
0.2%
2000 2010 2020 2030 2040 2050
% d
iffe
rnec
e
Central fuelprices
High fuelprices
Low fuel prices
SLT
No nuclear
No CCS,nuclear
2020innovation limit
2010innovation limit
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
Relevant projects on environmental tax reform (ETR) or green fiscal reform (GFR)
Definition: ETR is the shifting of taxation from ‘goods’ (like income, profits) to ‘bads’ (like resource use and pollution) • COMETR: Competitiveness effects of environmental tax
reforms, 2007. http://www2.dmu.dk/cometr/ (What is the experience to date of ETR in Europe? See Andersen, M.S. & Ekins, P. (Eds.) Carbon Taxation: Lessons from Europe, Oxford University Press, Oxford/New York, 2009
• petrE: ‘Resource productivity, environmental tax reform (ETR) and sustainable growth in Europe’. One of four final projects of the Anglo-German Foundation under the collective title ‘Creating Sustainable Growth in Europe’. Final report published October 29, Berlin, November 25, London. www.petre.org.uk
• UK Green Fiscal Commission. Final report published October 26, London. www.greenfiscalcommission.org.uk
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PETRE: What opportunities are presented by ETR in Europe?
Economic impacts
Environmental impacts
ETR Increased output
Higher employment
Less pollution Less resource use
Higher human
well-being
Green innovation Green technology development
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
Relevant projects on environmental tax reform (ETR) or green fiscal reform (GFR)
• COMETR: Competitiveness effects of environmental tax reforms, 2007. http://www2.dmu.dk/cometr/
• petrE: ‘Resource productivity, environmental tax reform (ETR) and sustainable growth in Europe’. One of four final projects of the Anglo-German Foundation under the collective title ‘Creating Sustainable Growth in Europe’. Final report published October 29, Berlin, November 25, London. www.petre.org.uk
• UK Green Fiscal Commission. Final report published October 26, London. www.greenfiscalcommission.org.uk
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
What is the experience to date of ETR in Europe?
• Six EU countries have implemented ETRs: Denmark, Finland, Germany, Netherlands, Sweden, UK
• The outcomes – environmental and economic – have been broadly positive: energy demand and emissions are reduced; employment is increased; effects on GDP are very small
• Effects on industrial competitiveness have been minimal
• See Andersen, M.S. & Ekins, P. (Eds.) Carbon Taxation: Lessons from Europe, Oxford University Press, Oxford/New York, 2009
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Environmental and economic impacts of ETR, from COMETR study, 2007
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
CHART 7.28: THE EFFECTS OF ETR: GDP IN ETR AND NON ETR COUNTRIES
-0.1
0.0
0.1
0.2
0.3
1994 1997 2000 2003 2006 2009 2012
ETR Countries
% difference
Non ETR Countries
Note(s) : % difference is the difference between the base case and the counterfactualreference case.
Source(s) : CE.
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What might a large-scale ETR in Europe look like.....? (1)
• Two European macro-econometric models: E3ME, GINFORS.
• Models deliver insights, not forecasts or ‘truth’• Six scenarios:
– Baseline with low energy price (LEP)– Baseline sensitivity with high energy price (HEP, reference case)– Scenario 1: ETR with revenue recycling designed to meet 20% EU
2020 GHG target (S1(L) – scenario compared with LEP Baseline)– Scenario 2: ETR with revenue recycling designed to meet 20% EU
2020 GHG target (S1(H) – scenario compared with HEP Baseline) – Scenario 3: ETR with revenue recycling designed to meet 20% EU
2020 GHG target (S2(H) – scenario compared with HEP Baseline)• proportion of revenues spent on eco-innovation measures
– Scenario 4: ETR with revenue recycling designed to meet 30% ‘international cooperation’ EU 2020 GHG target (S3(H) – scenario compared with Baseline with HEP)
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What might a large-scale ETR in Europe look like.....? (2)
• The taxes …– A carbon tax rate is introduced to all non EU ETS sectors equal to the carbon price in
the EU ETS that delivers an overall 20% reduction in greenhouse gas emissions (GHG) by 2020 (in the international cooperation scenario (S4) this is extended to a 30% GHG reduction)
– Aviation is included in the EU ETS at the end of Phase 2 in 2012– Power generation sector EU ETS permits are 100% auctioned in Phase 3 of the EU
ETS (from 2013) [NB auctioning does not change carbon prices or emissions]– All other EU ETS permits are 50% auctioned in 2013 increasing to 100% in 2020– Taxes on materials are introduced at 5% of total price in 2010 increasing to 15% by
2020– S4 carbon tax in non-EU countries is 25% of carbon tax in EU
• … and tax reductions– Reductions in income tax rates (for households) and social
security contributions (for businesses) in each of the member states, such that there is no direct change in tax revenues
– In S3 10% of the environmental tax revenues are recycled through spending on eco-innovation measures
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
A large-scale ETR in Europe that meets its carbon targets
Scenario CO2 price GDP Employment Labour productivity
Euro2008/t
% change from
baseline % change
from baseline % change from
baseline S1(L) E3ME 142 0.6 2.2 -1.6 GINFORS 120 -3.0 0.0 -3.0 S1(H) E3ME 59 0.2 1.1 -0.9 GINFORS 68 -0.6 0.4 -1.0 S2(H) E3ME 53 0.8 1.1 -0.3 GINFORS 61 -0.3 0.4 -0.7 S3(H) E3ME 204 0.5 2.7 -2.1 GINFORS 184 -1.9 0.8 -2.6
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... and what would be its implications for the rest of the world?
