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THE NEW ECONOMY: ALIGNING GROWTH, CLIMATE ACTION
AND SUSTAINABLE DEVELOPMENT
Manish Bapna | Executive Vice President and Managing Director, WRI
May 30, 2017
@ManishBapnaWRI
Led by a Global Commission
Made up of former heads of government, finance
ministers, CEOs of major companies, Mayors,
heads of international economic institutions, etc.
Commissioned in 2013 by 7 countries
Colombia, Ethiopia, Indonesia, Norway, Sweden,
South Korea, United Kingdom
Building the evidence base
3 major annual reports and 42 working papers
and country case studies so far.
THE NEW CLIMATE ECONOMY PROJECT
OTHER WRI RESEARCH
THE FALSE DILEMMA
vs
Promoting economic
growth
Fighting climate
change
“WIN-WIN”
PRO-ENVIRONMENT
GROWTH
A DIFFERENT GROWTH PATHWAY
NEGATIVE
EXTERNALITIES
TODAY
LIMITS TO
GROWTH
Growth
performance
Good
Bad
Bad Good
Environmental performance
3 KEY SYSTEMS AND 3 KEY DRIVERS
Cities Land use Energy
Resource
productivity
Innovation
Infrastructure
investment
Higher quality, more resilient, inclusive growth
THE NEW ECONOMY
Photo: Flickr / Miroslav Petrasko
1. Cities
2. Land-Use
3. Energy
4. Financing Sustainable Infrastructure
5. United States
NONE OF THE WORLD’S TOP 50 CITIES BY
POPULATION MEET WHO AIR QUALITY STANDARDS
Source: World Health Organisation:
http://apps.who.int/gho/data/node.wrapper.ENVHEALTH3
North America
Latin AmericaEurope & Central Asia
Middle-east & North Africa
East Asia & Pacific South Asia
WHO air
quality
standard
PM10
TRAFFIC CONGESTION COSTS SOME CITIES MORE
THAN 4% OF GDP
Sources: IBM Institute for Business Value, Smarter cities for smarter growth. Li-Zeng
Mao, Hong-Ge Zhu, and Li-Ren Duan (2012) The Social Cost of Traffic Congestion and
Countermeasures in Beijing. Sustainable Transportation Systems: pp. 68-76.
CITES: UNDERSERVED
Source: WRI
up to 70% of city
residents lack
access to one or
more core services
10
In 2012 482m urban residents lacked access
to modern fuels
In 2015 140m urban residents did not have reliable, clean water
COMPACT CITIES
Source: LSE research, drawing on data from Atlanta Regional Commission (2014), Autoritat del Transport Metropolita
(Area de Barcelona) (2013), GenCat (2013), UCSB (2014), D’Onofrio (2014), based on latest data.
Atlanta’s built-up area
Population: 5.26 million
Total area: 16,605 km2
Urban area: 7692 km2
Transport emissions: 6.9 tonnes CO2 p.c.
ATLANTA
Barcelona’s built-up area
Population: 5 million
Total area: 3263 km2
Urban area: 648 km2
Transport emissions: 1.2 tonnes CO2 p.c.
BARCELONA
HOUSTON AND COPENHAGEN: CONTRAST SHOWS ECONOMIC
AND CARBON VALUE OF MASS TRANSIT AND COMPACTNESS
Source: Laconte, P., Urban and Transport Management - International Trends and Practices, in International Symposium "Sustainable
Urban Transport and City. 2005, Tongji University and Nagoya University: Shanghai, carfreeinbigd.com, chron.com/thehighwayman,
ec.Europa.eu for emissions for Copenhagen, World Bank for emissions for Houston
Houston Copenhagen
Population density: 3,500 per sq mile
~4% of people use public transport, 95%
of trips are by car
14% of local GDP spent on transportation
Emissions per capita (tCO2e/capita): 14.1
Population density: 17,000 per sq mile
~46% of people use public transport,
cycling also common
4% of local GDP spent on transportation
Emissions per capita (tCO2e/capita): 4.7
SMART TRANSPORT SYSTEMS HAVE TAKEN OFF WORLDWIDE
Source: Dalkmann, WRI
Sustainable Transport Adoption
LOW-CARBON TRANSPORT, BUILDINGS, AND WASTE
SECTORS ARE A US$17 TRILLION OPPORTUNITY TO 2050
Source: Gouldson, A., Colenbrander, S., Sudmant, A., Godfrey, N., Millward-Hopkins, J., Fang,
W. and Zhao, X., 2015. Accelerating Low-Carbon Development in the World’s Cities. NCE, 2015.
Waste (all values are less than -0.01
Transport – freight
Transport – passenger
Buildings – commercial
Buildings – residential
Total net NPV
Total net NPV – high learning
GROWING CITY LEADERSHIP
7,000+ cities have joined the
Global Covenant
of Mayors
Source: Compact of Mayors
CITY LEADERSHIP: CHINA PILOT ON LOW CARBON CITIES
First batch (2010)
Second batch (2012)
Third batch (2017)
CITY LEADERSHIP: CHINA’S TRANSIT METROPOLIS
PROGRAM
0%
Guangzhou
Shanghai
Tokyo
Paris
Seoul
20% 40% 60% 80% 100%
Beijing
Public Transit
Others
CITIES: RECOMMENDATIONS
• Commit to a connected, compact and coordinated urban
development model, centered on mass transport,
building efficiency and resource-efficient service delivery.
• Identify ways to increase locally generated revenues to
finance and incentivize smarter, more compact and
resilient urban development. Strengthen the
creditworthiness of cities.
Photo: Marta Obelheiro, EMBARQ Brasil
THE NEW ECONOMY
1. Cities
2. Land-Use
3. Energy
4. Financing Sustainable Infrastructure
5. United States
Photo Source: CIFOR Flickr/Photograph by Kate Evans
LAND USE INTERVENTIONS COMPRISE 15-35% OF THE
MITIGATION POTENTIAL TO GET ON A 2°C PATHWAY BY 2030
Source: Emissions estimates: IPCC AR5; New Climate Economy analysis based on
expert input and multiple data sources
COMING SOON: NCE LAND USE SPECIAL INITIATIVE
Boost yields: crops,
livestock, forest products
Avoid
deforestation
Restore forests
“Produce”
“Protect”
Limit expansion to just
restored “degraded land”
“Prosper”
Reduce growth in consumption
(e.g., reduce food loss and
waste, shift diets)
GLOBAL ANNUAL TREE COVER LOSS REMAINS HIGH
TREE COVER LOSS INCREASING IN TROPICAL
COUNTRIES OUTSIDE BRAZIL & INDONESIA
THE TROPICAL FOREST ALLIANCE: A NEW COALITION TO END
NATURAL FOREST LOSS BY 2030
Source: Tropical Forest Alliance 2020 website. See website for full list of partners.
Private Sector
Public Sector
Civil Society
14 countries
36 organisations38 companies
OVER 300 MILLION HA OF DEGRADED LAND COULD BE
RESTORED IN SUB-SAHARAN AFRICA. CASE STUDY: NIGER
Source: WRI analysis using the following datasets: Protected areas: IUCN and UNEP. 2013. The World Database on Protected Areas (WDPA).
Cambridge, UK: UNEP-WCMC. Croplands: Fritz, S. and L. See. 2013. Global Hybrid Cropland. Laxenburg, Austria: IIASA and IFPRI.
Precipitation isohyets: FAO/UNEP Desertification and Mapping Project. 1986. Africa Mean Annual Rainfall. Geneva, Switzerland: UNEP/GRID.
Impact for Niger Zinder case from worldagroforestry.org.