20
24
28
32
36
40
1990 2005 2010 2015 2020
Base LEP
Base
S2
S4
CO2 emissions- GINFORS
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
What might be a way forward for ETR in Europe (in a time of financial crisis)?
• Need for substantial new sources of tax revenue (tax pollution)• Need for substantial new sources of employment (make
employment cheaper)• Carbon tax very similar to permit auction• Energy Tax Directive in place – proposal to split between energy
and carbon• Carbon tax would put floor on permit price• EU-wide carbon tax would dilute concerns about
competitiveness (cf China)
Ekins, P. & Speck S. Eds. 2011 Environmental Tax Reform: A Policy for Green Growth, Oxford University Press, Oxford
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
UK Green Fiscal Commission• Investigation of
– Enonomic, social and environmental implications of major green fiscal reform (GFR) (share of environmental taxes in total revenues from 5% to 15-20% by 2020)
– Public attitudes to GFR
• Modelling of scenarios– Three baselines (B1, B2, B3) – low, medium, high world market fossil
fuel prices – Two GFR scenarios (S1, S2) – increase in transport, household and
industrial energy taxes, and taxes on water and materials, reductions in income taxes (households) and social security contributions (business)
– Two ’eco-innovation’ scenarios (E1, E2) – spending 10% of green tax revnues on energy-efficient buildings, renewable energy and hybrid vehicles
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
Green Fiscal Commission – GHGs
400
500
600
700
800
1990 B1 2020 B2 2020 B3 2020 S1 2020 S2 2020
MtCO2e
Source(s) : NAEI, Cambridge Econometrics.
GHG EMISSIONS IN 2020
34% reduction target
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
Results: GDP and carbon emissions
92
94
96
98
100
102
104
80 85 90 95 100 105
Note(s) : GHG figures have been calculated on a net carbon account basis in MtCO2e.
Source(s) : ONS, NAEI, Cambridge Econometrics.
COMPARISON OF GDP AND GHG EMISSIONS IN 2020
B1
B3
S1
S2E2B2
E1
GDP (B1 = 100)
GHG (B1 = 100)
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
How would the economy in Europe develop with ETR?
• ETR would rule out a resource-intensive growth path
• This would constrain growth unless it led to innovation in low-resource technologies
• ETR would stimulate such innovation, but this may need to be supported with complementary policies
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
Will ETR lead to ‘sustainable growth’ in Europe?
• ‘Sustainable’ growth will be resource-efficient and may in time turn out to be slower growth, with higher employment (lower productivity and incomes)
• Relatively high-growth countries in a sustainable future will be those that have developed, and can export, resource-efficient technologies and industries
• ETR is a key policy for fostering sustainable growth• There is no evidence that ETR or other policies for environmental
sustainability would choke off economic growth altogether• ‘Unsustainable’ growth will not last beyond this century, and could
lead to environmental collapse well before 2100• The choice is clear and from a cost-benefit angle is a no-brainer at
any but the highest discount rates.• If the economic costs are low, why is carbon reduction so difficult?
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The cost/political feasibility paradox (1)• The technologies for large-scale climate change
mitigation are, or soon will be, available at affordable cost.
• Government funding of R,D&D will need to increase dramatically, but deployment and diffusion can only be driven at scale by markets.
• Developing and deploying the technologies will require huge investments in low-carbon technologies right along the innovation chain (research, development, demonstration, diffusion).
• Financing this investment will require a substantial shift from the UK’s consumption-oriented economy of today to an investment economy that builds up low-carbon infrastructure and industries.
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
The cost/political feasibility paradox (2)
• This shift need not impact negatively on GDP (incomes) and employment but will require higher savings and lower consumption rates. This may not be politically popular in a consumer society (UK savings rates fell below zero in early 2008).
• Stimulating the required investment will require high (now) and rising carbon prices over the next half century, to choke off investment in high-carbon technologies and incentivise low-carbon investments.
• These high carbon prices will also greatly change lifestyles and consumption patterns. This too may not be politically popular.
UCL ENERGY INSTITUTEUCL ENERGY INSTITUTE
Conclusion
• It is not technology or cost, that are the constraining factors to climate change mitigation, but politics – related to people’s attachment to consumption rather than savings/investment, and aspects of high-carbon lifestyles.
• Changing this political reality is the necessary condition for the adequate mitigation of climate change, and for achieving environmental sustainability more generally, which will alone avoid the potentially enormous, but still very uncertain, costs of adapting to climate and other environmental events and conditions outside all known human experience.
•Further readingEconomic Growth and Environmental Sustainability: the Prospects for Green Growth (Routledge 2000)
Thank You
www.ucl.ac.uk/energy
Next Event - DMUG 2012: Much Ado About Modelling
Wednesday, December 5, 2012St Martins in the Fields
IAQM is hosting this year's DMUG conference that will focus on the science and application of modelling in air quality. This must attend event for anyone involved in air quality and dispersion
modelling will also mark the 10th anniversary of the founding of IAQM.
Recommended