1980s
1980s Present Day
• Improved productivity: 5 million hectares restored – farmers produce 100 kg/hectare
more now than before
• Reduced poverty: more than doubled farm income for over one million households
• Reduced emissions: Agroforestry technique sequesters 1.6-10 tCO2e/ha
AMBITIOUS GLOBAL TARGETS EXIST
Photo: Flickr/CIFOR; Source: WRI
150mhectares under restoration by 2020
Bonn Challenge
350mhectares under restoration by 2030
NY Declaration
27
63.3M HECTARES
COMMITTED
BUT RESTORATION MONITORING WITH GOOD RESOLUTION AND
FREQUENCY IS A GAP
Agricultural greenhouse gas emissions, Gt CO2e/year (2050)
0
2
4
6
8
10
12
14
BA
U 2
05
0
Fo
od
lo
ss
&
was
te
Sh
ift
die
ts
↓ c
rop
bio
fue
ls
Fe
rtili
ty r
ate
s
Cro
p b
ree
din
g
Re
sto
rati
on
Cro
pp
ing
inte
nsity
Pa
stu
re y
ield
s
Ric
e m
gm
t
Fe
rtili
ze
r
eff
icie
ncy
Ma
nu
re m
gm
t
On-f
arm
en
erg
y
En
teric
me
tha
ne
20
50
ta
rge
t*
Consumption
Production
Focus area
TACKLING AGRICULTURE-BASED GHG EMISSIONS
* Could be reduced by forest landscape restoration on agricultural land “freed up” by the other menu item strategies
Source: GlobAgri-WRI model (developed by INRA, CIRAD, and WRI)
WHY DOES FOOD LOSS AND WASTE MATTER?
Source: FAO (Food and Agriculture Organization of the United Nations). 2011. Global food losses and food waste –
extent, causes and prevention. Rome: UN FAO; FAO. 2015. Food wastage footprint & climate change. Rome: UN FAO.
Food loss and waste is greater nearer “the fork” in developed regions and nearer “the farm” in developing regions
Note: Numbers may not sum to 100 due to rounding.
WHERE IS FOOD LOSS OR WASTED?
Source: WRI analysis based on FAO. 2011. Global food losses and food waste—extent,
causes and prevention. Rome: UN FAO.
Percent of kcal lost and wasted, 2009
For every £1 invested in curbing household food waste,
more than £250 was saved
REDUCING FOOD LOSS AND WASTE RESULTS IN
HIGH ECONOMIC RETURNS
Photo: The times UK; Source: Champions 12.3
Catalyzed a 21%reduction in household
food waste (2007-2012)
BUILDING A MOVEMENT: CHAMPIONS 12.3
SHIFTING DIETS – THE PROTEIN SCORECARD
Sources: GlobAgril-WRI model developed by CIRAD. Princeton University. INRA and
WRI (GHG data): USDA and BLS (2016) (US retail price data).
WE GET NEARLY ENOUGH PROTEIN FROM PLANTS
Source: WRI/Shifting Diets
Gra
m o
f pro
tein
con
sum
ptio
n pe
r ca
pita
, per
day
, 200
9
BETTER BUYING LAB
LAND USE: RECOMMENDATIONS
Photo: Flickr/CIFOR
• Halt the loss of natural forests by 2030
• Restore at least 500 million hectares of lost or
degraded forests and agricultural land by 2030,
• Cut in half per capita global food waste at the retail
and consumer level, and reduce food losses along
production and supply chains by 2030
ENERGY
1. Cities
2. Land-Use
3. Energy
4. Financing Sustainable Infrastructure
5. United States
Photo: Flickr/DFID
~ 2CWell below
2C
~ 2C
Increase in share
of zero-carbon1
energy
% points p.a.
1 or
more
< 1
< 3 3 or more
Improvement in energy productivity% p.a.
INDCs: 2013-2030
Historical: 1980-2014
Well above
2C
WE MUST ACCELERATE THE PACE AT WHICH WE DECARBONIZE
ENERGY SUPPLY AND IMPROVE ENERGY PRODUCTIVITY
Source: Energy Transitions Commission (2017), Better Energy, Greater Prosperity
COAL AND UNCONVENTIONAL FOSSIL FUEL RESERVES FAR
EXCEED THE CARBON BUDGET
Source: IPCC Working Group I; IIASA Global Energy Assessment 2012, BGR, 2013; BP
Statistical Review of World Energy, 2014; IEA, 2013; World Energy Council, 2013
HIGH DEMAND FOR ENERGY
1.2 billion
people lack
electricity
access
Source: IEA, World Energy Outlook 2016 Photo: Power for All 41
AFRICA’S ENERGY GAP
Source: 2015 Africa Progress Report: POWER, PEOPLE, PLANET. Available at:
http://www.africaprogresspanel.org/publications/policy-papers/2015-africa-progress-report/
http://www.africaprogresspanel.org/publications/policy-papers/2015-africa-progress-report/
THE COST OF WIND AND SOLAR CONTINUES TO FALL
Source: © OECD/IEA Next Generation Wind and Solar Power: From Cost to Value,
IEA Publishing. Licence: www.iea.org/t&c
Indexed cost of onshore wind and utility-scale solar PV
MORE THAN HALF OF NEW ELECTRICITY SECTOR
INVESTMENT IN 2016 WAS IN RENEWABLES
Source: Frankfurt School-UNEP Centre/BNEF. 2017.
Coal21%
Gas14%
Other flexible capacity
2%Nuclear4%
LargeHydro
6%
Renewables, excluding large hydro
53%
13
4
8
20
47
HALVING CARBON EMISSIONS BY 2040 IS WITHIN OUR REACH IF WE ACT
NOW TO IMPLEMENT 4 INTERDEPENDENT TRANSITION STRATEGIES
Source: Energy Transitions Commission (2017), Better Energy, Greater Prosperity
WB2C 2040
Acceleration in the pace of
energy productivity improvement to 3% per annum
2
Business as usual 2040
48%
15%
30%
7%
Transition strategy
Annual emissions, 2040, GT CO2e
Illustrative path to WB2C scenario
1 Decarbonization of power combined with extended electrification
2 Decarbonization of activities which cannot be cost-effectively electrified
4 Optimization of fossil fuels use within overall carbon budget constraints
3
RENEWABLE ENERGY IN THE NDCS
80% of NDCs
have a
renewable
energy target
Source: WRI Analysis; Photo: Flickr / Oregon Department of Transportation
Country Target
China Around 20% non-fossil fuels in national energy consumption 2030
Brasil 45% of renewables in the energy mix by 2030
India 40% cumulative electric power installed capacity from non-fossil fuels by 2030
Indonesia At least 23% from new and renewable sources by 2025
JapanRenewables will comprise approximately 22% - 24% of Japan's total power
generation in 2030.
MexicoThe increase of clean energy sources in the national electricity generation mix to 35%
by 2024
European
UnionAt least 27% share of renewable energy consumption by 2030 (2014)
United StatesIncrease the US share of renewables, beyond hydropower, in the electricity generation
mix to the level of 20% by 2030 (June 2015)
RENEWABLE ENERGY TARGETS IN THE NDCS
Source: WRI Analysis
INDIA’S AMBITIOUS SOLAR TARGETS
Source: India's Ministry of New and Renewable Energy (MNRE); Bridge to India
Note: All years in the chart are fiscal years: 1 April – 31 March
ENERGY: RECOMMENDATIONS
Photo: Flickr / DFID
• Accelerate the shift away from polluting coal-fired power generation, with
a global phase-out of unabated fossil fuel power generation by 2050.
• G20 and other countries should converge their energy efficiency
standards to the global best by 2025, and establish a global platform for
alignment and improvement of standards.
• Development banks should scale up collaboration with governments and
the private sector, and their own capital commitments, to reach US$1
trillion of investment per year in clean energy.
THE NEW ECONOMY
1. Cities
2. Land-Use
3. Energy
4. Financing Sustainable Infrastructure
5. United States
Photo: Flickr/The Danish Wind Energy Association 50
Boost global demand and activity
in the short-term and lay
foundations for sustained long-
term growth.
Implement the Sustainable
Development Goals through
inclusive growth and access
to basic services.
Cut emissions to achieve
net zero by 2050, and
increase resilience &
adaptation.
Sustainable infrastructure is at the heart of
solutions to all three.
THE WORLD’S THREE KEY CHALLENGES
2016 NCE REPORT: SUSTAINABLE INFRASTRUCTURE
• In next 15 years we will develop more infrastructure than entire
current stock – we need to ensure it is sustainable.
• Sustainable infrastructure includes:
– Clean and efficient energy systems, public transport, efficient buildings,
water supply and sanitation
– And also natural infrastructure (such as forest landscapes, wetlands and
watershed protection)
70% OF COMING INFRASTRUCTURE INVESTMENTS WILL BE
MADE IN DEVELOPING AND EMERGING ECONOMIES
Source: Global Commission on the Economy and Climate, 2016, based on Bielenberg et
al. (2016) and Bhattacharya et al. (2016)
Percentage of projected infrastructure demand by sector and income group
(2015-2030)
INVESTING IN SUSTAINABLE INFRASTRUCTURE REQUIRES A SHIFT
IN INVESTMENT BUT DOES NOT NEED TO COST MUCH MORE
Note: Δ is the mathematical symbol for change. Source: Global Commission on the
Economy and Climate, 2016 and 2014, and Bhattacharya et al., 2016
Infrastructure spending needed for a 2°C scenario (2015-2030, percentage change)
THE 2016 GLOBAL COMMISSION ACTION AGENDA
TACKLE FUNDAMENTAL PRICE DISTORTIONS
Source: World Bank Carbon Pricing Watch 2017
Carbon pricing initiatives underway
THE FINANCIAL SECTOR NEEDS TO BE FIT FOR PURPOSE:
A MOMENTOUS SHIFT IN AWARENESS OF CLIMATE-RELATED RISKS
Sources: Bank of England; Financial Times; International Institute of Sustainable
Development; Bloomberg; G20.org
The Bank of England is studying the impact of climate risks
on the UK financial system
China is developing a “green financial system” including
legal frameworks, fiscal and financial policy incentives, and
information infrastructure
G20 Finance Ministers have commissioned an FSB Task
Force to look into climate-related financial risks; introduced
new focus on green finance
Investors themselves are shifting: over 400 investors with
$25 trillion in AUM joined Investor Platform for Climate
Actions; divestment commitments, Norwegian SWF.
TRANSFORM THE FINANCIAL SYSTEM TO DELIVER THE SCALE
AND QUALITY OF INVESTMENT NEEDED
“Increasing transparency makes markets more efficient, and economies more stable and resilient.”
-Michael Bloomberg, Chair of Task Force on Climate-Related
Financial Disclosures
Photo: Flickr/World Bank Photo Collection
BOOST INVESTMENT IN CLEAN TECHNOLOGY R&D AND
DEPLOYMENT
Source: Global Commission on the Economy and Climate, 2014
THE NEW ECONOMY
1. Cities
2. Land-Use
3. Energy
4. Financing Sustainable Infrastructure
5. United States
Photo: Flickr / Phil Roder
A NEW ADMINISTRATION
Photo: Flickr / Matt Johnson
U.S. CARBON DIOXIDE EMISSIONS HAVE FALLEN WHILE
ECONOMIC GROWTH HAS CONTINUED
Source: U.S. Energy Information Administration and U.S. Bureau of Economic Analysis
HOW DOES THIS COMPARE WITH OTHER COUNTRIES? GHG
EMISSIONS AND ECONOMIC GROWTH
PRESIDENT TRUMP HAS ALREADY STARTED TO ROLL
BACK CLIMATE AND CLEAN ENERGY PROGRESS
Source: WRI
IF SUCCESSFUL, THESE ACTIONS MAY SET BACK THE
NATION’S EFFORTS TO REDUCE GHG EMISSIONS
Source: Rhodium Group Analysis
WILL IT BE POSSIBLE TO CLOSE THE GAP?
Source: Rhodium Group Analysis
• States and Cities
• Private sector
• Federal
PROJECTIONS ARE NOT ALWAYS ACCURATE:
ACTUAL VS PROJECTED US CO2 EMISSIONS
Source: U.S. EIA
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2005 2010 2015 2020 2025 2030 2035
AEO2006
AEO2008AEO2010AEO2012AEO2014AEO2016AEO2017Actual Emissions
WILL TRUMP WITHDRAW THE US FROM THE
PARIS AGREEMENT?
Photo: COP Paris